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Home My WebLink About _ 4.5(a)--Approve and Execute the MOU between City of Redding and Western Area Power Administration GI �" Y C� F � � �- ' � ° � � i � CITY OF REDDING �� REPORT TO THE CITY COUNCIL MEETING DATE: May 19, 2026 FROM: Nick Zettel, Director of ITEM NO. 4.5(a) Redding Electric Utility ***APPROVED BY*** � �� t� �.� � y" ,� � -� �,� � . � � �'�^��.��-�.,, , -,, �k ct e o ��rcctor �i9' e in r tric�[Jtriity � � 515�`2��G G��I1a��arbc�x �'��1�a�nag�r � S11�12t726 nzettel@cityofredding.org wtarbox@cityofredding.gov SUBJECT: 4.5(a)--Approve the execution of an MOU between the Western Area Power Administration and the Redding Electric Utility to provide electric service to the Wintu Pumping Plant, and authorize the Cit Mana er to execute a future 1on -term service a reement. Recommendation Authorize and approve the following: (1) Approve the execution of a Memorandum of Understanding (MO� with Western Area Power Administration and Redding Electric Utility to provide electric service to the Wint�u Pumping Plant operated by Bella Vista Water District; and (2) Authorize the City Manager, or designee, to execute a future long-term contract that would define scheduling, delivery, accounting, settlement, billing, and operational protocols, along with and any related documents necessary to implement the MOU. Fiscal Impact Approval of the Memorandum of Understanding (MOU) does not create a significant immediate fiscal impact. The MOU expresses the parties' intent to negotiate and execute a future service contract and, by itself, does not obligate Redding Electric Utility (REU) to construct majar facilities or assume ownership of customer-side project infrastructure. Time associated with contract development and coordination can be absorbed by existing REU staff. Any future billing, energy crediting, settlement methodology, or service charges associated with the definitive agreement would be established in the future contract and would be a net financial benefit to the City of Redding. Alternative Action Council may choose not to approve the MOU and provide an alternate direction to staff. Report to Redding City Council May 13,2026 Re: 4.5(a)--Approve and Execute the MOU between City of Redding and Western Area Power Administration Page 2 Background/Analysis The Wintu Pumping Plant (Wintu) is a Central Valley Project facility owned by the U.S. Bureau of Reclamation (Reclamation) and operated and maintained by the Bella Vista Water District (BVWD). Western Area Power Administration (WAPA) is responsible for serving Wintu's electrical load as Project Use Energy and currently fulfills that obligation through Pacific Gas and Electric (PG&E) Company's transmission and distribution system. BVWD received Infrastructure Investment and Jobs Act (IIJA) funding through Reclamation for a transformer replacement project at Wintu. During project development, REU, BVWD, Reclamation, and WAPA evaluated a modified service arrangement under which Wintu would be served from REU's distribution system rather than continuing to rely on PG&E service. Under the revised concept, a radial line would be constructed between REU's service lines near Hilltop Drive and Wintu, together with the installation of an appropriately sized transformer. The proposed MOU does not establish final commercial terms. Instead, it provides assurance to Reclamation and BVWD that REU and WAPA intend to negotiate and execute a future contract that would allow WAPA to continue meeting its federal Project Use obligations while using REU's distribution system as the delivery path. The MOU contemplates a twenty-year contract term and states that the contract would define scheduling, delivery, accounting, settlement, billing, and operational protocols. REU staff have evaluated the service concept with Public Works, Engineering, Development Services, WAPA, Reclamation, and BVWD. Internal review identified no major implementation barriers, although the project developer (not REL� should remain responsible for design, environmental compliance, easements, and construction of the facilities required to connect Wintu to REU's system. Because IIJA funding may be used only for federal infrastructure, REU is not expected to own the new transformer or associated customer-side facilities. This reduces REU's direct capital exposure and supports a structure in which REU primarily provides point- of-delivery service, metering, and associated operational coordination. Several possible service and settlement models have been discussed. These include struct�ures under which Wintu could take service in a manner like a large commercial customer, as well as a wheeling-type arrangement under which WAPA would schedule Project Use Energy to REU, and any differences between scheduled energy and actual metered load would be addressed through agreed settlement provisions. The MOU intentionally leaves those details to the de�nitive contract so the parties can complete operational and legal review before binding terms are finalized. The hourly load information developed for Wintu shows a pumping profile with the highest usage generally occurring during the irrigation season, particularly