Item 7 - Resolution Authorizing Purchase Electricity
~~5-t1"\ b.;W 16/".1 'l~
TO: """ooW, M'"" ,00 M'O"".~ COO",,
- FROM:
James L. Bowersox, City Man
INITIATED BY: James R. Williams, Director of Public Services rf
DATE: June 16, 1998
SUBJECT: Resolution Authorizina the City Manaaer to Execute Aoreements. Permittina the City
of Powav to Purchase ElectriCi~ from Commonwealth Enerov COrDoration and New
Energy Ventures
ABSTRACT
AB1890 created the framework for establishing a competitive electrical energy market, thereby reducing prices
and improving benefits for the electrical energy customer. To take advantage of this special energy reduction
opportunity, staff recommends that the City of Poway enter into two separate joint powers agreements-one
with SANDAG and the other with the Association of Califomia Water Agencies (ACWA). Consistent with these
programs and other CPUC rate reductions, the City of Poway stands to save an estimated 3.1 % [$30,738] from
SDG&E electricity rates in 1998-99, when compared to SDG&E electricity rates offered between April 1997
and March 1998. Using the same base period, the City of Poway stands to save an estimated 5.3% [$50,738]
in 1999-2000.
ENVIRONMENTAL REVIEW
-
This item is not subject to CEQA review.
FISCAL IMPACT
In fiscal year 1998-99, entering into these agreements for the purchase of electrical energy, after expenses,
should result in a combined estimated reduction in energy costs of $30,738. During the second year
participation will increase annual energy savings to an estimated $50,738.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
None
RECOMMENDATION
It is recommended that the City Council approve the attached resolution authorizing the City Manager to
execute agreements that will permit the City to purchase electricity from New Energy Ventures through ACWA
and Commonwealth Energy Corporation through SANDAG, each beginning July 1, 1998.
ACTION
-
1/38 7.1
JUM 1 6 1998 ITEM ,
,.---'-.----------
- AGENDA REPOF.. ,
CITY OF POWAY
TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Man~
INITIATED BY: James R. Williams, Director of Public Services ~
Doug Hilliker, Water Utilities Manager
Norm Ginsburg, Interim Sr. Management Analyst
DATE: June 16, 1998
SUBJECT: RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AGREEMENTS,
PERMITTING THE CITY OF POWAY TO PURCHASE ELECTRICITY FROM
COMMONWEALTH ENERGY CORPORATION AND NEW ENERGY VENTURES
BEGINNING JULY 1,1998
BACKGROUND
Governor Wilson signed AB1890 into law on September 23, 1996. This state legislation created
the framework for establishing a competitive electrical energy market, thereby reducing prices and
improving benefits for the electrical energy customer. The key elements of AB1890 include (1) the
creation of Independent Systems Operators to manage the electrical transmission system, (2) the
"unbundling" of the costs associated with electricity power (e.g., generation source, transmission
lines, distribution, etc.). and (3) a price cap set on current electrical rates.
Public Services Department staff has been actively monitoring California's move toward
deregulation and participated in an Energy Deregulation Committee of the San Diego County Water
Authority and the SANDAG Ad Hoc Committee on Energy Deregulation. These committees met
frequently to discuss energy deregulation activities and review potential energy saving options
available to municipal jurisdictions. At one such meeting held on March 22, 1998, representatives
from the Association of Califomia Water Agencies (ACWA), New Energy Ventures (NEV).
SANDAG, and SDG&E presented information on the status of deregulation and the potential pooled
energy purchase options. Independent operators have also contacted City staff in attempts to gain
our energy needs business.
Among the many options known to staff, two programs have emerged which would permit Poway
to pool its energy demands with other government agencies and through the vastly increased
demand of the "power pool," purchase electricity at lower rates than otherwise would be available
ACTION: I
)J
2/38 ITEM 7.1 .
JUN 1 6 1998
- Purchase of Electrical Power Aoreements
June 16, 1998
Page 2
to us. ACWA has formed a joint power's agency (ACWA-USA) to provide power and possibly other
energy related services to member agencies through NEV. In addition, SANDAG has created a
pooled energy purchase program for govemmental jurisdictions through Commonwealth Energy
Corporation. NEV promises to reduce annual electric rates by a minimum 5% below SDG&E's
normal rates whereas Commonwealth promises to reduce annual electric rates from 1.5% - 3.5%.
NEV purchases are targeted to high demand service points therefore, participation is limited to
those service points that demand >50kW per hour for a significant portion of the fiscal year. There
are six such City of Poway meter locations. Eleven additional Poway meters record demands
greater than 50KW but these service points have wide fluctuations in power needs so NEV will not
accept them into their 5% plus a savings program. Commonwealth will serve these locations as
well as the remaining Poway electrical accounts using under 50kW per hour throughout the year.
Both companies guarantee these saving throughout the 1998-99 fiscal year. If they fail to meet
their pricing objectives, the City can return to SDG&E at its current electric rates without any
penalty. Both companies also offer renewal options for future years if we are satisfied with their
service and pricing structure.
FINDINGS
The Association of Califomia Water Agencies authorized the formation of a joint power's agreement
to member water agencies and the SANDAG Board of Directors authorized the formation of a San
Diego Regional Power Pool through a joint power's agreement among San Diego County
municipalities. The principal purpose of these joint power's agreements is to obtain the best
guaranteed electricity rates by aggregating the electricity needs of multiple agencies into a large
pool of power users thereby increasing the negotiating position of all participants. An added
advantage of aggregating power needs is to minimize the changes in power needs between peak
and off-peak periods. For example, agencies such as the City of Poway offset much of its high-use
period demands (normally during the day when air conditioning systems are running) with off-peak
use increases such as for street lighting.
Annually, City of poway facilities and services use approximately 11,186,000 kWhrs of electricity
at a cost of approximately $1,217,500. Working with our SDG&E accounts executive, ACWA and
SANDAG representatives, City of Poway staff has analyzed our energy use history for the period
April 1997 to March 1998. During this period, seventeen electricity accounts demanded 50kW per
hour or above. Combined, these metered locations consumed 5, 114,384kW of energy at a cost
of $550,138. Most of these energy uses are associated with running electrical power equipment
in the City's water and wastewater systems, e.g. water pumping stations, filtration plant operating
equipment, and sewage lift stations. The City Hall complex, Fire Station #1 and the Performing
Arts Center are also high energy use facilities. Yet another 185 metered service points demand
less than 50kW and use approximately 4,975,179 kWhrs of electricity each year; among these
meters are those at 43 traffic signals. City-owned street lights are not metered but use
approximately 750,000 kWhrs each year at a cost of approximately $107,600. SDG&E-owned
street lights (we are still awaiting a decision from the Califomia Public Utilities Commission to allow
the transfer of ownership for these lights to Poway) use another 347,000 kWhrs at a cost of just
under $50,000. The City of poway pays SDG&E for this street light energy use indirectly through
rates that also include maintenance.
3/38 ITEII 7.1
JUtl 1 6 1998
-.--.---.-. ____m
Purchase of Electrical Power Agreements
June 16, 1998
Page 3
Under deregulation restrictions, SDG&E, as a public utility, will be required to sell any power that
it generates to the Power Exchange) and then purchase back all electricity that it sells from the
Power Exchange and melded rates that fluctuate every few minutes according to supply and
demand economics. SDG&E is not in a position to enter into discounted arrangements with certain
of its customers. This, among other reasons, has prompted SDG&E to sell off much of its
electricity generating capacity to become primarily a transmission, distribution and administration
company. SDG&E has embraced the deregulation efforts and has been restructuring itself during
the last several months so as not to be significantly impacted when customers such as Poway
aggregate their needs and seek contracts at discounted prices from other energy service providers.
The independent operators who have approached City staff have been anxious to sign us on as
one of their customers, but they have been ill-prepared to contract for firm prices or to guarantee
reliable electricity delivery. Staff determined that with such a complex system, to participate with
multiple agencies through qualified experts in the energy field, the City's interests would be better
served.
Conclusions from the various analyses suggest that participation in these joint powers agreements
will provide reliable energy and cost reductions in the City's 1998-99 Operating Budget. Moreover,
the City will have opportunities to join with the region's other municipal jurisdictions and water
agencies to immediate benefits arising from electricity energy deregulation in Califomia beyond the
initial ten percent reduction given to all Class A electrical accounts in the City of Poway. To
participate in these opportunities, the City must enter into a formal Agreement with the ACWA USA
and SANDAG as well as enter into one year contracts with NEV and Commonwealth . [A copy of
the resolution authorizing their execution and each Memorandum is attached. [Attachments A, B,
and C] By working within a joint power's framework, the City will position itself to take advantage
of additional increased benefits as the new deregulated electricity market develops and matures.
There will be some expenses associated with this deregulation direction but they would be incurred
regardless of who provides electricity supply to Poway. These expenses will be approximately
$1,000 to purchase and install a direct read time of use electric meter for each 50kWand above
meter (seventeen meters). Through Commonwealth (SANDAG) an option to lease the meters is
offered but we would ultimately have to purchase them anyway so staff proposes to make the
investment immediately. There will be a one time joining fee of $3,000 payable to ACWA to make
us eligible to participate in the New Energy Ventures contract. All of our smaller category "A"
accounts will automatically realize a 10% savings from SDG&E which was mandated by the CPUC.
Through Commonwealth we can obtain an additional estimated 2.5% savings on these accounts.
