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Contract for Energy Exchange services
Contract 06-SNR-009XX UNITED STATES DEPARTMENT OF ENERGY WESTERN AREA POWER ADMINISTRATION CENTRAL VALLEY PROJECT, CALIFORNIA CONTRACT FOR ENERGY EXCHANGE SERVICES WITH THE TRUCKEE DONNER PUBLIC UTILITY DISTRICT AND THE CITY OF FALLON Draft 6 January 9, 2007 Contract 06-SNR-009XX 1 2 3 UNITED STATES DEPARTMENT OF ENERGY 4 WESTERN AREA POWER ADMINISTRATION 5 CENTRAL VALLEY PROJECT, CALIFORNIA 6 CONTRACT FOR 7 ENERGY EXCHANGE SERVICES $ WITH 9 THE TRUCKEE DONNER PUBLIC UTILITY DISTRICT AND 10 THE CITY OF FALLON 11 12 13 1. PREAMBLE: 14 This Contract is made this day of , 2006, pursuant to 15 the Acts of Congress approved June 17, 1902 (32 Stat. 388); August 1, 1956 16 (70 Stat. 775); August 4, 1939 (53 Stat. 1187); and August 4, 1977 (91 Stat. 565); and 17 Acts amendatory or supplementary to the foregoing Acts; between the UNITED 18 STATES OF AMERICA (United States), acting by and through the Administrator, 19 WESTERN AREA POWER ADMINISTRATION, DEPARTMENT OF ENERGY, 20 represented by the officer executing this Contract, or a duly appointed successor, 21 hereinafter called Western or Contracting Officer; and the TRUCKEE DONNER PUBLIC 22 UTILITY DISTRICT, a Public Utility District, organized and existing under the laws of the 23 State of California, hereinafter referred to as Truckee; and the CITY OF FALLON, a 24 political subdivision organized and existing under the laws of the State of Nevada, 25 hereinafter referred to as Fallon; jointly referred to as TDF, their successors and 26 assigns; all also hereinafter referred to individually as Party and together as Parties. 27 28 Contract 06-SNR-009XX --- 1 2.5 Truckee and Fallon each now have Network Integration Transmission 2 Service Agreements (NITS) with SPPC and, therefore, have the ability to receive 3 the Stampede Energy. 4 5 2.6 TDF desire to assume the responsibilities currently performed by SPPC 6 under Contract 00010 and, under the terms and conditions of this Contract, 7 Western is willing to allow TDF to assume said responsibilities. 8 9 3. AGREEMENT: 10 The Parties agree to the terms and conditions set forth herein. 11 12 4. EFFECTIVE DATE TERM AND TERMINATION OF CONTRACT: 13 4.1 This Contract shall become effective on and shall 14 remain in effect through September 30, 2026; subject to prior termination as 15 otherwise provided for herein. 16 17 4.2 Western may terminate this Contract pursuant to Section 15 and, also, 18 upon a one (1) year advance written notice to TDF. This Contract may also be 19 terminated by either Party if Stampede ceases to generate for a period of time 20 longer than one (1) year without an established schedule to restart. 21 22 4.3 The Parties may mutually agree in writing to terminate this Contract. 23 24 4.4 All obligations incurred under this Contract shall be preserved until 25 satisfied. 26 27 5. DEFINITION OF TERMS: 28 3 Contract 06-SNR-009XX 1 The purpose of this Contract is to create a mechanism to provide project use benefit to 2 the project use loads on a first priority basis., 3 4 7. Renewable Energy Credits: 5 Western and TDF acknowledge that Stampede may or may not be qualified as a 6 producer of Nevada qualifying REC's. At the option of TDF and at TDF's sole expense 7 TDF may seek to effect the establishment of REC's in accordance with Nevada statutes 8 and in such event, Western acknowledges that the REC's will become the property of 9 TDF. Western hereby transfers to TDF all REC's derived from the ownership, operation 10 or production of energy from Stampede, if any. Western shall timely take all reasonable 11 actions under Nevada law or regulation to cause the REC's to vest in or be transferred 12 to TDF, including the registration of Stampede with the PUCN or other government 13 authority, the provision of periodic kWh production data and the filing of requests to 14 transfer REC's to TDF. The quantity of REC's transferred to TDF shall be the amount of 15 REC's attributable to the gross production of REC's measured in kWh's including station 16 use. 17 18 8. DELIVERY ARRANGEMENTS FOR STAMPEDE ENERGY: 19 8.1 Subject to the provisions of this Contract, Western shall provide solely to 20 TDF and TDF shall purchase all energy generated, available for sale, and 21 delivered to the Delivery Point. All product shall be dedicated exclusively to TDF 22 for the term of this Contract. 