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HomeMy WebLinkAboutStaff Report 314-06C ty C ty Manager’s Report 7 TO: FROM: DATE: SUBJECT: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: UTILITIES AUGUST 7, 2006 CMR:314:06 ADOPTION OF A RESOLUTION APPROVING THE TRANSMISSION AGENCY OF NORTHERN CALIFORNIA’S AMENDED AND RESTATEDPROJECT AGREEMENT NO. 5 FOR PARTICIPATION IN AN OPEN ACCESS SAME TIME INFORMATION SYSTEM AND DELEGATION OF AUTHORITY TO THE CITY MANAGER TO EXECUTE AMENDMENTS TO THE AGREEMENT RECOMMENDATION Staff recommends that City Council adopt the resolution approving the amendment to the Transmission Agency of Northern California (TANC) Project Ageement No. 5 (P.A. 5) for the participation in the "wesTTrans" Open Access Same Time Information System (OASIS), and authorize the City Manager to execute the attached contract amendment (Attachment B). Staff further recommends that Council delegate the authority to the City Manager to approve and execute amendments to the Ageement. BACKGROUND In 1996 the Federal Energy Regulatory Commission (FERC) issued two landmark orders, FERC Order 888 and FERC Order 889. Order 888 required transmission owners to provide open access to transmission services. Soon afterward, Order 889 set standards regarding information that utilities must make available to the marketplace and established OASIS, an electronic bulletin board system for sharing this information. OASIS allows energy customers on the wholesale market to schedule and reserve capacity on the national re~onal transmission grids to ensure that energy can be delivered to customers without competitive interference. CMR:314:06 Page ! of 3 TANC, as project manager, constructed the California-Oregon Transmission Project (COTP) in the early 1990s. COTP is a high-capacity transmission line rated at 1,600 megawatts, which stretches 346 miles from Captain Jack Substation near Malin, Oregon through Northern California to PG&E’s Tesla Substation, east of San Francisco. TANC owns 75% of the transfer capability on COTP and, ttvough participation in TANC, the City has rights to a 50 megawatts share, which translates to just over a 4% share of the COTP. The decision to participate in the COTP was made so the City would have access to low cost energy from the Northwest whenever energy is available. On March 31, 2004, a voluntary coalition of transmission-providing entities in the western United States began offering access to their transmission systems on a single OASIS site, known as the wesTTrans OASIS. The 18 original participants include the Sacramento Municipal Utility District (SMUD), the Western Area Power Administration (WAPA), and the Los Angeles Department of Water and Power (LADWP). TANC and its participating members concluded that it was in their interest and in the interest of electricity customers in California for TANC to participate as a transmission provider on the wesTTrans OASIS. On August 23, 2004, the TANC Commission approved Resolution 2004-30 authorizing execution of TANC P.A. 5 and other a~eements associated with TANC’s participation in the wesTTrans OASIS. On October 25, 2004, the City Council adopted a resolution (No. 8467, CMR 429:04) approving the P.A. 5 for the participation in the "wesTTrans" OASIS. P.A. 5 was entered into by and among TANC and the Cities of Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah; the Modesto Irrigation District; the Turlock IaTigation District; and the Plumas-Sierra Rural Electric Cooperative (TANC participating members). P.A. 5 authorizes and directs TANC to act on behalf of its participating members to become a participant in the wesTTrans OASIS, and defines how the costs and revenues associated with the OASIS participation are to be allocated anong participating members. DISCUSSION TANC’s participation in the wesTTrans OASIS cormnenced December 1, 2005. Since the execution of the original contract, it has become apparent that the participating members’ use of the OASIS differs from the intended use at the time the oriNnal ageement was executed. Some TANC participating members are posting their surplus transmission on a month-ahead basis and at times buying back that transmission within the trading month ("buy back"). The allocation of revenues in the P.A. 5 was designed under the assumption that all sales would be to third parties and participating members that posted their surplus transmission would receive a share of the third party revenues in proportion to the an~ount of transmission they had posted for the period. This allocation of revenue does not allow a TANC participating member to buy back its own transmission and be assured that the costs and revenues are properly allocated. Whenever other TANC participating members have posted surplus transmission during the period that a "buy