HomeMy WebLinkAboutAgenda Report - October 19, 1994 (58)4
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CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: Power Agreement between General Mills, Inc. and the City of Lodi
MEETING DATE: October 19,1994
SUBMITTED BY: Electric Utility Director
RECOMIVmptutu ACTION: That the City Council, by resolution, adopt the POWER
AGREEMENT BETWEEN GENERAL MILLS, INC. AND THE
CITY OF LODI and authorize execution by the City Manager and
City Clerk
BACKGROUND INFORMATION: General Mills, Inc. (GMI), desires to use the electrical output of its
cogeneration unit internally in lieu of selling the output. GMI also
desires to have the City stand ready to supply backup electrical power
(standby service) in case of cogeneration plant outage. A contract is
required between customers and the City to provide such service.
The attached contract:
1 . obligates the City to provide standby electrical service for approximately S years
2. is based on Electric Rate Schedules and Rules and Regulations
3. modifies Rules and Regulation to allow totalization of GMI electric loads for billing purposes
4. provides for distribution of cogeneration unit's electrical output to Customer's various points of receipt
A cogenerator is a dual purpose unit. In this case. the natural gas fueled cogencrator produces sufficient
quantities of steam for both manufacturing foodproducts and propelling an electric generator. To insure
critical manufacturing processes are not intanapted, customers contract with their host utility to provide
standby electric service in case of plant outages for maintenance, repairs, and emergencies.
GMI is presently the City's only electric customer with a cogeneration unit. The unit is located at the
customer's facility on Turner Road. Previously, the unit's electrical output was sold to PG&E under a 10 -
year contract. GMl concurrently contracted with the City to provide a path for transmission of the unit's
output to PG&E's system. GMI has detennincd that it is now more economically beneficial to use
cogererator output to reduce it's need for electric power purchases from the City's system.
i �i. &.:-
APPROVED J
THOMAS A PETERSON
City Manag.r
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Power Agreement between General Mills, Inc. and the City of Lodi.
October 19, 1994
Page two
The attached contract is based on existing Electric Rate Schedules, Resources and Rules and Regulations
with additional provisions to provide increased customer operational flexibility and mutual ease of contract
administration.
FUNDING: Not Applicable
Henry J. Ria
Electric Utility Director
JS/pn
Prepared by: John Stone, Manager. Rates and Resources
Attach.
c: City Attorney
Assist. Electric Utility Director
Sr. Electric Utility Rate Analyst
BETWEEN
GENERAL MILLS, INC.,
AND
THE CITY OF LODI
This Agreement is made by and between GENERAL MILLS, INC.
("Customer") and the CITY OF LODI, a California Municipal
Corporation ("City"), collectively called "the Parties" and
individually as "Party". This Agreement supersedes the Power
Agreement between General Mills, Inc., and the City of Lodi dated
February 7, 1984.
WITNESSETH:
WHEREAS, City operates an electric utility system supplying
electric power to City customers; and
WHEREAS, Customer is a manufacturer of food products who operates
and maintains a cogeneration facility ("Facility") at its
manufacturing plant located at 2000 West Turner Road, Lodi,
California ("Plant"); and
WHEREAS, Customer desires to use Facility power output to offset
totalized Plant capacity and energy requirements previously
supplied by City and to have City supply unmet capacity and
energy needs above Facility nameplate rating output; and
WHEREAS, Customer desires to have the City stand ready at all
times to supply standby electric service to replace Facility
output in case of Facility Planned or Forced Outage; and
WHEREAS, City desires to supply above Customer requested Facility
standby service and unmet Plant capacity and energy needs.
NOW, THEREFORE, the Parties hereto agree as follows:
Section 1. Definitions. Whenever used in this Agreement,
in either the singular or plural number, the following terms
shall have the following respective meanings:
1.1 "Agreement" is this contract.
1.2 "City" is the City of Ludi, a California
Municipal Corporation.
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1.3 "Customer" is General Mills, Inc.
1.4 "Facility" is the Customer's cogeneration
facility — at it's Plant.
1.5 "Force Majeure", as used herein, means
unforeseeable causes beyond the reasonable control of and without
the fault or negligence of the Party claiming force majeure.
Such an occurence may include, but is not limited to, acts of
God, labor disputes, sudden actions of the elements, actions or
inactions by federal, state and municipal agencies, and actions
or inactions of legislative, judicial, or regulatory agencies.
1.6 "Forced Outage" is any unplanned or unexpected
outage of the Facility or Customer's Interconnection Facilities
that immediately, fully or partially, curtails the electrical
output of the Facility resulting from a design defect, inadequate
construction, operator error, inadequate fuel supply due to
equipment failure or weather induced fuel transportation
curtailment, or a breakdown of the mechanical or electrical
equipment. Recurring operational, maintenance, or contractual
problems shall not be a cause of Forced Outage.
