HomeMy WebLinkAbout2004-03-15 City Council (8)City of Palo Alto
City Manager’s R r_ t
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:MARCH 15, 2004 CMR:174:04
SUBJECT:ADOPTION OF A RESOLUTION OF THE COUNCIL OF THE
CITY OF PALO ALTO IN THE AMOUNT OF $167,000
APPROVING PARTICIPATION IN CERTAIN NORTHERN
CALIFORNIA POWER AGENCY MEMBER AGREEMENTS
(SECOND PHASE AND THIRD PHASE) FOR FINANCING OF
PLANNING AND DEVELOPMENT ACTIVITIES FOR
AGREEMENTS TO PURCHASE POWER AND PURCHASING
POWER FROM NCPA GENERATED BY LANDFILL GAS
ELECTRICITY PROJECTS AND WIND ELECTRIC
GENERATING PROJECTS
RECOMMENDATION
Staff recommends Council adopt the attached resolution authorizing the City Manager or
his designee to execute the three attached member agreements with the Northern
California Power Agency (NCPA), to conduct the necessary due diligence, and negotiate
power purchase contracts for electric energy supplies generated by wind and landfill gas.
BACKGROUND
On October 21, 2002, the City Council approved the Long-Term Electric Acquisition
Plan (LEAP) Guidelines [CMR:398:03], including Guideline #6: Renewable Portfolio
Investments, which serves as Palo Alto’s "Renewable Portfolio Standard". On August 4,
2003, Council approved the LEAP Implementation Plan [CMR:354:03], Task #1 of
which is to acquire renewable energy resources to meet LEAP Guideline 6.
On January 14, 2004, staff presented the Utilities Renewable Energy Supply
Implementation Plan (Plan) to the Utilities Advisory Commission (UAC). The UAC
report, presentation and surrounding discussion summary were provided to Council in an
informational report on March 1, 2004 [CMR:168:04]. The Plan has two "tiers": (1)
CMR:174:04 Page 1 of 4
power purchase agreements (PPAs) for the near term (2005-2008) to meet the 10%
renewable investment target by 2008, and (2) exploring new resource development
oppommities for the longer term (2009-2015) to meet the 20% renewable investment
goal by 2015. Resources being pursued for the near term are 15-30 MW of wind energy
from Solano County with deliveries beginning in 2005, and 3-10 MW of electricity from
landfill gas from various locations in and around the Bay Area, with deliveries expected
to.ramp up from late 2005 to 2007. The proposed projects have been selected by means
of the NCPA Renewable Energy RFP, described in detail in the previous staff reports.
The NCPA Commission approved the attached NCPA member agreements on February
26, 2004 (NCPA Commission Resolution 04-03 is attached). The member agreements
facilitate the next steps in completing the supply contracts needed to implement Tier 1 of
the Plan. Staff expects to bring the resulting .contracts to Council for approval to meet
these goals during the spring and summer of 2004.
DISCUSSION
Staff requests that Council adopt a Resolution authorizing the City Manager or his
designee to execute the three attached member agreements with the Northern California
Power Agency to conduct the necessary due diligence and negotiate power purchase
contracts for electric energy supplies generated by wind and landfill gas. There are two
second phase agreements, for landfill gas energy generated by several projects by
Ameresco, Inc., and Energy Developments, Inc. (EDI). There is one Third Phase
agreement, for wind power generated from the High Winds project by PPM Energy, Inc.
(PPM).
The NCPA facilities agreement, effective September 22, 1993, provides for three phases
of project planning and development. Each phase provides the option to the participating
members to participate in the subsequent phase .The first stage is exploratory, and was
completed by means of a comprehensive renewable energy RFP conducted jointly with
other NCPA members.
The second phase Consists of all work performed after one or more participants has
signed an agreement with NCPA for project study or development, before a third phase
agreement, and any accompanying power purchase agreement, becomes effective for
obtaining the rights to the output of an NCPA project. The two second phase agreements
are for projects that are yet to be constructed. The end result of the second phase
agreement is a third phase agreement and possibly an accompanying PPA, both to be
approved by Council. The third phase agreement is for a project has already been built.
The end result of the third phase agreement is a PPA, to be approved by Council.
CMR:174:04 Page 2 of 4
All of the projects govemed by these member agreements will be built, owned, and
operated by the third party suppliers. NCPA will serve as the scheduling coordinator,
managing the day-to-day balancing activities within the NCPA Pool, verifying deliveries,
monitoring supplier compliance with contractual obligations, and managing invoicing
and payment. NCPA will purchase the power directly from the projects, and allocate the
energy deliveries and costs to the participating members.
The output from these projects will be shared with Alameda Power & Telecom. Palo
Alto’s participation percentages are 50% for the landfill gas projects and 67% for the
wind project. These percentages also define the portion of the negotiation and due
diligence costs paid by each participant. Palo Alto’s share of the costs to complete the
work outlined in the three member agreements is $167,000.
The final product specification, volume, contract term, and pricing are to be finalized
during negotiations. The combined volume in Tier 1 will meet 8-12% of the City’s
expected load. Energy payments will be made as energy is delivered. Estimated total Palo
Alto annual cost of the proposed wind PPA is $2.5-5 million. Estimated total Palo Alto
annual cost of the proposed landfill gas PPAs is $2-4 million. Energy supplies from wind
could start as soon as January 1, 2005, and from landfill gas starting in late 2005 and
ramping up through 2007. These contracts are expected to allow Palo Alto to move
aggressively toward meeting its LEAP Guideline #6 renewable energy targets well within
the system average rate impact limit of ½ C/kWh.
RESOURCE IMPACT
Funds to support Palo Alto’s $167,000 share of the costs to complete the work outlined in
the three member agreements are included in the Utilities Electric Fund Supply budget
for the current fiscal year 2003-2004.
POLICY IMPLICATIONS
The proposed Member Agreements are key elements of the Utilities Renewable Energy
Supply Implementation Plan, and supports the Council-approved Utilities Strategic Plan
[CMR 432:02] and Utilities Strategic Implementation Plan [CMR:223:01].
Renewable energy supplies are required to meet the targets established by Council in
LEAP Guideline #6 (Renewable Portfolio Investments) and also support LEAP Guideline
#2 (Hydro Risk Management) and #3 (Market Risk Management) by diversifying Palo
Alto’s resources, and #5 (Local Generation) through exploring local renewable
generation alternatives.
CMR:174:04 Page 3 of 4
Implementing LEAP Renewable Portfolio Investments also supports City’s Sustainability
Policy Statement, adopted April 2, 2001 [CMR 175:01], the Green Government Pledge,
adopted July 19, 1999 [CMR 284:99] and elements of the Comprehensive Plan,
specifically:
1. GOAL N-9: A clean, efficient, competitively-priced energy supply that makes use
of cost-effective renewable resources, and Policies
2. POLICY N-44: Maintain Palo Alto’s long-term supply of electricity and natural
gas while addressing environmental and economic concerns.
3. POLICY N-48: Encourage the appropriate use of alternative energy technologies.
ENVIRONMENTAL REVIEW
Execution of the Member Agreements does not constitute a project for the purposes of
the California Environmental Quality Act (CEQA). However, Palo Alto and other
participating members intend to receive output from projects that will constitute a project
for the purposes of CEQA. These member agreements provide for NCPA, on behalf of
itself and the project members to ensure that environmental review has been conducted
and certified prior to progressing to any project’s subsequent phase.
ATTACHMENTS
A: Resolution authorizing the City Manager or his designee to execute the three attached
NCPA Member Agreements.
B: NCPA Resolution No. 04-03 Authorizing Execution of the Agreements.
C: Member Agreement (Third Phase), Wind, PPM Energy, Inc.
D: Member Agreement (Second Phase), Landfill Gas, Ameresco, Inc.
E: Member Agreement (Second Phase), Landfill Gas, Energy Developments, Inc.