Similarly, 2.5% savings will be realized on all remaining accounts below 50kW. Finally, depending
on the specific meter, savings of 2.5% through Commonwealth, or 5% through NEV, will be realized
on accounts above 50kW. Consistent with these programs and other CPUC rate reductions, the
City of Poway stands to save an estimated 3.1 % [$30,738] from SDG&E electricity rates in 1998-
99, when compared to SDG&E electricity rates offered between April 1997 and March 1998. Using
the same base period, the City of Poway stands to save an estimated 5.3% [$50,738] in 1999-
2000. (Attachment D summarizes the anticipated savings in fiscal 1998-99 and 1999-2000.)
4/38 JUlll 6 1998 ITEM "1.11
Purchase of Electrical Power Agreements
June 16, 1998
Page 4
ENVIRONMENTAL REVIEW
This action is not subject to CECA review.
FISCAL IMPACT
In fiscal year 1998-99, entering into these agreements for the purchase of electrical energy, after
expenses, should result in a combined estimated reduction in energy costs of $30,738. During the
second year participation will increase annual energy savings to an estimated $50,738.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
None.
RECOMMENDATION
It is recommended that the City Council approve the attached resolution authorizing the City
Manager to execute agreements, permitting the City of Poway to purchase electricity from
Commonwealth Energy Corporation and New Energy Ventures beginning July 1, 1998.
Attachments:
A. Resolution authorizing the execution of agreements
B. Memorandum of Agreement - ACWA, including an agreement with New Energy Ventures
[On file in the Public Services Department]
C. Memorandum of Agreement - SANDAG, including an agreement with
Commonwealth Energy Corporation [On file in the Public Services Department]
D. Summary of Projected Electrical Energy Savings in Fiscal 1998-99
C:\DIRSDA T AIWPFILESICQUNCIL 1ST AFF.RPT\ 1998\ELEC616.400
5/38 Jutl 1 6 1998 ITEII "1.1.\
RESOLUTION NO. 98 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA
AUTHORIZING THE EXECUTION OF MEMORANDUMS OF AGREEMENT WITH
ASSOCIATION OF CALIFORNIA WATER AGENCIES (NEW ENERGY VENTURES)
AND SAN DIEGO AREA GOVERNMENTS (COMMONWEALTH ENERGY
CORPORATION) FOR JOINT POWERS PARTICIPATION IN DISCOUNTED
ELECTRIC POWER CONSORTIA
WHEREAS, Association of California Water Agencies (ACWA) and San Diego Area
Government (SANDAG), based on the recommendations of each respective agency's
study committee dealing with California Electricity Utility Restructuring (AB1890), have
authorized the formation of joint powers' agreements to implement the purchase of
discounted electric power and related services on behalf of interested municipal agencies;
and
WHEREAS, ACWA has selected New Energy Ventures and SANDAG has selected
Commonwealth Energy Corporation though a competitive bidding process; and
WHEREAS, ACWA has negotiated a master contract with New Energy Ventures
and SANDAG has negotiated a master contract with Commonwealth Energy
Corporation, both contracts will provide guaranteed savings on the monthly City of
Poway's electricity bills; and
WHEREAS, the City of Poway understands that there are no costs and no risks
involved in participating in these respective joint powers.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway
as follows:
Section 1: The City Council authorizes the execution of these respective
Memorandums of Agreement with ACWA and SANDAG to implement the
purchase of discounted electric power and related services; and
Section 2: The City Council authorizes the execution of contracts with New
Energy Ventures and Commonwealth Energy Corporation for guaranteed
savings on the City of Poway electricity bills; and
Section 3: The City Council authorizes the City Manager to sign the necessary
Memorandums of Agreement and Contract documents on behalf of the City
Council.
ATTACHMENT A ITEM -1.1 I'
JUlIl 6 1998
6/38
Resolution 98 -
Page 2
PASSED, ADOPTED, and APPROVED by the City Council of the City of Poway
at a regular meeting thereof this 16th day of June, 1998.
Don Higginson, Mayor
ATTEST:
Lori Anne Peoples, Assistant City Clerk
STATE OF CALIFORNIA )
)SS
COUNTY OF SAN DIEGO)
I, Lori Anne Peoples, Assistant City Clerk of the City of Poway do hereby certify,
under penalty of pe~ury, that the foregoing Resolution No. 98- , was duly adopted
by the City Council at a meeting of said City Council held on the 16th day of June 1998,
and that it was so adopted by the following vote:
AYES:
NOES;
ABSTAIN:
ABSENT:
Lori Anne Peoples, As 'stant City Clerk
JU~ll 6 1998 ITEM -'.1
7/38
____...______.__.._________________________.____n___..___________
JOINT POWERS AGREEMENT.
OF THE
ASSOCIATION OF CALIFORNIA WATER AGENCIES
UTILITY SERVICE AGENCY
This Agreement which is entered into by and between the Parties signatory
here to is made with reference to the following:
RECITALS
A. The Parties are each public agencies or mutual water companies
authorized to acquire, construct, maintain and/or operate facilities for the development
and/or use of water resources, including facilities to store, treat, and deliver water for
municipal, industrial, agricultural, domestic and other purposes.
B. The Parties are each authorized to purchase Utility Services in
connection with the operation of facilities for the development, use and delivery of water.
C. One or more of the Parties are also authorized to acquire, construct,
own, operate, control or use works for supplying their own facilities or others with Utility
Services.
D. The Parties are each members of the Association of Califomia Water
Agencies and share the common purpose of securing and providing Utilities Services at
reasonable cost in the public interest.
2
jpaI2.97.doc
12JSI97
ATTACHMENTB JUN 1 6 1998 ITEM 7.1'e
8138
-
E. The Parties desire to create a jOint powers agency to exercise those
powers held in common to provide for the development or purchase of Utility Services for
their mutual benefit.
NOW THEREFORE, the Parties for and in consideration of the premises,
and the mutual terms, conditions, promises and covenants contained in this Agreement,
do hereby agree as follows:
ARTICLE 1. DEFINITIONS.
The following terms capitalized in the text shall have the meaning specified
in this Article unless the context otherwise requires.
1.1. AGENCY. Agency shall mean the Association of Califomia Water
Agencies-Utility Service Agency, a joint powers agency created by the Parties pursuant to
this Agreement.
1.2. AGREEMENT. This joint powers agreement as it now exists or as it
may from time to time be amended.
1.3. ASSOCIATION. The Association of Califomia Water Agencies, a
Califomia non-profit corporation.
1.4 CUSTOMERS OR CONSTITUENTS. Customers or constituents
shall mean those persons, corporations, partnerships or other entities that receive
services from a Party or own property within the boundaries of that Party.
1.5. COMMISSION. The goveming body of the Agency.
3
jpaI2.97.doc
IV""
9/38 JUN 1 6 1998 ITEU 7.111
1.6. LAW or THE LAW. The Joint Exercise of Powers Act, being
Articles 1 and 2 of Chapter 5 of Division 7 of Title I of the Govemment Code of the State
of Califomia commencing with Section 6500, and all laws which amend or supplement it.
1.7. PARTY. Any full or affiliate member of the Association that can
legally enter into this Agreement and that does so by signing it.
1.8. PROJECT SERVICE AGREEMENT OR PSA. An agreement
between the Agency and any of the Parties relating to a Utility Service or Utility Services
which those Parties use or are authorized to provide.
1.9. UTILITY SERVICE OR UTILITY SERVICES. One or more of the
following utility services: water, electrical, power, heat, gas, transportation, telephone,
television, or other utility or communications services.
1.10. WORKING CAPITAL ACCOUNT. The special fund maintained for
general overhead and reconnaissance or other limited initial studies of the Agency.
ARTICLE 2. PURPOSE AND POWERS.
2.1. Creation: There is hereby created, pursuant to the Law, a public
entity to be known as the "Association of Califomia Water Agencies-Utility Service
Agency" .
2.2. Term: This Agreement shall be effective from the date on which the
Executive Director of the Association certifies that it has been executed by Parties that
have collectively deposited a minimum of $100,000 in the Working Capital Account and
shall remain in effect until terminated as hereinafter provided.
4
jpa 12-97.doc
12Im7
10/38 JUN 1 6 1998 ITeM 7.1 "
2.3. Puroose: The purpose of this Agreement is to provide for the joint
exercise, through the Agency, of powers COmmon to the Parties to study, acquire,
construct, own, operate, control, maintain, use, or replace works for supplying their own
facilities and their customers or constituents with Utility Services as provided for in Project
Service Agreements executed by Parties having the common power to provide for the
Utility Services specified in each respective Project Service Agreement and to enter into
agreements and to do all acts related and incidental thereto in order to provide Utility
Services required by the Parties.
2.4. Powers. The Agency shall have the power to exercise any power
common to all the Parties as authorized by the Law and to exercise any power common
to those Parties that enter into a Project Service Agreement to provide the means,
manner and methods of providing for a Utility Service. These powers shall be exercised
subject to such restrictions upon the manner of exercising such powers as are imposed
on the Modesto Irrigation Distrid as specified in the Irrigation District Law (Water Code
Sections 20500, at seq.) The Agency is authorized, in its own name, to do all acts
necessary or convenient for the exercise of such powers for such purposes that the
Parties could do separately, and all other acts authorized by the Law, including but not
limited to any or all of the following:
2.4.1 To make and enter into contracts;
2.4.2 To employ agents, consultants, attomeys and employees;
1 Government Code Section 6509 states that the powers of the Agency shall be 'subject to the
restrictions upon the manner of exercising the power of one of the contracting parties, which oartv
shall be desionated bv the aoreement." (Emphasis added.)
