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HomeMy WebLinkAbout0562.091'I " 1 - . ,-' December 12, 1991 THE HONOPABLE CITY CCUNCIL Palo Alto, California 16 Natural Gas Procurement Proqram Third Phase Agreement Members of the Council: SUmmary of Staff and utilities Advisory Commission Actjons: On November 6, 1991, staff presented their recommendation in CMR:480:91 to the Utilities ~dvisory commission (UAC} that the CQuncil approve the Nat~ral Gas Procurement Third Phase Agreem.::nt. The UAC voted not to accept. the staff recommendation. Staff's recommendation is based upon their analysis ~hich continues to show tha~ an efficient g35 fired generation r~source with flexible operating characteristics necessary to compliment the City's hydroelectric resources makes sense. The financial risk associated \dth the low level of participation (5 mega ... ·atts out of an existing City load of,196 megawatts) is small and the proposal is cost effective. Even more resources will be needed and this proposal is consistent 'With staff pl~ns to develop a -Demand Side Management (DSM} plan For The 90's· as part of an Integrated Resource Plan (IRP) scheduled to be cocplet~d in mid- 1992~ Additional resources will be necessary to protect against potential reductions in availability of existing resources as well as to provide for increasing needs of th03 city in the future. In staff's opinion, the option of gas fired gene",ation maKes sense and participation in the Third Phase Agreement has a v~ry strong potential to be the most economical and reliable means of providing the fuel~ Therefore staff continues to recommend Council approval of the Natural Gas Proc'.Jrement Thinl Phase Agreement Report f~om the utilities Advisor; commission: The Utilities .. ,\dvisory Commission at its lI'.eeting of December 4, 1991 voted 4 to 1 not to accept the staff recommendation as stated in CMR:480:91 (attached) to authorize the Mayor to execute the Natural Gas Procurement Program Third Phase Agree:rnent. This recommendation was en the UAC November 6, 1991 agenda~ but action ~as delayed so that staff backup material could be studied and made available for the Dece~~er 4th UAC meeting. The CXR~5'2: '1 :::-it +,. .~~ "-,<:>:" ." . _ ·,~\t-· <}j: - Co~~ission believes that the need to commit the Northern California ?o~er Agency (NCPA) Steam Injected Gas Fueled combustion Turbi~e F~oject (STrG) to Palo Altors IMtegrated Resource Plan must be studied prior to reaching a decision on the Gas Procuremer.t Proqram. The UAC concurs the staff has a good resource plan, but in view of other uncommitted resources, decided that a STIG type Project should not be considered at this ti~e. The tollo~ing projects we~~ discussed: 1. Demand Side Management 2. TANC Project--nearing completion. Palo Alto yill have uncommitted transmission rights available for additional sl,)urces ot energy froll! the NorU"~' .. ·est and possibly Canada. 3. Calaveras Enhancements ,(. PG'S Backup The feasibility of joining the Gas Procurement Project as a backup resource for either the Gas or Electric Utility ~as considered. In view of the economic impacts, th~ uncertainty of future gas pricing, the possibility of joining other transmission ~ysterns, and the availability cf othe= resources for the Electric Utility, the UAC decided against the Gas Procurement Program Third Phase Aqreement. Background: In April 1991, stat! recommended, and counci~ subse~~ently approved., a Member Se.r~ice ~,green:ent with NCPA for participation in the development ot gas supplies relating to STIG. As reported to council at that tima in CMR:241:91 (attcched) ~ staff believed Palo Alto's participation vas in the best interest of the City~ staff also indicated that the Me~er Service Agreement ~ou1d subsequently be replaced by a standard Third Phase Agree~ent, once all NCPA members had ~orked out details of participation. That Third Phase l.greernent is noW' available and represents no substantive change in concept from the existing Member Service Aqreement under ~hich we are currently obligated. On November 6, 1991, Council and the Utilities Advisory commission a~tended a joint vork session in order to fa~iliarize all parties, especially the newly appointed Commissioners, with the details of the pr.oject. As you ~ilt recall, NCPA is developing two power generating plants utilizing steam injected 91'\s f\.leled col'l'lbusticn turbines (S'fIG) ~ 'rhe proposed gas supply, ~hich ~ould fuel the turbines, is located in canada and ~ill require that we participate in the constr~ction of a gas transmission line from C~nada to the United states. Palo Alto is ~committed~ to a mcdest 1Q percent share of the NCPA portion of CMR:S62:tl • the gas transmission project. ~5sumin9 that the STIG project is built, c~e of the units ~ill be locatea in Ceres, California tor use by the Turlock Irrigation District (TID) _ The other unit .. -ill be located in Lcdi,. California and would be used by the other members of ~CPA, including Palo Alto. The units ate especially desirable from an environmental point of view, since they ~urn natural gas which is very clean, and then recover the waste heat from that burning. The w~ste heat is used to produce steam, ~hich is injected back into the turbine to pI:oo\lce additional po ... er. In short., ..... e obtain more pow-er than in conventional turbine technology 'Witho'.lt expending additional fuel. Each unit 'Will generate appro~imately 50 megawatts. ~encing At the present time, a detailed analysis of the costs and benefits of th~ STIG project are not complete. Ordinarily ~e would insist that such data be available prior to committing ourselves to any part of the project. It makes little sense, for example, to commit to sharing in the gas supply line cost if we are not convinced that the STIG project will be built or that it would not be beneficial for Pale Alto to ~own" a portion of it. Unfortunately, events have not worked out in this-order and, in order to participate, we had to maY.e a commitment on the gas pipeline before ""'e had more complete and detailed information about ~he STIG project and its usefulness to NCPA and Palo Alto. When this sequencing dilemma was debated before the NCPA board I they came to the conclusion tha~ t~e risk to t~e members was not large. This ste~s from the fact that the market for gas pipeline capacity is very good and promises to remain 50 for quite SOIDe time. If, for some reason. ~CPA fcund itself ~ith ownership of a gas line but elected not to Duild the STIG pruject. the gas line capacity \.lould be relatively easy to sellon the ma'lket. (In this respect that situation is somewhat similar to our partiCipation in the Calaveras project where ~e have nroore~ capacity than ~e need and so we market that power to others until ~e need it.) Staff believes the reasoning that the risk is not large, advanced by the NCPA board applies !.o Palo Alto as ,,·ell. OUr share of the pipeline cost is approximately $80.oo0/yr for 30 years. This is a relatively small amount of money 'When seen in terms of the overall cost of obtaining electric power supplies which run into the multi-millions of dollars. As reiterated belOW, staff believes the risk we incur in terms of both cost and the likelihood of loss is small. TWo further factors argue for our participation in the gas line project. First, if we assume that the STIG project is not built , we have a second alternative to simply selling our share of the pipeline. That alternative arises because ~e are in the unique 3 < •• -"'--'-' ... ~-,- position (com~~red to other NCPA members) of operating our own gas utility. As a last rpsort~ if there ~ere no m~rket for our sharf:'. of the pipeline, ..... e could use it to transmit gas to our o'"m system. The cost of that gas ~ould be higher than that of our regular supply but che~per than letting the Fipeline capacity go unused. In short, we could reduce our financial risk even further by using the pipeline for our gas utility.. Second l even if NCPA does. not build its STIG '\.