HomeMy WebLinkAboutReso 91-043 - Approve & Authorize CM to sign letter agreement dated 01/07/91 between COR & CEC 1992 Elec Report (ER92) consulting serv r
RESOLUTION NO. q
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
APPROVING AND AUTHORIZING THE CITY MANAGER TO SIGN THE
LETTER AGREEMENT DATED JANUARY 7 , 1991, BETWEEN THE
CITY OF REDDING AND ECONOMIC SCIENCES CORPORATION TO
PROVIDE CALIFORNIA ENERGY COMMISSION (CEC) 1992
ELECTRICITY REPORT (ER92) CONSULTING SERVICES TO ASSIST
j WITH THE COMMON FORECASTING METHODOLOGY .9 (CFM9)
PROCEEDINGS; AND AT THIS TIME ONLY AUTHORIZING THE
EXPENDITURE OF $54, 000 FOR THE ITEMS SET FORTH UNDER
"'TASKS" IN EXHIBIT C TO SAID AGREEMENT.
WHEREAS, following individual interviews and extensive
quantitative evaluation of the written proposals of four
competing consulting firms, the Electric Department: concluded
that Economic Sciences Corporation would be an appropriate choice
to provide technical assistance to the City of Redding during the
ER92 proceedings; and
WHEREAS, during its meeting of January 3 , 1991 , the Electric
Utility Commission voted unanimously to recommend that Council
approve the Letter Agreement with Economic Sciences Corporation,
a true copy of which is attached hereto and incorporated herein
by reference; and
WHEREAS, the Electric Department respectfully requests that
Council approved the attached Letter Agreement; and at this time
authorize the expenditure of $54,000. 00 , being the "Total Cost to
Report Filing" as set forth under "Task" in Exhibit C to said
Agreement, commonly known as Phase 1 (Phase 2 would be the "CEC
Liaison after filing" shown on Exhibit C) ; and
WHEREAS, sufficient funds for said Phase 1 are included in
! the Fiscal Year 1990-91 Budget;
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NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of
the City of Redding as follows:
1. That the above recitals are true and correct. \
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2 . That the City Council hereby approves the attached
Letter Agreement dated January 7 , 1991 , between the City of
Redding and Economic Sciences Corporation, on the condition that
the only expenditure authorized at this time is -the sum of
$54 , 000. 00 for Phase 1 of said Agreement (see Exhibit C, Task,
Total Cost to Report Filing) .
3 . That the City Manager of the City of Redding is hereby
authorized and directed to sign said Letter Agreement on behalf
of the City of Redding; and the City Clerk is hereby authorized
and directed to attest the signature of the City Manager and to
impress the official seal of the City of Redding thereto.
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 15th day of January 1991 , and was
duly adopted at said meeting by the following vote:
AYES: COUNCIL MEMBERS: Arness, Dahl , Fulton, Moss & Buffum
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
I ABSTAIN: COUNCIL MEMBERS: None
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ANC UFFUM, Mayor
Ci of Redding
ATTEST:
�,�L �/' • �
ETHEL A. NICHOLS, City Clerk
FOR PP ED:
R DALL A. HAYS, City Attorney
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Economic Sciences Corporation
111 2120 University Avenue Berkeley, CA 94704
(415)841-6869 FAX(415)644-1943 January 7, 1991
Rick Coleman
Electric Department
City of Redding
760 Parkview Avenue-
Redding, California 96001-3396 :UL.L.
Dear Mr. Coleman:
This Letter Agreement, when executed by both parties, will
authorize Economic Sciences corporation (the "Contractor")
effective , as an independent contractor, to
perform services for the City of Redding (the "City") in accordance
with the following terms and conditions:
1. Services
Contractor agrees to perform the services and scope of
work set forth in Contractor's project proposal entitled
110EC ER92 Consulting Services" dated January 7, 1991, a copy
of which is attached hereto as Exhibit A and incorporated
herein, (the "Services") .
2. Rate of Payment for Services
Contractor will perform the Services to the satisfaction of
the City on a time and materials basis in accordance with the
budget attached as Exhibit C, with charges invoiced in
accordance with the rate schedule attached as Exhibit D.
3. Terms of Payment
Charges will be invoiced monthly and paid within 30 days of
receipt of each invoice.