5
jpaI2-97.doc
1=
11/38 JUN 1 6 1998 ITEM 7.1' ~
------ - ---..--
,
2.4.3 To acquire personal property, and any interest therein by purchase,
gift, lease, option, grant, bequest, devise or otherwise, and to hold
and dispose of such property;
2.4.4 To sue and be sued in its own name;
2.4.5 To be an applicant, make applications for, and receive grants from
govemmental and private entities and to participate in State bond
issues;
2.4.6 To prepare project reports and applications, to qualify for grants, and
to enter into grant contracts and to do all other things necessary to
comply with State and Federal laws and regulations with respect to
grants;
2.4.7 To borrow or receive advances of funds from Parties or from other
sources as may be permitted by law;
2.4.8 To execute leases and installment sale or installment purchase
contracts; and
2.4.9 To exercise all powers necessary and proper to carry out the terms
and provisions of this Agreement or otherwise authorized by law;
In addition to the above listed powers, the Agency is authorized to exercise
the following powers to the extent permitted in a Project Service Agreement, for the
benefit of the Parties to such Project Service Agreement:
2.4.10 To acquire real as well as personal property, and all and any interest
therein, by purchase, gift, lease, grant, bequest, devise, eminent
domain or otherwise, and to hold and dispose of such property;
2.4.11 To incur debts, liabilities and obligations;
2.4.12 To issue bonds, notes, warrants, and other evidences of
indebtedness to finance costs and expenses to carry out the powers
exercised for the Parties to a Project Service Agreement; and
2.4.13 To set service charges and fees for any Utility Service.
6
jpll12.97.doc
121S/97
12/38 JUN 1 6 1998 ITEM 7.1 ,~
-
ARTICLE 3. COMMISSION ORGANIZATION AND POWERS
3.1. Govemino Bodv. The Goveming Body of the Agency shall be a
Commission consisting of one Commissioner appointed by each Party. Each Party may
also appoint one or more altemates to act in the absence of a Commissioner. Each
Commissioner or altemate shall serve at the pleasure of the Party who appointed such
Commissioner or altemate. The role of an altemate Commissioner shall be to assume
the duties of the Commissioner for whom he or she is the altemate in case of the
absence or unavailability of such Commissioner.
3.2. Commissioners' Comoensation and Exoenses. Commissioner's and
altemate's compensation, if any, and expenses shall be bome by the Party appointing
such Commissioner.
3.3. Meetinos. The Commission shall hold at least one regular meeting
each year, and, by resolution, may provide for the holding of regular meetings at more
frequent intervals. The date upon which, and the hour and place at which each such
regular meeting shall be held, shall be fixed by resolution of the Commission. Special
meetings of the Commission may be called in accordance with the provisions of
Section 54956 of the Califomia Govemment Code. All meetings of the Commission shall
be called, held, noticed and conducted subject to the provisions of the Ralph M. Brown
Act (Califomia Gov. Code SS 54950, at seq.)
7
jpaIZ.97.cIoc
12JS/97
13/38 JUN 1 6 1998 ITEM 7.11
-------._-, -----"
--,._--,----~
3.4. Quorum. A quorum of the Commission for the transaction of
business shall consist of 50 Commissioners, except less than a quorum may adjoum from
time to time.
3.5 Votino. The Commission shall take no action on a general matter
without the affirmative vote of a simple majority of the Commissioners voting; provided,
however, that if a Project Service Agreement so provides, any action of the Commission
involving such PSA that does not affect the rights and obligations of any Party that is not
a participant in such PSA shall be taken only by a majority vote of the Commissioners
representing the Parties participating in such PSA, whose votes shall be weighted as
provided for in such PSA.
3.6. Bvlaws. The Commission shall establish bylaws and rules of
procedure not inconsistent with this Agreement.
3.7. Princioal Office. The principal office of the Agency shall be the
principal office of the Association.
3.8. Aoreement with Association. The Agency shall contract with the
Association for the provision of all staff and administrative services required by the
Agency and such contract shall be on terms mutually acceptable to the Commission and
the Association.
3.9. Powers of the Commission. The Commission shall have the
following powers and functions:
8
jpaI2-97.doc
12/5191
14/38 JUN 1 6 1998 ITEM 7.1 '4
-
(a) The Commission shall elect from its voting members a President, a
Vice President and three other members of the Executive Committee as provided for in
Section 4.1 and in the Bylaws.
(b) The Commission may review all acts of the Executive Committee,
and shall have the power to modify and/or reverse any decision or action of the Executive
Committee upon a majority vote of the Commissioners present and voting at any duly
constituted Commission meeting.
(c) The Commission shall review, modify if necessary, and approve the
annual operating budget of the Agency, prepared by the Executive Committee pursuant
to Section 4.4.
(d) The Commission shall receive and review periodic accountings of all
funds of the Agency.
(e) The Commission shall have the power to conduct on behalf of the
Agency all business of the Agency, including that assigned to the Executive Committee,
which the Agency may conduct under the provisions hereof and pursuant to law.
(I) The Commission shall have the power to approve or disapprove
each proposed Project Service Agreement submitted to it by the Executive Committee
pursuant to Section 7.2(a).
(g) The Commission shall have such other powers and functions as are
provided for in this Agreement or in the Bylaws.
ARTICLE 4. EXECUTIVE COMMITTEE
9
jpa 12-97.doc
121SJ97
15/38 JUtll 6 1998 ITEM 7.1
--- ~ ~---~--_.
4.1. Membershio. There shall be an Executive Committee of the Agen9Y
which shall consist of 7 members. The members of the Executive Committee shall be the
President of the Commission, the Vice President of the Commission, three other
members elected by the Commission from its voting members as provided for in the
Bylaws, and two members appointed by the Board of Directors of the Association.
4.2. MeetinQs of the Executive Committee. The meetings of the Executive
Committee shall be held and conducted as provided for in the Bylaws. The President of
the Agency, or the Vice President in his or her absence, shall serve as the Chairman of
the Executive Committee. The Executive Committee shall make periodic reports to the
Commission advising the Commission of its decisions and activities and shall fumish to
the Commissioners copies of all minutes of Executive Committee meetings. All meetings
of the Executive Committee shall be called, held, noticed and conducted subject to the
provisions of the Ralph M. Brown Act (Govemment Code 99 54950, et seq.).
4.3. Vacancies. Vacancies on the Executive Committee shall be filled as
provided in the Bylaws.
4.4. Powers of the Executive Committee. The Executive Committee shall
have the following powers:
(a) The Executive Committee shall cause to be prepared an operating
budget for the Agency for each fiscal year, subject to review, modification and approval by
the Commission.
(b) The Executive Committee shall appoint the Treasurer/Controller and
Secretary of the Agency.
10
jpaI2-97.doc
1215197
JUtll 6 1998 ITEM 7.1
16/38
(c) The Executive Committee shall exercise {1eneral supervisory and
policy control over the Administrator.
(d) The Executive Committee may establish additional committees and
subcommittees as it deems necessary to best serve the interest of the Agency.
(e) The Executive Committee shall have such other powers and
functions as are provided for pursuant to this Agreement or by the Commission.
ARTICLE 5. OFFICERS
5.1. Officers. The officers of the Agency shall be a President, a Vice
President, an Administrator, a Secretary, and a Treasurer/Controller.
5.2. President and Vice President. The Commission shall elect a
President and Vice President of the Agency from its members for two year terms. In the
event the President or the Vice President so elected ceases to be a member of the
Commission, the resulting vacancy in the office of President or Vice President shall be
filled at the next regular meeting of the Commission held after such vacancy occurs. In
the absence or inability of the President to act, the Vice President shall act as President.
The President, or in his or her absence the Vice President, shall preside at and conduct
all meetings of the Commission and of the Executive Committee.
5.3. Administrator. The Executive Director of the Association or his or
her designee shall be ex-officio the Administrator of the Agency and shall have the
general administrative responsibility for the activities of the Agency pursuant to the
contract between the Agency and the Association provided for in Section 3.8.
11
jpaI2-97.doc:
12IS197
17/38 JUtll 6 1998 ITEM 7.1
-_._----~-- -~--------
.
5.4. Secretary. The Secretary shall be app.ointed by the Executive
Committee and shall be responsible for all minutes, notices and records of the
Commission and the Executive Committee and shall perform such other duties as may be
assigned by the Executive Committee.
5.5. Treasurer/Controller. The Treasurer/Controller shall be appointed by
the Executive Committee and shall be the chief financial officer of the Agency, shall have
the powers, duties and responsibilities specified in the Law and shall draw checks to pay
demands against the Agency which have been approved by the Agency. The
Treasurer/Controller shall file an official bond with the Secretary of the Agency in the
amount fixed by the Executive Committee.
ARTICLE 6. FINANCIAL PROVISIONS.
6.1. Fiscal Year. The fiscal year of the Agency shall be the same as the
fiscal year of the Association.
