HomeMy WebLinkAboutReso. 1987 - 320 - Approving the proposed settlement with the department of energy wetern area power administration to resolve the direct service discount • III
RESOLUTION NO. g7-1z0
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
APPROVING THE PROPOSED SETTLEMENT WITH THE DEPARTMENT OF
ENERGY, WESTERN AREA POWER ADMINISTRATION, TO RESOLVE THE
DIRECT SERVICE DISCOUNT DISPUTE, AND AUTHORIZING THE CITY
MANAGER TO SIGN SAME .
WHEREAS, the City of Redding has entered into a Power Sales
Contract with the Western Area Power Administration (Western) ;
and
WHEREAS , attached hereto is a proposed letter agreement
dated October 9 , 1987 , from Western to resolve the Direct Service
Discount Dispute which the parties have been negotiaiting since
November 1986 ; and
WHEREAS, the proposed settlement provides that thle City pay
the disputed amount in exchange for inclusion of the attached
Amendment No. 1 dated October 9 , 1987 , as part of Contract
Supplement No. 2 to Contract No. DE-MS65-83WP59008 ; and
WHEREAS, it is deemed in the best interests of the City of
Redding to approve said settlement;
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of
the City of Redding as follows:
1 . That the City Council of the City of Redding approves
the attached proposed settlement agreement received from the
Western Area Power Administration in a letter dated IOctober 9 ,
1987 , directed to the City Manager of the City of Redding, which
agreement provides for payment of the disputed amounts by the
City of Redding in exchange for inclusion of the attached
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Amendment No. 1 dated October 9 , 1987 , as part of Contract
Supplement No. 2 to Contract No. DE-MS65-83WP59008 .
2 . That the City Manager of the City of Redding is hereby
authorized and directed to sign, on behalf of the City of
Redding, the letter agreement between the Department of Energy,
Western Area Power Administration, and the City of Redding dated
October 9 , 1987 , together with Attachments 1 , 3 and 4 to said
letter agreement, true copies of which are attached hereto and
incorporated herein.
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3 . That the City Clerk is hereby authorized anld directed
to attest the signature of the City Manager and to iiipress the
official seal of the City of Redding on the '; aforesaid
documentation.
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 20th day of October , 19817 , and was
duly adopted at said meeting by the following vote:
AYES: COUNCIL MEMBERS: Carter, Fulton, Gard, Johannessen, & Dahl
NOES : COUNCIL MEMBERS : None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
914144-d CA-4A—
MIKE DAHL, Mayor
City of Redding
ATTEST: FORM PPROVED:
e.444;2.
ETHEL A. NICHOLS, City Clerk RA ALL A. HAYS, City Attorney
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,T Department of Energy
Y \
s� Western Area Power Administration
' Sacramento Area Office
Es� 1825 Bell Street
:',. Sacramento, CA 95825
.5 OCT 91987
., fix • Mr. Robert M. Christofferson
City Manager
City of Redding
760 Parkview Avenue - __
Redding, CA 96001-3396
Dear Mr. Christofferson:
The City of Redding (City) and the Western Area Power Administration (Western)
HA:...'„ :-- have, in a manner established by past successful negotiations, worked out an
',equitable resolution on the appropriate level of direct service discount on
' ;`4' bills from Western. As the City continues to develop transmission and
J',! . :resource projects, Western will work closely with the City in an effort to
build and maintain a reliable power delivery system. This direct sertvice
discount settlement provides for payment of the disputed amounts by the City
. in exchange for inclusion of the attached Amendment No. 1 as a part o;f
Contract Supplement No. 2 to Contract No. DE-MS65-83WP59008 (Supplement No.
2) .
The City and Western both recognize that the direct service discount may
only be resolved through protracted litigation and that a settlement ,which
provides benefit to both parties is of mutual interest. In settlement of the
direct service discount issue, the City and Western agree that: I
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1. The City and Western will adopt Amendment No. 1 to Supplement No.12
. (Attachment No. 1 of this letter) between the City and Western. Said
. . Attachment No. 1 provides for certain mutual agreements regarding; the
provision of bidirectional , firm transmission service on Western's system
for the City•
x of - '. ..` :• ,..s :.:. . . _ .,. ..
2. The City shall pay to Western the disputed amount for the adjusted direct
,,, ,,. service discount credit for the months of February through November, 1986 `° '
(as listed on Attachment No. 2 of this letter) , with no interest,Pin four
may:'` equal monthly installments beginning in October, 1987.
