HomeMy WebLinkAboutTransmission Agency of Northern California (TANC) 2019-11-20 COU Na. i�la� - MO
TRANSMISSION AGENCY OF NORTHERN CALIFORNIA
PROJECT AGREEMENT NO.6 FOR REGULATORY ENGAGEMENT IN PARTICIPATING
TRANSMISSION OWNER CASES BEFORE THE FEDERAL ENERGY REGULATORY
COMMISSION
This Project Agreement No.6(Agreement)is entered into as of _,2019 by and among
the Transmission Agency of Northern California,hereinafter referred to as TANC;and the Cities
of Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah;
the Modesto Irrigation District; the Sacramento Municipal Utility District, the Turlock Irrigation
District; and the Plumas-Sierra Rural Electric Cooperative (hereinafter collectively referred to as
the "Participating Members" and together with TANC are "Parties" to this Agreement) with
regard to the following:
RECITALS
WHEREAS:
A. TANC, acting on behalf of the Participating Members, has engaged in certain
regulatory forums, including before the Federal Energy Regulatory Commission
(FERC), to protect the value of TANC's transmission assets and to support the
Participating Members by striving to limit the Participating Members'exposure to
transmission costs when transacting in the California Independent System.
Operator (CAISO)markets, or as otherwise may be applicable.
B. TANC has historically placed particular focus on the Pacific Gas and Electric
Company's (PG&E) transmission owner (TO) rate cases due to the potential
impact such rate cases may have on the transmission rates under TANC's South
of Tesla Principles(SOTP)existing transmission contract on PG&E's transmission
system.
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C. Prior to the effective date of this Agreement, costs associated with TANC's
engagement in TO rate cases have been allocated to TANC Members based on
their transmission capacity entitlements under the South of Tesla Agreement(SOT
Allocation Percentages) due to the potential impact of PG&E's transmission costs
on the SOTP transmission rate.
D. TANC has also pursued engagement in FERC and other regulatory matters based
on the potential impacts of TO rates or on industry matters generally and these
costs have been shared based on either Project Agreement No. 3 (PA3) or Project
Agreement No.5(PA5)allocation percentages.
E. Certain SOT Members have entered into a settlement agreement with PG&E,and
based on such are not subject to specific SOTP transmission rates for use of their
SOTP transmission rights,but are rather subject to the CAISO's transmission rates.
F. In addition to the potential impacts to the SOTP transmission rates, TANC
Members may also be impacted by changes in the transmission rates charged by
the CAISO for use of the CAISO controlled transmission system.
G. The CAISO provides transmission service under a single statewide high-voltage
transmission access charge (TAC) rate, where certain transmission investments
made by the Participating Transmission Owners (PTOs) and other transmission
rights holders, impact transmission costs for all users of the CAISO transmission
system and therefore TANC has reviewed certain California and regional
transmission projects for purposes of forecasting the high-voltage TAC.
H. TANC Members are situated differently with respect to exposure to CAISO
transmission rates,depending how a TANC Member receives transmission service
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from the CAISO, or depending where they choose to procure their energy
resources.
I_ TANC has conducted outreach with the Members to provide transparency for
TANC's past activities in the FERC regulatory TO proceedings,and to provide an
initial estimate of the benefits and costs of TANC's recent engagement in TO rate
cases before FERC.
I- TANC and the Participating Members have determined that it is appropriate to
implement a revised cost allocation mechanism to be used by TANC for allocating
certain legal and subject matter expertise costs, that are associated with TANC's
engagement in TO rate cases and other related transmission activities.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth in this
Agreement,TANC and the Participating Members hereby agree as follows:
AGREEMENT
1_ SCOPE OF ACTIVITY
Pursuant to the terms and conditions of this Agreement, TANC may be directed by the
Commission to act on behalf of the Participating Members to engage in certain activities, either
directly, indirectly, or in conjunction with legal counsel and subject matter experts, pertaining
to proceedings that affect the CAISO Transmission Access Charge (Scope of Activity). The
Scope of Activity contemplated herein generally includes:
• Representing the interests of the Participating Members by monitoring, analyzing, and
participating in TO rate cases before FERC and any related judicial appeals;
• Engaging in other related filings or industry developments that affect the cost or
provision of transmission service under TO rate cases; and,
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• Engaging in other activities as may be approved by the Participating Members.