6.2. Deoositarv. The Treasurer/Controller shall be the depositary and have
custody of all money of the Agency from whatever source and shall perform the duties
specified in Govemment Code Section 6506.5. All funds of the Agency shall be strictly
and separately accounted for, and regular reports shall be rendered to the Parties, the
Executive Committee and to the Commission of all receipts and disbursements at least
quarterly during the fiscal year. The books and records of the Agency shall be open to
inspection by any Party or Commissioner at all reasonable times. The
Treasurer/Controller shall either make or contract with a certified public accountant or
12
jpaI2-97.doc:
1'1IS/97
Jmll 6 1998 iTEM 7.1
18138
-
public accountant to make an annual audit of the accounts and records of the Agency,
which shall be conducted, at a minimum, in accordance with the requirements of the
State Controller under Section 26909 of the Califomia Govemment Code, and shall
conform to generally accepted auditing standards.
6.3. Prooertv Bonds. The Executive Committee shall from time to time
designate the officers and persons, in addition to the Treasurer/Controller, who shall have
charge of, handle, or have access to any property of the Agency. Each such officer and
person, including the Treasurer/Controller, shall file a bond in an amount designated by
the Executive Committee. When fixing the amount of such bonds, the Executive
Committee shall be deemed to be acting for and on behalf of the Parties who appointed
them in compliance with Govemment Code Section 6505.1.
6.4. Budoet. As soon as practicable after the effective date of this
-
Agreement, and thereafter at least 30 days prior to the commencement of each fiscal
year the Administrator shall present a proposed budget to the Executive Committee for
the forthcoming fiscal year, and prior to the commencement of the fiscal year, the
Executive Committee shall present a budget to the Commission for the Commission's
adoption.
6.5. Contributions to Workino Caoital Account. The Working Capital
Account shall initially be a minimum of $100,000 which is to be used for the purpose of
funding general overhead and administrative expenses for the ongoing operations of the
Agency and for initial reconnaissance level studies of any Utility Service the Commission
may determine to undertake. Parties who join the Agency within one hundred twenty
13
jpaI2.91.doc
121S197
19/38 JUtl1 6 1998 ITEM 7. 1, ~
- -----_._-----~._- ----..--'-
(120) days of the effective date of this Agreement shall contribute $2,500 to the Working
Capital Account upon signing this Agreement. Parties who join the Agency thereafter
shall contribute to the Working Capital Account an amount to be determined by the
Commission. The Commission may assess additional contributions to the Working
Capital Account which shall be assessed equally among the Parties; provided, however,
that any Party that does not desire to contribute any such assessment to the Working
Capital Account may withdraw as a member of this Agency. Any Party that does not pay
any such assessment within sixty (60) days after receipt of a statement from the Agency
shall be deemed to have withdrawn as a Party and ceased to be a Party to this
Agreement.
6.6 Other Contributions. Contributions or advances of other funds and
of personnel, equipment or property may be made to the Agency by any Party for any
purposes of this Agreement, with the consent of the Executive Committee. Any such
advances may be made subject to repayment, and in such case shall be repaid in the
manner agreed upon by the Party making the advance and the Agency.
6.7 Retum of Contributions and Revenue. In accordance with
Govemment Code Section 6512.1, repayment or retum to the Parties of all or any part of
any contributions made by the Parties and any revenues received by the Agency may be
directed by the Commission at such time and upon such terms as the Commission may
decide. The Commission shall hold title to all funds, and property acquired by it during
the term of this Agreement.
14
jpaI2.97.doc
12I5J97
20/38 JUN 1 6 1998 ITEM 7.tH
--
ARTICLE 7. UTILITY SERVICES.
7.1. Reconnaissance Studies. The Executive Committee may institute
studies of any Utility Service which may be of interest to the Parties. During the
preparation of the budget, the Executive Committee shall identify any Utility Service
warranting an investigation during the current and succeeding fiscal years. Funds for any
reconnaissance level study may be budgeted by the Commission and authorized for
expenditure from the Working Capital Account of the Agency, or by contributions or
advances which one or more Parties may make to the Agency.
7.2. Proiect Service Aoreements.
(a) Upon a determination by the Executive Committee that a Utility
Service warrants pursuit for further study and development beyond the initial phase of a
reconnaissance study, the Executive Committee shall cause to be prepared and
submitted to the Commission a proposed Project Service Agreement. If the Commission
approves the proposed Project Service Agreement (PSA), it shall be submitted to the
Parties. Each Party whose contribution to the Working Capital Account is current and
who has the power to acquire or provide the Utility Service specified in the proposed PSA
shall be entitled to participate in that Utility Service and to execute the proposed PSA. No
Party shall be obligated to participate in any Utility Service or in any PSA, nor shall any
Party be obligated to withdraw from this Agreement for failure to participate in any such
Utility Service or in any PSA. The contribution requirements, benefit shares and voting
rights of the Parties electing to participate in a PSA shall be determined by the Parties to
the PSA and set forth in the PSA. In order to participate in a Utility Service a Party shall
15
jpaI2-97.doc
12JSm
21/38 JUN 1 6 1998 ITEM 7.1 '
-----~--~------- - .___U"M"
approve the PSA pertaining to that Utility Service by a resolution duly authorized and
adopted by its Board of Directors. Any amendments to PSAs must be approved by the
Executive Committee in order to be effective.
(b) A PSA may provide that Parties to the PSA may make the Utility
Services fumished by the PSA available to their customers and constituents and
associate members of the Association to the extent permitted by law, provided that such
customers and constituents and Association members agree to pay to the Agency those
charges established by the Executive Committee for such service. One half of any
payments received by the Agency for such charges from customers and constituents who
are not members of the Association and one-half of any royalties or other payments
received by the Agency resulting from Utility Services provided to such customers and
constituents shall be paid by the Agency upon receipt to the Association as an additional
payment under the contract with the Association provided for in Section 3.8. The
furnishing of Utility Services by a Party to a customer or constituent or associate member
of the Association shall not confer any membership or voting rights upon that customer,
constituent or Association member.
(c) The Parties to a PSA shall indemnify, defend and hold harmless the
Association and the Parties that do not participate in such agreement from liability of any
kind resulting from or in any way related to the financing, contribution or acquisition of any
Utility Service provided by such agreement. A PSA shall provide for such rates, charges,
fees and payments as shall be agreed upon by the Parties thereto, and they shall be at
16
jpaI2-91.doc
121S197
22/38 Jutll 6 1998 ITEM 7.1
-
least sufficient to pay and discharge all obligations of the Agency that are or will be
increased in connection with any Utility Service provided by such agreement.
ARTICLE 8. RELATIONSHIP OF THE AGENCY AND ITS MEMBER ENTITIES.
8.1. Separate Entitv. The Agency shall be a public entity separate frorn
the Parties to this Agreement. Unless, and to the extent, otherwise agreed herein, the
debts, liabilities and obligations of the Agency shall not be the debts, liabilities or
obligations of the Parties. All property, equipment, supplies, funds and records of the
Agency shall be owned by the Agency, except as otherwise provided in this Agreement.
8.2. Additional Parties. Additional Parties who are members of the
Association may join in this Agreement after its effective date and become mernbers of
the Agency if accepted and approved by a majority of the Executive Cornmittee members.
The Executive Committee may prescribe terms and conditions for the joinder of such
Parties. Such Parties shall evidence their joining of the Agency by signing this Agreement
and contributing to the Working Capital Account the amount set by the Commission.
8.3. Termination of a Party's Participation in the Aoencv bv the Party.
Any Party may withdraw from this Agreement by giving six months written notice of its
election to do so, which notice shall be given to the Executive Committee and to each of
the Commissioners; provided, that such withdrawal does not in any way impair any
contracts, resolutions, indentures or other obligations of the Agency then in effect. No
refund or repayment of any portion of the Working Capital Account or any other funds
17
jpaI2-97.doc
1215197
23/38 JUlll 6 1998 ITEM 7.1
---- ------------ . ---------------~-_._~._-----
.
contributed by the Party, unless otherwise provided for in a PSA, shall be made to the
Party ceasing to be a Party to this Agreement.
8.4. Termination of a Party's Participation bv the Commission. The
Commission may terminate any Party's participation in the Agency, provided that such
Party is not then a participant in any Project Service Agreement, by a two-thirds vote of
the Commissioners present and voting at any duly constituted Commission meeting.
8.5. Disposition of Property Upon Termination. Upon termination of this
Agreement, any surplus money on hand shall be retumed to the Parties in proportion to
their contributions made. The Executive Committee shall first offer any property, works,
rights and interests of the Agency for sale to the Parties. If no such sale to the Parties is
consummated, the Executive Committee shall offer the property, works, rights and
interests of the Agency for sale to any govemmental agency, private party or persons for
good and adequate consideration. The net proceeds from any sale shall be distributed
among the Parties in proportion to their contributions made. If no such sale is
consummated, then all property, works, rights and interest of the Agency shall be given to
the Association.
ARTICLE 9. MISCELLANEOUS PROVISIONS.
9.1. Breach.' If default shall be made by any Party in any covenant
contained in this Agreement, such default shall not excuse any of the other Parties from
fulfilling their obligations under this Agreement, and the Parties shall continue to be liable
for the payment of all contributions and the performance of all obligations contained in
18
jpaIZ-91.doc
1215/97
JUll 1 6 1998 . . EM ., ,1
24/38
this Agreement and in any PSA executed by such parties. The Parties hereby declare
that this Agreement is entered into for the benefit of the Parties and the Agency, and the
Parties hereby grant to the Agency the right to enforce by whatever lawful means the
Agency deems appropriate all the obligations of each Party hereunder. Each and all of
the remedies given to the Agency by this Agreement, by the Law, by any PSA, or by any
law now or hereafter enacted are cumulative, and the exercise of any right or remedy
shall not impair the right of the Agency to any or all other remedies.