3. The City shall pay the amounts due to Western for the power services
included in undisputed direct service discounts, provided to the City
beginning in December, 1986 through the date of this agreement (as listed
` ` on Attachment No. 2 of this letter), with interest applied pursuant to the
City's power sales Contract No. DE-MS65-83WP59008, from the due date of
, - -any outstanding bills, or portions of bills, rendered by Western until the
date paid. All such amounts and accrued interest shall be paid in eleven
monthly installments starting in October, 1987.
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eicw„, m`�• Celebrating the U.S. Constitution Bicentennial — 1787-1987
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4. The City agrees to approve the revised direct service discount as provided
in Attachment No. 3 of this letter. On and after the date of this
agreement, the City shall accept the monthly direct service discount as
provided in the Power Sales Contract and billed by Western. Also; the City
agrees not to contest retroactive adjustments (up or down) in the, direct
service discount which may be due to any proper adjustment in such
discount prior to June, 1988.
5. The City and Western will adopt Amendment No. 1 to Contract No. DE-MS65-
83WP59008 (Attachment No. 4 to this letter) between the City and
Western. Said Amendment No. 1 provides for a change by Western in the
notification procedures for the direct service discount starting ,n June,
1988.
If you are in agreement with this settlement, please sign both duplicate
originals of this agreement and return one to me.
Sincerely,
David G. Coleman
Area Manager
In Duplicate
Attachments In Duplicate
Agreed to this day of , 1987 , by
Robert M. Christofferson
City Manager
ATTACHMENT NO. 1
AMENDMENT NO. -1 TO CONTRACT SUPPLEMENT NO. 2
TO CONTRACT NO. DE-MS65-83WP59008
1. On this Cj day of 1987, this Amendment No. 1 is herieby made
a part of Contract Supplement No. 2 to Contract No. DE-MS65-83WP59008,
hereinafter referred to as Supplement No. 2.
2. This Amendment in no way modifies the existing covenants and agreement as
set forth in Supplement No. 2.
3. As provided for in Article 6 of the Explanatory Recitals to ,Supplement No.
2, both parties hereby agree to amend said Supplement Nc. 2 .to 1n6orporate
the following transmission agreements:
4. TRANSMISSION SERVICE PROVIDED TO CONTRACTOR BY UNITED STATES
4.1 Upon the inservice date of the California Oregon Transmission Project
(COTP), the United States will designate the Olinda Substation 230-kV
bus as a point of receipt and delivery of power for the Contractor,
and
4.1.1 Pursuant to terms, loss adjustment, and rate schedules of this
Supplement No. 2 or any applicable successor contract(Is) , the
United States shall provide the Contractor with 90 MW1of firm
transmission service from Olinda Substation to Keswick/Airport
Substations for the term of the COTP Participation Ageement.
4.1.2 Pursuant to terms, loss adjustments, and rate schedules of
this Supplement No. 2 or any applicable successor cont;ract(s),
the United States shall provide the Contractor with 90 MW of
firm transmission service from Keswick/Airport Substations to
Olinda Substation for five (5) years beginning on the ;l
inservice date of the COTP. After the five-year period, the
United States may reduce, on not less than twelve (12) months
advance notice to the Contractor, the amount of firm
transmission service provided from Keswick/Airport Substations
to Olinda Substation to the level available. Alternatlively,
the United States will permit the upgrade of or the
construction of new United States facilities as requi1ied to
continue the level of firm transmission service required by
the Contractor, pursuant to subsequent contract(s) to be
negotiated between the United States and the Contractor. The
Contractor shall bear its proportionate share for the cost of
such facilities. �I
4.1.3 In the event that under prudent utility operating condiitions,
the Olinda Substation is out of service, the United States
will make a good faith effort to schedule the Contract'or's
power transfers over the United States 230-kV system between
Tracy Substation and the Redding Area until such time as the
Olinda Substation service is restored.
410 411
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4.1.4 For the purposes of accessing losses, the schedule toiiOlinda
Substation from Keswick/Airport Substations in each half-hour
scheduling period will be netted against the schedule from
Olinda Substation to Keswick/Airport Substations in the same
scheduling period and losses will apply to the net schedule.
