HomeMy WebLinkAbout2003-07-14 City Council (9)TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:JULY 14, 2003 CMR:293:03
SUBJECT:ADOPTION OF A RESOLUTION OF THE CITY OF PALO ALTO
AUTHORIZING THE APPROVAL OF AMENDMENT NO. 3 TO
THE AGREEMENT FOR FUNDING OF OPERATION AND
MAINTENANCE FOR THE CENTRAL VALLEY PROJECT
POWER FACILITIES AND AUTHORIZATION TO THE CITY
MANAGER TO EXECUTE AMENDMENT NO.3 TO THE
AGREEMENT
RECOMMENDATION
Staff recommends that the City Council adopt the attached resolution authorizing the City
Manager to execute the attached Amendment No. 3 to the Agreement for Funding of
Operation and Maintenance for the Central Valley Project Power Facilities (Amendment).
BACKGROUND
The City receives the majority of its electricity supply from the Western Area Power
Administration (Western). About one half the power marketed by Western is generated by
the Central Valley Project (CVP) hydroelectric plants operated by the Department of
Interior’s Bureau of Reclamation (Reclamation). A variety of money-saving investment
and spending opportunities arise in the maintenance, replacement and addition of
equipment for the CVP and at Western. However, reductions in federal budgets in past
years put significant constraints on Western and Reclamation’s ability to pursue economic
opportunities to maintain and improve the efficiency of the CVP. Therefore, the City,
along with several dozen other Western customers, entered into the Agreement for the
Funding of Operations and Maintenance (O&M) for the CVP Power Facilities (CMR:
CMR:293:03 Page 1 of 4
138:97 on February 10, 1997) in order to take advantage of these opportunities (provided
as Attachment A to this CMR and referred to as "Agreement" in this CMR). Amendment
No. 1 to the Agreement was a minor amendment adopting Western’s standard general
power contract provisions as applicable to the Agreement. Amendment No. 2 was
another minor amendment binding parties’ successors to the terms of the Agreement and
requiring Governance Board (the board formed among participants to the Agreement that
approves the O&M plans that are funded through the Agreement) approval of assignment
of the Agreement.
In February 2003 Council approved increasing Palo Alto’s funding of the Agreement for
FY 2003, 2004 and 2005 (CMR 106:03 February 3, 2003).
DISCUSSION
The Agreement utilizes a monetary threshold of approximately $200,000 for capital.
improvement projects (CIP) funded under the Agreement. Due to this low threshold,
larger and longer-lived CIP projects are not being funded. Amendment No. 3 would
permit the removal of this threshold and allows larger CIP projects to be funded without
requiring a separate customer funding agreement. The result is that Western and its
customers can afford to make more improvements to the CVP with this Amendment in
place, thereby improving the ability to increase the pace of pursuing beneficial projects.
Customer money collected from current Western power rates would continue to be
credited back to the Agreement participants on their power bills as per the procedures in
the original Agreement.
The following are some of the long-lived O&M projects that Western and Reclamation
will pursue shortly, if Amendment No. 3 is approved:
Replacement of aging and obsolete equipment such as Folsom generator unit 1,
Trinity generator circuit breakers, Shasta generator governors.
o Replacement of the water turbines (runners) at New Melones and Can power
plants to increase reliability, efficiency and output.
Investment in software and equipment such as California Independent System
Operator (CAISO) compliant meters and load scheduling and accounting software
needed by Western to market the CVP output in the post 2004 environment.
CMR:293:03 Page 2 of 4
Each of the above projects will result in benefits to Palo Alto through more efficient
hydro-electric generation facilities and streamlining the transition to the post-2004
Western Marketing Plan.
RESOURCE IMPACT
Signing this Amendment facilitates Western’s and the Bureau’s pursuit of larger, long-
lived equipment acquisition, replacement and improvement that would benefit customers
by offsetting the need to purchase replacement energy. Failure to approve this
Amendment may delay Western and Reclamation investment in CIP and would likely
result in an increase in the cost of power to the City in the long-term. This Amendment
can be enacted only after each and every one of the original signatories to the Agreement
approves the Amendment. Because the City is one of the 30 signatories to the original
Agreement, the City’s execution of the Amendment is vital to enable all the original
signatories to garner the benefits of the Amendment.
POLICY IMPLICATIONS
This recommendation is consistent with the City Council approved Utilities Strategic
Plan to preserve a supply cost advantage compared to the market price (Strategy 2).
Furthermore, the City’s participation in Western and Reclamation O&M funding allows
Reclamation to produce more electricity through efficiency improvements at its facilities
for a given water release consistent with the City’s Green Government Pledge.
ENVIRONMENTAL RE~qEW
Approving this Amendment to the O&M funding agreement does not constitute a project
for the purpose of the California Environmental Quality Act.
ATTACHMENTS:
A.Resolution Of the City Of Pa!o Alto approving Amendment No. 3 to the Agreement
for Funding of Operation and Maintenance for the Central Valley Project Power
Facilities and Authorizing the City Manager to Execute the Amendment
B.Agreement for the Funding of Operation and Maintenance for the Central Valley
Project Power Facilities
CMR:293:03 Page 3 of 4
C. Amendment No. 3 to the Agreement for the Funding of Operation and Maintenance
Facilitiesfor the Central Valley Project Power r(vl/~~B ~T~/~~/~~. ,/
PREPARED BY:
TO
" St. Resource Originator
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
~
~f Utilities
~ON
Assistant City Manager
CMR:293:03 Page 4 of 4
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO APPROVING AME~MENT NO. 3 TO THE AGREEMENT
FOR FUNDING OF OPERATION AND MAINTENANCE FOR THE
CENTRAL VALLEY PROJECT POWER FACILITIES AND
AUTHORIZING THE CITY MANAGER TO EXECUTE THE
AMENDMENT
WHEREAS, the City of Palo Alto ("City") has negotiated
and executed several contracts with the Western Area Power
Administration of the U.S. Department of Energy ("WAPA"),
including An Agreement For The Funding Of Operation and
Maintenance Fro Central Valley Project Power Facilities ("O&M
Funding Contract"); and
WHEREAS, the City has provided funds to WAPA and the
U.S. Bureau of Reclamation to pay for the operation, maintenance
and improvements to the Central Valley Project and the Shasta
Dam, among other facilities, and the federal agencies are
repaying these funds by crediting Palo Alto’s account for energy
received in the amount of the funds contributed in the month
fol!owing the contribution; and
WHEREAS, the parties by Amendment No. 3 to the O&M
Funding Contract ("Amendment No. 3") intend to delete reference
to the Capital Improvement Project threshold set forth in
Section 6.5 of the O&M Funding Contract and thereby allow a
greater volume of projects to be funded by the Operation and
Maintenance Funding Program.
NOW, THEREFORE, the Council of the City of Palo Alto
does hereby RESOLVE as follows:
SECTION i. The Council hereby approves Amendment No. 3
to the O&M Funding Contract, and further authorizes the City
Manager to execute Amendment No. 3.
//
//
//
//
//
030708 syn 0072288
SECTION 2. The Council finds that the adoption of this
resolution does not constitute a project under the California
Environmental Quality Act, and therefore no environmental
assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Mayor
City Manager
Senior Asst. City Attorney Director of
Administrative Services
Director of Utilities
030708 syn 0072288
2
ATTACHMENT B
City of Pale Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
AGENDA DATE: FEBRUARY 10, 1997 CMR: 138:97
SUBJECT:Agreement for the Funding of Operation and Maintenance for the
Central Valley Project Power Facilities
REQUEST
Staff requests Council approval of the attached Resolution and Agreement which will
support the funding of operation and maintenance (O&M) costs for the Central Valley
Project (CVP) power facilities. Approval will ensure adequate funding for necessary. O&M
and provide CVP customers, including Palo Alto, with an increased chance to influence the
O&M plans and budget through participation on the Governance Committee. The Utilities
Advisor5, Commission has reviewed and approved the Agreement.
RECOMMENDATIONS
Staff recommends Council approval of the attached Resolution authorizing the Mayor to
execute the Agreement for the Funding of Operation and Maintenance for the Central
Valley Project Power Facilities. Staff also recommends that Council authorize the Cib~
Manager to execute amendments and/or to terminate the Agreement as appropriate.
POLICY IMPLICATIONS
There are no policy implications.
C1~fl~.:138:97 Page 1 of 4
EXECUTIVE SUMMARY
The output of the CVP generators makes up almost 50 percent of the power sold by the
Western Area Power Administration (Western) to the Palo Alto Electric Utility (PAEU).
The United States Department of Interior Bureau of Reclamation (Reclamation) continues to
face cutbacks in federal appropriations for the O&M of the CVP power facilities. It is
expected that Western may face similar cutbac~ in the future.
As appropriations for CVP O&M continue to diminish over time, staff believes that a
comprehensive approach to the problem is preferable to addressing O&M funding on a case
by case basis. Direct customer funding of CVP O&M was adopted as the solution by the
majority of the Western customers. Representatives of Western, Reclamation, and a number
of Western’s customers, including Palo Alto, have been meeting for the past year to
negotiate an appropriate arrangement for funding the CVP O&M activities, resulting in the
attached Agreement. The Agreement is similar in concept and effect to the Shasta Rewind
Financing Agreement approved by Council on October 15, 1996 (CM]K:424:96). The
Agreement is expected to be signed by participants by February 14, 1997. The Agreement
will commit the City to ongoing funding (for a rolling 4-year period) to supplement CVP
O&M costs and to participation in the establishment of a CVP reserve account.
Exhibit A highlights the main elements of the Agreement in some detail. The major
provisions of the Agreement include:
o
o
o
o
Funding to supplement CVP O&M;
Customer input to O&M decisions and related expenditures;
Establishment of a revolving account for depositing customer contributions; and
Establishment of a reserve account to ensure adequate cash flow.
The benefits to the PAEU from participation in the Agreement include:
Providing urgently needed maintenance of generators and other power facilities of the
CVP, thus greatly reducing the probability of failure;
Increasing the value of the C\rP resource with the attendant decrease in overall power
cost to the customers;
Setting a good example for customer enhancement of federal facilities at a time when
the Power Marketing Administrations are being considered for sale;
CMR: 138:97 Page 2 of 4
Providing oversight and governance of Western’s and Reclamation’s O & M work
plans; and
Indicating to Western and Reclamation that the participating customers are interested
in the well-being of the CVP facilities and desire to work cooperatively to that end.
Ongoing contributions will be credited by Western on each customer’s monthly power bill
in the month following the contribution. The one time up front contribution to form the
reserve account will not be refunded until spent or until participation is terminated.
