HomeMy WebLinkAbout0481.091,
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November 6, 1991
THE HONORABLE CITY COUNCIL
Palo Alto, California
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Settlement and Interconnection Agreements B~tweeD PG'E and NePA'
City of Palo Alt,2
Members of the Council:
Report in Brie~
This report recommends that CO~"1cil adapt the attached Resollltion
authorizing the SETTLEMENT AGREEMENT CONCERNING FERC OOCKET NOS.
ELB9-34 AND ER90-355 BETWEEN PACIFIC GAS AND ELECTRIC COMPANY AND
NORTHERN CALIFORNIA P,;:)WER AGEtlCY ,Settlement Agreement) and
a~thorize the Mayor to ex~cute the a&ended INTERCONNECTION
AGREEMENT BETWEEN PACIFIC GAS AND ELECTRIC COMPANY AND NORTHERN
CALIFORNIA POWER AGENCY, CITY OF PALO ALTO, plus nine other
entities CIA). NCPA and pacific Gas and Electric Company ,PG'E)
have neqotiated a s~ttlement of a number of disputes (Settlement
Agreement), and agreed to amendments to t".he IA to address
Sections where disputes and/or other interpretations had caused
difficulties between the parties. The IA is incorporated into
the Settlement Aqreement, which must be filed at the Federal
Energy Regulatory Commission (FERC) Py December 2, 1991. The
Settlement Aqreement and the amended IA must be app~oved and
executed by all parties sufficiently in advance to meet the FERC
filinq deaaline. The Settlement Agreement. the amended IA and
resulting major implications to Palo Alto are discussed in this
staff report.
Background
The Northern California Power Agency (NCPAl was farmed under the
Joint E~ercise of Powers Act on July 19, 1968, which was revised
on April 1, 1973 and subsequently amended on January 1, 1982.
The 3PA is the NCPA ·constitution,· establishing the Commission,
voting rights, ~emhersl rights and obligations, and fees. The
members joined NCPA to address the power supply challenges faCing
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the city and its public power counterparts in Northern
California. In qene~al NCPA is the vehicle through ~hich Palo
Alto can collectively p~rsue goals it has in ~omoon ~ith other
memhers. The most i~portant of these common goals is resource
acquisition. NCFA and its membe~6 have been successful in
developinq and operating its r~sources, ena they continue to plan
and implement additional resources as necessary~
An lA is a key docum~nt that is absolutely required to be able to
operate NCPA resources and to have access to transmission to link
the members to their various sources of power~ The original IA,
to which Palo Alto became a party on September 14, 19B3, pro".,rided
member acceS$ to PG&E transmission to deliver power from NCPA
res~urces to each lA member delivery point, proviaed emergency
and maintenance power services to back up NCFA resources,
established the process for buying and selling pol-Ier, set the
rates to be charged £or all the servi~es, and documented the
procedures tor coordinated operation of the interconnected
systems. In essen~e, the lA is the basis of the rela~ionship
between NCPA (and NCPA lA Members) with PG&E.
The formation of NCFA and the difficult negotiation of the IA
marked a siqnificant transi't.ien in Palo .~ltots (and other
members'J relationship with PG&E. The cities were becoming less
dependent on PG&E and perhaps even viewed as a competitive threat
to PG&E's market. As a result, NCPA and PG&E have had numerous
disputes over interpretation of very basic aspects of the lA,
including support for NCPA resources, transmission services,
various power supply issues and the costs. In addition, NCPA and
PG&E have had numerous disputes outside the lA, the most
significant beinq PERC Docket E-7777~
The latest in the series of disputes regarding the l"A involved an
attempt by PG&E to significantly increase rates for transmission
services. Other issues included the need for a more detailed
transmission service study process, greater availability of
information to verify PG'E's study results, greater NCPA
participation in the study process, the need for connecticn of
NCPA resou~ces to not be held up until negotiation of cost
allocation relative to benefits of upgrades are cvmpleted, the
application of transmission rates to be consistent ~ith the
actual tur.cticnal use, and others.
The FERC Docket E-7777 involved a longstanding dispute that was
not acted upon by FERC until 1990 and was then dismissed. The
issues included NCPA access to a portion of the Pacific !ntertie,
the effect of the SMUD -PG&E Integration Aqreement on NePA,
~ransmission rights through Western's transmission agreement
(2948A} with PG&E, and membership in the California Pewer Pool.
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f S~.nce initial efforts to reach a neqotiate~ settlement .. ere not
successful, both parties filed actions at FERC. Considerable
effort arA large sums of money were sp~nt preparing testimony fer
what turned out to be a protracted, yet productive effort. As a
consequence, in January 1991 the parties met and successfully
neqotiated the settlement Agreement vhich resolves a number of
outstanding disputes and requires numerous revisions to the
oriqinal lA, including its Rate Appendix4 A copy of the
Settlement Agreement is attached and summarized below. A brief
description o.f the IA, which is designat,ed as' Attachment 1 to the
Settlement Aqreement. fo110v6 and a copy of the more massive: IA
is available from staff upon request4
Description of the Settlement Agreement
Section 2 of the Settlement Agreement -Recitals -provides a
convenient CuuteA~ in which these settlement negotiations and the
resultant Settlement Agreement were crafte~. Section 4 is a
detailed description of the settlement release and dismissal of
outstandin9 disputes and claims for each of the FERC dockets
impacted by this Settlement A9reem~nt. In additipn , beginning in
section 4.7 and its subsections, several exceptions to the
release language are provided. The parties agree that the
settlement and release ~ill have no application on certain
ongoing proceedings in which NCPA or a nwnber of its member"s are
a party. Section 5 incorporates the amended lA and its Rate
Appendices. Section 6 is a reference to third party deliveries
of power to NCPA with respect to Firm Transmission service.
Section 7 includes an off-ramp clause for certain automatic
adjustment clauses to rates and terms within the agreement.
section B provides a recitel of certain benefits to the City of
Redding as a result of the settlement of E-7777, in which the
City of Redding is a party but not a party to the lA.