~nit, Turlock Irrioatior.. District (rIO) intends to build th~irs. TID is a member of-NCPA and is a -natural-mark£t for additional pipeline capacity. The !mUQrtance of STIG ioo'hile the issue before the Council is \r,'hether or not to participate in the pipeline project, the underlying question go~s to how valuable SXIG is to us. If the STIG project offers us no r-eal benefit, then participating j T! the pipel ine proj ect --even if there were no risk --cakes little sense. To determin2 the ~alue of STIG, we must refer to the Council-adopted Electric utility Resource Plan. The Resource Plan is a strategy for assuring that Palo Alto has adequate electric po."er in the future. One key 12'1 en'.ent of the Plan is the need t·:> diversify our po'Jer supply. For years Palo Alto was entirely dependent on Central Valley P.coject (CVP) po'Wer through a cont.ract with t.he Western Area POlfo'er Administration (WAPA). In the early 1960 l s we began to move away from that position and look at other possible power supplies Our participation in the Calaveras hydroelectric project and the NCPA geothermal projects are examples of this. (Note that we ~keptM Calaveras l but ~sold-the Geothermal when it turned out ~ot to suit our needs.) The Resource Plan ackno\r.rledges our need to look at a variety of ways to provide electric power to the community. It assesses the relative benefits and risks of varicus options open to us such as greater emphasis on demand side tnanagement~ en6rgy efficiency projects; load man3gemen~ programs; ~ind, solar, and hydro project$.; enhancements t.o t.he calav-eras project.; renegotiating the WAPA contract~ additional transmission line capacity, and new purchases from other agencies. The proposed STIG proje~t, though small in size, fits nicely into the overall framework of ouz Resource Plan~ Staff recommended reducing the amount to ~hich the City is entitled for that reason. Figure 1 below illustrates our energy surplus and/or deficiency from 1991 through 20]1. The bottom line shows only existing and committed resources; the second line shows alternative unco~itted resources without STIG i~cludeQ. The top line depicts all committed and proposed resources including STIG. CXR:562:'1 4 ./' •• Q ... -_ .... --- 1 "-_/ FIGURE ~ AUGUST ENERGY SURPLUS (DEFICIENCY) IOWHl ··rcc-c-·------------------------------------- "I ._ .. l iJ I "''Ii !'---'--'-~~ ~" ." YEiI.R CRITICAL. !oj YCAO YEAR In all three cases~ there is surplus of energy through the year 1997. Therea~ter there is a significant deficiency unless additional resources are added. Adding all nproposed~ resources considered but not yet ~committed~ effectively eliminates the deficiency. Removing the STIC project from con~ideration results in some deficiency reappearing~ The proposed STIG project adds to the surplus from 1994 through 1997 and thereafter provides a portion of the deficiency, still leavinq a significant void to be fille~ by all other uncommitted resources under consideration. The objective of Resource Planning is tc determine which resources are appropriate to recommend to fill the deficiency in an economical, reliable and environmentally sound manner. Figure 2 shows the present value of annual production costs (PVAC) assuming only committed resources and PG&E Partial Requirements power are available. PVAC is also shown assuming the STIG project has been added for co~parison. CXR~ 5152:91 5 FIGURE 2 ANNUAL DISCOUNTED PRODUCTION COST (6.5%) COMPARISON .. rco,,,,, co., """ .. ~ 40 3' I ·'I..':-'~~-'::''::''~-~''::'':-:'~~-:'-:':O",~...l...-,-',,:-:.~~,:~L~;:;.' d" /-CO'-1M:ITTED .......... COMMITTEe .. STIG 1 ~ The above graph shows that participating in STIG results in increased costs from 1993 through 1997 and produces net savings thereafter. The area between the curves prior to 1997 indicates the additional cost risk associated with STIG while the area following 1997 is the cost benefit. The re~ult is a long-term net cost savings Elhowing the cost effectiveness of such a project for Palo Alto. Risk As noted above, the dilemma ~e face is that the pipeline capacity commit~ent is out of sequence with the final decision on the STIG project. Ideally, we would like to knov the usefulness of STIG more precisely and to have had Council approval of the project before we commit to sharing the cost of the pipeline~ That is not the case here. Because of the complexity of the pipeline project, NCPA and its members find thewselves in a position where they must decide on the pipeline issue before they know all the facts about STIG a~d other gas fired generation options that may be roore appropriate than STIG. NCPA staff are in the process of obtaining more precise information about STIG and other combustion t1.lrbine based technologies for comparison. All of these 'Will also be include,d in the evaluation of responses to CKa:562:9.l 6 ------ I , -- --.." NCPA's RFP. Based on the infonllatic;n currently available, City staff's analysis is that STIG 'Will be a ..... aluable addition to our power supply mix. If another option proves to be supericr to 5:TrG~ then staff .. ould rea.ssess the City's options. Even if it turns out that ST!G is not es valuable as first envisioned. staff helieves (and NCPA concurs) that there ~ill b~ a market fer the pipeline capacity. Giveu that (1) our share is very small --onl,r 5 1l1.ega;.,-atts (10 percent of the unit) I (2) C'Ll'!' an?lual cost is small compared to the cost of other power supplies, (3) ..... e feel confident that there is a market for unused pipaline capacity, and (4) the STIG unit is a good addltion to our po~er supply ~ix, staff concludes that the risk to the City is small and 'We should proceed. ~ecommendation: The utilities Advisory Commission's deliberations led them to conclude that other resources should be pursued before committing to the STIC project and, therefore, participation in the gas pipeline project is not appropriate. The other resources referrad to include (but are not limited to): demand side management, TANC, Calaveras enhancements, and PG~E backup. Staff concurs with the conclusion thut these resources need to be the subject of continuing analysis, but believes that the STIG project is a good "ti t n in the oV2rall resource plan and should be pursued by the City. Other resources should be pursued ~in addition to" the STIG project. The first step to this end is agreement to participate in the necessary gas pipeline. The staffrs conclusion is that the risk to the city is small and the pot-ential benefit substantial ~ l'herefore, staff continues to recommend, as it did in April 1991, that Falo Alto should participate in the project. Adoption of the Third Phase Aqreement allows us to repl~ce the Member Service Agreement with a more conventional arrangement. You may wish to refer to the City AttornE,y's accompanying memo on this subject (or an '~pinjon with regard to our ongoing obligation~ Respectfully submitted, I'~~-<-~ RICHARD L. YOuNG ~ Director of Utilities l.t_!:(~Z-~ c WILLIAM ZANER City ¥..anager cc: Utilities Advisory Ccm:rr.ission Attachment CKlt:5U:91 7 - Nov6mber 6, 1991 THE HONORABLE C~TY COUNCIL Palo Alto, California NaturAl Gas Procure:!l:lent PrograJIl. Third PhAse Agreement Kembers of the council: Report in Brief This report recommends Council approval of the llatural Gas Procurement Program 1~ird Phase Aqreement (Ga& Agreement). This agreement authorizes the Northern California Power Agency (NCPA) General Manager to enter into contracts and to take other actions to obtain