9.2. Severabilitv. Should any part, term or provision of this Agreement be
decided by a court of competent jurisdiction to be illegal or in conflict with any Federal law
or any law of the State of Califomia, or otherwise be rendered unenforceable or
ineffectual, the validity of the remaining parts, terms or provisions hereof shall not be
affected thereby.
9.3. Successors and Assionment. This Agreement shall be binding upon
and shall inure to the benefit of the successors of each of the Parties. The Agreement
rnay not be assigned without the advance written consent of all of the Parties. A PSA
shall set forth the conditions under which a Party may assign any right or obligation
thereunder.
9.4. Amendment of this Aoreement. This Agreement may be amended
by a two-thirds vote of the Commissioners voting thereon at a duly constituted meeting of
the Commissioners; provided, that no such amendment shall cause the Agency to violate
any condition or restriction or any contract of the Agency or frustrate the operation of any
PSA.
19
jpa 12-97.doc
1215/97
25/38 JUN 1 6 1998 ITEM 7.1
.,~--~-
"-~
9.5. Notices. Any notice authorized or required to be given pursuant to
this Agreement shall be in writing and shall be deemed to have been given when mailed,
postage prepaid, or delivered during working hours to the addresses of the Party as such
addresses are communicated to the Agency from time to time.
9.6. Withdrawal by Operation of Law. Should the participation of any
Party to this Agreement be decided by the courts to be illegal or in excess of that Party's
authority or in conflict with any law; the validity of the Agreement as to the remaining
Parties shall not be affected thereby, and each Party hereby agrees that it would have
entered into this Agreement upon the same terms as provided herein if that withdrawing
party had not been a participant in this Agreement.
9.7. Multiple Orioinals. This Agreement may be executed in
counterparts, each of which shall be deemed an original.
9.8. Limitations on Liabilitv. The Agency shall be authorized to defend,
indemnify and hold harmless any Commissioner, altemate Commissioner, Executive
Committee member or officer or employee for actions taken or not taken within the scope
of the authority given or granted by the Agency and may purchase insurance as the
Executive Committee may deem appropriate, if any. The Agency shall defend, indemnify
and hold harmless the Association, each Party, and their respective officers, agents and
employees from and against any claim or suit arising out of any act or omission of the
Agency, its Commission, the Executive Committee or its officers, agents and employees
in connection with this Agreement, a Utility Service or a Project Service Agreement. The
Parties, as between themselves, in contemplation of Section 895.2 of the Govemment
20
jpaI2-97.doc
I2ISI97
26/38 JUtll 6 1998 ITEM 7.1
-- -
Code, and pursuant to the authority contained in Sections 895.4 and 895.6 of that Code,
each assume the full liability imposed upon the Party, or any of its officers, agents or
employees by law for injury caused by any negligent or wrongfUl act or omission occurring
during the performance of this Agreement to the same extent that such liability would be
imposed in the absence of Section 895.2 of that Code. To achieve such purpose, each
Party shall indemnify and hold harmless the other Parties for any loss, costs or expenses
that may be imposed on such other Parties solely by virtue of Section 895.2. The
provisions of Section 2778 of the Civil Code are made a part of this Agreement as though
fully set forth in this Agreement.
IN WITNESS WHEREOF, the Parties executed this Agreement on the
dates shown below.
OFFICIAL NAME OF PARTY
Date: By:
Title of Officer:
ATTEST:
Secretary of the Party
APPROVED AS TO FORM: (Not Required by ACWA-USA)
Counsel of the Party
21
jpaI2-97.doc
1215/97
Jutll 6 1998 ITEM 7.1 1
27/38
---"
~._-- ---
.
5/8/98
,
COMMONWEALTH ENERGY POWER SERVICES AGREEMENT
This Agreement rAgteement'j is entered into by and between Commonwealth Energy COIpOration ("COMMONWEALTH'),
a California COJpOration, and San Diego Regional Power Pool participant ("PARTICIPANT; effective the date written
below and based upon the following recitals, covenants and conditions:
WHEREAS, PARTICIPANT controls the electricity purchases for the meter or meters listed on Schedule A contained herein
or separately attached hereto (individually, a "Meter' and, collectively, the 'Meters');
WHEREAS, COMMONWEALTH is in the business of providing low cost electricity and related services and is registered by
the California Public Utilities Commission as an Electric Service Provider (ESP #1092) and with the Federal Energy
Regulatory Commission as a Power Marketer.
WHEREAS, COMMONWEALTH has been selected through a competitive bidding process and has entered into an
Agreement with the San Diego Association of Governments (the .SANDAG Agreementj, the administrator of the San
Diego Regional Power Pool, and has furnished a petiormance bond to SANDAG for use by the San Diego Regional Power
Pool to pay the costs of conducting another Power Procurement Process if COMMONWEALTH were to default under the
SANDAG Agreement or this Agreement;
WHEREAS, COMMONWEALTH hereby offers to PARTICIPANT electric power purchasing services under California's
competitive power supply program created by AB 1890 and known as the Direct Access program ("Direct Access'), at a
discount to the rates offered by CUSTOMER'S Utility Distribution Company ('UDC");
WHEREAS, PARTICIPANT wishes to participate in COMMONWEALTH'S power purchasing program;
NOW THEREFORE, in consideration of the covenants, recitals and conditions contained herein and for other good and
valuable consideration, receipt of which is hereby acknowledged, COMMONWEALTH and PARTICIPANT hereby enter into
this Agreement
DEFINITIONS
All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in Schedule B
attached hereto,
AGREEMENT
1, COMMONWEALTH SERVICES: COMMONWEALTH shall procure electric power to serve the full requirements of the
meter loads specified by PARTICIPANT and listed in Schedule A, and shall perform, manage or acquire all functions
necessary, including scheduling through a CAlSO-<:ertified Scheduling Coordinator, to effect delivery of such power to
PARTICIPANT through the California Direct Access system. PARTICIPANT shail have the right to include any meters
(existing or new) into this Agreement at any time during the term of the Agreement upon thirty (3O) days written notice
to COMMONWEALTH. COMMONWEATH shall be PARTICIPANTS' exclusive electrical supply purchasing agent for
the loads specified in Schedule A during the term of this Agreement, with the exclusive right to pursue, evaluate and
negotiate any and all electric supply procurement opportunities for the purpose of reducing PARTlCIPANrS electric
supply procurement costs. PARTICIPANT shall keep COMMONWEALTH apprised of other energy cost reduction
options it may pursue and shall forward to COMMONWEAL TH any proposals from any other sources that may lead to a
reduction in PARTlCIPANrS electricity unit costs for electric supply procurement
2, PRICING:
2.1 Guaranteed Savinas: COMMONWEALTH shall provide electrical energy to PARTICIPANT at a rate such that
PARTICIPANT is guaranteed a minimum savings of ("Guaranteed Savings"):
, Three and onE~-half percent (3.5%) discount below the otherwise applicable total bill from the
PARTlCIPANrS UDC provided the San Diego Regional Power Pool has an Aggregated Monthly Load Factor
greater than or equal to .60,
ATTACHMENT C ITEM 7.1 4
28/38 Jutll 6 1998
,-
518/98
. Two and one-haJf percent (2,5%) discount below the otherwise applicable total bill from the PARTICIPANTS
UDC provided the San Diego Regional Power Pool has an Aggregated Monthly Load Factor greater than or
equal to ,55 but less than ,60,
. Two peroent (2%) discount below the otherwise applicable total bill from the PARTICIPANTS UDC provided
the San Diego Regional Power Pool has an Aggregated Monthly Load Factor greater than or equal to ,50 but
less than ,55,
. One and one-half percent (1.5%) discount below the othllfWise applicable total bill from the PARTICIPANTS
UDC provided the San Diego Regional Power Pool has an Aggregated Monthly Load Factor less than ,50.
2.2 Incremental Savinas: In addition, COMMONWEALTH will share with PARTICIPANT any realized cost saving
beyond the applicable Guaranteed Savings ('Incremental Savings') according to the following schedule: seventy
five percent (75%) of Incremental Savings to PARTICIPANT and twenty fIVe percent (25%) of Incremental Savings
to COMMONWEALTH. Incremental Savings is defined as the difference between (1) the amount PARTICIPANT
would have paid for electrical energy during the billing period under PX pricing as a buncled utility customer under
its Applicable Tariff and (2) COMMONWEALTH's Cost of Power, less the Guaranteed Savings, provided that the
Incremental Savings cannot be negative. COMMONWEALTH's Cost of Power is defined as its purchased
generation costs plus any out-of-pocket costs for functions required to utilize the ISO controlled grid for energy
delivered to PARTICIPANT, provided that the cost for such functions shall not exceed what PARTICIPANTS cost
would have been with bundled utility service.
2.3 Enemv Charae Calculation: COMMONWEALTH'S bill amount for the energy and services provided to
PARTICIPANT by COMMONWEALTH shall be equal to COMMONWEALTH's actual Cost of Power for the
electrical energy delivered to PARTICIPANT, plus 25% of any Incremental Savings, provided that in no event will
COMMONWEAL TH's bill amount to PARTICIPANT exceed an amount which ensures that PARTICIPANT realizes
the Guaranteed Savings, There shall be no additional charges to PARTICIPANT related to COMMONWEALTH'S
provision of electrical energy service beyond those described above and in section 4 of this Agreement. The above
pricing includes the provision of all services or functions which are, or may be required, to be performed, managed,
or acquired by COMMONWEALTH including without limitation billing, Meter Data Management Agent (MDMA)
functions, and all schedule coordination services, to effect delivery of power to PARTICIPANT whether or not they
are specifically enumerated in this Agreement.