Description of the Interconnect_ion ,~.,g.reemcnt and Its Rate
~ndices
The NCPA IA provides for, among other things, po~er supply,
transmission services, the treatment of incremental transmission
facilities for the connection of NCPA resources to PG&E'S
facilities, and support services for NCPAfs resourceS 4 The basic
construction of the new IA is not significantly different from
the original lA. However, considerable detail has been added to
certain Sections where disputes and/or other interpretations had
caused difficulties. Most notably, Section 6, dealing with
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Transmi58ion Services, has been s~9tantially rewritten to
include additlonal services and to cr-eate a more 4ssurad process
for the studying and gra.nting of transmission requests by NCPA.
In addition, Section 9 has been amended to greatly enhance both
parties' underst,anding cf each other's obligations tiS they may
relate to incremental transmission facilities required by new
transmiszion service~ Further Section 9 hss been a~ended to
reduce the security deposit required from either a $25 million
bond or a $12.5 million cash pledge to a security deposi~ equal
to one-half of NCPA's estimated bills for a given year~
The most notable change in the IA is to the billing provisions
tor-trans:'1ission service. Umler the original lA, NCPA and PG&E
differed greatly in their interpretation of the applicable
billlnq det~rminants associat~d with the provision of
transmission service~ NCPA generally took the position that
transmission billing determinants are based on the load ot the
NCPA members. PG&E ~ost often took the position that
transmission billing determinants are based upon :tJCPA resources.
As a result of these different interpretations, numerous disputes
evolved throughout the period under th.!' existirlg IA. In the
sett16ment of the disputes, the parties have agreed to a much
simpler application of billing determinants to NCPA. At the
present time, PG&E has a functionalized transmission rate method
which classifies transmission facilities by type. These include
qeneration tie which connect generation plant to the bulk
transmission ~rid, area facilities ~hich connect NCPA ~ember
CU$tomers· load to the bulk transmission grid, ~nd backbone
facilities which make the culk transmission grid. The rates in
general for transmission service to NCPA will be based on the
followinq!
l~ NCPA member load connected to PG&E area transmission
facilities will be assessed an area transmission charge.
PG.E previously thought NCPA sho~ld pay an area transmi~sion
cha~e for all NCPA resources, regardless of NCPA's actual
use of PG&E's area transmission facilities.
2. NCPA resources connected directly to PG&E generation tie
facilities will be assessed a generation tie transmission
charge. Generation tie charges will not be applied to any
other NCPA resource or load. PG&E previously thought NCPA
should pay a generation tie transmission charqe for all NCPA
resources, regardless of NCPA's actual use of PG&E's
qeneration tie transmission facilities.
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Backbone tran$mission charges will apply to all NCPA
resources and ~wer purchase contracts in PG&E's service
area and import capability intc the control area~ slJch as
t:ile COTP .. which use Firm TI:aTtsmission service under the IJ,.
Backbone charges 'Wollid not apply to any NCPA or member
resources that do not use Firm Transmission Service under
the IA. PG&E previously thought NCPA should pay a backbone
transmission charge, even for NCPA resources that did not
use Firm Transmission Service under the lA.
The new billinq construction provides a straightton"ard mechanism
for NCPA and PG&E to administer transmission costs during the
tenn of the IA.
An additional complement of this !A and its associated amendments
includ~6 the ap~lication of a benefit analysis for determining
the CQst allocation between the parties of incremental
transmission facilities, added to PG&E's transmission system due
to new NCPA transmission requests4 As part of this settle~ent
Agreement, PG&E has aqreed to assume the responsibility to
maintain and pay for transmission facilities adequate to serve
the load of l~CPA member customers for all norm.al load growth of
those member customerS4 Previously, PG&E argued that it could
have required the NCPA members to pay for any added transmission
facilities. Where system upgrades are required to integrate NCPA
resources into PG&E1s transmission system, NCPA ~ill assume the
responsibility for the initial connection facilities. Other
transmission upgrades required on PG&E's trans~ission system for
NCPA resources beyond what is necessary for the initial
connection will be allocated based on the bene~its shared by both
parties. But this is only if NCPA is required to make initial
capital outlays~
.l.mpact on HeM Members
The impact to each NCPA member is dependent on its unique load
profile ana mix of NCPA resources. In general, this Settlement
Aqreement provides a reduction in costs compared ~ith those rates
and billinq determinants identified in PG&E's ERSO-355 filing at
FERC. Furthermore, the revised IA provides NCPA with
significantly greater flexibility with respect to bulk po.er
transactions, thereby providing an opportunity to reduce power
supply costs to the members. The overall benefits of this
Settlement Agreement, as they pertain to a particular NCPA member
customer, are difficult to esti~ate, as the cost allocations of
these benefits often are subject to the provisions in the NCPA
pooling agreements and facilities agreement, which themselves may
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be chonqed by the
certain ranqes ot
shown below.
members. Ho~ever, it is possible to estimate
cost impacts; and estimates for Palo Alto are
Impact on PalQ Al.t2
The overall financial impact ot the settlement on Palo Alto is
favorable. In addition to nQ longer having to provide funding
for consultants and NCPA staff efforts to deal with the disputes,
the settlement results in transmission costs significantly more
in line ~ith our expectations of the original IA. The following
graph compares the respective positions of PG&E and NCPA versus
the Settlement and clearly sho" .. s the: financial advantage.
PALO ALTO'S IA TRANSMISSION COST
SETTLEMENT VS RESPECTIVE POSITIONS
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.... 1102 ... ...'" '!HI IBM ~1iI7 tH8 1HC1
[~-PGlE _HCPA _ ~8~~
The Settlement Agre~en~ and amendments to the IA represent a
restructurinq of the relationship between NCPA and PG&E in a
manner that will lower cost, increase flexibility, remoYe
uncert~inty, and minimize disputes~ In order to become
~tfective, the amendments must be approved by the NCPA members'
governing boards.
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RttcoMendatiQD.
stat! recommends that Council adopt the Resol~tion authoLizinq
the settlement Aqreement and authorize th~ Mayor to execute the
LA as expeditiously as possible in order to meet the PERC filing
deadline.
