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HomeMy WebLinkAboutReso. 1986 - 304 - Approving the consultation agreement between the city of redding and resource management international inc for technical support of negotiations with the western area power administration and authorizing the city manager to sign same kRESOURCE RES MANAGEMENTINTERNATIONAL, IN� A1. MANAGEMENT� INTERNATIONAL 010 Hurley Way, Suite 500 �^" �� Sacramento, CA 95825 (916) 924-1534 CONSULTATION AGREEMENT This is an agreement for Resource Management International, Inc. (RMI) to provide consulting services to: Client City of Redding Address 760 Parkview Avenue City ReAding State CA Zip 96nni I CONSULTING SERVICES The services to be provided are as follows: RMI will provide technical support of negotiations as described in Section II of RMI ' s proposal to the City of Redding dated October 23 , 1986 at a cost not to exceed $35, 500. II PROFESSIONAL AND PARAPROFESSIONAL FEES The fees for services, except testimony, shall be billed as follows: Managing Executive Consultant $ 95 per hour Principal Executive Consultant 85 per hour Executive Consultant 75 per hour Principal Consultant 68 per hour Supervising Consultant 62 per hour Senior Consultant 57 per hour Associate Professional 52 per hour Junior Professional 48 per hour Research Assistant 36 per hour Office Services 27 per hour The fees for testimony shall be billed as $ n/a per day or fraction thereof for , and $ per day or fraction thereof for all other personnel. RMI fees shall be adjusted each year, commencing January 1, 1987 , to reflect the change in fees officially established by the RMI Board of Directors. III SUPPORT SERVICE CHARGES Charges for reproduction, printing, communications, computer services, word processing services, graphics, and other miscellaneous support services shall be billed at rates for such services as determined from time to time and officially established by the RMI Board of Directors plus ten percent expense reimbursement to RMI. IV CONSULTANTS RMI may use the consultants listed below to assist in performing work here- under. The services of such consultants will be billed at the Consultants' rate to RMI, plus an amount which includes RMI's compensation for the administrative, financial, and organizational costs and other expenses incurred in connection with the consultants' work. The consultants will function as independent contractors and will rely on RMI for all administrative and billing functions. Billing Rate Consultant's Name Task to Client N/A II! PROPOSAL TO THE CITY OF REDDING FOR TECHNICAL SUPPORT OF NEGOTIATIONS WITH THE WESTERN AREA POWER ADMINISTRATION October, 1986 • PROPOSAL TO THE CITY OF REDDING FOR TECHNICAL SUPPORT OF NEGOTIATIONS WITH THE WESTERN AREA POWER ADMINISTRATION I. INTRODUCTION The City of Redding ' s (City) Electric Department has successfully begun the development of new electricity service agreements with the Western Area Power Administration (Western) . A Letter of Agreement has been successfully completed (City of Redding/Western LOA-3) which will allow the City to obtain emergency and maintenance power, seasonal capacity, transmission service, and sales of surplus City power to Western. LOA-3 represents an historic breakthrough for the City, since many of the concepts in this agreement are totally new in Northern California. LOA-3 could provide substantial benefits to the City' s ratepayers, since the total costs proposed by Western are less than the alternative costs for the same service from the Pacific Gas and Electric Company (PGandE) . Resource Management International, Inc. ( RMI ) has provided close support to the City' s Electric Department staff throughout the negotiating process. RMI ' s expertise in dealing with Western has been critical to the completion of LOA-3 . RMI has successfully accomplished the tasks described in our February 1986 proposal, within the budget established by the City. Preliminary discussions with Western have been held, operational parameters of concern to the parties have been identified, the Letter of Agreement with Western was successfully concluded, first draft contracts with Western have been provided, the best initial market for surplus power, Western, has been identified, and preliminary sales agreements with Western have been drafted. -1- • Negotiations to complete the detailed implementing contracts are presently underway. Due to the unique nature of these new agreements, the time and effort to complete these agreements is likely to be substantial . II . PROPOSED SCOPE OF WORK RMI proposes to provide technical support to complete the City/Western negotiations for the new service agreements as described herein. RMI staff will assist City's representatives in preparing and negotiating the best available agreements for : • Emergency and Maintenance Power o Transmission Service o Scheduling o Sales of Surplus City Power It is presently envisioned that at least three new City/Western agreements, each 20 to 50 pages in length, will be required to provide this package of