The funding of the reserve account is expected to be established in 1999 and is expected to
total approximately $2 million. The PAEU’s minimum qualifying share will be
approximately $200,000. However, if federal appropriations for the CVP O&M continue to
decline, the total reserve obligation could increase to $8,000,000; and PAEU’s share of
contribution to the reserve account could increase to $1,000,000. To facilitate customer
funding of the reserve account, Western has committed to returning over-collected funds
from 1994 and 1995 to customers rather than prepaying some U.S. Treasu~~ debt. Palo
Alto’s share of these funds is $1,032,000. It will be paid in equal portions from January
1997 through September 1997. PAEU plans to utilize $1,000,000 of these funds to establish
a reserve that will support funding of the CVP reserve account when it is established.
There are two ways in which the participation in this Agreement may be terminated. If
PAEU terminates the contractual relationship with Western Area Power Administration, the
reserve balance would be returned within 90 days. If PAEU chooses to terminate this
Agreement, without ending the relationship with Western, PAEU must meet its outstanding
commitments for O&M contributions. Due to the drawn out nature of federal budgeting
those commitments could extend for up to four years. Upon meeting those commitments, the
unused portion of the reserve account, including interest, would be returned within 90 days
of the close of the final year of participation. Any portion of the reserve account that has
been used would be returned to PAEU upon completion of the work for which the reserve
had been used. The notice of termination of this Agreement must be forwarded to Western
by the City Manager.
FISCAL IMPACT
This Agreement will create a commitment on the part of PAEU. To prudently plan for
PAEU’s participation in this Agreement, the budget needs to be adjusted in 1996-97 to
reflect the receipt of the returned funds from Western to be paid beginning January ! 997.
These funds will be used to create the CVP Reserve. It is anticipated that approximately
$803,000 will be received in 1996-97, and $230,000 will be received in i997-98. The
CMR:138:97 Page 3 of 4
receipt of the 1996-97 revenue and the creation of the CVP Reserve will be included in the
1996-97 Midyear Report which will be forwarded to Council later this spring. In the 1997-
98 Proposed Budget, the funding that will be received during that year will be included and
the CVP Reserve.
ENVIRONMENTAL ASSESSMENT
Entering into an agreement to separately fund portions of the Central Valley Project power
Operation and Maintenance budget does not constitute a project for the purpose of the
California Environmental Quality Act.
ATTACHMENTS
Attachment A.
Attachment B.
Agreement Highlights.
Resolution approving Contract NO. 96-SNR-00110 Authorizing
Execution of the Agreement for the Funding of Operation and
Maintenance for the Central Valley Project Power Facilities
Attachment C.Agreement for the Funding of Operation and Maintenance for the
Central Valley Project Power Facilities
PREPARED BY: Tom Kabat, Senior Resource Planner, Utilities
DEPARTMENT HEAD APPROVAL:
EDWAR~ J.
DirectO/r of Utilities
CITY MANAGER APPROVAL:
FLEMING
\CW Manager
CM1l:138:97 Page 4 of 4
ATTACHMENT B
HIGHLIGHTS
AGREEMTENT FOR THE
FUNDING OF OPERATION AND BiAINTENANCE (O&]VD
FOR CENTRAL VALLEY PROJECT (CVP) POWER FACILITIES
Benefits/Impacts
o Customer input into Reclamation and Western (Agencies) O&M Activities and related
expenditures.
¯Program assures funding available to properly maintain the CVP power facilities.
¯Customers approve 0&M Activities that are to be performed through customer funding
(Contributions).
o Contributions are voluntary.
o Contributions are non-rate impacting, unless O&M Activities directed by the Governance
Board increase annual cost.
Customers will be provided with billing credits for a portion of the net revenues over
Collected (net revenues collected that were greater than the maximum revenue adjustment
clause (RAC)) during the current rate-setting period. The customers may use this revenue
adjustment to initially fund their Contributions.
Signatories to Agreement
o Signing the Agreement is not a commitment to Contribute.
Customers who sign the Agreement are eligible to nominate and elect Customer
Governance Board representatives.
Customers who sign the Agreement and commit Contributions may be included in the
voting when a percentage vote is called.
Signatories agree to follow the terms and conditions of the Agreement.
Customers who sign the Agreement can elect to commit Contributions to a specific FY.
O&M Program
Implementation to begin in 1997 for O&M activities to be funded by Customers during
fiscal year (FY) 2001. (FY period is October through September).
Contributions for O&M Activities during the FY 1998-2000 will be determined by the
Governance Board. The Agencies will provide the Governance Board with a list of O&M
Activities which may be funded under the Customer O&M Funding Plan. The O&M
Funding Plan categorizes and defines the Emits for spending Contributions for
Governance Board approved O&M Activities and capitalized improvement projects
(cm).
The Governance Board will review and. prioritize specific elements in the Agencies O&M
Work Plans, which are the Agencies projections of O&M Activities. O&M Work Plans
display priorities, costs, benefits and impacts of various altematives for the Agencies’
respective annual O&M programs.
Customers need only to commit Contributions on FY basis.
Western will be responsible for billing for the Contributions.
Western will credit each Customer’s monthly power bill for Contributions sent to the
escrow account in the month following the Contribution. Contributions for escrow
account reserves will not be refunded until spent.
The Governance Board will select a program treasurer to establish an escrow account for
deposit of Contributions for the Customer O&M Funding Plan.
A~encies will transfer funds from the escrow account into an Agency trust fund, accounts
in the United States Treasury, prior to expenditure.
The Agreement provides for progam and individual termination. Customers must honor
commitment(s) for Contributions unless the O&M program terminates ora customer
terminates its power sales contracts. Otherwise, Contributions that were not previously
returned through billing credits will be retumed to the customer.
Gore..-’=nance Board
o There will be 12 Governance Board Members - Reclamation, Western and I0 customer
Representatives.
Customer Governance Board members will be elected by customers within the following
_.groups who sign the agreement:
-6 Municipal!Public Utility Districts/Rural Electric Cooperatives
- Only contributors eligible for Governance Board membership
- 1 largest contributor
-1 small customer
-2 Federal!State/Other
-Do not need to be a contributor
-1 small customer
- 1 Water and/or Irrigation Districts
- Only contributors eligible
- 1 First Preference Customers
- Only contributors eligible
To be classified as a contributor, a customer must commit to contributions equal to or
greater that 1/12th of such customer’s share of the total annual O&M cost for the FY four
(4) years out from the current FY. (For example: In 1997 a Customer must commit to
Contribute for FY2001.)
One vote per Governance Board member, except a Governance Board member may call
for a percentage vote of contributors on matters relating to the Customer O&M Funding
Plan.
Actions by the Governance Board require Agencies’ and 2/3 customer member approval.
Actions based on percentage vote require 2/3 approval based on contributions. Customer
employee or representative, representing 2/3 of the Contributions, must be present to
vote.
Functions of Governance Board
¯ Governance Board reviews and may modify Customer O&M Funding Plans.
.Governance Board will establish general O&M objectives, exclusive of purchase power.
o Governance Board will establish a recommended leveI of customer Contribution.
¯Capitalized Improvement Projects (CD) may be recommended for funding, but funding
will only be provided by customers on a case-by-case basis under separate agreements.
Election of Customer Members on Governance Board
o All customers who si~m’t the agreement may vote for representation within their customer
group.
¯One vote per customer for Governance Board membership.
°Customer employee or customer’s representative at the meeting may vote, or vote may be
submitted in writing.
2/3 vote of customers siam-ring the Agreement required to change voting procedures for
customer ~oup.
°Initial election to be held day of or prior to first Governance Board meeting, subsequent
elections to be held in 2000 and every. 3 years thereafter.
Customer Obligations
o Each customer will determine the magnitude of its Contribution commitment.
Contributing customer will agree to allow its Contribution to be expended in accordance
with the approved Customer O&M Funding Plan.
Each customer will provide, in writing, the name of a designated contact and!or
representative for the organization. A representative may vote for a customer in elections
and percentage votes.
Agencies Obligations
Each Agency will provide O&M Work Plans to Governance Board.
Each Agency will provide the Governance Board with a prioritized list of capital
improvement projects.
Each agency will prepare O&M Activities Budgets using approved Customer O&M
Funding Plans.
RESOL~!ON NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
APPROVING CONTP~ACT NO. 96-SNR-00110 BETWEEN THE
UNITED STATES OF AMERICA, DEPARTMENT OF ENERGY,
WESTERN AREA POWER ADMINISTRATION, AND DEPARTMENT
OF THE INTERIOR, BUREAU OF RECLAMATION, AND
SEVERAL LOCAL GOVERNVfENT AGENCIES, INCLUDING THE
CITY OF PALO ALTO,FOR THE FUNDING OF
OPERATION AND MAINTENANCE FOR THE CENTRAL VALLEY
PROJECT POWER GENERATION FACILITIES
WHEREAS, the City of Paio Alto ("City") is a customer of the
Central Valley Project ("CVP"), an electric power generation
facility, operated by the United States of America, Bureau of
Reclamation ("Bureau"), and marketed by the Western Area Power
Administration ("WAPA"), and receives electric power at favorable
wholesale rates; and
WHEREAS, the City’s staff has determined that the voluntary
advancement of funds not exceeding $i,000,000 to the Bureau and the
WAPA for operation and maintenance expenses for the CVP power
generation facilities is in the best interests of the City and all
other customers of the CVP; and
WHEREAS, the City’s advancement will be repaid by the Bureau
and the WAPA by credits against future billings for electric power
purchased by the City.
NOW, THEREFORE, the Council of the City of Palo Alto does
RESOLVE as follows:
SECTION i. The City Council hereby approves Contract No.
96-SNR-00!I0 with the United States of America, represented by both
the Bureau of Reclamation and the Western Area Power
Administration, and severa! participating !ocal government
agencies, including the City of Palo Alto, which are customers of
the Centra! Valley Project for the funding of operation and
maintenance work for the Central Valley Project power generation
facilities, and hereby authorizes the Mayor to execute the contract
on behalf of the City of Palo Alto.