Regpectfully submitted,
,?6->W# P 8dv-d
RONALD P. BELVA.L
Enqineerinq Manaqe~ -Energy Planning
/'~ ·~·~2'
RICHARD L. YOt1NG F
Oirector of Utilities t ~-
WI AX ZANER
ci y Manager
Atbchlllents
ClOt. 4811 91 7
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SETrLE.\fE1'oT AGREEME; ... T
CONCERNIl'G FERC DOCKET NOS. ELS9-34 AM) ER90-355
BETWEE:-I
PACIFIC GAS AND ELECTRIC COMP,A.N)'
A-"ID
NORTHER)', CAlIFORNIA PoWER AGENCY
This Settlement AgTe~ment is made as of this __ day of _____ , 1991. by
and between the PACme GAS A.'ID ELECTRIC COM.PA."~ ("PG&E"J and the
NORTIiERN CALIFOR.'11A POWER AGENCY rNCPA"J. PG&E 2l!d NCPA are
hereinafter referred 10 indhiduaUy as "Party'" aDd collectively as "Parties."
2.1 WHEOFEAS, PG&E, a corporation organized under California law, is
engaged, amoog other thmgs. in tb~ business of generating. tra!lSDlitting, and distributing
electric power and energy in nortbern and ceDtr.ai DEf~mi3 aod elsewher<e;
2.2 WHERE.4.S~ ,t\;CPA is a public agency engaged in the ge.oeration, sale,
purchase and excbacgt' of electric po...ver and energy and Wi3S created by a joint powers
agreement dated July 19, 1968, as ameDded~ by th~ member cities of Alameda. Biggs,
Gridley. Healdsburg, Lod~ Lompoc, F'lo Alto, Redding, Roseville. Santa Clara and L 1tiah,
and the Pfumas-Sjerra Rural Electric Cooperative, Me::! which also preseDtIy includes the:
Truckee-Donner Public Utility District and the Turlock Irrig.tion District;
2.3 WF'.EREAS, the loterconne.tion Agreement between NCPA and PG&E
rthe lAO), as ameneed, initially acc<pted by the Federal Energy Regulatory ColllJltission
("FERC" or "the Commission") by order of September 14, 1983, in Docket No. ERS3-683-
000, and currently on file as PG&E Rate Schedule FERC No. 84. is pre;eotIy in force;
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2.4 WHEREAS, On May 31, 1989, NCPA filed a complaint witb FERC
designated as Docket Nc. ELS9·)':-OOO coourniDg principan.Y billing.. and the interpretation
of provisionS. for certain trttJJS.mis&ioo services under th~ L.c\ and its A?pe!Jdi.~ A ("the Rate
Appeodu-');
2.5 WHEl>EAS, 00 May 3, 1990, PG&E filed an incr""",-in rates for ""ruin
transmissioc services provided undeT th~ t.a.. with FERC designated as Docket No. ER90-
3:;5.00<);
2.6 WHEREAS, 00 June 29, 1990, NCPA filed an AmendmeN 10 Complaint in
Docket No. EtS~-34-000 coDcerning issues about billing for certain transmission services
that bad been deferred as a result of the settlement between the Parties ill FERC Docket
;';0. EL89-4-OOO;
2.7 \\o11EREA,S, on September 10, 1990, PG&E issued a compreh::-nsr.-e bill to
NCPA whieh incorporated aU amoants to whi.cb PG&E as.serttd it -.vas entitled wnder the
Rate Appendi,;; for the 49 mont.O period fr{)Jn January 1, 19a~ through J:muary 31, 1~~
2.8 WHEREAS, On November 5,1990, NCPA flied a Second Amended Complaint
in Docket No. EL89-34-000 contestiD~ PG&E', comprehen£ive bill of September 10, 1990,
and on ~ovembcI 9, 1990, NCPA fi!ed a Petition for Emergency Relief and Request for
Summary Disposition also c:baDenging tbts comprehensive bill;
2.9 WHEREAS, in ao Order dated September 28, 1990. the CoIJllIlis>ion
consolidated Docket Nos. EL89-34-000 and ER90·355.<JOO and set them for hearing under
Section 206 of the Federal Power Act ("FPA"), including a complaint initiated by
CommissioD Staff;
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2.10 w1{EP.EAS. oe Jaeuary 2~. 1991. PG&E filed a withdIawai of the rate cb.nge
filed in Dod:('t No. ER90-35.5-OOO or, in the alternatIve, a mot.'oc to withdr.3w wat ra(e
ehaDgl! filing;
2.11 WHEREAS. since January 1991, :-;CPA and PG&:E have been engaged in
negotiatio!Js to settle these dockets and have agtt:r.:d to settle the billieg dUpute, make
numerous revisions to tbe lA illduding: tb:c Rate: Appendix. and settle orher proceedings
involvillg the Parties, notably FERC Docket No. E-7777 (Pbase II);
2.12 WHEREAS, the Parties agree that this Settlement Ayeemeet resolves aU
outstanding differences between them which ar. the subject of FERC Docket Nos.
EL89-34-OOO. ER90-35S-OOO, E-7777 (Ph... II], ER76·:96, ERS6-I07'()()1 ~Dd
ER86-120-OO1, and FERC Project Nos. 137, 233 and 2735, as "'ell as th= di.l'u1cs and
claims in FERC Project So, 1988 insef", as it was consolidated with FERC Project
No. 273:5. aDd Ypon signing and sl):b'Sequ!:"Dt acceptance by FERC oi this Settlement
Agreement these dockets or relevant portiocs thereof will be closed; aDd
2.13 WHEREAS. eac"h FaIry represents aDd warrants that its undersigned
Iepre~Dtative bas be'en duly authorized to enter into this SettlemtDt Agree-ment.
3. AGREEMENT
NO\V. 11iEREFORE in coDsid~rarion of tile covenants and conditions herein set
forth, the Parties agree as foDow"
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SE-.-rtEMEYL RELEASE AND orSMISSAL Of 01.. 'TSTA.'-l;lIJ'l.i:U::>!SPUTES
AND QAIMS
comprom.is.e, settle and release aD disputes aDd claims i..1volved in FERC Docket No,
EL89-34. Conditional upon FERC acceptance or appro"l of this S<ttJeme!l! A"oreewenl,
NCPA withdraws with prejudice its complaint aDd requ~"t for emergency relief in this
docket, PG&E withdray,~ its responsive pl •• dings, and neither Party will take any further
action .in this docket other than to implement this settlement. UDder this Settlemellt
Agreement. the Parti~s agree that aD bills rendered under the IA.. tb:ou,gh and icc1uding
the bill for December 1990. bave been satisfactorily paid. No Party ."ill seek any
readjustment of such bills or seek additiocal or reduced compensation for ~rvices rendered
pursuant 10 the IA. d!JriDg the time periods covered by such bills, or ",'ill allege overpayment
or Ullderyayment [0 connection with such bills. The 52,531,729.10 preseell". in agency
account DO. 318-111251 he-Jd by the Wells Fargo Bank is hereby released, and the mODey.
