Loading...
HomeMy WebLinkAboutStaff Report 401-10TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: UTILITIES DATE: NOVEMBER 1, 2010 CMR: 401:10 REPORT TYPE: CONSENT SUBJECT: Adoption of a Resolution Authorizing the City Manager to Sign up to Four One-Year Term Extensions to the Letter of Agreement with the U.S. Western Area Power Administration and the U.S. Bureau of Reclamation RECOMMENDATION . Staff requests that the Council: 1) Adopt a Resolution authorizing the City Manager to sign up to four one-year extensions and enter into all necessary contracts, agreements, and amendments on the City's behalf to implement and carry out the consulting agreement(s) with the U.S. Western Area Power Administration and the U.S. Bureau of Reclamation for a period not to exceed four years; EXECUTIVE SUMMARY In November 2007 the City of Palo Alto and Western Area Power Administration (Western) entered into a one-year Letter of Agreement (LOA) 07-SNR-01080 for Palo Alto staff to provide various analysis and consulting services to optimize the federal hydropower resource available to all Central Valley Project (CVP) Base Resource customers including Palo Alto. This one-year agreement was executed by the City Manager and has been amended twice to extend it for a total of three-year signature authorization through November 30, 2010. Western, the U.S. Bureau of Reclamation (Reclamation) and staff would like to amend the LOA to extend it again for an additional one-year term, but not to exceed four additional one-year terms. Council authorization is required, and is hereby requested, to make that amendment as it would extend beyond the City Manager's three year authorization. If approved by Council, the City of Palo Alto Utilities Department (CP AU) would continue to provide specialized consulting services to the federal agencies under the LOA as long as it was amended to be extended by the City Manager. It is anticipated that future revenues from the LOA would be approximately $40,000 per year. BACKGROUND Western provides the City's largest electric resource, so the City has focused analytical attention on the hydropower resource and its optimization for more than 20 years. During this time staff has developed considerable experience, specialized knowledge, skills, working relationships and Page 1 of3 analytical tools that are effective in analyzing and advising on opportunities and risks related to the federal hydropower resource. Both Western and Reclamation have come to depend on staffs ability to illuminate complex situations and suggest beneficial paths of action. Along with Palo Alto, Western's dozens of other customers benefit from the optimization of the resource. In order to support the time and effort Palo Alto staff contribute to the benefit of both federal agencies and all customers, the LOA was developed to allow Western and Reclamation to subscribe to consulting services and pay the Utilities Department's fully burdened labor cost rate for the service, ($161/ hour as of 7/1/2010). Palo Alto's Municipal code section 2.30.21O(i) gives the City Manager authority to sign contracts for the City to provide municipal services to other public entities where the term of the agreement does not exceed three years. The subject LOA has been extended twice by one-year term amendments and is now approaching the end of its third year. For ease of extending the LOA one year ata time for up to four years, staff is requesting Council authorize the City Manager to execute up to four additional one year extensions as needed and desirable .. RESOURCE IMPACT If approved, one to two hours per day of one staff member's time will continue to be spent on Western and Reclamation LOA tasks to produce value for all customers including Palo Alto. The amendment of the contract will enable Palo Alto to be compensated while performing work that is in Palo Alto's as well as other customers' interest. Minor clerical staff time will continue to be spent on billing Western monthly for the consulting work. From January 2008 through August 2010, the LOA has produced cumulative revenues for the City of $116,812. It is anticipated that future revenues from the LOA would be approximately $40,000 per year. POLICY IMPLICATIONS Continuing the consulting work of assisting the federal agencies in maximizing the value provided by the federal power resource generally conforms to City policies related to fiscal responsibility. ENVIRONMENTAL REVIEW Amending the consulting LOA is not a "project", because it is not an activity that may cause either a direct physical change in the environment or reasonably foreseeable indirect physical change in the environment. The federal agencies would be the lead agencies for any projects they may undertake under the National Environmental Policy Act (NEPA). Page 2 3 ATTACHMENTS A. Resolution B.. Letter of Agreement 07-SNR-01080; C. Amendment 3 to Letter of Agreement 07-SNR-OI080 :~:::~::~om Wesrem ilianking pm::: ::;c~ Senior Resource ~inator REVIEWED BY: .~~. Acting Assistant Director, Utilities Resource Management DEPARTMENT APPROVAL: VALE .E NG CITY MANAGER APPROVAL: C(jJ~MES KEENE \ '/' City Manager Page ATTACHMENT A Not Yet Approved Resolution No Resolution of the Council of the City of Palo Alto Authorizing the City Manager to Sign Up To Four Successive One-Year Term Extensions of the Letter of Agreement 07-SNR-OI080 to Facilitate the Provision of Hydroelectric Consulting Services by Palo Alto Utilities Staff Members to the Western Area Power Administration and the United States Bureau of Reclamation . '~ '. WHEREAS, the City of Palo Alto (the "City"), a municipal utility and a chartered city, is a customer of the Western Area Power Administration ("Western") for hydroelectric output marketed from the federal Central Valley Project (the "CVP") that is operated by the U.S. Bureau of Reclamation ("Reclamation"); and WHEREAS, the City's staff have developed considerable experience, specialized knowledge, resource modeling tools and techniques that are helpful to Western and Reclamation in modeling, forecasting, and optimizing the operation of the CVP for the benefit of power customers, including the City; and WHEREAS, in 2007, Western (on behalf of itself and Reclamation) and the City executed a one-year agreement, entitled Letter of Agreement 07-SNR-OI080 (the "LOA"), to . facilitate the provision of various hydroelectric consulting services by Palo Alto Utilities staff members to Western and Reclamation; and WHEREAS, Palo Alto Municipal Code section 2.30.210(i) grants the City Manager authority to sign contracts for the City to provide municipal services to other public entities for a term or terms not exceeding three years; and i WHEREAS, in 2007, the City Manager signed the LOA for a term of one year, and the term has been extended for two successive one-year terms, consistent with his authority under the Palo Alto Municipal Code; and WHEREAS, Western, Reclamation and the City desire to extend the term of the LOA for up to four additional one-year terms; NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby authorizes the City Manager or his designee to sign up to four one-year term extensions to the Letter of Agreement 07 -SNR -0 I 080, which terms will commence in 2010,2011,2012 and 20B,respectively. II II II 101025 jb 0073449 Not Yet Approved SECTION 2. The Council finds that the adoption of this resolution does not meet the definition of a project under Section 21065 of the California Environmental Quality Act and, therefore, no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager Senior Assistant City Attorney Director of Utilities Director of Administrative Services 2 101025 jb 0073449 ... ~!: Department of E;nergy Western Area Power Administration Sierra Nevada Customer Service Region , 114 Parkshore Drive Folsom, California 95630-4710 NOV - 7 2007 ·ATTACHMENT B AUTHENTICATED COpy Leiter or Agreement 07-SNR-01 080 Mr. Frank Senest City Manager City of Palo Alto ,250 Hamilton Avenue l 3rd Floor Palo Alto, CA 94301-2593 Dear Mr. Benest: This Letter of Agreement 07-SNR-01 080 (LOA) is between the City of Palo Alto (Palo Alto) and the Sierra Nevada Regional Office of the Western Area power Administration. (\JYestern). Palo Alto is a preference customer of Western and receives an allocation of the Base R,esource under Western's 2004 Power Marketing Plan. ' Western and Palo Alto, along with the