riqhts to the transportation, storage and supply of natural qas to provide ruel for NCPA gas fired power qeneration resources. Background In early 1990, NCP~ and several of its members concluded that it would be in their best interest to develop two generating facilities !Steam Injected Gas (STIG) projects] with a combined output of 100 MW to meet Turlock Irrigation District (TI;» and certain NCPA Interconnected Members I anticipat.ed load qrowth.. The primary fuel required to operate these generators is natural qas. NCPA/TID began its gas procurement efforts in the fall of 1990. A Natural Gas Procurement Investigation Report was compl eted in JaTiuary 1991. One of the recommendations was to acquire transportation to Canadian gas supplies .. OVer the years NCPA has developed a "standard-process any time the members wish to consider a ney project. The process has l.hree phases, each represented by a written agreement~ A Phase III Agreement is the final step for a member agency. Signing a Phase III Agreement represents a commitment to proceed and usually obligates the members to share in the cost in some way~ Because of u"certainties i~ regulation and gas markets, NCPA/TID CI(R,(80:t1 - · ----..,._., o nee~&~ to act quickly to participate in the Pacitic Gas Transportation Company 7 s Expansion P~oject {PGT-EXPJ biddinq proc~sa to obtain 94S pipeline capacity to Canada~ Since a Third Phase Aqreement was not available in time for NCPA/TID to make this commit:ment, the combustion Turbine Project No. 1 -Third Phase A9re~nt was the mechani~M used to establish the initial commitments, with the understanding that these ~ommitments be transferred t~ the Gas Procu,ement Third Phase Aqreement as ~oon as possible. niscusslQIJ. The need to establish a program for the procurement of natural qas is driven by: 1) the uncertainty of the amount of firm pipeline capacity and qas available to NCPA froll! PG&E, and: 2) the opportunity to bid for interstate capacity on t~e proposed PGT-EXP. NCPA's bid for the PGT-EXP ...... as for 7000 million British Thermal Units (mmbtu) per day of interstate transportation capacity. NCPA was awarded 5486 ~u per day which is SUfficient to operate the STIG projects at about a 2S percent capacity factor~ Additional qas transportation rights may have to be secured to allow the STIG project to operate at 4 higher capacity factor, provide additional operating flexi~ility, or in the event that additional qas fueled generator projects are developed by NCPA in the tuture. In addition to the PGT-EXP, NCPA has recently secured long-term. contracts tor gas transportation with Pacific Gas and Electric; and Alberta Natural Gas. As noted above, these contracts collectively provide for 5486 mmbtu per cay of both interstate and intrastate pipeline transportation capacity to access Alberta's natural gas resourc.es. These contracts will be effective in late 1993, to coincide with the schedule for completing construction on the PGT-EXP. Analysis Th. most likely scenario is that NCPA will develop the two STIG units. One unit will b~ dedicated to Turlock Irrigation District and the oth~r will be allocated to six of the ten Interconnected Me~rs including palo Alto. Assumjng average hydro conditions, the Interconnected Members' STIG CID.:480.tl 2 • - unit is likely to operate at 25 p~rcent capacity factor. Therefore, the majority of the gas supply to this unit \Jill be bought froD Alberta .. Canada. Table 1 and Figure 1. show the anticipated savinqs fc~ Palo Alto for making tho&e gas purchase6 from Alberta versus Pacific Gas and Electric~ .. iqure 1 o 1994 PGT -EXP & CORE SUBCRIPTION COMPARISON OF COSTS 1998 1998 2000 2002 _ Fixed Tran.port E2Z Variable Tran.porl am VariaC-Ie Supply Based on the latest STIG cost assumption, staff ~ill recommend that Palo Alto's participation percentage in the Interconnected: Members' STIG unit be 10 percent. To match this participation, the City's allocation of the total natural gas resource would then be 5 percent~ However, if the STIG cost assumptions change an~ the final allocations also Change, the participation level in the total Gas Agreement will change accordingly. This would lead to revising Appendix A in the attached Gas Agreement. In the event that NCPA Interconnected Members find the cost of financinq and operating the STIG to be economically unattractive in comparison to other resources on the market, it is likely that Turlock Irrigation District will offer to purchase the transmission CMR,480'91 3 i I I I I - " ---'''''-------- o capaelty·at cost to enable them to purchase ~ore inexpensive gas from Alberta. conclusion: In order to obtain an economical source of gas fuel for NCPA combustion turbine projects, it is necessary to purchase gas pipeline capacity. With the fast-!Doving qas 1t8rket, NCPA has determine-l that access can best be obtained from the contracts neq<>tlated. Recommendation: staff recommends that the City council authorize the Mayor to execute the Natural Gas Procurement Program Third Phase Aqreemcnt. Respectfully Submitted, ~ftt,.vh TOM HABASHI Senior Pover Engineer ~~,~ RICHARD L. YOUN?.j7 Director of Utilit~es C)IR,no, 11 4 --'~:-~'" '.~ l ; I, NATURAL GAS PROCURE!'.f8>.i' PROGRA.\,l nmm PHASE AGREEMTh, TItjs Agreement, date.o as of _________ ~, 1991, by and among the Nort.i.em California Power Agency, a joint powers age:lCY of tr.e State of California (NCP A) and the members of NCPA which have execu ted dtis AgreemoC'Ilt (partidpa..'1t or Participa!lt;), is entered iMO on ihe basi$ of the following RECITALS: A. On March 28, 1991, the NCPA Commission adopted Resolution No. 91-09 ... approving the Natural Gas Pro...-urement Program. Service Schedu!e (Se.rvice Schedule'. B. NCPA and certain of its members have determined that p!Ocurlng contract and other rights te) and for the transportation, storage, and supply of natural gas for use in NCP A projects: ... and for the needs of members for their own use as file! o!' for resaie, is in the best interests of ~CPA and its membe:s. C This Agreement is the Third Phase A.greement contemplated in the Service Schedule. The primary purpose 01 this Agreement is to assemble an integrated bundle of rights to a natural gas supply useful to NCPA and the Participants. NOW THEREFORE, NCP A and L'>. Participants hereby enter into this AGREEMENT Section 1. Service Sciledule. This Agreement supeT5tedes the Service Schedule. Section 2. Assignment to Participants. The Participani;s in the Combustion Turbine Project and the members who executed and delivered the Service Schedule hereby assign all of their right, title and interest in their obligations and entitlements UIlder the Service Schedwe to the Participants to ExECUTI01'1 COUNTERPART \ o this Agreement and the Particip.mts do hereby accept suc.i. ob!;g~tions and entitlpments. Section 3. Participation Pe:ocE"ntages. The Participation Percentages of the Participants are shown .in Appendix A, attached to and incorporated into this Agreement. The Participation Percentage for each Participa.."1! shall be--L'l-te percentage set forth opposite the name of such Particip"-"t L'l Appendix A, as such appendix may be amended from time to time in accordance with this Agreement Section 4. Authority of General Manager. 4.1 The General Manager is hereby authorized, on behalf of the Fartidpants~ to enter into contracts and to take other actions~ indudi.."1g bu t not limited to the acquisition of real and personal property, the expenditure of NCP A staff Tesot.il'ce5" and the retention of expert consultants to obtain rights to the transportation, .torage, and supply of natural gas (Project); provided that expenditures resulting from such contracts O! actions must be in a.ccordance 'With the Project Budget provided for in this AgT!2'2!l1ent. 4.2 The General Manager shall present each contract which would encumber more than $15,000 in • fis<:al year to the NCPA Ccmmission for its approval or disapproval prior to the effective date or the date of rescission of each contract. 