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Home My WebLink About80-733 4 5 6 7 $ 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 RESOLUTION NO. 80-73 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH APPROVING ELECTRIC SUPPLY PROJECT CAPACITY AGREEMENT (SHELL PROJECT) BE IT RESOLVED that the Electric Supply Project Capacity Agreement attached hereto and made a part hereof is hereby approved and the Mayor and Clerk are authorized to execute same on behalf of the City. PASSED AND ADOPTED this 23rd day of April, 1980, by the following roll call vote: AYES: Councilmembers Riley, Myers, Hickey NOES: Councilmembers Snyder, Feibusch ABSENT: None ATTEST: City Clerk 24 25 26 27 28 2/13/80 ELECTRIC SUPPLY PROJECT CAPACITY AGREEMENT SHELL PROJECT This Electric Supply Project Capacity Agreement (the "Agreement") by and among~ NORTHERN CALIFORNIA POWER AGENCY, a joint powers agency of the State of .California existing pursuant to the provisions of Division 7 of the Government Code of the State of California, hereinafter referred to as "NCPA" and the following governmental agencies: · · · · · · · · · The City of Alameda; The City of Biggs; The City of Gridley; The City of Healdsburg; The City of Lodi; The City of Lompoc; The City of Roseville; · The City of Santa Clara; The City of Ukiah; and among the Plumas- Sierra Rural Electric '~ooperative... ' ..... .. The parties to this Agreement, other than NCPA, are herein- after individually referred to as "Participant,. and collec- tively referred to as "Participants." 1 The effective d~te of this Agreement will be the day that NCPA executes the Agreement. WITNESSETH: · WHEREAS, there is a need for electric power capabil- ity from economical and environmentally sound sources for present and future needs in the areas served by each Partici- pant; and WHEREAS, the Participants to this Agreement and NCPA entered'into an agreement entitled "Member Agreement . for Construction, Operation and Financing of NCPA Geothermal Generating Unit #2 Project" (the "~hell Member Agreement") · and WHEREAS, to secure the financing of the Project provided for in the Shell Member Agreement ("Shell Project"), the Participants desire that the Shell Member Agreement be amended so that NCPA will receive unencumbered legal.. .~. title to the Shell Project facilities at th~ ~d of the financing as required by the regulations of the Internal Revenue Service; and WHEREAS, the Participants also desire to secure the availability of electric~power after the repayment of the bonds or notes or other evidences of indebtedness issued to finance the Shell Project'(the "Bonds"); and NOW, THEREFORE, in consideration of the Partici- pants and NCPA amending the Shell Member Agreement and the performance of the promises, covenants and conditions hereinafter set forth, at the time and in the manner specified, the parties hereto do agree as fol'lows: SECTION 1. CAPACITY PROVISIONS A® DEFINITION OF PROJECT CAPABILITY. For purposes of this Agreement, "Project Capability" to be generated by the Shell Project is defined as the amount of power and energy that.the Shell Project was proven to be capable of at the last power and energy capability test. .. 3 B · NCPA TO PROVI'DE CAPABILITY. The duration of this Agreement shall be for the useful productive life of the Shell Projectl NCPA's obligation to supply 'Project Capability pursuant to this Agreement will commence upon (i) the repayment of the Bonds, or (ii) pro- vision for their prepayment and such Bonds shall not be deemed outstanding, which, ever shall occur first. This eye,it is hereinafter referred to as "Commencement." Upon Commencement NCPA shall provide each Partici- pant with Project Capability at the approximate points of delivery at whiCh the Member receives power and energy from the Shell Project prior to Commencement or at such other points of delivery as may be mutually agreed u~on. Each Participant Shall, during the remaining productive life of the Shell Project, be entitled to receive a share of Project Capability from NCPA in the same amounts and at the same cost as it would have received if the Shell Member Agreement-had remained in effect; but such entitlement ~- ., .... shall not constitute an encumbrance on the Shell Project, and NCPA shall supply such entitlement, from any available source. The share of such Participant as defined in this 4 paragraph shall be referred to as "Participant Project Capability". C. USE OF PROJECT CAPABILITY Each Participant shall have the exclusive right to the use of its Participant Project Capability, provided it is not in default· It is understood that the rights acquired by the Participants pursuant to this Agreement from NCPA relate only to Project Capability, and not to actual amounts of power. NCPA shall not be required to provide Participant Project Capabili.ty if the Shell Project is not operated because of