23 24 8.2TDF shall take delivery of the Stampede Energy over the transmission system 25 of SPPC at the Western-owned disconnect switch (6001-13) at the Stampede 26 Switchyard adjacent to Stampede. 27 8.3Western shall assist TDF, no later than April 1 of each year with developing a 28 monthly estimate of the energy to be delivered under this Agreement for the 5 Contract 06-SNR-009XX 1 TDF understands that the Washoe Project is operated and maintained by Reclamation. 2 TDF shall not have any control, whatsoever, over Reclamation's maintenance schedule 3 of the Washoe Project. 4 5 11. VALUE CALCULATION: 6 The calculation to be used in determining the value of Stampede Energy is provided in 7 Exhibit A attached hereto. The value is based on the previous three (3) years running 8 average of quarterly Mid C prices. 9 10 12. STAMPEDE ENERGY EXCHANGE ACCOUNT: 11 Truckee shall establish and maintain the SEEA, as provided in this Section. An 12 example of Stampede Energy Exchange Account Monthly Transactions is 13 provided in Exhibit B, attached hereto. At no time during the term of this Contract 14 will a payment or debit entry be made to the SEEA in excess of the then-existing 15 credit balance of such account, unless otherwise agreed to in writing by the 16 Parties. 17 18 12.1 As of the last day of each month during the term of this Contract, Truckee 19 shall debit and/or credit the SEEA, as follows: 20 12.1.1 A credit entry shall be made equal to the dollar value of the 21 Stampede Energy delivered to TDF. The dollar value shall be determined 22 by the calculation provided for in Exhibit A of this Contract. 23 12.1.2 By the due date reflected on the SPPC electric service billing for 24 power service to Stampede, Truckee shall make payment in full to SPPC 25 at the address provided on the bill or to Reclamation within 10 days of the 26 receipt of the Sierra Pacific bill if directed by Western. Truckee will then 27 debit the SEEA in the amount of said payment. 28 7 Contract 06-SNR-009XX 1 13.1 Western may, upon reasonable notice, request TDF to deliver to Western 2 a quantity of energy specified by Western on a non-firm basis. The quantity of 3 energy requested by Western shall not amount to a value in excess of the 4 balance of the SEEA. TDF may elect to honor the request and provide non-firm 5 energy in quantities and prices to be determined at the time of the requested 6 transaction. 7 8 13.2 Truckee shall debit the SEEA by an amount equal to the total dollar 9 amount of the transaction. 10 11 13.3 The specific delivery arrangements, including but not limited to, 12 transmission, losses, and delivery point, of each request will be agreed to by the 13 Parties at the time of the request. 14 15 14. EXAMINATION AND CORRECTION OF TRANSACTION SUMMARIES: 16 14.1 As soon as practicable, but no later than one (1) year after Western's 17 receipt of each Transaction Summary, Western shall provide written notice to 18 Truckee, at the address provided in Exhibit C attached hereto, of any alleged 19 error in such summary. 20 14.2 If Western notifies Truckee of an alleged error in a Transaction Summary, 21 the Parties agree to make good faith efforts to reconcile the transactions and 22 mutually agree on the appropriate remedy, if any. 23 24 14.3 If Truckee discovers an error in a Transaction Summary within one (1) 25 year of preparation of said summary, Truckee shall notify Western in writing of 26 the error. The Parties agree to make good faith efforts to reconcile the 27 transactions and mutually agree on the appropriate remedy, if any. 28 9 Contract 06-SNR-009XX 1 2 17. CREDITWORTHINESS: 3 For the purpose of determining the ability of TDF to meet its obligations related to 4 service hereunder, Western may require reasonable credit review procedures. In 5 addition, Western may require TDF to: 6 17.1 Provide and keep in effect during the term of this Contract, an 7 unconditional and irrevocable letter of credit as security to meet its 8 responsibilities and obligations under this Contract. Since paragraph 12.3 9 provides Western the ability to limit risk to the net balance in the account for a 10 period of 30 days, any letter of credit will be limited to this level of exposure. or 11 12 17.2 Provide an alternate form of security acceptable to Western and TDF. 13 14 18. GENERAL POWER CONTRACT PROVISIONS: 15 The GPCP, effective June 15, 2005, attached hereto, are hereby made a part of this 16 Contract, the same as if they had been expressly set forth herein. 