HomeMy WebLinkAboutTransmission Agency of Northern California (TANC) 2014-07-01 ' , ('ol,�-,NQ l3 t�-t 4�,
.
LONG-TERM LAYOFF AGREEMENT
BY AND AMONG
THE
TRANSMISSION AGENCY OF NORTHERN CALIFORNIA
AND CERTAIN OF ITS MEMBERS
NAMELY
THE CITIES OF ALAMEDA,HEALDSBURG,LODI,LOMPOC,SANTA CLARA,AND UKIAH
THE PLUMAS-SIERRA RURAL ELECTRIC COOPERATIVE
AND
THE MODESTO IRRIGATION DISTRICT,THE TURLOCK IRRIGATION DISTRICT,AND
THE SACRAMENTO MUNICIPAL UTILITY DISTRICT
EXECUTION ORIGINAL
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TABLE OF CONTENTS
RECITAL S...............................................................................................................................1
AGItEEMENT.........................................................................................................................2
Section1. Definitions...........................................................................................................2
Section2. Effective Date and Term..........................................................:........................2
a. Effective Date.............................................................................................................2
b. Term.............................................................................................................................2
Section3. COTP Layoffs......................................................................................................2
a. Layoff of the LAYOFF ENTITIES' COTP Interests, Rights, and Obligations...2
b. Retum of the LAYOFF ENTITIES' Interests, Rights, and Obligations..............3
c. Layoff Quanrity..........................................................................................................3
d. Project Agreement No.3 Appendix C....................................................................3
e. Billings and Payments ..............................................................................................4
f. Addirions, Betterments, and Replacements...........................................................5
g. Default.........................................................................................................................7
h. Voting Rights..............................................................................................................8
Section4. Recall and Return Options...............................................................................9
a. Conditions for Exercising Recall Option................................................................9
b. Repayment Obligations if the LAYOFF ENTITIES Exercise Recall Option....10
c. Repayment Obligations if the DISTIZICTS Exercise Return Option................10
Section5. Market Payments..............................................................................................10
Section6. Debt Service Payments....................................................................................11
Section 7. No Assignment Without Consent.................................................................11
Section 8. Long-Term Layoff to Third Parties Not an Assignment...........................11
Section9. Dispute Resolution..........................................................................................12
a. Negotiarion...............................................................................................................12
b. Mediarion..................................................................................................................12
c. Additional Rights....................................................................................................13
i EXECUT'ION ORIGINAL
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Section10. Attorney Fees...................................................................................................13
Section11. California Law.................................................................................................13
Section12. Integrated Agreement....................................................................................13
Section 13. No Third Party Beneficiazies........................................................................13
Section 14. TANC Liability...............................................................................................14
Section 15. Notices..............................................................................................................14
Section16. Severability......................................................................................................14
Section17. Dischazge of Obligations..............................................................................14
Section18. Modifications..................................................................................................15
Section 19. Counterparts/Electronic Delivery.................................................................15
ii EXECUTION ORIGINAL
.
This Long-Term Layoff Agreement ("Agreement") is entered into by and among
the Transmission Agency of Northem Califomia, a Califomia public entity and joint
powers agency ("TANC"), and certain of its members,namely the City of Alameda
(ALAMEDA), City of Healdsburg(HEALDSBURG), City of Lodi (LODI), City of
Lompoc (LOMPOC), City of Santa Clara (SANTA CLARA), and City of LTkiah
(UKIAH), and the Plumas-Sierra Rural Electric Cooperative (PLUMAS), referred to as
"LAYOFF ENTITIES" in this Agreement and the Modesto Irrigation District
(MODESTO), the Turlock Irrigation District (TURLOCK), and the Sacramento
Municipal Utilities District (SMUD), referred to as "DISTRICTS" in this Agreement,
with references to each entity individually and collectively as "Party"or"Parties° in
this Agreement, as of the Effective Date, defined in Section 1 of this Agreement,with
regard to the following:
RECITALS:
A. The LAYOFF ENTITIES and the DISTRICTS are each Participants in and parties
to TANC Project Agreement No. 3, entered into as of March 1, 1990.
B. Pursuant to Section 7.1 of TANC Project Agreement No. 3, the LAYOFF
ENTITIES each desire to make their entitlement, or portion of their entitlement to
TANCs Transfer Capability on the Califomia-Oregon Transmission Project
("COTP"), in their respective Participation Percentages, available to a Participant
(hereinafter 'layoff") in accordance with the terms and conditions relating to
layoffs by Participants under the Intertie Agreements, under TANCs Long-Term
Layoff Procedures, and this Agreement.
C. The DISTRICTS are willing to accept the LAYOFF ENTITIES' Participation
Percentages, subject to this Agreement, of TANCs entitlement to Transfer
Capability on the COTT'.
D. This Agreement does not include the layoff of allocarions held by the LAYOFF
ENTITIES pursuant to the South of Tesla Agreement ("SOT Agreement") and
therefore no costs associated with the SOT Agreement will be incurred by the
DISTRICTS and the DISTRICTS shall not incur any costs associated with the SOT
Agreement under this Agreement.
NOW THEREFORE, in consideration of the premises described in the recitals, and in
consideration of the terms, covenants, and conditions that are set out below, the Parties
have entered into this Agreement.
1 EXECUTION ORIGINAL
AGKEEMENT:
Section 1. Defulirions.
All capitalized terms used herein are set forth and defined in ATTACHMENT A
to this Agreement.
Section 2. Effective Date and Term.
a. Effective Date.
This Agreement shall become effective and enfarceable on July 1, 2014
(hereinafter "Effective Date").
b. Term.
The term of this Agreement shall be twenty-five (25)years commencing
on the Effective Date and terminating at 0000 hours Pacific Prevailing
Time on the day before the 25u anniversary of the Effective Date, unless
the Parties mutually agree in writing to extend the term of the Agreement
for another five (5) years (hereinafter "Term").
Section 3. COTP La,�j offs.
The LAYOFF ENTITIES and their respective ParHcipation Percentages ("Layoff
Percentages') laid off pursuant to this Agreement are as follows: ALAMEDA-
1.2272 percent;HEALDSBURG-0.2456 percent;LODI- 1.9201 percent;
LOMPOC -0.1865 percent;PLUMAS-0.1479 percent; SANTA CLARA (exclusive of its
Vemon acquisition)-10.4706 percent;and UKIAH-0.1945 percent.
a. Lavoff of the LAYOFF ENTITIES' COTP Interests, Ri�hts, and
Obligations.
Except as otherwise set forth in this Agreement, on the Effective Date, and
for the Term of this Agreement, the LAYOFF ENTITIES hereby lay off and
relinquish to TANC 100 percent of the LAYOFF ENTITIES' layoff
percentage use of their interests, rights, and obligations under TANC
Project Agreement No. 3, except their interests, rights, and obligarions in
the event of a default pursuant to Section 6 of Project Agreement No. 3
and this Agreement, associated with the LAYOFF ENTITIES' Layoff
2 EXECUTION ORIGINAL
Percentages in TANC's entitlement to Transfer Capability on the COTT'.
TANC hereby transfers at that instant: i) 19990 Participation Percentage in
TANCs entitlement to Transfer Capability on the COTP to MODESTO;
u) 3.2383 Participation Percentage in TANC's entitlement to•Transfer
Capability on the COTT'to TURLOCK;and iii) 9.3550 Participation
Percentage in TANC's entitlement to Transfer Capability on the COTP to
SMUD. MODESTO, TURLOCK, and SMUD hereby accept and assume at
that instant for the Term of this Agreement the use of the LAYOFF
� ENTITIES' interests, rights, and obligations under the provisions of TANC
Project Agreement No. 3 associated with the Layoff Percentages under
this Agreement.
b. Return of the LAYOFF ENTITIES' Interests. Rights, and Obligations.