Senior Resource Planner
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
HARRISON
Assistant City Manager
CMR: 174:04 Page 4 of 4
****NOT YET APPROVED****
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO APPROVING PARTICIPATION IN CERTAIN NORTHERN
CALIFORNIA POWER AGENCY MEMBER AGREEMENTS
(SECOND PHASE AND THIRD PHASE) FOR FINANCING OF
PLANNING AND DEVELOPMENT ACTIVITIES FOR
AGREEMENTS TO PURCHASE POWER AND PURCHASING
POWER FROM NCPA GENERATED BY LANDFILL GAS
ELECTRICITY PROJECTS AND WIND ELECTRIC
GENERATING PROJECTS RESPECTIVELY
WHEREAS, the City of Palo Alto (~City"), a municipal
utility and a chartered city, is a member of the Northern
California Power Agency (~NCPA") ;
WHEREAS, on October 21, 2002, the City approved seven
electric portfolio planning and management guidelines to guide the
development and management of the City’s long-term electricity
acquisition plan; one of the guidelines is to pursue target levels
of new renewable energy purchases equal to ten percent and twenty
percent of the City’s expected energy load by 2008 and 2015,
respectively;
WHEREAS, NCPA and its members are interested in
purchasing additional power generation from renewable resources
for the benefit of customers of NCPA members as well as financing
the planning and development activities for agreements to purchase
power from one or more landfill gas electricity or wind electric
generating projects;
WHEREAS, by purchasing these sources of renewable or
"green" power, NCPA and members like the City will help reduce the
production of greenhouse gases and assist in reducing volatile
organic compound emissions;
WHEREAS, certain NCPA facilities agreements provide for a
second stage of project planning through a second phase agreement,
and NCPA and its members contemplate financing the planning and
development activities for agreements to purchase power from
landfill gas electricity projects operated by Energy Developments,
Inc. and Ameresco, Inc.; and
WHEREAS, certain NCPA facilities agreements provide for a
third stage of project deve!opment through a third phase
agreement, and NCPA and its members contemplate contracting for
power generated by PPM Energy, Inc.’s wind electric generating
projects;
NOW, THEREFORE, the Council of the City of Palo Alto
hereby RESOLVE as follows:
SECTION i. The Council hereby approves the City’s
execution of the following three member agreements with NCPA:
Member Agreement (Second Phase) for Financing of
Planning and Development Activities for Agreements
to Purchase Power from One or More Landfill Gas
040310 cl 0072365 1
****NOT YET APPROVED****
Electricity Projects Proposed by Energy
Developments, Inc. in the Greater San Francisco Bay
Area.
o Member Agreement (Second Phase) for Financing of
Planning and Development Activities for Agreements
to Purchase Power from One or More Landfill Gas
Electricity Projects Proposed by Ameresco, Inc. in
the Greater San Francisco Bay Area.
o Member Agreement (Third Phase) to Purchase Power
from the Northern California Power Agency Pursuant
to an Agreement to Purchase Power Generated from the
High Winds Electric Generating Project Operated by
PPM Energy, Inc.
The City Manager or his designee is hereby authorized to sign the
contracts referred to above on behalf of the City of Palo Alto.
SECTION 2. The Council finds that the adoption of this
resolution does not constitute a project under the California
Environmental Quality Act and no environmental assessment is
required. The Council further finds that the City intends to
receive energy output from projects that will constitute a project
for CEQA purposes; in that regard, the member agreements with NCPA
require NCPA on behalf of itself and participating NCPA members to
conduct and otherwise obtain the necessary environmental
assessments, reviews and certifications before proceeding to
subsequent phases of the member agreements.
INTRODUCED ~ PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED:
APPROVED AS TO FORM:City Manager
Senior Asst. City Attorney Director of Administrative
Services
Director of Utilities
040310 cl 0072365 2
CMR:17404: AI-IACHMENT [~
RESOLUTION NO. 04-03
RESOLUTION OF THE COMMISSION
OF THE NORTHERN CALIFOP~N-IA POWER AGENCY
AUTFIORIZENG EXECUTION OF THE
MEMBER AGREEMENT (SECOND PHASE) FOR
FINANCING OF PL.~NNING AND DEVELOPMENT ACTWITIES
FOR AGREEMENTS TO Pb~R.CI-L&SE POWER
FROM ON-E OR MORE LANDFILL GAS ELECTRICITY PROJECTS
PROPOSED BY ENERGY DEVELOPNIENTS, INC.
IN" TEE GREATER SAN FRANCISCO BAY AREA
(Pittsburg and Another Location)
NIEMBER AGREEMENT (SECOND PHASE) FOR
FINANCING OF PLANNENG AND DEVELOPNIENT ACTIVITIES
FOR AGREEMENTS TO pLrRCFLASE POWER FROM ONE OR MORE LANDFILL
GAS ELECTRICITY PROJECTS PROPOSED BY
AMERESCO, INC. IN THE GREATER SAN FRANCISCO BAY AREA
(Livermore and Suisun)
MEMZBER AGREENIENT (THIRD PHASE) TO
PURCHASE POWER FROM TE1E
NORTHERN CALIFORNIA POWER AGENCY
PURSUANT TO A_N AGREEMENT TO PURCHASE POWER GENERATED
FROM TEE WEST CONTRA COSTA LANDFILL GAS ELECTRICITY PROJECT
OPER &TED BY At’viERESCO, INC.
ME~ER AGREEMENT (TEEtZD PHASE) TO
PURCHASE POWER FROM TEE
NORTHERN CALIZFORNIA POWER AGENCY
PURSU.&NT TO AN AGREEMENT TO PURCHASE POWER GENEP~ATED
FROM TEE HIGH WINDS ELECTRIC GE,.N~RATD, IG PROJECT
OPER~-kTED BY PPM ENERGY, INC.
ON BEHALF OF THIS AGENCY
,VHEREAS. this A_~encv conducted a competitive evaluation of potential
rene:vabie resource opportunities proposed by an array or" respondents to the Agency’s
fom~al request for proposals: and
~,x,.m~:~= x<,, ,._,-.~...,~. certain of the Agenc:.’:s member entities -,e~ue_t2 ~ that the A~enc:’_
proceed .:o fitrther deve!op ,:andidate projects through the second or third phases of
~roiect deveiopment, as orovided in .:he MemSe:" A.~,e~m,.nts .’.isted by ~itie above: now
THEREFORE, BE IT HEREBY RESOLVED by the Commission of the Northern
¯ California Power Agency, as follows:
Section 1. The above-entitled Member Agreements, in the form presented to this
meeting, are hereby approved, with such technical or non-substantive changes and
clarifications as may be approved by General Counsel.
Section 2. The General Manager is hereby authorized and directed to execute and
deliver the Member Agreements on behalf of this Agency and to manage and carry out
this Agency’s responsibilities pursuant to the Member Agreements upon and after their
effective dates, as instructed by the Project Members and Participants pursuant to such
Member Agreements.
PASSED AND ADOPTED this 26th day of February, 2004 by the following vote
on roll call:
Vote Abstained Absent.
Alameda
Biggs
Gridtey
Healdsburg "{
Lodi
Lompoc
Palo Alto
Port of Oakland
Redding
Roseville ......
Santa Clara
Truckee-Donner
Turlock
Ukiah
Plumas-Sierra
CMR:174:04: AI-I’ACHHENr C
MEMBER AGREEMENT (THIRD PHASE) TO
PURCHASE POWER FROM THE
NORTHERN CALIFORNIA POWER AGENCY
PURSUANT TO AN AGREEMENT TO PURCHASE POWER GENERATED
FROM THE HIGH WINDS
ELECTRIC GENERATING PROJECT
OPERATED BY
PPM ENERGY, INC.
This Agreement, by and between Northern California Power Agency, a
joint powers agency of the State of California, hereinafter called "NCPA" and its
members who execute this Agreement, hereinafter called "Participants,"
WITNESSETH:
WHEREAS, NCPA and the Participants are interested in purchasing
additional power generation from renewable resources for the benefit of the
customers of the Participants; and
WHEREAS, following a competitive proposal process, NCPA and the
Participants have evaluated the potential for purchasing electric power to be
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:O4.: AI-[ACI’IMENI
generated from the High Winds electric generating project operated by PPM
Energy, Inc. (Project); and
WHEREAS, by purchasing power generated from the wind, NCPA and
the Participants will help reduce the production of greenhouse gases, assist in
reducing the emission of volatile organic compounds and particulate matter, and
aid the State of California in reaching its renewable energy goals; and
WHEREAS, the September 22, 1993 Facilities Agreement provides for a
third stage of project development pursuant to a third phase Agreement; and
WHEREAS, this third phase Agreement will enable NCPA to negotiate a
power purchase agreement with PPM Energy, Inc., and if desired, conduct
further due diligence and environmental reviews of the Project; and
WHEREAS, to enable NCPA to conduct the foregoing activities, and to
enter into a power purchase agreement with PPM Energy, Inc., and purchase and
deliver power from the Project to the Participants, NCPA and the Participants
hereby enter into this third phase Agreement;
NOW THEREFORE, the parties hereto agree as follows:
Section 1. Definitions.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: AI-I’ACHMENI C
1.1 Balancing Account. The Balancing Account is an account
established at NCPA pursuant to this Agreement. The Balancing Account
is established to: (1) make timely payments to PPM Energy, Inc. under the
power purchase agreement and protect NCPA from potential Participant
default by providing funds and time to cure, (2) provide working capital
for NCPA’s provision of Project Services and to bridge timing differences
between the receipt of payments from Participants and the date payments
are due PPM Energy, Inc. and (3)provide security against Participant
default.
