HomeMy WebLinkAbout0334.091,
June 20, 1991
THE HO&ORABLE CITY COUNCIL
Palo Alto, California
Renewal of consultant Service Agreements for~~~Utility
Proceeding
Members of the council:
This report requests that Council authorize the Mayor to execute
. the attached agreements with Recon Research corporation (P~CON)
and Mr. Patrick J. Power to provide specialized consulting
services on 9as utility lrlatters before the California PUblic
Utilities Commission (CPUC). ~th consultants are presently
under contract, repre-::~nting the City before the CPUC on a
variety of important gas issues related to deregulation of the
industry which will continue to be addressed in the upcoming
year~ council approval of the attached agreements will make them
e~tective through June 30, 1992.
Piscussion
During Fiscal Year 1991-92, the city will continue active
participation in CPUC gas proceedings on cost allocation,
interstate transportation, gathering charges, procurement of
8upplJes, and other related matters which directly affect the
wholesale rate the City pays to Pacific Gas and Elect~ic (PG&E),
as well as the City's plans for alternative gas supply and
aevelopment. The issues in these hearings have broadened since
their beginnings in 1984, vhen the Commission instituted its
investigation into California gas transportation matte~s and
assigned Mr. Power as the Administrative Law Judge. Important
issues remain to be resolved in the upcoming year, and issues
already resolved must he monitored to protect the City's
interests from proposals whiCh deviate trom established rormulas
and policies. In addition to close ~onitoring of all phases of
these proceedings, the city will present its o~~ witnesses,
cross-examine PG&E witnesses, submit briefs and file petitions if
necessary.
The ineredsed compensation requested for consulting services is
ror additional services resulting from issues which originally
surfaced during an En Bane hearing called by the CPUC on November
1, 1989_ The En Bane hearing was notable jn that it showed the
CPUC's commitment to implementing a new gas utility program
structure that already has had a significant i~pact on Palo Alto.
The ePee filed an Order Instituting Rulemaking (OIR) proposing a
number of changes to California's current gas procurement and
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pipeline capacity access policies, vhich may materially affect
the city and its retail gas customers~ The consultants have
assisted staff in instituting Palo Alto's efforts to obtain gas
l..:nder the OIR decisions and sn.hsequent settlements. A n;.;.mber of
important related issues still remain unresolved. As C!I result,
it is e)(tremely important that the city contin:cJe to avail itself
of the specialized services until these issues have been
resolved.
To accomplish Palo Alto's objectives in these proceedings,
reliance upon outside consultant.s 'With expertise in t.ne CPUC
arena has become necessary due to the demanding s~hedulef
technical subjE:ct matte:r', 'Workload and the multitude of issues
under consideration simultaneously at the hearings. Although the
consulting field is very narrov with respect to specializing in
CPUC gas rate and regulatory matters, the City has been fortunate
to retain the highly regarded services of RECON in 1986 and Mr.
Power in 1987 after his departure from the CPUC. Both
consultants are among a relative few ~ho have been closely
involved. in the construction of the CPUC's rate and regulatory
program since its inception in 19B4. REODN has infor.med us that
they do not generally represent other parties in regulatory
proceedings before the CPUC ~hich would result in a conflict of
interest with its representation of the City of Palo Alto~
However, in any instanc~ in which either the City or the
consultant fee~s that conflicts ~ay or will arise, RECON has
agreed to recommend alternative advisors to the city for those
proceedings. Mr. Power is also aware of the need to avoid
conflicts of interest.
These two conSUltants are of value to the City vith regard to
advice on rate design, gas acquisition costs, procurement and
tran~portation issues at the state and federal levels and various
legal, economic and regulatory matters. Their effort~ have
substantially aided the City in obtaining access to PG&E's gas
storage facilities, asserting Palo Alto's unique status as a
wholesale customer, and facilitating staff's understanding of
critical issues as they have developed.
rt may be noted that Mr. Po~er, a rormer CPUC Administrative Law
Judge, resigned in April 1987 to enter the consulting field.