4.2 Should the COTP and Olinda Substations not be completed as provided
for in the COTP Project Agreements, and should a subsequent
transmission project develop that would provide both parties
additional transmission capacity, the United States agrees to provide
to the Contractor, to the extent practicable, 90 MW of bidirectional
firm transfer capacity over the United States' area 230-kV
transmission system between the Keswick/Airport Substations and
interconnecting United States' substations under terms and conditions
equivalent to Article 4(a) of this Amendment No. 1 to Supplement No.
2
5. SUBSEQUENT CONTRACTS •
5.1 In the event that subsequent contract(s) for transmission service
should be developed between the United States and the Contractor, the
agreements embodied within this Amendment No. 1 to Supplement No. 2
shall be incorporated therein. At such time, this AmendmentlNo. 1 to
Supplement No. 2 shall terminate.
WESTERN AREA POWER ADMINISTRATION
By1)41(4644‘"L
Title Area Manager
Address 1825 Bell Street, Suite 105
Sacramento, CA 95825
CITY OF REDDING
ATTEST: By
Title it
City Clerk !I
Address l
AGREED AS TO FORM:
City Attorney
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411
Atment 2
Page 2
ATTACHMENT 2
FEBRUARY AND MARCH 1986 ADJUSTMENT
FOR DIRECT SERVICE
Net mount
As of 1/10/87 Was Should Be Of Adjustment
Recalculation of Direct $ 602,812.97 $ 634,539.97
Service Discount .1011 .0622
February 1986 $ 60,944.39 $ 39,468.39 $ 21,476.00
Recalculation of Direct $ 1,315,728.54 $ 1,384,977.41
Service March 1986 .1011 .0622
$ 133,020.16 $ 86,145.59 $ 46,874.57
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ATTACHMENT NO. 3
EXHIBIT D
DIRECT SERVICE DISCOUNT
1. This Exhibit D made this 9 �2 day of (2.q_4.4.1.0_,_ , 1917 to be
effectiv under and as a part of Contract No. DE-MS65-83WP59008,
dated ] AS , 19f (hereinafter call the Contract) , shall
beco effecti on the first day of Oc.._ , / , 1917 , and shall
remain in effect until superseded by another Exhibit D; Provided, That
this Exhibit D or any superseding Exhibit D shall be terminated by the
termination of the Contract.
2. Direct Service Discount Rate
2.1 On and after the effective date of this Exhibit D the direct service
discount rate shall be 6.39.
WESTERN REA PO ER ADMINISTRATION
By
Title Area Manager
Address 1825 Bell Street, Suite 105
Sacramento, CA 95825
I '
ATTEST: CITY OF REDDING
By
City Clerk
Title
AGREED AS TO FORM:
_ Address j,
City Attorney
'
411 410 •
ATTACHMENT NO. 4
AMENDMENT NO. 1 TO CONTRACT NO. DE-MS65-83WP59008
1. On this ( day of ra--W.o.,-, 1987, this Amendment No. 1 is hereby
made a part of Contract No. DE-MS65-83WP59008, hereinafter referred to as
the Contract.
WITNESSETH:
2. WHEREAS, this Amendment is part of the settlement of a billing dispute
regarding the applicable Direct Service Discount Rate referenced in
Article 15.c. of the Contract;
NOW, THEREFORE, the parties .hereto agree es follows: I
3. TERM OF AMENDMENT I
3.1 This Amendment No. 1 shall become effective on the
first day ,of June,
1988, and shall remain in effect concurrently with the Contract.
4. Upon the effective date of this Amendment and each subsequent June
thereafter, the United States shall submit to the Contractor a twelve-
month schedule, beginning in July and ending in June, that establishes the
monthly Direct Service Discount provided for by Article 15.c. of the
Contract. Each subsequent year for the term of the Contract, the ';I United
States shall compute the prior year' s accumulated difference between the
accrued Direct Service Discount credit and the Contractor' s actual! credit
entitlement resulting from the United States' actual costs of transmission
service from PGandE or other transmission agents which are included in the
power sales rates. The accumulated difference, if any, shall be evenly
credited or debited to the calculation of the subsequent yearly schedule
establishing the monthly Direct Service Discount.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
the Contract to be executed the day and year first above written.
WESTERN REAOWER AADMII ISTRATION
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Title
MID C. COLEMAN
Address RFA MANAGER
1825 Bell Street, Sacramento, CA 95825
ATTEST: CITY OF REDDING
By
City Clerk
Title
AGREED TO AS TO FORM:
Address
City Attorney
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