3, SCHEDULE COORDINATION SERVICES: Schedule coordination services required to effect delivery of power to
PARTICIPANT shall be performed by COMMONWEALTH or by contractors approved by the Califomia Public Utilities
Commission and the Independent System Operator and under contract to COMMONWEALTH.
4, METERING: If required, COMMONWEALTH shall provide, install, own and maintain at a cost of $22 per month per
meter Direct Access Meters to PARTICIPANT. COMMONWEALTH shall own, insure, WBrTant, and provide meter
support services including corrective maintenance services for all meters installed under this Agreement at no
additional cost to the $22 per month metering charge. If required, additional communications equipment (extension of
phone/modem line beyond 10 feet from meter installation location) shall be the responsibility of the PARTICIPANT.
Upon the expiration or sooner termination of this Agreement, PARTICIPANT may purchase meter{s) at a fair market
value or COMMONWEALTH will remove the meter at no additional cost at PARTICIPANTS option.
COMMONWEALTH shall allow PARTICIPANT to own, install, and maintain its own Direct Access Meter at
PARTICIPANTS option without PARTICIPANT incurring the $22 per month per meter charge, PARTICIPANT grants
COMMONWEALTH, its contractors and agents the right to enter its premises to install, repair, maintain, and remove
meters provided by COMMONWEALTH.
5. BILUNG: PARTICIPANT elects to receive a consolidated invoice submitted by the UDC for UDC charges and
COMMONWEALTH'S charges, COMMONWEAL TH shall take the necessary steps to fulfil the ESP obligations set forth
under the UDC's direct access rules, with no charge to PARTICIPANT, to ensure that PARTICIPANT is billed through
the Consolidated UDC Billing option for the energy services to be provided by COMMONWEALTH according to the
29/38 JUfll 6 1998 ITEM 7,1
--.,,-----" ~--_.,------------_.__.-
518198
pricing terms specified in this Agreement All meter reading and data processing functions are included as a part of this
billing saMce obligation.
6. ENERGY CONSUMPTION INFORMATION: PARTICIPANT shall designate COMMONWEALTH to PARTICIPANrS
current electricity supplier(s) as an authorized recipient of PARTlCIPANrS current and historical electricity cost and
usage data. PARTICIPANT shall provide facility descriptions, operating information and such other infonnation
available to PARTICIPANT as COMMONWEALTH may reasonably require in the perfonnance of its seMces under this
Agreement and that PARTICIPANT is comfortable providing; provided that such requests shall be reviewed and
approved by SANDAG prior to COMMONWEALTH making the request to PARTICIPANT. Except as specifically
authorized by PARTICIPANT to disclose such infonnation and except for use by SANDAG for the purpose of verifying
the calculation of its Aggregation Fee, COMMONWEAL TH shall maintain in accordance with CPUC rules and decisions
any and all such infonnation provided by PARTlCIPANrS current electricity supplier(s) as confidential.
COMMONWEAL TH shall provide semi-annual consolidated summary reports to each PARTICIPANT reganing
PARTlCIPANrS historical monthly energy usage and savings achieved compared to PX costs for each meter, At no
additional cost, PARTICIPANTS with installed Direct Access Meters will be able to view and electronically download
historical energy use data through a secure intemet server on a daily basis or more frequently, ff required,
7, QUALITY: COMMONWEALTH shall procure and provide finn electric power supplies to meet the full energy
requirements of PARTlCIPANrS loads specified in Schedule A
8, EFFECTIVE DATE: This Agreement shall commence on July 1,1998,
9, TERM OF AGREEMENT: This Agreement shall commence on the effective date for a tenn of one (1) year from the
date PARTICIPANT begins receipt of service from COMMONWEALTH, or until June 30, 1999, whichever occurs firs~
with PARTICIPANT having the option to renew at the existing tenns of this Agreement for up to four (4) additional one
year periods beginning on July 1 of every year. PARTICIPANT may exercise its option to renew by giving written notice
thereof to COMMONWEAlTH at least thirty (30) days prior to expiration of the then current tenn.
10. LOW PRICE GUARANTEE: If, after at least six (6) months from the execution of this Agreement, The San Diego
Regional Power Pool receives a verifiable written offer by an Established Supplier to supply The San Diego Regional
Power Pool's electricity at a rate which The San Diego Regional Power Pool believes is below the COMMONWEALTH
delivered rate, then COMMONWEALTH shall have thirty (30) days from notice of the offer to elect to supply
PARTICIPANT The San Diego Regional Power Pool the electricity and equivalent seMce, if any, as described in the
offer on tenns equivalent to the offer, If after thirty (30) days' notice of the offer, COMMONWEALTH has not elected in
writing to supply The San Diego Regional Power Pool the electricity and services under terms equivalent to the offer
and The San Diego Regional Power Pool accepts the offer, then the PARTICIPANT will terminate this Agreement
without penalty or liability.
11, COMMUNICATIONS: All communications shall be in writing and sent or delivered to the address set forth opposite the
Party's signature hereto or such other address as may be designated by written notice, and shall be deemed given when
received.
12. AUDIT AND INSPECTION OF RECORDS: COMMONWEALTH shall maintain complete and accurate records with
respect to the Guaranteed Savings, Incremental Savings, and Cost of Power calculations under Section 2 under this
Agreement All such records shall be maintained on a generally accepted accounting basis and shall be clearly
identified. COMMONWEALTH shall provide reasonable access to the representatives of PARTICIPANT, or their
appointees, to such books and records. PARTICIPANT reserves the right to examine and audit such books and records
and to make transcripts or copies of them as necessary, COMMONWEALTH shall allow inspection of all work data,
documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final
payment under this Agreement In addition to the above accounting records, COMMONWEALTH shall maintain
records to show actual costs for its Cost of Power, .
13, INDEMNIFICATION: At no time shall PARTICIPANT, including its officers, agents and employees, parent or Slilsidiary
company be liable or forced to pay penalties, fees, fines or any other sanction levied against COMMONWEALTH by the
30/38 Jutl 1 6 1998 ilt::M 7,1
-
5/8/98
Independent System Operator, the California Public Utilities Commission, the Federal Energy Regulatory Commission
or any other entity as a result of any default on the part of COMMONWEALTH in regards to performance of duties
required by this Agreement Should, for ar\y reason, PARTICIPANT be direcUy assessed any fine, fee or penalty by
any entity because of COMMONWEALTH'S activities regarding this Agreement, COMMONWEALTH will be fully
responsible for paymentlhereof, COMMONWEALTH will defend, indemnify, and hold PARTICIPANT harmless from
losses, claims or costs of any kind caused or alleged to have been caused by COMMONWEALTH'S negligence, actions
or inactions,
14, INSURANCE: COMMONWEALTH shall maintain comprehensive general liability insurance in minimum limits of $1
million/occurrence and $3 million aggregate and shall maintain wor1<ers' compensation insurance as required by
California law, COMMONWEALTH will provide proof of insurance to PARTICIPANT upon signature and request
15. ASSIGNMENT: Neither COMMONWEALTH nor PARTICIPANT may assign this Agreement without the prior written
consent of the other. If written consent to assignment is not given within 15 days after a written request therefor, which
consent will not be unreasonably withheld, then the party proposing the assignment may terminate this Agreement
without penalty or liability upon 30 days written notice, provided that COMMONWEALTH may not terminate for failure of
PARTICIPANT to consent to COMMONWEALTH'S proposed assignment unless its proposed assignee is an
Established Supplier, An Established Supplier is defined as an entity possessing all of (1) all requisite certifications,
permits and authorities to perform COMMONWEAL TH'S obligations under this Agreement, (2) a demonstrated track
record in the provision of electric power indicative of an ability to fully perform COMMONWEALTH'S obligations under
this Agreement, and (3) a net worth at least the equivalent of that of COMMONWEALTH'S as of the date of this
Agreement
16, FORCE MAJEURE: "Force Majeure' shall be defined as an event that is not within the reasonable control of the Party
claiming suspension rthe Claiming Party"), and that by the exercise of due dligence, the Claiming Party is unable to
overcome in a commercially reasonable manner or obtain or cause to be obtained a commercially reasonable substitute
performance therefor, and such event shall not be deemed to be a default under this Agreement Force Majeure
includes, but is not limited to: acts of God; fire; war, flood; earthquake; civil disturbance, sabotage; failure of facilities or
breakage of machinery or equipment of parties other than the Claiming party; supply curtailment due to UDC equipment
failure; declaration of emergency by the ISOIPX; regulatory or legislative action, or action or restraint by court order or
governmental authority (so long as the Claiming Party has not applied for or assisted in the application for, and has
opposed where and to the extent reasonable, such governmental action), Specifically excluded from Force Majeure
events is economic hardship due to mar1<et conditions, whatever their cause.
If either party shall be unable to cany out any obligation under this Agreement (other than the obligation to make
payments) due to Force Majeure, this Agreement shall remain in effect but such obligation shall be suspended for the
period necessary as a result of the Force Majeure, provided that (I) the Claiming Party gives the other Party prompt
written notice describing the particulars of the Force Majeure, including but not limited to the nature and date of the
occurrence and the expected duration of the disability; (ii) the suspension of performance is of no greater scope and of
no longer duration than is required by the Force Majeure; and Qii) the Claiming Party uses commercially reasonable
efforts to remedy its inability to perform.