4.3 The General Manager shall exercise t..'1e authority delegated by t!-Js Agreement to promote economy by assembling an integrated b\.!I\dle of natural gas rights for electric power production or other uses or purposes and, because oi efficiencies resulting from the assembled rights for all Participants, for resale by the Participants which have exercised their powers to furnish na!'.rral gas fD< resale. Section 5. Project Availability. NCPA shall make availabie or cause to be made available, and sell to each Partiepant, and each Participant shall be ·2· E.XECUTION COUNTER]' ART - :. -- entitled to receive, and shall purchase from NCPAr such Partidpant's Particpation Percentage of the Project. Section 6. Rates and Charges. NCPA shall fix rates a.."1.d c..~arges to the Participants, en a fixed and variable basis, to produce revenues to NCPA from the Project at least equal te the amounts needed oy NCPA to illeet the total . costs of NCPA to provide the Project. Each Partiopa!lI hereby directs l'<CP A to assess the rates a.nd charges in a manner which facilitates coUectiOrl, suc.i.. as a cost of fuel for the NCP A projects which consume or wiJl consu.me nat-.Jl"al gas, and ch"'ge back such rates and d\arges through t."e third phase agreements or facilities agreements for such projects, unless a Partiopal.t directs oth·arwise. The rotes and charges shall be uniform for l'<CP A and Participant p,ojects of slmilar capacity faclars. NCP A shall review and adjllit rates and charges as required. Section 7. Special Fund Obligation. Each Participant shall be obligated to make payments under this Agreement solely from the revenues of, al,d as an operating expense of, its electric system, or its gas system. However, nothing in this Agreement shall be construed as prohibiting any Particip.nt from using any ct."" funds or rever.Cl" for purposes of satisfying any provls:ons 0: this Agreement if the Participant chooses to do so. Section 8. Unconditional Obligation. Each Participant shall make payments under this Agreement whether or not the Project is availabte and notvl'ithstanding t. ... e suspension, interruption, interiere..'1ce, redu.ction or curtailment of th2 Project, in whole or in part, for any reason whatsoever. Such payments are not subject to any reduction, whether by offset or othE:IVio1se, and are not conditioned upon performance by NCP A or any other Participant under this Agreement or any other agreement. Section 9. Several Obligation. No Participant shall be liable under t,;1is Agreement for the obligations of any other Participant. Each Partidpant shall be solely responsible and liable for performance of its obligations under this Agreement and for the maintenance and operation of its ~espective properties. The obligation of each Partiopant to make payments under this -3- ExECUTiON COUI'iTER], ART .-" .. ";.-i.:;. .-~ . ~ ;".:, - Agreement is a several obligatioI': a~d not a jotnt obligation with those of the other Participants. Section 10. Rate ObUgztion. Each Participant covenants and agr~ to establish arId collect fees and charges for electric capadi)' and onergy furrushed m,-ough facilities of its e1ectrk system, or gas furnished through its ga.; system, sufficient to provide revenues adequate to meet its obligations Ul"Lder this Agreement. Tht:' obligaticn of a. Partidpant to make payments. under this Agreement shall not cGnstitute a legal or equitable pledge, charge, lien or encumbrance upon any property of the Participant or upon any of its income, receipts or revenues, except the rever.ues of its electric system or its gas system. Neither the Participant nor the State of California or any agency or political subdivision thereof shall ever be obligated or compelJed to levy ad valore",. taxes to malee the payment., provided for in this Agreement. Section 11. Qreration and Maintenance Oblisation. Each Participant COVenai1..i::s and agrees that it sJ"1.all, at all times, operate t.~e properties of its electric system or its gas system and the businesses in connection therewith in an efficient manner and at reasonable (OS~ and 5hall mri...,tain its electric system or gas system in good repair, working order, iUld condition. Section 12. Sales of SuroluSe5. !\1CP A is authorized and directed te market, lease, rent, seU and assign natural gas transportation, stOrage and supply rights of the Project, su..,,!us to the needs of the Participants, to persons or entities wr..ich are not Participants. t-;CP A shall endeavor to set rates and charges for such 5urplus rights at amounts which recover thE" costs of such rights and a premium for the risks borne by the Participants. Ani premium shall be credited to the accounts of the Partidpants as they may direct. Short term layoffs of rights in the Project, between or among Participants, shall be permitted, for such periods as Participants may agree In a meeting 0( the NCPA Conunission, pursuant to the voting provisions of this Agreement. Section 13. Participant Direction and Re\'iew. :-;CPA shaJl cOIl'ply with all lawful directions of the Participants with ,espect to this Agreement, while not stayed or nullified, to the fullest extent authorized by law. Actions 4- EXECUTION COUI-.'TERP ART I I i ! I • -. ' 'ilf •••. . <i. .1". i I ~ ·1 of the Participant>, induding giving directio"s to NCPA, will be taken only at meetings of to". NCP .... Commi"ion duly called and held pursuant to the open meeting 1a ws. Section 14. Quorum. A quorum of the NCPA Commission, for purposes of acting vpon matters relating to this Agreement, shall consist of COII'unissloners. or their designated Alternates, representing at least twe Participants having a rombined majority in interest based on Participation Percer.tages. Section 15. Voting. Each Participant shall have the right to cast ore vote with respect to matters pertaining to this Agreement. Actions of e:e NCPA COIIUI'is>ion shall be effective only upon a majority vote, except that upon demand of any Participant, at a.ny meeting of the Commission, the mte on a.ny issue relating to this Agreement shan be based u?On Participation Percentages. Actions of the Commission shall be effective ordy upon an affirmative vore of 65% or greater of the Participation Percentages established. in this Agreement upon such demand. Any Participant may vefo an affirmative action of the Commission rela ting to this Agreement tha t was not taken by a 65% or more vote, within 10 days following mailing of notice of 5uch action, by giving written notice of veto to NCPA, unless at a meeting of the Commission caJJed for the purpose of considering the veto, held withlr. 