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HomeMy WebLinkAbout6 UAMPS Power Project Agenda Item # V IU Public Utility District Staff Report To: Board of Directors From: Stephen Hollabaugh Date: August 27, 2004 Subject: UAMPS Intermountain Power Project Unit#3 History- The District is a UAMPS member and is active within the Resource Project. This project of UAMPS looks into new possible generation units and the needs of its members. In May 2003, Doug Hunter (UAMPS General Manager) led a discussion of the IPP#3 with the Board. This project has progressed and is close to entering the Development Phase of the Project. New Information Doug Hunter, General Manager will do a presentation and lead a discussion of the Intermountain Power Project Unit 3 (IPP3) and its progress and initial steps into the Development Phase of the project and Truckee Donner PUD's amount of interest in the project. Stephen Hollabaugh will discuss Truckee Donner PUD's load and resource needs during the time period that this electric generation plant comes on line and into the future. Attached are a few graphs that will help explain the District future power needs. Recommendation — I recommend the Board approve the Board President to sign the Development Stage agreement when it is completed with UAMPS for an amount of entitlement share of IPP3 the District decides it is interested in. u r { TDPUD Projected Monthly I I Average Requirements - 2007 25 I 20 i II II � 15 II 10 iI 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec i ` aseload Peak I L-- , I I I TDPUD Projected Monthly Average Requirements - 2011 30 25 20 li I 15 10 - 5 - � I 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec I M Baseload 0 Peak f 3{ } TDPUD Projected Monthly Average Requirements - 2015 35 30 z 25 Ii 20 15 10 I � 5 p Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec r®Baseload M Peak IPP UNIT 3 PROJECT AGREEMENT BETWEEN UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS AND This IPP Unit 3 Project Agreement (this "Agreement") is made and entered into as of 2004, between Utah Associated Municipal Power Systems, a political subdivision of the State of Utah ("UAMPS"), and a and a member of UAMPS (the "Participant"). UAMPS and Participant are referred to herein collectively as the "Parties" and individually as 'Party." RECITALS; A. UAMPS is organized as an Energy Services Interlocal Entity under the Utah Interlocal Cooperation Act, Utah Code Ann. §§ 11-13-101 et seq., and pursuant to its Amended and Restated Agreement for Joint and Cooperative Action, as amended from time to time (the "Joint Action Agreement") for certain purposes, including acquiring reliable and economic supplies of electric energy for the benefit of the public agencies that are parties to the Joint Action Agreement (the "Member(s)"). B. UAMPS will enter into the Intermountain Power Project Unit 3 Development Agreement and the Intermountain Power Project Unit 3 Development Coordination Agreement, both attached hereto as Exhibit "A", (the "Development Agreements") as Development Manager and as a Development Participant to develop Unit 3 of the Intermountain Power Project ("Unit 3"). C. Participant is familiar with the terms of and has read the Development Agreements;Participant desires to Participate in determining the Development of Unit 3 and hereby directs UAMPS to enter into the Development Agreements on Participant's behalf as a Development Participant. D. Participant and UAMPS have formed the Intermountain Power Project Unit 3 Project of UAMPS (the "Unit 3 Project") to provide for the coordinated management of the Development Agreements. 298293795Q E. UAMPS and Participant now enter into this Agreement to create the IPP Unit 3 Project (the "Unit 3 Project") and to set forth terms and conditions upon which DAMPS will represent Participant's interests as a Development Participant in the Development Agreements. NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: Section 1. Integrated Contract; Definitions. Participant hereby agrees to the terms and conditions of the Development Agreements as amended from time to time and shall comply with all requirements contained therein. Except as defined specifically herein, all capitalized terms shall have the same meaning set forth in the Development Agreements. Section 2. Term and Termination. This Agreement shall be effective on the date first written above and shall remain in full force and effect through the term of the Development Agreements, pursuant to Section 16.1 of the Intermountain Power Project Unit 3 Development Agreement and Section 8.1 of the Intermountain Power Project Development Coordination Agreement. This Agreement may also terminate upon the unanimous vote of the Participants to dissolve the Unit 3 Project Management Committee of UAMPS (the "PMC") and thus terminate DAMPS'involvement in Unit 3. Section 3. Appointment of UAMPS. Participant agrees to participate in the development of Unit 3 and hereby appoints UAMPS as its agent to enter into the Development Agreements as a Development Participant. The PMC and UAMPS'Board of Directors, pursuant to the Joint Action Agreement and the Amended and Restated By- Laws of UAMPS shall administer all Participant's duties, obligations, and rights as a Development Participant under the Development Agreements. Section 4. Management of Development Agreements. Participant accepts all terms of the Development Agreements and agrees to all the duties and obligations of a Development Participant thereunder. Further, Participant acknowledges and agrees that all rights, obligations, and duties as a Development Participants under the Development Agreements shall be administered through the PMC. Such rights, obligations, and duties include, but are not limited to, the following: (i). Except through its participation in the PMC,Participant shall have no right to appoint a representative to the Development Committee pursuant to Section 3.2 of the Intermountain Power Project Unit 3 Development Agreement. (it). Except through its participation in the PMC,Participant shall have no right to vote on actions or decisions of the Development Committee pursuant to Section 3.4 of the Intermountain Power Project Unit 3 Development Agreement. 