together with aD accumulated interest, 'will be rerumed to ~CPA. except for $300,000)
wbich will be paid to PG&E. The Parties agree to e.x&ute speedily all releases or otber
doc'Jments ne.cessary to release t.he~ funds from escrow i1.fter this Set"Je:nelJt Agreement
has been approved or accepted by tIle FERC. 'I1lls St-niemeo! Agreement is expressly
-cQnditioned on the Co!!".missioo,'s tenn.ina.tion of its o .... 'n in'l,l.estigation in this dv::"ket under
Section 206 of the FP A
4.2 FERC Docket No. ER90-355. 8y tllis S<tt!ement Agreewent, tll< Parties
compromise, se~Je aDd release aU disputes and claims invol .... ed in fERC Docket No.
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ER90~35.s. Conditional upon FERC acceptance Of approval afthis ~tt.!ement Agreement,
NePA withdraws Its participatioe Ie rhis docl::et and re!louncts any daim wh..icb it might
otherwise possess to rtfunds a"",ded under Secti<m 2()(i(b) or the fe<leral Power Act, aDd
I1either Party -will !alee any further action in this docket other tban to implem.ent this
uttlemc.ut. Vpoa FERC .apprO'v'al or acceptaD:::C: of this Settleme.ot Agretmeot, PG&:E will
Mtbdraw its relared Petition Cor Review .in the Vaited States Court of Appeals (or the
District c{Columbia Circui~ No. 91·1096. Tbi. sel'Jement is expressly cOlJdition~ on lb.
Approval of its alternative mot.ion to withdraw that rate filing,. End on the Commission's
termination of its own iuve$ti.gation in this docket under Section 11]6 o! th~ FP A
4.3 FERC Project Nos. 137.2.33. 1988 ODd 2735. By Ibis SenJellltnt Agreement,
the Parties compromise, settle and release in accordance ';l.ith this agr~ement the disputes
add claims of NCPA and PG&E in aU pecding proceedings conce.rcing FERC Project ~os,
137, 233 aDd 273$, as well as those disputes and daims ill FERC Project No. 1988 insofar
as it was ccnsolidated with FERC Projeot No. 2735. Upon FERC ao;;.ptance cr apFrovaJ
0{ this. Settlement Agreement, (3) }..·CPA \l.i11 -witbdraw with prejudice ~ts Request fer
Reheariug filed on May 6, 1991 in Projects :-10. 233, 1983, ODd 273S, (b) .either Party will
take any further action in tlt~sc: proce~ings other than to impJement this Settlement
Agreement and, in the case of PG&E, to obtain • new lice"St fer Proje<:t No. 1988, and
(e) NCPA and Ibe Cities of Alameda, Healdsburg. Lod~ Lompoc, and Ukiah will .... ithdraw
their interventions and neither tbese parties nor PG&E will take any furtlJer part ill Project
N"o. 137 except to the c.neD[ FERC aDQYI.;S the introduction. on its own motion or by third
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parties of jssues not pre~nt1y [n Project ~o. 137 and Dnt raised in such lnterventloc5, ie ...
cbacges the proceeding ieto a gel!eric oce aad except. in the case of PG&E. to obtli.."l a
Dew license ('Of ?rajtt! No. 137.
4.4 Docket Nos. 10·7777 {Pha.<e TO and ER76-296. By th:is Settlement Agreement,
the Parties (:omprom~e, settle and release in: accordance ';\o;th this agreement all disputes
and claims invoMng FERC Docket Nos, E-7m (Phase II) and ER76-296. Upon f"ERC
approval or acceptance of !his Settlement Agreement, and upon vacating the ruling of the
Presiding Judge in Docl:et No. E-7777 (Ph"", II) publisbed" 2S F.E-R.C. , 6:1.074 (198:;)
or otherwise rendering this ruling of 00 Jegal fort:.e or effect. NCPA wi!! withdraw witlJ
prejuciice its application for rehearing filed in FERC Docket :-las. E-m7 aDd ER76-296
on May 6, 1991. and neither Party wiT! take any further action in these dockets other than
to implement this Settlement Agrcc:meDt. PG&E agrees to support NCPA's request COi"
..... acation vi the aforesaid ruling,
4.5 Geothermal Public POW~[ Line. By thi> SettJemect Agr .. ",en~ NeF;" agrees
to take no furtheI action ilSSOC1ateQ -with the 3Fplicati.on r"r certification before the
ealifonria Energy Resources Co05el\'atioD and Developmeot Comm:isslO%l for the
c.,othennal Public Power Line ("GFF!."). D<>cket No. S6-AFC-2, other than to terminate
ihat docket NCPA further agrees to recommend to and <ocourage the other applicants
and participants in GPPL similarly to ta~e ,,"0 forther action in that docket other thal!
jointly 10 withdraw their .pplication. PG&E recognizes that NCPA b ... satis5ed its
obligation pursuant to Section 6.2.7.c of the 1A either to construcl or to cause to be
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CQc'Sotructed a third 2)0 IcV transmis.s.ioD tine out cf The G~ys.ers. by reasoD of bf!ing a
cotecant in th~ Castle-Rock-Lakeville O"aDSD'lisslon line and by obtaining the right :0 use
add.iti':>naJ traDsmis;s.ioD: capacity in this lioe from the Californja Department of Wat:!
ReSO'.Jrces.
4.6 Docke! No •. ERS6-107-OQ1 and ERM·!20-00l. Upon aeeeptaDc. or approval
by FERC of this SenJ.",en, Agr.emeD~ PG&E wiU pay '0 NCPA, .Dd NCPA accepOl as
complete ",,",ord and satisfactioD, S 1,500,000 fo: all NCPA claims for refund pursuaD< '0
tbe "Temporary lUte Implementation Procedure for Diablo Canyon tlnit No.1 and Unit
No.2" ("Oi.bIo True-up Mecbanism"), whicb is Part Ifl of tbe "Se!'Je:nenl Agreement
Offer, and £>planalory Stalement Pursuant to Rule 602 (Northern California Power
Agency)" filed in FERC Docke! :-l05. ER86-107-OQ1 aDd ER86-I~O-OOl. :-lCPA agrees th.,
because such payment fully satisfies PG&E's refund cbbgatioDS., it belwy releases and
waiv~ ... n r.T~im~ and dispute'i arising &om or reb ted to the Di:ililo 1"n.:.c-up McchMism..
