HomeMy WebLinkAboutStaff Report 3627
City of Palo Alto (ID # 3627)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 4/15/2013
City of Palo Alto Page 1
Summary Title: NCPA Operating Agreement for Scheduling Coordination
Services
Title: Adoption of a Resolution Approving and Authorizing the City Manager
to Execute and Amend the Northern California Power Agency Operating
Agreement for Scheduling Coordination Services for Renewable Resources
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that the City Council adopt the attached resolution (Attachment A), by which
the City approves of the Operating Agreement with the Northern California Power Agency and
delegates authority to the City Manager, or the Director of Utilities, to do the following:
1. Sign the Operating Agreement between the Northern California Power Agency (NCPA)
and the City Of Palo Alto (Attachment B); and
2. Amend the Operating Agreement as necessary to add and/or remove electric
generation facilities.
Executive Summary
Execution of the NCPA Operating Agreement “Operating Agreement” is necessary to enable
continued delivery to our customers of renewable energy purchased to meet the City’s
Renewable Portfolio Standard (RPS). Council approved several long-term power purchase
agreements (PPAs), including six PPAs with Ameresco for landfill gas generation whereby Palo
Alto is responsible for scheduling coordination services to ensure proper delivery of the
resources. In the Ameresco PPAs, NCPA is named as the scheduling coordinator and, for the
projects already on-line, NCPA has been scheduling these resources accordingly.
Scheduling coordination services entail providing daily and hourly instructions for dispatching
electricity from the resources to the state’s electric grid operator. City staff is not equipped to
provide scheduling coordination services as it requires specific resources, market expertise and
information systems and staffing for a 24-hour/day operation. Scheduling coordination services
City of Palo Alto Page 2
are, however, a core function of NCPA, which is fully equipped to provide these services to its
members. NCPA is currently obligated to provide scheduling coordination services on behalf of
Palo Alto for other resources such as the Calaveras Hydroelectric Project, the Western Base
Resource contract, and the City’s market purchases.
Although NCPA currently provides scheduling coordination services to the City for its Ameresco
landfill gas PPAs, the addition of several new renewable PPAs, including the Brannon Solar PPA,
has prompted NCPA to request execution of the Operating Agreement to ensure proper
authorization, obligations and indemnification of liabilities are in place. This practice is
consistent with NCPA members’ desire, including Palo Alto’s, to limit risk to only members
participating in specific projects. The proposed Operating Agreement has been reviewed and
approved as to form by the City Attorney’s Office.
Background
The City of Palo Alto (City) is a member of NCPA. NCPA provides a host of services to the City’s
electric utility, including acting as the City’s scheduling coordinator. As the scheduling
coordinator, NCPA schedules the City’s and other members’ electric loads and certain resources
with the California Independent System Operator (CAISO) which entails following load and
resource deviations from forecasts; coordinating outage and other disruptions; and adhering to
all requirements as specified in the CAISO tariff and/or NCPA-CAISO Metered Subsystem
Aggregator (MSSA) Agreement.1 Further, NCPA is obligated to provide scheduling coordination
services2 on behalf of Palo Alto and other NCPA members for the Calaveras Hydroelectric
Project, Western Base Resource contract, all of the City’s forward market transactions made
through the electric master agreements, and several natural gas-fired generators and
renewable resources owned and/or operated by NCPA.
Therefore, the City has requested that NCPA provide scheduling coordination services for its
renewable PPAs with Ameresco. Additionally, the City may elect to use NCPA as the scheduling
coordinator for future renewable projects including the Brannon Solar PPA, which names NCPA
as the scheduling coordinator but permits the City to replace it with an alternate scheduling
coordinator.
In pursuit of the City’s RPS goal of 33% of energy purchases from renewal energy resources by
2015, to date Council has approved several long-term PPAs for renewable resources. Table 1 is
a summary of Palo Alto’s existing renewable PPAs including which entity has been or will be
acting as the City’s scheduling coordinator.
1 Under Resolution No. 8847, in July 2008 City Council authorized the City Manager, or his designee, to execute the
Second Amended and Restated MSSA Agreement and any subsequent amendments needed to comply with the
requirements of the CAISO. Under such authority the City Manager executed the Third Amended and Restated
MSSA Agreement in October 2011.
2 The NCPA Scheduling Coordination Services Program Agreement, approved by Council in July 2002 (CMR:298:02)
and the NCPA Pooling Agreement, approved by Council in 1993, specify member/NCPA obligations.
City of Palo Alto Page 3
Table 1: Palo Alto’s Existing Renewable PPAs
Project PPA Supplier Contract Start
Date
Percent of
Retail Sales
Scheduling
Coordinator
High Winds I Iberdrola December 2004 4.9 Iberdrola
Shiloh Wind Iberdrola June 2006 7.1 Iberdrola
Santa Cruz Landfill Ameresco February 2006 1.1 NCPA
Keller Canyon Landfill Ameresco August 2009 1.2 NCPA
Ox Mountain Landfill Ameresco April 2009 4.0 NCPA
Johnson Canyon Landfill Ameresco March 2013* 1.0 NCPA
San Joaquin Landfill Ameresco June 2013* 3.0 NCPA
Crazy Horse Landfill† Ameresco Terminated 2.0 NCPA
Brannon Solar Trina Solar August 2014* 5.0 Not yet specified
* Expected as of February 2013.
† The Crazy Horse Landfill PPA was terminated in March 2013 due to lack of development progress by the supplier.
Discussion
NCPA has the authority and obligation to act as the scheduling coordinator for NCPA-owned
and operated projects “NCPA Projects” under the Scheduling Coordinator Program Agreement
(SCPA). The SCPA provides obligations, responsibilities, limits of liability and commits the City
to pay the cost associated with scheduling coordination services for NCPA Projects. The SCPA
does not specify obligations, responsibilities and limitation of liabilities for scheduling
coordination services for non-NCPA projects such as those acquired by the City on its own
including the Ameresco PPAs. NCPA has requested that Palo Alto sign the Operating
Agreement to make clear obligations and protocols for scheduling and settling all of the City’s
renewable PPAs in accordance with the applicable CAISO tariffs. Further the Operating
Agreement acts to limit cross-member risk by allocating all benefits and burdens associated
with the resources to Palo Alto.
