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HomeMy WebLinkAboutReso. 1986 - 144 - Approving letter agreement between the city of redding and the western area power adminitsration regarding development of contract amendments necessary to implement • • RESOLUTION NO. gL i f[( A RESOLUTION OF THE CITY COUNCIL OF THE CITY SOF REDDING APPROVING LETTER AGREEMENT BETWEEN THE CITY OF REDDING AND THE WESTERN AREA POWER ADMINISTRATION REGARDING DEVELOPMENT OF CONTRACT AMENDMENTS NECESSARY TO IMPLEMENTS REAL-TIME SCHEDULING OF POWER BY THE CITY, AND AUTHORIZING THE CITY MANAGER TO SIGN SAME. WHEREAS, the City of Redding is presently developing new power resources to meet its future power requirements; and WHEREAS, the City of Redding and the Western Area Power Administration wish to enter into a Letter Agreement regarding the development of contract amendments necessary to implement real-time scheduling of power by the City; and WHEREAS, a true copy of said Letter Agreement is attached hereto and incorporatedherein by reference; and WHEREAS it is in the best interests of the City of Redding to approve said Letter Agreement; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding as follows : 1 . That the City Council of the City of Redding hereby approves the attached Letter Agreement between the City of. Redding and the Western Area Power Administration; and 2. That the City Manager of the City of Redding is hereby authorized and directed to sign all necessary documents 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 . , :. ,. III III , , impress the official seal of the City of Redding on the aforesaid documents, when appropriate. 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 16th day of June , 19$6 , and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: Dahl , Gard, Johannessen, & Fulton NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Carter ABSTAIN: COUNCIL MEMBERS: None LEE D. FULTON, M.D. , Mayor City of Redding ATTEST:/ (?: c a ni.,,,,,,z, ETHEL A. NICHOLS, City Clerk Fe PPROVED: RA DALL A. HAYS, City Attorney -2- • T .4 MAY I 1986 i m 154• LdE'T Department of Energy ‹ MAY IP c z 1986 S, Western Area Power Administration .Sacramento Area Office crry OF RE13DING 1825 Bell Street,Suite 105 ELECTRIC DEFT. Sacramento,California 95825 -In reply refer to: N6115 REDDI NG-L0A-3 Mr. Robert Courtney City Manager • City of Redding 760 Parkview Avenue Redding, CA 96001 Dear Mr. Courtney: This Letter Agreement is hereby made between the Western Area Power . Administration (Western) and the City of Redding (City), referred oto herein individually as "Party" and collectively as "Parties". The City is presently developing new power resources to meet its future power requirements. As a result, the Parties have agreed to enter into this Letter Agreement and to subsequently develop, in good faith, the necessary detailed agreements and contract amendments necessary to implement this Letter Ayr eeizieiit. 1. Purposes of the Letter Agreement This Letter Agreement sets forth the concepts for negotiation for long- -term agreements between Western and the City to: (1) Implement real-time scheduling of City resources and the' City' s . allocation of CUP power. (2) Provide for the sale to Western up to 205 GWH/year of energy which the City may have available from City resources beginning in 1987, or to reduce CUP power deliveries if Western declines the energy offered by the City and refuses to wheel such energy. (3) Provide for the City to purchase up to 50 MW of emergency or maintenance power from Western or, if not available, provide for wheeling emergency or maintenance power to the City across Western' s transmission system. (4) Provide for the City to utilize, when available, up to 50 MW of bidirectional transmission, service on the CVP transmissionlsystem. (5) Provide for the City to purchase, if available, up to 30 MW of seasonal power from Western. , . • • (6) Allow the City to temporarily transfer up to 30 MW of the City's firm CRD to other CVP preference customers. 2. Scheduling Coincident with Commercial Operation cf the first designated City . resource following execution of this agreement, Westernandthe City agree that City shall begin half-hourly scheduling of its CVP allocation and its other power resources on a real-time basis.. The City and Western will establish a mutually acceptable contract for scheduling such power Minimum and maximum delivery rates and conitments for CVP power, and other appropriate charges will be developed. Western -may, at certain times, require Toad patterning by the City. The City's CVP energy entitlement associated with its. CRD shallbe estimated in advance. The City' s CVP..energy =available for scheduling shall be determined based upon historical -City:monthly-Load factors (as appropriately adjusted due to any temporary transfer of the City' s CRD), and may be scheduled by the City on a half-hourly basis within the minimum and maximum rates of delivery and any load patterning requirements. Mechanisms for accounting for deviations between the City's schedule and the City's actual metered energy deliveries shall be addressed in the contract. 3. Sales of Power to Western The City intends to develop or purchase power from several projects, particularly those which are located in the vicinity of the City. At times these projects will provide the City with excess power available for sale to Western and other entities. Western may purchase up to 205 GWH/year of such excess energy, at prices equivalent to Western' s commercial rate for CVP energy sold to preference customers, provided that the parties mutually agree upon the terms and conditions of such sales. If Western declines to purchase such energy from the City, or offer wheeling services for such energy, then the City may proportionately reduce its CVP power deliveries from Western. The City and Western shall develop a mutually acceptable contract for the scheduling of any such sales to Western. Such contract shall recognize the interests of both Parties, including the City' s need for summer peak power resources and Western' s minimum load and hydro spill constraints. 