1.2 Commission. The NCPA Commission.
1.3 Commissioner.
appointed by a Participant.
A voting member of the Commission
1.4 Committee. An ad hoc committee composed of one
representative appointed by each Participant that will from time to time
provide liaison with NCPA regarding Project matters.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: AI-IACHMENI C
1.5 Electric System. Electric System means, with respect to each
Participant, all properties and assets, real and personal, tangible and
intangible, of the Participant now or hereafter existing, used or pertaining
to the generation, transmission, transformation, distribution and sale of
electric capacity and energy, including all additions, extensions,
expansions, improvements and betterments thereto and equipment
thereof; provided, however, that to the extent the Participant is not the
sole owner of an asset or property or to the extent that an asset or property
is used in part for the above described purposes, only the Participant’s
ownership interest in such asset or property or only the part of the asset or
property used for electric purposes shall be considered to be part of its
Electric System.
1.6 Participant. An NCPA member or associate member that is
a signatory to this Agreement.
1.7 Participation Percentage. The percentage share of each
Participant in this Agreement as set forth in Section 8.1, Participation
Percentages.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CHR:174.’:0~: ATTACHMENT C
1.8 Project Cost Allocation.
Participants in the NCPA Annual
Participation Percentages.
Project Costs allocated to the
Budget in proportion to the
1.9 Project Costs. Costs related to the Project as estimated in the
NCPA Annual Budget and incurred without estimation, due to
extraneous factors, throughout the operating year.
1.10 Project Services. The Services provided to the Participants
by NCPA under this Agreement, including but not limited to NCPA’s
duties, as described in Section 3 of this Agreement.
1.11 Revenues. Revenues means, with respect to each
Participant, all income, rents, rates, fees, charges, and other moneys
derived by the Participant from the ownership or operation of its Electric
System, including, without limiting the generality of the foregoing, (a) all
income, rents, rates, fees, charges or other moneys derived from the sale,
furnishing and supplying of electric capacity and energy and other
services, facilities, and commodities sold, furnished, or supplied through
the facilities of its Electric System, (b) the earnings on and income derived
from the investment of such income, rents, rates, fees, charges or other
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: A’I-I’ACHHENT C
moneys to the extent that the use of such earnings and income is limited
by or pursuant to law to its Electric System and (c) the proceeds derived
by the Participant directly or indirectly from the sale, lease or other
disposition of all or a part of the Electric System, but the term Revenues
shall not include (i) customers’ deposits or any other deposits subject to
refund until such deposits have become the property of the Participant or
(ii) contributions from customers for the payment of costs of construction
of facilities to serve them.
1.12 SC Program Agreement.
Program Agreement.
The SchedulingCoordination
Section 2. Purpose. The purpose of this Agreement is to set forth the
terms and conditions under which NCPA will provide Project Services to the
Participants under this Agreement.
Section 3. NCPA Duties. NCPA shall perform the following Project
Services. Such duties shall include but are not limited to:
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: A.TTA~HMENI ¢
3.1 Negotiate a power purchase agreement to purchase the
output of the Proiect from PPM Energy, Inc. satisfactory to the
Participants.
3.2 Conduct any additional due diligence or environmental
review requested by the Participants.
3.3 When approved by the Participants, execute the power
purchase agreement with PPM Energy, Inc.
3.4 Estimate Project Costs and Project Cost Allocations.
3.5 Schedule Project output from the Project to the Participant.
3.6 Make timely collection from the Participants of Project
Allocations.
3.7 Deliver Project output and collect costs associated with such
delivery pursuant to the SC Program Agreement and the MSS
Aggregation Agreement and MSS Agreements defined therein.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
3.8 Pay PPM Ener~!, Inc. for the delivered Proiect output from
the Balancing Account.
Section 4. Participant Duties. The duties of the Participants are to:
4.1 Accept the Project output as delivered.
4.2 Pay NCPA for all Project Cost Allocations and maintain its
credit balance in the Balancing Account.
4.3 Provide staff and other assistance as may be required from
time to time necessary for NCPA to fulfill its duties described in Section 3.
Section 5. Billing and Payments.
5.1 Estimated Invoice. NCPA will issue estimated invoices for
Project Cost Allocations to Participants not later than 15 calendar days
after the end of each month, with payment due thirty (30) calendar days
after the date of the invoice. These invoices will be based on schedules,
metering data, and estimates. At the request of individual Participants,
these invoices shall be provided in electronic format.
8
NCPA PACKET DRAFT FEBRUARY 19, 2004
Cf, IR:17~:04: ATTACHI~ENT C
5.2 Adjusted Invoice. When applicable, NCPA will issue
adjusted invoices for the Project Cost Allocations within thirty (30)
calendar days of receipt of any adjustments to Project Costs. If the
adjusted invoice results in a credit amount due to any Participant, NCPA
will apply the credit to the balance of the Participant’s share of the
Balancing Account. At the request of individual Participants, these
invoices shall be provided in electronic format.
5.3 Projects Costs. Monthly billing statements prepared by
NCPA shall be sent to each Participant showing the Participant’s
Participation Percentage of Project Costs and other expenses relating to
this Agreement incurred by NCPA for the previous month. Each
Participant’s Project Cost Allocation shall be based on its Participation
Percentage.
5.4 Application of Balancing Account. NCPA may apply a
Participant’s share of the Balancing Account to the payment of any
portion of an invoice allocated to that Participant. Application of such
funds shall not relieve the Participant from any late payment charges
pursuant to Section 5.5.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
5.5 Late Payments. Amounts shown on each invoice are due
and payable at the time noted on the invoice, but not later than thirty (30)
days after the date of the invoice, except that any amount due on a Friday,
holiday or weekend may be paid on the following working day. Any
amount due and not paid by a Participant shall bear interest at the per
annum prime rate (or reference rate) of the Bank of America NT & SA
then in effect, plus two percent per annum computed on a daily basis until
paid.
5.6 Settlement Data. NCPA will make metering and settlement
data, including underlying data received from PPM Energy, Inc., available
to the Participants. Procedures and formats for the provision of such data
will be as established by the Participants and NCPA from time to time.
5.7 Audit Rights. Each Participant shall have the right to audit
any data created or maintained by NCPA pursuant to this Agreement on
thirty (30) days written notice unless otherwise agreed by such Participant
and NCPA.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04.: AI-IACHMI::NI ¢.
5.8 Participant Covenants. Each Participant covenants and
agrees (a) to establish and collect rates and charges for the services and
conmaodities provided by its Electric System sufficient to provide
Revenues adequate to meet its obligations under this Agreement and to
pay all other amounts payable from, and all lawful charges against or
liens upon, the Revenues; (b) to make payments under this Agreement
from the Revenues of, and as an operating expense of, its Electric System;
(c) to make payments under this Agreement whether or not there is an
interruption in, interference with, or reduction or suspension of services
provided under this Agreement ~uch payments are not subject to any
reduction, whether by offset or otherwise, and regardless of whether any
dispute exists); and (d) to operate its Electric System and the business in
connection therewith in an efficient, manner and at reasonable cost and to
maintain its Electric System in good repair, working order, and condition.
Section 6. Defaults.
6.1 Failure to Pay. If any Participant fails to pay any amount
due NCPA within thirty (30) days of the date of the estimated or final
invoice enumerating such amounts, the Participant is in default and
material breach under this Agreement.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04:ATrACI-IMEN1 C
6.2 Other Material Breaches. If a Participant is in default or in
breach of any of its covenants under any other agreement with NCPA, it
shall also be considered in material default of this Agreement.