Approval of the proposed resolution will enable the City Manager, or his designee, to execute
the Operating Agreement so that NCPA may provide scheduling coordination services for the
City’s resources as identified in Exhibit B of the Operating Agreement. Additionally, the
resolution delegates authority for the City Manager, or his designee, to modify the Operating
Agreement. Modifications are expected to include adding new resources as the City acquires
additional renewables and/or removing resources in the event that a project does not come on-
line or the City arranges for alternative scheduling coordination services.
City of Palo Alto Page 4
NCPA is in the process of updating the existing SCPA and anticipates that once approved and
executed by all members, including Palo Alto, the SCPA will supersede the Operating
Agreement. The schedule to modify the SCPA is tentative; however, NCPA anticipates seeking
members’ governing board approval sometime in 2013.
Alternative
An alternative to having NCPA provide scheduling coordination services is to seek a third party
service provider. There are a number of entities besides NCPA that could provide this service to
Palo Alto—including for-profit companies like Shell Energy North America and VIASYN, as well
as other municipal utilities like the Turlock Irrigation District and Silicon Valley Power. Based on
informal inquiries of the cost of procuring scheduling coordination services for renewable
resources, staff believes other providers are likely to be more expensive than obtaining the
services through NCPA for the Ameresco PPA resources and would require an agreement
similar to the Operating Agreement.
This alternative would require that the City issue a request for proposals (RFP) for this service in
order to meet the City’s procurement requirements. Furthermore, it could potentially cause
disruptions in delivery and scheduling of the resources. For this reason, staff is not
recommending this alternative at this time, but will investigate alternative scheduling
coordination services in the context of a broader evaluation of NCPA services, costs and
benefits.
Staff does intend to solicit alternative scheduling coordinator proposals for the Brannon Solar
project. Given the potential complexity in scheduling this highly intermittent resource, staff
anticipates that NCPA’s cost for scheduling coordination services may be higher than procuring
the services through a third-party provider. Since the Brannon Solar project is not expected to
come on-line until August 2014, staff has time to investigate alternative service providers or to
negotiate a reasonable arrangement with NCPA.
Resource Impact
The costs of NCPA’s provision of scheduling coordination services to Palo Alto will be included
in NCPA’s annual budget, and will be determined pursuant to cost allocation methodologies
approved by the NCPA Commission. All costs associated with NCPA’s provision of scheduling
coordination services for the PPAs resources as specified in Exhibit B of the Operating
Agreement will be allocated to Palo Alto.
Based on NCPA current cost allocation methodology for Fiscal Year (FY) 2014, the estimated
annual cost of providing scheduling coordination services for each renewable energy PPA is
provided in Table 2.
City of Palo Alto Page 5
Table 2: Annual Scheduling Coordination Services Cost of PPAs Scheduled by NCPA
Project PPA Supplier Annual
Scheduling Cost
Annual Energy
MWh
$/MWh
Santa Cruz Landfill Ameresco $16,000 10,200 $ 1.57
Keller Canyon Landfill Ameresco $30,000 15,100 $ 1.13
Ox Mountain Landfill Ameresco $17,000 43,500 $ 0.69
Johnson Canyon Landfill Ameresco $19,000* 10,400 $ 1.83
San Joaquin Landfill Ameresco $27,000* 30,300 $ 0.89
*Estimated as of February 2013.
Approval of the resolution authorizing the City Manager to execute the Operating Agreement
will not impact the City’s FY 2013 Electric Operating Budget or proposed FY 2014 Electric
Operating Budget as the cost for providing such services is already included as part of the
electric supply purchase costs. For subsequent fiscal years, staff will to include the cost of
scheduling coordination services as part of the Electric Fund’s Operating Budget.
Policy Implications
Acquiring scheduling coordination services for the City’s renewable resources is an efficient use
of City resources and as such supports the Council-approved 2011 Utilities Strategic Plan
objective to manage supply costs.
Environmental Analysis
This activity would not result in a direct or reasonably foreseeable indirect change in the
physical environment and is therefore not a “project” for purposes of Section 21065 of the
California Environmental Quality Act. No environmental review is necessary.
Attachments:
Attachment A: Resolution NCPA Operating Agreement (PDF)
Attachment B: NCPA PA Operating Agreement (DOCX)
*NOT YET APPROVED*
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ATTACHMENT A
Resolution No. _____
Resolution of the Council of the City of Palo Alto Approving and
Authorizing the City Manager to Execute and Amend the Operating
Agreement Between the Northern California Power Agency and The
City of Palo Alto to Allow Scheduling Coordination Services of
Renewable Resources
R E C I T A L S
A. The Northern California Power Agency (“NCPA”) was formed in 1968 for the
purpose of utilizing the joint action of participating public power entities to pursue common
interests for the benefit of all such members; and subsequently revised on April 1, 1973 and
January 1, 2008. The City of Palo Alto (“City”) is a member NCPA as one of the original
signatories to the NCPA Joint Power Agency Agreement.
B. The City operates as a metered subsystem located within the California
Independent System Operator Corporation (“CAISO”), and is a party to the Second Amended
and Restated NCPA Metered Subsystem Aggregator Agreement (“MSSA Agreement”), as it
may be amended from time to time. NCPA, acting on behalf of the City, schedules the City’s
electric load and resources within the balancing authority pursuant to the terms of the CAISO
Tariff and subject to the terms and conditions of the NCPA Scheduling Coordination Program
Agreement (“SCPA”). By Resolution Number 8200, Council approved the City’s participation in
the NCPA SCPA. The SCPA is intended to cover scheduling coordination services for member
loads and NCPA owned and/or operated projects (“NCPA Projects”) exclusively.
C. By Resolution Number 9152 Council updated the Long-term Electric
Acquisition Plan (LEAP) with three primary energy portfolio objectives and the directive to
achieve a Renewable Portfolio Standard (“RPS”) by pursuing a minimum level of renewable
purchases of at least 33 percent of retail sales by 2015 while ensuring that the retail rate
impact for renewable purchases does not exceed 0.5 cents per kilowatt hour.