back" occurs, some members will receive a share of the revenue from the purchasing member. In addressing this issue, the TANC Commission approved on May 17, 2006 additional language that allocates revenues such that should a participating member purchase transmission through CMR:314:06 Page 2 of 3 the wesTTrans OASIS site for any period, the revenue fi’om such a purchase shall first be allocated to that purchasing member to the extent that the purchasing member has posted surplus transmission for the period. TANC Convnission resolution 2006-14 approving the modification and related documents are shown in Attaclm~ent C. Staff is also recon~nending that the City Council delegate authority to the City Manager to approve future amendments to P.A. 5. Amendments might include further changes to the cost and revenue allocations to reflect use of the OASIS by participating members. RESOURCE IMPACT Approving this amendment will transmission are properly allocated. that same. ensure that costs and revenues associated with posting The cost of participating in the wesTTrans OASIS remains POLICY IMPLICATIONS This recommendation is consistent with the Council-approved Utilities Strategic Plan. ENVIRONMENTAL REVIEW Execution of this project a~eement does not constitute a project for the purpose of the California Enviromnental Quality Act. ATTACHMENTS A. Resolution approving amendment to P.A.5 and delegation of authority to City Manager to execute further amendments B. TANC Amended and Restated Project Ageement No. 5 C. TA_NC Commission resolution approving amendment to P.A.5 and related documents PREPARED BY: DEPARTMENT APPROVAL: CITY MANAGER APPROVAL: DEBRA LLOYD Resource Plmmer C ~~q~A S!T Director of A@inistr.~ces EM-t!LY HARRISON Assistant City Manager CMR:314:06 Page 3 of 3 ***NOT YET APPROVED*** ATTACHMENT A RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO APPROVING THE TRANSMISSION AGENCY OF NORTHERN CALIFORNIA’S AMENDED AND RESTATED PROJECT AGREEMENT NO. 5 FOR PARTICIPATION IN AN OPEN ACCESS SAME TIME INFORMATION SYSTEM AND DELEGATION OF AUTHORITY TO THE CITY MANAGER TO EXECUTE AMENDMENTS TO THE AGREEMENT k~EREAS, the City of Pa!o Alto ("City"), a municipa! utility and a chartered city, is a Member of the Transmission Agency of Northern California ("TANC") ; WHEREAS, TANC is a joint powers agency authorized by Section 6502 of the California Government Code; WHEREAS, TANC owns Transfer Capability on the California-Oregon Transmission Project ("C0TP") that is not under the control of the California Independent System Operator ("CAIS0"); WHEREAS, TANC, and the Cities of Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah; the Modesto Irrigation District; the Turlock Irrigation District; and the Plumas-Sierra Rural Electric Cooperative (the TANC "Participating Members") desire to enhance transmission availability in California by making the Participating Members’ unused and unencumbered Transfer Capability available for use by other entities in an open and efficient manner and in accordance with the TANC Open Access Transmission Tariff; WHEREAS, on March 31, 2004, a voluntary coalition of transmission-providing entities in the Western Interconnection began offering access to their transmission systems on a single OASIS site, known as the wesTTrans OASIS; WHEREAS, on December i, 2005, TANC and its Participating Members commenced participation as a Transmission Provider in the wesTTrans OASIS; and WHEREAS, based on Participating Members’ subsequent use of the wesTTrans OASIS, TANC has concluded that an amendment to the revenue allocation rules is required to allow a Participating Member to buy back their own Transfer Capability as posted in the wesTTrans OASIS; 060725 syn 0072740 ***NOT YET APPROVED*** NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION i. The Council hereby approves the City of Palo Alto’s execution of the "Transmission Agency of Northern California Amended and Restated Project Agreement No. 5 for the Participation in the wesTTrans OASIS" ("Agreement"), and hereby authorizes the City Manager to execute amendments to the Agreement on behalf of the City of Palo Alto. SECTION 2. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmenta! impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: City Clerk Mayor APPROVED AS TO FORM:City Manager Senior Asst. City Attorney Director of Administrative Services 060725 syn 0072740 2 ATTACHMENT B TRANSMISSION AGENCY OF NORTHERN CALIFORNIA AMENDED AND RESTATED PROJECT AGREEMENT NO. 5 FOR THE PARTICIPATION IN THE WESTTRANS OASIS PREAMBLE This Project Agreement No. 5 ("Agreement") originally entered into as of August 23, 2004, and amended and restated effective as of May 1, 2006, by and among the Transmission Agency of Northern California, hereinafter referred to as "TANC’; and the Cities of Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah; the Modesto Irrigation District; the Turlock Irrigation District; and the Plumas-Sierra Rural Electric Cooperative, TANC Members hereinafter collectively referred to as the "Participating Members," with regard to the following: RECITALS WHEREAS: A.TANC owns Transfer Capability on the California Oregon Transmission Project that is not under the control of the California Independent System Operator. B.TANC desires to enhance transmission availability in California by making the Participating Members’ unused and unencumbered Transfer Capability available for use by other entities in an open and efficient manner and in accordance with the TANC Open Access Transmission Tariff. C.On March 31, 2004, a voluntary coalition of transmission providing entities in the Western Interconnection began offering access to their transmission systems on a single OASIS site, known as the wesTTrans OASIS. This cooperative effort includes alignment of business practices and processes between all transmission prov:iders to the greatest extent possible, while retaining the individual Open Access Transmission Tariffs of each transmission provider. A primary benefit of this effort is the enhancement of the transmission market within the Western Interconnection. D.TANC and its Participating Members have concluded that it is in their interest and the interest of electricity customers in the state for TANC to participate as a Transmission Provider on the wesTTrans OASIS. Based on discussions with Open Access Technologies, Inc. the operator of the wesTFrans OASIS, TANC has concluded that TANC’s designation of a TANC OASIS Administrator will be necessary to facilitate TANC Members’ sales of available Transfer Capability on wesTrrans OASIS. NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth in this Agreement, TANC and the TANC Members that will be Participating Members and have signed below hereby agree as follows: AGREEMENT 1.SERVICE AGREEMENTS TANC is hereby authorized and directed to act on behalf of the Participating Members to become a participant in the wesTrrans OASIS, including the negotiation and execution of a service agreement with Open Access Technologies, Inc, for TANC’s participation in the wesTTrans OASIS. TANC is additionally authorized and directed to act on behalf of the Participating Members to designate and execute a service agreement with a TANC OASIS Administrator to facilitate TANC’s participation in the wesTTrans OASIS. 2.SERVICE INITIATION AND OTHER FEES. A schedule of service fees that includes an initiation fee and a monthly fee associated with services that Open Access Technologies, Inc. will perform, in order for TANC to participate in the wesTTrans OASIS, is included in Exhibit A. Fees associated 2 with the TANC OASIS Administrator ftmctions shall be set forth in the service agreement between TANC and the TANC OASIS Administrator. Any fees related to the termination of this Agreement shall be allocated to Participating Members in accordance with the provisions of Section 3. 3.ALLOCATION OF PRO~CT COSTS TO PARTICIPATING MEMBERS All costs and expenses associated with this Agreement and all fees or charges for wesTTrans OASIS and the TANC OASIS Administrator service initiation, and wesTTrans OASIS and the TANC OASIS Administrator monthly service will be allocated to the Participating Members in accordance with their Project Agreement No. 3 Participation Percentages prorated after subtracting the percentages of the TANC Members that do not execute this Agreement. Schedules of fees associated with such services are located in Exhibit A and the service agreement between TANC and the TANC OASIS Administrator. TANC, upon receipt of such invoices from Open Access Technologies, Inc. (OATI), and the TANC OASIS Administrator will allocate such initiation and service costs to Participating Members. The allocation percentage for each Member executing this agreement is shown in Exhibit B, attached to and incorporated into this Agreement. 4.ALLOCATION OF NET REVENUES For the purposes of this Project Agreement No. 5, the term "Transmission Offer" shall mean a specified whole number of megawatts, that in compliance with the procedures under this Agreement, Project Agreement No. 3, and those applicable provisions of the wesTTrans OASIS, the WesTTrans contract with TANC, the service agreement between TANC and the TANC OASIS Administrator, and the service agreement between TANC and Open Access Technologies, Inc., is released by the Participating Member to TANC to be offered for sale, for a period, as designated by the Participating Member. The time period of any Transmission Offer must coincide with the time period of the actual sale or sales TANC makes, regardless of any difference 3 between the amount offered and the amount