4.7 ether Pr(J("e ed ingo;.
4.7.1 Except a~ otbeI\lltse pro\ided in iliis Section -i.i, each Pa!1y agrees that
it will state no claim, assert no right, 2nd seek no remtdy or relief, whether in the fcnn of
mom~y damages. refunds, license conditions, requests for provision of service or for
modification of rates,. cbarges,. terms or conditions of service:, investigations.., or otherwise,
ill any judicia~ administrative, or other proceedin~ for facts, circumstances and conditions
(incruding actions or faJ.lures to act of the other Party. alone or with olhers., and i!lciuding
entry Into agreemen [S, the terms and conditions of S"ucn agreements, and th e Ilahl re of
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performance or DO!l-performAnce 'UDder :s'U<::h agr~emeDtsJ which are alleged in thoe rccords
ofth~ proa:edmgs identifi.ed iD Sections 4.1 through 4..; or fo! the coctinuation of any 5u<::h
facti,. circumstances or coadioom up to and including the tLtte or this Settlement
I Agreem<llt.
4.7.2 .By agreeing to this settIeIIi~n! and release, .ceitber Party waives aD)"
rights to state claims or seek relief against the other Party for facts. circumstances or
condjtions prior 10 the date of this Settlt'ment AgreemeDt which are not simJlar to facts,
circumstances or conditions alleged ill tbe records oftbese proceedings. By agreeing to this
settl~ment aDd release. neith~r Party wan;e.;: any rights to state claims or seek re1.ief against
the oc.ber Party for facts. circumstances or condjtions in exis1ence after the date of this
Settlement Agr.ee::nent, irrespective of whether sucb fa!;~. cirrnmsranccs or cODditioILS are
differe!lt trom facts, circumstarlc.es or <.'Ocdjtion.s e.'CistlDg prior to this Ser+Jement
Agreement. For pUlJ'oses of this Se<."tion 4.·7. the terms a.cd c:J.cditioDS of agreements
entered into prior to the: date: of this SettlemeDt Agreement and still in effect will be
deemed to be facts., cirC1Jmstances or conditions i:l existence after the date of this.
~tt1ement Agreement.
4,7.3 Notwithstandillg any otber provision of this s.,ction 4,7. NCPA agrees
that the prohlbition of Section 4.7.1 on maIdng claims. asserLi..cg rights,. and seeking
remedies or relief will apply for a period up to and illc]udillg December 31. 1998 to the
extent auy proceeding, judicial. adn:J.inistrative or other, Involves the California PO'II!'er Pool
Agreement, PG&E Rate 5<:bedulc FERC No. 27, as it may b. amended ("CPPA"). or the
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power pool w!tich operates purS'llant to that a~re-etro~ot {"CPP··); p(O'>ided that if the CPPA
should contain a pTO"isioo for eligibl1ity faT membersbip in the cpp~ NCPA m~y cQmpiaic
und~ SectiC(l 206 o( tr.~ FPA for thE': sol~ p\lrpose. of sbo..wing the :llleged fa:jfure of piU"tie.s
to the CPPA to apply the terms of such provisioD to NCPA in I m4.D.Der consi:stent w!th
St-ctiOD 20.5 of the FederaJ Power Act; and provided further that the prohibitic.D oi this
SectiOD 4.7.3 'WiG :!lot apply to ilDy eHen by NCPA to demonstrate benefits of its act~ai or
potential membership in the CPP, 33 It c.:cists at tha:t time, if I.h..i:s. effort is made in an
administrative proceeding which is dearing with power pooling in general and not the CPPA.
alo1le and if NePA ~oes not request or demand compelled membersbip in the CPP or
c:hiUlge.s or addirioD.!5 to the CPPA.
4.7.-l This release does Ilot bar the a~rtioc ot claims to toe extcct they are
based on fa~ circumst.anus or coodirioDs not wlthin the scop.'! of SectioI!. .:1..7.1 and on
facts., ctrcumstances or conditions whkb are 'Within tbt scope of Section ~.1.1 and which
existed only after s"ptember 14, 1983. However, in lb. ease of SIleo clalms, Ibe relief and
remedy :')Ought .cannot indnde aD), recovery by a Party for damagEs, if any. incurred as a
result of facts, cUC'.JmstaDces or conditions which are .... ;tbi.o the SCClpt. of Section 4.7.1. and
a Party asserting such a c(aim cannot use anything within the scope of Section 4.7.1 to show
damage ..
4.7.5 Nothing in this rele .. " is intended to preclude any proceeding wroth
may be brought by NCI'A alleging any ob~gation or liability of. Pacific respecting the
provision of notice of cbanges in Project Dependable Capacity. as used in Contra", 2948A
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~tweell Pacific a.nd tbe Unit«!d States E\Jre~u or ReclAmation. uDd~T SectioD 205(d) of the
Fl'A. 16 V.S.C ~ 824<i(d).
4.7.6 E'Ccept 2S may be expressly pennined by otlle.r prO\-isions of thls See-tioD
4-.7. as part of tIris s~~tJeme!H acd release neither Party will ref"!r to or otherwise use
anything in the record of:.be proceedings identified in Sections 4.1 through 4.4 above for
ilIIy purpose associated "ith 16 Us.c. §§ SO.l(h)(2) and BIl8(aX3). However, nothing iII
this release is inrended Co affect the Com.m::.ssi"Il~S. obfigatio~ if any, to consider past
condllct of til. Parti"" if and to the oneo' required by 16 V.S.c. is 8Q3(h)(2) ."d
808(0)(3).
4.7.7 The Parties agree that this settlement and release "INill ha\le no
apt"',...licatioD to tbe fon~.ng proceedings, as and to the e.xtenl spet..ified: United States v.