SECTION 2. The City Council finds that the approval of
Contract No. 96-SNR-00110 does not constitute a project under the
970204 ~’n 0071120
California Environmental Quality Act, and, thus, no environmental
assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
Mayor
City Manager
Director of Utilities
Deputy City Manager,
Administrative Services
970204 .syn 0071120
ATTACHMENT C ~
Contract No. 96-SNR-00110
UNITED STATES
DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
SIERRA NEVADA CUSTOMER SERVICE REGION
CENTRAL VALLEY PRO~CT, CALIFORNIA
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
MID-PACIFIC REGION
CENTRAL VALLEY PROJECT CUSTOMERS
AGREEMENT FOR THE FUNDLNG OF OPERATION AND MAINTENANCE FOR
CENTRAL VALLEY PROJECT POWER FAC]ZITIES
o
TABLE OF CONTENTS
PREAMBLE ...........................................................1
EXPLANATORY RECITALS .............................................2
2.1 Agencies Operation and Maintenance Needs ............................2
2.2 Adequate Funding Source ...........................................2
2.3 Purpose of Agreement ..............................................2
2.4 Agreement Description .............................................2
AGREEMENT ..........................................................3
TERM AND TERMINATION OF AGREEMENT .............................3
4.1 Term ............................................................3
4.2 Termination ......................................................3
DEFINITION OF TERMS ................................................3
AGENCIES’ OBLIGATIONS ..............................................8
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
Agencies’ O&M Responsibilities .....................................8
Interagency Coordination ............................................8
O&M Standards ...................................................8
Preliminary O&M Work Plans .......................................8
Capital Improvement Project .........................................8
Agencies’ O&M Activities Budget ....................................9
General Reporting Requirements ......................................9
CVP Power Facilities Reviews .......................................9
Accounting .......................................................9
CUSTOMER OBLIGATIONS
7.1
7.2
7.3
7.4
7.5
7.6
Customer’s Contribution Level ......................................10
Governance Board Actions .........................................10
Contributions ....................................................10
Funding Commitment .............................................10
Designated Contact ...............................................10
Designated Representative ..........................................10
O&M PROGRAM ......................................................11
8.1 Interim Process for Customer O&M Funding ...........................11
8.2 Customer O&M Funding Process ....................................11
8.2.1
8.2.2
8.2.3
8.2.4
8.2.5
8.2.6
8.2.7
8.2.8
8.2.9
8.2.10
Preliminary O&M Work Plans ................................12
Priorifization of Preliminary O&M Work Plans ...................12
Establishment of Proposed Customer O&M Funding Plan ...........12
Determining Commitment Level ...............................12
Development of the Approved Customer O&M Funding Plan ........13
Agencies’ O&M Activities Budgets ............................14
Revision of O&M Work Plans and Customer O&M Funding Plans ....14
Implementation of Customer O&M Funding Plan .................15
Congressional Actions .......................................15
Reprogrammed Items ........................................15
i Contract No. 96-SNR-00110
10.
11.
12.
13.
8.3
8.4
8.2.11 Exigency Fund .............................................16
8.2.12 Achieved Savings ...........................................16
8.2.13 Carryover .................................................16
8.2.14 Spending Limitations . .......................................17
8.2.15 Changes to Customer O&M Funding Process .....................17
Financial Management .............................................17
8.3.1 Billing ...................................................17
8.3.2 Contribution Credits on Power Bill .............................17
8.3.3 Escrow Account for Customer O&M Funding Plan ................18
8.3.4 Recording Contributions: .....................................19
8.3.5 Late Deposit Fee ...........................................19
8.3.6 Trust Accounts for Customer O&M Funding Plan .................20
8.3.7 Refunds ..................................................20
CIP Funding .....................................................21
TERMINATION OF INDIVIDUAL CUSTOMER PARTICIPATION IN THE
AGREEMENT ....................... ¯ .................................. 22
GOVERNANCE BOARD ................................................22
10.1 Qualifications/Membership on Governance Board .......................22
10.1.1 Composition of Governance Board .............................23
10.1.2 Agencies Membership on Governance Board .....................23
10.1.3 Customer Membership on the Governance Board ..................23
10.1.4 Election of Customer Membership on the Governance Board ........24
10.2 Quorum and Voting of Governance Board .............................25
10.2.1 Quorum ..................................................25
10.2.2 Voting ...................................................26
10.3 Designated Alternate ..............................................26
10.4 Duties of the Governance Board .....................................27
10.4.1 General Powers ............................................27
10.4.2 Bylaws ...................................................27
10.4.3 Committees ...............................................27
10.5 Function of the Governance Board ...................................27
10.5.1 Review of Annual Reports ....................................27
10.5.2 Establishment of O&M Objectives .............................28
10.5.3 Review and Approval Rights ..................................28
10.6 Officers and Secretary .............................................29
10.6.1 Chair and Vice-Chair ........................................29
10.6.2 Duties of the Secretary of the Governance Board ..................29
DISPUTE RESOLUTION ................................................30
! 1.1 Informal Settlement ...............................................30
11.2 Between Western and Reclamation ...................................30
11.3 Between the Customers or the Customers and Agency(ies) ................30
AUDIT RIGHTS .......................................................31
12.1 Audit Request ....................................................31
12.2 Information Concerning Work Performed ..............................31
SUCCESSORS AND ASSIGNS ...........................................32
ii Contract No. 96-SNR-00110
14.
15.
16.
17.
18.
19.
20.
21.
ENFORCEABILITY ....................................................32
SEVERABILITY .......................................................32
GENERAL POWER CONTRACT PROVISIONS .............................33
RELATIONSI-K[P OF THE PARTIES .......................................33
OWNERSHIP RIGHTS ..................................................33
LIABILITY ...........................................................33
ATTACHMENTS AND EXHIBITS MADE PART OF AGREEMENT ............33
EXECUTION IN COUNTERPART ........................................34
RESOLUTIONS
GENERAL POWER CONTRACT PROVISIONS (August 15, 1995)
EXHIBIT A
EXHIBIT B
EXHIBIT C
ATTACHMENT 1 (Escrow Agreement)
iii Conlract No. 96-SNR-00110
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3
4
5
6
7
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15 1.
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UNITED STATES
DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
SIERRA NEVADA CUSTOMER SERVICE REGION
CENTRAL VALLEY PROJECT, CALIFORNIA
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
MID-PACIFIC REGION
CENTRAL VALLEY PROJECT CUSTOMERS
AGREEMENT FOR THE FUNDING OF OPERATION AND MAINTENANCE FOR
CENTRAL VALLEY PROJECT POWER FACILITIES
PREAMBLE: This Agreement is made this ~ day of ,1997, pursuant to
the Acts of Congress approved June 17, 1902 (32 Star. 388); March 4, 1921 (41 Stat. 1404);
January 12, 1927 (44 Stat.957); August 26, 1937 (50 Stat. 844); August 4, 1939 (53 Star.
1187); and August 4, 1977 (91 Star. 565); and Acts amendatory or supplementary to the
foregoing Acts; between the UNITED STATES OF AMERICA (United States), (i) acting by
and through the Administrator, Western Area Power Administration, Department of Energy,
represented by the Regional Manager, Sierra Nevada Customer Service Region, the oE[icer
executing this Agreement, or a duly appointed successor, and (ii) acting by and through the
Commissioner, Bureau of Reclamation, Department of the Interior, represented by the
Regional Director, Mid-Pacific Region; and the Central Valley Project (CVP) preference
power customers signing this Agreement and set forth in Exhibit A, all collectively called
Parties.
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EXPLANATORY RECITALS:
2.1 Agencies Operation and Maintenance Needs: Federal appropriations to finance
Reclamation’s Operation and Maintenance (O&M)Activities have been declining over
the past several years. Federal appropriations to finance Western’s O&M Activities
may also decrease in the future.
2.2 Adequate Funding Source: To properly maintain the CVP power facilities and avoid
deferred maintenance, Western and Reclamation require an adequate and reliable
source of funding for the O&M Activities.
2.3 Purpose of Agreement: In order to assure a predictable flow of funds for O&M
Activities of the CVP power facilities, the Agencies and the Customers desire to
establish an O&M Program that will provide a source of funds for the O&M of CVP
power facilities and maximize the benefits from those facilities. This Agreement
addresses only the power portion of the CVP facilities. Although CVP power.O&M
expenses are suballocated between the Customers and CVP water customers,
conlributed funding for the portion suballocated to water customers is not included in
this Agreement.
2.4 Agreement Description: This Agreement sets out the procedure for establishing a
Governance Board in order to effectively plan and monitor the O&M Program. This
Agreement clarifies and sets forth the details of the O&M Program whereby the
Customers may contribute funds for Western and Reclamation to perform the O&M
Activities required by this Agreement pursuant to 43 U.S.C. §§ 395,397a. The funds
received from the Customers shall be available for expenditure for the specific purpose
for which contributed in a like manner as if said funds had been specifically
appropriated for said purposes.
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AGRE]EMENT: In consideration of the mutual benefits to be received through this
Agreement, the Parties agree to the terms and conditions set forth herein.
TERM AND TERMINATION OF AGREEMENT:
4.1 Term: This Agreement shall become effective upon execution by both Agencies and
shall remain in effect until terminated. The Agencies will execute this Agreement upon
signature by fifty percent (50%) of the CVP preference power customers and enough
Contributors to form the Governance Board.
4.2 Termination: The Governance Board may vote to terminate this Agreement if, in its
opinion Contributions are not at a level to provide an effective O&M Program;
Provided, That the termination will not be effective until it is determined by the
Agencies, through written notice, that all work has been completed under the last
Customer O&M Funding Plan approved by the Governance Board; Provided Fm-ther,
That after December 31, 2004, the Agencies may agree to terminate this Agreement if
at any time there are not at least five (5) Customer members on the Governance Board.
A one hundred twenty (120) day written notice to all Customers must be given by the
Secretary of the Governance Board prior to termination pursuant to this Section.
DEFINITION OF TER~S: As used herein, the following terms shall have the following
meanings when used with initial capitalization, whether singular or plural:
5.1 Agency(ies): U.S..U~artment of the Interior, Bureau of Reclamation, Mid-Pacific
Region (Reclamation) and/or U.S. Department of Energy, Western Area Power
Administration, Sierra Nevada Customer Service Region (Western).
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5.2 Capital Improvement Projects (CIP): Replacements or additions of one or more
traits of property that are generally capitalized and amortized in Western’s power
repayment study. These replacements or additions are generally: (a) items that will be
replaced as a complete unit more than one time within the period of analysis as def’med
in the most recent Agencies’ document titled "Replacements Units, Service Lives,
Factors"; and (b) items whose costs are significant compared to the Agencies’ annual
maintenance expense but are not ordinarily replaced as a part of the normal recurring
O&M program.
5.3 Contribution: Monies provided by the Customers to fund a Customer O&M Funding
Plan.
5.4 Contributor: A Customer who commits in writing to make contributions equal to or
greater than 1/12th of such Customer’s share of the estimated annual O&M cost for the
FY that is four (4) years out from the current FY, which shall be determined by the
formula:
12 TP
EC=Estimated Annual O&M costs for each FY as set forth in the latest rate
case power repayment study.
PU= Project Use revenue as set forth in the latest rate case power repayment
study.
Where:
Cp=The Customer’s Power Entitlement from the latest Power Entitlement
Report as prepared by Western.
The sum of all preference power customer’s Power Entitlement from the
latest Power Entitlement Report as prepared by Western.
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A Customer who has met this definition may fund at a level less than that committed to
in meeting this definition only when the sum of all Customer Contributions in a given
FY would exceed that needed for the Customer O&M Funding Plan for that FY.
5.5 Customer: CVP preference power customer(s) who sign this Agreement.
5.6
5.7
5.8
5.9
5.10
Customer O&M Funding Plan: The plan which defines the spending limits for
O&M Activities and CIP approved for funding by Contributions for the FY under
consideration.