services from Western. Due to the total lack of precedent for these contracts, careful and innovative contract drafting and negotiating will be a must . The City could potentially gain substantial financial advantages for its ratepayers through these agreements . RMI proposes to provide close technical support to the City for these negotiations, within the budgetlevel prescribed herein. It is hoped that these agreements would be available for execution by mid-1987. There is, however, no certainty to this process since Western is entering into these negotiations with significant concern regarding the reactions of PGandE. -2- • III . KEY PERSONNEL The following key personnel are proposed to be assigned to this project, as appropriate to the negotiations . Resumes for these individuals are attached. Responsibilities will be: Lloyd Harvego, President - Project Overview Maury Kruth, Vice President - Negotiations with Western; Project Manager Stan Stamp, Buzz Link - Scheduling and Real-Time Operations Bob Crump - Preparation of Agreements, Contract Reviews and Research Other RMI staff will be used as appropriate in support of the project . IV. BUDGET AND SCHEDULE A budget of $35, 500 is recommended for this Project. RMI proposes to utilize its standard agreement to perform this work and would not exceed this budget level without further authorization from the City. Completion of the City/Western service agreements ( in form for execution) is presently targeted for June 1987. Frequent negotiation sessions will be required to meet this schedule. It is assumed that Western will negotiate in good faith and will not fall prey to external pressures. Such events would obviously have an influence upon this project and adversely impact the budget and general work schedule. RMI ' s estimates herein are not premised upon these circumstances. -3- • 0 RESUMES 410 111 LLOYD H. HARVEGO Mr . Harvego is the founder and President of RMI. He is an expert in the complex matters associated with electric and water utility management in the areas of resource planning, economic evaluation, and financing. He identified and developed several multiple party regional water and power projects and long-term contractual arrangements. His analytical and managerial experience includes water supply, hydroelectric, transmission, coal, nuclear, geothermal, and cogeneration projects and technologies. Accomplishments o Represented California interests in the tri-state (Arizona, California, Nevada) negotiation of the new 50-year contract allocating power from the 1500 MW federal Hoover Dam Power Plant to replace the 1935 contract that expires in 1987 . • Represented Modesto and Turlock Irrigation Districts in negotiating a settlement with the City and County of San Francisco for allocation of power from the Hetch Hetchy hydroelectric system. o Assisted with the development and execution of plans for the creation of the M-S-R Public Power Agency and the financing thereof, including management of the Agency 's purchase, financing, transmission, and power brokerage for a 136 MW share of a major coal project in New Mexico. • Developed a plan and managed activities to obtain necessary agreements between 24 public and investor-owned utilities to finance, own, design, construct , and operate a 500-kV transmission line between California and the Pacific Northwest . o Managed the preparation of consultant ' s reports for financing for nearly $1 . 5 billion in public utility bond and note issuances since April 1983 . Previous Positions o Career progression of 15 years to Deputy Chief of the Energy Division at the California Department of Water Resources . The division was responsible for power resource supply for the 1500 MW and 10 billion kWh per year power requirements of the California State Water Project. Education o Graduate studies in Management, Contract Negotiation, and Financing. o Bachelor of Science Degree in Electrical Engineering, University of Idaho. I . 1 • • MAURICE A. KRUTH Mr . Kruth is a Registered Civil Engineer and at RMI is Vice President for Engineering, responsible for the engineering aspects of all RMI activities. He is an expert in energy resource management, planning, and development, in power marketing and in regulatory agency matters . Accomplishments o Managed the initial development work on the California- Oregon Transmission Project on behalf of the Transmission Agency of Northern California. • Developed the 1981 Central Valley Project Marketing plan for the Western Area Power Administration and managed a $70 million annual purchased power budget and marketing program. • Managed Environmental Impact Statement preparation for Department of Energy' s power marketing programs, national energy plan, and coal conversion programs . • Directed environmental programs for Maui County State of Hawaii , and served as technical expert on air, water, and hazardous waste pollution cases . Previous Positions o Assistant Manager of the Sacramento Area Office of the U. S. Western Area Power Administration. o Senior Engineer, U. S. Department of