HomeMy WebLinkAboutReso 92-374 - Authorize CM to execute & forward letter agreement dated 09/01/92 to PG&E and upon execution thereof by PG&E, the advancement of $ to PG&E for Engineering Work associated with upgrading natural gas facilities to serve the Redding power site RESOLUTION NO. �LZ'3 ?
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
AUTHORIZING (1) THE CITY MANAGER TO EXECUTE AND FORWARD THE
ATTACHED LETTER AGREEMENT DATED SEPTEMBER 1, 1992, TO
PACIFIC GAS AND ELECTRIC; AND (2) UPON EXECUTION THEREOF BY
PG&E, THE ADVANCEMENT OF $100,000 TO PG&E FOR ENGINEERING
WORK ASSOCIATED WITH UPGRADING NATURAL GAS FACILITIES TO
SERVE THE REDDING POWER SITE.
IT IS HEREBY RESOLVED _ that the City Council of the City of
Redding hereby authorizes the City Manager to execute and forward the
attached letter agreement dated September 1, 1992, to Pacific Gas and
Electric (PGandE) .
IT IS FURTHER RESOLVED that the City of Redding advance the sum
of $100,000 .00 to PGandE, subject to PGandE' s execution of said
letter agreement and in accordance with the terms thereof . Said
payment is to be charged to Job Order No. 9146-38; the Electric
Utility Project Financing.
I HEREBY CERTIFY that the foregoing Resolution was introduced
and read at a regular meeting of the City Council of the City of
Redding on the 1st day of September 1992, and was duly adopted at
said meeting by the following vote:
AYES: COUNCIL MEMBERS: Arness, Dahl, Kehoe & Moss
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: Anderson
ABSTAIN: COUNCIL MEMBERS: None
CHARLIE MOSS, Lyor
City of Redding
i
AST:, FOR
PPROVED:
CONNIE STROHMAYER, ity Clerk ALL A. HAYS, City Attorney
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City of Redding
September 1, 1992
Mr. Kirk Bishop
Senior New Business Representative
Pacific Gas and Electric Company
3600 Meadowview Drive
Redding, CA 96002
Dear Mr. Bishop:
The purpose of this letter agreement is to formally document the
understanding(s) set forth in past correspondence between Pacific
Gas & Electric Company (PG&E) and the City of Redding (City)
regarding the upgrade of natural gas delivery facilities to serve
the City's Redding Power site (Site) . For purposes of establishing
our respective obligations on the aforementioned upgrades, this
letter agreement shall supersede the letter agreement forwarded to
the City by PG&E and dated July 22, 1992. However, the City
acknowledges the incidental statements made in the July 22 letter
agreement and those statements are not hereby invalidated.
In past letters and during past telephone conversations, the City
has indicated a desire to proceed with a modified Option 2, Run B,
to establish natural gas service to the Site. With this option, we
have chosen to take delivery adjacent to Line 402 west of Highway
273 ; and the City will construct its own facilities from that
delivery point to the Site. With this option, PG&E's metering will
be located at or near Line 402 ; and it will be the City's
responsibility to insure that its facilities along Clear Creek Road
are adequate to provide the required pressure at the Site. The
City understands that even though PG&E does not guarantee anything
other than Standard Delivery Pressure (see Rule 2 attached) , PG&E
should be able to provide 160 PSIG at the Redding Power tap off
Line 402. However, future operating conditions may preclude PG&E
from delivering anything other than standard delivery pressure. If
this should occur and 160 PSIG is still required at the City's
service location, the potential exists for PG&E to install
additional special facilities at the City's expense to maintain
that level of service.
The City has requested that PG&E proceed with the Line 402
engineering required to provide the City with the upgrades' costs.
Since no gas usage has been guaranteed by the City, the City
understands that all costs (including the Contribution in Aid of
Construction [CIAC] tax and the cost of ownership) associated with
760 PARKVIEW AVENUE, REDDING, CA 96001-3396 • P.O. BOX 496071, 96049-6071 • (916) 225-4000
Mr. Kirk Bishop
September 1, 1992
Page 2
all work performed by PG&E will be the responsibility of the City.
Preliminary costs discussed at our prior meetings are subject to
change based on PG&E's final detailed engineering estimates.
PG&E is currently proceeding with due diligence to accomplish this
engineering work based upon its understanding that the City will
advance PG&E $100, 000 for the estimated cost of such work upon
PG&E's execution of this letter agreement. It should be noted that
this advance will be considered part of the cost of the Line 402
upgrades should such upgrades proceed. This payment is based on
current costs and will be firm for a period of 90 days after the
date of this letter. If this letter agreement is not executed and
the payment not made by the City prior to the expiration of the
90-day period, it may be necessary for PG&E to reestimate the
amount of the payment and prepare another letter agreement.
The City may, at any time, request that PG&E stop the engineering
work with the understanding that the actual costs that have been
incurred by PG&E to that time will be deducted from the City's
payment; and the excess, if any, will be refunded to the City
without interest. Conversely, if it is determined by PG&E that the
engineering advance has been depleted prior to the completion of
engineering, the work will curtail and an additional advance will
be requested from the City.
The total actual cost as used herein includes costs incurred by
PG&E for labor, materials and supplies, transportation, store's
expense, payroll taxes, insurance, supervision, general overheads,
and other costs which may be allocated to such work in accordance
with PG&E's standard practice under the applicable Uniform System
of Accounts prescribed by the California Public Utilities
Commission.
Once PG&E's engineering studies are completed, PG&E and the City
shall promptly enter into negotiations for a final agreement
regarding the upgrade work. Because of the potential for costs to
be outdated, the engineering advance payment will be credited
against amounts due and owing by the City under the terms and
conditions of the final agreement. However, if the installation of
PG&E's facilities does not proceed as proposed or if the final
agreement requires specific authorization of the California Public
Utilities Commission in order for PG&E to carry out its terms and
conditions and the CPUC does not grant such approval, the
previously advanced payment for PG&E's engineering work will be
retained by PG&E to the extent actual costs have been incurred.
The balance, if any, will, at that time, be refunded to the City
without interest.
Mr. Kirk Bishop
September 1, 1992
Page 3
If you concur with the arrangements outlined in this letter, please
so indicate by signing a copy of this letter in the space indicated
below and returning it to Chuck Gilfoy of the City's Electric
Department for disbursement of funds.
If you have any questions, please contact Chuck Gilfoy at
(916) 224-4377.
Sincerely,
Robert M. Christofferson
City Manager
Accepted:
(Date)
By:
(Signature)
(Print Name)
(Title)
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