TANC succeeds in selling. The TANC OASIS Administrator shall allocate to each Participating Member the revenue received, net of expenses associated with the Transmission Offer, from sale of Transfer Capability by the TANC OASIS Administrator in proportion to each Participating Member’s Transmission Offer. In making such allocation, when more than one Participating Member has made a Transmission Offer, the TANC OASIS Administrator shall allocate to each Participating Member that made a Transmission Offer, the revenue derived by multiplying the total revenue received from the sale or sales coinciding with the time period during which more than one Transmission Offer has been made, by the fraction resulting from the division of each such Participating Member’s Transmission Offer by the sum of the Transmission Offers made during the coincident time period of the sale or sales. Notwithstanding the foregoing paragraph, should a Participating Member (Purchasing Member) purchase transmission through the wesTrrans OASIS site for any period, the revenue from such a purchase shall first be allocated to that Purchasing Member to the extent that the Purchasing Member has made a Transmission Offer for the period. If the transmission purchase is greater than the amount of the Purchasing Member’s Transmission Offer, the remaining revenue shall be allocated to the other Participating Members who submitted Transmission Offers in the same time period by multiplying the remaining revenue received from the sale by the fraction resulting from the division of each such Participating Member Transmission Offer by the sum of the Transmission Offers made during the time period of the purchase, excluding the Transmission Offer of the Purchasing Member. For the purpose of allocating revenue from other transmission purchases during the period, the Purchasing Member’s Transmission Offer will be reduced by the amount it purchased through the wesTrrans OASIS. The TANC Commission may modify the allocation of revenue as delineated in the preceding paragraphs by an affirmative vote of the Participating Members representing 65% of the Cost Allocation Percentages as indicated in Exhibit B. 4 Revenue resulting from the sale of the Participating Members’ offered Transfer Capability shall be distributed by the TANC OASIS Administrator to each Participating Member not in default of any obligation to TANC, according to the timelines contained in the service agreement between TANC and the TANC OASIS Administrator. The TANC OASIS Administrator may set off amounts due TANC or the TANC OASIS Administrator from revenues due a Participating Member in default in accordance with Section 9 of this agreement. 5.COORDINATION wrrH TANC OASIS ADMINISTRATOR Participating Members agree to coordinate with the TANC OASIS Administrator to (1) provide information regarding available Transfer Capability, credit policies, and other information as may be reasonably deemed necessary by the TANC OASIS Administrator in the performance of its duties to facilitate TANC’s participation on behalf of Participating Members in wesTrrans OASIS, to collect the revenues from transmission customers, and (2) to perform the financial settlements among Participating Members of fees and revenues associated with the participation in the wesTTrans OASIS. Each Participating Member agrees to provide to the TANC OASIS Administrator the available Transfer Capability it desires to post for sale on the wesTTrans OASIS as a Transmission Offer in accordance with the procedures, tirnelines, and formats as mutually agreed to by the Participating Members and the TANC OASIS Administrator, as those may be modified from time to time by agreement of the participating members. 6.TERM AND TERMINATION. This Agreement shah take effect as of the date hereof and shah remain in hall force and effect for a minimum of twelve months from the date that TANC initiates service on the wesTFrans OASIS. Following the initial twelve-month period, any Participating Member may terminate its participation in this Agreement upon sixty days written notice to TANC, after which time TANC shah no longer participate on behalf of the terminating Participating Member in the wesTTrans OASIS. The terminating Participating Member shall be obligated to pay its share of all project costs and liabilities pursuant to Section 3 of this Agreement incurred in connection with the provision of services provided up to the date when the Participating Member’s termination becomes effective, as well as for contingent liabilities that occurred prior to but may arise after the date of termination, regardless of when the fees are assessed to TANC or the contingency is liquidated, and in accordance with the Participation Percentages shown in Exhibit B if fixed in nature, or the Schedule of Service