The Scope of Activity shall be supported by Iegal services and other specialized services relevant
to TANC's participation in proceedings that are performed by qualified subject matter experts
and/or witnesses. It may also include TANC Management and staff as required,or as determined
to be beneficial,to advance TANC's and the Participating Members' interests.
The Scope of Activity shall apply to the TO rate cases and new related transmission activity
matters that are filed subsequent to the effective date of this Agreement, and shall include all
future activities and costs associated with PG&E's TO 18, TO 19 and TO 20 rate cases, but only
for costs incurred after the effective date of this Agreement.
2. COORDINATION WITH OTHER ENTITIES
As part of TANC's duties under this Agreement,TANC shall strive to work collaboratively with
other intervenors and relevant parties, and where practicable, build alliances and find common
interest in promoting TANC's and the Participating Members' interest in the Scope of Activity.
Such efforts include building coalitions, where strategically and economically viable, to support
the alignment with other intervenors or to form "joint intervenor" perspectives for engaging in
the Scope of Activity. This may include coordinating and sharing responsibilities on areas of
common interest to ensure the most efficient advancement of TANC's interest on behalf of the
Participating Members, and to reduce redundancy in the Scope of Activity of TANC and other
similarly situated parties on issues of importance to TANC and the Participating Members.
To the extent coordination with other entities, including direct coordination with a Participating
Member,or subset of Participating Members,results in gained efficiencies and benefits for TANC,
or directly or indirectly reduces TANC's costs for performing the Scope of Activity contemplated
herein, the Commission shall evaluate and consider such joint benefits and the individual
Participating Member's funding obligations when establishing annual funding amounts. The
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evaluation of joint benefits will occur prior to the development of the annual funding under this
Agreement and may reflect completed work activities and planned activities, by a Participating
Member or subset of Participating Members.
3. ROLE OF THE COMMISSION
The Commission shall provide TANC management policy and strategic direction, and set
budgetary authorizations for TANC's overall engagement in the Scope of Activity, taking into
consideration recommendations from TANC management, which may be further informed by
guidance from legal counsel, relevant subject matter experts, and recommendations from the
Contracts Committee.
Upon receiving direction from the Commission, TANC management is responsible for
implementing the direction of the Commission with respect to Scope of Activity under this
Agreement. TANC management will coordinate the Scope of Activity through the Contracts
Committee, where the Contracts Committee will be responsible for reviewing and providing
feedback regarding TANC's Scope of Activity, and will advise TANC's management for
advancing the policy and strategic direction provided by the Commission. Notwithstanding the
responsibility of the Contracts Committee described herein, all activities and decisions
considered by TANC's management related to the Scope of Activity that involves potential legal
action,or that is of a legal strategy, shall be further coordinated with legal representatives of the
Participating Members through the Contracts Committee and/or the Commission.
This coordination will include when reasonably practicable: (i) draft materials for filing in
advance to the Contracts Committee for review and comment prior to submission to FERC; (ii)
access to any relevant filings in connection with the Scope of Activity;and(iii)analysis from legal
counsel and subject matter experts supporting the positions of TANC or other intervenors related
to the Scope of Activity.