Unless earlier relinquished because of a default under tkris Agreement by
MODESTO, TURLOCK and/or SMUD,upon the end of the last hour of the
last day of the Term of this Agreement, all of the LAYOFF ENTITIES
interests, rights, and obligations in the LAYOFF ENTITIES' Layoff
Percentages laid off under this Agreement, adjusted for any changes in
such Participation Percentages during the Term of tkus Agreement
(presently 14.3923 percent of TANC's COTP Entitlement as of the Effecrive
Date of this Agreement) under TANC Project Agreement No. 3, shall
automatically and without any action of the Parries be relinquished by
MODESTO, TURLOCK, and SMUD through TANC to the LAYOFF
ENTITIES, and the LAYOFF ENTTTIES hereby accept their interests,
rights, and obligarions at that instant in the future.
c. �off OuantitX.
The sum of the layoffs shall be known as the "Layoff Quanrity."
d. Project Aareement No. 3 A��endix C.
The TANC Commission by resolurion approving this Agreement,has
approved a revised version of APPENDIX C of TANC Project Agreement
No. 3, showing the effect of the layoffs on the Participation Percentages of
the LAYOFF ENTITIES and the DISTRICTS during the Term of this
Agreement, for the purposes of delineating voting rights,billings, and
obligarions during the Term of this Agreement. The version of
APPENDIX C approved by the TANC Commission and attached to and
3 EXECUTION ORIGINAL
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incorporated into this Agreement as ATTACHMENT B has been created
solely for the convenience of the Parries, and does not affect the interests,
rights, or obligarions of the LAYOFF ENTITTES if the DISTRICTS were to
default in their obligations under this Agreement. Notwithstanding
anything to the contrary in this Agreement, title to the interests, rights and
obligarions of the LAYOFF ENTTTIES in their respective Participation
Percentages shall remain vested in the LAYOFF ENTIT'IES during the
Term of this Agreement, while the right of use of those interests, rights,
and obligations shall be vested in the DISTRICTS in their respective
Layoff Percentages acquired hereunder. Nothing in this Agreement is
intended to alter or amend any interest, right or obligation of any
Participant under TANC Project Agreement No. 3. The failure to give due
and timely notice of a default or potenrial default pursuant to Section 3(i)
of this Agreement shall not absolve the obligarion of any Party to this
Agreement to comply with its responsibilities under TANC Project
Agreement No. 3. Regardless of any default on the part of the
DISTRICTS, the LAYOFF ENTITIES shall not be excused from their
respective obligations under TANC Project Agreement No. 3.
e. Billings and Pavments.
During the Term of this Agreement, and in the absence of a default under
this Agreement by the DISTRICTS, all billings and payments shall be
made in accordance with the provisions of TANC Project Agreement
No. 3, with ATTACHMENT B of this Agreement employed by TANC to
assure that, in the absence of a default by the DISTRICTS, the LAYOFF
ENTITIES will not be billed for any TANC Project Agreement No. 3 costs
associated with the Layoff Percentages laid off under this Agreement,
including but not limited to TANC Project Agreement Operations and
Maintenance ("O&M") Costs, TANC Project Indebtedness,Debt Service,
or TANC Capital Improvement Costs associated with the Layoff
Percentages laid off under this Agreement;provided,however, that the
LAYOFF ENTITIES shall remain responsible under the TANC Joint
Powers Agreement for any costs unrelated to TANC Project Agreement
No. 3. During the Term of this Agreement, TANC shall bill the
DISTRICTS, and the DISTTtICTS shall pay, for TANC Project Agreement
No. 5 costs, expenses, fees, and charges otherwise allocable to the
LAYOFF ENTITIES pursuant to Section 3 of TANC Project Agreement No.
5 for the Layoff Percentage of TANC's enritlement to Transfer Capability
4 EXECUTION ORIGINAL
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on the COTP laid off to the DISTRICTS in this Agreement pursuant to the
percentages contained in ATTACHMENT C.
f. Additions, Betterments, and Replacements.
(i) Use of Additions, Betterments, and Replacements during Term
of Agreement. ,
Additions, Betterments, and Replacements, as defined in TANC
Project Agreement No. 3, approved by TANC during the Term of this
Agreement with respect to the use of the acquired shares of the COTP
interests, rights, and obligations laid off to the DISTRICTS under this
Agreement, shall be available for the DISTRICTS' sole use and at their sole
expense during the Term hereof.
(ii) Responsibility For and Use of Betterments at End of the Term
of this Agreement.
At the end of the Term of this Agreement, the DISTRICTS shall be solely
and severally responsible for the Layoff Percentages of Betterments
approved, paid for, or financed by them during the Term of this
Agreement, and the Layoff Percentages of such Betterments shall remain
available for their sole use and benefit for the life of the COTP.
(iii) Responsibility For and Use of Additions that Exceed the
Adjusted Cost Index at End of the Term of this Agreement.
At the end of the Term of this Agreement, the DIST'RICTS shall be solely
and severally responsible for the Layoff Percentages of Addirions
approved and financed by them that exceed the adjusted cost index
defined in Section 3.1.2.2.2 of TANC Project Agreement No. 3 (hereinafter
"Adjusted Cost Index"). Such Layoff Percentages of such Addifions,
adjusted for any changes in such Layoff Percentages during the Term of
this Agreement for the life of the COTP, shall remain available for the
DISTRICTS' sole use and benefit for the life of the COTP.
5 EXECUTION ORIGINAL
(iv) Kesponsibility For and Use of Additions Up to the Adjusted Cost
Index at End of the Term of this Agreement.
At the end of the Term of this Agreement, the LAYOFF ENTITIES shall be
solely and severally responsible for the Layoff Percentages of Addirions
approved by TANC during the Term of this Agreement in an amount up
to the Adjusted Cost Index, and the Layoff Percentages of such Additions
shall be available for their sole use and benefit in their respective Layoff
Percentages, adjusted for any changes in such Layoff Percentages during
the Term of this Agreement for the life of the COTP. For the purposes of
clarification, to the extent that an Addition exceeds the Adjusted Cost
Index, the LAYOFF ENTITIES shall be responsible for any amount up to
the Adjusted Cost Index pursuant to this subsection 3(�(iv), and the
DISTRICTS, as applicable shall be responsible for,the remaining amount
that exceeds the Adjusted Cost Index, in accordance with subsection
(3)(fl(iii).
(v) Responsibility For and Use of Replacements at End of the Term of
this Agreement.
At the end of the Term of this Agreement, the LAYOFF ENTITIES shall be
solely and severally responsible for the Layoff Percentages of
Replacements approved by TANC during the Term of this Agreement.
Such Layoff Percentages of such Replacements shall be available for their
sole use and benefit in their respective Layoff Percentage, adjusted for any
changes in such Layoff Percentages during the Term of this Agreement for
the life of the COTP.
(vi) Allocation of Capital Costs and Associated Financing Costs.
The Parties agree that the capital costs and associated financing costs of
any portions of Additions that do not exceed the Adjusted Cost Index and
all Replacements put into service during the Term of this Agreement shall
be allocated on a straight-line financial basis over the expected useful life
of such Additions and Replacements. Capital costs and associated
financing costs, and the expected useful life of such Additions and
Replacements, shall be determined at the time the Addirions and
Replacements are put into service.
( EXECUTTON ORIGINAL
(vii) Payment of True-Up Adjustments.
If the expected useful life of any portions of Additions that do not exceed
the Adjusted Cost Index and all Replacements put into service during the
Term of this Agreement extend beyond the Term of this Agreement, the
Parries agree to make "true-up adjustments' via true-up payments for the
capital costs and associated financing costs paid or incurred for such
Additions or Replacements put into service during the Term of this
Agreement. The "true-up adjushnents" will be based on the cost
differences between the costs calculated on a straight-line financial basis
and the actual payment method(s) used. Upon the end of the Term of this
Agreement the Parties shall make such true-up payments to each other, as
calculated in accordance with subsection 3(�(viii)below, to effect their
mutual intenrion that costs for such Additions and Replacements with
long lives be allocated among the Parties on a straight-line financial basis.