6.3 Cure Period. Upon written notice by NCPA, a Participant
shall cure any default within five (5) working days.
6.4 Cure of Defaults. A default pursuant to Section 6.1 shall be
cured by the payment of any monies due NCPA, including any late
payment charges pursuant to Section 5.5, and repayment of any funds
drawn from the Balancing Account pursuant to Section 5.4. A default
pursuant to Section 6.2 shall be cured by compliance with the covenant.
6.5 Remedies in the Event of a Material Default. NCPA may
suspend the provision of Project Services and the delivery of Project output
to any Participant with a default which has not been cured within the Cure
Period, including deducting sums in default from the Balancing Account
share of the defaulting Participant, demanding further assurances, and
taking any other legal or equitable action before or after the Cure Period to
compel the correction of the default, as for example, to mandate the
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: AI-I-ACHMI:NI ¢.
collection of a surcharge to produce Revenues to secure the cure of the
default, (and the selection of one remedy shall not preclude the use of other
remedies), on behalf of NCPA and the non-defaulting Participants (in which
event the defaulting Participant shah not have the right to vote under the
provisions of this Agreement while such defaulting Participant is in material
default as determined by the non-defaulting Participants).
6.6 Obligations in the Event of Default. In the event that a
Participant’s share of the Balancing Account is insufficient to cover all
invoices for Project Costs sent to a defaulting Participant, (a) the defaulting
Participant shall cooperate in good faith with NCPA and shall cure the
default as rapidly as possible, on an emergency basis, taking all such action
as is necessary, including, but not limited to, raising rates and charges to its
customers to increase its Revenues to replenish its share of the Balancing
Account as provided herein, drawing on its cash-on-hand and lines of credit,
obtaining further assurances by way of credit support and letters of credit,
repairing its Electric System, and taking all such other action as will cure the
default quickly; and provided, however, (b) that no Participant shall be
liable under this Agreement for the obligations of an), other Participant, and
each Participant shall be solely responsible and liable for performance of its
obligations under this Agreement, and (c) that the obligation of each
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATI-ACflMI:NI ~.
Participant under this Agreement is a several obligation and not a joint
obligation with those of the other Participants.
Section 7. Balancing Account.
7.1 Initial Amounts. Within thirty (30) days of the effective date of
this Agreement, each participant shall deposit in the Balancing Account, its
Participation Percentage of $100,000, and any other amount estimated by
NCPA as necessary to conclude negotiations with PPM Energy, Inc. for the
purchase of power from the Project, and any further reviews requested by
the Participants. Within thirty (30) days of the effective date of a power
purchase agreement with PPM Energy, Inc., each Participant shall deposit in
the Balancing Account an amount equal to its three highest months of the
Project Cost Allocation estimated by NCPA as associated with PPM Energy,
Inc. invoices for the succeeding twelve (12) months. NCPA shall maintain a
detailed accounting of the share of each Participant in the Balancing
Account. Interest earned on the Balancing Account shall be credited to the
shares of the Participants. Any losses in the Balancing Account shall be
allocated to the Participants’ shares.
14
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: AI-rACHI~ENT C
7.2 Periodic Reviews. Prior to the effective date of this Agreement
and at least quarterly thereafter, NCPA shall review the balances and
Participants shares of the Balancing Account to ensure the amount is equal
to the current projection of the three highest months of each Participant’s
Project Cost Allocation for the succeeding twelve months. Any funds in
excess of one hundred ten per cent (ll0%) of this amount shall be credited to
the Participants. If the funds on deposit in the Balancing Account are less
than ninety per cent (90%) of this amount, NCPA shall prepare an invoice to
the affected Participants who shall remit such funds within fl0irfy (30) days
of the invoice date.
7.3 Emergency Additions. In the event that the funds in the
Balancing Account are insufficient to allow payment of an PPM Energy, Inc.
invoice, demand, request for further assurances, or Claims related to this
Agreement, as defined in Section 12, NCPA shah notify all Participants and
then prepare and send a special or emergency assessment to the Participants.
Each Participant shall pay to NCPA such assessment when and if assessed
by NCPA.
7.4 Return of Funds. On the termination of this Agreement or the
withdrawal of a Participant, the affected Participant or Participants may
15
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04:AI-[ACHMEN1 C
apply to NCPA for the remm of their share of Balancing Account funds
ninety (90) days after the effective date of such termination or withdrawal.
NCPA shall, in its sole discretion, as determined by a vote of the
Commission, excluding the vote of the withdrawing Participant(s), estimate
the then outstanding liabilities of the Participant(s), including any estimated
contingent liabilities, such as by way of example PPM Energy, Inc. invoices
subject to dispute, and retain all such funds until all such liabilities have
been fully paid or otherwise satisfied in full. NCPA may apply any
remaining Balancing Account funds to any remaining obligation of such
Participant(s), including but not limited to revised PPM Energy, Inc.
invoices.
Section 8. Project Costs.
8.1 Participation Percentages. Project Costs and the rights to
Project output shall be allocated to the Participants on the basis of
Participation Percentages. The Participation Percentages of the Participants
are as follows:
Alameda requests 33.0000
Biggs 0.0000
16
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: AI’rACHMENT C
Gridley 0.0000
Healdsburg 0.0000
Lodi 0.0000
Lompoc 0.0000
Palo Alto requests 67.0000
Plumas-Sierra R.E.C.0.0000
Port of Oakland 0.0000
Redding 0.0000
Rosevflle 0.0000
Santa Clara 0.0000
Truckee Donner Public Utility District 0.0000
Turlock Irrigation District 0.0000
Ukiah 0.0000
100.0000%
8.2 Cost Estimation. NCPA, in conjunction with the Participants,
shall estimate its annual Project Costs associated with this Agreement in
providing Project Services that are to be alIocated to the Participants as
Project Cost Allocations in the Annual Budget. The Participants’ Committee
shall review the estimates.
17
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATrACHHENI C
8.3 Annual Budget. Prior to the beginning of each NCPA fiscal
year for which no budget has been adopted and for each fiscal year for
which a budget will be adopted, NCPA shall give notice to each Participant
of the Proiect Costs that NCPA estimates will be incurred as a result of this
Agreement. Such costs shall be allocated to the Participants by such me~hods
approved by the Commission on the basis of Participation Percentages, with
the adoption of the Annual Budget, in accordance with this Agreement.
Section 9. Adminisfration of Agreement.
9.1 NCPA. The Commission has
administration of this Agreement.
overall responsibility for the
9.2 Participants" Committee. The Participants’ Committee may
convene from time to time to advise NCPA during the course of negotiating
the power purchase agreement with PPM Energy, Inc., and if further due
diligence or environmental review is requested by the Participants.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMENT C
9.3.NCPA Commission Governance Of The Program.
9.3.1 Commission Meetings. The Commission shall meet in
accordance with provisions of the Joint Powers Agreement.
9.3.2 Q)uorum. A quorum of the Commission, for purposes of
acting upon matters relating to this Agreement, shall consist of those
Commissioners, or their designated alternates, representing a
numerical majority of the Participants, or, in the absence of such,
those Commissioners representing Participants having a combined
Participation Percentage of greater than fifty percent (50%).
9.4 Voting.
9.4.1 Agreement Voting. Each Participant shall have the right
to cast one vote with respect to matters pertaining to this Agreement.
Actions of the Commission with regard to this Agreement shall be
effective only upon a majority vote subject to the following
exceptions:
19
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMENT C
(a) Upon demand of any Participant, at any meeting
of the Commission, the vote on any issue relating to this
Agreement, shall be based upon the Participation Percentages.
Each Participant shall have a number of votes equal to its
Participation Percentage. Actions of the Commission shall be
effective only upon an affirmative vote of sixty-five percent
(65%) or more of the total votes to which all Participants are
entitled.
(b) Any Participant may veto a discretionary action
of the Participants relating to this Agreement that was not
taken by a sixty-five percent (65%) or more vote, within ten
(10) days following mailing of notice of such Commissioners"
action by giving written notice of veto to NCPA, unless at a
meeting of the Commissioners or alternates called for the
purpose of considering the veto, held within thirty (30) days
after such veto notice, the holders of Participation Percentages
totaling sixty-five percent (65%) or more shall vote to override
the veto.
