HomeMy WebLinkAboutAgenda Report - November 20, 2002 E-09ffiM
CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: Adopt resolution authorizing the City Manager to terminate the City of Alameda
Power Exchange Agreement (EUD)
MEETING DATE: November 20, 2002
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council adopt a resolution authorizing the City Manager
to terminate the City of Alameda Power Exchange Agreement.
BACKGROUND INFORMATION: Given the change in the nature of the Electric Utility Department's
power supply by the defeasement of the Calpine power contract, it is
prudent to terminate the City of Alameda Power Exchange with the
City of Lodi related to the Steam Injection Gas Turbine (STIG). The agreement can be terminated by
mutual agreement of both parties. The City of Alameda has communicated such a desire. This exchange
termination has a positive benefit to the City of Lodi of $200,000 net preset value. Attached is a copy of the
original agreement, a graph summarizing the exchange and a letter requesting the termination.
FUNDING: None required
A10 N. allow
Electric Utility Director
PREPARED BY: Boris Prokop, Power and Rates Manager
ANV/BP/kse
C: City Attorney
APPROVED'
on Flynn - City Manager
'ER AGREEMMM
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T" CITY OF ALAMEDA BUREAU OF ELECTRICITY
AND
THE CITY OF LODI ELECTRIC UTILITY DEPARTMENT
PROVIDING FOR TRANSFER OF RIGHTS TO ELECTRICITY
FROM TEE NORTHERN CALIFORNIA POWER AGENCY
COMBUSTION TURBINE PROJECT NUMBER TWO
FOR A LIMITED TERM
Because the City of Lodi Electric Utility Department (Lodi)
and the City of Alameda, Bureau of Electricity (Alameda),
collectively the Parties, are participants in the development of
the Northern California Power Agency (NCPA) Combustion Turbine
Project Number Two and have determined that it is beneficial for
them to participate in the financing, construction and operation of
that project; and
Because the City of Lodi is expected to be in need of
additional power supply resources, especially during the summer, in
future years; and
Because the City of Alameda is expected to have excess power
supply resources during the summer; and
Because Alameda is expected to be in need of additional power
supply resources, especially during the winter, in future years;
and
Because Lodi is expected to have excess power supply resources
during,the winter; and
Because the benefits of the NCPA Combustion Turbine Project
Number Two to both Lodi and Alameda can be enhanced by a seasonal
exchange of that project;
Alapeda hereby agrees to provide to Lodi a 10 percent Project
Entitlement Percentage (approximately 5 megawatts) of the NCPA
Combustion Turbine Project Number Two during the seven months of
April through October of each year for the term of this agreement.
In consideration thereof, Lodi hereby agrees to provide to
Alameda one and one-half times the cumulative monthly entitlement
amount received or 21 percent Project Entitlement Percentage
(approximately 10.5 megawatts) of NCPA Combustion Turbine Project
Number Two during the five months of November through march of each
year for the term of this agreement.
These exchanges shall be considered to be resource transfers
within the NCPA Power Pool. This is a bilateral transaction as
envisioned under the NCPA Pooling Agreement and subject to the
provisions of this transfer agreement. Should any of the required
enabling agreements expire during the term of this agreement, the
Parties will endeavor to replace them s6 that service may continue
as envisioned herein.
it is understood, that the transferor will continue to bear the
fixed (capacity) cost while the transferee will bear the variable
(energy) cost of the transferred resource, as those costs are
determined by the budgeting and pooling procedures of NCPA.
If one of the Parties to this agreement finds itself in a
situation of having excess power supply resources as a result of a
loss of significant electric load in its service area and the other
Party is in need of additional power supply, it is agreed that the
Party in need of additional power supply will consider a purchase
of NCPA Combustion Turbine Project Number Two from the Party with
excess prior to purchasing, or otherwise acquiring, other
comparable power supply resources.
It is the intent of both Parties that the provisions of this
agreement may be extended for an additional term on the same basis
subject to mutual agreement.
Parties shall also consider increasing exchange percentages as
seasonal requirements increase over time.
This transfer agreement becomes effective upon the commercial
operation of the NCPA Combustion Turbine Project Number Two, but
not before January 1, 1995, and can be terminated by either party
with four years advance written notice, but no earlier than
January 1, 2005, unless mutually agreed. such termination will not
relieve the Parties of any financial obligation derived pursuant to
this agreement.
Authorized representatives of the Parties hereby execute this
agreement.
By _ . _ Date 7 -
For City of Lodi
Electric Utility Department
For City of Alameda
Bureau of Electricity
Date 7= Z/-- tz-
Approved as to R rm
-,, rr1 ATTORNEY
October 22. 2002
yIr..Alan wallow
City of Lodi
Llec:ric Utility Director
1331 Soeth Ham Lane
Lodi, CA 95242-33995
Dear Adan:
The Transfer Agreement between Alameda and Lodi, signed in July 1992, provides for the
.iewonai exchange of rights to the output of the NCPA Combustion Turbine Project Number'_,
By its letter of December 27, 2001, Alameda notified Lodi of its intent to terminate the
agreement no later than January 2005, and its interest in terminating earlier if agreed to by
Lodi. Recently, we have learned that you are interested in terminating the exchange as of
January 1, 2003.
Alameda Power & Telecom staff is in favor of the January 1, 2003, tcnaination date but we
need to take this to our Public Utilities Board to get their concurrence. We intend to do so
during November. When this is accomplished, and you have received any necessary
authorizations, we propose sending a joint letter to NCPA effecting the termination. If you do
not agree with this course of action, please let Don Rushton, or me know as soon, as possible.
Thanks for your attention to this matter.
Sincerely, �\
Junonna A> Jamas J
Ge,aeral Manager
IAJ:msw
ca Dom Dame, NCPA
Jim Beck, City of Lompoc
Toga Habasbi, City of Roseville
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RESOLUTION NO. 2002-230
A RESOLUTION OF THE LODI CITY COUNCIL
AUTHORIZING THE CITY MANAGER TO TERMINATE
THE CITY OF ALAMEDA POWER EXCHANGE
AGREEMENT
WHEREAS, due to the defeasement of the Calpine Power Contract, it is prudent
to terminate the City of Alameda Power Exchange Agreement with the City of Lodi
related to the Steam Injection Gas Turbine (STIG); and
WHEREAS, the agreement can be terminated by mutual agreement of both
parties and the City of Alameda has communicated such a desire.
NOW, THEREFORE, BE IT RESOLVED, that the Lodi City Council does hereby
authorize the City Manager to terminate the City of Alameda Power Exchange
Agreement.
Dated: November 20, 2002
hereby certify that Resolution No. 2002-230 was passed and adopted by the
Lodi City Council in a regular meeting held November 20, 2002 by the following vote:
AYES: COUNCIL MEMBERS — Hitchcock, Howard, Land, Nakanishi, and
Mayor Pennino
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
SUSAN J. BLACKSTON
City Clerk
2002-230