Emergency: An unplanned or unanticipated event or circumstance that requires an
Agency to take immediate action to preserve, maintain, or re-establish the safety,
integrity, or operability of the CVP power facilities that have been affected.
Escrow Account: An interest bearing account established by the Program Treasurer at
a Federally insured bank for the purpose of holding the Contributions until
disbursements are made to Western and Keclamation, or the account is otherwise
closed.
First Preference Customer: Those preference power customers in either Trinity,
Tuolumne, or Calaveras Counties, as the case may be, which have satisfied the
statutory requirements according to the Trinity River Division Act (69 Star.719) and
the New Melones Act of the Flood Control Act of 1962 (76 Stat. 1180).
Fiscal Year (FY): The Federal fiscal year that begins on October 1 of each calendar
year and ends on September 30 of the following ca!ench__r year.
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5.12
5.13
5.14
5.15
5.16
Governance Board: The board formed of Customers’ and Agencies’ representatives
that will, among other things, approve the Customer O&M Funding Plan and govern
the O&M Program.
Industry Standards: Guidelines and criteria established, maintained and published by
entities such as the Institute of Electrical and Electronic Engineers, Inc., the National
Electrical Manufacturers Association, and the American National Standards Institute.
O&M Activities: Those actions and work elements to be performed to continue the
safe, economic, reliable, and environmentally acceptable operation of the CVP power
facilities including power related programs such as marketing, rates, studies, bilting and
energy services.
O&M Activities Budgets: Itemized obligation plans developed by the respective
Agencies that identify both the level of Federal appropriations and Customer
Contributions that will be utilized to fund those actions and work elements performed
by the Agencies in support of the operations, maintenance and capital improvement
projects of the CVP power facilities, for specific fiscal years.
O&M Program: An arrangement between the Agencies and the Customers whereby
Customers provide Conlributions and input concerning the O&M Work Plans and CIP
of the Agencies. The O&M Program does not include purchased power and CVP
power O&M expenses suballocated between the CVP water customers.
O&M Work Plan: Projections of O&M Activities prepared annually by each Agency
displaying priorities, costs, benefits and impacts of various alternatives for their
respective annual O&M.
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5.18
5.19
5.20
5.21
5.22
Power Entitlement: The value (in kilowatts (kW) or as defined in a subsequent
marketing plan) of a Customer’s contractual fight to purchase long-term power from
the CVP on an annual basis. Currently this value is called the Contract Rate of
Delivery.
Power Entitlement Report: A report prepared by Western that sets forth each
preference power customer’s CVP Power Entitlement. This report is currently called
the Central Valley Project Contract Rate of Delivery Report.
Program Treasurer: The entity selected by the Govemance Board to establish and
perform all financial duties related to the Escrow Account.
Prudent Utility Practice: Those practices, methods and procedures, as modified from
time to time, that are currently and commonly used by electric utilities and other power
providers to design, engineer, select, construct, operate, and maintain electric power
facilities and equipment dependably, reliably, safely, efficiently, and economically,
with due regard to the state of the an in the electric power industry.
Reclamation Fund: The fund established in the U.S. Treasury by Congress under the
Reclamation Act of June 17, 1902.
Senior Manager: The Regional Director for Reclamation, the Regional Manager for
Western, or the ranking official of each-elected Customer member on the Governance
Board.
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5.23 Small Customer: A Customer with a long-term finn allocation of 20 megawatts or
less from Western and a maximum load of 40 megawatts or less.
AGENCIES’ OBLIGATIONS:
6.1 Agencies’ O&M Responsibilities: The Agencies shall remain solely responsible for
developing their respective O&M Activities Budgets, including setting the amount of
the appropriations request, and for the O&M Activities of their respective CVP
facilities.
6.2 Interagency Coordination: The Agencies will coordinate budget and financial
transactions in accordance with current budgetary, fiscal, and accounting regulations
and policies.
6.3 O&M Standards: The Agencies will perform their O&M Activities using Prudent
Utility Practice, Industry Standards, Agency standards, guidelines, and policies; and
any applicable laws, regulations, orders, permits, and licenses. The Governance Board
may recommend standards for consideration by the Agencies.
6.4 Preliminary_ O&IM Work Plans: Preliminary O&M Work Plans shall be prepared by
each Agency, and presented to the Governance Board as set forth in Section 8.2. The
preliminary O&M Work Plans shall include, among other things, the minimum level of
O&M Activities needed to sustain safety and reliability of the power system, and may
include additional O&M Activities which will prevent deterioration, enhance system
performance, or improve reliability.
6.5 Capital Improvement Pro_leer: A list ofprioritized CIP in excess of the
predetermined threshold will be maintained by each Agency. CIP items below this
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6.7
predetermined threshold, as determined by the Governance Board, may be included in
the Agency’s respective preliminary O&M Work Plan(s).
A__gencies’ O&M Activities Budge.!: The Agencies will prepare their O&M Activities
Budgets using the O&M Work Plans and the approved Customer O&M Funding Plan.
General Reporting Requirements: The Agencies shall prepare and submit a report to
the Governance Board summarizing their respective annual O&M Activities for the
preceding FY which provides a general description of the work that was performed.
The report will include deviations between planned work and actual work completed,
and deviations from forecasted expenditures and costs actually incurred and paid. This
report will be prepared and submitted to the Governance Board in accordance with the
format and schedtfle requested by the Governance Board.
6.8 CVP Power Facilities Reviews: CVP power facilities may be reviewed on a periodic
or as needed basis, as defined by the Agencies or as requested by any Customer
member on the Governance Board. The purpose of the CVP facilities reviews will be
to assist the Governance Board in evaluating the O&M Program. These reviews will
be coordinated, to the extent practicable, through the Governance Board and will be
conducted by qualified representatives independent from the work group directly
responsible for the O&M Activities.
6.9 Accounting: The Agencies will maintain appropriate accounts and follow generally
accepted accounting principles.
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CUSTOMER OBLIGATIONS:
7.1 ~ustomer’s Contribution Level: Each Customer shall remain solely responsible for
determining the magnitude of its respective Contribution level and will indicate such
commitment in Exhibit C by specifying the amount to be contributed for the
appropriate FY and signing Exhibit C.
7.2 Governance Board Actions: Customers who contribute will act, in a timely manner,
on the approval of or revisions to the Customer O&M Funding Plan in order to
facilitate the actions of the Governance Board.
7.3 Contributi0n~: Customers who contribute will allow their Contribution to be
expended by the Agencies pursuant to the Customer O&M Funding Plan as approved
and revised by the Governance Board. All Contributions will be deposited into an
Escrow Account pursuant to Section 8.3.
7.4 Funding Committaelat: Any Customer who contributes will make their Contributions
available, as requested by Western pursuant to Section 8.3.
7.5 Designated Co~atact: For purposes of this Agreement, each Customer shall provide
the name, title, and address of an employee within the organization who shall be
specified as a designated contact of the Customer’s organization. Customers may also
provide the name, rifle, and address of any additional individual(s) to receive copies of
all distributions. All contact information will be set forth in Exhibit A.
7.6 ~ated Representative: For purposes of this Agreement, each Customer shall
provide the name, title, and address of an employee within the organization who shall
be specified as a designated representative of the Customer’s organization. The
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Customer’s representative will be authorized to represent the Customer in all matters
involving the Agreement including the exercise of the Customer’s fights and the
performance oft.he Customer’s duties under the Agreement and may participate in all
elections and percentage votes. The Customer’s representative may designate an
individual to vote on behalf of the Customer’s representative in all elections and
percentage votes. Such designation shall be furnished in writing to the Secretary of the
Governance Board prior to any election or vote.
O&M PROGBAM:
8.1 Interim Process for Customer O&M Funding: The Governance Board will not be
established in time for a complete four-year O&M funding cycle as set forth in Section
8.2 for FY98 through FY2000. It is anticipated that to the extent practicable, the
process set forth in Section 8.2 will be followed for FY98 through FY2000. The
Agencies will present lists of O&M Activities, instead of O&M Work Plans, to the
Governance Board. Based on the information provided by the Agencies, the
Governance Board may develop and approve Customer O&M Funding Plans for FY98
through FY2000. The Governance Board for this interim process shall be that
Governance Board established with.in 60 days following the effective date of this
Agreement.
8.2 Customer O&M Funding Process: The Agencies will continue to pursue
appropriations for their respective O&M Activities. The Governance Board will
determine the level of funding to be contributed through the development of the
Customer O&M Funding Plan. The following process will be utilized in developing
the Customer O&M Funding Plan:
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8.2.2
8.2.3
8.2.4
Preliminary O&M Work ,plans: Each Agency will prepare a prelimina_ry
O&M Work Plan describing their respective O&M Activities and CIP. The
Agencies will include an estimate of the anticipated level of appropriations.
Pri0ritization ofPrelirrlinary O&M Work Plans: The Governance Board or a
committee designated by the Governance Board will work with the Agencies
in the prioritization of the specific elements within the preliminary O&M
Work Plans. Additional elements that could be funded with Contributions
may be included in the prioritization of the specific elements. This step
culminates in proposed O&M Work Plans for each Agency including the
specific elements which could be funded with Contributions.
Establishment of Proposed Customer O&M Funding Plan: The Governance
Board will review the proposed O&M Work Plans developed pursuant to
Section 8.2.2 and will accept or modify the specific elements for funding with
Contributions. This step culminates in the proposed Customer O&M
Funding Plan.
Determining Commitment Leve!: Following the establishment of a proposed
Customer O&M Funding Plan, each Customer will individually establish,
retain, or increase, as appropriate, its Contribution commitment level. In
order to facilitate the Customers timely commitment of Contributions, the
following funding guidelines are defined.
8.2.4.1 Fair-Share Funding Level:_ A fair-share funding level is determined
as the ratio of the Power Entitlement for the individual Customer as
listed in Exhibit B, divided by the total Power Entitlement for all the
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Customers listed in Exhibit B, multiplied by the proposed Customer
O&M Funding Plan level. The Power Entitlements will be that set
forth in the latest Power Entitlement Report.
8.2.4.2 Maximum Contribution: An individual Customer’s Contribution ’
shall not exceed Westem’s ability to credit the Contribution against
the annual power payment obligation of the Customer:.-
8.2.4.3 Redistribution of Contribution Commitments: Any redistribution in
the level of Contribution commitments required to fund the Customer
O&M Funding Plan may be distributed among other concurring
Customers.
8.2.4.4 Total Contributions Available: The sum of all individual
Contribution commitments shall be the total Contribution
commitments available to fund the Customer O&M Funding Plan.
8.2.4.5 Commitment: Prior to the Governance Board approving the
Customer O&M Funding Plan, each contributing Customer shall
commit in writing, pursuant to Section 7.1, to the amount such
Customer is willing to contribute.