1.7 "Parties" are collectively Customer and City.
1.8 "Planned Outage" is any regularly scheduled
outage.
1.9 "Plant" is the Customer's manufacturing plant
located at 2000 West Turner Road, Lodi, California.
Section 2. Operation.
2.1 Customer agrees to op.2rate Facility in
conformance with Electric Utility Department Rules and
Regulations, dated May 23, 1994, as amended from time to time.
2.2 City will permit Customer to operate Facility in
parallel with City's electric system, and will distribute
Facility capacity and energy to Plant.
2.3 City will provide Facility standby service.
Section 3. Rules and Regulations. All provisions of the
City of Lodi Electric Utility Department Rules and Regulations,
dated May 23, 1994, as amended from time to time, apply with the
exception that totalized metering shall be permitted for Plant
12,000 kV and Facility meters for purposes of netting Plant load
with Facility output and City supply.
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Section 4. Rate Application.
4.1 Schedule G5 General Service - Group 5
Commercial/Industrial, dated September 1, 1993, as amended from
time to time, and Electric Rate Schedule SS dated November
1,1991, as modified below shall apply:
4.1.1 City will totalize all Customer's Plant
metered energy and capacity readings into one (i.e., GMI #1
(including Facility), GMI $2, and GMI $3) one delivery for
billing purposes.
4.1.2 Facility operational rating of 3,000
kilowatts will be used in lieu of nameplate rating for purposes
of Standby Service Charge determinations.
4.1.3 Facility maximum offset against combined
Plant load shall be capped at 3,000 kilowatts and 750 kilowatt-
hours per 15 minutes.
4.1.4 Schedule SS Standby Service charges shall
be as follows:
Customer Charge $ 125.00 per month
Telecommunications Charge $ 50.00 per month
Standby Charge:
Contract Capacity, per kw -month:
0000 hrs.July 19, 1994 through 2400 hrs.July 18, 1495: $ 7.28
0000 hrs.July 19, 1995 through 2400 hrs.July 18, 1996: $ 7.28
0000 hrs.July 19, 1996 through 2400 hrs.July 18, 1997: $ 6 19
0000 hrs.July 19, 1997 through 2400 hrs.July 18, 1998: $ 3.64
0000 hrs.July 19, 1998 through 2400 hrs.May 31, 1999: $ 3.64
4.1.5 Beginning bills will be prorated.
4.1.6 It is recognized that the purpose of
Standby Service is to provide shor*-term backup electric power
for customers in case of Planned Forced Outages and is not
intended to replace power a - -i ...ble on other rate schedules.
Therefore, a maximum of 60 consecutive days are allowed without
Customer's revision to the appropriate Commercial/Industrial
electric rate schedule. Should an outage exceed 60 consecutive
days, at its sole discretion, the City may terminate this
Agreement and place the Customer on the appropriate
Commercial/Industrial electric rate schedule.
4.1.7 A 3,000 kilowatt credit sh..11 be given
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towards the totalized charges whether or not the Facility is
running.
4.1.8 All unmet energy charges shall be billed as
set forth in Schedule G5.
4.1.9 City shall distribute Facility output to
Plant without charge.
4.10.9 If Customer cancels Standby Service prior
to expiration of this Agreement, Customer shall pay the Standby
Service charges remaining for the unexpired term of the
Agreement.
Section 5. Term of Agreement.
5.1 This Agreement shall be binding on execution and
shall remain in effect subject to Paragraphs 5.2 and 5.3 below,
until May 31,1999.
5.2 If either party fails to perform any of the
provisions of this Agreement, the other party may, by written
notice given within thirty days of such failure to perform,
terminate this agreement if the noticed party does not correct
such failure within a period of sixty days (or such longer period
as specified in the notice) after receipt of the notice
specifying such failure. Customer may appeal such termination to
the City Manager and City Council. This is in addition to any
other legal recourse Customer may have.
5.3 Parties may mutually terminate this Agreement at
any time.
5.4 Parties may extend this Agreement from year to
year beyond the original term of this Agreement.
5.5 The addition or amendment to Exhibits to this
agreement may be made by mutual consent of the Parties without
effect on this agreement.