Mid-Pacific Region of the Burec;tu of RecIam'ation . (Reclamation) have had discussions regarding exploring ways to continuously maximize the value of the Base Resource within the 'context of Reclamation's regulatory water . release constraints. Th!9 maximization of the value of the Base Resource,will benefit all of its preference customers; incliJding Palo AI~b. Western understands Palo Alto has unique internal expertise in this area. It is In the best interests of both Western and its preference customers for Western to obtain assistahce 'from Palo Alto in this area. All preference cl,Istomers Will benefitt6the' eXteht of their'Base Resou"rce percentages in any efforts that Western does to m~ximize the value of the Central Valley' Project (CVP) generation.' ' . . . .. Western' and Palo Alto are also parties to Contract 03-SNR-00583 1 Central Valley 'Project Corporation Funding Contract (Contract). The Contract provides a mechanism for e$tablishing a funding arrangement to allow for a more, predictable flow of funds related to Westefn's power rates and/or direct charges. The Contract also provides for an energy exchange program between Western and its preference customers which provides firm power for project use and first preference customers during certain times. Both of these programs were instituted at the request of Western's customers as a ,means of trying to stabilize the unpredictability of Western's costs and Base Resource deliveries. If Western, Reclamation, and Palo Alto are able to institute any Page 1 of? ""': . AUTHENTICATED COpy AUTHENTICATED 'COpy Letter of Agreement 07-SNR-01080 . . improvements as outlined in .this LOA to maximize the value of the Base Resource to Western's preference customers, it could result in a reduction of the efforts needed' under the Contracrto provide a cost stabilization fund. and t~e need to require . ; preference customers to provide energy to Western to meet project use and first preference customer loads. ' 1. yvestem and Palo Alto agree to the following terms and conditions: 1.1 Palo Alto will provide a technical resource to provide analytical services to. . maximize the value of the Base Resource from the CVP (Le., hydropqwer resource value maximization). 1.2 'Within 15 days of the execution of this LOA, Palo Alto shall notifY both Western and Reclamation of the analyst designated by' Palo Alto, at its 'sole discretion, to perform the services designated in this LOA. . . . 1.3 The analyst from Palo Alto will use technical hydropower-generation data and schedul~s that are provided by Reciamation to Western and its preference customers to provide alternative recommendations related to water operations. which still allow Reclamation to comply with its statutory and contractual' downstream at:ld in-stream water delivery requirements while still allowi.ng the value of the hydropower generation to be maximized to the extent practicable: . 1.4 . The analyst will review the operation of the tvp on a daiiy basis and' . . periodically, as the need ~rises and. as agreep to by Western's point of contact. the analyst will provide review and recommendation$ to both Western and . Reclamation resource.personnel related to CVP daily, weekly, monthly, or seasonal water/power fOJecasts.. Such analysis will be focused towards maximizing the value of the Base Resource within water operational constraints gnd 'corltnjl area limitations. ' : . .., , '. . 1.5 On approximately a monthly basis the analyst will also provide 2~ month. .' generation forecasts based on the 12 month 50% exceedence inflow water models published by Reclamation including estimates of thE? daily costs of hypothetical water bypasses at each major CVP powerplant and estimates of the daily lost value of hypothetical single and doubleunitor lineoutages'at each . poWerplant for Western and Reclamation personnel to use in their estimates of the lost generation costs of outages and bypas~es. 1.6 Occas.ionally' as requested by Western re~ource personnel the analyst may be asked to commit additional time (to the extennt does not int~rfere with , Palo Alto duties) to revi.ew and make recommenqations on, plant and/or line . maintenance pl~ns, altern.atives, outages