D. To meet the City’s RPS, by resolution Council has approved seven Power
Purchase Agreements (“PPA”) for the delivery of long-term renewable resources for which the
City is responsible for providing scheduling coordination services as follows:
1. Resolution #9055: Ameresco Crazy Horse, LLC;
2. Resolution #8495: Ameresco Half Moon Bay, LLC;
3. Resolution #8852: Ameresco Keller Canyon, LLC;
4. Resolution #9055: Ameresco San Joaquin, LLC;
5. Resolution #8473: Ameresco Santa Cruz, LLC;
6. Resolution #8971: Ameresco Johnson Canyon, LLC; and
7. Resolution #9225: Trina Brannon Solar, LLC.
*NOT YET APPROVED*
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E. The City staff does not have the resources, capabilities and/or expertise to
perform scheduling coordination services and therefore has named NCPA as its scheduling
coordinator for the PPAs listed in Recital D. NCPA has been providing scheduling coordination
services on behalf of the City for the PPAs on-line, however has indicated that resources
acquired by the City through PPAs are not NCPA Projects and therefore are not covered under
the NCPA SCPA. In an effort to formalize responsibilities and obligations and to minimize
cross member risk to other NCPA members, NCPA has requested that the City sign the NCPA
Commission-approved Operating Agreement to continue to receive scheduling coordination
services for non-NCPA Projects. The Operating Agreement may be subsumed by an Amended
and Restated Scheduling Coordination Program Agreement.
F. The City intends to continue signing PPAs until it achieves its RPS target
up to the rate impact limit of 0.5 cents per kWh and in the absence of an alternative
scheduling coordinator wishes to continue to use NCPA as its scheduling coordinator for
existing and future renewable resources as determined by the City.
The Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. The Council hereby approves, and authorizes the City Manager, or his
designee, to sign the Operating Agreement with NCPA and amend as needed to add and/or
remove generating facilities.
SECTION 2. Cost associated with the Operating Agreement will be included in the
annual NCPA Budget as approved by the NCPA Commission and provided for in the Utilities
Department’s Electric Supply Purchase Cost on an annual basis.
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*NOT YET APPROVED*
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SECTION 3. The Council hereby finds that this ordinance is exempt from the
provisions of the California Environmental Quality Act pursuant to Section 15061(b)(3) of the
California Environmental Quality Act Guidelines, because it can be seen with certainty that there is
no possibility of significant environmental effects occurring as a result of the approval of this
Resolution.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
_____________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
_____________________________ ______________________________
Senior Asst. City Attorney City Manager
______________________________
Director of Administrative
Services
______________________________
Director of Utilities
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Operating Agreement Between NCPA and City of Palo Alto
OPERATING AGREEMENT BETWEEN
NORTHERN CALIFORNIA POWER AGENCY
AND THE CITY OF PALO ALTO
This Operating Agreement (“Agreement”) is made by and between the NORTHERN
CALIFORNIA POWER AGENCY (“NCPA”), a joint public powers agency with offices located at 651
Commerce Drive, Roseville, California and the CITY OF PALO ALTO with offices located at 250
Hamilton Avenue, Palo Alto, California, 94301 (“Contracting Member”) (together sometimes
referred to herein individually as “Party” and collectively as “Parties”) as of ______________, 20__
(the “Effective Date”) in Roseville, California.
Section 1. RECITALS
This Agreement is entered into based on the following facts, among others:
1.1 NCPA is a public agency created by a joint powers agreement established under
California law for the purpose of assisting its members in the efficient use of their common powers.
1.2 Contracting Member is engaged in, among other things, transmitting and
distributing electric power in Palo Alto, California. Contracting Member is also a member of NCPA.
Contracting Member desires that NCPA provide Contracting Member with the Services described
in this Agreement.
1.3 Article III, Section 3 of the “Amended and Restated Northern California Power
Agency Joint Powers Agreement” (as amended and effective January 1, 2008) (hereinafter “JPA”)
entitled “Powers and Functions” provides that none of the debts, liabilities or obligations of NCPA
shall be the debts, liabilities or obligations of any of the members of NCPA unless assumed in a
particular case by resolution of the governing body of the member to be charged.” Notwithstanding
the foregoing, Article V, Section 1 of the JPA entitled “General Provisions” provides that “[t]he
governing Commission of NCPA is authorized to procure public liability and other insurance as it
deems advisable to protect NCPA and each of the parties hereto, charging the cost thereof to the
operating costs of NCPA.”
1.4 Contracting Member desires to secure NCPA’s Services under this Agreement in a
manner that balances its interests and the interests of other NCPA members with the ongoing
financial viability and professional responsibilities of NCPA. Accordingly, Contracting Member
desires to secure NCPA’s Services under this Agreement by accepting a limited insurance based
recourse against NCPA, with the option of procuring additional insurance at Contracting Member’s
sole expense, thereby insuring that NCPA will substantially limit its risk for the provision of such
Services which, in turn, allocates risks back to the Contracting Member in the event NCPA is not
adequately insured.
1.5 The NCPA Commission has previously approved an agreement with Contracting
Member to provide these same or similar services (“the Prior Agreement”). The Prior Agreement,
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Operating Agreement Between NCPA and City of Palo Alto
approved by NCPA Commission resolution 09-64 was not executed by Contracting Member and is
superseded by this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and promises set forth, NCPA
and Contracting Member agree as follows:
Section 2. DEFINITIONS
Whenever used in this Agreement with initial capitalization, these terms shall have the
following meanings as applicable, whether in the singular or plural:
2.1 “Annual Budget” means the budget for the ensuing Fiscal Year adopted by the
NCPA Commission, as it may be amended from time to time.
2.2 “California Independent System Operator (CAISO)” is a non-profit public benefit
corporation responsible for the provision of fair and open transmission access, and maintaining
reliable and efficient operation of the grid, within the State of California pursuant to Chapter 2.3,
Part 1, Division 1 of the California Public Utilities Code.
2.3 “Fiscal Year” means the NCPA fiscal year; currently the twelve month period
beginning July 1 and ending on the next following June 30.
2.4 “General Operating Reserve Account” means the NCPA General Operating
Reserve created through resolution of the NCPA Commission, as the same may be amended from
time to time.
2.5 “Generating Facilities” shall mean those generating units listed in Exhibit B for
which NCPA has been designated as the Scheduling Coordinator, for which CAISO has assigned
a Resource ID, and as to which the Contracting Member has entered into a power purchase
agreement with third persons to receive the energy and capacity produced by the generating units.