17 18 19. ENFORCEABILITY: 19 it is not the intent of the Parties that this Contract confer any rights on third parties to 20 enforce the provisions of this Contract except as required by law or express provision in 21 this Contract. Except as provided in this Section, this Contract may be enforced, or 22 caused to be enforced, only by Western or TDF, or their successors or assigns. 23 20. EXHIBITS MADE PART OF CONTRACT: 24 Exhibit A, Value Calculation; Exhibit B, Example of Stampede Exchange Account 25 Monthly Transactions; and Exhibit C, Mailing Addresses, attached to and existing under 26 this Contract may vary during the term hereof. Said Exhibits shall become a part of this 27 Contract during the term fixed by their provisions. Exhibits A, B, and C are attached 28 11 Contract 06-SNR-009XX 1 IN WITNESS WHEREOF, the Parties have caused this Contract to be executed 2 the day and year first above written. 3 4 WESTERN AREA POWER ADMINISTRATION 5 6 By, Name: Thomas R. Boyko 7 Title: Power Marketing Manager 8 Address: 114 Parkshore Drive Folsom CA 95630-4710 9 10 11 TRUCKEE DONNER PUBLIC UTILITY DISTRICT 12 13 Attest: By: 14 Name: Title:_ General Manager 15 By: Address: Post Office Box 309 16 Title: Truckee California 96160 17 18 CITY OF FALLON 19 20 21 Attest: By. Name: 22 Title: Mayor By: Address: 55 West Williams Avenue 23 Title: Fallon Nevada 89406 24 25 26 27 28 13 Contract 06-SNR-009XX Truckee Donner Public Utility District City of Fallon Exhibit A to Contract 06-SNR-009XX EXHIBIT A (Value Calculation) 1. This Exhibit A is to be effective under and as a part of Contract 06-SNR-009XX, shall become effective upon execution of the Contract; and shall remain in effect until either superseded by another Exhibit A or termination of the Contract. 2. Stampede Energy is considered non-firm energy. The value of Stampede Energy shall be considered approximately 75 percent of firm energy. 3. The value of Stampede Energy shall be determined using the rolling average of the previous three years of the Intercontinental Exchange (ICE) Mid-C price index. This three year average shall be calculated and updated annually using the most recent 3 years of published indices. in the following calculation: Calculation 0.75[((Previous 3 year quarterly average ICE Mid-C On-Peak quarterly average index price * month's total On-Peak daily Stampede Energy) + (Previous 3 year quarterly average ICE Mid-C Off-Peak quarterly average index price * month's total Off-Peak Stampede Energy)] _ Month's value of Stampede Energy Page 1 of 1 Truckee Donner Public Utility District City of Fallon Exhibit C to Contract 06-SNR-009XX .Initial Year Values of 3 Year average quarterly ICE Prices 1 st Qtr. 2nd Qtr 3rd Qtr 40tr On Peak Off Peak On Peak Off Peak On Peak Off Pear On Peak Off Peak 2004 42.3 38.0 45.1 35.01 47.0E52..7� E024 2005 49.4 43.5 44.1 32.1 69.9200 51.0 45.6 29.3 13.5 61.7 2004 thru 2006 Quarterly Ave 47.61 42.45 39.56 26.91 59.57 45.95 65.09 57.24 Qtr Avg ' 75% 35.71 31.83 29.67 20.18 44.68 34.46 48.82 42.93 Truckee Donner Public Utility District City of Fallon Exhibit D to Contract 06-SNR-009XX EXHIBIT D (Mailing Addresses) 1. This Exhibit D is to be effective under and as a part of Contract 06-SNR-009XX, shall become effective upon execution of the Contract; and shall remain in effect until either superseded by another Exhibit D or termination of the Contract. 2. The following Mailing Addresses are to be used for any notices and/or payments as provided for in the Contract: Page 1 of 1 WESTERN AREA POWER ADMINISTRATION Sierra Nevada Region STAMPEDE POWERPLANT (box■ denotes powerplant) STAMPEDE Ric , IV er 3ccZ �' �� I.>< 1 rnAµ10 IAKE /YRAM10 LAKE ftDA.* Y I �. I ,MARCLE 7LUff DAM t i UM' Truckee _ �:.;.::=ice. 'T air t.Cit 2 3IVE11SION DAM .. f ^w R••rw• u'I.r:. ��+`"' 'awar CAESON 0.NER ildl.u:. rt•w•�yD DIVERSION DAM 4-- STAMPEDE RES Mlle .I•<.••1 ' 1RO5SER CREEK 7ES T LVc0.110, :�R:CN:Ac£rASi:10.f ,AHOE DAAf i_ PROJECT AKE' 1 HEAgOUARTEU '2E 1 t, r = '1 v, wrweu . �...r�\\ �,D3.r•w.n.