Fees, if variable. The terminating Participating Member not in default shall be entitled to its share of all transmission revenues derived from TANC’s sales of Transfer Capability on the wesTTrans OASIS made up to the date when the Participating Member’s termination becomes effective, in accordance with the revenue allocation procedures described in Section 4 of this Agreement. In the event that one or more Participating Members terminates its participation in this Agreement, the remaining Participating Members may elect to adjust the cost allocation percentages shown in Exhibit B. If by the date that any Member’s termination of its participation in this Agreement becomes effective the remaining Participating Members have not agreed to adjust the allocation percentages shown in Exhibit B, TANC shall terminate its participation in the wesTTrans OASIS in accordance with termination provisions contained in the service agreement in place between TANC and Open Access Technologies, Inc, or its successor and with the TANC OASIS Administrator. This Agreement shall automatically continue for an indefinite term unless terminated pursuant to the above provisions. 7.AMENDMENTS This Agreement may be amended only by the written agreement of all the parties hereto. 6 8.BILLING AND PAYMENT With the exception of the service fee associated with the initiation of service with Open Access Technologies, Inc., as presented in Exhibit A, and TANC OASIS Administrator Setup and Testing/Training costs as described in the service agreement between TANC and the TANC OASIS Administrator, the accounting and billing period shall be one (1) calendar month. Monthly bills sent by the TANC OASIS Administrator to a Participating Member shall be sent by United States mail first class, postage prepaid or its equivalent, to the billing address specified in Exhibit C. The designation of any person specified in Exhibit C may be changed at any time by advance notice given to all Participating Members not then in default of any payment due hereunder, TANC, and the TANC OASIS Administrator. A copy of such billing will be sent to TANC. Billings for amounts payable shall be due on the thirtieth (30~) day after receipt of the bill. Payment shall be made at offices designated by the party to which payment is due. If the due date falls on a non-business day of either party, then the payment shall be due on the next following business day without interest. Amounts of monthly billings not paid on or before the due date shall be payable with an interest charge calculated from the due date to the date of payment. The interest charge shall be that charge against unpaid amounts due and owing in accordance with this Agreement assessed at an annual interest rate compounded monthly equal to the lesser of (i) two percent (2%) plus the applicable first of the month reference rate or successor, of the Bank of America N.T. & S.A., San Francisco, California, in effect from time to time during the period over which the payment is overdue or (ii) the maximum interest rate permitted by law. Payments for the use of TANC’s available Transfer Capability shall be co!lected by the TANC OASIS Administrator and on a monthly basis, fully credited to the Participating Member or Participating Members making such Transfer Capability available, in accordance with the revenue allocations described in Section 4 of this 7 Agreement and the timelines contained in the service agreement between TANC and the TANC OASIS Administrator. 9.DEFAULT Upon the failure of any Participating Member to meet its obligations hereunder, TANC shall give written notice of the failure to such Participating Member and, if such failure has not been cured within forty-five (45) days after the date of such notice, it shall constitute a default at the expiration of such forty-five (45) day period. Upon such default, TANC may terminate this Agreement as to the defaulting Participating Member, and protect and enforce its rights hereunder by suit or suits in equity or at law, whether for the specific performance of any covenant herein or for damages or in aid of the execution of any power granted herein or any other remedy available under any provision of applicable law. The costs allocation percentages will be adjusted amongst the remaining Participating Members in accordance with the process described in Section 6 of this agreement. 