2.6 "Good Utility Practice" shall mean any of the practices, methods and acts engaged
in or approved by a significant portion of the electric utility industry during the relevant time period,
or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of
the facts known at the time the decision was made, could have been expected to accomplish the
desired result of the lowest reasonable cost consistent with good business practices, reliability,
safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice,
method or act to the exclusion of all others, but rather to be acceptable practices, methods, or acts
generally accepted in the region and consistently adhered to by the electric utility industry.
2.7 “NCPA Members” shall mean the signatories to the JPA or those agencies which
have executed an Associate Member Agreement with NCPA.
2.8 “NCPA Project” has the meaning set forth in the Northern California Power Agency
Facilities Agreement between NCPA, certain NCPA Members and the Turlock Irrigation District and
dated as of September 22, 1993, as the same has been amended and as it may hereafter be
amended from time to time.
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Operating Agreement Between NCPA and City of Palo Alto
2.9 “Resource ID” shall mean the CAISO resource identifier used for tracking each
resource for market scheduling, settlement and outage coordination purposes.
2.10 “Scheduling Coordinator” shall mean an entity certified by the CAISO for the
purposes of undertaking the functions of a Scheduling Coordinator specified in the CAISO tariff,
including, but not limited to, submitting and settling bids, self schedules, and trades in the CAISO
markets.
2.11 “Scheduling Coordination Program Agreement” or “SCPA” shall mean the NCPA
Scheduling Coordination Program Agreement dated as of August 28, 2002, as such may be
amended from time to time.
2.12 “Scheduling Coordination Services” shall mean services provided by NCPA under
the SCPA.
2.13 “Stranded Costs” shall mean all costs incurred by NCPA in providing Services to
Contracting Member under this Agreement that could not reasonably be avoided by NCPA from the
date it receives a written Notice of Termination. Such costs may include, but not be limited to,
salary and employment costs, rent, utilities, or contracts incurred to provide Services under this
Agreement.
2.14 “Uncontrollable Force” shall mean any act of God, labor disturbance, act of the
public enemy, war, insurrection, riot, fire, storm, flood, earthquake, explosion, any curtailment,
order, regulation or restriction imposed by governmental, military or lawfully established civilian
authorities or any other cause beyond the reasonable control of the Party claiming Uncontrollable
Force which could not be avoided through the exercise of Good Utility Practice.
Section 3. SERVICES TO BE PROVIDED; AUTHORIZED REPRESENTATIVES; STANDARD
OF PERFORMANCE
3.1 Services. This Agreement is entered into by the Parties in order for NCPA to provide
services to Contracting Member for the services described in Exhibit A hereto (“Services”).
3.2 Authorized Representatives. The following are the Authorized Representatives of
the parties for contract administration purposes under this Agreement:
David Dockham Valerie Fong
Assistant General Manager - Power Management Director of Utilities
Northern California Power Agency City of Palo Alto
651 Commerce Dr. 250 Hamilton Avenue
Roseville, CA 95678-6420 Palo Alto, CA 94301
(916) 781-4256 Phone (650) 329-2277 Phone
(916) 781-4252 Fax (650) 321-0651 Fax
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Operating Agreement Between NCPA and City of Palo Alto
No Authorized Representative is authorized to amend any provision of this Agreement except
in accordance with Section 12.16.
3.3 Standard of Performance. NCPA will perform the Services using that level of skill
and attention reasonably required to complete the Services in a competent and timely manner.
3.4 Assignment of Personnel. NCPA shall assign only competent personnel to perform
Services pursuant to this Agreement.
3.5 Time. NCPA shall devote such time to the performance of Services pursuant to
this Agreement as may be reasonably necessary to meet the standard of performance provided in
Section 3.3 above, and to satisfy NCPA’s obligations hereunder.
Section 4. TERM AND TERMINATION
4.1 Authorization to Perform Services. NCPA is not authorized to perform any initial
Services or incur any costs whatsoever under the terms of this Agreement until its receipt of a
written resolution and/or other appropriate/applicable authorization from Contracting Member’s
governing body confirming Contracting Member’s authority to enter into this Agreement and
confirming that the Contracting Member has allocated funds for and approved contract payments to
NCPA under this Agreement.
4.2 Term. The term of this Agreement shall begin on the Effective Date. This
Agreement may be terminated by either Party upon at least two (2) years’ prior written notice of
such early termination (“Notice of Termination”). Not withstanding the foregoing, this Agreement
shall also terminate in the event that the SCPA is amended to provide that NCPA will provide
schedule coordination services to NCPA members for non-NCPA Projects and, following such
amendment, upon the inclusion of all Generating Facilities for which Services are provided
pursuant to this Agreement into the SCPA.
Upon termination of this Agreement, Contracting Member shall pay NCPA for all fees and
costs, including all Stranded Costs through the effective date of termination. Upon payment of the
above amounts, neither Party shall have any further obligations under this Agreement except as
otherwise set forth in Section 5.7 regarding the survival of defense and indemnity obligations.
Section 5. INDEMNITY AND INSURANCE
5.1 Limitation of NCPA’s Liability.
5.1.1 Except as provided in this Section 5.1, NCPA shall not at any time be liable for any
injury or damage occurring to Contracting Member or any other person or property from any
cause whatsoever arising out of this Agreement.
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Operating Agreement Between NCPA and City of Palo Alto
5.1.2 The provisions of Section 5.1.1 shall not apply where the injury or damage
occurring to Contracting Member is caused by the negligence of NCPA or of any employee,
agent or contractor of NCPA, and provided that any liability under this subsection is limited to
the extent of the actual coverage and coverage limits of the insurance policies described in this
Section 5.
5.1.3 Contracting Member Liable for NCPA’s Deductibles and/or Self-Insured Retentions.
Notwithstanding Section 5.1.2 above, Contracting Member agrees to reimburse NCPA, in a
timely manner, for all deductibles and/or self-insured retentions payable for any claim, liability
or damage arising out of this Agreement.