20
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: AI’I’ACHMENT C
(c) The sixty-five percent (65%) affirmative vote
required for action pursuant to this section shall be reduced by
the amount that the voting rights of any Participant exceed
thirty-five percent (35%), but such sixty-five percent (65%)
shall not be reduced below a majority in interest.
Section 10. Term and Termination.
10.1 Term. This Agreement shall become effective on the date on
which it has been duly executed by NCPA and by one (1) of the Participants
and shall continue in effect until terminated by consent of all of the
Participants that have not withdrawn or materially defaulted as provided
herein on or after the end of the term of the power purchase agreement with
PPM Energy, Inc., or if such agreement is not executed with PPM Energy,
Inc. by December 31, 2004.
10.2 Termination and Partial Termination. Before the execution of a
power purchase agreement with PPM Energy, Inc., and not afterward, any
Participant may withdraw from this Agreement by submitting notice, in
writing, to all other Participants at least three (3) months in advance of the
effective date of such withdrawal. Withdrawal by any Participant shall not
21
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: A’I’I’ACHMENT C
terminate this Agreement as to the remaining Participants. Withdrawal by
any Participant will not terminate any ongoing or undischarged contingent
liabilities or obligations resulting from this Agreement until they are
satisfied in full or provision satisf.actory to NCPA and its nonwithdrawing
Participants has been made fpr their satisfaction in full. Such termination
shall be reflected in revised Participation Percentages.
10.3 Associated Costs. A Participant withdrawing from this
Agreement pursuant to Section 10.2 shall reimburse NCPA for any costs
resulting from withdrawal, including but not limited to the tegal,
accounting, and administrative costs of winding up and assuring the
complete satisfaction and discharge of the withdrawing Participant’s
obligations.
10.4- Suspension for Default. In the event that a default by a
Participant remains uncured for one (1) month after notice, NCPA may
suspend the delivery of Project output to that Participant and take any other
action, including the remedies for default provided in this Agreement. The
suspension and other action will not terminate any ongoing or undischarged
contingent liabilities or obligations resulting from this Agreement until such
obligations are satisfied in full, and all of the costs thereof, including
22
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMEN[ C
reasonable attorney fees, the fees and expenses of other experts, including
auditors and accountants, and other reasonable and necessary costs
associated with any and all of the remedies, are paid in full.
Section 11. Confidentiality. The Participants and NCPA will keep
confidential al! confidential or trade secret information made available to them in
connection with this Agreement, to the extent possible, consistent with applicable
laws, including the California Public Records Act. It shall be the responsibility of
the holder of the claim of confidentiality or trade secret to defend at its expense
against any request that such information be disclosed. Confidential or trade secret
information shall be marked or expressly identified as such.
Section 12. Indemnification and Hold Harmless. Each Participant agrees
to indemnify, defend and hold harmless NCPA and its members, including their
respective entities governing officials, officers, agents, and employees, from and
against any and all claims, suits, losses, costs, damages, expenses and liability of
any kind or nature, including, without limitation, reasonable attorneys’ fees and
the costs of litigation, including experts (Claims), to the extent caused by any
breach of contract, negligence, active or passive, gross negIigence or willful
misconduct of a Participant, its officers, employees, subcontractors or agents, to
23
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:t74:04: A’iTACHMENT C
the maximum extent permitted by law, but only as to Claims related to this
Agreement.
Section 13. No Consequential Damages. No party to this Agreement shall
be liable to NCPA or to any Participant or Participants for consequential damages
that might result from any action or inaction in connection with this Agreement.
Section 14. Amendments. Except where this Agreement specifically
provides otherwise, this Agreement may be amended only by wndtten instrument
executed by the parties with the same formality as this Agreement.
Section 15. Severabili _ty. In the event that any of the terms, covenants or
conditions of this Agreement or the application of any such term, covenant or
condition, shall be held invalid as to any person or circumstance by any court
having jurisdiction, all other terms, covenants or conditions of this Agreement and
their application shall not be affected thereby, but shall remain in force and effect
unless the court holds that such provisions are not severable from all other
provisions of this Agreement.
Section 16. Governing Law. This Agreement shall be interpreted, governed
by, and construed under the laws of the State of California.
24
NCPA PACKET DRAFT FEBRUARY 19, 2004
Section 17. Headings. All indices, titles, subject headings, section titles and
similar items are provided for the purpose of convenience and are not intended to
be inclusive, definitive, or affect the meaning of the contents of this Agreement or
the scope thereof.
Section 18. Notices. Any notice, demand or request required or authorized
by this Agreement to be given to any party shall be in writing, and shall either be
personally delivered to a representative of the Participant on the Commission and
the Secretary of the Commission or transmitted to the Participant and the secretary
at the address shown on the signature pages hereof. The designation of such
address may be changed at any time by written notice given to the Secretary of the
Commission who shall thereupon give written notice of such change to each
Participant.
Section 19. Warranty of Authority. Each Participant, and NCPA, represents
and warrants that it has been duly authorized by all requisite approval and action
to execute and deliver this Agreement and that this Agreement is a binding, legal,
and valid agreement enforceable in accordance with its terms as to the Participant
and as to NCPA.
25
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: A’I’I’ACHMENT C
Section 20. Counterparts. This Agreement may be executed in any number
of counterparts, and each executed counterpart shall have the same force and effect
as an original instrument and as if all the signatories to all of the counterparts had
signed the same instrument. Any signature page of this Agreement may be
detached from any counterpart of this Agreement without impairing the legal effect
of any signatures thereon, and may be attached to another counterpart of this
Agreement identical in form hereto but having attached to it one or more signature
pages.
IN WITNESS WHEREOF, each Participant has executed this Agreement
with the approval of its governing body, and NCPA has authorized this
Agreement in accordance with the authorization of its Commission.
NORTHERN CALIFORNIA CITY OF ALAMEDA
POWER AGENCY
By: /~/,~O 7/L_,ii__By:.
CITY OF BIGGS
By:.
By:.
CITY OF GRIDLEY
By:.
By:.
26
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMENT
CITY OF HEALDSBURG
By:
By:
CITY OF LOMPOC
By:.
By:.
PLUMAS-SIERRA RURAL
ELECTRIC COOPERATIVE
By:.
By:.
CITY OF ROSEVILLE
By:.
By:.
TRUCKEE DONNER PUBLIC
UTILITY DISTRICT
By:.
By:.
CITY OF UKIAH
By:.
By:.
CITY OF LODI
By:.
By:.
CITY OF PALO ALTO
By:.
By:.
CITY OF REDDING
By:.
By:
CITY OF SANTA CLARA
By:
By:
TURLOCK IRRIGATION DISTRICT
By:
By:
27
NCPA PACKET DRAFT FEBRUARY 19, 2004
CFtR:174:04: ATTACHI~ENT D
MEMBER AGREEMENT (SECOND PHASE) FOR
FINANCING OF PLANNING AND DEVELOPMENT ACTIVITIES
FOR
AGREEMENTS TO PURCHASE POWER
FROM ONE OR MORE LANDFILL GAS ELECTRICITY PROJECTS
PROPOSED BY
AMERESCO, INC.