�r• , \ antsuER Af7ERSAY CARSON CANAL \�. NA7ASHEAMU RES It •/ \ NALKfR'A,CE/ •e.Nh ��lj � \% OAS\ fir�++ Was;�oe i-oiect October200 P--posed Powej Rates Adjustment Section SUMMARY - PROPOSED RATES FOR STAMPEDE POWER This brochure provides information on the Sierra Nevada Region, Western Area Power Administration's (Western) proposed adjustment of power rates for the Washoe Project, Stampede Division (Stampede), to be effective October 1, 2005. According to Reclamation Law and Department of Energy (DOE) policies, chiefly DOE Order RA6120.2 Power Marketing Administration Financial Reporting (RA6120.2), Western must establish power rates sufficient to recover annual expenses and to repay the Federal government's investment in building generation and transmission facilities. Rates must also be set to cover interest expenses on the unpaid balance of power-related facilities, replacements and additions. The present Stampede rate schedule (SNF-5) was confirmed and approved by the Federal Energy Regulatory Commission (Commission) pursuant to Delegation Order No. 0204-108 on October 19, 2000 in Docket No EF00-5161- 000. The rate was approved for the period from October 1, 2000 through September 30, 2005. The rate schedule established floor and ceiling -aces. Tr!e floor rate is the Stampede Energy Exchange Account (SEEA) rate. The ceiling Section II Rate Adjustment Procedures A. Public Process Procedures for Public Participation in Power and Transmission Rate Adjustments and Extension, 10 CFR Part 903, as amended (Procedures), is being followed for the Washoe Project, Nonfirm Energy Rate Adjustment. These procedures stipulate that if a power system has either "annual sales normally less than 100 million kilowatt hours or an installed capacity of less than 20,000 kilowatts", then it qualifies as a minor rate adjustment. As a minor rate adjustment, there is no public information or comment period for this rate process. The first step required by the Procedures is the publication of a Federal Register Notice (FRN). Western published the FRN announcing the Proposed Rates and the public consultation and comment period on May 6, 2005. The public consultation and comment period began with the publication date of the FRN and closes 30 days thereafter. The FRN is included in this brochure as Attachment 1. Table II-1 is a schedule of major steps for the Proposed Rate Adjustment proceedings. Table II-1 Schedule of Major Steps Washoe Project, Stampede Division Proposed Rate Adjustment Proceeding � I 0-.,blicaiion of FRN for Proposed Rates announcing the f beginning cf the consultation and comment period for May 6, 2005 Rate Process. 1 in effect on an interim basis as Provisional Rates. The decision by the Deputy Secretary of DOE, with an explanation of the principal factors leading to the decision, will be announced in a final FRN. E. Final Decision on the Rate Adjustment The Deputy Secretary will submit all information concerning the Provisional Rates to the Commission, and request approval of the Provisional Rates for a 5- year period (through September 30, 2010). The Commission will then confirm and approve the Provisional Rates on a final basis; remand the Provisional Rates back to Western for further clarification and study; or disapprove the Provisional Rates. F. Additional Information Additional information regarding the Proposed Rates or any questions regarding this brochure may be directed to Ms. Debbie Dietz, Rates Manager, Sierra Nevada Customer Service Region, Westem Area Power Administration, 114 Parkshore Drive, Folsom, CA 95630-4710, (916) 353-4453, e-mail ddietz@wapa.gov. A one-half mile 60 kilovolt transmission line interconnects the Stampede power facilities with Sierra's transmission system. Stampede Dam and Reservoir are operated for four specific purposes: flood control, fisheries enhancement, recreation, and power generation. The powerplant has a 3.65 megawatt (MW) generator, and it provides approximately 11 million kilowatt-hours (kWh) annually. The energy generated by the powerplant has a priority reservation for designated Washoe Project loads. All remaining energy generation is sold on a nonfirm basis under the conditions outlined in Western's contract with Sierra. Energy generated at Stampede x : Powerplant is dependent on the run of the river, and is therefore nonfirm. Further information on Stampede's historical generation is available upon request. The L ahontan National Fish Hatchery and the Marble Bluff Fish Facility are project use facilities entitled to energy from Stampede Powerplant. The Marble Bluff Fish Hatchery is located on the Truckee River about 3.5 miles upstream from Pyramid Lake. The other project use facility, the Lahontan National Fish Hatchery, is located off the Carson River just south of Carson City in Gardnerville, Nevada. The loads at these facilities are projected to be approximately two million kWh annually. Further information on project use loads is avaiiable ,jpcn request. 2003 and March '.)03, debit entries exceeded the SEE_ baiance. in these .n Dezember_'002,January C! ri:hS. file �lilIe.re'lC`°`.1aS billed t0 ' :J i`VS ERRATA SHEET Washoe Project October 2005 Proposed Power Rate Adjustment Revisions to the Rate Brochure. Page 10. 