Having presided over the transportation proceedings, Mr. Po~er
brings invaluable knowledge, experience and legal expertise to
the city 1 s effort before the Commission. On the other hand,
RECON provides strong economic and ratemaking ~upport to the City
in the hearings~ Thus, their individual areas of expertise
complement each other and provide th·:: city with sufficient depth
to accomplish the city's goals.
The c~rrent agreements expire June 30, 1991. Approval to the
attached RECON agreement ~ill renew the present agreement through
June 30, 1992 and allow for an annual compensation level not to
exceed $lOO,OOO. With regard to Mr. Po~er. the attached
agreement provides for a term through June 30, 1992, and allo~s
for an annual compensation ceiling up to $15~OOO. Nevertheless,
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the combined cunsultant expenditures for CPUC activities shall be
limited to $130,000, in th~t the additional sum of $15,000 vill
be payable to either RECON or Patrick J. POYer tor ~dditional
service~ rendered. Funds for this purpose have been budgeted for
F"i 1991-92 in the Gas Fund. Approval of these agreements .... ill
provide adequate legal and economic analysis support for an
ongoing effort in gas proceedings before the CPUC in the upcoming
year ..
Recommendations
staff recommends that Council approve the attached agreements
with RECON Research Corporation and Mr. Patr-ick J .. PO\lo'er for
ongoing consulting services on gas rate, procure~ent and
transport matters before the California Public Utilities
commission.
R.?5 es ectfully Submitt. ed,_
IJ( ~ (f) 2t~-.vf
RONALD P. BELVAL
Manager, Energy Plarlning
~.;j~.c~ i/'( lT~~tt
MCI\ARD L. YOUNG
o eC~,or O~f lJlities
• FLEMING s~;istant City c! er
Attachmp.nts:
CXRI33'~91
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Agreement for Recor. Research Corp~
Agreement for patrick J~ Power
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AGREEMENT No.
8v THIS AGREEMENT MAO€' .o,r-;O e,"'TE"£D !rn:) ON THE C"'Y OF
Jay..-.NO BfMEE.r<nHE CffV OF PALO ALTO lHEFlEI"AFTEI'i ~EFEFI'1EC' 'C''''S C~TY,.t.ND ''''AM'E:r !T) .......R.E.r.ON...P.£.S.EAR..C . ..L.O.f!.f'(',pAl IO~I _ ___ _ _ _ ,2', ___________ _
IADCRESS) __ .6.3Ei!L-'il..ls.hi.c:.e-B.l. ... ..d..-7" ____ 51,1.1 U ____ 1.511L ,e ITI'] L0.5.-__ An..g.ele.s .. ___ CA....--_ :Z1i>:'9..O.OA.B. __ ;PHONE,' lZl..JJ. __ . .6.55: 350,
:HE"EI~R i'lE:~RRE:D ~o AS CONTRACTOR) IN ·:CNSID€R .... -IQN D~ '[HE,R "'OJ' J,"~ CQ~'lN,I .. ;S THE """TIi'S KERE:'O .l,GRfE .is '.:JUQW:;'