in late spring and summer, and staff have noted peak demand of approximately 1.5 megawatts. That operating profile reinforces the importance of clearly defined metering, scheduling, and true-up provisions in the final agreement. The MOU provides a framework for that work while allowing Reclamation and BVWD to continue advancing design and project planning. Report to Redding City Council May 13,2026 Re: 4.5(a)--Approve and Execute the MOU between City of Redding and Western Area Power Administration Page 3 Approving the MOU is a prudent interim step because it documents REU's and WAPA's shared intent to complete the service arrangement needed for the revised interconnection concept. It also positions REU to continue collaborating with federal and local project partners on a service model expected to be more resilient, cost-effective, and operationally practical than the original transformer replacement concept tied to PG&E service. Envir�onmental Review This is not a project defined under the California Environmental Quality Act, and no further action is required. Council PNio�^ity/City Manager Goals � Government of the 21st Century — "Be relevant and proactive to the opportunities and challenges of today's residents and workforce. Anticipate the future to make better decisions today." Attachments MOU with Western Area Power Administration re Wintu Pumping Plant MEMORANDUM OF UNDERSTANDING BETWEEN REDDING ELECTRIC UTILITY AND WESTERN AREA POWER ADMINISTRATION REGARDING A FUTURE CONTRACT FOR SERVING THE ELECTRICAL LOAD OF THE WINTU PUMPING P�ANT Introduction The purpose of this Memorandum of Understanding (MOU) is to provide assurance to the Bureau of Reclamation (Reclamation} and the Bella Vista Water District (BVWD) that Redding Electric Utility (REU) and the Western Area Power Administration (WAPA) intend to execute a contract under which REU will serve the electrical load of the Wintu Pumping Plant (Wintu) on behalf of WAPA. Wintu is owned by Reclamation and operated and maintained by BVWD. WAPA is responsible for serving Wintu's electrical load, which it currently fulfills through contracted use of Pacific Gas and Electric Company's (PG&E) transmission and distribution systems. Reclamation and BVWD plan to modify Wintu's electrical service by constructing a radial line between REU's service (ines at Hilltop Drive in Redding, CA, and Wintu, and installing an appropriately sized transformer. This modification necessitates a contract between REU and WAPA to enable WAPA to fulfill its obligation to serve Wintu's electrical load. Scope REU and WAPA (collectively, "the Parties") intend to execute a long-term contract ("the Contract") under which REU will provide electric service to Wintu in a manner that enables WAPA to continue fulfilling its obligation to serve Wintu as a Central Valley Project ("CVP") Project Use facility. The Contract is expected to: a) Allow WAPA to deliver Federal Project Use energy, consistent with Reclamation Law and WAPA's CVP responsibilities, to Wintu through REU's distribution system following completion of the radial line creating a physical interconnection between REU and Wintu. b) Define mutually agreed procedures for the scheduling, delivery, accounting, and settlement of such energy, including provisions for addressing differences between scheduled energy and actual metered load. c) Establish the methodology by which REU will bill for electric service provided to Wintu and by which energy delivered by WAPA for Wintu's benefit will be credited or otherwise accounted for. Page 1 of 3 d) Incorporate appropriate scheduling, metering, settlement, and operational protocols necessary to support reliable service and compliance with applicable reliability and regulatory requirements. The Parties acknowledge that the specific mechanisms for scheduling, energy crediting, settlement, and billing will be fully developed and mutually agreed upon in the Contract. The Contract is anticipated to have a term of twenty(20) years. The Parties intend to execute the Contract in a timeframe that coincides with, or precedes, the completion of construction by Reclamation and BVWD necessary to connect Wintu to REU's system. Responsibilities ■ WAPA will coordinate with Reclamation to determine the timeline for executing the Contract and will share this information with REU. ■ REU will prepare a draft Contract and provide it to WAPA. ■ The Parties will collaborate to negotiate, revise, finalize, and execute the Contract. Termination This MOU will automatically terminate upon the execution of the signed Contract. Page 2 of 3 IN WITNESS THEREOF, the City of Redding and Western Area Power Administration have executed this Memorandum of Understanding on the day and year of the last signature set forth below. By their signatures below, each signatory represents that s/he has the authority to execute this Agreement and to bind the party on whose behalf his/her execution is made. WESTERN AREA POWER CITY OF REDDING ADMINISTRATION Date: Date: By: By: Sandee Peebles, Vice President of Power Mike �ittau, Mayor Markeiing, Sierra Nevada Region Approved as to form: Ben Stock Interim City Attorney, City of Redding ATTEST: Sharlene Tipton, City Clerk Page 3 of 3