4. Independent Contractor
Contractor shall at all times act as an independent contractor
with respect to the Services. Neither Contractor nor
Contractor's employees or agents shall be deemed to be or
shall represent themselves to be employees or agents of the
City.
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5. Information
I All reports and other data prepared, compiled or obtained by
Contractor in connection with the performance of the Services
shall be made available upon receipt to the City. All such
materials may be copied, reproduced or used in any manner
R which the City deems appropriate. Upon receipt of materials
specifically prepared for the City by Contractor, the City
shall be entitled to use any of such materials in any manner
which the City, in its sole discretion, deems appropriate
without restriction or accountability. Materials prepared,
compiled or obtained exclusively for the City shall
immediately become the sole property of the City.
6. Confidentiality
Contractor covenants and agrees to keep confidential any and
all information concerning the plans, operations, or
1 activities of the City which may be divulged to Contractor by
any source in the course of the performance of the Services,
and which is not already in the public domain, except when
specifically cleared by the City, in writing, for release.
The terms of this Paragraph 6 shall be continuing covenants
which survive the termination of this Agreement.
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7. Employees
Contractor shall be solely responsible for the payment of
compensation and for all state and federal taxes, including,
but not limited to employment taxes, workers' compensation and
J any similar tax associated with employment of Contractor's
{{ personnel. Contractor shall take appropriate measures to
insure that its employees who perform the Services are
competent to do so and that they comply with Paragraph Six.
8. Termination
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Services under this Agreement shall terminate upon the
{ earlier of:
(a) The completion by Contractor of the last of Contractor's
services requested in writing by the City hereunder; or
(b) The giving by the City to Contractor of written notice to
the address set forth in Paragraph 14 hereof that this.
! Agreement is terminated.
Notice pursuant to subparagraph (b) of this paragraph shall be
deemed given on the earlier of the date of personal delivery
or 48 hours after deposit of such notice, addressed as set
forth in Paragraph 14 hereof, in the first class United
States mail, postage prepaid. If this Agreement is
terminated pursuant to subparagraph (b) of this Paragraph,
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Contractor will promptly invoice and the City shall, within 30
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days of receipt thereof, pay for any services performed and
expenses incurred up to and including the date notification of
j termination of this Agreement was given; provided however,
that such amounts shall be payable only for tasks completed to
1 the satisfaction of the City.
9. Complete Agreement, Amendments, and Waivers
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This Agreement constitutes the entire agreement between the
parties and supersedes all oral negotiations and prior
writings in respect of the subject matter hereof. This
agreement may be amended, modified or varied only by an
' instrument in writing signed by both parties. No waiver of
any provision hereof shall be effective unless in writing
signed by the party to be charged therewith.
10. Conformity With Laws and Safety
A a) Contractor shall observe and comply with all applicable
laws, ordinances, codes and regulations of governmental
agencies, including federal, state, municipal and local
governing bodies, having jurisdiction over the
performance of the Services or any part thereof,
including, without limitation, all provisions of the
Occupational Safety and Health Act of 1970 and all
amendments thereto, Equal Opportunity and other related
{ federal requirements, and all applicable federal, state,
municipal and local safety and environmental regulations.
All work performed by Contractor must be in accordance with
these laws, ordinances, codes and regulations.
b) Contractor shall, while on or about the City premises,
enforce such safety and fire precautions as the City may
prescribe for the protection of the City and other personnel
and property.
11. Insurance
Contractor shall provide and maintain in full , force and
effect during the term of this Agreement:
a) Workers' compensation insurance in accordancewith the -
Workers' Compensation Law of the State of California;
and
b) Comprehensive general liability insurance (including
automobile liability insurance covering owned, non-
owned and hired automobile equipment) in the amount of
at least $1, 000,000 to cover any claims or damages for
acts committed by Contractor or Contractor's employees
or agents during the performance of the Services.
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12. Indemnity
Contractor shall indemnify and hold harmless the City, its
officers and employees from and against any and all
liability, loss, injury, death or damage to persons or
property caused by Contractor's own or its employees' or
agents ' or subcontractorsnegligent or wrongful acts or
omissions in connection with the performance of any
Services.
13. Assignment
Neither this Agreement nor any duties or obligations hereunder
' shall be assignable by Contractor without the written consent of
the City. Except for the prohibitions on assignment contained
in the preceding sentence, this Agreement shall be binding upon
and inure to the benefit of the heirs, successors or assigns of
the parties hereto.