These true-up payments will effect the required true-up adjustments
referenced above.
(viii) Calculation of True-Up Adjustments.
Prior to the end of the Term of this Agreement,unless the Parties
othenvise agree, TANC shall determine from its books and records, and
recommend to the Parties an allocation of the capital costs and associated
financing wsts for any portions of Additions that do not exceed the
Adjusted Cost Index and all Replacements during the Term of the
Agreement that have been (aa) paid or incurred during the Term of the
Agreement plus (bb) those that remain to be paid beyond the Term of the
Agreement. The true-up adjustments shall be calculated by TANC in a
manner consistent with the examples in ATTACHMENT D,which are
incorporated herein by reference. Any disagreement regarding the
calculation of the trtxe-up adjusrinents shall be resolved by the TANC
Commission.
g. Default.
In the event of a default by any of the DISTRICTS under this Agreement,
TANC shall immediately and simultaneously notify each of the Parties in
accordance with the provisions of Section 15 of this Agreement. If a
default remains uncured for twenty (20) days after the date notice is first
given under Secrion 15, then the LAYOFF ENTITIES shall cure any
'7 EXECUTTON ORIGINAL
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monetary default not later than three (3)business days following the 20w
day. Upon the LAYOFF ENTIT'IES' complerion of the cure of a monetary
default or, in the instance of a non-monetary default arising out of a
breach of Sections 5 or 6,below,by any of the DISTRICTS that remains
uncured for twenty (20) days after the date notice is first given under
Section 15 use of the interests, rights, and obligaHons laid off shall be
automatically relinquished to the LAYOFF ENTITIES at that instant, and
without any action of the Parties. TANC shall provide norice of the default
to each of the Parties to this Agreement,but TANC shall have no
responsibility to otherwise respond to the default.
h. Voting Rights.
During the Term of this Agreement:
(i) The LAYOFF ENTTTIES shall not have any rights to vote on any
matter related to TANC Project Agreement No. 3 during the layoff
of their Layoff Percentages;provided,however,that the LAYOFF
ENTITIES shall retain voting rights related Additions and
Betterments to be considered for approval under TANC Project
Agreement No. 3,but the percentage of such vote will be zero (0)
percent in order to fulfill the meaning of Opposing Member.
Absent any vote to the contrary, the vote of the LAYOFF ENTITIES
shall be deemed to be a "no" vote. The LAYOFF ENTITIES shall
retain voting rights associated with any Participation Percentages
not transferred by this Agreement,or any other Agreement.
(ri) In the event of a default under this Agreement by any of the
DISTRICTS, the defaulting Party may not vote on any matter
related to TANC Project Agreement No. 3 with respect to the use of
their acquired shares of the COTP interests, rights, and obligations
laid off to them under this Agreement. The Parties adversely
affected by the default may vote on any matter related to TANC
Project Agreement No. 3 with respect to their shares of the COTP
interests, rights, and obligations that were laid off to the defaulting
Party under this Agreement.
(iii) Any new TANC program or project shall be governed by the
agreements that pertain to such programs or projects.
g EXECUTION ORIGINAL
Section 4. Recall and Return Options.
a. Conditions for Exercising Recall O�tion or Return O�tion.
During the Term of this Agreement, based upon the events set forth in this
Secrion 4, any of the LAYOFF ENTITIES shall have the option to recall and
any of the DISTRICTS shall have the right to return up to fifty (50)percent
of their share of the Layoff Quanrity (respectively "Recall Option' or
"Retum OpHon'). Parties acknowledge the potential impact that
exercising the Recall Option or Retum Option might have on the non-
exercising Parties, and therefore, to the extent commercially and legally
practicable, Parties agree to use reasonable efforts to provide advance
notice that they are intending to exercise such an option.
The Recall Option or Return Option shall be effective upon the later of one
year s written notice or the actual effective date/occurrence (respectively
"Recall Effective Date" or"Retum Effective Date") of one of the following
events:
(i) Dissolution of the Califomia lndependent System Operator
Corporation ("CAISO"), or any successor Independent System
Operator ("ISO") or Regional Transmission Operator ("RTO");
(ii) Relocation of the LAYOFF ENTITIES to a different Balancing
Authority, excluding the CAISO Balancing Authority, or any
successor ISO or RTO;
(iii) Elimination or change to Integrated Balancing Authority Area
("IBAA") pricing in a manner that would allow the LAYOFF
ENTITIES to realize a value for transactions utilizing the COTP.
For purposes of this provision, entering a Market Efficiency
Enhancement Agreement with the CAISO shall not constitute a
"change to IBAA pricing."
(iv) Termination of BANC or its successor or the execution of an
agreement by the DISTRICTS to parHcipate in the CAISO in a
manner that provides for a retum on all or a portion of the Layoff
Quantity. For purposes of this provision, "to participate in the
CAISO in a manner that provides for a return on all or a portion of
the Layoff Quantity" means that the DISTRICTS enter into a
9 EXECUTION ORIGINAL
Transmission Control Agreement with the CAISO and recover an
authorized rate of retum on all or a portion of the Layoff Quantity
through CAISO transmission or wheeling access charges,or their
equivalents. This shall only apply to the Layoff Percentage of the
entity electing to participate in the CAISO, as described in this
Secrion.
b. Revavment Obligations if any of the LAYOFF ENTITIES Exercise the
Recall Option.
In the event of any of the LAYOFF ENTTfIES exercise of the Recall Option
for a portion of the Layoff Quantity, the LAYOFF ENTITIES shall be liable
to repay all Debt Service Payments and TANC Project O&M Costs and
TANC Administrative and General Expenses ("TANC A&G Expenses')
incurred by the DISTRICTS, associated with the Layoff Percentages under
this Agreement,up to the Recall Effective Date with respect to a1L or a
portion of the Layoff Quantity on or before the date the recall occurs, or at
a time and duration as mutually agreed to by the PART'IES, and assume
all Debt Service Payments and TANC Project O&M Costs and TANC
A&G Expenses for the recalled portion of the Layoff Quantity from the
Recall Effective Date forward.
c. Renavment Obligations if any of the DISTItICTS Exercise the Retum
O�tion.
In the event any of the DISTRICTS elect to exercise the Return Oprion for a
portion of the Layoff Quanrity, the DISTRICTS shall continue to pay Debt
Service Payments, as defined in Section 6 of this Agreement, on the entire
portion of the Layoff Quantity until no additional Debt Service Payments
are required to pay back the Debt Service in place as of the date this
Agreement is executed by the Parties. The DISTRICTS shall be relieved of
TANC Project O&M Costs and TANC A&G Expenses for the retumed
portion of the Layoff Quantity from the Retum Effective Date forward.
Section 5. Market Pa�ments.
Starting May 1, 2024, and on each May 1 thereafter, the DISTRICTS shall pay the
LAYOFF ENTITIES, in aggregate, an annual fixed premium of$1,752,000 far the
remainder of the term of the Layoff. This payment will be administered by TANC.
10 EXECUTION ORIGINAL
Section 6. Debt Service Payments.
The DISTRICTS shall be solely and severally liable, shall assume, and hereby
agree to pay and retire the debt service issued pursuant to TANC Project Agreement
No. 3 in connection with the Layoff Percentages of the LAYOFF ENTTTIES ("Debt
Service Payments"), and in accordance with the DISTRICTS' Layoff Percentage of
TANCs Entiflements to Transfer Capability on the COTP, as defined in Section 3(a) and
3(c) of this Agreement. Timing of the payoff of such Debt shall be at the option of the
DISTRICTS,provided that at the end of the term of the Layoff the Layoff Entities will
have reiumed, to them, their Layoff Percentages without any TANC Project Agreement
No. 3 Debt associated with the Layoff Percentages that existed as of the execution date
of this Agreement.