30 days after ~uch veto notice, the holders of 65% or more Participation Percentages shall vote to override the veto. The 65% of the P.articipation Percentages specified in this Agreement shall be reduced by the amount that the Participation PercentJ.ge of any Partidpant exceeds 35%, but such 65% shall not be reduced below a majority in interest Section 16. Budget. ~or to the beginning of each fiscal year for which no budget has been adopted, the NCPA Commission shail adopt, as a part of the regular budget for such fiscal year or years, a budget fer the costs of developing and maintaining the Project (Project Bu.dget). The KCPA Commission may adopt budgets for more than one flScal yea:. The Project Budget shall authorize the General Manager to make expenditures for -So EXEarJ10N COG'NTERPAn o programs in the amounts 5.pecified in the Project Budget, subjeL1: to the terms and conditions of this Agr~ment Section 17. LonS-Term Transfers. A Participant may not sell, trmsferJ or assign (transfer) ell or any part of its Participation Percentage of ,r.e Project without the advance written consent of the NCPA Conur.ission. By written evide..,ce of offidal action duly and regularly made with all requisite authority. Participants may traI'l.sfer among themselves their Participation Percentages, after written notice to NCP A a.nd all Participants. No long-term transfer, being a transfer for a period longer than prescribed by the Participants acting through the NCPA COnurjSs1(>n as provided in section 12 of this Agreement, shall occur without ninety days advance written notice to NCP A or such lesser period of notice as NCP A maybe able to accept. If the proposed transfer is to an entity rn..t is not a Participant, all Participa"ts must be given the right of first refusal in proportion to their Parlicip.tien Percentages. If the proposed transfer is to • person or enti ty that is not a member of NCP A, all NCPA members shall havo the right of fll'st refusal in proportion to the amounts those members contribute to the NCPA general fund. No transfer shall relieve a Participant of its obligations under this Agreement, except that such obligations shall be discharged to the extent that NCPA receives payment from the transferee of the transferring Participant's Participation Percentage. Upon the eIfective date of such transfer, • new service schedule shall be anr.exed to Appendix A to reflect the transferred Participation Percentages. Section 18. Records a....,d Accounts. 1\"CPA shall keep accurate records and accounts for the Project. Such records a..,d accounts shall 'be made availabte to any Pa.~cipant fo: inspection at any reasonable time. All records and accounfs shall be subject to .audit at the request of and at the reasonable expense of any ParticipanL Section 19. Measurements. NCPA shall estabLish procedures for the measurement of the quantities of gas transported, Sfored~ and supplied under this Agreement. Such procedures shall provide for mdintenance, testing. calibrating,. correction, and adjustment. -<>- EXECUTION COCNTERP ART ---..~----.---"L - • 1 I ! l ! I I I I : t Section 20. BUling. Monthly bUling statements prepared by NCPA shall be sent to each Participant shov,fug the Partiopant's share of cosiS and other charges payable pu.'"Suant to this Agreement for each billing period. Such statemE"nts shall separately set forth any credit or debit adjustments. Amounts shown on each bUling statement are due .. ,d payable thirty (30) days after the date of the billini' statement except that any amount due on a Friday, holiday or weekend may be paid on the closest following workday. Section 21. Disputes. Any amount due and not paid by a Farticipant shall bear interest from the due date until paid at the annual rate established by the Co~sion of NCPA at the time of adoption of the then most recent budget. IT a Participant questions or disputes the correctness of any billir,g statement by NCP A, it shall pay NCP A the amount claimed when due and shall within thirty (30) days of the receipt of such billing statement request an explanation from NCP A. IT tlte bill is determined to be incorrect, NCF A will issue a corrected bill a"d refund any amount which may be due t.':e Participant, which refund shall bear interest from the date NCPA re<.eived payment until the date of the refund at an annual rate to be established by the COIr.mission of NCPA at the time of adoption of the then most recent annual budget. 1£ NCP A and the Participant fall to agree on the correctness of a bill within thirty (30) days after the Participant has requested .. ,' explanation, the parties shall promptly submit the dispute to arbitration under "",tion 1280 el seq. of the Code of Civil Procedure. Section 22 ObUS.tions in the Event of Default. 22.1 Upon failure of any Participant to :roake any payment in full when due under this Agreement, NCPA shall make written demand upon such Participant, and if payment is not made within 30 days from the date of such demand, the fallure to make payment shall constitute a default 222 Upon the default of any Participant NCP A (a) may terminate the provislons of this Agreement insofar as the Agreement entities the defaulting Participant to its Participation Percentage of the Project, and (b) , ----...... I , 1 I , , I i - o shall use its best efforts to sell and transfer for the Participanfs account all or a portion of the Participant's Participation Percentage of the Project. When !T.iling sucit sales and transfers NCPA shal! allow all Participants the right of (lIst rEiusa! in proportion to their Participation Percentages ar,d shall allow other NCP A members the right of second refusal in proportion to the arr.ount those members contribute to the NCPA general func. Notvdth..<;tanding such sale~ transf.er or termination, the obHgac.ons of the defaulting Pa.'licipant under this Agreement shall continue in full force and effect except that such obligations shal! be clischarged to the extent that NCPA receiv€S payment from a pu.rchaser or tra.nsferee of the defaulting Participant's Participation Perc2I\tage in the Project. 223 Upon the default of any Participant, and except as tra..~fers are made pursuant to subsection 22.2 of this section, (aJ the Participation Percentage of .. cit nondefaulting Participant shal! be automatically increased for the remaining term of this Agreement pro rala with those of the ot.'>er nondefaulting Participmts, and (b) the def.u1fng Participant's Participation Percentage in the Project shal! (but only for purposes of computing the respective Participation Percentages of t..lte nondefaulting Partidpants) be reduced corre.pon<lir.gIy. The fact that other Partidpants have increased their obligations to NCPA accor<lir.g to this subsection shall not relieve the defaulting Partidpant of its liability under this Agreement, and any Participant L"creasing its obligation shal! have. right of recovery from the defawting Participant to the extent of its increase b obligation. Section 23. Member Service Agreement. This Agreem~nt is a Servi.:e Schedule to the Member Service Agreement and a third phase agreement and shall be deemed incorporated into the Member Service Agreement the Participant has executed or successor agreement to the Member Service Agreement. This Agreement shall be construed as constituting the more spedfi( terms governing the general re1ationship set out in that Member Service Agreement. Section 24. Term of Agreement. This Agreement shall become effective on the date the last of the Participants executes and delivers it to -s- ExECUTION COUl\o"TERPART i ! ! - r , -.--~---.....~., .. -. --'I NCPA This Agreemp.nt shall remai." in luliloree and effect until all obligations entered pursuant to it have been I12'xtinguished, cancelled, or discharged. Section 25. Termination. This Agreement may not be cancelled or terminated without the consent of all Participants and KCPA and unless the means have been established to timely pay, extinguish, or discl1arge, without any liability to NCPA or to any Participant, all obligations entered and liabilities incurred under this Agreement. Section 26. Notices. Any notice, demand or request required. or authorized by this Agreement to be given to any Participant or to NCPA shall be given in writing and shall either be personally delivered to the Participant or transmitted to the Participant by regular mall at the address designated by the Participant. The designation 01 such addeess may be char,ged at any time by written notice. Section 27. No Waivers. No waiver of performance under this Agreement shall be effective unless given by the Commission. Any such waiver by the Commission in any particular instanOi! shall not be deemed a waiver with respect to any subsequent performance. Section 28. Uncontrollable Forces. Except with respect to the payment 01 money, a Participant shall not be considerad ro be in delault of any obEgalion under this Agreement if prevented from fulfilling such obligation by reason of an uncontrullable force. An uncontrollable force shall include storm, flood, lighming., eart.