and rapid return to service values,' etc. " PE}ge 2 of 6 AUTHENTICATED COpy I . r i J AUTHENTICATED GOPY . Letter of Agreement 07-SNR~01080 As with all products, these are only recommendations, af.ld ultimately, managerial personnel at both Western and Reclamation need to concur and approve any such recommendations before any changes are implemented. , ' 1.7 The analyst may provide other services under this. LOA if requested by'the Western point of contact and agreed to by the,Palo Alto point of contact. These services may involve maximizing the value of the Base Resource through ' " evaluating pu'rchase power options to meet Western's contractual and statutory obligations. The Reclamation point of contact will coordinate all requests for yvork to be performed by P~lo Alt9 on behalf of Reclamation through the Western . point of contact. " The contact information for both Western and Reclamation resources personnel .. are as follows: ' Western: 'Mr:Tom Patton Power Resource's 114 Parkshore Drive Folsom, CA 95630 (916) 353~4511 Reclamation: Mr. Paul Landry , 3310 EI Camino Avenue J Suite 300 ' Sacramenfo, CA 95821 (916) ,979~0255 " , '·l.B The analyst will 'be 'a'iiowed to"work'from a'-remote 'site' to' cOmplete··tDe analysis identifiea in this LOA. It is estimated that the analyst could spend, on average, approximately 10-12 hours per week performing servIces under this " LOA related to items 1.3, 1.4 and 1.5 above with a total number of h'ours on all tasks under this LOA not to exceed BOO hours per ye,ar. : 1.9 The estimated .. cost for the analyst to perform services under thi.s LOA will be'based on Palo Alto's fu'lly purdened labor cost which is estimated to be , ~. . $,104.00 per hour. , ~ ~ III /'f. c/ '?-1/-: 110 , . ~ .Il,1-c1l.$' 7ft 7(7 .~I ' 1.10 Jt is not antiCipated that a:ny travel or other miscellaneous expenses will be required under thi1:!LOA that will require reimbursement by eitner Western or' .. , Reclamation. If any travel or other misceJ.laneous expenses are requir€ld by either Western or Reclamation under this LOA, Palo Alto will be reimbursed for. the travel time and miscellaneous expense:, Page 3 of6 'AUTHENTICATED COpy AUTHENTICATED COpy Letter of -Agreement 07 -SNR~01 080 . 1.11 Throughout the oourse of. each yearl Palo Alto representatives part.icip·ate in 6ther CVP power related activities (such as the Customer Coordination · Committee, Technical Committee associated with the Customer Funding Program, Western's periodic customer meetings l or rate processes, etc). It is · not anticipated that the costs of the analyst1s participation in any of these types m~etjngs will be reimbursed under. this LOA. . / · 1.12 Western and Reclamation shall provide Palo Alto Representative with general guidelines, potential scenarios and/or desired outcomes for maximizing the benefits of the CVP generationl as well as the appropriate data n~eded for the analyses. Such data could include, butis not'limit~d to: monthly, weekly, daily and/or hou'rly historical and forecasted data for purchases and sales of power .. CVP generation, forecast~d and actual loads, ISO scheduling protocols i etc. 1.13 Western and ReClamation will evaluate and give feedback on the information provided by the Palo Alto Representative as·it relates to maximizing the value of the CVP generation. Nothing in·thls LOA is intended to commit Western or Reclamation to a course of action. Analyses and supporting data will not be released to entities other than the Federal agencies unless both agencies agree to the diss'emination of such information. . 2. Compensation: . 2.1 Palo Alto will bili Western for services rendered Ulider this 'LOA at the end of each month. Please reference LOA 07-SNR-01080 on the bill. 1he bill will be sent to the following address: Accounts Payable ATTN: NaOOO \ '. . Western Area Power Administration . 