Section 7. No Assi�nment Without Consent.
During the Term of this Agreement, the DISTRICTS shall not assign the rights to
the use of the interests, rights, or obligations of the LAYOFF ENTITIES acquired
pursuant to this Agreement, or delegate any obligations that have been undertaken by
the DISTRICTS pursuant to this Agreement, including but not limited to the obligation
to pay as set forth in this Agreement and the obligarions set forth in Sections 7 or 8, to
any enrity, including but not limited to a TANC Member (hereinafter "Assign" or
"AssignmenY'),without the advance written consent of the respective boards,
commissions and/or councils with requisite authority (hereinafter"Council") of TANC,
the LAYOFF ENTIT'IES, or their authorized representatives. The Parties agree that such
consent shall not be unreasonably withheld and further agree that best efforts shall be
utilized by the Parties to bring the issue of a proposed Assignment to Council within
ninety (90) days following the Parties' receipt of written norice requesting permission to
Assign. It is the intent of the Parties that any proposed Assignrnent by the DISTRICTS
must result in a complete assumption of that which was acquired by the assigning Party
under this Agreement. Parrial Assignments by the DISTTZICTS are expressly prohibited.
Section 8. Lon -T� erm Lavoff to Third Parties Not an Assi�nment.
To the extent that any of the DISTRICTS, as applicable (hereinafter "Layoff
Party") intend to layoff or transfer the use of the interests, rights, and obligations
received from the LAYOFF ENTITIES under this Agreement to a third party
("Acquiring Party") for a period of more than one (1) year, and such layoff or transfer is
not otherwise an Assignment as defined and discussed in Section 7 of this Agreement,
and provided the conditions of Sections 7.1, 7.2, and 7.4 of TANC Project Agreement
No. 3 have been satisfied and pursuant to the requirements of TANC's Long Term
11 EXECUTION ORIGINAL
Layoff Procedures, the Layoff Party shall do all of the following: 1) provide written
notice to the LAYOFF ENTITIES and TANC prior to the effective date of such layoff;2)
include in its layoff agreement with the Acquiring Party provisions specifying: i)that
such layoff agreement shall be terminated immediately upon a default under this
Agreement by the DISTIZICTS, as applicable, that remains uncured for twenty (20) days
after the date norice is first given under Section 13;ii) that the Acquiring Party is not a
third-party beneficiary of this Agreement between the LAYOFF ENTTTIES on the one
hand and the DISTRICTS, as applicable, on the other; and 'ui) that the Acquiring Party
shall have no recourse against the LAYOFF ENTITIES and TANC in the event of a
default by the DISTRICTS under this Agreement and the layoff agreement; and 3)
provide the LAYOFF ENTITIES and TANC with a copy of the executed layoff
agreement.
Section 9. Disoute Resolution.
In the event of any controversy or claim between the Parties, whether based in
contract, tort or otherwise, arising out of,based upon, or relating to this Agreement,
except for any controversy or claim based upon a default of the obligations to make
payments as set forth in Sections 3 of this Agreement or a breach of the obligations set
forth in Sections 7 or 8 of this Agreement(hereinafter "Dispute"), the Parties shall
attempt to resolve such Dispute in the following manner:
a. Negoriation.
The Parties shall attempt in good faith to resolve the Dispute prornptly by
negotiations between duly authorized representatives of the Parties who
have authority to resolve the Dispute. When a Party believes there is a
Dispute, that Party shall give the other Party written notice describing the
Dispute with reasonable particularity. Within fifteen (15) calendar days
following the receipt of such norice, the receiving Party shall submit a
written response to the noricing Party. The authorized representatives
shall meet in person and attempt to resolve the Dispute.
b. Mediation.
If the Dispute is not resolved within fifteen (15) calendar days following
receipt of the receiving Party's response given pursuant to subsection (a),
above, or such additional time, if any, that the Parties mutually agree in
writing,the Parties shall try in good faith to resolve the Dispute by
mediation. The form of inediation and the mediator selected to mediate
12 EXECUTION ORIGINAL
the Dispute shall be acceptable to both Parties,which acceptance shall be
confirmed by the Parties in writing.
c. Additional Rights.
If the Dispute is not resolved through mediation within ninety (90)
calendar days of the noticing Party's written notice of the Dispute
pursuant to subsection (a) above, or such additional time, if any, that the
Parties mutually agree to in writing, the Party or Parties involved in the
dispute shall be free to pursue any and all legal and equitable actions or
remedies.
Section 10. Attomey Fees.
In any mediation, arbitration, or litigation to enforce or defend any interest, right,
or obligation of this Agreement, the prevailing Party shall be entitled to an award of
reasonable attomeys' fees and other litigation expenses.
Section 11. California Law.
This Agreement was made in and will be performed in California, and the law of
Califomia shall apply in the interpretation and enforcement of this Agreement.
Section 12. Integrated Agreement.
This Agreement is the whole, integrated agreement of the Parties, superseding
prior negoriations. This Agreement does not amend TANC Project Agreement No. 3 in
any respect. In the event of any conflict between this Agreement and TANC Project
Agreement No. 3, the provisions of TANC Project Agreement No. 3 shall control. If
there is a conflict betcveen this Agreement and the Long-Term Layoff Procedures, this
Agreement shall prevail.
Section 13. No Third-Party�Beneficiaries.
There are no third-party beneficiaries to this Agreement, and this Agreement
shall not impart any rights enforceable by any person or entity that is not a Party to this
Agreement.
13 EXECUTION ORIGINAL
Section 14. TANC LiabIlitv.
TANC and its officers, agents, and employees, as well as the other members and
commissioners of TANC (hereinafter "Indemnitees"), undertake no legal liability to the
Parties to this Agreement and each Pazty releases,holds harmless, and covenants not to
sue the Indemnitees for any cause, claim, injury, damage, or death arising from a
negligent act or omission of an Indemnitee in connecrion with this Agreement.
Section 15. Notices.
Notices required under this Agreement shall be given by TANC to each Party to
this Agreement using all of the four following methods on the same day,if possible:
facsimile, email, ovemight delivery, and a personal phone call from the TANC General
Manager to each Chief Executive Officer of each Party.
Contact information for the purposes of notice for each Party shall be maintained
by TANC as ATTACHMENT E of this Agreement, attached to and incorporated herein.
Each Party shall be responsible for maintaining current contact information with
TANC.
Section 16. Severabilitv.
�Any provision of this Agreement determined by a court of competent
jurisdiction to be invalid shall not be severed from this Agreement if severance would
materially adversely affect any Party, and if any Party in good faith concludes that
severance would result in materially adverse consequences, such Party may give norice
under the notice provisions hereof, that this Agreement shall terminate on a date all of
the Parties consider appropriate, and if no agreement is reached on an appropriate early
termination date, then at the last hour of the day that is one hundred and twenty (120)
days after the date notice was first given.
Section 17. Discharge of Obli�,ations.
All obligations unsatisfied at the end of the Term of this Agreement shall be
promptly discharged by the responsible Party.
14 EXECUTION ORIGINAL
Section 18. Modifications.
This Agreement may only be modified or amended in writing by the Parties
following receipt of all necessary approvals. Approvals and consents shall not be
withheld unreasonably.
Section 19. Counter�arts/Electronic Deliv�.
This Agreement may be signed in counterparts, each of which shall be deemed
an original but all or which together shall constitute one and the same instrument. This
Agreement may be executed and delivered by facsunile or electronic transmission and
the Parties agree that such facsimile or electronic (PDF) execurion and delivery shall
have the same force and effect as delivery of an original document with original
signatures, and that each Party may use such facsimile or electronic signatures as
evidence of the execution and delivery of this Agreement by the Parties to the same
extent that an original signature could be used.