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TANC management shall provide briefings and supporting material to the Commission and the
Contracts Committee at each regularly scheduled meeting regarding the status of the Scope of
Activity under this Agreement. Briefing materials may include the following:
• An overview of the relevant proceedings and known schedules;
• Assessment of the financial impact to TANC and, to the extent practicable, each of the
Participating Members;
• The scope of TANC's potential initial engagement and each recommended change in
scope;
• Identification of potential legal actions that TANC should consider and the likelihood of
success (by argument if practicable);
• An estimate of the potential benefits and costs associated with engagement (periodically
updated as may be necessary recognizing progress of proceedings under the Scope of
Activity); and
• Scope of Activity progress reports identifying:
o Status of the proceeding
u Summary of TANC's issues and the position(s)of relevant intervenors
o Costs incurred for engagement, tracking, and monitoring, as well as any changes
to the estimated benefits and costs
o Identification of key decision points in the proceeding
4. VOTING
The Commission shall direct all policy and legal action required in connection with this
Agreement. The Contracts Committee will direct the implementation of the Commission's policy
and legal direction. The Participation Percentages set forth in Appendix 1,as attached hereto and
made part of this Agreement, shall govern voting rights for actions taken under this Agreement.
In order for a formal action to be taken by the Commission or the Contracts Committee under
this Agreement related to the Scope of Activity, a quorum of the Participating Members shall be
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established,where the Participation Percentages of the Participating Members present must be at
least 60%. An affirmative vote representing 60% of the Participating Percentages of the
Participating Members under the Agreement is required to provide authorization.
The Participating Percentages as set forth in Appendix 1 may be modified by a unanimous vote
of the Participating Members.The Participating Members may determine additional Participating
Percentages for cost allocation and voting for specific regulatory or legal proceedings, based on
unanimous approval of the Participating Members.
5. FUNDING AND OBLIGATIONS FOR ACTIVITIES
All costs attributed to the Scope of Activity performed in accordance with this Agreement shall
be allocated to the Participating Members based on the Participation Percentages set forth in
Appendix 1; provided, however, as described in Section 2 of this Agreement, the funding
obligation of a Participating Member,or subset of Participating Members,shall be considered and
may be adjusted by the Commission to account for any contributions or benefits associated with
joint coordination and activities among the Participating Members. Any adjustments by the
Commission of the funding obligation for Participating Members contemplated under this
Section 5 shall be by the voting under Section 4..
All costs that are estimated to be incurred under this Agreement shall be included in the annual
TANC Budget, and the total amount of expenses TANG is authorized to incur during any fiscal
year for performing the Scope of Activity under this Agreement shall be subject to annual caps
and not exceed the Budget or the annual funding caps unless additional funding is approved by
the Commission. Costs shall be itemized by proceeding for the sole purpose of TANC's work
under the Scope of Activity, including accounting for distinct legal costs, subject matter experts
and witnesses. TANC management costs may be included upon approval of the Commission.
EXECUTION ORIGINAL
6, TERM AND TERMINATION.
This Agreement shall take effect as of the date hereof and shall remain in full force and effect for
three years from the date that TANG and the Participating Members execute the Agreement. At
least 120 days in advance of the initial three-year term of this Agreement, the Participating
Members may extend the term for an additional one to three years by a unanimous vote. In
accordance with Section 15.6 of PA3, the provisions of Section 15 of PA3 shall be incorporated by
reference.
In the event that one or more Participating Members choose to terminate its participation in this
Agreement,by providing written notice 100 days prior to the end of the initial three-year term or
pursuant to the provisions of Section 15 of PA3, the remaining Participating Members may elect
to adjust the cost allocation percentages shown in Appendix 1 and continue this Agreement.If by
the end of the initial three-year term of this Agreement the remaining Participating Members
have not agreed to adjust the allocation percentages shown in Appendix 1,TANC shall terminate
this Agreement.
Upon termination of this Agreement, or termination of any individual Participating Member's
participation in this Agreement pursuant to this Section 6,any costs and liabilities associated with
the Scope of Activity approved in accordance with this Agreement shall remain the obligation of
the Participating Members until such Scope of Activity is completed.