10.INDEMNIFICATION The Participating Members shall indemnify, defend, and hold harmless TANC, its commissioners, officers, agents, and employees, to the extent provided by law, and the TANC Members that do not execute this Agreement, and their respective governing bodies, officers, agents, and employees, from any liability for personal injury, death, property damage, contractual or tort liability, regardless of the theory of recovery, to the fullest extent of the law, arising out of the negligent acts or failures to act of TANC, its commissioners, officers, agents, and employees, or of a non-participating TANC Member, its governing body, officers, agents, and employees in connection with this Agreement. Each Participating Member agrees that TANC’s commissioners, officers, agents and employees shall not be liable to the Participating Members for direct, indirect or consequential loss or damage suffered by the Participating Members as a result of the performance or nonperformance by TANC or the TANC OASIS Administrator of this Agreement or any agreement with a third party associated with this Agreement. Each 8 Participating Member releases TANC’s Commissioners, officers, agents and employees from any claim or liability (whether negligent or otherwise) as a result of any actions or inactions of TANC under this Agreement or the performance or nonperformance by TANC under this Agreement. 11.SEVERABILITY If any provision of this Agreement is finally adjudicated by a court of competent jurisdiction to be invalid, the remainder of this Agreement shall remain in full force and effect as though the invalid provision had not been included herein. 12.MEMBERS’ OBLIGATIONS SEVERAL The obligation of each Participating Member to make payments under this Agreement is a several obligation and not a joint obligation with those of the other Participating Members. 13.WAIVER OF DEFAULT Any waiver at any time by any party of its rights with respect to a default under this Agreement, or with respect to any other matters arising in connection with this Agreement, shall not be deemed a waiver with respect to any subsequent default or other matter. 14.WAIVER OF RIGHTS OF REFUSAL Each Participating Member as to each other, and as to each non-participating TANC Member that delivers a duly authorized and executed waiver in the same form as this section to TANC, does hereby waive and release any and all claim of right to exercise a right of refusal under Section 7 of Project Agreement No. 3 to Transfer Capability offered as a Transmission Offer under this Agreement or, if offered by a non- participating TANC Member, on the wesTTrans OASIS or a similar OASIS in accordance 9 with the then current Short and Long-Term Layoff Procedures of TANC, provided that such offer is for a period of less than twelve (12) months. 15.COLFNTERPARTS This Agreement may be executed in several counterparts, each of which shah be deemed to be an original and aH of which, when taken together, shah constitute a single Agreement. 16.SIGNATURES In witness whereof, the parties have caused this Project Agreement No. 5 to be executed as of the date first above written. The signatories to this Project Agreement No. 5 represent that they have been appropriately authorized to enter into this Project Agreement No. 5 on behalf of the party for whom they sign. PARTICIPATING MEMBERS CITY OF ALAMEDA By: Name: Title: Date: CITY OF HEALDSBURG By: Name: Title: Date: 10 CITY OF HEALDSBURG By: Name: Title: Date: CITY OF LODI By: Name: Title: Date: CITY OF LOMPOC By: Name: Title: Date: MODESTO IRRIGATION DISTRICT By: Name: Title: Date: 11 CITY OF REDDING By: Name: Title: Date: CITY OF ROSEVILLE By: Name: Title: Date: CITY OF SANTA CLARA By: Name: Title: Date: TURLOCK IRRIGATION DISTRICT By: Name: Title: Date: 12 CITY OF UKIAH By: Name: Title: Date: PLUMAS-SIERRA RURAL ELECTRIC COOPERATIVE By: Name: Title: Date: TRANSMISSION AGENCY OF NORTHERN CALIFORNIA By: Name: Title: Date: 13 NON-PARTICIPATING MEMBERS SACRAMENTO MUNICIPAL UTILITY DISTRICT By: Name: Title: Date: 14 EXHIBIT A SCHEDULE OF SERVICE FEES FOR SERVICES RENDERED BY OPEN ACCESS TECHNOLOGIES, INC. Description Service Monthly Comments Initiation ServiceFee1Feez3 $50,000 $5,000I"ANC as a single entity (All TANC TP’s oin as TANC and will be one TP on the OASIS) Provides all ft~nctionality in accordance with the Common Western OASIS Functional Specification. Assumes all TP’s register as a single NERC entity. :or less than 500 OASIS requests per month. 10 User ID’s and certificates total. Price Schedule Notes: 1.Service Initiation Fee will be invoiced upon execution of Common Western OASIS Customer Agreement. 2.Minimum subscription term is 12 months. 3.Monthly Service Fee for each Provider begins at time of OASIS initialization or 30 days after completion of acceptance testing, whichever is earlier. 4.Other OATI subscribed services will continue to be provided under separate OATI Customer Agreements. 5.Any necessary, preapproved travel expenses will be invoiced to Common Western OASIS Service customers at pro-rata OATI actual cost. 6.One day of training provided at OATI Data Center in Minneapolis, MN. 7.The Monthly Service Fee reflected above is the initial monthly fee for the first 12 months of service and may change from time to time there after. 