Development of the Approved C~tomer O&M Funding.P_lan: The
Governance Board will revise, as necessary, the proposed Customer O&M
Funding Plan and will approve the Customer O&M Funding Plan which will
specify the Contributions available for expendip,~a-e by each Agency by
September 1st, three (3) years prior to the FY under consideration.
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8.2.7
The approved Customer O&M Funding Plan shall include the deposit
requirements for each contributing Customer. If the total Contribution
commitment level would exceed that needed for the Customer O&M Funding
Plan, the individual Customer deposit requirements will be based on the pro
rata distribution of the commitments made pursuant to Section 8.2.4.5.
~gencies’ O&M Activities Budgets: The Agencies will use their proposed
O&M Work Plans and the approved Customer O&M Funding Plan to
develop their respective O&M Activities Budgets. The Agencies’ O&M
Activities Budgets shall be submitted through the Federal appropriation
process and ultimate release of the President’s Budget.
Revision of O&M Work Plans and Customer O&M Funding_P_la~: Upon
release of the President’s Budget, the Agencies will compare their submitted
O&M Activities Budgets to the funding level identified in the President’s
Budget. As necessary, the Agencies will analyze and recommend
modifications to their O&M Work Plans to avoid conflict with Congressional
appropriation language while maintaining the original intent of the previously
developed O&M Work Plans. If the Agencies determine that Contributions
are no longer needed to maintain the program elements identified in the
O&M Work Plans, the Agencies will recommend a reduction in the
Contribution level. The Governance Board will then review the
recommendations and make appropriate changes to the Customer O&M
Funding Plan subject to Section 8.2.8. The Customer O&M Funding Plan
will not be increased without the approval of the Governance Board and each
contributing Customer who elects to increase its Contribution commitment
by revising its Contribution commitment level in Exhibit C.
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8.2.9
8.2.10
Implementation of Customer O&M Fundin Pg.P_I.~: To ensure the Agencies’
continued operations, and to allow the Agencies time to incorporate the
Governance Board’s decisions into their respective O&M Work Plans, the
Governance Board’s final approval of the Customer O&M Funding Plan must
occur no later than August 1st, prior to the FY of implementation to facilitate
the steps outlined in Section 8.3. If the Governance Board does not approve a
final Customer O&M Funding Plan by August 1 st prior to the FY of
implementation, the Agencies will operate under the Congressionally
approved appropriations level and at the Customer O&M Funding Plan level
equal to seventy-five percent (75%) of the Customer O&M Funding Plan
approved for that FY pursuant to Section 8.2.5. The Agencies will follow, to
the extent practical, the intent of the original Customer O&M Funding Plan in
spending at the seventy-five percent (75%) funding level. Subsequent
adjustments to the Customer O&M Funding Plan may be made only after the
Governance Board’s approval.
Con_m’essional Actions: Congressional actions may modify the President’s
Budget. Should such action significantly impact the O&M Work Plans, the
affected Agency and the Governance Board will review and/or modify the
Customer O&M Funding Plan pursuant to Sections 8.2.4 and 8.2.5.
l~ed Itera~: Latitude to reprogram items within the Customer
O&M Funding Plan may be necessary in the overall management of power
facilities, or due to unforeseeable circumstances. The threshold for
repr0gramming will be established-by the Governance Board.
Reprogramming in excess of the predetermined threshold wil! be, presented
by the’ Agency(ies) for Governance Board approval prior to execution. All
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8.2.12
8.2.13
reprogramming changes made by the Agencies will be documented and
reported to the Governance Board within ninety (90) days of occurrence.
Exigency Fund: An exigency fund may be established by the Governance
Board and may be included in the Customer O&M Funding Plan. The level
of this fund will be determined based upon exigency requirements, as
presented by the Agencies, and/or in the event of an Emergency or other
requests brought to the Governance Board. Within this exigency fund, the
threshold for Emergency expenditures will be established by the Governance
Board. Latitude to make Emergency expenditures within the O&M Work
Plans may be necessary in the overall management of power facilities,-or due
to unforeseeable circumstances. Within ninety (90) days, any Emergency
expenditures, within the predetermined threshold made by the Agency(ies),
will be documented and reported to the Governance Board. Emergency
expenditures in excess of the predetermined threshold will be presented by
the Agency(ies) to the Governance Board for approval. Expenditures from
the exigency fund, for other than Emergencies, will be approved by the
Governance Board on a case-by-case basis.
~Td~i~N.e,.g~a~t3~l~: In order to encourage greater efficiencies in O&M
Activities, any savings in the use of the Customer O&M Funds may be
directed by the Agencies subject to Governance Board approval.
Carryover: Unobligated funds in the trust account(s), otherwise known as
carryover, will be committed to projects and activities as approved by the
Governance Board.
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8.3
8.2.!4 Spending Limitations: The Agencies will ensure that spending does not
exceed the combined funding level of the appropriation~ approved for its
O&M Activities by Congress and the Customer O&M Funding Plan
approved by the Governance Board.
8.2.15 ~es to Customer O&M F~nding Process: Changes to the Customer
O&M Funding Process set forth in this Section 8.2 shall be approved by the
Governance Board.
Financial Managem~ltlt:
8.3.1 ]~.i]li~: Western will be responsible for all billing of the Contributions under
the approved Customer O&M Funding Plan or the default Customer O&M
funding level of seventy-five percent (75%). Western will request the
contributing Customers to deposit Contributions into an Escrow Account,
based on the Customer O&M Funding Plan level determined pursuant to
Section 8.2.5 and Section 8.2.8, and guidance provided by the Govemance
Board in accordance with the terms of this Agreement. Billing for
Contributions which includes Escrow Account reserves for a FY will begin in
August immediately prior to commencement of the FY. The Governance
Board may change the month for the first billing for the FY.
8.3.2 ~bution Credits on Power Bill: Customers will receive credits on their
monthly power bills equal to their previous month’s Contribution to be used
to finance Agency O&M Activities; ~ovided, That Customers will not
receive credits on their power bills £or Escrow Account reserve deposits until
Escrow Account reserve funds are withdrawn from the Escrow Account by
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8.3.3
the Agencies. If the entire credit cannot be applied to a monthly power bill,
the credit balance will be carried forward and applied to future power bills.
E~crow Account for Customer O&M Funding Plan: Under the direction of
the Governance Board, an Escrow Account will be established for depositing
the Contributions. Fees associated with the Escrow Account will be deducted
from the Escrow Account balance. The Governance Board will select a
Program Treasurer to manage and admim’ster the Escrow Account. All funds
advanced by the Customers into the Escrow Account will only be used by the
Agencies for expenses identified in the Customer O&M Funding Plan
approved by the Governance Board and for payment of fees associated with
the Escrow Account.
8.3.3.1 Escrow Account Reserve: The purpose of the Escrow Account
reserve is to ensure adequate cash flow for the Agencies
expenditure of Contributions. The initial Escrow Account reserve
level shall be established by the Governance Board at their first
meeting. An initial Escrow Account reserve of at least 1/12
(estimated to be $2 million) of the total annual O&M Program cost
is needed prior to any expenditures by the Agencies. With the
approval of the Customer O&M Funding Plan, the Governance
Board shall determine the appropriate Escrow Account reserve
level. It is anticipated that the Escrow Account reserve needed will
be approximately 25% of the greater of the current or the next FY
Customer O&M Funding Plan.
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8.3.4
8.3.5
8.3.3.2 Interest Earned in the Escrow Account: Interest will be earned on
the funds in the Escrow Account. The interest will be credited to
each Customer listed in Exhibit B in proportion to the individual
Customer’s annual deposits of funds into the Escrow Account.
8.3.3.3 End of FY Escrow Account Reconciliation: After the close of the
FY, the Program Treasurer shall reconcile the Escrow Account, by
Customer, to reflect the actual deposits, Escrow Account fees,
credits pursuant to Section 8.3.2, interest earned and late deposit
fees. The Program Treasurer will use this Escrow Account balance
to prepare a statement of reconciliation for each Customer. The
Customer may request a refund of its reconciled balance. If no
requests for a refund is received from the Customer within thirty
(30) days a_~er receipt of the annual statement of reconciliation, the
balance will be carried forward and credited to that Customers
Contribution for the next FY.
Recording Contributions: Contributions used to finance Agencies O&M
expenses during any FY will be recorded in the CV-P power repayment study
for that FY.
Late Deposit Fee: Contributing Customers who deposit their requested
Contribution later than the due date indicated on the bill, will be assessed a
late deposit fee on the amount unpaid. Bills not paid in full by the due date
shall bear a charge of .05 percent (,05%) of the amount unpaid for each day
payment is delinquent. The late deposit fee will not be considered to be a
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8.3.6
8.3.7
part of any Contribution. The Governance Board may change the level and
mechanism for application of the late deposit fee.
Trust Accounts for Customer O&M Fundin Pg_P_I~: Funds from the Escrow
Account will be transferred into two trust accounts, one for Western and one
for Reclamation, within the United States Treasury, where funds will be held
prior to commitment, obligation, and expenditure for O&M Activities.
Agencies’ requests for transfer of funds, will be accomplished in a manner
approved by the Governance Board. No interest will be earned on the funds
in the trust accounts. Each Agency will administer its respective trust
account.
Refunds: Refunds of Escrow Account balances shall be returned to the
Customers as follows:
8.3.7.10&M Program Termination: Should the O&M Program terminate,
the balance of funds remaining in the Escrow Account, plus
interest earned, less credits received pursuant to Section 8.3.2 and
less any Escrow Account fees, will be returned to each Customer
proportionate to its level of Contributions.
8.3.7.2 Individual Termination from the Agreement: Individual
termination of participation in the Agreement can occur in two
ways and refunds will be made as follows:
8.3.7.2.1 Termination from Agreement: Should the Customer
¯terminate its participation in the Agreement with the ninety
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(90) day notice pursuant to Section 9, the Customers share
of the balance of funds remaining in the Escrow Account,
plus interest earned, less credits received pursuant to
Section 8.3.2, and less any Escrow Account fees, will be
returned to the Customer after the Customer’s Contribution
commitment(s) have been satisfied.
8.3.7.2.2 Termination as a Western Preference Power Customer:
Should a Customer terminate its electric service contract
(primary contract) with Western pursuant to Section 9, the
Customer’s share of the balance of funds remaining in the
Escrow Account, plus interest earned, less credits received
pursuant to Section 8.3.2, and less any Escrow Account
fees, will be returned to the Customer within ninety (90)
days of contract termination.
8.3.7.3 Change in level of Contribution: At the change of FY’s, Customers
who have reduced their ConWibution commitment level for the next
FY may request a refund of their surplus Escrow Account reserve
funds, calculated pursuant to Section 8.3.3.3.