technical or economic reasons as agreed to by the Participants. D · ASSIGNMENT OF PROJECT CAPABILITY. This subsection places no restraint upon any transfer, assignment, sale or exchange of Participant Project · Capability or rights thereto by any Participant when such transfer, assignment, sale or exchange is for the direct or indirect use of the customers of its electric distribution system. With regard to such transfers, assignments, sales 5 or exchanges the Participant has unfettered rights so far as this Agreement is concerned. As used in this section, ~he transfer, assignment, exchange or sale of Participant Project Capability includes the transfer, assignment, 'exchange or sale of.rights thereto. (a) As to any other disposition of Participant Project Capability, any Participant may transfer, assign, sell or exchange power to which it is entitled under this Agreement to others only a's provided for · · in this subsection. · (b) Such Participant Project Capability shall be offered first to those other Participants in the Shell Project which desire to acquire such capability for the use of the customers of their electric distribu- · tion systems solely. Each such Participant shall be limited in its right to such Participant Project · Capability as against any other Participant to its Purchasing Participation Percentage thereof as defined in the Shell Member Agreement. (c) Any such Project Capability not accepted by other Participants shall be offered second].y to such members of the Development Fund which are not Purchasing Participating Members, which shall be limited in their rights as against each other to the proportion which their Participation Percentage is to the total of the Participation Percentage of all such members. (d) Such Project Capability may then be offered to any person or entity. (e) Any such transfer, assignment,-sale or exchange of Participant Project Capa'bil~ty provided for herein shall be in accordance with terms and conditions set · forth by the NCPA Member Agreement For Participation In Electric Development Fund and subject to the principles of economic dispatch. (f) The Participant receiving Project Capability under paragraph (b) or (c) above shall pay the transferring Participant for such Project Capability an amount not more than the cost of such-power to such transferring participant plus all other costs of such Participant related to such transferred Project Capability. 7 (g) To the extent not prohibited by existing · contracts no Participant shall purchase capability from any other source exclusive of its own generating projects if Project Capability is available under this subsection at lower cost, and any other Participant receiving capability by transfer, assignment, sale or exchange hereunder shall agree to the same restriction as a condition of such receipt. (h) Upon request NCPA will arrange such trans- action under this section as is desired by a Partici- pant. (i) No Participant shall transfer ownership · of substantially all of its electric distribution system to another entity until it has first complied with the provisions of this sub-subsection. A consoli- dation with another governmental entity or change in governmental form is not deemed a transfer of owner- ship. ~ : (1) Before the date of such transfer, the rights of the transferring Participant under this Agreement shall have been disposed of by 8 transfer, assignment, sale or exchange pursuant to provisions of paragraphs (a), (b), (c) and (e) of this subsection, and subject to the limita- tions of paragraph (d), effective as of the date of the transfer. (2) Such disposition of a Participant's electric distribution system must be under terms and .conditions that provide assurances to the holders of any outstanding indebtedness of NCPA secured by the electric department revenues of the Participant which is transferring ownership of its electric distribution system, so that · ', NCPA's obligations under resolutions issuing bonds or under other agreements made or to be made by NCPA to carry out its obligations, may be promptly and adequately met. NCPA may require that sufficient moneys to discharge such obliga- tions be irrevocably set aside and maintained in a trust account, as a condition to the transfer of the elec'tric distribution system, if no other adequate assurance is available. (j) No transfers, assignments, sale~ or exchanges shall diminish any Participant Project Capability without its consent, except in the case of. a Participant which sells its distribution system, and then only as provided in paragraph (i), and except as provided in Section 5 herein. E. LIMITATION ON SALE OR TRANSFER. NCPA may not assign, sell or transfer any of the electrical facilities or property of any kind whatsoever · owned or controlled by NCPA, including the SheT1 Project, to the extent such action would prevent NCPA from providing