Section 6. Force Majeure. If either Party because of
Force Majeure is rendered wholly or partly unable to perform its
obligations under this Agreement, that Party shall be excused
from whatever performance is affected by the Force Majeure to the
extend so affected, provided that:
6.1 The non-performing Party, within two weeks after
the occurrence of the Force Majeure, shall give the other party a
written report describing the particulars of the occurrence;
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6.2 The suspension of performance is of no greater
scope and of no longer duration than is required by the Force
Majeure;
6.3 No obligations of either Party which arose before
the occurrence causing the suspension of performance are excused
as a result of the occurrence; and
6.4 The non-performing Party uses its best efforts to
remedy its inability to perform. This sub -paragraph shall not
require the settlement of any strike, walkout, lockout or other
labor dispute on terms which, in the sole judgment of the Party
involved in the dispute, are contrary to its interest. It is
understood and agreed that the settlement of strikes, walkouts,
lockouts or other labor disputes shall be entirely within the
discretion of the Party having the difficulty.
Section 7. Assignment. Neither Party shall voluntarily
assign its rights nor delegate its duties under this Agreement
without the written consent of the other Party.
Section 8. Amendments. This Agreement may be amended only
by written instrument executed by the Parties or their
successors.
Section 9. Severability. In the event that any of the
terms, covenants, or conditions of this Agreement shall be held
invalid, the Parties intend that all other terms, covenants, and
conditions and their application shall not be affected thereby,
but shall remain in force and effect unless a court holds that
such provisions are not severable from all other provisions of
this Agreement.
Section 10. Governing Law. This agreement shall be
interpreted, governed by, and construed under the laws of the
State of California.
Section 11. Counterparts. This Agreement may be executed
in counterparts, all or any of which shall be regarded for all
purposes as one original and shall constitute and be but one and
the same instrument.
Section 12. Headings. The headings to the articles in this
Agreement are intended for convenience only and not for the
purpose of interpreting the provisions of this Agreement.
Section 13. Notices.
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13.1 Any notice, demand,or request required or
permitted to be given by either. Party to the other and any
instrument required or permitted to be tendered or delivered .by
either Party to the other may be so given, tenderedor delivered,
as the case may be, by depositing the same in any United States
Post Office with postage prepaid, for transmission by certified
or registered mail, addressed to the Party, or personally
delivered to the Party, at the address designated below. Changes
in such designation may be made by notice similarly given.
13.2 All written notices or questions shall be
directed as follows:
To City:
To Seller:
Electric Utility Director
City of Lodi
1331 South Ham Lane
Lodi, California 95242-3995
Engineering Manager
General Mills, Inc.
PO Box 3002
Lodi, California 95241-1906
Section 14. Non -waiver. None of the provisions of the
Agreement shall be considered waived by either Party except when
such waiver is given in writing. The failure of any Party at any
time or times to enforce any right or obligation with respect to
any matter arising in connection with this Agreement shall not
constitute a waiver as to future enforcement of that right or
obligation or any right or obligation of the Agreement.
Section 15. Warranty of Authority. Each of the Parties
which has executed and delivered this Agreement represents and
warrants that it has agreed to be bound by all the terms,
covenants, and conditions of this Agreement and has acted with
all the requisite capacity and authority and approval of its
governing body.
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IN WITNESS THEREOF, the Parties have caused this Agreement to be
executed by their duly authorized officers and their seal to be
affixed, as of the day and year herein written.
CITY OF LODI
By (Date)
City Manager
Approved as to form Attest:
By
City Attorney
GENERAL MILLS, INC.
City Clerk
BY (Date)
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RESOLUTION NO. 94-121
A RESOLUTION OF THE LODI CITY COUNCIL
APPROVING EXECUTION OF A POWER AGREEMENT
BETWEEN GENERAL MILLS, INC., AND THE CITY OF LODI
WHEREAS, General Mills, Inc. (GNI), is a customer which
manufactures, operates and maintains a cogeneration facility.at 2000
West Turner Road, Lodi, and desires to have the City of Lodi provide
standby electric service; and
WHEREAS, the City of Lodi desires to supply standby electric
service; and
WHEREAS, a separate contract (Agreement) with the City i$
required for standby electric service; and
WHEREAS, this Agreement for standby electric service shall be
deemed effective as of midnight July 18, 1994, and subject to prior
termination as provided therein, until midnight May 31, 1999; and
WHEREAS, approval of the Agreement provides standby service to
GNI for the term of this Agreement.
NOW, THEREFORE, BE IT RESOLVED, that the City Council hereby
authorizes approval of the Contract for Standby Electric Service
between GNI and the City of Lodi; and
BE IT FURTHER RESOLVED that the City Manager and City Clerk are
hereby authorized and directed to execute said agreement on behalf of
the City of Lodi.
Dated: October 19, 1994
I hereby certify that Resolution No. 94-121 was passed and
adopted by the Lodi City Council in a regular meeting held October 19,
1994 by the following vote:
Ayes: Council Members Pennino, Snider and Sieglock (Mayor)
Noes: Council Members - None
Absent: Council Members - Davenport
Abstain: Council Members - Mann
41(1-4,t,
ifer MU Perrin
ty Cler
94-121