14. Notice
Notice shall be given to the parties at the addresses set forth
below:
City: Tim Nichols
Electric Department
City of Redding
,j 760 Parkview Avenue
Redding, California 96001-3396
Contractor: Economic Sciences Corporation
2120 University Avenue, Suite 600
Berkeley, California 94704
Attn: B. F. Roberts
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If this Agreement meets with your approval, please sign and return one
{ original of this letter. The other original is for your__records.
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ECONOMIC SCIENCES CORPORATION
-77i
B. F. Rob its
Pre ident
Agreed to this day of January, 1991
CITY OF REDDING
A
Name
Title
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Exhibit A
CEC ER92 CONSULTING SERVICES
PROPOSAL: To provide consulting services to assist the City of
Redding in preparing its ER92 filing, irk presenting
supporting testimony, and in guiding the filing through
the CEC ER92 proceedings.
f Economic Sciences Corporation's consulting services will include
the following activities as required to achieve adoption of the
City's electric plan by the CEC:
I) Critical Review, Advice, and Analysis
j For ultimate CEC approval of the City's demand forecast, the
forecast methodology must be defensible against whatever
criteria the CEC may use in its evaluations. ESC proposes to
take responsibility for assuring the defensibility (or
credibility) of the City's demand forecast. This will be
accomplished by:
' A) Providing critical review of all aspects of the forecast
as it is developed by the City. Critical review will be
directed at the logical plausibility of each component of
the forecast and the overall consistency of the forecast.
Preliminary examination of the City's CFM8 filing reveals
the following three problems that would undermine the
credibility of the City's forecast and plan if it were
subjected to CEC scrutiny:
1) The City's energy forecasting model has implausible ,
coefficients that imply indefensible :responses to
the various determinants of electric sales. •''= The
residential energy sales equation, for example, has
negative coefficients for all of the binary
variables and the constant term. This implies that
every month causes a reduction in . sales. The
equation also has a higher real income elasticity
and a lower real electricity price elasticity than
would reasonably be expected.
2) The City's demand forecasting model relies on a
a projection of load factor to forecast peak demand
from energy sales. This approach does not
accommodate decomposition of peak demand into
weather versus non-weather related determinants.
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Economic Sciences Corporation
Gov Cu. �;04
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3) The City's forecast relies on PG&E class load
i factors to allocate peak load by class. These load
factors may not be relevant to the Redding system
and their use may lead to inaccurate analysis of
class targeted demand side management programs.
B) Advising the City on corrective measures to make the
demand forecasting model defensible. For example, ESC
advises the following corrections to the three problems
mentioned above.
1) Develop new energy sales equations as follows:
i) For each customer class, develop equations for
energy use per customer and for the number of
I customers. This facilitates the calibration
of use per customer estimates from the NCPA
end-use model. It also generates the
projected number of customers to drive the
NCPA end-use model.
Use nonlinear functional forms for the use per
customer equations.
ii) In addition to residential and commercial
' classes, include formal but simplified
equations for agriculture, industrial, and
government classes to provide complete model
coverage in generating forecasts of total
energy sales.
' 2) Develop a peak demand model ,that decomposes peak
into weather sensitive and non -weather sensitive
components. Using temperature data, the weather
sensitive portion can be normalized for weather
swings.
3) Develop estimated system average load curve and
customer class load curves. The system average
load curve will be developed : by screening the
system hourly . load data .: according to daily
temperatures. The customer class load curves will
be developed using statistical techniques that
start with initial guesses of class load curves and
iteratively allocates residuals to classes until
the class load curves are fully calibrated with the
City's system load curve. The estimated load
curves can be modified as metered data becomes
available.
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C) ESC will provide analytic support by developing the
energy sales model, the peak demand model, the class load
curves, and all other analytic components of the City's
filing for which problems may emerge during forecast
preparation and during adoption proceedings„
In addition to the modeling tasks discussed above, a
special area of analysis anticipated in preparation of
the City's filing is in developing DSM programs. ESC
proposes to work with the Redding Electric Department in
delineating a set of DSM programs to be analyzed for
possible inclusion in the City's plan and to perform the
appropriate cost-benefit analyses of the programs. The
starting point for selecting the set of programs to be
considered will be PG&E's 1990-1992 Energy Efficiency
Programs approved by the CPUC. These programs have been
fully documented with estimated costs, energy and demand
savings, useful life, etc. From this documentation,
initial estimates for similar programs in Redding can be
a inexpensively developed. ESC will screen these programs
for their feasible applications in Redding and suggest a
list for possible adoption by the Electric Department.