• CONTRACTOR SHA~L F'''aVI~ CI'I ;:URNISH TH<: ~OllJ::WI~G s~"r'EO sr';:;VICES .N::J.'CR MAT::FtIAlS sPEoOFI~r;-iN E,~.HISIT _
.HrACHfOH'ER('TO"'NOINCCl~PO!V.r£DH<:Rf""8YrHtSR~~EFiENCe Sen-ices shall be '.H1Gertaken by Reco,,'s principal
staff wl-)ose unique qualifjcatiar;:; are r-eTred L!pon to represent tho:-C~ty before the CaliforrLla
Public Utility COrT!1lission {(PUC}. Senices 'Will be prc\;ided in regard to essential (PUC
·proceedings regarding gas transPQrtatio~ and gas pracure~ent as well as enalJsis of ot~er
p~uposa15 which determine ho~ the City conducts its gas business. CITY is relying UpOG t~e
ser~ices of Dr. Andre~ Safir. who is u~iquely qualified to s~rve under this Agreement as
• EXHIBiTS ~EFauOWlNG",nA:::~EDE';HLaiTS>tEI'I£a1'AREM".:rEp.\.HrOF:}~ISAGRE.='-IE .. r City's CPUC representative,
EXHIB!T A -~Attacnment A -Compensation
-Conflict of Interest"~
• TERMS tME ~R\lICES ""'O'C.R lAAiERiALS FUl'tNISI-<ED I.J~OH~ T.,IJS''''GPe:el.'EJ.,:T SHALl,. CC~"I'(NCE ON ~J V 1. 1921 .. _
AN{) So'-IAl.LB(CQM'PLt;:'i"ED8EFOI=IE J\.l!ie 30! 1992 ___ _
• COMPENSA nON FQ<I. \~E HJlL. PER.fCIRMA~C.E OF Tl-i{S 4.c;.A~r.U;:"'T
Ill: em s ...... u.. P~I' eONrAACTOR:
• PAYMENT RECORD ICE?"~T"'ENT USE RE',IEASE SIDE'
• CITY ACCOUNT NUMBER:
"" cooe 030J£1 O'lT ·1"'FAru... EST PKA,:.f NO OOL.l.AA "',",OUNT ~ 24423400 . . ________ -j .~$ ,.;I:;;,5~. O~O~O _-_-_-_-_-_-_-_-_--_-.. --1_
L~~~O~O~ ____ . 3107---1 _~~I~O~OcO~O~O_
• GENERAL TERMS AND CONOrnoNS.&.RE rNCWDEDON BOTH sm£s OF TH~S DOCllMENT
TI',($ AG.~£e:ME"i SKAll BECQ .... E EF~CTt..,E ut'QII4 tTS "PP~O\[,I"L ,l"SO O:WJ"i'IOIt \IV err'/'. IN WiTNESS 1'KEREQF, Tl-(E j:I,AR'fIES "',,,,[ €'XEC~TEQ THIS
.tJ:;AEUtE~ THl CA".lI!O~H, AND \'EAR FIRST WllJITE'N ABOVE
HOLD HARMlESS. CDflTRACTOR aQr~ III Int!\:rr.1'1rfy, def~[j and holtlnarrnlt\S CrT", rts. o/!",~rs ~wf'l1is, and empliJ')'t:5 :'cm iIl)' .rod all (J'tm.nQS, claims or llabrl,ty ~
a(1'"~ Murt, IlIdudi~ ~T\,II du.II'I, Q~d ~ (lr l.(lSt~1;j <lut ~ CQttTP,k":1'CP, S, II~ Q~I'trs ... ,,.e.nts. or ~rr,~iC,!,e.~S' n~lIl~ertt K\'s., l!.i"'C:S, III Qrr.'Sil<lt'S, or oIIT.lli'Jt
m~nr:I~. or COOCIlt:l Itor 'WI11Ct1 me law imposes str1ClI<a!lI'I~ on o:mo'Til~CT[lR In me ~lICI'rtn~l'la! (Jr faJluf't 10 ~r'c'm ~15 19~~enl )y '::'If'RII.Cfc.R
EW11RE AG1IEftrlU:lfT. ThIS ,;lir~m~ and re..c terms and ~[)nJ;l:Q.I1~o.n2';Vrrl:if 'mea! re;:re5t-'rt t;;c en~'li ~gree'Olem ~et.."ee:' tT1e p,o rt>6 'W,r.-"e>p~~ 1) :~,e purchase
Inti sale a::-roe <i!qU'~IT'..t~'\t ~ter""15 Q;' i.UPr;lIIH 'lI' p;ymt.nt lOI i.~N\Ce.s ~!'I,'~ m,j,~ tie. tl1e ~L:tJ.:eo::t 0; ~~I~ ~~tr¢ct All p.tlo.r ;t~~O'!t.rnl!.~:.s., ~0l(t'enla1,cns., Sl~teme.nli.,