15 EXHIBIT B COST ALLOCATION PERCENTAGES TANC Member City of Alameda City of Healdsburg City of Lodi City of Lompoc City of Palo Alto City of Redding City of Roseville City of Santa Clara City of Ukiah Modesto Irrigation District Plumas-Sierra Rural Electric Cooperative Turlock Irrigation District WesTTRans OASIS Service Initiation Fee 1.850 % 0.370 % 2.622 % 0.255 % 5.550 % 11.487 % 3.184 % 27.976 % 0.293 % 29.082 % 0.223 % WesTTrans OASIS Monthly Service 1.850 0.370 2.622 0.255 5.550 11.487 3.184 27.976 0.293 29.082 0.223 17.124 TANC OASIS Administrator Fees 1.850 % 0.370 % 2.622 % 0.255 % % % 17.124 % Fee % % % % %5.550 %11.487 %3.184 %27.976 %0.293 %29.082 %0.223 %17.124 % % % % 16 EXHIBIT C BILLING ADDRESSES OF THE PARTIES City of Alameda Alameda Power & Telecom P.O. Box H Alameda, CA 94501-0263 City of Healdsburg c/o Northern California Power Agency 180 Cirby Way Roseville, CA 95678 City of Lodi 1331 South Ham Lane Lodi, CA 95242-3995 City of Lompoc P.O. Box 8001 Lompoc, CA 93438 Modesto Irrigation District P. O. Box 4060 Modesto, CA 95352 City of Palo Alto P. O. Box 10250 MS3C Palo Alto, CA 94303 City of Redding 17120 Clear Creek Road Redding, CA 96001-5106 City of Roseville 2090 Hilltop Circle Roseville, CA 95678 City of Santa Clara 1500 Warbu_rton Avenue Santa Clara, CA 95050 Turlock Irrigation District P. O. Box 949 Turlock, CA 95381 City of Ukiah 300 Seminary Avenue Ukiah, CA 95482 Plumas-Sierra Rural Electric Coop. 73233 Hwy 70 Portola, CA 96122-2000 Transmission Agency of Northern California P. O. Box 661030 Sacramento, CA 95866 17 ATTACHMENT C RESOLUTION 2006-14 A RESOLUTION OF THE TRANSMISSION AGENCY OF NORTHERN CALIFORNIA APPROVING MODIFICATIONS TO TANC PROJECT AGREEMENT NO. 5 WHEREAS, the Transmission Agency of Northern California is a joint exercise of powers agency organized under the laws of the State of California; and WHEREAS, TANC Resolution 2004-30 approved TANC Project Agreement No. 5 providing for the TANC participation in an OASIS site; and WHEREAS, for the past several months TANC has been participating in the Wes3-Trans OASIS; and WHEREAS, the TANC Ad Hoc OASIS Subcommittee has been addressing various matters pertaining to TANC’s OASIS participation; and WHEREAS, the TANC Ad Hoc OASIS Subcommittee recommends modifications to TANC PA-5 to reflect how TANC Members purchase transmission posted on the OASIS; and WHEREAS, the TANC Contracts Committee has reviewed the proposed modifications to PA-5 and recommend Commission approval. NOW, THEREFORE, BE IT HEREBY RESOLVED by the Commission of the Transmission Agency of Northern California that the modifications to TANC Project Agreement No. 5 are approved and the TANC Chairman is authorized to execute, on behalf of TANC, the revised TANC Project Agreement No. 5, subject to the final review and approval of TANC’s General Counsel. PASSED AND ADOPTED this 17th day of May, 2006 on a motion by Mr. Weisel, seconded by Mr. Short. City of Alameda City of Biggs City of Gridley City of Healdsburg City of Lodi City of Lompoc Modesto Irrigation District City of Palo Alto Plumas-Sierra Rural Electric Cooperative City of Redding City of Roseville Sacramento Municipal Utility District City of Santa Clara Turlock Irrigation District City of Ukiah AYES X X X X X X X X X X X X Resolution 2006-14 NOES ABSTAIN ABSENT X X X TrANsMIssION Ac ENcY OF NortHerN cAuFOrNIA P.O. Box 15129, Sacramento, CA 95851-0129 (916) 852-1673 MEMORANDUM DATE: TO: FROM: SUBJECT: May 18, 2006 TANC Commissioners James C. Feidcor~, Chairman ~,,,,------ ~-~ ~ AMENDMENT TO PROJECT AGREEMENT NO. 5 The TANC Commission has approved an amended version of Project Agreement No. 5 (PA 5), which provides for TANC’s participation in the wesTTrans Open Access Same Time Information System (OASIS). The modifications to PA 5 include several minor, "clean-up" changes and a change to the formula by which transmission sales revenues are allocated to Participating Members under certain situations as described below. The approved modifications to PA 5 were deemed necessary based on TANC’s experience over the initial months of operating its OASIS; however, the fundamental purpose and terms of PA 5 have not been altered. Attached is a redlined version of PA 5, identifying the changes being made to the agreement. Also attached is an executable original for your signature. The amended and restated PA 5 has been developed over the past several weeks in consultation with the TANC OASIS Ad Hoc Committee, and on May 8, 2006, the TANC Contracts Committee acted to recommend the proposed modifications for approval by the TANC Commission. On May 17, 2006, the TANC Commission approved the amended PA 5. The following discussion provides background on PA 5 and the modifications that have been made to the agreement. If