15 EXECUTION ORIGINAL
TRANSMISSION AGENCY OF ALAMEDA MUNICIPAL POWER
NORTHERN CALIFORNIA
By: � �• � By:
its: G� ,��� s�✓�,�-��,-� its:
Dated: -S'�n a /6 . zoL� Dated:
�
CITY OF HEALDSBURG CITY OF LODI
By: sy:
Its: Its:
Dated: Dated:
CITY OF LOMPOC PLUMAS-SIERRA RURAL
ELECTRIC COOPERATIVE
By: By:
Its: Its:
Dated: Dated:
CITY OF UKIAH CITY OF SANTA CLARA
By: By:
Its: Its:
Dated: Dated:
16 EXECUTION ORIGINAL
TRANSMISSION AGENCY OF ALAMEDA MUNICIPAL POWER
NORTHERN CALIFORNIA
By: By:--���'��
Its: Its:
Dated: Datped:p '� /'�/�`�---
�J '\�(/�� .,� ]Z� -��J�n'i �
>
CITY OF HEALDSBURG CITY F LOD� f��v'�� ��`°� �,e,r/�,
By: By:
Its: Its:
Dated: Dated:
CITY OF LOMPOC PLUMAS-SIERRA RURAL
ELECTRIC COOPERATIVE
By: By:
Its: Its:
Dated: Dated:
CITY OF UKIAH CITY OF SANTA CLARA
By: By:
Its: Its:
Dated: Dated:
16 EXECUTION ORIGINAL
TRANSMISSION AGENCY OF ALAMEDA MUNICIPAL POWER
NORTHERN CALIFORNIA
By: By:
Its: Its:
Dated: Dated:
TY OF HEALDSBURG CITY OF LODI
By: By:
Its: Its:
Dated: � �7 �� Dated:
CITY OF LOMPOC PLUMAS-SIERI�1 RURAL
ELECTRIC COOPERATIVE
By: By:
Its: Its:
Dated: Dated:
CITY OF UKIAH CITY OF SANTA CLARA
By: By:
Its: Its:
Dated: Dated:
16 EXECUTION ORIGINAL
TRANSM[SSION AGENCY OF AI.AMEDA MUNICIPAL POWER
NORTHERN CALIFORNIA
By: By:_
lts: Its:
Dated: Dated:
CITY OF HEALDSBURG CITY OF LODI
---��
By: By: ,
Its: Its: Inter'm ity Man r
Dated: Dated: �� f � ��
APPRO AS 0 FORM: . AT E •
���
�Jan'ce D. Ma dich Int.City Att. Ran i Johl-01sor
CITY OF LOMPOC F�.U��' A R�I2AL tJ/ City Clerk
ELECTRIC COOPERATIVE
By: By:
Its: Its:
Dated: Dated:
CITY OF UKIAH CITY OF SANTA CLARA
By: By:
Its: Its:
Dated: Dated:
16 EXECUTION ORIGINAL
TRANSMISSION AGENCY OF ALAMEDA MUNICIPAL POWER
NORTHERN CALIFORNIA
By: By:
its: its:
Dated: Dated:
CITY OF HEALDSBURG CITY OF LODI
By: By:
its: 1ts:
Dated: Dated:
CITY OF LOMPOC PLUMAS-SIEI2RA RURAL
ELECTRIC COOPERATIVE
By: � � By:
Its: M�YY°R Its:
Dated: �6 Dated:
CITY OF UKIAH CITY OF SANTA CLARA
By: By�
Its: Its:
Dated: Dated:
16 EXECUTION ORIGINAL
TRANSMISSION AGENCY OF ALAMEDA MUNICIPAL POWER
NORTHERN CALIPORNIA
By: By:
Its: Its:
Dated: Dated:
CITY OF HEALDSBURG CITY OF LODI
By: By:
Its: Its:
Dated: Dated:
CITY OF LOMPOC PLUMAS-SIERRA RURAL
ELECTRIC COOPERATIVE
By: By:
� ✓
Its: Its:�e�2ca�T'^�o�c�C£Z7
Dated: Dated: t'*1�i.�cA d-1� a01�-{
CITY OF UKIAH CITY OF SANTA CLARA
By: By:
Its: Its:
Dated: Dated:
16 EXECUTION ORIGINAL
TRANSMISSION AGENCY OF ALAMEDA MUNICIPAL POWER
NORTHERN CALIFORNIA
By: By:
Its: Its:
Dated: Dated:
CITY OF HEALDSBURG CITY OF LODI
By: By:
Its: Its:
Dated: Dated:
CITY OF LONII'OC PLUMAS-SIERRA RURAL
ELECTRIC COOPERATIVE
By: By:
I�: Its:
Dated: Dated:
CITY OF UKIAH CITY OF SANTA CLARA
By, / By:
Its: Ct+..� M. �er- Its:
D ✓` �� � Dated:
1( EXECUTION ORIGINAL
TRANSMISSION AGENCY OF ALAMEDA MUNICIPAL POWER
NORTHERN CALIFORNIA
By: By:
rts: ics:
Dated: Dated:
CITY OF HEALDSBURG CIT'Y OF LODI
By: By:
Its: Its:
Dated: Dated:
CITY OF LOMPOC PLUMAS-SIE1Z1tA RURAL
ELECTRIC COOPERATIVE
By: By�
Its: Its:
Dated: Dated:
CITY OF UKIAH CITY OF SANTA CLARA
�
By; By: �� � U
Its: Its � ` � �
Dated: Dated: �IZXI �U� <x' �
APPROV&D AS TO PORM:
SANTA CtARA CITY ATTORNEY'S OFFICB
,�,�r�a-� ���--
LINDSAY BEA , DEPUTY CITY ATTORNEY
16 EXECUTION ORIGINAL
MODESTO IIZRIGATION DISTRICT TURLOCK IIZffiGATION DISTRICT
By: By:
Its: General ager Its:
Dated: v/o/i� Dated:
SACRAMENTO MUNICIPAL
UTILTTY DISTRICT
By:
Ics:
Dated:
17 EXECUTION ORIGINAL
MODESTO IRRIGATION DISTRICT TURLOCK IRRIGATION DISTRICT
�
BY� : James 1 . arrar
ItS: tS: Director, Energy Markets
Dated: Dated: May 22,2014
SACRAMENTO MUNICIPAL
UTILITY DISTRICT
By:
Its:
Dated:
17 EXECUTION ORIGINAL
MODESTO IRRIGATION DISTRICT TURLOCK IRRIGATION DISTRICT
By: By:
res: its:
Dated: Dated:
SACRAMENTO MUNICIPAL
UTILITY IS ICT
By: I
��y� rts: €�y4� �Gm ' /
l�D Dated: � I � �LO i N'
r
17 EXECUTION ORIGINAL
,
ATTACHMENT A
DEFINITIONS
Acquiring Parly
Has the meaning set forth in Section 8 of this Agreement.
Additions
A new facility, other than a Betterment or Replacement that is added to the Project, together
with associated land rights,if any.
Adjusted Cost Index
Has the meaning set forth in Section 3.1.2.2.2 of TANC Project Agreement No.3.
Agreement
This Long-Term Layoff Agreement, as it may be amended time to time.
Annual Fixed Payment
Has the meaning set forth in Secrion 5 of this Agceement.
Annual TANC Budget
The annual budget approved by the TANC Commission which provides for all TANC activities
as a joint powers agency,including TANC's share of any joint obligations arising from the
Agency's participation in projects such as the COTP,expenses associated with related debt
service obligations, transmission service costs incurred on behalf of TANC Members, and
operarion costs for the Agency.
Balancing Authority
The responsible entity that integrates resource plans ahead of time,maintains load-interchange-
generafion balance within a Balancing Authority Area, and supports Interconnecfion frequency
in real time.