net'~~ICM and uroclert.l~Ifl!l> wt1!~htf cr:lr (Jr wnt1e~ ar! SOJpe:-<;e-;jelf ~ere~~
CONTRACTOR
~,wE ~l4J............e..el.:i..aJ,~~,~,l'lage r. E nillY.-.E 1 a r; .,e,,' _
OCf'T _~tiTities I Energy Pl~J1l!J.r'l.,g~ __ _ 'TIT .. ! _, __ _
SC'CI,I.!. 5t:CURtT"f
OF ! FI S NU~SE R ___ _
• JNVOICING SEND AU INVOICES '1'0 Tl;E CITY, ATTN, PRCJE':-T ItIAI<A(;Ei=I
• CITY OF PALO ALTO APPROVALS: IROUT( F':lR SIGN'" Il...'FlES ACCOADI'!><G TO NU""8=~S IN APPROlfA,L BOXES BELOW]
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F OVE.R U;OOO, MOL1Fl.ES CITY WoN"I,GER'S SIGNA TU~E
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~ AGREEMENT No, ______ t W {DATE TO ~ EN'1"ERED I. BY THIS AGREEMENT ...... DEANe ENl'~RED I!'HOON -;-1-110 _~~ _______________ DArOF __ ~ '9_ 5'( elT'r PLJf\C~"'SI"*G
BY /lNO EETWHN Tf-IE CliY OF PALO ALTO l"EFlEI",,,FfE:o; REF€RI'lfD TO....." CITY AND
IWlMfH'l Patrick.~J. Power _________ r2,_ --~ ---;;-;-;o-----,,,,::7TI,
;AOi)>I.(;SS'j llDl lIIebster Street, SJite 1709 <,elr"l _Q_akland. CA _______ iZ'F': g4612 _____ I~""'NE" 1J§-=-U~,L
,H£RDNAF"'!"ER FlE'n:I'tREO TO AS CONTRACTOR) IN CCNS'rn:."A ~ICN o~ ,'"1[11'1 ~urUAL CD'iE,'V.NTS r .. r P .. P:T:E5 .. EFi£1:; 'oc;.AEE "'S "-0...1 Ow5
• COt<.l!TRACTOR S~Ll. PFlClw'IDC. OR F"URNISI-< ~t F'JL~{lWlr..C ;;PECIF,EC:, $CRV:CES J;1.C"OFi M"'TERIA~S S.P;:CIF'E.J IN ;;:,,1-11211 __
_ TI_C)i!EOr+E~£10ANtllSC~KlA .. ,'''''DHI::~EI~'C~T\oiIS~U'(RO.CE ServicEs Shall be undertaKen by Patrick. Power on
... ·hose unique qua1ificc!tioflS tne City is re~'yin~. legal and cOl'lsultation ser\l~ces \llPi11 be
provided in connectiCin .. ith the Citj"s gas transportation rate, wholesale r~te. and analysis
of reg"lation proposals before tl1e California Put-lie lrtilities Corrrnission af1d. on g.u trans
portation matters directly ~ith Pacific Gas and Electric Compa~y. Additional services wilT be
prQvided r~arding gas acquisition and procurement ~atters fc~ the City's utilities.
• EXHiBITs T~c: "'ouaWir-.Q A Tl ;\CKEO EXHISITS K[RE:e'r' .... RE" ~ ... DE PA.~T OF T"I$ .... c;.R(EIvIE:"'r Th i sag reeme!"l t s na 11 supe rse de
Contract ~~'o. 50-013913.
EXKIBIT A --Attachment A -Com~ensation
-Conflict of Interest~
• TERMS n-Ic. SERVICES ,4\r'O,'O~ WTE-RIALS "-Ul'INISJ-i.E.D l1N~ER THIS ACiAEE~[N; SH"'lL COM,.;ENCE ON ...1lll~~1
"'NO SMt.L BE COOPlETE=D Bemo;e: ,) I I ne 30. ... -1992 _____ _
.. COMPENSA TJON FOR THE FUlL Pi;:RfCl".UANCE ChI' T~15 ACREE""EIOT
tA CITY St4U PA.l" CQNTl".ACTaR.