2 298293795v2 (iii). Except through its participation in the PMC,Participant shall have no right to withdraw as a Development Participant pursuant to Section 91 of the Intermountain Power Project Unit 3 Development Agreement. (iv). Except through its participation in the PMC, Participant shall have no right to reimbursement of Development Costs pursuant to Section 10.1 of the Intermountain Power Project Unit 3 Development Agreement. Section 5. Amounts to be Paid by Participants. Participant agrees to pay to UAMPS the following: (i) Development Costs for its potential entitlement share of energy from Unit 3 for the term and as of the effective date as provided on Appendix I attached hereto and in accordance with Article VII of the Intermountain Power Project Unit 3 Development Agreement and Section 3.6 of the Intermountain Power Project Unit 3 Development Coordination Agreement; (ii)its portion of all other costs, if any, incurred by UAMPS as a Development Participant under the Development Agreements; and(iii) its portion of all administrative and general costs incurred by UAMPS in acting as a Development Participant and in administering the Development Agreements. The payments of all Participants shall be sufficient to pay the total of the costs enumerated in this Section 5 for each billing period. In no case shall other UAMPS projects be required to pay for any costs incurred as a Development Participant under the Development Agreements. Section 6. Billing Period, Billing and Payment. (a) The initial billing period to be used for the preparation, calculation, and billing of the amounts payable by the Participant hereunder shall be a calendar month. To promote the efficient and economic administration of the Unit 3 Project, UAMPS, may, at any time, adopt another standard period of time as the billing period hereunder. In addition to the foregoing, UAMPS may from time to time revise the billing and payment procedures provided for in this Section 6 to promote the efficient and economic administration of the Unit 3 Project or to conform such billing procedures to those utilized in connection with other projects of UAMPS. Any change in the billing period or in such billing and payment procedures shall be made in the Unit 3 Project Annual Budget and shall not be effective for at least 15 days after the mailing of notice of such change in the billing period or in the billing and payment procedures to the Participant. At the time of the mailing of such Annual Budget, UAMPS shall send to the Participant a revised form of this Section 6, which shall reflect any changes in the dates of billing and payment and the method thereof that are necessary or desirable to make this Section 6 correspond to the new billing period. Participant hereby delegates to the Participant's Member Representative to UAMPS full authority to approve or disapprove and agree or disagree to such changes in the billing procedures on behalf of the Participant. (b) For so long as the billing period is a month, on or before the 25`h day after the end of each billing period beginning with the first billing period following the effective date of this Agreement, UAMPS shall render to the Participant a billing statement showing the amount payable by the Participant for such billing period in respect of the following: (i) Development Costs; (ii) other charges, if any, related to the 3 2W293795Q Development Agreements; (iii) UAMPS'administrative and general costs; and (iv) any other amounts, adjustments or reconciliations payable by or credited to such Participant and the Participant shall pay the total of such amounts at the time specified below in Section 6(c) as the same may be revised from time to time. The billing statement for each billing period shall be based, to the fullest extent practicable, upon the actual costs of the Unit 3 Project during such billing period. (c) Payments required to be paid by the Participant to UAMPS pursuant to this Section 6 shall be due and payable to UAMPS at the office of UAMPS, or such other address as UAMPS shall designate in writing to the Participant, on the 15`h day following the date on which the billing statement was rendered or at such other time as may be established by DAMPS pursuant to Section 6(a) above. (d) If payment in full is not made on or before the close of business on the due date, UAMPS shall impose a delayed-payment charge on the unpaid amount due for each day overdue at a rate equal to the lesser of one percent per month, compounded monthly, or the maximum rate lawfully payable by the Participant;provided, however, that UAMPS, acting upon the direction of its Board of Directors, may elect to waive such delayed-payment charge but only to the extent that any such waiver will not adversely affect the ability of UAMPS to meet its payment obligations under the Development Agreements. If said due date is Saturday, Sunday, or