Betterment
A new facility,other than a Replacement,together with associated land rights,if any,which will
increase the Rated Project Transfer Capability" (as that term is defined in the Intertie
Agreements) above the then-current Rated Project Transfer Capability or sixteen hundred (1600)
megawatts,whichever is less.
CAISO
The California lndependent System Operator Corporarion, or its successor.
A-1 EXECUTION ORIGINAL
.
CAISO Tariff
The California lndependent System Operator Corporation Operating Agreement and Tariff,
dated Mazch 31, 1997,as modified or amended from time to fime.
Debt
Indebtedness.
Debt Service
With respect to any period, the aggregate of the amounts required by each Indenture to be paid
during said period into any fund or account created by the Indenture for the sole purpose of
paying or providing reserves for paying the principal(including sinking fund installments) of
and premium,if any, and interest on all the Indebtedness from time to time outstanding;
provided,however,that Debt Service shall not include any amounts on account of accelerarion
of the mahxrity of any Indebtedness.
Debt Service Payments
Has the meaning set forth in Secfion 6 of this Agceement.
Indebtedness
Bonds,notes or other evidences of indebtedness(including,without lunitation,contracts
relating to letters of credit or other credit enhancement devices and long-term contracts which
are characterized as debt by TANC at or prior to execution thereo� issued or otherwise incurred
or entered into by or on behalf of TANC in connection with the Project.For purposes of this
Agreement, Indebtedness shall be considered outstanding as of any date if such Indebtedness
has not been paid or in provision for the payment of the principal of and interest on such
Indebtedness has not been made in accordance with the Indenture pursuant to which such
Indebtedness has been issued or incurred.
Integrated Balancing Authority Area
Has the meaning set forth in the CAISO Taziff, as modified or amended from time to time.
Intertie Agreements
Agreements related to the Project which have been or which may be entered into by TANC and
some or all of the other Parricipants,which include,but are not limited to,the MOU, the Project
Development Agreement,the Project Pazticipation Agreement,any amendments to the
foregoing agreements, and other agreements related to the Project entered into by TANC as
Project Manager or by TANC on behalf of the Members.
Layoff
As used in this Agreement,the voluntazy temporary transfer of all or a portion of TANC
Member entitlements to Transfer Capability for a period of more than one (1)yeaz.
A-2 EXECUTION ORIGINAL
Layoff Quantity
The sum of the Layoffs as set forth in Section 3(c)of this Agreement.
Layoff Party
Has the meaning set forth in Section S of this Agreement.
Layoff Percentages
Has the meaning set forth in Section 3 of this Agreement.
Mazket Efficiency Enhancement Agreement
Has the meaning set forth in the CAISO Taziff, as modified or amended from time to time.
MOU
The Memorandum of Understanding,California-Oregon Transmission Project, dated
December 19, 1984, among the Pazticipants,the Depaztment of Water and Power of the City of
Los Angeles, and the California Depaztrnent of Water Resources,as modified by the
Memorandum of Decision of the United States Secretary of Energy,dated February 7, 1955,as
interpreted by the letter of ttte United States Deparhnent of Energy Acting General Counsel,
dated May 4, 1955,as amended by the Califomia-Oregon Transmission Project Memorandum of
Understanding Amiex, dated Mazch 19, 1986(MOU Annex), and as it may be further amended.
The MOU and MOU Annex are incorporated into Project Agreement No. 3 as Appendix A and
Appendix B, respecrively.
Participants
Those enrities, including TANC,which have interests in the Project through execution of the
InterHe Agreements.
Participation Percentage
That percentage of TANCs enritlement to Transfer Capability which an individual TANC
Member has the right to use as set forth in Appendix C of TANC Project Agreement No. 3.
Such percentages may be modified pursuant to Sections 2.3,3.12.2, 6,and 15 of TANC Project
Agreement No. 3. Modified percentages are included in Appendix B of this Agreement.
Project
The California-Oregon Transmission Project(COTP),which consists of electric transmission
facili5es beriveen California and the Pacific Northwest. As such,Project is generally described
in, and as changed pursuant to, the Intertie Agreements.
Project Development Agreement
That agreement among the Participants dated September 30, 1985,which provides,inter alia,for
the Parricipants to share the costs of Project Development Work.
A-3 EXECUTION ORIGINAL
� '
Project ParticipaHon Agreement
That agreement which was executed by those Pazticipants electing to proceed with Phase II and
Phase III of the Project, as it may be modified and supplemented in accordance with the terms
thereof.
Recall Effective Date
Has the meaning set forth in Section 4(a)of this Agreement.
Recall Opdon
Has the meaning set forth in Section 4 of this Agreement.
Replacements
A new facIlity that is intended to be a direct replacement for an existing facility,which is
designed prunarily to maintain the existing operational reliability or capability of the Project,
irrespective of whether the replacement results in an incidental increase in the Rated Project
Transfer Capability (as that term is defined in the Intertie Agreements),and which results in a
rerirement unit being subsrituted for another such retirement unit.As used herein, retirement
unit shall mean property as defined in Section 15060 of the Federal Energy Regulatory
Commission Uniform System of Accounts Prescribed for Public Utilities and Licensees Subject
to the Provisions of the Federal Power Act,or its successor document.
Return Effective Date
Has the meaning set forth in Section 4(a) of this Agreement.
Return Option
Has the meaning set forth in Section 4 of this Agreement.
SOT Agreement
The agreement betcveen TANC and TANC Members with respect to allocaHons of TANC
entitlements to Tesla-Midway Transmission Service,dated as of February 14, 1993.
TANC
The Transmission Agency of Northern California or its successor.
TANC Capital Improvement Costs
T'hose costs incurred in connecHon with Phase III of the Project allocable to TANC for the
purpose of making Addirions,Betterments,or Replacements to the Project and such other costs
relating to capital improvements to the Project properly chazgeable to TANC pursuant to the
InterHe Agreements.
A-4 EXECUTION ORIGINAL
Y ,
TANC Commission
The governing body of TANC as described in the TANC Joint Powers Agreement.
TANC Joint Powers Agreement
The Joint Powers Agreement,Transmission Agency of Northern California, dated December 10,
1984,which established TANC as a joint powers agency pursuant to Section 6500 et seq.of the
California Government Code,as amended and supplemented from time to time.
TANC Long-Term Layoff Procedures
The procedures adopted by the TANC Commission via Resolurion 2004-21,to facilitate Layoffs
consistent with TANC Project Agreement No. 3.
TANC Member
A sig�atory to the TANC Joint Powers Agreement.
TANC Project Administrative and General Expenses or TANC A&G Expenses
Those adininistrarive and general expenses incurred by TANC in its management of the Project
that are recoverable fro�TANC Members and set forth each fiscal yeaz in the TANC annual
TANC Budget,being categorized as "TANC Agency' and "TANC Operations."
TANC Project Agreement No.3
The agreement entered into as of March 1, 1990,by and among TANC and the Cities of
Alameda, Healdsburg,Lodi,Lompoc,Palo Alto,Redding,Roseville,Santa Claza and Ukiah;the
Sacramento Municipal Utility District;the Modesto Irrigation District the Turlock Irrigation
District;and the Plumas-Sierra Rural Electric Cooperarive.
TANC Project Agreement No.5
An agreement entered into as of August 23,2004,and amended and restated effective as of May
1,2006,by and among the Transmission Agency of Northern California, and the Cities of
Alameda,Healdsburg,Lodi, Lompoc,Palo Alto,Redding,Roseville, Santa Claza, and Ukiah;
the Modesto Irrigation District;the Turlock Irrigation District;and the Plumas-Sierra Rural
Electric Cooperative.
TANC Project Costs
Those costs incurred in connection with Phase II of the Project allocable to TANC and such
other costs relating to the acquisition and construcrion of the Project properly chargeable to
TANC pursuant to the Intertie Agreements.