Those elected for further study will then be tested for
cost-effectiveness in Redding using the CEC-accepted
formulas.
The NCPA will be developing conservation adjustments for
the City, using NCPA's end-use model adapted to the
Redding service territory and incorporating the City's
latest customer survey data. ESC will work with NCPA to
assure consistency between the City's econometric model
and the NCPA's end-use model. ESC will provide NCPA with
projections of the number of customers -and "before
adjustments" projections of energy use per customer. ESC
will confirm that weather and other exogeneous inputs
utilized by both the econometric and end-use models are
consistent. ESC will evaluate and discuss the
similarities and differences between the econometric and
end-use forecasts.. and. provide. a recommendation .to the
City on the usefulness` of the end-use model.
The City's versions of production cost and financial
models are assumed to be fully developed for purposes of
the ER92 filing and work on these models by ESC is not
planned. However, ESC will develop in-depth 'knowledge of
the City's versions of utility production cost and
financial models and, should the City request extensive
modification of these models during filing preparation or
adoption proceedings, ESC will provide T&M support to
accomplish such modifications.
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I II) Database development
Data consistency is an absolute requirement for presentation
1 of a credible forecast. To assure consistency, ESC will
develop a central Redding Database (on ESC's mainframe) as the
'1 residence for all historical and projected data relevant to
the development and presentation of the City's forecast.
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ESC's substantial software facilities will readily handle data
in monthly, quarterly, and annual frequencies. Additionally,
conversion routines will be established to consistently
maintain selected statistics of all frequencies on both
J calendar year and fiscal year bases. All statistics will be
clearly documented as to fiscal or calendar year basis.
All external data required for the project will be acquired by
ESC. Most external data required is already available in
ESC's extensive California Database and will be transferred to
the Redding Database. Other data such as PG&E's gas prices
and class load factors will be obtained by ESC and loaded into
the Database.
ESC will load and document all of the City's historical and
projected internal data (sales, peak, customers, temperature,
end-use, square footage, prices, and supply statistics) into
the Redding Database as soon as it is provided by the City.
All data received from the City will be checked for
consistency. The Database will be the primary control source
for analyses and for all data printed on the forms for
submission to the CEC. The City will be given dial-up
procedures and/or diskette transfer for uploading and
downloading between the Database and the City's PC's to
facilitate consistency of all data used by personnel involved
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To assist the City in achieving final forecast/plan
convergence, ESC will supply the City with the final demand
model equations and all data necessary to drive the equations
in Lotus executable form for interface with the City's
J' production cost and financial models. On achieving final rate
convergence, the City will supply ESC with final forecast/plan
figures for updating the database and completing the forms.
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III) Forecast document preparation
Using the Redding Database as the primary control source with
other data sources, ESC will complete all CEC forms required
for the City's filing (including the demand, supply,
transmission, and the February, 1991 historical DSM filing) .
The forms will be programmed for automatic printing from the
Database and alternate sources at any stage of the forecast
development. This will permit early review of the forms and
allow maximum time and flexibility in modifying the forecast.
This will also reduce the time pressure on incorporating the
NCPA end-use adjustments into the forecast.
The executive summary and all textual material required for
the ER92 document will be supplied by ESC. This will include
descriptions of all model components, computational
procedures, and measurement conventions relevant to the CEC's
understanding of the City's filing. The objective is to
produce a concise, clear document that adequately explains the
City's filing, eliminating the need for downstream clarifying
testimony. ESC will produce 150 copies of the filing
' document.
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IV) Guide the City's Filing Through the ER92 Proceedings
� ESC will develop a dialogue with CEC early in the project to
help anticipate the focus of the staff's scrutiny of the
y City's plan. ESC will maintain a positive working dialogue
with staff throughout the process of plan development and
documentation and of the CEC ER92 proceedings. Mr. Taylor
will have primary liaison responsibility for ESC. Mr. Roberts
and other ESC personnel will provide supporting liaison as
appropriate for communications regarding technical issues.
As soon as feasible, contact will be made with key CEC staff
jmembers, the CEC public advisor, and the parties responsible
for keeping ER92 participants informed about the CEC calendar.