Pacific Go> and Electric Co No. ':·88·1600 (U.S. DiS!. C" N. Dist CaL), aDd anyappeaJ.
or successor proceedings., only as to mattef5 relevant to the proceedings under the pleadillgs
of the parties as of the date of this Settiement Agreement; Pacific Ga.s; __ and Electric Co. v
Qtv of Alame:da. No. 569904·1 (Alameda COUDty Super. Ct.). only as to matters relevant
to tile proceedings under ilie pleadings of the partittS as of the da1e of this Settlement
Agreement; Pacific Ga_5 alld Ele~sC Co. v. Cit.... of Heaidsburg. No. 127234 (Sonoma
County Super. Ct.~ on!y as to matters IelevaIlt to the proceedings under the pleadings of
the parties as of the date of this Settlement Agreement; Paclf,]c G_al and Electric Co. v:..5;ity
of Lodt No. 169313 (San Joaquin County Supa, Cll. only as to matters relevant to the
proceedings onder the pleadings oftlle parties as a(the date of this Settlement Agreement;
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Pacific Gas 2nd Electric Co, v. Citv of Lornpc.c. :"io. 144796 (Sa~ta Ba..rban County Super.
Cl.). on...Iy as 10 matters relevant to tl!e proceedings ander ::be pleadings of the pa.rtie.s 6.S
of the date of tbis Settlement AgreemeDt; Pacific Gas and Elec:!rt.c Co, v. Cit\." of Sal:lta:
g~ No. 537572 (Soota Clara Coun!)! Super. Ct.), cely as to matters relevan. 10 the
proceedings under the ploodings of the patries as of the date of this SetUe.weet Agreemen~
Pacific Gas ~nd Electric eg. v. City of Ukj~ Nc. 47426 (Mendocino Ccu"ty Super. Ct.),
only as to maners relevant to the proceedings under the pleadings of tlle parties as of the
date of this Settleme.t Agreement; petitions by NCPA to the Nuclear Regulatory
Ccmmission under 10 C.F..R. § 2.206 dated De<ember 4, 1981, August 1, 1984 .. clarified
on March 19, 1985, and November 19, 1990, alleging ';olatioru of PG&E's license for
.Diablo Canyon Nudear Plant l~nic; 1 and 2, and subsequent proceedings. only as to
matters relevant to the prlXeediD~ under the pleadings of the partic::5 as of tbe date of this
Settlement Agreement z~d tne Director's De~iOD .n:::d 1'!otice o[ Vio1atioD dated ]1J.De 14,
1990; Padfic Cas and Electric Co., FERC Dockets No. ER91-344, ER9I-50S, ""d any
successor proceedings. only as to matters reJevaot to the proceedings under the pleadings
of the parties thereto or FERC orders issued .H ef th~ date of tl!is Settlemeot Agree!!le.nt;
Tran5mis.;,;on Agencv of :~on.hern California v. P<i:.<;ific Gas and Electtic CO,;)l FERC Docket
No. E1..9!-8 and any successor proceedings, only as to matters relevant to the proceedings
under the pleadings of the parties tbereto or Comw.iss.i.oo: orders issued as of tile date of
this Settlement Agreemen~ Pacific Ga!and Electric Co. FERC Dock.t Nos. ER91-337
aDd EL91-31~ only as to matters reieV3llt to the proceedings onder the pleadings of the
parties tIlereto os of the dale of this Settlemen' Agreement; and Pacific Gas ond Electric
Q2, FERC Project No .. 2019 and 2699, and any competing license applications, only with
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reference to Pacific's alleged past exen::ise of what ~CPA characleru'!S as it!; .... c:!0 po-wcr
under Section 6 of the FPA, 16 U.S.c. § 799, "ith respect to Project Xo. 24()9.
4.7.8 With regard to proce~dings eoaceroing compensation uDder Section 10
of the Electric Con>1!mers Prol.ction Act of 1986, Pub. t. 99·495, 100 Stal 1243, ;"
cOncectiOD with the electio", to negotiate filed by PG&E for FERC Project Xcs. 1962 and
1988, NCPA will not assert any facts, cirC'Um5ta.n~s or conditions rd~renced in Section
4.7.1 as a basis for compensation cla.ims 'UDder Section 10. HO\Vever, the Parties recognize
that this Settlement .... ...greemeot cannot bind or affect the rights of other claimants; ['or cao
this Settlement Agreement affect or lintit S"Jch compensation as may be awardea by ilie
Commission, or NCPA', right to !<-hane in Sl.:ch compensation. on the basis ot facts.
circumstances or conditio.u.s lawfully in the record of S1.lch pn .. "'Ceedings, induding bets,
CUCllIDstanccs orccnditioDS re(ere.Dced 1n Section ".7.1. PG&:'E will Dot object on the basis
cf this Settlement Agreement to an)' claim or assertion made UDder Section 10 of ECPA
by all)' claimant other than NCPA No eoullsel joiotly representing SCPA a.nd any other
claimant will be restricted from pr(,Sl'Dong ac)' argument or tak::i!1g az::y positioD on bo:-half
of such other claimant.
4.7.9 Tn.: Parties further agree that. Dct'Nitbstanding 3:ly other provisioc of
this SettJement Agreement, this settlement and release will Dot bar either Party from the
reference to or use of the condllct, statemen15 or records of any person or corporation,
whe.never made, to the extellt it is offered as admisstble evidence as to the interpretation
of any contract, agreement, rate schedule, or license condition} provjded, that each Party
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.reserves the right to object to tDe admi!.sibillty or lJse of s::,).ch conduct. statements or
records for ,Jny other reasolJ.
4.8 Gegeral provisiops. NeitlJer the e.~tt:ution of. nor aJly consideration provided.
in. thls Settlement Agreement win be deemed an admission of any liabDirj by eit~er Party.