2nd paragraph. Revise the last sentence in the paragraph to read, "The loads at these facilities are projected to be approximately 2 million kWh annually." The second rate adjustment established an annual bidding process for the sale of Stampede energy. The energy was sold to the entity offering the highest price for the energy, provided that the bidding price was between the floor and ceiling rate established by Western. The floor rate was based on the greater of either: (a) the rate necessary to recover the projected annual O&M expenses for the powerplant plus 2 mills/kWh, or (b) 85 percent of the purchaser's projected average marginal energy cost. The ceiling rate was the full cost recovery rate determined by the power repayment study (PRS). At the time of the second rate adjustment, this PRS ceiling rate was 50.96 mills/kWh. Western first accepted bids for Stampede energy in 1990 for the sale from July 1, 1990 to June 30, 1991. Western did not receive any bids that comported with the bidding process set forth under the rate adjustment. However, in a letter dated , June 7, 1990 Sierra did offer to continue to purchase the Stampede energy for a 15-month period under essentially the same rate methodology as set forth in Contract 59067, at a rate less than the floor rate. Subsequently, based on negotiations between Western and Sierra, Sierra agreed to pay 19.52 mills/kWh for the Stampede energy, the floor price established in the rate adjustment. However, Sierra did not agree to the retroactive cost adjustment feature set forth in the approved rate. Western entered :nto a 1-year agreement with Sierra at the 19.52 miilsAINh rate. wnicn was accroveu ✓v the 'Nestem"s Administrator in C. U. S. Fish and Wildlife Service Contract On June 27, 1994, Western executed Letter of Agreement No. 94-SAO-00013 with FWS which established arrangements for billing credits from Sierra for FWS loads up to the value of energy banked into the SEEA under Contract 94-SAO- 00010. This letter of agreement became effective May 1, 1994, with options for annual renewal. It has been renewed every year since with the most recent renewal occurring in April 2005 for the period through March 2006. D. Stampede Energy Exchange Account (SEEA) The SEEA is credited for energy generated at Stampede using Sierra's non-time differentiated California Quarterly Short-Term Purchase Price Schedule for As- Available Purchases from Qualifying Facilities with Capacities of 100 kW or less rates at the time of receipt. Since 1999, this rate has remained static at 17.39 mills/kWh because of Sierra's unchanged tariff. The SEEA can be debited for: 1) project use load power costs; 2) Sierra's administrative charge; 3) station service costs; and 4) energy to be delivered to Western based on 85 percent of the CSPP rate at the time of the delivery and associated transmission charges. Debit entries shall not exceed the credit balance.2 The SEEA shall be zeroed out by April 30 of each year unless otherwise agreed to by Sierra and Western. The SEEA provides a method for providing project use benefits to FWS, as contemplated by the Washoe Act. Historical information on the SEEA is available upon request. Historical Stampede revenues have been derived from nonfirm short-term sales of energy. Annual expenses include O&M, project use and interest. Capitalized costs include payment of any deficits and repayment of associated replacements and additions. The PRS begins in 1987 when generation first began from Stampede Power plant. Repayment requirements are dictated by the authorizing act for power facilities, other applicable acts, and DOE policies, chiefly RA6120.2. C. Cost Allocation O&M and investment costs associated with the Stampede Powerplant are allocated by Reclamation. The existing cost allocation, updated to reflect FY 2003 levels, is used for this rate adjustment. T he standard Separable Se arable Costs-Remaining Benefits method of cost allocation is � not used for Stampede. Western and Reclamation agreed to adopt a method that is referred to as Planning Instruction No. 81-02 (71 06), documented in a January 22, 1981, memorandum from the Commissioner of Reclamation, Subject: Allocating Joint Costs to Small Add-on Hydropower Plants. Since execution of Contract 94-SA000010 with Sierra in FY 1994, which provides the benefit of Stampede power for project use loads, a portion of the