114 Park$ho"re Drive Folsom,' CA 95630 2.2 Western and Reclamation have agreed that each agency will pay one half of the estimated cost as set forth in Sectiqn··1 above. Western will pay the full invoice issued by.Palo Alto in accQrdance .with the due date on the. bill for collection. Western will initially pay the'full amount as set forth above to Palo Alto, and Will then coHect Reclamation's share of the costs via a Local Agreement under the Consolidated Operation and Maintenance Agreement (referenced as Western Agreem~nt 03-SNR-00560; and Reclamation Agreement 2~0720-00448) .. Western and Reclamation will execute such Local Agreement . a~ a separate document and will reference this LOA. Page4 of 6 AUTHENTICATED COpy I, AUTHENTICATED COpy tetter of Agreement 07 ~SNR-01 080 3. Contingent Upon Appropriations and Authorization: 4. 3.1 . Where activities provided for iri the contract extend beyond the current fIscal year, continued expenditures by Western are contingent upon Congress making the necessary appropriations required for the continued performance of Western's obligations under this LOA. In case such appropriation is not made, Palo Alto hereby releases Western from its contractual obligations and from all liability due to the failure of Congress to m,ake such ,appropriation. ,. , 3.2 . Palo Alto policy requires full cost recovery forwork performed. Western and or Reclamation shall not request nor require of Palo Alto any work wIthout .' either appropriati~:>ns or a final continuing resolution, Palo Alto shall have the right to refuse work'without appropriations or a continuing rE}solution. Covenant Against-Contingent Fe'es: Palo Alto warrants that no person or selling agency has been employed or retained to solicit or secure this LOA upon an agreement or understanding for a commisSion, percentage) brokerage, or contingent fee, excepting bona fide , er:nployees or bona fide established commercial or selling agencies l11aintained by Palo Alto forthe'purpose of securing business. For breach or violation of this warranty; West~rn shall have the right to annul this LOA without liability or in its discretion to deduct from the LOA price or ,consideration the full amount of such ' commission, percentage, brokerage, or con~ingent fee. 5. Contract Work Hours and Safety Standards: . This ~OA, to the extent ,that it is of a character specified In Section 103 of the Contract Work Hours and Safety Standards Act (Act), 40 U:S,C. § 370,1, as amended or supplemented, is subject to the provisions of the Act, 40 U.S.C. §§ 3701-370'8, as-amended or supplemented, and to'TegulationspromtJlgated by- the Secretary of Labor pursuant to the Act. ' 6. Equal Opportunity Employment Practices: Section 202 of Executive Order No. 11246, 30 Fed. Reg. 12319 (1965), as amended by Executive Order No. 12086,43 Fed. Reg. 46501 (197!32.!_as .­ amended or supplemented, which provides, among other things, that Palo Alto will not discriminate against any employee or applicant for employment because . of race, color, religion, sex) or national origin, is incorporated herein by reference the saine as if the specific language had been written into the contract, except that Indian Tribes and tribal orga'nizations may apply Indian preference to the extent permitted by Federal law. ' , Page 5 of6 AUTHENTICATED COpy " AUTHENTlCATED COpy" '" letter of Agreement 07-SNR-01080 '- 7, Use of Convict Labor: . Palo Alto agrees. not to employ any person undergoing sentence 6f imprisonment in performing trie contract except as provided by 18 U.S.C. § 3622(c), as ' amended.or supplemented, ~nd Executive Order No; 11755,39 ·Fed. Reg .. 779 (1973), as amended or supplemented. 8. Term: This LOA shaWbecome effective 'Upon execution by Palo Alto and Western, and shall remain in effect for a period of one year; Provided, That the parties may mutually agree to extend the term of this LOA for successive one . year terms by executing an amendment to this LOA , If you are in agreement with the terms and conditions of this 'LOA, please have the . appropriate official sign, date, and attest if appropriate ,both ori.ginals, and return' one to Ms. Ruth Nys" Mail Code N6205, at this office. . . . Sincerely; ;Jerra(l~ Sonja A. Anderson . . Power Marketing Manager In Duplicate . . ,. '" ...... .•. CilyOfP~ . ... , .......... = ...... ~". " By:" . . . . ' Title: . City Manager .Addtess:. __ ~ ______ _ Oate: ___ NO_V_1_3 _20_07_._' __ _ ... - Page 6'of6 AUTHENTICATED COpy · Department ·of Energy Western Area Power Administration Sierra Nevada Customer Service Region 114 Parkshore Drive 'Folsom, California 95630-4710 OCT 14 2009 Amendment 2 to Letter of Agreement 07-SNR-01 080 Mr. James Keene City Manager City of Palo Alto 250 Hamilton Avenue. 