8.4 ~,__~: Unless otherwise agreed to by the Governance Board, the Agencies will
continue to seek appropriations for funding CIP. When appropriations are used,
repayment of CIP will be in accordance with repayment requirements set forth in the
Agencies’ policies on repayment of investment. C]~P funding below the threshold
established by the Governance Board, will be treated and repaid in the same manner as
an annual expeflse. If any Customer(s) desires to fund CIP in excess of the established
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threshold, such voluntary funding will be subject to the individual Customer’s approval
and will be performed through a separate agreement with the appropriate Agency.
TERMINATION OF I_NDIVIDUAL CUSTOMER PARTICIPATION I~ THE
AGREEMENT: An individual Customer may terminate its participation in this Agreement
upon a ninety (90) day written notice to the Secretary of the Governance Board. When a
Customer terminates its participation in this Agreement, all Conwibution commitments and
all other obligations made by that Customer under this Agreement shall remain in effect until
satisfied. After satisfying all Contribution commitments and other obligations made by the
Customer pursuant to this Agreement, the Program Treasurer shall return the Customer’s
share of the remaining Escrow Account balance pursuant to Section 8.3.3.3. Provided, That
if such Customer terminates its electric service contract (primary contract) with Western, all
of its obligations under this Agreement shall terminate concurrently with the termination of
the electric service contract. Provided further, That any late deposits and fees due to the
Escrow Account must be fully satisfied prior to termination.
10.GOVERNANCE BOARD:- A Governance Board will be established within sixty (60) days
following the effective date of this Agreement. Western will notify the Customers of the date
of the first Governance Board meeting by giving a thirty (30) day written notice to all
Customers.
10.1 Qualifications/Membership on Governance Board: Western, Reclamation, and any
Customer meeting the qualifications set forth in this Section 10.1 is eligible to be a
member of the Governance Board. The Agencies will represent their respective
interests, and the elected Customer memberg shall represent the interest of their
respective Customer group as deft.ned under the following sections.
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10.1.1
10.1.2
10.1.3
Composition of Governan¢ Board:
comprised of twelve (12) members.
Govemance Board will be:
(a)Customers
(b)Reclamation
(c)Westem
The Govemance Board will be
The overall composition of the
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~gencies Membership or~ Governance Board: The Agencies shall appoint
and designate in writing their respective member(s) to the Governance Board.
Customer Membership on the Govemance Board: To ensure equitable and
diverse participation of the Customers, Customer membership on the
Governance Board shall be grouped as follows:
(a)
(b)
(c)
(d)
Municipal/Public Utility Diswicts/Rural Electric Cooperatives (6
Governance Board members)
FederaL/State/Other (2 Governance Board members)
Water and!or Irrigation Districts (1 Governance Board member)
First Preference Customers (1 Governance Board member)
At least one (1) Small Customer shall be a member in groups (a) and (b)
above, and no Customer will have more than one (1) member on the
Governance Board. The Contributor in group (a) with the largest annual
Contribution commitment shall be deemed a Governance Board member.
The preference power customers and their respective groupings are as set
forth in Westem’s Central Valley Project Contract Rate of Delivery Report
dated May 31, 1996. Any new grouping of preference power customers, or
changes to the classification of existing preference power customers, will be
propqsed by Western and approved by the Governance Board.
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10.1.4 Election of Customer Membership on the Ggvemmace Board: Each
Customer group shall select and designate in writing their members to the
Governance Board. To be elected a Customer Governance Board member in
Customer groups (a), (c), and (d) as defined in Section 10.1.3, a Customer
must be a Contributor. A Governance Board member from Customer group
(b) in Section 10.1.3 is only required to be a Customer. Any Customer may
nominate a qualified candidate for election to the Governance Board.
10.1.4.1 Initial elections, by the Customer groups, for membership to the
Governance Board will be held on the day of or prior to the first
Governance Board meeting. Subsequent elections for all Customer
Governance Board members will be held in February 2000 and
every three (3) years thereafter.
10.1.4.2 A Customer Governance Board member may remain on the
Governance Board until the member resigns, is replaced in an
election, is no longer qualified to be a Customer Governance Board
member, or is otherwise removed.
10.1.4.3 An election to fdl any Customer Governance Board member
vacancy shall be held prior to or at the next scheduled Governance
Board meeting.
10.1.4.4 Each Customer representative may vote once for each of the
available Governance Board positions within its Customer group
as outlined in Section 10.1.3. The candidates receiving the most
votes are awarded the positions available.
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10.2
10.1.4.5 To vote in an election, any Customer employee or designated
representative may vote on behalf of the Customer. A Customer
may choose to submit a written vote to the Secretary of the
Governance Board. Provided, That if a dispute arises regarding
who is representing the Customer only the representative
designated in writing may vote.
10.1.4.6 Westem will notify all Customers within each Customer group of
the date of the Customer group’s first election by giving a thirty
(30) day written notice to all Customers. Thereafter, the Secretary
of the Governance Board will provide notification of elections.
10.1.4.7 The election procedures specified in Section 10.1.4 for each
Customer group may be changed by a two-thirds (2/3) vote of
Customers in that Customer group.
10.1.4.8 An elected Customer member of the Governance Board may be
removed by its respective Customer group subject to a two-thirds
vote of Customers in that Customer group.
Ouornm and Voting of Governance Board:
10.2.1 !~l!9.I:!J~: A majority of the Govemance Board members in attendance shall
constitute a quorum necessary for the transaction of business at any meeting
of the Governance Board. Such quorum must include the Agencies’
members on the Governance Board.
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10.3
10.2.2 V_.Qljag: All matters coming before the Governance Board for approval shall
require the atYarmative vote of Western, Reclamation, and two-thirds (2/3) of
the Customer Governance Board members present; Provided, That an Agency
member shall not vote on the other Agency’s O&M Work Plans or the other
Agency’s proposed expenditure of Contributions.
The Customer Governance Board member approval shall be based on one
vote per Customer Governance Board member, except, after having a vote
based on one-member one-vote basis, a Customer Governance Board member
or both Agencies jointly may call for a percentage vote on Customer O&M
Funding Plan issues only, whereby all Customers listed in Exhibit B and
whose designated representative is present at the meeting, may participate in
the voting and may represent only its own interests; Provided, That an
Agency may not represent a customer in percentage votes. The percentage
vote of each Customer listed in Exhibit B will be based upon that Customer’s
armual commitment percentage level listed in Exhibit B for the FY under
consideration. An atYarmative vote representing two thirds (2/3) of the total
Contribution commitment, for the FY under consideration, as set forth in
Exhibit B is required for passage under the percentage vote and shall override
the Customer Governance Board member vote taken on a one-member one-
vote basis. If less than two-thirds of the percentage level of the Customers
listed in Exhibit B are present, a Governance Board member may call for the
vote to be held over until the next Governance Board meeting.
~ated Alternate: A Governance Board member may designate an alternate to
attend any Governance Board meeting by a written notice to the Secretary of the
Governance B6ard, and such alternate shall have full authority to act and vote in place
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of the absent Governance Board member. An Agency may not serve as an alternate for
a Customer Governance Board member.
10.4 Duties of the Goverla;ance B~ard:
10.4.1 General Powers: The Governance Board shall take such actions as it may
deem appropriate in exercising all of the powers contemplated and
conferred by this Agreement.
10.4.2 ]~.].~: The Governance Board shall develop and adopt bylaws within
forty five (45) days after its first meeting for circulation to all Parties. An
appropriate comment period will be afforded to all Parties prior to its
adoption by the Governance Board.
10.4.3 Committees: The Governance Board may create, direct, and terminate
committees as it may deem appropriate. The Governance Board shall set
forth the duties and responsibilities of each committee. Each committee
shall be subject at all times to the direction and bylaws of the Governance
Board.
10.5 Function of the Governance Board: The Governance Board will monitor and
provide oversight of the O&M Program and establish general O&M objectives. The
Governance Board will have the following powers, duties, and responsibilities in
regard to the overall monitoring and oversight of the O&M Program.
10.5.1 Review of Annual Reports: Review of annual reports on the O&M
Program is performed to:
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10.5.2
10.5.3
(1)
(2)
Determine that Governance Board approved work is completed as
planned; and
Direct any necessary audits.
Establishment of O&M Objectives: The Governance Board shall establish
the objectives for activities related to the expenditure of Contributions as
they relate to:
(1)
(2)
(3)
(4)
(5)
Annual O&M Activities for the fiscal year under consideration;
Capital Improvement Projects;
Strategy for scheduling O&M Activities;
New or improved goals and/or indices to be accomplished during
the FY then under consideration, based upon the previous years’
experiences and results; and
Reporting requirements of the Agencies and Governance Board.
Review and Approval Pdghts: The Governance Board shall review and
approve changes to the Governance Board by-laws and items related to the
Customer Contributions, such as:
(1)
(2)
(3)
(4)
(5)
(6)
Customer O&M Funding Plan;
Exigency Fund level;
Expenditure thresholds for Emergency, reprogramming, and CIP;
Escrow Account administrative duties;
Escrow Account reserve level; and
Proposed procedures and schedules for the Contribution
collections.
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10.6 Officers and Secretary_:
10.6.1 Chair and Vice-Chair: The Governance Board Members shall elect a Chair
and a Vice-Chair from the Governance Board Members. The Chair and
Vice-Chair may be removed from office by the Governance Board
whenever, in its judgement, the best interests of the Governance Board will
be served thereby. Vacancies shall be filled by the Governance Board at
that meeting or the next meeting.
10.6.1.1 Duties of the Chair: The Chair shall:
(1)
(2)
(3)
preside over all meetings of the Govemance Board;
perform duties established in the bylaws; and
perform all duties that may be reasonably required
by the Governance Board.
10.6.1.2 Duties of the Vice-Chair:
Vice-Chair shall:
(1)
(2)
(3)
In the absence of the Chair, the
perform the duties of the Chair;
perform duties established in the bylaws; and
perform all duties that may be reasonably required
by the Governance Board.
10.6.2 Duties of the Secretary_ of the Governance Board: Unless otherwise
determined by the Governance Board, the secretary of the Governance
Board shall be provided by Western. The secretary of the Governance
Board shall:
(1)record all votes and keep. a complete record ofal! meetings of the
Governance Board;
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11.
(2)
(3)
distribute copies upon request to interested parties, and
perform duties that may be reasonably required by the Governance
Board. Unless designated to be Westem’s representative, the
secretary of the Governance Board shall not be a voting member
of the Governance Board.
DISPUTE RESOLUTION:
11.1 Informal Settlement: The Parties will use good faith efforts to settle all disputes
arising under, or in relation to, this Agreement.
11.2 Between Western and Reclamation: Should any dispute arise between the Agencies
concerning the O&M Program, the duties or obligations of the Parties, or the
implementation or interpretation of the O&M Program, remain unresolved for a
period of twenty (20) days, such dispute shall be forwarded to the Agencies’ Senior
Managers for resolution.