5.2 Indemnification of NCPA. Except as specified in Section 5.1.2 above, Contracting
Member shall, at its sole cost and expense, indemnify and hold harmless NCPA and all associated,
affiliated, allied, member and subsidiary entities of NCPA, now existing or hereinafter created, and
their respective officers, boards, commissions, employees, agents, attorneys, and contractors
(hereinafter referred to as “Indemnitees”), from and against any and all liability, obligation,
damages, penalties, claims, liens, costs, charges, losses and expenses (including, without
limitation, reasonable fees and expenses of attorneys, expert witnesses and consultants), which
may be imposed upon, incurred by or be asserted against the Indemnitees arising out of this
Agreement.
5.3 Defense of Indemnitees. In the event any action or proceeding shall be brought
against the Indemnitees by reason of any matter for which the Indemnitees are indemnified
hereunder, Contracting Member shall, upon reasonable prior written notice from any of the
Indemnitees, at Contracting Member’s sole cost and expense, resist and defend the same with
legal counsel mutually selected by Indemnitee and the Contracting Member, unless mutual
selection of counsel is expressly prohibited by an applicable insurance policy; provided however,
that neither Indemnitee nor Contracting Member shall admit liability in any such matter or on behalf
of the other without express written consent, which consent shall not be unreasonably withheld or
delayed, nor enter into any compromise or settlement of any claim for which Indemnitees are
indemnified hereunder without prior express written consent. The Contracting Member’s duty to
defend shall begin upon receipt of a written notice identifying with specificity the allegations that
give rise to this duty to defend.
5.4 Notice. The Parties shall give each other prompt notice of the making of any claim
or the commencement of any action, suit or other proceeding covered by the provisions of this
Section 5.
5.5 Insurance. During the term of the Agreement and prior to beginning any work
under this Agreement, NCPA shall maintain, or cause to be maintained, in full force and effect, and
at its sole cost and expense, the types and limits of insurance as are annually approved by the
governing Commission of NCPA. The types and limits of insurance that are applicable to this
Agreement are evidenced in policy summaries attached hereto as Exhibit C. NCPA warrants and
represents that the types of insurance and coverage limits shown in Exhibit C are in full force and
effect and shall remain so during the term of this Agreement unless NCPA gives prior written
notification (of not less than 30 days) of modification, cancellation or rescission of such coverage.
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Operating Agreement Between NCPA and City of Palo Alto
5.6 Contracting Member’s Acknowledgment of Option to Secure Additional Insurance.
Contracting Member acknowledges that there are limitations on NCPA’s liability to Contracting
Member under this Section 5 and that the Contracting Member may need to purchase additional
insurance of its own to cover the additional risks and the potential additional liabilities it is assuming
under this Agreement. Contracting Member agrees that it will cause, with respect to any additional
insurance it obtains or which is otherwise available to Contracting Member, its insurers to issue an
endorsement providing a waiver of subrogation rights as to Indemnitees.
5.7 Survival of Obligations. The defense and indemnity obligations of Section 5 shall
survive the termination of this Agreement.
Section 6. CHARGES & SECURITY DEPOSIT
6.1 Monthly Charges. Charges for the Services provided hereunder shall be calculated
as follows:
Contracting Member will be solely responsible for any and all costs incurred by NCPA
attributed to NCPA’s provision of Services for the Generating Facilities, including, but not limited to,
NCPA’s costs for providing Scheduling Coordination Services as forecasted in NCPA’s Annual
Budget, and any and all CAISO charges and credits assessed to NCPA for acting as Scheduling
Coordinator for the Generating Facilities. Scheduling Coordination Services costs shall be
determined and allocated to Contracting Member as if the purchase power agreement for each
Generating Facility were an NCPA Project.
6.2 Security Deposit. Contracting Member shall maintain on deposit in its General
Operating Reserve Account held at NCPA the sum of zero dollar ($0.00) as security to NCPA for
liabilities NCPA could incur under this Agreement. Contracting Member hereby authorizes NCPA
to reserve and commit this sum in its General Operating Reserve Account for the payment of the
aforementioned liabilities should some become necessary. Interest on monies held by NCPA
pursuant to this section shall be credited in accordance with the then standard practices of NCPA
relating to the General Operating Reserve Account.
Section 7. BILLING AND PAYMENT
7.1 Monthly Payments. As part of its “All Resources Bill,” prepared in the usual and
ordinary course of business, NCPA shall render a monthly billing to Contracting Member for all
charges incurred by Contracting Member hereunder. Contracting Member shall pay such bill within
thirty (30) calendar days of the due date indicated on the bill. Any amount due on a day other than
a business day, i.e., any day except a Saturday, Sunday, or a Federal Reserve Bank holiday, may
be paid on the following business day.
Payments shall be remitted directly to:
Northern California Power Agency
651 Commerce Drive
Roseville, California 95678
Attn: Accounts Receivable
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Operating Agreement Between NCPA and City of Palo Alto
Except for an “Uncontrollable Force” as described in Section 9 hereof, any amount due and
payable but not paid by Contracting Member within 30 days following the date of the invoice shall
bear interest at the per annum prime rate (or reference rate) of the Bank of America NT & SA, then
in effect, plus two percent per annum computed on a daily basis until paid. NCPA will mail all
invoices within 24 hours of the invoice date thereon.
The postmark date on the envelope containing payment by check shall be used to determine
timeliness of payment, except that payments received later than seven (7) days after the due date
shall be declared late without regard to postmark date. An invoice coming due on a Friday,
holiday, or weekend shall be due on the next following nationally recognized working day.
7.2 Billing Dispute. If all or any portion of a bill is disputed by Contracting Member, the
entire amount of the bill shall be paid when due, and NCPA’s Authorized Representative shall be
concurrently provided written notice of the disputed amount and the basis for the dispute. NCPA
shall reimburse any amount determined to have been incorrectly billed, within ten (10) days after
such determination.
7.3 Total Payment. Contracting Member shall pay for the Services to be rendered by
NCPA pursuant to this Agreement. Contracting Member shall not pay any additional sum for any
expense or cost whatsoever incurred by NCPA in rendering Services pursuant to this Agreement
unless the Agreement has been modified by a properly executed change order or amendment in
accordance with this Agreement.
7.4 Payment of Taxes. NCPA is solely responsible for the payment of employment
taxes incurred under this Agreement and any similar federal or state taxes.