the Project Capability under this ~greement to the Partici- · pants. F · COSTS OF DECOmmISSIONING. If the Federal Government or other owner of the interests in the lan°d or property on which the Shell Project is situated properly demands the'decommissioning of the Shell Project in whole or in part, which demand requires the alteration, removal or restoration of the Shell Project 10 or the underlying land or property, the costs of such decom- missioning shall be borne by the Participants in the ratio of their' then rights to Project Capability. SECTION 2. OPERATION AND MAINTENANCE. A. NCPA TO OPERATE AND MAINTAIN THE SYSTEM. NCPA shall operate and maintain any NCPA property and facilities (the "System") necessary to provide Project Capability for the Participants pursuant to this Agreement. B. ANNUAL BUDGET. NCPA agrees that it will annually prepare and · submit to the Participants prior to' the beginning of each fiscal year, a proposed budget for the operation and mainte- · nance costs of the System covering the next fiscal year. Such budget will be conSidered by the Participants, who , '" will make recommendations and suggestions, .i.f needed, to NCPA concerning the proposed budget. The proposed budget will be prepared according to generally accepted accounting practices. NCPA agrees to fully and fai~l~ con.sider all suggestions from the Participants concerning the proposed budget. . 11 SECTION 3. CAPITAL IMPROVEMENT, CAPITAL REPLACEMENTS AND REPAIRS. NCPA shall administer and make all capital improve- ments, capital replacements and repairs to the System for the benefit of the Participants. The Participants shall pay for the costs of such, as provided in the annual budget. SECTION 4. PROCUREMENT OR GENERATION.OF PROJECT CAPABILITY. It shall be the duty of NCPA to provide Participants Project Capability from the SysteIn (including the Shell Project) so long as the provision of the Project Capability does not adversely affect any Participant in any manner. This shall include, but not by way of limitation, all appli- cable State and Federal requirements. SECTION 5. REMEDIES. ae DEFINITION OF DEFAULT BY PARTICIPANT. If (a) any Participant shall fail to pay any costs of operation, maintenance, capital improv'ements, capital replacements, or major repairs of the System within ten (10) days from the 'date such payment is due and payable, · .or (b) any Participant shall fail to keep any other terms, covenants or conditions herein for a period of thirty (30) days after written notice thereof from NCPA'to the Partici- pant, or (c) any Participant's interest in this Agreement or any part thereof shall be assigned or transferred without · the written consent of NCPA, contrary, to the provisions of this Agreement, either voluntarily or involuntarily, then in any such events, such Participant shall be deemed to be in default .hereunder. B · NCPA'S RIGHTS ON DEFAULT BY PARTICIPANT. If a Participant should, after written notice, fail to remedy any default with all reasonable dispatch, not to exceed thirty (30) days, then NCPA shall have the right, at its option, without any further demand or notice, to any one or all of the following remedies: To termin'ate such participant's interest in this Agreement and refuse to provide such Participant its Participant Project Capability. 13 2. NCPA shall have the further option to not · terminate the interest in this Agreement and to sell or transfer all or a portion of such Participant Project Capabil- ity upon such terms and conditions as NCPA may deem advisable, in which event' the money received on such sale or transfer shall be applied first to the expenses of sale or transfer and collection, including any necessary alteration of the System and reasonable attorney's f'ees, and ~hereafter toward payment of all sums due by the defaulting Participant, and if a sufficient sum shall not be th~s realized to pay such sums and other charges, the defaulting Participant · shall pay NCPA any deficency. .. 3. TO receive from the defaulting Participant a sum of money equal to the interest and charges incurred by NCPA in borrowing money to pay sums due by such Partici- pant and such other costs and damages caused by Participant's default. 4. NCPA shall have.the right to 1.e'Vy or assess. . a surchar.ge on any Project Capability delivered to the defaulting Participant from any facilities of the System in an amount equal to any amounts due NCPA, inclusive of 14 interest at the rate established by NCPA at the time of · the adoption of the annual budget. C. SURCHARGE FOR LATE PAYMENT. NCPA may impose a reasonable surcharge on any late payments from 'the due date paid. D. ALL' OTHER REMEDIES AT LAW AND IN EQUITY AVAILABLE. The parties agree that the remedies set forth are not exclusive, and any one or all other remedies provided at law or in equity may, at the option of NCPA, be exer-cised against a defaulting Participant for breaches not entitling NCPA to a surcharge under the terms of this Agreement. The parties further agree that with respect to provisions concerning surcharge for delinquent sums due, that damages in addition to the contracted amounts due are of such a nature that they are impracticable or extremely difficult to ascertain, and that such a surcharge is a reasonable' estimate of the damages tha't would be susta'ined by NCPA, .