4. Transmission Service The City and Western have previously agreed upon firm transmission service by Western as specified in Contract No. DE-MS65-83WP59008 (Supplement No. 2). In addition to that contract, the City and Western agree that Western will provide up to a total of 50 MW of as-available, bidirectional transmission service on a "best efforts" basis between the Points of Delivery 2 • and Points of Receipt as specified .i n Exhibit. A attached hereto. jThe only circumstances which would require a curtailment of transmission service would =be uncontrollable forces, hydro spill conditions on the CVP system, system -operating conditions or conditions under-which the power flows of iiithe CVP were to limit additional CVP- transmission service. Such transmission service shall be provided at the customary CVP transmiss4on rates and shall include applicable losses. The City shall provide ►Nestern with appropriate advance. written notice of its intent to utilize such transmission service1and shall not be obligated for payment for such transmission service until the month in which the City power deliveries on a specified transmission path FUUave been initiated. In the event that Western modifies its transmission marketing plan, as set forth in the 1981 Power Marketing Plan, the City shall receive' full and equal consideration with other CVP preference customers who apply for such service. 5. Purchase of Emergency or Maintenance Support The City may request on a real-time basis up to 50 MW of emergency power .and support service from Western. Such support will be utilized by the City to provide emergency power in situations wherein City resources have been made unavailable due to uncontrollable forces, system operations, or malintenance scheduling. In the event Western cannot provide all or part of _ neje ded Emeraencv or Maintenance Support. Western will provide transmissio'n service rvice suchthut the City cn ld purrh.sa Emargency or M ihtensnce Support! from third party utilities and deliver the power to the CVP transmission system, for subsequent delivery to the City'.s electric utility system. The City and Western will establish mutually acceptable return of energy ,provisions and an appropriate rate to be paid to Western for any such emergency or maintenance support. To the extent practicable, the City shall coordinate maintenance scheduling with Western. 6. Seasonal GYP Power The City may wish to purchase, if available, up to 30 MW of seasonal CVP power from Western. Capacity associated with this power will be provided on a firm, monthly basis by Western. Western will provide a written notice of any seasonal capacity available no later than April 1 of each calendar year. The City and Western will establish mutually acceptable return of energy provisions, as appropriate. Western' s CVP capacity rate or an appropriate peaking capacity rate, on a monthly basis, would apply to purchases by the City of this power. 7. Temporary Transfer of City CRD Subject to the mutual agreement of Western and the City, the City may, upon not less than 6 months advance notice to Western, establish dates for the 3 • • temporary transfer and recall of up to 30 MW of its firm CRD to-,another CVP preference customer. Upon the mutual agreement of Western and the City, the date of recall may be subsequently extended. Such temporary transfers of the City's CRD shall be subject to the terms and conditions as agreed to by the Parties. . 8. Relationship of this Letter Agreement `o Other City/Western Agreements I This Letter Agreement between Western and the City shall be considered subordinate to all other City/Western agreements. If this Letter-Agreement is cancelled due to third party litigation, then all other existing:City/Western agreements shall remain in full force and-:effect and shall continue in accordance with their respective terms and conditions. 9. Term This Letter Agreement shall be effective on the date of its execution and shall be effective concurrently with Contract No. DE-MS65-83WP59008 and, unless terminated earlier pursuant to Paragraph 10 of this Letter Agreement, shall terminate upon the termination of Contract No. DE-MS65-83WP59008. 10. Cancellation The City or Western may cancel this Letter Agreement upon 18 months' advance written notice to the other party. NcAhi ng in this Letter Agreement shall bind either party to operate, schedule, receive, or deliver power under this Letter of Agreement. It is intended that the future long term agreements would establish the details necessary for such operations. If the foregoing is satisfactory and consistent with your,understanding, please so indicate by countersigning below and returning one original copy to me for Western' s files. Sincerely, dee,Aad2464.-4,---1 David G. Coleman Area Manager Accepted by: Robert E. Courtney Date City Manager ! City of Redding, California Agreed as to Form: ,e_,,,,, _, * p sate 4 • EXHIBIT A Points of Delivery and Receipt Western and the City have agreed to designate the following locations as Points of Delivery and Points of Receipt under this agreement: 1) The Keswick 115/230 kV bus; 2) The Tracy 230 kV substation; 3) The Round Mountain 230 kV substation; 4) The Cottonwood 230 kV substation; 5) The Elverta 230 kV substation. In addition, the parties will consider future additional Points of Delivery and Points of receipt including: 1) A second direct interconnection point between the Parties; 2) Any future substation locations or system interconnection; and 3) Any future interconnection locations between Western and the Geothermal Public Power Line.