7.5 Payment upon Termination. In the event that Contracting Member or NCPA
terminates this Agreement pursuant to Section 4, Contracting Member shall compensate the NCPA
for all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as
of the date of written notice of termination. NCPA shall maintain adequate logs and timesheets in
order to verify costs incurred to that date.
Section 8. STATUS OF NCPA; FACILITIES AND EQUIPMENT
8.1 Independent Contractor. At all times during the term of this Agreement, NCPA shall
be an independent contractor and shall not be an employee of Contracting Member. Contracting
Member shall have the right to control NCPA only insofar as the results of NCPA's Services
rendered pursuant to this Agreement and assignment of personnel pursuant to Section 3.4;
however, otherwise Contracting Member shall not have the right to control the means by which
NCPA accomplishes Services rendered pursuant to this Agreement. Notwithstanding any other
agency, state, local or federal policy, rule, regulation, law, or ordinance to the contrary, NCPA and
any of its employees, agents, and subcontractors providing Services under this Agreement shall
not qualify for or become entitled to, and hereby agree to waive any and all claims to, any
compensation, benefit, or any incident of employment by Contracting Member, including, but not
limited to, eligibility to enroll in the California Public Employees Retirement System (“PERS”) as an
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Operating Agreement Between NCPA and City of Palo Alto
employee of Contracting Member and entitlement to any contribution to be paid by Contracting
Member for employer contributions and/or employee contributions for PERS benefits.
Section 9. UNCONTROLLABLE FORCES
9.1 Obligations of the Parties, other than those to pay money when due, shall be
excused for so long as and to the extent that failure to perform such obligations is due to an
Uncontrollable Force; provided, however, that if either Party is unable to perform due to an
Uncontrollable Force, such Party shall exercise due diligence to remove such inability with
reasonable dispatch. Nothing contained in this Agreement shall be construed as requiring a Party
to settle any strike, lockout, or labor dispute in which it may be involved, or to accept any permit,
certificate, contract, or any other service agreement or authorization necessary for the performance
of this Agreement which contains terms and conditions which a Party determines in its good faith
judgment are unduly burdensome or otherwise unacceptable.
9.2 Each Party shall notify the other promptly, by telephone to the other Party’s
operating personnel and Authorized Representative identified in Section 3.2, upon becoming aware
of any Uncontrollable Force which may adversely affect the performance under this Agreement. A
Party shall additionally provide written notice in accordance with Section 12.8 to the other Party
within 24 hours after providing. Each Party shall notify the other promptly, when an Uncontrollable
Force has been remedied or no longer exists.
Section 10. LEGAL REQUIREMENTS
10.1 Governing Law. The laws of the State of California shall govern this Agreement,
without regard for the choice of law doctrine.
10.2 Compliance with Applicable Laws. NCPA and any subcontractors shall comply with
all laws applicable to the performance of the Services hereunder.
10.3 Other Governmental Regulations. To the extent that this Agreement may be
funded by fiscal assistance from another governmental entity, NCPA and any subcontractors shall
comply with all applicable rules and regulations to which Contracting Member is bound by the
terms of such fiscal assistance program.
10.4 Licenses and Permits. NCPA represents and warrants to Contracting Member that
NCPA and its employees, agents, and any subcontractors have all licenses, permits, qualifications,
and approvals of whatsoever nature that is legally required to practice their respective professions.
NCPA represents and warrants to Contracting Member that NCPA and its employees, agents, any
subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of
this Agreement any licenses, permits, and approvals that are legally required to practice their
respective professions.
10.5 Nondiscrimination and Equal Opportunity. NCPA shall not discriminate, on the
basis of a person’s race, religion, color, national origin, age, physical or mental handicap or
disability, medical condition, marital status, sex, or sexual orientation, against any employee,
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Operating Agreement Between NCPA and City of Palo Alto
applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or
applicant for any services or programs provided by NCPA under this Agreement. NCPA shall
comply with all applicable federal, state, and local laws, policies, rules, and requirements related to
equal opportunity and nondiscrimination in employment, contracting, and the provision of any
services that are the subject of this Agreement, including but not limited to the satisfaction of any
positive obligations required of NCPA thereby.
NCPA shall include the provisions of this Subsection in any subcontract approved by
Contracting Member’s Authorized Representative.
Section 11. KEEPING AND STATUS OF RECORDS.
11.1 Records Created as Part of NCPA’s Performance. All reports, data, maps, models,
charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or
any other documents or materials, in electronic or any other form, that NCPA prepares or obtains
pursuant to this Agreement and that relate to the matters covered hereunder shall be the property
of Contracting Member. NCPA hereby agrees to deliver those documents to Contracting Member
upon termination of the Agreement. It is understood and agreed that the documents and other
materials, including, but not limited to, those described above, prepared pursuant to this
Agreement are prepared specifically for Contracting Member and are not necessarily suitable for
any future or other use. Contracting Member and NCPA agree that, until final approval by
Contracting Member, all data, plans, specifications, reports and other documents are confidential
and will not be released to third parties without prior written consent of both Parties, except as may
otherwise be required by applicable law.
11.2 NCPA’s Books and Records. NCPA shall maintain any and all ledgers, books of
account, invoices, vouchers, canceled checks, and other records or documents evidencing or
relating to charges for Services or expenditures and disbursements charged to Contracting
Member under this Agreement for a minimum of three (3) years, or for any longer period required
by law, from the date of final payment to the NCPA to this Agreement.
11.3 Inspection and Audit of Records. Any records or documents that Section 11.2 of
this Agreement requires NCPA to maintain shall be made available for inspection, audit, and/or
copying at any time during regular business hours, upon oral or written request of Contracting
Member. Under California Government Code Section 8546.7, if the amount of public funds
expended under this Agreement exceeds TEN THOUSAND DOLLARS ($10,000.00), the
Agreement shall be subject to the examination and audit of the State Auditor, at the request of
Contracting Member or as part of any audit of the Contracting Member, for a period of three (3)
years after final payment under the Agreement.