11.3 Between the Customers or the Customers and Agency(i¢~): Should any dispute
arise among the Customers or between the Customers and the Agency(ies) under or in
relation to the O&M Program, the duties or obligation of the Parties, or the
implementation or interpretation of the O&M Program, that remains unresolved for a
period of thirty (30) days (or such shorter or longer time as agreed by the Parties),
such dispute shall be forwarded by written notice to the Chair of the Governance
Board for resolution by the Governance Board members. The written notice shall set
forth the nature of the dispute and the resolution and relief sought. Should the
Governance Board be unable to resolve such dispute by unanimous decision, within a
period of thirty (30) days from submission of the dispute to them, such dispute shall
be forwarded fo the Senior Managers, who shall meet within thirty (30) days (or such
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12.
13.
. shorter or longer time as agreed by the Senior Managers) to discuss and attempt to
reach a resolution of the dispute. Should all attempts at resolution by the Senior
Managers prove unsuccessful, with the written consent of all Parties which are parties
to such disputes, the dispute will be submitted to mediation which shall be conducted
using any procedures agreed to by such Parties. The mediator will not render a
decision, but will assist the Parties in reaching a mutually satisfactory agreement. The
Parties to the dispute agree to equally split the costs of the mediation .....
AUDIT RIGt~S:
12.1 Audit Request: A Party may request the Program Treasurer to cause an audit to be
conducted of the Escrow Account established in accordance with this Agreement.
Such audits shall not be conducted more often than every two (2) years. Such audit
may examine records which relate to work associated with Contributions including,
but not limited to, the financial and contractual records of the Program Treasurer,
Western, and Reclamation. The costs, including reasonable costs incurred by the
Program Treasurer, Western, and/or Reclamation in the performance of the audit,
shall be paid by the Party(ies) requesting the audit.
12.2 Information Concernit~g Work Performed: A Party shall be afforded the
opporttmity to obtain information concerning work performed under this Agreement
through reasonable requests to the Governance Board. If the amount of information
desired becomes excessive, as determined by the Governance Board, the Governance
Board shall inform the requesting Party(ies) of same, and shall make arrangements to
provide the information requested at the sole expense of the .requesting Party(ies).
SUCCESSORS AND ASSIGNS." This Agreement shall inure to the benefit of and be
binding upon the PLrt.ies hereto and their respective successors. No Party shall assign its
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14.
15.
interest in this Agreement, in whole or in part, without the prior written consent of the other
Parties. In no event, shall any Party assign this Agreement to any Party that is not
financially responsible or which cannot perform its obligations pursuant to this Agreement,
nor shall any Party assign this Agreement on any terms at variance from those set forth in
this Agreement. No permitted assignment or transfer shall change the duties of the Parties,
or impair the chances of obtaining performance under this Agreement, except to the extent
set forth in such permitted assignment and approved in writing by the Parties.
ENFORCEABILITY: It is not the intent of the Parties that this Agreement convey any
rights to third Parties to enforce the provisions of the Agreement. This Agreement can only
be enforced by the Parties or their successors.
SEVERABILITY: If any clause, sentence, paragraph, or part of this Agreement should
for any reason be finally adjudged by any court of competent jurisdiction to be
unconstitutional or invalid, such judgment shall not affect, impair or invalidate the
remainder of this Agreement but shall be confined in its operation to the clause, sentence,
paragraph, or part thereof directly involved in the controversy in which the judgment is
rendered. If such judgment modifies or holds invalid any material terms or conditions of
this Agreement in such a manner that any Party is required to incur new or different
obligations not expressly provided herein or forego benefits which it was otherwise entitled
to, the Parties shall in good faith renegotiate the terms and conditions affected by the
judgment so as to restore the original balance of benefits and burdens contemplated by the
Parties as of the effective date of this Agreement. Such renegotiated terms and conditions
shall be in the form of an amendment to this Agreement which shall be effective upon
execution by the Parties. The original Agreement shall remain in full force and effect, as
modified by said judgment, until the negotiation process for the amendment is complete.
32 Contract No. 96-SNR-00! 10
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GENERAL POWER CONTRACT PROVISIONS." Articles 1, 28, 29, and 31 through
43 of the General Power Contract Provisions, effective August 15, 1995, attached hereto,
are hereby made a part of this Agreement, the same as if they had been expressly set forth
herein.
RELATIONSHIP OF THE PARTIES: The covenants, obligations, and liabilities of the
Parties are intended to be several and not joint or collective, and nothing herein contained
shall ever be construed to create an association, joint venture, trust or partnership, or to
impose a trust or partnership covenant, obligations and liabilities under this Agreement.
No Party shall be under the control of or shall be deemed to control any other Party. No
Party shall be the agent of or have a right or power to bind any other Party without its
express written consent, except as expressly provided in this Agreement.
OWNERSHIP RIG1TI’S: The ownership of, the title to, and the operation and
maintenance responsibility for any equipment procured with Contributions under the terms
of this Agreement shall be in the name of the UNITED STATES.
L~ILITY: This Agreement does not confer any liability upon the Customers for any
claim, action or judgment, arising out of or in connection with the work generally
described in this Agreement.
ATTAINTS AND EXttIBITS MADE PART OF AG1LEI~b~NT: Inasmuch as
the signatories, their contacts and representatives, contributing Customers, and individual
Customer commitments and Contribution(s) under this Agreement may change during the
term hereof, they will be set forth in Exhibits A, B and C respectively. Each of said
exhibits shall become a part of this Agreement during the term fixed by its provisions.
Exhibits A, B and (2 are attached hereto, and each shall be in force and effect in accordance
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with its terms until respectively superseded by a subsequent exhibit. Upon signature by the
Agencies and the Program Treasurer, the Escrow Agreement will become a part of this
Agreement and copies will be distributed by Western to all Parties.
21.EXECUTION IN COUNTERPART: This Agreement may be executed in a number of
counterparts and shall constitute a single document with the same force and effect as if each
Party had signed all other counterparts.
IN WITNESS WIIEREOF, the Parties have caused this Agreement to be executed the day
and year first above written. The signatories hereto represent that they have been appropriately
authorized to enter into this Agreement on behalf of the Party for whom they sign.
Western Area Power AdmJmistration
By: ,~ ..~/~.z--~7~ i (~._~.-=-----~
Title: "--Acting Re~onal Manager
Address:114 Parkshore Drive
Fotsom, CA 95630
Bureau of Reclamation
By: ~-~. ~/~~i--v"P
T’i~e ~ion’a’l Director /~)
Address: Mid-Pacific Region
2800 Cottage Way
Sacramento, CA 95825
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Contract No. 96-SNR-00110
EN WITNESS WttZREOF, the Parties have caused t.bis Agreement to be executed the
day and year first above written. The signatories hereto represent that they have been
appropriately authorized to enter into this A~eement on behalf of the Party for whom they sign.
(Seal)City Palo .Alto
By:
Address:
35 Contract No. 96-SN’R-00110
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Amendment No. 1
Contract No. 96-SNR-00110
CONTRACT AMENDMENT TO THE AGREEMENT FOR THE FUNDING OF OPERATION
AND MAINTENANCE FOR CENTRAL VALLEY PROJECT POWER FACILITIES
1.This Contract Amendment No. 1, to be effective under and as a part of Contract
No. 96-SNR-00110 (Primary Contract or Agreement), shall become effective on November 12, 1997
and shall remain in effect concurrently with the term of the Agreement.
2. MODIFICATION TO SECTION 16 OF THE PRIMARY CONTRACT:
Section ! 6 of the Primary Contract is hereby deleted, and the following substituted therefor:
"16. GENERAL POWER CONTRACT PROVISIONS: Articles 1, 28, 29, and 31
through 37.1 and 38 through 43 of the General Power Contract Provisions, effective August
15, 1995, attached hereto, are hereby made a part oft.his Agreement, the same as if they had
been expressly set forth herein."
3. PRIMARY CONTRACT TO REMAIN IN EFFECT: Except as expressly modified by the
Amendment, said Primary Contract shall remain in full force and effect; and this Amendment shall be
subject to all provisions of the Primary Contract except as herein amended.
4. EXECUTION IN COUNTERPART: This Amendment may be executed in a number of
counterparts and shall constitute a single document with the same force and effect as if each Party had
signed all other counterparts.
IN WITNESS WItEREOF, the Parties have caused this Amendment to be executed the day
and year first above written. The signatories hereto represent that they have been appropriately
authorized to enter into this amendment on behalf of the Party for whom they sign.
Western
By:
Title:
Address: 114 Park~hore Drive
Folsom. CA 95630
Bureau of R~lamation. A /
Title:~, _-_-~onal Director d
Address: Mid-Pacific Region
2800 Cottage Wa, y
Sacramento. CA 95825
AIRHEiTI’ICATED COPY
Contract No. 96-SNR-00110
Amendment No. 2
UNITED STATES
DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMLNISTRATION
SIERRA N~VADA CUSTOMER SERVICE REGION
CENTRAL VALLEY PROJECT, CALWORNIA
AND
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
MED-PACE=IC REGION
AN~D
CENTRAL VALLEY PROJECT
CUSTOMERS
AMENDMENT NO. 2 TO THE
AGREEMENT FOR THE FUNDING OF POWER OPERATION AN~I2) MAINTENANCE FOR
CENTRAL VALLEY PROJECT POWER FACILITIES
AUTHENTICATED COPY
AUTHENTICATED COPY
Contract No. 96-SNR-00 t 10
Amendment No. 2
UNITED STATES
DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
SIERRA NEVADA CUSTOMER SERVICE REGION
CENTRAL VALLEY PROJECT, CALIFORNIA
AND
UNITED STATES
DEPARTMENT OE THE INTERIOR
BUREAU OE RECLAMATION
MID-PACIFIC REGION
AND
CENTRAL VALLEY PROJECT
CUSTOMERS
AMENDMENT NO. 2 TO THE
AGREEM~ENT FOR THE FUNDING OF POWER OPERATION AND MAENTENANCE FOR
CENTRAL V ALLEY PROJECT POWER FACILIT1~ES
Section
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Table of Contents
Pa~__..~e
PREAMBLE .....................................................................................................................1
RECITALS .......................................................................................................................1
AGREEMENT "~
TERM OF AMENDMENT ....."~
MODIFICATION TO SECTION 13 OF THE PRIMARY AGREEMENT .....................2
PRIMARY AGREEMENT TO REMAIN IN EFFECT ...................................................2
AUTRERTICATED COPY
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AUIHENTICATED COPY
UNITED STATES
DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMLNISTRATION
S~RRA NEVADA CUSTOMER SERVICE REGION
CENTRAL VALLEY PROJECT, CALWORNIA
AND
UNITED STATES
DEPARTMENT OF TI-t~ INTERIOR
BUR£AU OF RECLAMATION
MD-PACIFIC REGION
CENTRAL VALLEY PROJECT
CUSTOMERS
AMENDMENT NO. 2 TO TI-~
~,_GREEMENT FOR TI-~ FUNDING OF POWER OPERATION AND 1VLiINTENANCE FOR
CENTRAL VALLEY PROJECT POWER FACIT~IT£ES
PREAMBLE: This Amendment to Contract No. 96-SNrR-00110 (Primary
A~eement) is made the 6tu day of April ., 2001, between the
UNITED STATES OF AM2ERICA (United States), acting by and through the
Administrator, Western Area Power Administration (Western), Department of Energy,
represented by the Regional Manager, Sierra Nevada Customer Service Region (SNR),
the officer executing this Agreement, or a duly appointed successor, and (ii) acting by
and through the Commissioner, Bureau of Reclamation (Reclamation), Department of the
Interior, represented by the Regional Director, Mid-Pacific Region; and the Central
Valley Project (CVP) preference power customers set forth in Exhibit A of the Primary
Agreement.
o RECITALS:
2.1 Western, Reclamation, and the CVP preference power customers entered into the
Primary Agreement on November 12, 1997.