3rd Floor Palo Alto. CA 94301-2593 Dear Mr. Keene: The Sierra Nevada Regional Office of the Western Area Power Administration (Western) and the City of Palo Alto (Palo Alto) are parties to Letter of Agreement 07-SNR-01080 (LOA) under which Palo Alto has ,been providing a technical resource to provide analytical services to' maximize the value of the Base. Resource from the CVP (Le., hydropower resource value maximization). Section '8 of the LOA provides that the parties may mutua.lly agree to extend the LOA for successive one year terms by executing an amendment to the LOA: Both Palo Alto and Western staff have agreed that there would be a mutual benefit in extending the LOA for another year. Therefore. by executing this Amendment 2 to the LOA, the Parties agree to an extension of the LOA through November 30.2010. If you are in agreement with the terms and conditions of this Amendment 2, please have the appropriate official sign and date both originals, have the signatures attested, and return one original to Ms. Ruth Nye, mail code N6205. at Western's Sierra Nevada Region Office. If you have any questions. please contact Ms. Jeanne Haas at (916) 353-4438. Sincerely. ;& '!2~ sonj~erson . Power Marketing Manager \ In Du plicate Page 2 Amendment 2 to Letter of Agreement 07 -SNR-01 080 CITY OF PALO ALTO it ,.;I r- By: r ';z j{ u= '};--~'. Title: < City Manager . Address: 2 So J'4Cl(h" (fen A· VF· Pedo . A 1'+0 J CA CJ43dj Dated: I o"~ 2 J -(')9 Mr. James Keene City Manager City of Palo Alto 250 Hamilton Avenue, 3 rd Floor Palo Alto, CA 94301-2593 Dear Mr. Keene: . ATTACHMENT C Amendment 3 to Letter of Agreement 07 -SNR-01 080 'The Sierra Nevada Regional Office of the Western Area Power Administration (Western) and the City of Palo Alto (Palo Alto) are parties to Letter of Agreement 07 -SNR-01 080 (LOA) under which Palo Alto has been providing a technical resource to provide analytical services to maximize the value of the Base Resource from the CVP (Le., hydropower resource value maximization). Section 8 of the LOA provides that the parties may mutually agree to extend the LOA for successive one year terms by executing an amendment to the LOA. Both Palo Alto and Western staff have agreed that there would be a mutual benefit in extending the LOA for another year. Therefore, by executing this Amendment 3 to the LOA, the Parties agree to an extension of the LOA through November 30, 2011. If you are in agreement with the terms and conditions of this Amendment 2, please have the appropriate official sign and date both originals, have the signatures attested, and return one original to Ms. Ruth Nye, mail code N6205, at Western's Sierra Nevada Region Office. If you have any questions, please contact Ms. Jeanne Haas at (916) 353-4438. Sincerely, Sonja A. Anderson Power Marketing Manager Ms. Valerie Fang Utilities Director City of Palo Alto , 250 Hamilton .Avenue Palo Alto, CA 94301· Department of Energy. Western Area Power Administration Sierra Nevada Customer Service Region .114 Parkshore Drive Folsom, California 95630-4710 SEP 1 9 2008 l,/!3.t. .. ' Dear Ms. ,f..0ng;' /; . ATTACHMENTD SEP 2 62008 The Western Area Power Administration (Western) wishes to thank yo.u for making /' . Mr. Tom Kabat available to provide analytical support to the Bureau of Reclamation's (Reclamation) and Westem's hydropower generation and transmission programs. Tom is an innovative and out-of-the box analyst and is, highly respected by his peers in the industry. His insights and suggestions have improved the efficiency of th'e Federal hydropower generation function. Western appreciates the collaborative approach our customers take to share resources for the benefit of the entire preference power community. Tom's contributions have assisted Reclamation and Western to create the most value from Federal hydropower generation. Western strongly supports the continuation of the current arrangements. Thank you again forallowing Tom to perform this work forthe benefit of the entire C~ntral Valley Project.