IN THE GREATER SAN FRANCISCO BAY AREA
(Livermore and Suisun)
This Agreement, by and between Northern California Power Agency, a
joint powers agency of the State of California, hereinafter called "NCPA" and its
members who execute this Agreement, hereinafter called "Project Members,"
WITNESSETH:
WHEREAS, NCPA and the Project Members are interested in developing
additional power generation from renewable resources for the benefit of the
residential, commercial, and industrial customers of the Project Members; and
WHEREAS, following a competitive proposal process, NCPA and the
Project Members have evaluated the potential for purchasing electric power to be
1
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:17~:O~: AI"I’ACHf, IENT D
generated from one or more landfill gas electric generating projects proposed by
Ameresco, Inc. at two locations in the Greater San Francisco Bay Area, near
Livermore (Vasco Landfi!l) and Suisun (Portrero Hills Landfill) (Projects); and
WHEREAS, by purchasing power from combusting landfill gas, NCPA
and the Project Members will help eliminate a greenhouse gas, assist in reducing
the emission of volatile organic compounds and particulate matter from the
landfills, and aid the State of California in reaching its renewable energy goals;
and
WHEREAS, the September 22, 1993 Facilities Agreement provides for a
second stage of project planning pursuant to a Second Phase Agreement and the
identification of a first phase project as an NCPA project in a second phase
agreement; and
WHEREAS, the second phase consists of all work performed after one or
more participants has signed an agreement with NCPA for project study or
development, before a Third Phase Agreement becomes effective for obtaining
the rights to the output of an NCPA project; and
WHEREAS, to advance the due diligence investigation of the Projects and
further provide working capital for the negotiation of power purchase
agreements by which NCPA could purchase power if the Projects are developed,
2
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: A’I-IACI’IMENI D
NCPA and the Project Members hereby declare the Projects to be NCPA Projects,
as provided in the Facilities Agreement, and hereby enter into this second phase
Agreement;
NOW THEREFORE, the parties hereto agree as follows:
Section I. Obligations Formalized - Percentage Participation - Collections
and Accounting. NCPA, on behalf of itself and the Project Members, shall
investigate, evaluate, and if necessary or convenient, act as a lead or responsible
agency for the purchase of environmental review of the Projects, and negotiate
the terms and conditions of draft power purchase and third phase agreements
satisfactory to NCPA and the Project Members. Each Project Member agrees to
continue to pay or advance to NCPA, from its electric department net revenues
(after the payment of operating expenses) only, its percentage participation share
of the costs authorized by Project Members in accordance with this Agreement in
connection with the Projects prior to the execution of a Third Phase Agreement
authorizing NCPA to enter into power purchase contracts for one or more of the
Projects" output. Each Project Member further agrees that it will fix the rates and
charges for services provided by its electric department so that it will at all times
have sufficient money in its electric department
obligation. The percentage participation of each
established as follows:
revenue funds to meet this
Project Member is initially
3
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174.:04: ATTACHMENT
CMR:174:0~: ATTACHMENT D
Alameda requests 50.0000
Biggs 0.0000
Gridley 0.0000
Healdsburg 0.0000
Lodi 0.0000
Lompoc 0.0000
Palo Alto requests 50.0000
Plumas-Sierra R.E.C.0.0000
Port of Oakland 0.0000
Redding 0.0000
Roseville 0.0000
Santa Clara 0.0000
Truckee Donner Public Utility District 0.0000
Turlock Irrigation District 0.0000
Ukiah 0.0000
100.0000%
The percentage participation share of each Project Member shall be
revised proportionately if less than all NCPA members become Project Members
on the effective date hereof, and thereafter if and when any Project Member
withdraws in whole or in part. Any Project Member wholly withdrawing shall
4
NCPA PACKET DRAFT FEBRUARY 19, 2004
thereupon cease to be a Project Member for all purposes except for purposes of
Sections 4 and 7(c).
NCPA shall demand from each Project Member its share of its financial
commitment on a concurrent basis. Any part of such demand by NCPA which
remains unpaid for sixty days after its billing date shall bear interest from such
sixtieth day at the prime rate of the Bank of America then in effect computed on a
daily basis plus two percent until paid. Interest so earned shall not change any
Project Member’s participation percentage, and shall become a part of the
working capital account defined below.
The funds advanced according to this Section I shall be used to establish a
working capital account when approved by the Project Members, and in an
amount and subject to any limitations approved by the Project Members.
Nothing in this Section I shall be construed to prohibit a Project Member
from satisfying its financial commitments from unencumbered funds otherwise
on deposit at NCPA.
5
NCPA PACKET DRAFT FEBRUARY 19, 2004
Section 2.
Financing.
Limited Rights to Participate in Final Implementation and
(a) Discretion - Disposition of Power. In consideration of the
payments provided for in Section 1 hereof, each Project Member who has not
wholly withdrawn, or who is not then in default, shall have an exclusive option
to enter into a Third Phase Agreement for all or a part of its participation
percentage of all power made available to NCPA from the Projects.
(b) Increase in Purchases. A Project Member can, at the time of
entering into the Third Phase Agreement, purchase more than its participation
percentage of the Projects’ power if additional power is available by reason of the
non-participation in the Third Phase Agreement by one or more Project
Members. Such excess power shall be reallocated among those who do
participate in the same proportion as their shares bear to the total shares of those
who do participate. If Project Members so entitled do not wish to contract for all
the excess power, such remaining excess shall be disposed of as agreed to by the
Project Members.
(c) Exercise and Effect of Taking Less Than Full Entitlement.
The Project Members shall establish the terms and provisions of agreements for
NCPA to (i) purchase power from the Projects’ owner and (ii)for the Project
6
NCPA PACKET DRAFT FEBRUARY 19, 2004
C1~1R:174:0~: A’I-[ACflI~II:NI U
Members to purchase such power from NCPA, the latter to be known as the
Third Phase Agreement. The Project Members shall also establish the date by
which the Third Phase Agreement must be executed by Project Members and
delivered to NCPA if they are to participate in the purchase of power from the
Projects. Failure to execute the Third Phase Agreement for any of its total
participation share and to deliver it to NCPA by that date or 30 days after Project
Member receipt, whichever is later, will be an irrevocable decision on the part of
that Project Member not to purchase any such power or otherwise participate in
the Projects. Execution and delivery of the Third Phase Agreement for less than
its original total participation percentage, and delivery of that Project Member
executed agreement to NCPA by the date established or 30 days after Project
Member’s receipt, whichever is later, will likewise be an irrevocable decision on
the part o~ that Project Member not to purchase any such power in excess of the
share set forth in its delivered agreement. Supplemental agreements or other
agreements will be entered into for the excess or surplus power. The procedure
for processing supplemental agreements shall be consistent with those
prescribed immediately above in this subsection (c) for making purchases of
power. Failure to return an executed Third Phase Agreement for any additional
power within the prescribed period is an irrevocable decision not to purchase
such additional power. The Project Member making any herein defined
irrevocable decision not to purchase all of its original share of power shall be
7
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:17~:O~: A’I’[ACHMENT D
foreclosed from receiving, and shall be relieved of further burdens related to,
power which it has declined to purchase or further expense relative to the future
development of the Projects.
Section 3. Member Direction and Review. NCPA shall comply with all
lawful directions of the Project Members with respect to this Agreement, while
not stayed or nullified, to the fullest extent authorized by law. Actions of Project
Members, including giving directions to NCPA, will be taken only at meetings of
authorized representatives of Project Members duly called and held pursuant to
the Ralph M. Brown Act. Ordinarily, voting by representatives of Project
Members will be on a one member/one vote basis, with a majority vote required
for action; however, upon request of a Project Member representative, the voting
on an issue will be by percentage participation with a 65% or more favorable
vote necessary to carry the action.
Any decision related to the Projects taken by the favorable vote of
representatives of Project Members holding less than 65% of percentage
participation can be reviewed and revised if a Project Member holding any
participation percentage gives Notice of Intention to seek such review and
revision to each other Project Member within 48 hours after receiving written
notice of such action. If such Notice of Intention is so given, any action taken
specified in the Notice of Intention shall be nullified, unless the NCPA
8
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMENT D
Commissioners of Project Members holding at least 65 % of the total participation
percentage then in effect vote in favor thereof at a regular or specially called
meeting of Project Members. If the Notice of Intention concerned a failure to act,
such action shall nevertheless be taken if NCPA Commissioners of Project
Members holding at least 65% of the total Participation Percentage vote in favor
thereof at a regular or specially called meeting of Project Members.
Section 4. Repayment to Members. All payments and advances made
heretofore, and those hereafter made pursuant to Section 1, will not be repaid to
the Project Members making such payments and advances pursuant to this
Agreement, except out of the Projects’ unused funds, along with all other receipts
to which NCPA is entitled in connection with the Projects.
Section 5. Term. This Agreement shall take effect as of March 1, 2004, or
whenever executed by NCPA members holding 85% of the im’tial percentage
participation, whichever is later, and it shall not take effect at all if not in effect
by June 30, 2004. This Agreement shall be superseded by the Third Phase
Agreement pursuant to Section 2, except that Section 4 shah remain in effect.
Changes in this provision, except as to Section 4, shall be in accordance with
Section 3 hereof.
9
NCPA PACKET DRAFT FEBRUARY 19, 2004
Section Y. Assignment. This Agreement and any interest in it shall not be
assigned without ~he advance written consent of NCPA and the Proiect
Members.