costs assigned to power are -.onreimbursable and no longer recovered through -- 16- - c. Additions; and, d. Replacements. E. Cost Projections RA6120.2 specifies that expenses may be adjusted for inflation and other anticipated conditions during the cost evaluation period, which is normally the first five future years of the PRS period. By applying this escalation, the expenses more accurately reflect the required revenues during the first five future years that are involved in this rate adjustment period. O&M expenses for the rate case period are coordinated with Western and Reclamation staff and reflect FY 2005 budget documents. Project use costs are considered as a separate annual expense and have ranged from $ 97,853 in 1998 to $190,313 in 2004. F. Interest Rates The annual interest expense is determined by multiplying the various unpaid investments by the appropriate interest rate. A list of interest rates for FY 37 :o FY 99 follows: Fiscal Year I Interest Rate 1987 8.875 1988 8.500 j 1989 j 9.250 1990 I 8.875 1991 I 8.750 loan, plus interest, must be repaid from future years' revenues. The applicable interest rate for deficits is also determined from the rate criteria of RA6120.2. H. Repayment Periods Investments and additions allocated to power must be repaid with interest within 50 years after the related facility is placed in service. Replacements must be repaid within the estimated service life of each piece of equipment, or 50 years, whichever is shorter. I. Status of Repayment Due to the difficulty in selling the energy from Stampede Powerplant at full cost recovery rates. Western has entered into short-term arrangements at rates which orovice fie maximum cost recovery possible. Washoe revenues were sufficient to repay the annual expenses and $ 984,575 of capitalized deficits through FY "C04. No repayment a ment of investment has occurred. In most years, portions of the C&M and interest expenses have been deferred and capitalized. Beginning Cctober 1, 2005, the costs remaining after meeting project use requirements are included in the Central Valley Project (CVP) power revenue requirement (PRR). Based on this situation, the status of repayment for Stampede will improve dramatically. Beginning in FY 2006, Western expects -evenues sufficient to repay annual expenses and all capitalized deficits by 2023. Section VI Proposed Rate for Stampede Power Current rates for the sale of non-firm energy from Stampede consist of floor and ceiling rates and are designed to recover an annual revenue requirement. The proposed floor rate for non-firm energy from Stampede is 17.89 mills/kilowatthour (miils/kWh) and on average for the 5-year rate period provides sufficient revenue to pay for 96 percent of O&M expenses, excluding interest expense. The current ceiling rate was set by a power repayment study and provides sufficient revenues to repay all annual costs, including interest expense, s and the investment within the allowable pericd. The 2004 CVP Power Marketing Plan states that the output from the Washce Project remaining after meeting project use toads will be marketed to CVP preference customers. Beginning October 1, 2005, the costs remaining after meeting project use requirements are included in the CVP power revenue requirement (PRR) on an annual basis. This situation makes it unnecessary to establish a new proposed ceiling rate for Stampede. Western's Contract No. 94- SAO-00010 with the Sierra sets the floor rate. Based on estimated expenses and projected revenues generated from the floor rate, Western anticipates including an annual average cost of$401,000 in the CVP PRR for the 5-year rate case period (FY) 2006-2010). See Section VII, Appendix C for more information on this estimate. This proposed floor rate is used to calculate the value oT the SEER and determines the benefit of Stampede power fcr project use loads. Western Western will review the total PRR for Stampede annually in or around April of each year. According to Contract No. 94-SAO-0010 that governs SEEA administration, in April of each year, Western calculates the balance of the SEEA. According to the current rate procedures for the CVP (Rate Schedule CV-F11), Western will review the CVP PRR in March and September of each year. Western will analyze the CVP financial data from October through February, to the extent information is available, as well as forecasted data for March through September. In the case of Stampede, Western will use the disposition of the SEEA account through February