11.4 Confidential Information and Disclosure. During the term of this Agreement, either
party (“Disclosing Party”) may disclose confidential, proprietary or trade secret information (the
“Information”), to the other party (“Receiving Party”). All such Information made available in a
tangible medium of expression (such as, without limitation, on paper or by means of magnetic
tapes, magnetic disks or other computer media) shall be marked in a prominent location to indicate
that it is the confidential, proprietary and trade secret information of Disclosing Party at the time of
disclosure to Receiving Party. Receiving Party shall hold Disclosing Party’s Information in
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Operating Agreement Between NCPA and City of Palo Alto
confidence and shall take all reasonable steps to prevent any unauthorized possession, use,
copying, transfer or disclosure of such Information. Receiving Party shall not attempt to reverse
engineer or in any manner create any product or information which is similar in appearance to or
based on the Information provided by Disclosing Party. Receiving Party shall not disclose
Disclosing Party’s Information to any person other than Receiving Party’s employees, agents,
contractors and subcontractors who have a need to know in connection with this Agreement.
Receiving Party’s confidentiality obligations hereunder shall not apply to any portion of
Disclosing Party’s Information which:
(a) Has become a matter of public knowledge other than through an act or
omission of Receiving Party;
(b) Has been made known to Receiving Party by a third party in accordance
with such third party’s legal rights without any restriction on disclosure;
(c) Was in the possession of Receiving Party prior to the disclosure of such
Information by Disclosing Party and was not acquired directly or indirectly from the other party or
any person or entity in a relationship of trust and confidence with the other party with respect to
such Information;
(d) Receiving Party is required by law to disclose; or
(e) Has been independently developed by Receiving Party from information
not defined as "Information" in this Agreement, as evidenced by Receiving Party's written records.
Receiving Party shall return or destroy Disclosing Party’s Information (including all copies
thereof) to Disclosing Party promptly upon the earliest of any termination of this Agreement or the
Disclosing Party’s written request. Notwithstanding the foregoing, Receiving Party may retain one
copy of such Information solely for archival purposes, subject to the confidentiality provisions of this
Agreement. The Parties understand that each Party is a public entity and is subject to the laws
that may compel either to disclose information about the other’s business.
Section 12. MISCELLANEOUS PROVISIONS
12.1 Attorneys’ Fees. If a Party to this Agreement brings any action, including an action
for declaratory relief, to enforce or interpret the provisions of this Agreement, the prevailing Party
shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that Party may
be entitled. The court may set such fees in the same action or in a separate action brought for that
purpose.
12.2 Venue. In the event that either party brings any action against the other under this
Agreement, the Parties agree that trial of such action shall be vested exclusively in the state courts
of California in the County of Placer or in the United States District Court for the Eastern District of
California.
12.3 Severability. If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, or if any provision of this Agreement is
rendered invalid or unenforceable by federal or state statute or regulation, but the remaining
portions of the Agreement can be enforced without failure of material consideration to any Party,
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Operating Agreement Between NCPA and City of Palo Alto
then the remaining provisions shall continue in full force and effect. To that end, this Agreement is
declared to be severable. Provided, however, that in the event any provision is declared to be
invalid, void or unenforceable, either Party may terminate this Agreement upon ten (10) days’
written notice given within five (5) business days of receipt of notice of final entry of judgment.
12.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of
this Agreement does not constitute a waiver of any other breach of that term or any other term of
this Agreement.
12.5 Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of and shall apply to and bind the successors and assigns of the Parties.
12.6 Use of Recycled Products. NCPA shall endeavor to prepare and submit all reports,
written studies and other printed material on recycled paper to the extent it is available at equal or
less cost than virgin paper.
12.7 Conflict of Interest. NCPA shall not employ any Contracting Member official or
employee in the work performed pursuant to this Agreement. No officer or employee of
Contracting Member shall have any financial interest in this Agreement that would violate California
Government Code Sections 1090 et seq.
12.8 Notices. Unless this Agreement requires otherwise, any notice, demand or request
provided for in this Agreement, or served, given or made shall become effective when delivered in
person, or sent by registered or certified first class mail, to the persons specified below:
For NCPA:
Dave Dockham
Assistant General Manager – Power Management
Northern California Power Agency
651 Commerce Drive
Roseville, CA 95678
With a copy to:
Michael F. Dean
General Counsel, Northern California Power Agency
c/o Meyers Nave
555 Capitol Mall, Suite 1200
Sacramento, CA 95814
For Contracting Member:
Valerie Fong
Director of Utilities
City of Palo Alto
250 Hamilton Avenue
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Operating Agreement Between NCPA and City of Palo Alto
Palo Alto, CA 94301
With a copy to:
Marybelle Ang
Senior Deputy City Attorney, City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
When-ever it is required, permitted, or desired in this Agreement that written notice or demand
be given by any Party to any other Party, such notice or demand may be either personally served
or sent by United States Mail, or facsimile. Notice shall be deemed to have been given when
personally served, when deposited in the United States Mail, certified or registered with postage
prepaid and properly addressed, or when transmitted by facsimile; provided, however, notices
delivered by facsimile shall only be effective if delivered during regular business hours on a day
that is considered a regular business day for NCPA by the involved Parties.
12.9 Integration; Incorporation. This Agreement, including all the exhibits attached
hereto, represents the entire and integrated agreement between Contracting Member and NCPA
relating to the subject matter of this Agreement, and supersedes all prior negotiations,
representations, or agreements, either written or oral. All exhibits attached hereto are incorporated
by reference herein.
12.10 Dispute Resolution. If any dispute arises between the Parties that cannot be
settled after engaging in good faith negotiations, Contracting Member and NCPA agree to resolve
the dispute in accordance with the following:
12.10.1 Each Party shall designate a senior management or executive level
representative to negotiate any dispute.
12.10.2 The representatives shall attempt, through good faith negotiations, to resolve
the dispute by any means within their authority.
12.10.3 If the issue remains unresolved after ninety (90) days of good faith
negotiations, despite having used their best efforts to do so, either Party may pursue whatever
other remedies may be available to it.
12.10.4 This informal resolution process is not intended to nor shall be construed to
change the time periods for filing a claim or action specified by Government Code § 900, et
seq.
12.11 Other Agreements. This Agreement is not intended to modify or change any other
agreement between any of the Parties, individually or collectively.
12.12 Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be an original and all of which together shall constitute one agreement.