Neith~r Party makes any admissioD concerning the v:lIidi.ty or ir.validity of any claim mflde
m any of the proceedmgs sertled by this Settlement Ag.reemeDt. The rele.ases contained
in this Section 4-are expres.s.!y conditioned on the CommissiOll'S a«epta.nce Cit' approval of
this Settlement Agreement as provided in Section 7.2. Upon tlle signing o!this Settlement
Agreement by lx>tiI Parries, PG&E and NCFA .... ilI jointly request tIla! FERC acrept this
Sertlemect Agreement as the complete aDd final resolution of an cIaims and disputes
between the Parti .. iIi Dode! :-los. E· 7777 (Phase IT), ER76-296, EL39·34, ER90·355,
ER86-107-OO1 and ER86-IZo-oor, and ill Project Nos. 137,233, 1988, and 2735, ... and to
tbe extent specified above. Rderel!'ces i.e this Sectioll '* In NCPA include ~CPA's present
memben .~g through or on behalf of NCPA.
s. L"']J;RCO:-l"ECTIO.'1 AGREEME;o.iT AND.RATE APPEND1X;
IMPLEMENTATION Of RATE AND BILLrNG CHANG~
The amended lA, duly signed by NCPA. PG&E and tile member custome" of
NCPA. is designated as Attachment 1 '0 this Settlement Agreement and incorporated by
reference in this SettJemeDt Agreement as fully set forth herein. The changes in rates in
the lA, including the methods for determining hilling determinants and charges for
tnlDsmission services but not including the provision of any .service cot specified lI" the V\
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prior to this amended versioc or any rate provisio:ls a..ssoeiated 'Q,'1"th it., shaD be effective as
of JanuOr:f I. 1991. and the ... ties agree to request thai the O><mn.is&on "'Me such
cbanges effective rettoactive~J to tim date as ,art of app'",ing this ~nl.ment Agreement.
6. !Ji!RD PARTY DELIVERIES TO :-.ICPA
The billing principles for FinD TTa.!1sm!ssiOD Service under the [A ill this settlement
provide that NCPA will nol ~ assessed an additional lraILsmission charge for .... NCPA
Resoun'e if a third part)' is providing transmission service 10 NCPA. Following FERC
.ppr<Mll of !his Settlement Agreement, PG&E will within 30 days approacl1 the Califo,."ia
DopaJ1ment of W.to, Rosource, (CDWR) and offer to amend Table 1l·1 of Nibit II to
the Comprehemive AguemC:I11 bd .... 'eell CD'i'.o'R and PO&:E so as to mue NCPA a "Point
of DeUv~I}''' onder the latter agreement. The Parties understand that CDVIR is paying for
a Contract Coincidental Rate of Delivery at Bad.bene, ..s defined in the Compn:oensive
Agreement, of 1,355 megawatts. The Partie:s do not ~:q>eC1 that such addition to Table II·!
aDd subsequent CDWR use of ils transmission ",!Vice from PG&E for deliveries to NCPA
will !ncur additional transmisslcD service charges to CO.-..vR u~dt"r the Comprt"hensivc:
Agreement if CDWR does not increase its Contt'~ct Cr)i.!:.cidcuta.l Rate of DeU .. 'er,r.
provided. that tile Parties agree tilat this statement does not aDd is nOt intended to modify,
a .. nend or supplement any provision 0( the Compreaensive Agreement and tl:!at the
applicable rat .. and charges fOT>'Ucb se"ice 10 CDWR for delivery of power to NCPA w'Jl
be determined solely in aC(ordance v.ith the reJe\'ant terms acd conditions of the
Comprehensive Agre.ment.
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7. ELECDQ!I1 CONCERNING RATE APJUS]MENT METHOD
The Parties agn~ that NCPA ~ill have tliDety (90) rla~'5 frO(il the dat--=-of this
Settlemenl A&,eemenr 10 elect by written notice to PG&E not to apply the A.'lDPRRAF
formula set forth in Section 1y'3(b) of Appendix A of Ibe lA If NCPA male .. suciI an
e-iec:rion. PG&E a.grees that it will not apply this formula wher~ otherwise app!jcable in Put
IT of Appendix A of tbe toe\. 2nd that it will support requests for cba.ages in rates with cost
support information required by fERC regulations.
8 BENEFID OF SETTI.EMEI'VT
The Parties agr •• that the City of Reddillg, a memb<r of NCPA may obtain Ibe
benefits of this Seftleme:cr Agreement availab1e to NCPA by agrt"eing to take services under
lb. ~ p'ovidePi that NCPA .nd the City of Redding first satisfy the requirements of
SectiOI15 7.1 and 9.17, as they may apply, and an olber re!evant provisions of the V.
concerning service to Dew NCPA Member Cu~tomers as that teIlD is used .in: the LI\..
PG&E also agrees the City of Redding "'-ill nol be precluded in SUbseqU~Ilt bilateral service
agreements as may be entered iota bc:t".\ie~n PG&.E aDd the City of ReddiDg from obtaining
benefits similar to those provlded to NCPA as a r~.sult of this Settlement Agreement
9. E,ggULAJPRY AUTIfORITY
9.1 FiliDg of Settlement Upon the signillg of this Sottl.ment Agreement, PG&E
and NCPA promptly will jointly file this Settlement Apeemeot with fERC as part of an
offer of settlement in Docket Nos. EL89·34 and ER90-35S and request tbat FERC "eGept
this Settlement A!;reemect as a complete res¢lu.tion of aD claims in these dockets and those
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other pr~edin8s specified in ~CtiOD 4.. as and to the -extent descnbed. ~_~ovided, that s\.!ch
releases are conditioned upon FERC"!1 approval of~ Settlement Agreement as provided
jn Section 9.2. Each Party W'Jl provide to tbe other upon request appropriate informatioQ
and documeIlt .. rtion to prepare .or otbef",\,ise support the joint offer of settIemenl before
FERC and any other pr~eding concerning th!s settlemeIlt before any other regulatory
agency. when acceptance or approval of such application is necessa.rf for !be arrangements
contemplated herein.
9.2 AaprovaJ 'hjtb9Ut Modification. 1lili Sett1em~Dt AgTeement ~ <t.Xprc:sl.ly
condjtiooed upon approval by FERC without cbange or cew c-cIlditioo. unless such cbange
"" condit.,n is subseqUelItIy and promptly accepted by the Parties in writing, and will be
deemed to be \loid ab jcitiq unless so approved.
9.3 Rp.sto.[atioc. If t.his $e.ttlemenl AgreemeDt is Dot appro ... ed by FERC in
accordance with Section 9.2 or is modified by FERC in a. manner unacceptable to the
Parties as descnbed in SeC"tion 9.2, each Party'M1l be restored to its position with respect
to the other Partj as iI ~sted tmmediately before tb~ Settlement Agre.ement was executed.