TANC Project Indebtedness
That Indebtedness to be issued by TANC to finance TANC Project Costs,TANC Project O&M
Costs,TANC Capital Improvement Costs, and such other costs as aze described in Secrion
4.1.3.1 of TANC Project Agreement No.3.
A-5 EXECUTION ORIGINAL
� `
TANC Project O&M Costs
Those costs incurred in connection with Phase III of the Project allocable to TANC and
recoverable from TANC Members,which are necessary to operate and maintain the Project,
such other costs relating to the operarion and maintenance of the Project properly chargeable to
TANC pursuant to the Intertie Agreements,and costs of the TANC Coordinator.TANC Project
O&M costs shall not include TANC Project Costs or TANC Capital Improvement Costs. TANC
Project O&M Costs are set forth each fiscal year in the Aimual TANC Budget and categorized as
the "Califomia-Oregon Project."
Transfer Capability
The ability of the Project or a segment thereof to iransmit power,expressed in megawatts, as
detennined in acwrdance with the Interrie Agreements.As used in TANC Project Agreement
No. 3, the terxn Transfer Capability can refer to a rated amount or an amount available at any
given time,as appropriate in the context in which such term is used. TANC and its Members
acknowledge that there may be times when available Transfer Capability is less than the rated
amount for the Project or a segment thereof.
Transmission Control Agreement '
Has the meaning set forth in the CAISO Tariff, as modified or amended from time to time.
True-Up Adjustments
Has the meaning set forth in Secrion 3(�(vri) of this Agreement.
A-6 EXECUTION ORIGINAL
s
ATTACHMENT B
MODIFIED PROTECT AGREEMENT NO. 3 (PA-3)PERCENTAGES
Interim-COTP Operations and Maintenance
(Accommodates the Cities of Santa Clara,Alameda, Healdsburg,Lodi, Lompoc, and Ukiah,and the
Plumas-Sierra Rural Electric Cooperative 25-year layof�
)�,'CTTn. P'j�`1'.�'Z�..
t:
�
��6_�
MID 21.9470% 1.7990% 23.7460% 323
Reddin 8.4119% 0.0000% 5.4119% 115
SMUD 30.134$% 9.3550% 39.4893% 538
Santa Clara 20.4745% -10.4705% 10.0040% 136
TID 15.1105% 3.2383% 18.3488% 250
Alameda 1.2272% -1.2272% 0.0000% 0
Healdsbur 0.2456% -0.2456% 0.0000% 0
Lodi 1.9201% -1.9201% 0.0000% 0
Lom oc 0.1865% -0.1865% 0.0000% 0
Palo Alto 0.0000% 0.0000% 0.0000% 0
Plumas 0.1479% -0.1479% 0.0000% 0
Roseville 0.0000% 0.0000% 0.0000% 0
Ukiah 0.1945% -0.1945% 0.0000% 0
Totdl 100.0000% 0.0000% 100.0000% 1362
B_1 EXECUTION ORIGINAL
r
ATTACHMENT C
MODIFIED PROTECT AGREEMENT NO.5 (PA-51 PERCENTAGES
Interun-PA-5 Cost Shazin�Percenta�es
(Accommodates the Cities of Santa Clara,Alameda, Healdsburg,Lodi, Lompoc, and Ukiah, and the
Plumas-Sierra Rural ElecMc Cooperative 25-year layoffl
y -�a�+ k� c- v+rumm
MID 30.2978% 2.4836% 32.7814%
Reddin 11.6130% 0.0000% 11.6130%
SMUD 3.5496% 12.9147% 16.4643%
Santa Clara 282650% -14.4548% 13.8102% �
TID 20.8606% 4.4705% 25.3311%
Alameda 1.6940% -1.6940% 0.0000%
Healdsbur 0.3390% -0.3390% 0.0000%
Lodi 2.6510% -2.6510% 0.0000%
Lom oc 0.2570% -0.2570% 0.0000%
Palo Alto 0.0000% 0.0000% 0.0000%
Plumas 0.2040% -02040% 0.0000%
Roseville 0.0000% 0.0000% 0.0000%
Ukiah 0.2690% -0.2690% 0.0000%
Total 100.0000% 0.0000% 100.0000%
C-1 EXECUTION ORIGINAL
.
ATTACHMENT D
TRUE-UP METHODOLOGY FOR REPLACEMENTS AND ADDTITONS
The Pazries idenrified a desire to provide for equitable allocarion of costs between the Districts
and Layoff Entities for the laid-off shazes of Replacements and those Additions (all Additions
approved by TANC up to the threshold limit and the portion of those greater than the limit up
to the threshold limit) that, at the end of the term of the layoff, will revert from a right and
responsibility of the Districts to that of the Layoff Entities.
TANC developed the following methodology, which was incorporated into the 2009 Long-Term
Layoff Agreement between TANC, the Districts and the Cities of Palo Alto and Roseville, and has
been reviewed and approved by the Parties. TANC will treat all Replacements and Additions
(at least up to the Project Agreement No. 3 Threshold Amount) as if they were financed using
"typical municipal financing" (i.e., levelized payments composed of principal and interest, at
the prevailing municipal cost of money at the time of the Replacement or Addition, over the
useful life of the Replacement/Addirion). The TANC Commission will make a determination of
the usefixl life and the cost of financing at the time of approving a Replacement and/or
Addition.
If a payment struchzre or financing were used that were different from the form of a "typical
municipal financing;' then a transfer payment may be necessary to account for an accelerated or
decelerated(relative to typical municipal financing) payoff of principal as of the end of the term
of the layoff. The following aze for illustrarion purposes only and aze the same examples that
were provided in the 2009 Long-Term Layoff Agreement.
EXAMPLES:
The following assumptions apply to the examples provided below:
1. End of term of layoff:2/1/2024
2. Timing of Replacement(or Addirion):2/1/2014
3. Applicable cost threshold for Section 3.1.2.2.2: $52.7M
4. Cost of Replacement or Addition: $25M
5. Estimated useful life of Replacement or AddiHon at 1/1/2014: 20 yeazs
6. Remaining term of layoff at 2/1/2014: 10 yeazs
7. Esrimate useful life of Replacement or Addirion remaining after layoff: 10 yeazs
8. Prevailing municipal cost of money,2/1/2014: 6 percent(20-year term)
Using the assumptions listed above, TANC examined five different payment structures and the
potential need for a transfer payment under each. These are described below and a summary
table is included at the end of this seclion:
D-1 EXECUTION ORIGINAL
Example#1: TANC Paus Cash at time of Replacement(Addition)
As of Febnxary 1, 2024, all principal would have been paid off and there would be no
outstanding obligarions for the Addition. With typical municipal financing, there would have
been ten years of ]evelized payments remaining for principal and interest at $2.180M/yr with
respect to the full $25M cost for the Addition. The NPV of this payment stream as of 2/1/2024
comes to $16.04M. Cifies should pay the respective Districts their laid off pazticipafion
percentages times$16.04M.
Exam�le#2: TANC Borrows$25 million and makes interest onlu pauments:
As of Febnxazy 1, 2024, no principal would have been paid off. With typical municipal
financing, there would have been approximately $9M of principal paid off at the end of the
layoff; and the Districts should pay the respective Ciries their laid off participation percentages
times$8.96 million.
Example#3:Levelizedpauments over life a Addition:
As of February 1, 2024, there would have been $8.96 million principal rerired. Since financing
used typical municipal financing, this is the expected amount of principal to be paid off at the
end of the layoff,and no transfer payment is needed.
Exam�le#4•Levelized�ayments over lon�er than li�ofAddition:
As of February 1,2024, assuming a 25-year financing term, there would have been about$6M of
principal paid off. With typical municipal financing, there would have been about $9M of
principal paid off at the end of the layoff. Districts should pay the respecrive Cifies their laid off
participarion peccentages times$3M.