As appropriate, meetings will also be arranged to present
preliminary results of each aspect of demand model development
' and of DSM analysis to relevant CEC staff personnel to
informally prepare them for the City's report and to solicit
9 their response.
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on the City's filing of the ER92 document, ESC will
participate formally in the proceedings (and informally with
a the CEC staff) to guide the filing through adoption. This
will include the preparation (with City input) and delivery of
r any testimony as may be required to clarify and/or defend the
filing.
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Throughout the ER92 proceedings, ESC will maintain: constant
surveillance of the CEC calendar; frequent communication with
CEC staff, the CEC public advisor, CMUA representatives, NCPA
j representatives, and representatives of other utilities. ESC
i will strategically select the CEC sessions to be attended by
ESC and/or City personnel and develop contacts to daily
monitor sessions not attended by ESC or the City. ESC will
also obtain relevant transcripts.
ESC will also maintain a dialogue with NCPA representatives
regarding NCPA work on end-use modeling.
ESC will keep the City continuously informed of the progress
of the proceedings via telephone and fax. In the event of any
development related to the City's interest whether expected or
unexpected, ESC will quickly advise the City on its
appropriate response and assist in preparing the response.
ESC personnel will be made available to go to Sacramento or
other session sites on short notice to deal with any
emergencies that may develop.
In addition to ongoing telephone and fax communication, ESC
j will submit a bi-weekly report which will:
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{ - Outline the progress of the ER92 proceedings and
summarize developments of interest to the City.
- Summarize ESC's work-progress and changes in work plans.
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V) Provide all data, models, forms, and narrative developed in
this project on diskettes for subsequent use by the City. The
format of the diskettes will be compatible with Lotus 1-2-3,
version 3.0, or other Lotus versions as specified by the City.
j Documentation sufficient to guide the City (independent of ESC
systems and support) in future updating and simulation of all
t models developed during this project will also be provided.' -.
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Exhibit B
PROJECT SCHEDULE BY TASK
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Task Completion Date
Database Development and Kickoff Meeting Jan 17
Create Central Database and
Load Historical Data Feb 1
Historical DSM Filing Feb 15
Energy Sales Model Feb 15
Peak Demand Model Feb 22
System Average and Class Load Curves Mar 1
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Program Forms Mar 1
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Design DSM Programs Mar 15
Develop Load Forecast (before DSM Adjustment) Apr 1
! Develop DSM Adjustments Apr 15
Complete Load Forecast May 1
Draft Report May 6
j Final Report Jun 1
CEC Proceedings CEC Calendar
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3 Exhibit C
PROJECT BUDGET BY TASK
The following cost estimates assume that ESC will perform all
modeling work required for developing the City's filing, except for
the NCPA end-use model and the City's production cost and financial
models.
Task Estimated Cost
Create Central Database and
Load Historical Data $ 2, 000
Energy Sales Model $ 2, 000
Peak Demand Model $ 4,000
System Average and Class Load Curves $ 2, 000
Program Forms $ 8, 000
Design DSM Programs $ 3 , 000
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Develop Load Forecast (before DSM Adjustment) $ 5, 000
i Develop DSM Adjustments $ 2, 000
Complete Load Forecast $ 4, 000
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Draft Report $ 8, 000
1 Final Report (150 copies @ $40/copy) $ 6, 000 ,
i Report Production Costs : $ „2,000
CEC Liaison prior to Report Filing S 6 000
(75 person hours @ $80/hr. average)
Total Cost to Report Filing $54, 000
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CEC Liaison after filing - T&M with maximum of $25,000
(333 person hours @ $75/hr. average)
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I Estimated costs include labor charges, travel, and
miscellaneous costs.
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Exhibit D
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RATES
The following offer rates are fixed for the period of 1991 through
1992
All-in
Consultant Daily Rate
p Roberts $1,000
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Chin $ 800
Spilsbury $ 640
Taylor $ 500
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Liu $ 400
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No additional G&A charges will be billed. Travel and miscellaneous
i expenses will be passed through at cost. Travel costs between
ESC's Berkeley offices and Redding will not be billed.
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Exhibit E
ESC REFERENCES
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Tom Slatten
City of Anaheim
714-999-5112
Ronald Rudkin
Southern California Gas Company
213-689-3107
D. Steve Harris
Pacific Gas & Electric Company
415-973-2932
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Robert Langley
Central Illinois Public Service Company
217-525-5483
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