Prior to the termination of this Agreement,the TANC Commission shall review TANC's role with
respect to the Scope of Activity and take action regarding TANC's continued work and related
cost allocation.
7, AMENDMENTS
This Agreement may be amended only by the written agreement of all the parties hereto.
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8. DEFAULT
Upon the failure of any Participating Member to meet its obligations hereunder,TANC shall give
written notice of the failure to such Participating Member and,if such failure has not been cured
within forty-five (45) days after the date of such notice, it shall constitute a default at the
expiration of such forty-five (45) day period. Upon such default, TANC may terminate this
Agreement as to the defaulting Participating Member, and protect and enforce its rights
hereunder by suit or suits in equity or at law, whether for the specific performance of any
covenant herein or for damages or in aid of the execution of any power granted herein or any
other remedy available under any provision of applicable law. The cost allocation percentages
may be adjusted amongst the remaining Participating Members.
9. INDEMNIFICATION
Each Party and its officers,agents,employees,commissioners and board members,undertake no
legal liability to the other Parties to this Agreement ("Indemnitees") and each Party releases,
holds harmless, and covenants not to sue any Indemnitees for any cause, claim,injury, damage,
or death arising from a negligent act or omission of any other Party in connection with this
Agreement.
10. SEVERABILITY
If any provision of this Agreement is finally adjudicated by a court of competent jurisdiction to
be invalid, the remainder of this Agreement shall remain in full force and effect as though the
invalid provision had not been included herein.
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11. MEMBERS' OBLIGATIONS SEVERAL
The obligation of each Participating Member to make payments under this Agreement is a several
obligation and not a joint obligation with those of the other Participating Members.
12. WAIVER OF DEFAULT
Any waiver at any time by any party of its rights with respect to a default under this Agreement,
or with respect to any other matters arising in connection with this Agreement, shall not be
deemed a waiver with respect to any subsequent default or other matter.
13. COUNTERPARTS
This Agreement may be executed in several counterparts,each of which shall be deemed to be an
original and all of which,when taken together, shall constitute a single Agreement.
15. SIGNATURES
In witness whereof, the parties have caused this Agreement to be executed as of the date first
above written. The signatories to this Agreement represent that they have been appropriately
authorized to enter into this Agreement on behalf of the party for whom they sign.
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PARTICIPATING MEMBERS
CITY OF ALAMEDA
By:
Name:
Title:
Date:
CITY OF HEALDSBURG
By: --
Name:
Title:
Date:
CITY OF LODI
By:
Name:
Title:
Date:
CITY OF LOMPOC
By:
Name:
Title:
Date:
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MODESTO IRRIGATION DISTRICT
By:
Name:
Title:
Date:
CITY OF PALO ALTO
By:
Name:
Title:
Date:
PI..UNIAS-SIERRA RURAL ELECTRIC COOPERATIVE
By:
Nauru:
Title:
Date:
CITY OF REDDING
Name:
Title:
Date:
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CITY OF ROSEVILLE
By:
Name:
Title:
Date:
SACRAMENTO MUNICIPAL UTILITY DISTRICT
By:
Name:
Title:
Date:
CITY OF SANTA CLARA
By:
Name:
Title:
Date:
TURLOCK IRRIGATION DISTRICT
By:
Name:
Title:
Date:
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CITY OF UKIAH
By:
Name: Sage Sangiac mo
Title: RCi!y Manager
Date: 1 a - 2 11
TRANSMISSION AGENCY OF NORTHERN
CALIFORNIA
By:
Name:
Title:
Date;
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Appendix 1
Participating Percentages and Voting Rights
TANC Member Percentage(%}
MID 23.0000
Redding 8.0000
SMUD 11.0000
SVP 26.0000
T1D 8.0000
Alameda 4.0000
Healdsburg 1.0000
Lodi 4.0000
Lompoc 1.0000
Palo Alto 9.0000
Plumas 1.0000
Roseville 3.0000 j
Ukiah 1.0000
Total 100.0000
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