Section 6. Financial Commitments. Each Project Member agrees to a total
financial commitment for its respective percentage participation of a total sum,
including payments and advances heretofore made, up to $100,000 in costs
allocable to NCPA, as authorized and approved by Project Members.
Section 8. Withdrawal From Further Participation. If at any time
following the execution of this Agreement, there is an increase in the financial
commitment beyond that contemplated in Section 6, Project Members may
partially withdraw, i.e., from participation in the increase, or may withdraw
wholly from the Projects. Any withdrawal shall be subject to honoring any
commitments made by them or on their behalf pursuant to authorization of this
Agreement. To withdraw, such Project Members shall give NCPA written notice
of such withdrawal, in part or in whole, within thirty (30) days of the receipt of
the notice by them of the increase.
Section 9. Voting Rights and Duration. A Project Member is participating
for purposes of Section 3 percentage voting until it completely withdraws, but a
partial withdrawal will result in a reduction in its percentage participation share
10
NCPA PACKET DRAFT FEBRUARY 19, 2004
to the ratio of its payments after such withdrawal to the total amount of
payments by all Project Members after such withdrawal. When the Third Phase
Agreement is executed, or revised, revised participation percentages for voting
shall be established by dividing the amount of power agreed to be purchased by
each Project Member by the total amount of power to be purchased by all Project
Members except that the 65% of percentage participation specified in Sections 3
and 9 shall be reduced by the amount that the percentage participation of any
Project Member shall exceed 35%, but such 65% shall not be reduced below 50%.
Section 10. Quorum Defined. The presence of either a majority of the
Project Members, or of Project Members then having a combined participation
percentage of at least 65%, shall constitute a quorum for the purpose of action.
Section 11. Indemnification. Each Project Member agrees to indemnify,
defend and hold harmless NCPA and its members, including their respective
governing officials, officers, agents, and employees, from and against any and all
claims, suits, losses, costs, damages, expenses and liability of any kind or nature,
including, without limitation, reasonable attorneys’ fees (Claims) to the extent
caused by any breach of contract, negligence, active or passive, gross negligence
or willful misconduct of the Project Members, their officers, employees,
subcontractors or agents, to the maximum extent permitted by law, but only as to
Claims related to this Agreement.
11
NCPA PACKET DRAFT FEBRUARY 19, 2004
IN WITNESS WHEREOF, each Project Member has executed this
Agreement with the approval of its governing body, and NCPA has authorized
this Agreement in accordance with the authorization of its Commission.
NORTHERN CALIFORNIA
POWER AGENCY/. 1
By: ~V~/(~;i .~"
CITY OF ALAMEDA
By:.
By:.
CITY OF BIGGS CITY OF GRIDLEY
By:By:.
By:By:.
CITY OF HEALDSBURG CITY OF LODI
By:By:
By:By:
CITY OF LOMPOC CITY OF PALO ALTO
By:By:
By:By:
12
NCPA PACKET DRAFT FEBRUARY 19, 2004
PLUMAS-SIERRA RURAL
"ELECTRIC COOPERATIVE
By:
By:
CITY OF ROSEVILLE
By:.
By:.
TRUCKEE DONNER PUBLIC
UTILITY DISTRICT
By:.
By:.
CITY OF UKIAH
By:.
By:.
CITY OF REDDING
By:
By:
CITY OF SANTA CLARA
By:
By:
TURLOCK IRRIGATION DISTRICT
By:
By:
13
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04:A’I-IACHMEN1 E
MEMBER AGREEMENT (SECOND PHASE) FOR
FINANCING OF PLANNING AND DEVELOPMENT ACTIVITIES
FOR
AGREEMENTS TO PURCHASE POWER
FROM ONE OR MORE LANDFILL GAS ELECTRICITY PROJECTS
PROPOSED B½
ENERGY DEVELOPMENTS, INC.
IN THE GREATER SAN FRANCISCO BAY AREA
(Pittsburg and Another Location)
This Agreement, by and between Northern California Power Agency, a
joint powers agency of the State of California, hereinafter called "NCPA" and its
members who execute this Agreement, hereinafter called "Project Members,"
WITNESSETH:
WHEREAS, NCPA and the Project Members are interested in developing
additional power generation from renewable resources for the benefit of the
residential, commercial, and industrial customers of the Project Members; and
WHEREAS, following a competitive proposal process, NCPA and the
Project Members have evaluated the potential for purchasing electric power to be
1
NCPA PACKET DRAFT FEBRUARY 19, 2004
CHR:174:04.: ATrACHH~-NI I::
generated from one or more landfill gas electric generating projects proposed by
Energy Developments, Inc. at two locations in the Greater San Francisco Bay
Area, near Pittsburg (Keller Canyon Landfill) and another Location (Undisclosed
Bay Area Landfill) (Projects); and
WHEREAS, by purchasing power from combusting landfill gas, NCPA
and the Projec.t Members will help eliminate a greenhouse gas, assist in reducing
the emission of volatile organic compounds and particulate matter from the
landfills, and aid the State of California in reaching its renewable energy goals;
and
WHEREAS, the September 22, 1993 Facilities Agreement provides for a
second stage of project planning pursuant to a Second Phase Agreement and the
identification of a first phase project as an NCPA project in a second phase
agreement; and
WHEREAS, the second phase consists of all work performed after one or
more participants has signed an agreement with NCPA for project study or
development, before a Third Phase Agreement becomes effective for obtaining
the rights to the output of an NCPA project; and
WHEREAS, to advance the due diligence investigation of the Projects and
further provide working capital for the negotiation of power purchase
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ,ATTACHMENI- I:
agreements by which NCPA could purchase power if the Projects are developed,
NCPA and the Project Members hereby declare the Projects to be NCPA Projects,
as provided in the Facilities Agreement, and hereby enter into this second phase
Agreement;
NOW THEREFORE, the parties hereto agree as follows:
Section 1. Obligations Formalized - Percentage Participation - Collections
and Accounting. NCPA, on behalf of itself and the Project Members, shall
investigate, evaluate, and if necessary or convenient, act as a lead or responsible
agency for the purchase of environmental review of the Projects, and negotiate
the terms and conditions of draft power purchase and third phase agreements
satisfactory to NCPA and the Project Members. Each Project Member agrees to
continue to pay or advance to NCPA, from its electric department net revenues
(after the payment of operating expenses) only, its percentage participation share
of the costs authorized by Project Members in accordance with this Agreement in
connection with the Projects prior to the execution of a Third Phase Agreement
authorizing NCPA to enter into power purchase contracts for one or more of the
Projects’ output. Each Project Member further agrees that it will fix the rates and
charges for services provided by its electric department so that it will at all times
have sufficient money in its electric department revenue funds to meet this
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NCPA PACKET DR_AFT FEBRUARY 19, 2004
obligation. The percentage participation of each Project Member is initially
established as follows:
Alameda requests 50.0000
Biggs 0.0000
Gridley 0.0000
Healdsburg 0.0000
Lodi 0.0000
Lompoc 0.0000
Palo Alto requests 50.0000
Plumas-Sierra R.E.C.0.0000
Port of Oakland 0.0000
Redding 0.0000
Roseville 0.0000
Santa Clara 0.0000
Truckee Donner Public Utility District 0.0000
Turlock Irrigation District 0.0000
Ukiah 0.0000
100.0000%
The percentage participation share of each Project Member shall be
revised proportionately if less than all NCPA members become Project Members
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NCPA PACKET DRAFT FEBRUARY 19, 2004
C1flR:174:04: ATFACHt4EN] E
on the effective date hereof, and thereafter if and when any Project Member
withdraws in whole or in part. Any Project Member wholly withdrawing shall
thereupon cease to be a Project Member for all purposes except for purposes of
Sections 4 and 7(c).
NCPA shall demand from each Project Member its share of its financial
commitment on a concurrent basis. Any part of such demand by NCPA which
remains unpaid for sixty days after its billing date shall bear interest from such
sixtieth day at the prime rate of the Bank of America then in effect computed on a
daily basis plus two percent until paid. Interest so earned shall not change any
Project Member’s participation percentage, and shall become a part of the
working capital account defined below.
The funds advanced according to this Section I shall be used to establish a
working capital account when approved by the Project Members, and in an
amount and subject to any limitations approved by the Project Members.
Nothing in this Section I shall be construed to prohibit a Project Member
from satisfying its financial commitments from unencumbered funds otherwise
on deposit at NCPA.
NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMENT E
Section 2.
Financing.
Limited Rights to Participate in Final Implementation and
(a) Discretion - Disposition of Power. In consideration of the
payments provided for in Section 1 hereof, each Project Member who has not
wholly withdrawn, or who is not then in default, shall have an exclusive option
to enter into a Third Phase Agreement for all or a part of its participation
percentage of all power made available to NCPA from the Projects.
(b) Increase in Purchases. A Project Member can, at the time of
entering into the Third Phase Agreement, purchase more than its participation
percentage of the Projects’ power if additional power is available by reason of the
non-participation in the Third Phase Agreement by one or more Project
Members. Such excess power shall be reallocated among those who do
participate in the same proportion as their shares bear to the total shares of those
who do participate. If Project Members so entitled do not wish to contract for all
the excess power, such remaining excess shall be disposed of as agreed to by the
Project Members.
(c) Exercise and Effect of Taking Less Than Full Entitlement.
The Project Members shall establish the terms and provisions of agreements for
NCPA to (i) purchase power from the Projects’ owner and (ii)for the Project
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CHR:174:04: ATI"ACHHENT E
Members to purchase such power from NCPA, the latter to be known as the
Third Phase Agreement. The Project Members shall also establish the date by
which the Third Phase Agreement must be executed by Project Members and
delivered to NCPA if they are to participate in the purchase of power from the
Projects. Failure to execute the Third Phase Agreement for any of its total
participation share and to deliver it to NCPA by that date or 30 days after Project
Member receipt, whichever is later, will be an irrevocable decision on the part of
that Project Member not to purchase any such power or otherwise participate in
the Projects. Execution and delivery of the Third Phase Agreement for less than
its original total participation percentage, and delivery of that Project Member
executed agreement to NCPA by the date established or 30 days after Project
Member’s receipt, whichever is later, will likewise be an irrevocable decision on
the part of that Project Member not to purchase any such power in excess of the
share set forth in its delivered agreement. Supplemental agreements or other
agreements will be entered into for the excess or surplus power. The procedure
for processing supplemental agreements shall be consistent with those
prescribed immediately above in this subsection (c) for making purchases of
power. Failure to return an executed Third Phase Agreement for any additional
power within the prescribed period is an irrevocable decision not to purchase
such additional power. The Project Member making any herein defined
irrevocable decision not to purchase all of its original share of power shall be
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: AnACHMENT E
foreclosed from receiving, and shall be relieved of further burdens related to,
power which it has declined to purchase or further expense relative to the future
development of the Projects.
Section 3. Member Direction and Review. NCPA shall comply with all
lawfu! directions of the Project Members with respect to this Agreement, while
not stayed or nullified, to the fullest extent authorized by law. Actions of Project
Members, including giving directions to NCPA, will be taken only at meetings of
authorized representatives of Project Members duly called and held pursuant to
the Ralph M. Brown Act. Ordinarily, voting by representatives of Project
Members will be on a one member/one vote basis, with a majority vote required
for action; however, upon request of a Project Member representative, the voting
on an issue will be by percentage participation with a 65% or more favorable
vote necessary to carry the action.
Any decision related to the Projects taken by the favorable vote of
representatives of Project Members holding less than 65% of percentage
participation can be reviewed and revised if a Project Member holding any
participation percentage gives Notice of Intention to seek such review and
revision to each other Project Member within 48 hours after receiving writ-ten
notice of such action. If such Notice of Intention is so given, any action taken
specified in the Notice of Intention shall be nullified, unless the NCPA
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMENT E
Commissioners of Project Members holding at least 65% of the total participation
percentage then in effect vote in favor thereof at a regular or specially called
meeting of Project Members. If the Notice of Intention concerned a failure to act,
such action shall nevertheless be taken if NCPA Commissioners of Project
Members holding at least 65% of the total Participation Percentage vote in favor
thereof at a regular or specially called meeting of Project Members.
Section 4. Repayment to Members. All payments and advances made
heretofore, and those hereafter made pursuant to Section 1, will not be repaid to
the Project Members making such payments and advances pursuant to this
Agreement, except out of the Projects’ unused funds, along with all other receipts
to which NCPA is entitled in connection with the Projects.
Section 5. Term. This Agreement shall take effect as of March 1, 2004, or
whenever executed by NCPA members holding 85% of the initial percentage
participation, whichever is later, and it shall not take effect at all if not in effect
by June 30, 2004. This Agreement shall be superseded by the Third Phase
Agreement pursuant to Section 2, except that Section 4 shah remain in effect.
Changes in this provision, except as to Section 4, shall be in accordance with
Section 3 hereof.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMENT E
Section 6. Financial Commitments. Each Project Member agrees to a total
financial commitment for its respective percentage participation of a total sum,
including payments and advances heretofore made, up to $100,000 in costs
allocable to NCPA, as authorized and approved by Project Members.
From time to time as needs arise, representatives of Project Members may,
by a favorable vote as provided in Section 3, authorize an increased financial
commitment above $100,000, which can be shown to support the completion of
the Projects, but only after 30 days’ written notice of such proposed increase has
been given to all Project Members.
Section 7. Assignment. This Agreement and any interest in it shall not be
assigned without the advance written consent of NCPA and the Project
Members.
Section 8. Withdrawal From Further Participation. If at any time
following the execution of this Agreement, there is an increase in the financial
commitment beyond that contemplated in Section 6, Project Members may
partially withdraw, i.e., from participation in the increase, or may withdraw
wholly from the Projects. Any withdrawal shall be subject to honoring any
commitments made by them or on their behalf pursuant to authorization of this
Agreement. To withdraw, such Project Members shall give NCPA written notice
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04: ATTACHMENT
of such withdrawal, in part or in whole, within thirty (30) days of the receipt of
the notice by them of the increase.
Section 9. Voting Rights and Duration. A Project Member is participating
for purposes of Section 3 percentage voting until it completely withdraws, but a
partial withdrawal will result in a reduction in its percentage participation share
to the ratio of its payments after such withdrawal to the total amount of
payments by all Project Members after such withdrawal. When the Third Phase
Agreement is executed, or revised, revised, participation percentages for voting
shall be established by dividing the amount of power agreed to be purchased by
each Project Member by the total amount of power to be purchased by all Project
Members except that the 65% of percentage participation specified in Sections 3
and 9 shall be reduced by the amount that the percentage participation of any
Project Member shall exceed 35%, but such 65% shall not be reduced be!ow 50%.
Section 10. Ouorum Defined. The presence of either a majority of the
Project Members, or of Project Members then having a combined participation
percentage of at least 65%, shall constitute a quorum for the purpose of action.
Section 11. Indemnification. Each Project Member agrees to indemnify,
defend and hold harmless NCPA and its members, including their respective
governing officials, officers, agents, and employees, from and against any and all
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:1~’4:04: ATTACHMENT E
claims, suits, losses, costs, damages, expenses and liability of any kind or nature,
including, without limitation, reasonable attorneys’ fees (Claims) to the extent
caused by any breach of contract, negligence, active or passive, gross negligence
or willful misconduct of the Project Members, their officers, employees,
subcontractors or agents, to the maximum extent permitted by law, but only as to
Claims related to this Agreement.
IN WITNESS WHEREOF, each Project Member has executed this
Agreement with the approval of its governing body, and NCPA has authorized
this Agreement in accordance with the authorization of its Commission.
CITY OF ALAMEDA
By:.
By:.
CITY OF BIGGS CITY OF GRIDLEY
By:.By:.
By:.By:.
CITY OF HEALDSBURG
By:.
By:.
CITY OF LODI
By:.
By:.
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NCPA PACKET DRAFT FEBRUARY 19, 2004
CMR:174:04:AI-rACHMEN1 E
CITY OF LOMPOC
By:.
By:
PLUMAS-SIERRA RURAL
ELECTRIC COOPERATIVE
By:
By:.
CITY OF ROSEVILLE
By:
By:.
TRUCKEE DONNER PUBLIC
UTILITY DISTRICT
By:.
By:.
CITY OF UKIAH
By:.
By:.
CITY OF PALO ALTO
By:.
By:.
CITY OF REDDING
By:.
By:.
CITY OF SANTA CLARA
By:.
By:.
TURLOCK IRRIGATION DISTRICT
By:
By:
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NCPA PACKET DRAFT FEBRUARY 19, 2004