17, DEFAULT: Failure by COMMONWEALTH, any affiliate, parent company, partner or principal of COMMONWEALTH, in
the performance of any obligation under this Agreement constitutes default of this Agreement In the event of such
default, in addition to any other reme<ies it may have available by law, PARTICIPANT may terminate this Agreement at
its option by written notice to COMMONWEALTH. PARTICIPANT shall attempt to provide 30 days notice in the event
of such termination, but may provide less notice as it determines is reasonable under the circumstances,
18, ENTIRE AGREEMENT: This Agreement, including any Exhibit or Schedule hereto, embodies the entire Agreement
and understanding, and supersedes all prior Agreements and understandings between the parties with respect to the
subject mailer hereof. This Agreement may not be amended except by writing executed and delivered by the parties
hereto,
31/38 JUN 1 6 1998 ITEM 7.1
---~-----_.- ~-----_.~-------_.-
5/8/98
19. LAWS, VENUE, AND ATTORNEY'S FEES: This Agreement shall be intEllplllted in accordance with the laws of the
Slate of Calnomia. If any action is brought to interpret or enforce any tfl/lll of this Agreement, the action shall be
brought in a slate or federal court situated in the County of San Diego, Slate of California. In the event of any such
litigation be\W99n the parties, the prevailing party shall be entiUed to recover all reasonable costs incurred, including
reasonable allomeys' fees, as detennined by the court.
COMMONWEALTH ENERGY CORPORATION SAN DIEGO REGIONAL POWER POOL PARTICIPANT
Signature Signature
Name Name
TiUe Tme
Date Date
Address Address
Agency
32138 JUtl 1 6 1998 ITEM 7.1
-.
5/8/98
Schedule A
Electric Meters to Participate in San Diego Regional Power Pool
33/38 JUlll 6 1998 ITEM 7.1
- ~~------
-.-------
5/8/98
Schedule B
Definitions
Aggregated Monthly Load Factor: Represents the Load Factor calculated for the period of a month for an aggregated
group, Aggregated Monthly Load Factor is calculated by summing the total kWh for all participants of an aggregation,
dividing that total by the number of hours in the month, and then dividing that number by the coincident peak kW for all
participants of the aggregation for the same month. For every meter that is eligible to use load profiling, COMMONWEALTH
shall apply Califomia Public Utility Commission (CPUC) approved load profiles provided by Sen Diago Gas and Electric
(SDG&E) to the PARTlCIPANrS actual monthly kWh usage for that meter as recorded by SDG&E to calculate that meter's
demand for every hour of the period, The calculated hou~y demand for each meter will then be used in conjunction with
actual hourly interval metered data to calculate the aggregated group's coincident peak kW, For each meter not eligible to
use load profiling, COMMONWEALTH shall use actual recorded kWh usage for the month and actual recorded kW for each
hour in the month in its calculated of the aggregated group's coincident peak demand, A mete(s eligibility (less than 50 kW)
to use load profiling is defined by the CPUC in D. 97-10.Q86. The approved load profiles may be found on the Intemet at
hltp://162,15,5.2Iwk-group/daildail.
Applicable Tariff: The current or subsequent public rate or tariff schedule detailing utility rates, rules and tenns of service
that are filed with and approved by a regulatory agency and for which the customer is qualified to obtain service.
California Independent System Operator (CAlSO): The entity responsible for the operation and control of the statewide
transmission grid pursuant to AS 1890,
California Public Utilities Commission (CPUC): The regulatory agency established to regulate privately owned utilities and
to ensure adequate service to the public at rates which are just and reasonable both to customers and shareholders of the
utilities.
Cost of Power: As defined in Section 2.2 of this Agreement
Direct Access (PA): A service election which allows customers to purchase competitive energy services from non-utility
entities ragistered with the State of Califomia known as ESPs,
Direct Access Meters: An interval meter that complies with CPUC meter design specifications and is required by certain
customers to participate in Direct Access. This meter must meet CPUC meter design specification at the time of meter
installation. An interval meter is defined as a meter capable of reading and storing electric consumption data at specified
time intervals of no greater than one hour as required for Direct Access settlement and data required to bill applicable UDC
tariffs,
Electric Service Provider (ESP): An entity which provides electric service to a retail or end-use customer, but which does
not fall within the definition of an electrical corporation under Public Utilities Code Section 218,
Established Supplier: As defined in Section 15 of this Agreement
Federal Energy Regulatory Commission: The federal regulatory agency responsible for regulating the activities of key
portions of the nation's natural gas utilities, electric utilities, natural gas pipeline transportation utilities, and hydroelectric
power producers.
Guaranteed Savings: As defined in Section 2.1 of this Agreement
Incremental Savings: As defined in Section 2,2 of this Agreement
Kilowatt (kW): Often referred to as electric demand, kW is the amount of energy drawn by a customer at a specific time.
Kilowatt-hour (kWh): Electric energy expressed in kilowatt-hours is measured by multiplying the amount of electric power
delivered (measured in watts) by the amount of time over which the energy was consumed (measured in hours). Kilowatts
equal one thousand watt-hours. Megawatts equal a million watt-hours or one thousand kilowatt-hours,
34/38 JUlll 6 1998 ITEM "(.1
.
-
5/8198
Load Factor: Load Factor indicates to what degree a participant's actual energy consumption (kWh) during a given time
period compared to the consumption that would have occurred had consumption been fully sustained at the participant's
maximum demand (kW) level, Load Factors are expressed in peroentages, and higher load factors represent a more even
distribution of load Load Factor is calculated by dviang the total kWh for a period by the hours in the period, and then
civicing that number by the peak kW for the same period.
Meler Data Management Agent (MDMA): MDMAs must be approved by the custome(s UDC and is responsible for meter
reading, usage calculations and data access.
Participant: An agency that executes a Memorandum of Understanding with SANDAG to join the San Diego Regional
Power Pool. A Participant may be a subsidiary public agency or non profit organization of the entity executing this
Agreement
Power Exchange (PX): A Califomia state chartered, non profit organization charged with providing an efficient competitive
auction, open on a nondiscriminatory basis to all suppliers, that meets the loads of all exchange customers at efficient prices.
The PX is a scheduling cOOldinator and is independent of the CAISO and other market participants.
Power Procurement Process: The process which includes identifying qualified Electrical SeMce Providers, developing a
Request for Proposals, solicitation of ESP responses, evaluation of such proposals, negotiation of power purohase
agreements, and development of final contracts for competitive power purohases.
Meler (or Meters): ki. defined in the first Recital of this Agreement
San Diego Regional Power Pool: An aggregated group of agencies established to coordinate the purchase of electric
energy, transmission, and other services on behalf of the participating agencies.
San Diego ki.sociation of Governments (SANDAG): SANDAG is the regional planning agency, as well as a key technical
and informational resource, for the area's eighteen incorporated cities and the county government who collectively are the
Association of Govemments. Through this voluntary association, local govemments work together to solve current problems
and plan for the future. SANDAG is a joint powers agency authorized under California State law.
Scheduling Coordinator (SC): An entity certified by the Federal Regulatory Commission through the CAlSO that acts as a
go-between with the ISO on behalf of generators, supply aggregators (wholesale marketers), retailers, and customers to
schedule the distribution of eJeclJicity.
Utility Distribution Companies (UDCs): The entities which will continue to provide regulated services for the distribution of
electricity to customers and S9fVe customers who do not choose direct access,
35/38 JUtll 6 1998 ITEM "1.1
_.~.~--_.- -.-.'..---.-.-----
----~----_._------,-
5/8198
MEMORANDUM OF UNDERSTANDING
BETWEEN THE SAN DIEGO ASSOCIATION OF GOVERNMENTS (SANDAG)
AND THE PUBUC AGENCY PARTICIPANTS IN THE SAN DIEGO REGIONAL POWER POOL
PUrDose. The pUJpose of this Memorandum of Understanding (MOU) is to:
A. Provide public agencies in the San Diego area an opportunity to save money on electricity costs as a result of indusby
restructuring;
B, Transfer knowledge to public agencies on efficient and effective methods for achieving cost savings in the
restructured electricity mar1<et
C. Set forth the basic structure for public agencies to receive electricity cost savings from electric restructuring in
Califomia without having to individually bear the total costs of procuremen~ contracting, and administration necessary
to achieve the energy saMce cost benefits;
D. Position the San Diego Regional Power Pool to make effective and timely decisions and to increase future savings as
opportunities arise and the mar1<et matures; and
E. Create a structure for the San Diego area public agencies thet will facilitate competitive power suppliers responding to
the particular needs of the participating public agencies and their constituents.
Upon execution, this MOU between the public agency participant and SANDAG shall remain in effect for the period of time
during which the public agency participant is purchasing power from a competitive supplier using a master bilateral contract with
a energy selVice provider selected by the San Diego Regional Power Pool.
There is no cost to public agencies for entering into this Memorandum of Understanding.
There is no legal or financial liability created between SANDAG and public agency participants In the San Diego Regional
Power Pool, nor among the power pool participants, as a result of entering Into this Memorandum of Understanding.
Definition of Public Aaencies. Public agencies include agencies and their subsidiary non profit corporations.