Example#5•Levelized�ments over shorter than life ofAddition�
As of February 1,2024,assuming a 15-year financing term, there would have been about$142M
of principal paid off. With typical municipal financing, there would have been about $9M of
principal paid off at the end of the layoff. Cities should pay the respective Districts their laid off
parricipation percentages times$5.2M.
Exam le#I Exam le N2 Exam le#3 Exam le H4 Exam le MS
Cash Pa ment Interest Onl "T cial°MaNri Lon er Maturi Shortet MaNri
Loan Amoun[ $ 25,000 000 $ 25 000 000 $ 25 000,000 $ 25 000,000 S 25,000 000
InterstRate 6.00% 6.00% 6.00% 6.00% 6.00%
"T ical Tertn"- ears 20 20 20 20 20
AnnualPa en[ $2179614 $2,179,614 $2,179,614 $2,179,614 $2,179,614
Taz etBalencel/12024 $16,042148 $16,042,t48 $16,042,I48 $16042,148 E16042148
Exam leTem�- ears na 20 25 15
Actual Remaining Belance as of
Janua 1,2024 0 $ 25,000,000 $16,042,148 $ 18,993,934 10842915.45
Devia[ionfrom" ical" $ 16,042148 $ 8,957,852 $ S 2,951,786 $ S,199,233
PaymenttoDishrcts $ 16,042,148 $ (8,957,852) $ $ (2,951,786) 5 S,199,233
As mentioned above, this approach will require certain determinations be made by the
Commission at the approval of any future Replacements or Addiflons; these include: 1) the
useful life of the Replacement/Addition, and 2) prevailing TANC borrowing rate for the
determined useful life.
p_2 EXECUTION ORIGINAL
N '
ATTACHMENT E
CONTACT INFORMATION FOR PURPOSES OF NOTICES
AMI':
Ronald V. Stassi,General Manager
Alameda Municipal Power
USPS: P.O.Box H
Alameda, CA 94501-0263
Courier: 2000 Grand Street
Alameda,CA 94501
Phone: (510)748-3905
Fax: N/A
Email: stassi@alamedamp.com
Healdsburg:
Terry Crowley,Urility Director
City of Healdsburg
USPS: 401 Grove Street
Healdsburg,CA 95448
Courier: 401 Grove Street
Healdsburg,CA 95448
Phone: (70�431-3340
Fax: (707)431-2710
Email: tcrowley@ci.healdsburg.ca.us
Lodi:
Elizabeth Kirkley, Electric Utility D'uector
City of Lodi
USPS: 1331 South Ham Lane
Lodi, CA 95242-3995
Courier: 1331 South Hazn Lane
Lodi,CA 95242-3995
Phone: (209)333-6828
Fax: (209)333-6839
Email: ekirkley@lodi.gov
E-1 EXECUTION ORIGINAL
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Lompoc:
Leslie Bean,Utility Director
City of Lompoc
USPS: P.O.Box 8001
Lompoc,CA 93438-5001
Courier: 100 Civic Center Plaza
Lompoc,CA 93436-6916
Phone: (805)875-8299
Fax: (805)875-8396
Email: L_bean@ci.lompoc.ca.us
Santa Clara:
John Roukema,Director of Electric Utility
City of Santa Clara
USPS: 1500 Wazburton Avenue
Santa Clara, CA 95050
Courier: 1500 Wazburton Avenue
Santa Claza, CA 95050
Phone: (40S)261-5490
Fax: (408)249-0217
Email: jroukema@svpower.com
PSREC:
Robert Marshall, General Manager
Plumas-Sierra Rural Electric Cooperative
USPS: 73233 Hwy 70
Portola, CA 96122-7069
Courier: 73233 Hwy 70
Portola, CA 96122-7069
Phone: (530)832-4261
Fax: (530)832-6070
Email: shenson@psrec.coop
MID:
Greg Salyer,Assistant General Manager, Electric Resources
Modesto Irrigarion District
USPS: P.O. Box 4060
Modesto,CA 95352
Courier: 1231 Eleventh Street
Modesto, CA 95354
Phone: (209)526-7550
Fax: (209)526-7315
Email: greg.salyer@mid.org
E-2 EXECUTION ORIGINAL
TID:
Larry Gilbertson
Assistant General Manager
Turlock Irrigation District
USPS: P.O. Box 949
Turlock, CA 95381-0949
Courier: 333 East Canal Drive
Turlock, CA 95380
Phone: (209) 883-8334
Fax: (209) 656-2148
Email: lbgilbertson@tid.org
SMUD:
Paul Lau
Assistant General Manager,
Power Supply and Grid Operations
Sacramento Municipal Utility District
USPS: P.O. Box 15852
Mail Stop: B408
Sacramento, CA 95852-1830
Courier: 6201 S Street,
Sacramento,CA 95817-1899
Phone: (916) 732-6757
Fax: (916) 73-6562
Email: paul.lau@smud.org
TANC:
Transmission Agency of Northern Califomia
Bryan W. Griess, General Manager
USPS: P.O. Box 15129
Sacramento, CA 95851-0129
Courier: 35 Iron Point Circle, Suite 255
Folsom, CA 95630
Phone: (916) 852-1673
Fax: (916) 852-1073
Email: bgriess@tanc.us
E-3 EXECUTION ORIGINAL
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RESOLUTION N0. 2074-11
�l APPROVING AN AGREEMENT BETWEEN THE CITY OF UKIAH AND MULTIPLE OTHER
I MEMBERS OF THE TRANSMISSION AGENCY OF NORTHERN CALIFORNIA, AND �
J AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF UKIAH
_ _ _ WHEREAS• the Transmission Agency of No�m Califolnia_(SAf�C")�,s a�aliforni�Joiat_P_awers-- ----;
Agency that has facilitated the construction and joint ownership of transmission projects on behalf
of its members; and
WHEREAS, TANC Members include the Sacramento Municipal Utilfty District ("SMUD°), Modesto I
Irrigation District ("MID"), Turlock Irrigation District ("TID"), Plumas Sierra Rural Electric ;
Cooperative, and the California cities of Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, ;
Redding, Roseville, Santa Clara, and Ukiah; and
WHEREAS, TANC is a joint owner of the Califomia Oregon Transmission Project ("COTP"), a 340-
mile long, high-voltage transmission line that spans from the Captain Jack substation, at the border �
of Califomia and Oregon, and the Tracy substation in centrel California; and '
I
WHEREAS, the City is a signatory to TANC Project Agreement Number 3 (1990), by which the City �
has a 0.1945% project participation entitlement on the COTP; and �
WHEREAS, recent historic and projected value of COTP to the City's electricity portfolio is lower :
than participation costs; and �
WHEREAS, under TANC Project Agreement Number 3 and TANC's Procedures for Long-Term
� � Layoffs of Transmission Capacity, the City is able to assign its COTP entitlements to other COTP �
participants; and
` � WHEREAS, SMUD, TID, and MID have agreed to accept the City's share of COTP entitlements, via �
a layoff arrangement, for a period of 25 years, with an option to extend 5 years upon mutual
agreement; and
WHEREAS, the environmental impact is addressed in the Agenda Summary Report dated March
19, 2014.
NOW, THEREFORE, the City Council does RESOLVE as follows:
The City Council hereby approves the (agreement name]. The City Manager or designee is hereby
authorized to execute the agreement on behalf of the City of Ukiah. Authorization for any extension
of term, including the five-year extension, shall be subject to future review and authorization of the
City Council.
PASSED AND ADOPTED by the Ukiah City Council on March 19, 2014, by the following roll call
vote:
AYES: Councilmembers Scalmanini, Crane, Thomas, Landis, and Mayor Baldwin
NOES: None
ABSTAIN: None ^ � ,�
ABSENT: None (�
� /
1 Philip E. Idwin, Mayor
ATTEST:
���s��� 1���C��-
Kristine Lawler, City Clerk