a holiday, the next following business day shall be the last day on which payment may be made without the addition of the delayed-payment charge. (e) In the event of any dispute as to any portion of the billing statement for such billing period, the Participant shall nevertheless pay the full amount of the undisputed charges when due and shall give written notice of the dispute to UAMPS not later than the 60`h day after such billing statement was submitted. Such notice shall identify the disputed billing statement, state the amount in dispute and set forth a full statement of the grounds for such dispute. No adjustment shall be considered or made for disputed charges unless notice is given by the Participant. UAMPS shall give consideration to such dispute and shall advise the Participant with regard to its position relative thereto within thirty (30) days following receipt of such written notice. Upon final determination (whether by agreement or determination by the Board of Directors) of the correct amount, any difference between such correct amount and such full amount shall be accounted for in the billing statement next submitted to the Participant after such determination. (f) The obligation of the Participant to make the payments under this Section 6 for amounts payable by the Participant pursuant to this Section 6 is a several obligation and not a joint obligation with those of any other Participant. The obligation of the Participant to make the payments under this Section 6 shall constitute an obligation of the Participant and an operating expense of the Participant's electric system payable solely from the revenues and other available funds of the electric system and shall constitute a cost of purchased power and energy. The obligations of the Participant to make such payments shall not be subject to any reduction, whether by offset, counterclaim, or 4 298:293795v2 otherwise, and shall not be conditioned upon the performance by UAMPS under this or any other agreement or instrument. Section 7. Annual Budget;Accounting. (a) On or before the beginning of each UAMPS fiscal year, UAMPS shall prepare and mail to the Participant an annual budget for the Unit 3 Project recommended by the PMC and approved by DAMPS'Board of Directors. The Participant shall, to the extent and in the manner deemed appropriate by the Participant, incorporate the amounts shown on the annual budget in its annual budgetary process for the Participant's electric enterprise fund. (b) At the end of each quarter during each DAMPS fiscal year and at such other times as it shall deem desirable, UAMPS shall review the annual budget. In the event such review indicates that the annual budget does not or will not substantially correspond with actual receipts or expenditures, or if at any time during such fiscal year there are or are expected to be extraordinary receipts, credits or expenditures of costs substantially affecting the Unit 3 Project, UAMPS shall prepare and mail to the Participant a revised annual budget, as recommended by the PMC and approved by UAMPS'Board of Directors, incorporating adjustments to reflect such receipts, credits or expenditures which shall thereupon supersede the previous annual budget. (c) UAMPS agrees that it will keep accurate records and accounts relating to the Unit 3 Project in accordance with the Uniform System of Accounts, separate and distinct from its other records and accounts; provided that UAMPS may establish revenue and operation and maintenance funds that account for more than one project of UAMPS so long as UAMPS shall maintain books and records adequate to show the amounts in each of such funds allocable to each such project. Said accounts shall be audited annually by a firm of certified public accountants of national reputation, experienced in public finance and electric utility accounting, to be employed by UAMPS. A copy of each annual audit, including all written comments and recommendations of such accountants, approved by the Board shall be furnished by UAMPS to the Participant not later than 180 days after the end of each UAMPS fiscal year. Section 8. Review and Audit. Either Party shall have the right, at all reasonable times, to review and audit the books, records and documents of the other Party directly pertaining to the billings required to administer this Agreement and the Development Agreement. All information obtained by either Party's representatives in examining the other Party's applicable records to verify such billings shall not be disclosed to third parties without prior written consent of the audited Party. Section 9. Separate Agreement. This Agreement and the Development Agreements do not modify any existing or future rights, obligations, performances, or procedures of UAMPS or any of its Members except as specifically contracted herein and in the Development Agreements. Section 10. Representations and Warranties. Each party represents and warrants to the other that (i) it possesses all legal power and authority necessary on its 5 298:293795v2 part to enter into this Agreement and all Appendices and to perform its obligations hereunder and thereunder; and(ii) this Agreement has been duly authorized, executed and delivered and constitutes a legal, valid, and binding obligation, enforceable in accordance with its terms. Upon the request of the other party,each parry agrees that it will provide such certificates and legal opinions as may be reasonably necessary to confirm the foregoing representations and warranties to third parties,including, but not limited