9.4 Support and Defend Agreement. The Parties wi rue an reasonable action
necessary to sectae approval by FERC of this Settlement Agreement in jts entirety and
without cbange or cODdition. The Parties will make every reasonable effort to suppot1,
defend and protect tbis Settlement Agreement before FERC, tbe Pt:bUc Utt1ities
Commissioc of the Stare of California aDd any other regulatory authorir:y or court of
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competeDt jurisdiction which "bas as an iuue bt!for~ it this Settlement Asrecme!U or jts
operatioD or c:if.o::ct.
iO. INTEGRATION
'Tb.is s,e.n]emI:Ilt Af;reemeat constirutes the complete and fir.ar expresrion of the
agreement of the Parties as to its su~ject matter and is ictended as a c01l:JpJete .and
exclusive statement of the tenIlS of 'tlleir agreement whkh supersedes a.D prior and
cootemporaneous oral or written offers, promisu.. representatio!l..St. .ne~otiatio.D.$, disclOSSions
and communications concerning this Settlement Agn:ement
11. NO PRECEDEIIT
NolbiDg coDtaiDed in this S.tt1emeDI Agreement oLber than the [A itself will
establish aD)' precedent under Ibe LA. or elsewhere. This S<:tdemeDI Agreement will DOl
be submitted as e\1de.D~e of contract interpret.:uiol'1 in aD)' prOCl'.t"ding.
This Settlement Agreell1e.Lt may be amended only by a \I,'ritten instrument duly
exeC1J ted by the Parties,
13. GOVERNING LAW
This S.ttlement Agreement will be interpreted, goY,med by, aDd cODstrued under
the Jaws of the Stat~ of California or the laws of the United States, as applicable, as if
exeC1lted aDd to be performed wholly witllin the Stzte of California.
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14. CAPTIO"lS
An captions., beadings and titles in this Set"'Jement AgreemeIlt are provided for
convenience oe!y and are no!. intended to have any meaning or effect on t.b:~ contents of
this agreement. its scope or its interprttatioo.
15. SIGNATURE CLAUSE
The signatories hereto represent that they bavt: been appropriately authorized to
enter int~ this Settlement Agrf'..eme!:lt OD behalf of the Party for ..... bom they slgtl.
PACIFIC GAS AND ELECTRIC COMPAo'''Y
By:~-;;-::.:-::-........ =-:-:;---Name, Robert 1. Haywood
Tltlc: VICe Presideot -power Planning aDd CODO'acts
Da~: ________________ _
NORTIiERN CALIFOR.'\lA POWER AGE:-iCY
Bv:
Nam-e-,-·Mj=·c7b~a·e""'I;-W=.-;M=cDo=-:n"'a1"d
TitJe ~ General ~fanager
Date: ____________ _
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RESOWTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO APpaOVIIIG A SE'l"rLEHEN'r AGREEMENT BETWEEN
PACIFIC GAS AND ELECTRIC COMPANY AND NORTHERN
CALIFORNIA POWER AGENC¥
WHEREAS, the Northern California Power Agency (-NCPA-)
has developed the ~Settlement Agreement concerning FERC Docket
Nos~ EL89-34 and ~~9C-355 between Pacific Gas and Electric
Company and Northern California Power Ag~ncyW settlnq forth its
resolution of complaints before the Federal Energy Regulatory
commission by and between NCPA and Pacific Gas and Electric
Company; and
WHEREAS. the City of Palo Alto has determined it is
necessary and desirable to approve 5ych settlement.
NOW, THEREFORE, the Council of the City of Palo Alto aoes
hereby RESOLVE as follows:
SEctION l~ The ~Settlement Aqreement concerni~ FERC
Docket NOs. EL89-)4 ana ER90-355 between Pacific Gas and Electric
Company and Northern California Power Agency" is hereby approved~
SECTION 2. The council finds that there is no possibili
ty that the prOVisions of the Agreement will cause a significant
effect on the environment, and upon that basis, finds the project
£xempt from the provisions of the California Environmental
Quality Act.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
City Clerk Ma.yor
APPROVED AS TO FORM: APPROVED:
City Attorney City Manager
Director of Utilities
1
911101 i!pt (l()5OM8
RESOLUTION NO.
RESOLUTION OF THE COUllC1L OF THE CITY OF PlIl-O
ALTO APPROVING AND AUTHORIZING EXECL~ION OF THE
INTERCONNECTION AGREEMENT BETWEEN PAClFIC GAS AND
ELECTRIC COMPANY, NORTHERN CALIFORNIA POWER
AGENCY AND SPECIPIED MEMBERS or THE NORTHERN
CALIFORNIA POWER AGENCY
WHEREAS, the Northern California Po~er Agency ("NCPA~) has
developed the -Interconnection Agreement between Pacific GaS and
Electric company and Northern Californi<5. Power Agency, city of
Alameda, City of Biggs, city of Gridley, City of Healdsburq, City
of Lodi, City of Lompoc, city of Palo Alto, City of R~seville. city
of Ukiah and Plumas-Sierra Rural Electric Cooperative-CIiIA-)
setting forth its participating Members" rights and Obligations
with regard to interconnection and transmission of power resources:
and
WHEREAS, the City of Palo Al to has determined it is
necessary and desirable to participate in the ZA~
NOW, THEREFORE, the Council of the City of Palo Alto does
hereby RESOLVE as follows:
SECTION 1. Tbe "Interconnection Agreement between Pacific
Gas and Electric company and Northern California Power Agency, City
of AlaEeda, City of Biggs, City of Gridley, City of Healdsburg,
City of Lodi, City of Lompoc, City of Palo Alto l City of Roseville,
city of tIkiah and Plumas-Sierra Rur-al Electric Cooperative" is
hereby approved.
SECTION 2. The Mayor is authorized ana: directed to execute.
an execution copy of the Agreement.
SECTION ], The Council finds that there is no possibility
that the proviSions of the Agreement -will cause a Significant
effect on the environment, and upo~ that basis, finds the p,oject
exempt from ~e provisions or the California Environmental Quality
Act 4
INTRODUCED AND PASSED:
A¥ES:
NOES:
ABSENT:
ABSTENTIONS:
l
,~ ATl"EST: APPROVED:
city Clerk Mayor
APPROVED AS TO FI.:lRM: APPROVED:
city Attorney City Manaqer
Director of Utilities
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9]1101 ~ 00»W1