you have any questions regarding this subject, you may contact Bryan Griess or John Dalessi of TANC Staff at (916) 852-1673 for additional information. A Public Entity whose Members include: Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Modesto Irrigation District, Palo Alto, Piumas-Sierra Rural Electric Cooperative, Redding, Roseville, Sacramento Municipal Utility District, Santa Clara, Turlock IrriRation District, Ukiah TANC Commissioners May 18, 2006 Page 2 Background TANC and certain of its Members ("Participating Members")~ entered into PA 5 on August 23, 2004, for the implementation of an OASIS for transmission service offered pursuant to the TANC Open Access Transmission Tariff. TANC implemented the OASIS on December 1, 2005 by becoming a member of the wesTTrans OASIS, a voluntary coalition of transmission providing entities in the Western Interconnection. TANC began offering transmission on the wesTTrans OASIS on January 1, 2006. Among other things, PA 5 defines how revenues received from the sale of transmission on the OASIS are to be allocated among Participating Members. Generally speaking, revenues are to be allocated to Participating Members in proportion to the amount of transmission each Participating Member offers for the period of time corresponding to the sale. Based on several months of operating experience with the OASIS, TANC has identified a need to amend the revenue allocation provisions in PA 5 to address situations in which a Participating Member purchases transmission from the OASIS that the Participating Member had earlier offered, a situation that can be described as a "buy- back" of offered transmission. The current allocation provision in PA 5 would allocate revenues received from all transmission sales on the OASIS, which would include buy- backs, to all Participating Members that had posted transmission offers coterminous with the sale. The amended PA 5 modifies the allocation in cases of transmission buy- backs so that revenues received in such a situation would be first allocated to the Participating Member that purchased the transmission. In effect, the Participating Member would first pay itself for the transmission buy-back rather than splitting the revenues with other Participating Members. Revenues received from any purchases in excess of what the Participating Member had offered would be allocated among the other Participating Members that had made transmission available for the time period corresponding to the sale. In addition, several changes were made to certain terminology used throughout PA 5 and to make certain administrative corrections. Each of the modifications is described below. Description of Changes to PA 5 (a) The title has been modified to reflect the agreement’s amended status. (b)The preamble has been modified to reflect the agreement’s amended status and an effective date of May 1, 2006. (c)The original term "Binding Offer" has been replaced with the term "Transmission Offer", and the definition of Transmission Offer has been Participating Members include the Cities of Alameda,, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah; the Modesto Irrigation District; the Turlock Irrigation District; and the Plumas-Sierra Rural Electric Cooperative. The Sacramento Municipal Utility District is a Non- Participating Member. TANC Commissioners May 18, 2006 Page 3 (d) modified to better reflect the offering of both firm and non-firm transmission service by deleting the descriptors "unrevoked" and "unused, and unencumbered by any claim or reservation". An additional paragraph has been added to Section 4 to address member buy- backs as described above. (e) (g) An additional paragraph has been added to Section 4 to authorize the TANC Commission to modify the allocation of revenues by an affirmative vote of the Participating Members representing 65 percent of the Cost Allocation Percentages as indicated in Exhibit B of PA 5. The reference to the term "Binding Offer" in the second paragraph of Section 5 has been replaced with a reference to the term "Transmission Offer". The reference to the term "Binding Offer" in Section 14 has been replaced with a reference to the term "Transmission Offer". (h)An additional sentence has been added to Exhibit A to accurately reflect the terms of the agreement between TANC and Open Access Technologies, Inc, which allows for changes in the monthly service fee following the initial 12 months of service. (i)The billing address for the City of Redding shown in Exhibit C has been corrected. As these changes are unopposed by any TA_NC Member, we ask that you expeditiously review the attached agreement and return an original executed copy to the following address: Transmission Agency of Northern California 3100 Zinfandel Drive, Suite 600 Rancho Cordova, CA 95670 Enclosures