~quakel tsunami, explosion, dvil disturba..-rtce, or similar causes beyond the control of a Partidpant, which could not reasonab1y have been avoided by the exercise of due diligence and foresight. A.."1Y Partidpant affected by a,.-, uncontrollabje force shall use due diligence to place itself in a position to fulfill its obligations under trjs Agreement and such Partidpant shall exercise sudi due diligence to remove the effect of the uncontrollable force with reasonable dispatch. -9- EXKtmON COLINTERPART Section 29. !J~bility. All of the. pri..vileges and immunlti.es from liabt1ities~ exemptions from laws, ordinances and rl.lles, all pensiorl l relief, disability, workers' compensation, and other ~nefits wt-Jch apply to the activity of officers, agents or employees of any public agency which is a Fatticipa."·1t, while engaged in thE: performance of their functions Of duties, shall apply to them in the same degTee a.'ld extent when performing their respective public duties in connection with this Agr€ement Section 30. Indemnil;y. NCPA and the Participants indh;dually shall indemnify, defend, hold and save each other harmless from any a."d all ioss or dam.ge sustained, and from any and all liability to any person or property incurred by the other or othersr by reason of any act or performance, or failure to act or perform on the pa..-rt of the indelnnifying Participant or its officers, agertts, or employees in connection wit.\ the Project. Section 31. Reports. NCPA shall prepare and publish monthly reports regarding the Project in the ordinary course of NCP A Commission business. Section 32. Pledge and Assignment. NCPA may pledge and assign this Agreement, with the approval of the NCPA Co=nissicn, for the purpose of providing security for the performance of contracts authorized by the Commission for this Project or for the purpose of secur~ng temporary or permanent fi"ancing for any property or fadlities or ""ntract rights which the NCP A Commission detertI"'ines are necessary for the Project. Section 33. Amendments. This Agreement may be amended oely by a written instrument executed by the Participants and NCPA with the same form.lity as this AgTeement Section 34. Severabilitv. In the event that any of the terms, coven3...i."1ts or conditions of L1ti3 Agreement shall be held invalid, NCPA a"d L"e Participants intend that all other term5~ covenants and .:aI'l.ditions and their application shall not be affected thereby. but shall remain in force anc effect unless a court holds that such prOvisions are not severable from all other provls ions of this Agreemen t. -10- EXECUTION COL 1\'TERP ART Section 35. Governing La~. This Agreement shall be interpreted, governed by, and ;:-onstrued under the laws of the State of California. Section 36. Countemarts. This Agreement may be ex.€'C'...:.ted in any nwnbe-r of cour.terparts and each executed COlli'"'l.terpart shall have t..lte same force and effect as an original L.lStrurr.ent and as if all Participants to aU of the counterparts had signed the same instrument Section 37. Headings. The headings to the S€ ... iions in this Agreement are intended for convenience orJy and not for the purpose of in~rpreting the provisions of this Agreement Section 38. Warranty of Authority. Each Participant which has executed and delivered tllis Agreement represents and warrants that it has agreed to be bound by all of the terms, covrn1L~ts and conditions of this A@Teement and has acted with all of the requisite capadty and authority and the approval of its governing body. -11- EXECl"110N COlJ1';-rERPART i I ! I r --- o o IN W11NESS WHEREOF, •• d, Participant has by the signature of its duly authorized representatives sho'NIl below, executed and delivered a counterpart of tl"Js Agreement NORTHERN CAUFOR."IlA pov,"ER AGENCY By"- Date' _________ _ CITY OF LOMPOC B~ ________________ __ B~ ________________ __ D.te: CITY OF ROSEVILLE B~--_____________ _ B~ ______________ __ Date' ___________ _ OTYOFLODr B~ _______________ _ By _______________ _ Date: ________ _ CITY OF ALAMEDA B~ ________________ __ D.to, _________ _ CITY OF PALO ALTO B~~ ______________ __ "61' ___________ _ Date' ________ __ 11JRLOCK lRRlGA nON DISTRICT By:. _________ _ 6,-.. ______ _ Dato: __________ _ -12- EXECUTION COUNTER!' ART / APPENDIX A NATURAL GAS PROCUREMTh'T PROGRA.'>! Alameda LOO.i Lompoc Palo Alto Roseville SERVIa SCHEDULE I P ARTICIP ATION PERC~"TAGES Turlock lnigation District EXECl.iTION COUNTERPART 11.000% 16.000 2.000 5.000 16.000 SO.OOO .---.._-, .... _-_ .... \ ,"""".-,-- ,,-/ RESOWTION NO. RESOLUTION OF THE COUNCIL OF THE CITY ()~ PALO ALTO APPROVING AND AUTHORIZING EXECUTION OF THE NATURAL GAS PROCUREMENT PROGRAM THIRD PHASE AGREEHE!<T OF THE NORTHERN CALIFORNIA PO~~R AGENCY WHEREAS, the Northern Califo~nia Power Agency (-NCPA·) has developed the WNatural Gas P~oc~rement Program Third Phase Agree.m--ent-setting forth its participating Members' rights and obliqations with reqard to a project for the procurement of contract and other rights to the transportation, storage, and supply of natural gas for use as fuel {,or NCPA proj ects and the needs of NCPA Membe~s; and WlIEREAS, the !'1CPA Commission approv&ci that Agreement on September 25# 1991: and WHEREAS, the City of Palo Alto has deteruined it is necessary and desirable to participate in the Natural Gas Procure­ ment Program. NOW# THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as fcllo~s: SECTION 1. The "Natural Gas Procurement Program Third Phase Aqreement~ is hereby approved. SECTION :2 ~ The Mayor is authorized and directed to execute an execution copy of the Agreement. SECTION J. The Council finds that there is no possibility that the provisions of the A.greement .... i1l cause a significant effect on the environment, and upon that basis, finds the project exempt from the provisions of the California EnYiror~ental Quality Act. INTRODUCED AKD PASSE:D: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: City Clerk Mayor 1 911101 .po::: 00Y.:>444 • .. - ~. ,. / _._-'-' ________ '-_ .:L_. ______ , _______ _ • • APPROVED AS TO FORM: APPROVED: city Attorney City Maneger Director of utilities 2 9111.')1 ap; OOS()oI,4.4 ---.. _---- (I . " (1 .' ~ - ~ . . , ,.'~. <:'. ,. April 18, 1991 THE HONORABLE CITY COUNCIL Palo Alto, California Natural Gas P:;'9Curem§ot Program Service Schedule Member servi~ce Agreement -Northern California Power Agency Members of the Council: Report in Brief This report recommends council approval o~ a Natural Gas Procurement Program with Northern California Power Agency (NePAl. The Northern california Po~er Agency has in operation and plans to construct ad~itional natural gas fueled gcn~ration facilities ~hich Palo AI to may purchase power from. This Agreement is the first phalie in developing a source of fuel slJpply far these facilities at lower costs than available from the present supplier. This staff report prasents a Service Schedule to be added to the existing NCPA HelII.ber Servic~ Agreemant which provides the mechanism for Palo Alto to participate in NCPA's gas procurement activities as they relate to gas fueled projects the city participates in. Staff requests Council approval and authorization tor the Mayor to execute the Aqreement. Pdyments (estimated at $193,000 per year) will not be required until 1993 as discussed belo~. Discussion The changes that have t~ken place in the ge.s marketplace have occurred at a pace that has not allowed time to fully develop agreements providing for the members of NCPA to participate in a gas procurement project. Therefore, in order to keep pace .... ith the market activitys NCPA members who are participants (palo Alto is notJ in the existing NCPA Combustion Turbine Proj eet agreed to initially support the first phase of the gas procurement project. The first phase consists of NCPAls tentative bid for 7000 MMbtujday CJGU2H:91 ~ . . ,«0·"'..;. :.