San Dieao Reaional Power Pool. The San Diego Regional Power Pool was created to pursue maximum electricity selVice
cost savings, with limited or no financial risk, through the use of a power purchase contract that provides the flexibility for public
agencies to take advantage of competition in the restructured electric selVice indUsby, The San Diego Regional Power Pool
will operate through a Power Pool Committee created by the SANDAG Board. The Committee's membership will consist of
one representative from each public agency that has an effective MOU with SANDAG. The Responsibilities and duties of the
Committee will include:
A. Review and selection of a competitive energy selVice provider(s) that is viewed as offering cost savings of most
interest to the San Diego Regional Power Pool participants;
B. Develop a master bilateral contract(s) for the purchase of power and other energy selVices by the participants;
C, Administer the Memorandum of Understanding between participating public agencies and SANDAG regarding
participation in the power pool and its administration; and
D, Provide guidance to SANDAG staff on program administration and other matters necessary for the successful
operation of the San Diego Regional Power Pool.
The Committee will choose its own operating rules and procedures including voting formula, selection of officers, and
subcommittee structure, if necessary.
Responsibilities of SANDAG. The responsibilities and duties of SANDAG in the on-going operation and administration of the
San Diego Regional Power Pool will include:
A. Facilitating creation of the Power Pool Committee and authorizing agreements and other actions necessary for the
pool to make decisions on power purchases and related energy selVices;
B, Provide staff and administrative support to the Power Pool Committee in managing the electricity selVice provider(s)
and in performing other functions necessary for the success of the San Diego Regional Power Pool;
C, Receive payments from electricity selVice provider(s) selected by the San Diego Regional Power Pool to fund
administration and support activities provided by SANDAG; account for payments received over the costs of
administration and support and distribute those payments to benefit the power pool and its members, as determined
by the Power Pool Committee;
36/38 JUlll 6 199B ITEM 7.1
.
-
518/98
D. Consider Power Pool Committee recommendations, and take appropriate actions, regarcing developments, trends,
issues and opportunities for achieving the cont~atad electric energy cos( savings and communicate with the
region's governments, businesses and residents on lhasa matters; and
E. Consider legislative and regulaloly recomniendations from the Power Pool Committee and communicate with local,
state, and federal representatives on lhasa issues.
ResDonslbllilles of PartlclDallna Public Aaencies. The responsibilities and duties of participating pItlIic agencies in the 0n-
going operation and administration of the San Diego Regional Power Pool will include:
A Detennine if it will enter into bilateral contracL negotiated by SANDAG, with the electricity service provider(s), and
select meters to be entered in the San Diego Regional Power Pool;
B. Participate as a member of the Power Pool Committee, if desired by the pItlIic agency;
C. SLWIY the Power Pool Committee and SANDAG with notice of any verifiable written offer received from an
established supplier to supply electricity at a rate lower than the rate currenUy being delivered through the Power
Pool.
D, Through the Power Pool Committee, make recommendations to SANDAG on legislative and regulatory issues, and
developments, trends, issues and opportunities for electricity purchases to the region's governments, businesses and
residents.
SAN DIEGO REGIONAL POWER POOL PARTICIPANT SAN DIEGO ASSOCIATION OF GOVERNMENTS
Signature Signature
Name Name
TiUe TiUe
Date Date
Address Address
Agency
37/38 JUtl 1 6 1998 ITEM 7.1
----.-------- - ,------ _.~-~-
'0"00 ma:>......mor-- CO"litC"')C"')......com,.....,....O)O)CO,....CDCO-.;tN""'" CO
_ Q Na:>m,..........m CON,................a:>...,.CO~O......No)...,.O)V~V M
~~C ~~~~~~ ~~~~~~N...,.C"')......C"')............o)COM......~ ~
E ="> 0) N N '1"""............. Ll) C") Ll) N ...... ...... C"') Q
- >- ftI ...... N N II)
.. Ul
W~ ~~~~~~ ~~~~~~~~~~~~0~~0~W ~
~ -----------
..en. cnCO__CDO...... CO"!t'C"')C"')......CO......MC")N......NMN"l:tCOCX)...... CO
mQ Na:>m,..........cn CON,................CJ:)Ll)C"')vcnW,....OLl)OLl)vv M
~EmC ~~~~~~ q~~~Ll)......~e~~~~~-e~e~ ~
en':;: (J)NN............,..... "litN.q-...... CO 0
:w> ftI ...... N ("')
~~0 WW0WW0 WWWWWWW00WWW00W000 _
; ~ 000000000000000000 0 0
m~cn 000000000000000000 0 0
>mftl 000000000000000000 0 0
i~~ ~~~~~~~~~~~~~~~~~~ ri ~
.- =
~ ~ WWWWWWWWWWWWWWWWWW W 0
~ O)a:>......mo,.... a:>VC"')C"')......cocn,....,....mmm,....mCOVN...... a:>
-S.&Nrom,..........cn CON,................mVCOLl)O......NmVmvLl)v C"')
~ftI=C~~~~~~ q~~~~~N...,.C"')......C"')............mcoC"')......~ ~
oEC~mNN............,.... Ll)C"')Ll)N............ M 0
.....- ell...... N N Ll)
-ce
o ~ 0wwwwww 0WW0WWWWwwwwwwwwww W
01
C :c caco......cooo m.......,....comcor---COCO"'=tN<O CO
"S; - en COCOO>T"""T"""O> vCO 11)0 T""" NO>v 0) V II) CO II)
as C)"i= ~T"""_CO_M_M_M_ NVMT"""MT"""T"""O>COMT"""O>_ M_
tn c(;.~ T"""NNNT"""~ M ~
>. Q C II
01 ZOUl
... ce E ~
GI UlEo
C Oil!
W 2"N fA-tA-tA-fA-fA-fA- fA-tA-tA-fAofA-tA-fA-tA-fA-fAofA-fA- fA-
m 0
U cee;:::en CO"'l:tMMT"""CO II) II)
.- II)CI'J CON"""'T"""T"""CO ,.....,,.....,
bu ~->.5 I q,.....,_T"""_~U1or:. LO_ LO.
U > II)MLONT"""T""" 0> 0>
e>> c( W ca T""" T"""
W ~U) fA- fA-fA-fA-tA-fA-fA- fA- fA-
"'0 ,.. "C en M M,....., .....
e>> - CP Cft""lt CO 0 0
- ::l-u';/e.CII) N CO I CO
U ll. 0'- - - - -
e>> ,..CP~>"'" 0> CO CO
._ _.~ ca T""" T"""
o "C U)fA- tA- fA- fA- fA-
...
ll. -C T"""MM""ItCO..... T"""NNII)CO.....MO>Nen.....T"""T"""v.....MNT""" CO
~ MOII)MCOO CCCOII)COT"""NII)CO.....M.....M.....NMII)O>V V
o cL::S '1n V_II)_cc_<O_~cc_ M_v."'tN..N......._O>_<<tN..M_....._T"""_~~~....._O_or:. "':.
,.., 1l.~8o II)..........NNII) T"""VMCOOMO>COVVNLt'>...............MCCO II)
~- en 0 ..... CO 0 0> I.() T""" 0,....., 0 II) M N T""" T""" T""" C"') N T""" I.() <0
CG .- T""" VT"""T""" II) en
E "C fA-fA-fA-fA-fA-M- fAofA-M-M-fAofA-M-fA-fA-tA-M-M-fA-fA-tA-tA-fA-fA- fA-
E _ oooo~oooo~oo~oooo~
- ~ m O<OONN<O<OCCCCONVOCO.....NOCO
,.0;:: ~CP ~ <<t......_N........_~~C"')_....._T"""......._M_<O_~~~......_N_M_
VI cpen~ NT"""C"')oo>mo>coccT"""C"')cctn.....OCO,.....,v
C~> .....vvC"')T"""T"""<om.....coNVvVO>N.....T"""
W ~ O><OO>II)C"')N T""" T""" VT"""T""" or:.
- Il)
ce
, Ul
"E'C 5 :>>
~ 120: ~ cC
2 Q.~ l'9 ~
- Ql ~ 'E~ en 15 ()
~ E ~ wo ~ ~ c:a:
c~ :s: ~ S~ ~ ~c m
~w ~ ~ m~~ ~ ~ 8 ~
~Oc 0 > ~mo m c ~ ~E~ C
~w~ I.() 0 ~~i ~ .QlJ)mlJ)~oo ~
o/l 0 v .a ~ I - W - 00- ..,
~~ -ca W000~ 00 row WQ.~~
8o~ -ce--~. .~E~. Ql- ~~~E~~ES ~
o C3 --"''':> EC =0 ~.. ..m:>-",
~~_W~OS >~ Q)T""" mO~T"""Ew~wOQ.O '1n
'1J)IJ)m"~" ~~:>()~ >~Ql~:>oo~en~Ql~ 0
~~~~&~~ S~~~5 ~~c5Q.~~~~ffi~ u
~.~.~.-w- ~-0.2~_'C.2Q)~~~m.2.2~- Cp
o~~oom~ ~m~~l'9mO~um=~~~~ S E
~~~~us C~~~Eoo~.~E~m~E~EEgs ~ _
.QlQl=C~ ~ ,~~EQl~EE~QlOEEEE~~ 0 ~
m~~~o::s U~moo.~~.mow.~gomoo~::s oC 0
uooen~z0 ~~~z()~uuuen~:>uuuu>Ul ~
38/38 M "7 1
ATTACHMENT D JUlll 6 1998 ITE .
.