and estimate March through September to determine the amount of costs to be included in the CVP PRR. Again, in September when the next review occurs, Western will use the same methodology to include costs in the CVP PRR. Western estimates the Stampede Annual Transferred PRR for October 2005 through September 2006 to be $401,000. A comparison of existing and proposed rates follows: Comparison of Existing and Proposed Rates Washoe Project, Stampede Powerplant Non-Firm Energy Rates Existing I Proposed Rates Percent t Rates as (effective Change of 10/1/00 10/1105) (Mills/kWh) ! r Floor Rate Mills/kWh 17.89 17.89 1 0% Ceiling Rate 90.07 N/A N/A Due to the inclusion of Washce cutput in tl;e 20C4 CVP Power IN;lark-eting Flan and the rate design for the CVP, which uses percentages of a revenue Section VII APPENDICES 3 Federal Register/Vol. 70, No. 87/Friday, May 6, 2005/Notices 24019 filing" link.The Commission strongly DATES:The consultation and comment To serve project use loads and market encourages electronic filing. period begins today and will end June the energy from Stampede.Western's en ive 6,2005.Western will accept written contract with Sierra provides for the Documents—An s. Filing and Service of Responsy filings must bear in comments any time during the Stampede Energy Exchange Account corn period. exchange SEER is an annual energy all capital letters the title consultation and co account for Stampede energy. "COMMENTS", ADDRESSES:Send written comments to Under this contract,Sierra accepts "RECOMMENDATIONS FOR TERMS Ms.Debbie R.Dietz,Rates Manager, delivery of all energy generated from AND CONDITIONS","PROTEST",or Sierra Nevada Customer Service Region, "MOTION TO INTERVENE",as Western Area Power Administration, Stampede into Sierra's electrical system. applicable, and the Project Number of The dollar value of the Stampede energy 1 114 Parkshore Drive,Folsom,CA received by Sierra during any month is the particular application to which the 95630-4710,e-mail ddietz®wapa.gov. credited into the SEEA at the floor rate. filing refers.Any of the above-named Western will post information about the Western can use the SEEA to benefit documents must be filed by providing rate process on its Web site at http:// use facilities and market energy the original and the number of copies rti,ww.wapa.gov/sn/customers/rates/ project provided by the Commission's #currentrates/.Western will post official from Stampede to preference entities.The formula for the proposed floor rate, regulations to:The Secretary,Federal comments received via letter and e-mail per the contract with Sierra,is equal to Energy Regulatory Commission,888 to its Web site after the close of the First Street,NE.,Washington,DC 20426, comment period.Western must receive 85 percent of the then effective, non- 0 copy of any motion to intervene must the written comments by the end of the time differentiated rate provided t- also be served upon each representative Sierra's California Quarterly Short-Term p P consultation and comment period to purchase Price Schedule for as-available of the Applicant specified in the ensure they are considered in Western's purchases from qualifying facilities with particular application. decision process. kilo t.Agency Comments—Federal,State, capacities of 100 w file FOR FURTHER INFORMATION CONTACT: Ms. This proposed floor rate is used to and local agencies are invited to comments on the described application. Debbie R.Dietz,Rates Manager,Sierra calculate the value of the SEEA and A copy of the application may be Nevada Customer Service Region, determines the benefit of Stampede obtained by agencies directly from the Western Area Power Administration, power for project use loads.Western Applicant. If an agency does not file 114 Parkshore Drive,Folsom,CA applies the ratio of projected project use comments within the time specified for 95630-4710,(916) 353-4453,e-mail costs to the projected revenue recorded ddietz©tva a.