• ~CCOUNT NUMBE!m ~_'I '""""'__ p,,"'s.e ~ : OOLL.AKA~'J"'T t?44i3t~ ______ -_"~31~1%l-~7_~_~_~: ___________ ------~= ____ -_i~$~~~1}4----ugQ~~~D ______ __
• GENERAL TERMS AND CONDITIONS ARE ~NCU,.IOE=_r;O~ BOr~ SlOES OF Tr1IS DOCUMEr-T
THIS AGREE"-IENT S"W.l BECOME tJfECTIVE ilPOIli ITS A~PF<OV;\L ANC' DEcunO!lt Bv ClfT_ r", WIT!ooESS THERFa~, H1f PAPTiES I-!I\VE fXECLlTED THIS
AGREEMl:"lr r& CAY, MO'-'TH, "'ilia YEA~ FIRST wAlmN ABOvE
HOLD HAllflilLESS, CO"fTRACTO!l: ~g lee~ ~ In~ml1l~, Cltltllr:! ar C tWd l'-..ar.'TIle5S em.-;t::, ~'1I~e '''ii, ~~e~ts ;one: i!mp:J)~t!i 1r[;r"1 any and Air tlerc .. n~>, clal ms or il.t~tl~r,' of
IMy natUfl!. 1~IIlr;!mg wr~¢etl O!~I", C.ilu~eQ ll~ or il:511'W out 01 CO~II1,~,tl(.l~ 'S It!' OIl,,:frS ag!n:s or bnpIC'IP~~ Me~!I~~~! .tC:S i!~'O'., ~f omlss_or~ (lr IIIrll:l,:1
misc(;!lduct OJ CClMuct lo.r .,.tl1cl1I~e ~'" 1r;';~Dses str.ct Ila!:wl:" Ul' CO,," 1'"AC'l('fi In I"'t ;:.e","rman:e or f;J'I.r~ tr pe,1~rx t!'1r5 a~'~er:f'~t ~y ~CN;"P.A;;TiJ"-:
atnRE J.CiREEMEljT. ThIS "g;eemelT! d~_,,"_n~::,_.Qll_~~:!::_~~ re; CEs;on: ~e en1;'f' ~ 'em~.~: ~~I ,,'e~n 'r"e pa~,es 'N':~ r!~p~:;:1 t~ :!'1e ",u n:~..lse
ar,ij !Yle 01 the eCl~<~'nrm, rn.tter,3Is or SCopile5 or pa)mem lor ~r;ICf:-S "'~L~tl "-il'r ~ :he s"~le~: of ~t,,~ ~on1ra':1 A!I ~r'a' .t;'~'11e'IS, 'eV'!l!>EnlJtl~:::; s1Are~ents
n~~! ... 'i,~ ns an!:! ur.de!'ti~r.g-$ '..melh~r 'Oral C' wntten !rf s'J.ery..:!Kl ~<t r'!~J
• PROJECT MANAGER AI'<C RE:PRc.s.E~T""!· E;;'~ Cln
N.wE Ronal cLP_~.-B..e.1Y_d_' APPROVED·
DEPT, IlTillTfESfFNERGY PUu..'iNltffi ____ _
PO SOl( 10250
PAlO ALTO, C" 9430J
Tell"phQr-,e !A.l5l...J2.9_~22.9..L-
CONTRACTOR
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SOCIAL SECUR: .......
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• CITY OF PALO ALTO APPROVALS: IRooT£. FaF< SIGN"'TU~(S ",,;::COADIIII(; TO NU""E;E;RS IN APPRCYAr" SO>:ES BE'lOW/
"'CiTYOEPARn~r~r O~~~tdSelln 'I "''' ", .... ,," --~l~ ~A""'1' I ~l;~:~.lSI~C:-& CQ~~,I.G A;J~I~IS"I""l'D'-11
[11 ,12) 13' lJ..1.i
IF OVER SS,OOC, ~EOOIAe5 CFTY r.wooAGER'S 5IGioiATUt:lE IF "ilEA $..""5,000, I"EOOI~t:S ",. ... ,,01'1 ~ CIT)' I.TTO"-"!£Y SIc;.""'TURES'-;;-",_--l
I crrYOf~~O"l.TO ArnST AP"",rIEDAS TO-F<lRM
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