to, other parties to the Development Agreements. Section 11. Waiver. A waiver at any time by a Party of its rights with respect to a default under or breach of this Agreement, or with respect to any other matter arising in connection with this Agreement, shall not be deemed a waiver with respect to any subsequent default or breach. No delay, short of the statute of limitations, in asserting or enforcing any right hereunder shall be deemed a waiver of such right. Section 12. Assignment. Participant shall not assign or transfer this Agreement or any of its rights or obligations hereunder without the written consent of DAMPS, which consent may be withheld within UAMPS'sole discretion. Section 13. Relationship of Parties. (a) This Agreement is not intended to create, nor shall it be deemed to create, any relationship between UAMPS and the Participant other than that of independent parties contracting with one another for the purpose of effectuating the provisions of this Agreement. (b) The covenants, obligations, liabilities, rights and benefits of the Participant under this Agreement are individual and not joint and several, or collective, with those of any other Participant. Other than giving effect to the joint and cooperative action of UAMPS on behalf of the Participant, the Agreement shall not be construed to create an association,joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on, between or among the Participant and any one or more of the Participants. No Participant shall be or be deemed to be under the control of, nor shall any Participant control or be deemed to control, any or all of the other Participant or the Participants as a group. No Participant shall be bound by the actions of any other Participant, nor shall any Participant be deemed to be the agent of any other Participant or have the right to bind any other Participant. Section 14. No Recourse. No member of the governing body, nor any officer or employee of UAMPS or the Participant shall be individually or personally liable for any payment under this Agreement or be subject to any personal liability or accountability by reason of the execution of this Agreement; provided, however, that this Section shall not relieve any officer or employee of UAMPS or the Participant from the performance of any official duty imposed by law or this Agreement. Section 15. Applicable Law. This Agreement is made under and shall be governed by the law of the State of Utah. Headings herein are for convenience only and shall not influence the construction hereof. 6 298:293795,2 y F t Section 16. Severability. If any section, paragraph,clause or provision of this Agreement shall be 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 such section, paragraph, clause or provision or any part thereof so adjudicated to be invalid had not been included herein. Section 17. Amendment. This Agreement constitutes the entire and complete agreement of UAMPS and the Participant in respect of the Unit 3 Project and shall not be nor shall it be deemed to be modified, amended or superseded by any other agreement or contract between UAMPS and the Participant in respect of any other project or subject. Section 18. Notices. Any notice or demand by the Participant to UAMPS under this Agreement shall be deemed properly given if mailed postage prepaid and addressed to DAMPS at its principal office or if faxed to UAMPS with receipt confirmed, followed by a written copy of such notice or demand mailed to DAMPS postage prepaid; any notice or demand by UAMPS to the Participant under this Agreement shall be deemed properly given if mailed postage prepaid and addressed to the Participant's Member Representative at his address on file with DAMPS or if faxed to the Participant's Member Representative with receipt confirmed, followed by a written copy of such notice or demand mailed to the Participant's Member Representative postage prepaid. In computing any period of time from such notice, such period shall commence at noon,Salt Lake City time, on the date mailed or faxed. The designations of the name and address to which any such notice or demand is directed may be changed at any time and from time to time by either party giving notice as above provided. Section 19. Default by Participant. In the event of a failure of the Participant to observe, keep, and perform any of the covenants, agreements, or obligations contained herein,UAMPS may bring any suit, action, or proceeding in law or in equity, including mandamus, injunction and action for specific performance, as may be necessary or appropriate to enforce any covenant, agreement or obligation of this Agreement. Section 20. Default by DAMPS. In the event of any default by DAMPS under any covenant, agreement, or obligation contained herein, the Participant's sole remedy for such default shall be limited to mandamus, injunction, action for specific performance or any other available equitable remedy as may be necessary or appropriate. And in no event shall Participant withhold or offset any payment owed to UAMPS hereunder. 7 29&293795�2 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their authorized officers as of the date first above written. UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS By: Douglas O. Hunter, General Manager PARTICIPANT By: Its: Attest and Countersign: By: Title: 8 298:293795v2 APPENDIX I Effective Date: Entitlement Share: Term: UTAn ASSOCIATED MUNICIPAL POWER SYSTEMS By: Douglas O. Hunter, General Manager PARTICIPANT By: 298:2.93795v2 EXHIBIT A DEVELOPMENT AGREEMENTS s f 298:293795v2