~ in addition to the contracted amounts due, in the event .... of such default. 15 E. ATTORNEYS' FEES AND COSTS TO PREVAILING PARTY. Should any party commence an action to enforce the provisions of, or actions arising out of, this Agreement, then such party that prevails in that action, proceeding or suit shall be entitled to recover reasonable attorneys' fees, costs, exper6 witness fees, consultant's fees and testing fees in connection therewith, including such fees for p~osecuting, defending any appeal, or incurred in any supplemental proceeding, until judgment is satisfied in full. · SECTION 6. ARBITRATION IN AND OPERATION AND MAINTENANCE DISPUTES. In the event any dispute shall'arise among any of the parties hereto with reference to operation and mainten- ance or promulgation of reasonable rules and regulations for operation, and such disputes cannot be settled by conference among the parties and their engineers and officers within ~.- a period of ten (10) consecutive calendar days after such f~ture time as the parties may agree upon, in writing, then such disputes shall be settled by arbitration under 16 Section 1280 of the Code of Civil Pr. ocedure of the State of California. · SECTION 7. TAXATION OF SYSTEM OR INTEREST IN SYSTEM. In the event that the actions of any Participant · cause any facilities of the System to be subject to additional. property taxation in whole or in part, the amount of any such additional taxes required to be paid shall be paid by the Participant in addition to any amounts otherwise provided for in this Agreement to be paid 'for by Participant. As herein provided, a Participant may.assign its interest to a private en%ity or person. In the event that any s.uch assignment does occur and such is deemed to be a possessory of beneficial interest and becomes subject to taxation, the private entity or person taking such assignment shall be responsible for the payment of all additional taxes~ · SECTION 8. RULES AND REGULATIONS. It is intended by NCPA and the Participants that NCPA may promulgate reasonable rules and regulations for the operation of the System in accordance with .prudent utility practice. The foregoing regulations shall .not 17 increase, decrease or ~hange the herein specified obligation of NCPA to obtain and deliver Project Capability to the extent-such is available to NCPA. Prior to considering the adoption of any such reasonable' rules and regulationS, copies thereof shall be delivered to each Participant in writing not less than thirty (30) consecutive.cal~endar days prior to the consideration by NCPA of any such rules and regulations. SECTION 9. NOTICE. Any notice or written approval to be given under this Agreement shall be given by personal de].ivery to NCPA' or Participant or by addressing it as set forth below, depositing it in any United States Post Office, registered or certified mail, postage prepaid, and effective on the date of deposit. Notices or written approval shall be. , addressed as designated in writing and filed with the other parties to the Agreement by NCPA and Participants which designation~ma~ be amended from time ..... to. time. '~ ..~-~ 18 SECTION- 10, SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of, and be binding upon, each of the pa~ties and their successors and assigns. SECTION 11. SECTION HEADINGS, SEVE~\BILITY. The paragraph headings contained herein are for convenience and refe°rence and are not intended to define or' limit the scope of any provision of this Agreement. If any section, subsection', sentence, clause or phrase of this Aogreement, or the application thereof to either party of any other person or circumstance, is for any reason held invalid, it shall be deemed.severable, and the validity of the remainder of the Agreement or the application of suCh provision to the other party or to any person or circumstance shall not be affected thereby. SECTION 12. EXECUTION OF DUPLICATE ORIGINALS. ' .... This Agreement shall be executed by all parties in duplicate, each of which shall be considered an original' · · ].9 Agreement. The Agreements with each of the other parties shall be the same as this Agreement, and each Agreement may not be altered or changed without the consent of all · the remaining parties. This Agreement shall not be binding upon Plumas-Sierra Rural Electric Cooperative until approved in writing by the Administrator of the Rural Electrification Administration. APPROVED AS TO FORM:' 20