~~ ~ '~':I o o of pipelin~ capacity in pacific Gas Transport·s (PGT) pipeline expansion pr-oject accessing canadia.n gas suppliers. A go/no go decision must :be ma.de .... i th regara to the success (o!" partie.l success) of NCPA's bid by April 25, 1991 affirming the Agen~y's willingness to enter into a contract. The att~ched Member Service Agreement schedule was developed in order to allo~ those members who are not in the Combustion ~rbine Pr~ject to participate and to firm up the support for the project. Prospective participants in the gas procurement project ~ust act prior to April 25, 1991. N.xt Steps The Member Service Agreement Service Sch~dule ~ill ultimately be replaced by a for~al Third Phase Agreement bet~een NCPA and the particip~nt members ~ith percentage rights adjusted appropriately to t'.ccount tor each participant's ultimate fuel need for their share of gas fired generation. Staff is presently evaluating the need for future base load qeneratian that co~ld be provided by a new ST.IG project being proposed for development by NCPA. This project is entitled "STIG-whi~h is an acronym for steam injected gas.. The unit 'Will be part of NCPA's fUrther deve-lopment of combustion turbine generation, scheduled for the 1993 time trame. The Service Schedule will be replaced with a formal Gas Procurement Project Agreement (Third Phase Agre.ement) as soon as it can be dev&lope.d. The service Schedule provides for sale by NCPA on the open market of any surpluses developed at this stage. Staff's gas experience tells us that there ~ill be an active market for any surplus capacity. The Third Phase Agreement will provide Palo Alto with an opportunity to evaluate its continued participation or a chance to adjust the level of participatiorl in the final proj ect. Staff feels the potential for generation fuel cost savings is significant and the city should support the concept by participatinq in the Service Schedule at this time. 1\ctu.;-.l expenditures are not scheduled until 1993. Financial Impact Palo Alto's p~oposed 10 perce~t share of the fixed CO$ts in the service schedule is estimated to cost $193,000 per year in 1991 dollars, commencing in November 1993. This cost would be part of generation fuel costs. which would be lower under the purchase scenario as compared to relying solely on the present supplier. ", '#.:' < i"'" ReCommendation Statt recommends council approval of the attached Natural Gas Procurement Program Service Schedule Kember Service Agreement - Northern california Power Agency and requests that the Mayor be authorited to exe~~te the agreement. Respectfully submitted, /,I 71 iF i l ' rnl 1/-:/",. "I ' ,,/ I .,. I''' .... ·. ,~.(A_. RONALD P. BELVAL Man~ger, Energy Planning ~.~j Director of utilities ':-r' ",( rl(,,_ ,}lc.(H.< nd /, ,,' - JUNE FLEMI He; Assistant City Manager CIlR'Z41.U • o RESOLUTION NO~ RESOWTION OF THE COUNCIL OF THE CITY OF P.UO ALTO APPROVING AND AUTHORIZING EXECL~ION OF THE NATURAL GAS pROCtJREKENT PROGRAM SERVICE SC-riF,DULE TO THE MEl!BER SERVICE AGREEMENT OF THE NORTHERN CALIFOR­ NIA POWER AGESCY WHEREAS, the Northern California Power Agency ("NCPA-) has developed ~~e "Natural Gas Procu~ement Program service Schedule to the Member Service Agreement of the Nort.l]ern Californi~ Po'Wer­ Agency and its !-fembers· ("Service Schedule-) setting forth its participating Members I rights and obligations ... ith regard to a project for the procurement of contract and other rights to the transportation, storage, and supply of natural gas for use as fuel for the Combustion Turbine Project, the Combined Cycle (STIG) Project, and the needs of Members .. hich execute the Service Schedule; and WHEREAS, the NCPA commission approved that Agreement on Karch 28, 1991; and WlmREAS, ths Service Schedule requires Palo Alto, which is not a Proj~ct Participant in the Combustion TUrbine Project, to evidence its a1reement to par~icipate by ~esolution specifying its participation pe~centage and executed on or before the earlier of presentation of the Natural Gas Pr-ocllrement Program Third Phase Agreement or April 24, 1991: NOW, TH~FORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1~ The "Natural Gas Procurement Program service Schedule to the Member Service Agreement of the Northern California Power Agency and its Members" is hereby approved, with Palo Alto's participation percentage sgecified at ten percent (lO~Ol). SECTION 2. The Mayor is authorized and directed to execute an ~xecution copr of the Agreement on or before April 24, 1991. SECTION 3. The council finds that there is no possibility that the provisions of the Agreement 'Will cause a significant effect on the environment, and upon that basis and the bases set forth in the Service Schedule, find the project exempt from the provisions of the California Environmental Quality Act. INTRODUCED AND PASSED: AYES: NOES: ABSENT: 1 ':'ft .. ;> - .- A'l'T};S'l': APFROVED: Cl. ty Clerk Mayor APPROVED AS TO FORM: City Attorney city ){anager Direc~or Qf Utilities 2 . , o NATL"RAL GAS PROCUREME."IT PROGRAM SERVlCE SCHEDULE , MEMBER SERVlCE AGREEMENT NORTHERl'>! CALlFOR."'"lA POl'IER AGENCY Approved by Commission Resolution No. 91-09 March 28, 1991 Section 1. Reci~als. (a) This is the Natural Gas Procuremen~ Program Service Schedule (Service Sr...nedule) to the 1.fember Service Agreement of the Nort.".m California Power Agency (NCPA) and its Members, . dated as of February 12, 1981 {Member Service Agreement). {b) NCPA and certaIn of its Members have detennined that procuring con~act and other rights to the transportation, storage, and supply of natural gas for ... e as fuel for the Combustion Turbine Project, the Combined Cycle (STIG) Project, a.~d ~"e needs oE Memp.rs which execute this Senice Schedule, is in the best interests of NCPA and its Members. (c) NCPA hereby detennines that this Sen.ioe Schedule is an actlon undertaken by. public agency rela:;ng to thermal power plants (STlG), including the expenditure, obUgaticr~ or encumbrance of funds for th. conditional purchase of fuel, whi.::h thermal plants are subject of an EIR, and theref:>re, pursuant to 14 CCR §lS271, CEQA does not apply. Further, the Combustion Turbine Project has been constructed follo .... ing environmental review and the supply of fuel provided by this Service Schedule is an obvious consequence of approval of such project, wit-cou! any substantial change." and without significar.t environmental impacts. , 1 r:"" (d) NCPA and its Members inler.d to "rep are a Third Phase Agreement, as defmed h Member Service Agreement, into w}'1ich the terms ar.d conditions of this Serv.i.:e Schedui~ shall transfer upon app,oval of the Members and NCP A. (e) NCPA hereby declares tne N"tural Gas Procurement Program to be an NCP A Project. Section 2. Combus . .ti.on. Turblne ProiectnPartici,pants. The Project ParHtipants in the Combustion Turbine Project shall support. as operating expenses of the project, the obligations of NCPA, and reeei"e the entitlelr.ents to, the benefits of the contracts or other Tights (as third party beneficiaries), obtainE'd by KCPA pu.,uant to this Service Schedllie, in proportion to their respective Project Entitleme:1t Percentages. The Project Enti tlement Percentages of the Project Participants in the COIr.bustion Turbine Project. with respect to the obligations and entitlements of this Sen~ce Schedule, shall be adjusted proportionately to reflect execution and delivery of this Service Schedule by Members who are no! Project Participants in the Combustion Turbine Project, pursuant to sections 3 and 7 of this S€rvice Schedule (AdjustE'd Percentages). The Adjusted Percentages, if t.'1e City of Falo Alto and Iurlock L--rigation District execute and deliver this Service Schedule, shall be as shown in the column entitled "% Need PGT-ExP Bid" on I.!