Contract No. 96-SNR-00110 I
.~qendment 2
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The Parties have deter’mined that Section 13 of the Primary Agreement is
administratively burdensome and desires to modify it.
AGREEMENT:The Parties agree to the terms and conditions set forth herein.
TERM OF AMENDMENT: This Amendment shall become effective upon execution
and shall-remain in effect concuwently with the Primary Agreement.
DEFINITION OF TERMS: Section 13 of the Primary Agreement is hereby deleted,
and the following substituted therefor:
"13. SUCCESSORS AND ASSIGNS: This Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective successors.
No Party shall assign its interest in this Agreement, in whole or in pact, without
the prior written consent of the Governance Board. In no event, shall any Party
assign this Agreement to any Party that is not financially responsible or which
cannot perform its obligations pursuant to this Agreement, nor shall any Party
assign this Agreement on any ten-ns at variance from those set forth in this
Agreement. No pen-nitted assignment or transfer shall change the duties of the
Parties, or impair the chances of obtaining performance under this Agreement,
except to the extent set forth in such permitted assignment and approved in
writing by the Governance Board."
6.PRIMARY AGREEMENT TO REMAIN IN EFFECT: Except as expressly
modified by this Amendmen< said Primary Agreement shall remain in full force and effect; and
AUTHEI~TICATED COPY
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AUTHEnTICaTED ~OP’~
this Amendment shall be subject to all provisions of the Primary Agreement, except as herein
amended.
IN WITNESS WItEREOF, the Parties have caused this Amendment to be executed the
day and year first above written. The signatories hereto represent that they have been
appropriately authorized to enter into this Amendment on behalf of the Party for whom they sig-n.
WESTERN AREA POWER ADM]2N-ISTRATION
By: ~
Title:
Address:
Regional Mana_~er
114 Parkshore Drive
Folsom. CA 95630-4710
BUREAU OF RECLAMATION
Title: 4~~" Regional Director
Address:Mid-Pacific ReNon
2800 Cotta~.e Way
Sacramento. CA 95825
Contract No. 96-SNR-00110 ~ ~~[~’~’~D ~
Amendment 2
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IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed the
day and year first above written. The sig-natories hereto represent that they have been
appropriately authorized to enter into this Amendment on behalf of the Party for whom they sign.
Attest:
CITY OF PALO ALTO
Pa!o Alto, CA 94301
Contract No. 96.SNR-001 !0
Amendment 2
AUTHE~ICATED COPY
ATTACHMENT C
Contract No. 96-SNR-00110
Amendment No. 3
UNITED STATES
DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
SIERRA NEVADA CUSTOMER SERVICE REGION,
CENTRAL VALLEY PROJECT, CALIFORNIA
AND
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
MID-PACIFIC REGION
AND CENTRAL VALLEY PROJECT CUSTOMERS
AMENDMENT NO. 3 TO THE
AGREEMENT FOR THE FUNDING OF POWER OPERATION AND MAINTENANCE
FOR
CENTRAL VALLEY PROJECT POWER FACILITIES
Contract No. 96-SNR-00110
Amendment No. 3
UNITED STATES
DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
SIERRA NEVADA CUSTOMER SERVICE REGION
CENTRAL VALLEY PROJECT, CALIFORNIA
AND
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
MID-PACIFIC REGION
AND
CENTRAL VALLEY PROJECT CUSTOMERS
AMENDMENT NO. 3 TO THE
AGREEMENT FOR THE FUNDING OF POWER OPERATIONS AND MAINTENANCE
FOR
CENTRAL VALLEY PROJECT POWER FACILITIES
SECTION TABLE OF CONTENTS PAGE
2.
3.
4.
5.
PREAMBLE ..........................................................................................................!
EXPLANATORY RECITALS .................................................................................2
AGREEMENT .......................................................................................................2
TERM OF AMENDMENT ......................................................................................2
MODIFICATIONS TO THE PRIMARY AGREEMENT ..........................................2
5.1 Modification to Section 5.13 ...........................................................................2
5.2 Modification to Section 6.5 .............................................................................3
5.3 Modification to Section 8.3.4 ..........................................................................3
5.4 Modification to Section 8.4 .............................................................................3
5.5 Modification to Section 10.5.3 (3) ...................................................................4
PRIMARY AGREEMENT TO REMAIN IN EFFECT ..............................................4
MODIFICATIONS TO THE PRIMARY CONTRACT .............................................4
SIGNATURE PAGE(S)
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Contract No. 96-SNR-00110
Amendment No. 3
UNITED STATES
DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
SIERRA NEVADA CUSTOMER SERVICE REGION,
CENTRAL VALLEY PROJECT, CALIFORNIA
AND
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
MID-PACIFIC REGION
AND
CENTRAL VALLEY PROJECT CUSTOMERS
AMENDMENT NO. 3 TO THE
AGREEMENT FOR THE FUNDING OF POWER OPERATION AND MAINTENANCE
FOR
CENTRAL VALLEY PROJECT POWER FACILITIES
1.PREAMBLE: This Amendment to Contract No. 96-SNR-00110(Primary
Agreement) is made this 16th day of April ,2003, between the
UNITED STATES OF AMERICA (United States), (1) acting by and through the
Administrator, Western Area Power Administration, Department of Energy (Western),
represented by the Regional Manager, Sierra Nevada Customer Service Region, the
officer executing this Agreement, or a duly appointed successor, and (2) acting by and
through the Commissioner, Bureau of Reclamation, Department of the Interior
(Reclamation), represented by the Regional Director, Mid-Pacific Region; and the
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Contract No. 96-SNR-00110
Amendment No. 3
Central Valley Project (CVP) preference power customers signing this Amendment as
set forth in Exhibit A of the Primary Agreement, all collectively called Parties.
EXPLANATORY RECITALS:
2.1 Western, Reclamation, and the CVP preference power customers entered into
the Primary Agreement on November 12, 1997.
2.2 The Parties have determined that several sections of the Primary Agreement
need to be modified to eliminate the Capital Improvement Project (CIP) threshold.
This will enable the Agencies to accept Customer contributions under the Primary
Agreement for CIP in addition to funding annual Operation and Maintenance
(O&M) expenses.
2.3 Elimination of the CIP threshold will increase the ability of the customers to
fund a CIP with repayment in excess of one year.
3. AGREEMENT: In consideration of the mutual benefits to be received through this
Agreement, the Parties agree to the terms and conditions set forth herein.
4. TERM OF AMENDMENT: This Amendment shall become effective upon
execution by all Parties and shall remain in effect concurrently with the Primary
Agreement.
5. MODIFICATIONS TO THE PRIMARY AGREEMENT: The following modifications
have been made to the Primary Agreement:
5.1 Modification to Section 5.13: A new sentence has been added to Section
5.13 after the word "services". Section 5.!3 now reads as follows:
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5.2
5.3
5.4
Contract No. 96-SNR-00110
Amendment No. 3
"5.13 O&M Activities: Those actions and work elements to be performed
to continue the safe, economic, reliable, and environmentally acceptable
operation of the CVP power facilities including power related programs such
as marketing, rates, studies, billing and energy services. These activities
include annual O&M (which are recorded as annual expenses) and CIP
(which are recorded as capitalized assets)."
Modification to Section 6.5: Section 6.5 is deleted in its entirety and the
following language substituted:
"6.5 Capital Improvement Project: A list of prioritized CIP will be
maintained by each Agency and shall be included in the Agency’s
respective preliminary O&M Work Plan(s)."
Modification to Section 8.3.4: Section 8.3.4 is deleted in its entirety and
the following language substituted:
"8.3.4 Recording Contributions: Contributions used during any fiscal
year will be recorded in the CVP power repayment study. Contributions
used to finance Agencies annual O&M activities will be recorded in the CVP
power repayment study as annual expenses. Contributions used to finance
Agencies CIP will be recorded in the CVP power repayment study as
capitalized assets, which are recovered over the life of the asset."
Modification to Section 8.4: Section 8.4 is deleted in its entirety and the
following language substituted:
"8.4 ClPFUNDING: Unless otherwise agreed to by the Governance Board,
the Agencies will continue to seek appropriations for funding CIP. When
appropriations or Customer contributions are used, repayment of CIP will be
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Contract No. 96-SNR-00110
Amendment No. 3
in accordance with repayment .requirements set forth in the Agencies’
policies on repayment of investment."
5.5 Modification to Section 10.5.3 (3): Section 10.5.3 (3) is deleted in its
entirety and the following language substituted:
"10.5.3 (3) Expenditure thresholds for Emergency, and reprogramming;"
6.PRIMARY AGREEMENT TO REMAIN IN EFFECT: Except as expressly
modified by this amendment, said Primary Agreement shall remain in full force and
effect; and this Amendment shall be subject to all provisions of the Primary Agreement,
excerpt as herein amended.
7.EXECUTION IN COUNTERPART: This Agreement may be executed in a
number of counterparts and shall constitute a single document with the same force and
effect as if each Party had signed all other counterparts.
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Contract No. 96-SNR-00110
Amendment No. 3
II/W/ITNESS WHEREOF. the Parties have caused this Amendment to the
Primary Agreement to be executed the day and year first above written. The signatories
hereto represent that they have been -appropriately authorized to enter into this
Agreement on behalf of the Party for whom they sign.
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W ES T~j~~ Nt.STRATtON
Title~
R~eqi~4x~a n aqe r
/~ddAddress:1,4 Parkshore ~
Fotsom ~A~3~95630-4710
BU REAU AMA~~
~itle:~O~eoio~l Director
Address: Mid-Pacific Reqion
2800 Cottaqe Way
Sacramento CA 95825
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Contract No. 96-SNR-00110
Amendment No. 3
IN WITNESS WHEREOF, the Parties have caused this Amendment to the
Primary Agreement to be executed the day and year first above written. The signatories
hereto represent that they have been appropriately authorized to enter into this
Agreement on behalf of the Party for whom they sign.
CITY OF PALO ALTO
Attest:
By:
Title:
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