Energy, Washington, D. C. o District Engineer, U. S. Environmental Protection Agency, Hawaii . o Commissioned Officer, U. S. Public Health Service, Cincinnati, Ohio and Washington, D. C. Education o Master of Science Degree in Civil Engineering (Specialty in Environmental Engineering) , Stanford University. o Master of Business Administration Degree, Xavier University, Ohio. o Bachelor of Science Degree in Civil Engineering, Stanford University. • s STANLEY R. STAMP Mr . Stamp is an Engineer with over thirty-two years experience in electric energy matters . At RMI he is an Executive Consultant specializing in power contracts, power resource optimization, and on matters involving the U. S. Bureau of Reclamation ' s Central Valley Project. Accomplishments • Pioneered in the establishment of real-time monitoring and management of Central Valley Project customer loads during peak load periods, leading to the adoption of a diversity management program providing substantial power benefits for the Western Area Power Administration and its customers . • Managed the planning and implementation of customer support to the Western Area Power Administration ' s Diversity Program since its inception. Previous Positions o Program Manager with the U. S. Department of Energy responsible for providing electric power from federal and private utilities to three large DOE research laboratories. Special Assistant to the Manager, San Francisco Operations Office, for Energy Research programs . Project Manager for the Positron Electron Project high- energy physics facility. • Director of site activities at the Stanford Linear Accelerator Center for the U. S. Energy Research and Development Administration. o Fifteen years of experience in positions of increasing responsibility with the U. S. Atomic Energy Commission in the coordination and management of contractor activities in civilian power reactor and space nuclear electric power system research and development . Education o Bachelor of Science Degree in Engineering Physics, Montana State College. • GEORGE W. LINK Mr . Link is a Registered Civil Engineer experienced in the operation of water and power projects. In addition to long-term and short-term planning studies, his expertise encompasses real- time operation of multipurpose water projects with requirements for water and power supply. His expertise also extends to the development and operation of real-time electrical load management procedures and programs . Accomplishments • Developed methods for the real-time evaluation of electrical loads of the Central Valley Project for the purpose of load management . o Developed models and prepared studies for the City of Santa Clara to evaluate the increased power potential of modified operations of the Stony Gorge Hydroelectric Project. • Developed a program for the study of electrical load management opportunities by the City of Lodi . o Presented expert testimony before the California Court and the California State Water Resources Control Board on operations of the Central Valley Project . • Developed computer simulation models for the evaluation of water and power operations for multireservoir systems . Previous Positions o Ten years with experience in construction inspection, planning, operations research, and real-time water and power operations for the U. S. Bureau of Reclamation. Progressed to supervisory hydraulic engineer and chief of water operations branch responsible for water operations of the Federal Central Valley Project. Education: o Bachelor of Science Degree in Civil Engineering, California State Polytechnic University. 111 ROBERT L. CRUMP Mr . Crump is a Power Contract Negotiator at RMI . His expertise includes economic and operational analysis, drafting, negotiating and administering power sales, transmission and related contracts. Accomplishments o Responsible for administration of transmission and interconnection agreements for Portland General Electric Company (PGE) . o Developed generic wheeling rates and loss calculations for PGE. o Played a key role in implementation of the 500-kV Montana Intertie Transmission Agreements between the Bonneville Power Administration and the Colstrip Project Participants . o Represented PGE in the Hanford NPR 1983 to 1993 Power Purchase Negotiations. The analysis of which led to PGE' s decision to discontinue participation. o Provided analysis of Bonneville Power Administration ' s Transmission Rate Design. o Provided operational analysis of and coordinated responses to Bonneville Power Administration ' s Near Term, Interim, and Long-Term Intertie Access Policy. Previous Positions Career progression of 12-1/2 years at PGE. Beginning in public relations as an educational supervisor at the Trojan Nuclear Plant . From this position he transitioned to plant accounting and on to division engineering/estimating. His last five years with the utility were as a power contract analyst . Education o Master of Business Administration Candidate, City University, Bellevue, Washington. o Bachelor of Arts Degree, General Science, Linfield College.