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Operating Agreement Between NCPA and City of Palo Alto
12.13 Obligations Several. The duties, obligations and liabilities of the Parties are
intended to be several and not joint or collective. Nothing contained in this Agreement shall ever
be construed to create an association, trust, partnership or joint venture or to impose a trust or
partnership duty, obligation or liability on or with regard to either Party. Each Party shall be
individually and severally liable for its own obligations under this Agreement.
12.14 Effect of Section Headings. Section headings and subheadings appearing in this
Agreement are inserted for convenience only and shall not be construed as interpretation of text.
12.15 Authority of Signatories. The signatories hereby represent that they have been
appropriately authorized to execute this Agreement on behalf of the Party for whom they sign.
12.16 Amendments.
12.16.1 Deemed Approved Amendments. It is understood and agreed by the Parties
that any NCPA Commission approved update to the then current Annual Budget rates and
charges related to Services to be performed under this Agreement is deemed an approved
amendment to this Agreement.
12.16.2 Addition or Removal of Generating Facilities. The Parties may, by a writing
signed by the Authorized Representative of NCPA and the Authorized Representative of
Contracting Member and without the approval of their respective governing boards, add or
remove Generating Facilities listed in Exhibit B for which Contracting Member has requested
the provision of Services.
12.16.3 Authorized Representatives and Addresses for Notice. Any Party may, by
providing written notice to the other Party, modify either the identity or address for its
Authorized Representative as identified in Section 3.2, or may amend its address for notice as
provided in Section 12.8.
12.16.4 Amendments in General. Except as otherwise provided in this Section 12.16,
the Parties may amend this Agreement only by a writing signed by all the Parties following
each Party’s receipt of written resolution/authorization from their governing bodies.
12.17 No Third Party Beneficiaries. Nothing contained in this Agreement is intended by
the Parties, nor shall any provision of this Agreement be deemed or construed by the Parties or by
any third person, to be for the benefit of any third party, nor shall any third party have any right to
enforce any provision of this Agreement or be entitled to damages for any breach by the Parties of
any of the provisions of this Agreement.
The Parties have executed this Agreement as of the Effective Date.
Northern California Power Agency Contracting Member --City of Palo Alto
________________________________ _____________________________________
JAMES H. POPE, General Manager Name/Title:
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Operating Agreement Between NCPA and City of Palo Alto
Attest: Attest:
________________________________ _____________________________________
Assistant Secretary of the Commission Name/Title:
Approved as to Form: Approved as to Form:
________________________________ _____________________________________
General Counsel Senior Asst. City Attorney
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Operating Agreement Between NCPA and City of Palo Alto
EXHIBIT A
SCOPE OF SERVICES
Contracting Member has entered into power purchase agreements as buyer to take delivery of
energy and capacity from the non-NCPA Generating Facilities listed in Exhibit B. To enable the
scheduling and settlement of energy and capacity from the Generating Facilities, Contracting
Member requires that an entity be designated on its behalf as Scheduling Coordinator with the
CAISO. NCPA and Contracting Member, along with other NCPA Members, are parties to the
Scheduling Coordination Program Agreement dated as of August 28, 2002 (“the SCPA”), as the
the same has been amended or may hereafter be amended, by which NCPA provides Scheduling
Coordination Services with respect to NCPA Projects to those NCPA Members which have
executed the SCPA. In accordance with the terms of this Agreement, Contracting Member has
requested, and NCPA has agreed to provide, Scheduling Coordination Services for the Generating
Facilities. NCPA shall act as Scheduling Coordinator and provide Scheduling Coordination
Services for the Generating Facilities in accordance with the applicable CAISO tariffs and pursuant
to the terms of the SCPA, as if the power purchase agreements for each Generating Facility were
an NCPA Project.
NCPA’s agreement to provide Services to Contracting Member is based on the understanding
that the Generating Facilities will operate as resources within the CAISO balancing authority area,
and will be scheduled and settled through the CAISO markets. If one or more Generating Facilities
are not operated as resources within the CAISO balancing authority area, or are not scheduled and
settled through the CAISO markets, the Services provided in this Exhibit A will require modification
to identify and include the additional requirements that may be required to provide Scheduling
Coordination Services for the impacted Generating Facilities or NCPA may remove such
Generating Facilities from this Agreement upon sixty (60) days prior written notice.
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Operating Agreement Between NCPA and City of Palo Alto
EXHIBIT B
LIST OF GENERATING FACILTIES
The Generating Facilities for which NCPA will provide Services are listed in this Exhibit B.
Santa Cruz Landfill Generating Plant
o Resource ID: GRNVLY_7_SCLAND
o PGA Name: Ameresco Santa Cruz Energy, LLC
o Resource Capacity: 3.04 MW
o COD: February 2, 2006
Keller Canyon Landfill Generating Plant
o CAISO Resource ID: KIRKER_7_KELCYN
o PGA Name: Ameresco Keller Canyon, LLC
o Resource Capacity: 3.56 MW
o COD: August 1, 2009
Ox Mountain Landfill Generating Plant
o CAISO Resource ID: OXMTN_6_LNDFIL
o PGA Name: Ameresco Half Moon Bay, LLC
o Resource Capacity: 10.62
o COD: April 1, 2009
Johnson Canyon Landfill Generating Plant
o CAISO Resource ID: Pending
o PGA Name: Ameresco Johnson Canyon, LLC
o Resource Capacity: 1.50 MW
o Estimated COD: February, 19, 2013
San Joaquin Landfill Generating Plant
o CAISO Resource ID: Pending
o PGA Name: Ameresco San Joaquin, LLC
o Resource Capacity: 6.20 MW
o Estimated COD: April 1, 2013
The Generating Facility characteristics, such as resource capacity, may change over the course of
time, and such changes will not reduce or alter Contracting Member’s obligations as set forth in this
Agreement. Provided, however, that Contracting Member shall provide written notice of the change
in characteristics to NCPA.
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Operating Agreement Between NCPA and City of Palo Alto
EXHIBIT C
NCPA SUMMARIES OF LIABILITY INSURANCE
Attached are the following summaries of insurance coverage, as applicable to the Services being
provided by NCPA hereunder:
1. Workers’ Compensation & Employer’s Liability
2. Automobile Liability & Physical Damage
3. Excess Liability
2050354.1