>le 4(a) if Palo Alto determines to tal<e 600 MMbtu/day and an additional !DOO MMbtu/ day, or Table 4(b} if Palo Alte de~ermines to take 700 MMbtu/day. Tables 4(a} and 4(b) are attached to and incorporated into this Service Sched·"le. -2- ,0 Section 3. MernbE-r_ Servl~ Asreement Particip.w.!..i. ~:[embers who are not. Project Participants in the Combustion Turbine Project may execute this Service Schedule and then they shall support the obligations of NCPA, a.nd receive the entitlements to, the benefits of t.1.e ccntracts or other rights (as third parly beneiiciaries), obtained by NCPA pursuant to this Service Schedule, in Adjusted Percentages up to 65.72 per-cent of the sum of the Project Entitlement Percentages in the CombUstion Turbine Project. and the obligations and entitlements of the Project Participants in the Co:nbustion Turbine Project, with respect to this Service Schedule only, shall be reduced proporti<m.:el y. SecUon 4. Authorization to Confl"act. (a) The General Manager is hereby authorized, on behalf of NCPA., to enter into contracts !W.d to take other actions to obtain rights to the transportation, storage, and supply of natural gas. (b) The Firm Transportation Service Agreement proposed between Pacific Gas Transportation Coml'''''Y and NCFA is hereby approved In the form attached to this Service Schedule at the meeting at which it was presented. (c) The General Manager shall present each contract to the NCPA Commission for its approval prior to the effective date or the date of rescission of each contract. Section 5. Third Phase Agreement. NCPA shall present 10 the Membe~s a Natura! Gas Procurement Program Third Phase Agreement to pool • ·i i1 gas trmsportation, supply, a.'1.d storage opportu.nities. Upon execution and delivery by Members which are sufficient to support the pa.yment of the obligations undertaken pursuant to this Service Sc."tedule, the Third Phase Agreement shall supersede this Service Schedule, ond the participants in U,e Natural Gas Procurement Program Third Phase Agreement shall succeed to the obligations and entitlements of this Sen-ice Schedule in accordance ",,;th the pa.rtidp~tion pe!cerltages established pursuant to this Sen;ce Schedule. It is the intention of the Project Participants In the Combustion Turbine Project and t..l-te Members that participation percentages in !he Natural Gas Procu.-ement Program Third Phase Agreement shail reflect !he Adjusted Percentages on Table 4(b) or Table 4(b), with provisions for pooling the benefits of the program, as the participants may agree. Section 6. Incorporation Into Member Service Apeem_ent. This Sen-ice Schedule is hereby incorporated in and atf.citod to the appropriate Member Service Agreemen I. SeeliOI'. 7. Member Execution. Any Member which is r.ot a Project Participanl in the Combustion Turbil".e Project who desires to benfJit from this Service Schedule shall evidence its agreement to partiop.te in !he obligations 3.Ild entitlements by resolution of its governing body, specifying its participation percentage and authorizing execution and delivery of this Service Schedule before the earlier of presentation of the Natural Gas Procurement Program Third Phase Agreement or April 24, 1991. • . , ;,. ; r· "0._ "-.' .'." o Section a Surplus Rights. NCPA .hall be, and hereby is, authorized 10 market any gas transponation, supply, or 5to~age rights surplus to the needs of the Combustion TllJ"bine Project Participants or the Members which exe=te this Servke Schedule. Section 9~ ,Binding Contract. As to !o.-fernbers wrJch execute-or approve this ServiCE' Schedu!e .. it is a binding contract, unconditi~na1 and absolute, whose term shall extend, and I10t be terminable for any . reason, until all of the obligations of NCPA under contracts entered hereunder, are extinguished or discharged. NORTHERN CALIFORNIA POWER AGENCY By ____ -= __ ~~----------- Its General Manager DATE: CITY OF PALO ALTO By ________________ _ Its DATE: TURLOCK lRRIGA nON DISlRICT By ________ _ Its DATE: -~ • " ," , .-.' . "'.. ---,~.,.,...",,- L .. I . " r-i .. Table 4(al '--' \,."./ !..; PG .. -Natural Ga. Pipeline Expansion NCPA's Open Season bid 7000MMbtu/d ~ (1991 costs) t Need Fix Addtr.l Total PGT-El<P FGT-EXP partio: • MMbtu/d MMbtu/d MMbtu/d Bid $100C/yr ------------------------->----------------------- AL 11.22t 673 0 E73 9.62% 185.7 B1 0.00\ a 0 a 0.00\ 0.0 GR 0.00\ a a 0 0.00\ 0.0 HE 1.7H 107 0 107 1.52\ 29.4 LD 12.11% 727 a 727 10.38\ 2CO.4 1,0 2.6'% 160 a 160 2.29\ 44 .1 PA 10.00% 600 1000 1600 22.86t 441.3 PS 0.00\ a 0 0 O.oot 0.0 RE 0.00\ a 0 a 0.00\ 0.0 RO 12.22\ 733 a 733 10.4at 202.3 SC O.oot 0 a 0 O.o?t 0.0 TO 0.00\ 0 a a 0.00\ 0.0 TID 50.00\ 3000 0 3000 42. E6t 827.5 UK O.oot 0 0 a 0.00\ 0.0 100.00\ 6000.0 1000 7000 100.00\ 1930.8 .. + --+--------- - --'-- ---- - - - - - - --+ - - - - - - - -------------- - ----+ ---------+ I Stiq Total Partie Total Partie TID in Bid? Phase II TID in Bid? Stiq Melded Phase Ir l=Yes Partie stig l.=Yes Partie Partie ------------------------~------------------------AL 22.45\ 1 22.45% 0.00\ 0.00\ 11.22% Br 0.00\ 0.00\ O.oot 0.00\ 0.00\ Gk 0.00\ 0.00\ 0.00% 0.00\ 0.00\ HE: 3.56% 1 l.S6\ 0.00\ 0.00\ 1.7st LO 24.22% 1 24.22\ 0.00\ O.oot 12.11% LC 5.33\ 1 5.33% 0.00\ 0.00\ 2.en PA 20.00% 1 20.00\ 0.00\ 0.00\ 10.00\ PS 0.00% 0.00% 0.00\ 0.00\ 0.00\ RE 0.00\ 0.00\ 0.00\ 0.00\ 0.00\ RO 24.44\ 1 24.44\ 0.00\ 0.00\ 12.22\ SC 0.00\ 0.00\ 0.00\ 0.00\ 0.00\ TO 0.00\ 0.00\ 0.00\ 0.00\ 0.00% TI 0.00\ 0.00% 100.00\ 1 100.00\ 50.00\ UK 0.00\ 0.00% 0.00\ 0.00\ O.oot 100. Oat 100.00\ 100.00t 100. oct 100.00t +--+--------------------------+--------------------------+---------+ I I I , Partie * Pet .. Natural G~s Pipeline Expansion NCPA's open Se:ison bid: "II 7000HKlJtlJjd (1991 cost.s) -t Need Addtnl Tctal PG'1'-EXP )!Mbtu/d MMbtujd MMbtu/d Bid F1l< PGT-ExP $lOOO/yr -------------.. -...... --------------------~--------- AL 11.221: 78. 0 78. 11. 221: 2H.1 B1 o.oot a 0 0 O.oot 0.0 <OR C.OOl 0 0 0 O.OOl 0.0 !IE l.78l 124 0 12. 1. 78\ 34.3 LO 12.11\ au 0 848 l2.1a 233.8 !.O 2.67\ 11' 0 187 2 •• 7% 51.S PA 10.0M; 100 0 700 10.00\ 193.1 PS o.oot 0 0 0 0.00\ 0.0 RE o.oot 0 0 0 o.oot 0.0 RO U.2H 856 a eS6 12.22% 236.0 sc o.oot 0 0 0 o.oot 0.0 TO o.oot 0 0 0 O.CO\ 0.0 TID 50.00t 3500 0 3500 50.00t 965.4 UK o.oot 0 0 0 0.00\ 0.0 100.00\ 7000 0 7000 100.00t 1930.8 • +--+--------------------------~--------------------------+---------+ '-L Bt Gl\ II! LI) 1.0 PA PS R£ RO SC 'I'D TI tJ1( stig Ph .. ". II ------- 22.45t 0.001 O.oot J.5n 24.22% 5.3H 20.00% O.oot O.oot 24.4H O.oot O.oot O.oot o.oot 100. DOt Partic in Bid? l=i"es ----.. -- 1 1 1 1 1 1 Total Phase II Partie ------- 22.45\- 0.00\ O.oot 3.50\ 24~22" 5.33t 20. DOt 0.00\ 0.00\ 24.'U 0.00\ O.OOt O.oot O.oot 100.00t TID Stig ------- O.oot 0.00% 0.00% 0.00\ 0.00% O~oo\" O.oot 0.00\ 0.00" O.oot O.oot O.oot 100.00t O.oot 100.00\ Partic in Bid? l=¥'e.s ------- 1 Total TIO Stig partic ------- O.oot O.OOl O.oot 0.001 O.oot O.oot O.oot O.oot O.oot O.OOl 0.60% O.OOl 100.00l o.oot 100.00t Melded Partie ------. 1.l.22% 0.00\ 0.00% 1. 7st 12.11% 2.67\ 10.00t 0.00\ O.oot 12.22t O.OOl O.oot 50. oat o.Oot 100.00t ~--?--------------------------+--------------------------+---------+ :~i ;)' .. ~---~ ........ " .•..... T • •• "'-.