-ov. filing comments, it will be presumed to P re the SEER to determine a is non- have no comments.One copy of an SUPPLEMENTARY INFORMATION:Current reimbursable percentage.This agency's comments must also be sent to rates for the sale of non-firm energy reimbursable percentage is then applied to the appropriate power related costs to the Applicant's representatives. from Stampede consist of floor and ceiling rates and are designed to recover determine the reimbursable costs. The Magalie R.Salas, an annual revenue requirement.The reimbursable costs are reduced by Secretan roposed floor rate for non-firm energy revenues from sales made at the door TR Doc.E5-2220 Filed 5-5-05:3:45 aml frrom Stampede is 17.89 mills/ rate.Under the 2004 CVP Power 91LUNG CODE 6717-01-P kilowatthour(mills/kWh)and on Marketing Plan,the remaining reimbursabie costs and the estimated average for the 5-year rate period provides sufficient revenue to pay for 96 energy re. wining after meeting protect f_ DEPARTMENT OF ENERGY percent of annual expenses,excluding use service are then transferred to the Western Area Power Administration interest expense.The current ceiling CVP PRR. rate was set by a power repayment study The propose rate formula for Washoe Project—Rate Order No. and provides sufficient revenues to Stampede power is: WAPA-119 repav all annual costs,including Stampede Annual Transferred PRR= AGENCY:Western Area Power interest expense,and the investment Stampede Annual PRR - Stampede Administration,DOE. within the allowable period. Revenue The Central Valley Project(CVP) Where: ACTION:Notice of proposed rates. power Marketing Plan states that the Stampede Annual Transferred PRR= Stampede annual costs(Power SUMMARY: The Western Area Power output from the Washoe Project Revenue Requirement)and Administration(Western)is proposing a remaining after meeting project use associated energytransferred to the minor rate adjustment for non-firm loads will be marketed to CVP CVP energy from the Stampede Powerplant preference customers.Beginning (Stampede),of the Washoe Project, January 1, 2005,the costs remaining Stampede Annual PRR=The total located in Sierra County,California.The after meeting project use requirements power revenue requirement for current rates expire September 30, 2005. are included in the CVP power revenue Stampede required to repay all The rate will provide sufficient revenue requirement(PRR)on an annual basis. annual costs, including interest and to repav all annual costs,including This situation makes it unnecessary to the investment within the allowable interest expense,and repay ceauired establish a new• proposed ceiling rats: :or penod, investment within the allowable period. Stampede.western's C,,nz�-act No. 94- Stampede Revenue =Reenue T n`--`u`d The rate impact is detailed in a rate SAO-00010•.with the Sierra aerie i v tem the door rate and proier,: brochure to be provided to all interested Resources (Sierra) setj the lcor rate. ,generation. trties.The p Western •via review'he total ?RR :or Pproposed new rate is Based on estimated expenses and heduled to go into effect October 1, projected re n Fes zrerated ro'n th= Stampede i^.nuall� "sn er around.'.arii 2005,and will remain in effect through floor rate, Western anticipates including of e ach:car.according to Contract No. September 30,2010.Publication.of this an annual average cost of S-101,000 '-r 94-SAC-00010 that governs SEE. the t~: C`'o 2 « ,s,, i a, .ni' r ::::n in aprig of each%cat Federal Register notice begins _ «hg balar -o[ he Formal process For the proposed rata!S. period(Escal V,ca. _U06 3010j, --J�,S�C,i i' APPENDIX B Washoe PRS Executive Summary POWER REPAYMENT! 5/!112005 FXECUTI%7E SUMMARY For(WTORER 2005 PROPOSE0 R. II ASl10F l'ROJb'fT 1nce,f-m Aid to 1-i ali,m (3perationi K Project Prior r r,cal Total 111aurtenance l ie Net Imerv,t Total Year Allowable Cumulativ Yeal Revenue rx •use Expense Ea chic la cn;es AdlulnWI Unpaid Unpaid Cumulative Increnknta lamed Fiscal 1987 0 0 0 0 0 1 1(alance Balance Valance Babrice Sur lus fear 1988 42,122 141,534 0 242,539 384.073 0 1987 1989 116.670 155.394 0 271,372 426,766 0 1998 1990 150.246 173.390 0 300.083 473,473 0 1989 1991 131.988 260,841 0 337,614 599,455 U 1990 1992 87,388 238,923 0 380,589 619,512 0 1"1 1993 142.461 270,250 0 425,090 695.340 0 1992 1994 140,426 282,669 0 468,701 751.369 0 1993 1995 152,898 165,467 0 285.893 451360 (395.3 0 1994 1996 197.498 115,305 0 361,169 476.474 0 1995 1997 21,253 (37,424) 0 101,598 64,174 0 1996 1998 161,765 33,960 97,953 232,315 364.028 0 1997 1999 271,773 95,033 116,616 273,669 485,319 (1,053,4 0 1998 2000 220.719 78,609 98,421 284,119 461,148 0 1999 2001 721X42 204,192 121,406 346,493 672,091 0 2000 2002 196,841 44,448 157,557 209.430 410,435 0 2001 2003 165.564 2.817 163,123 209,604 375,544 0 2002 20(14 241.931 47,855 190,313 234.054 472,222 0 2003 Prior War 0 20(14 Adjustments 260,592 (379,672) 287,360 (704,095) (796,407) (LOSti,m HISTORICAL 0 0 0 0 0 . S(IHT07.4L 3,413,977 1,893,489 1,232,649 4,259,237 7,385,375 (2.506,2 2W5 196,79U 8,451 '190.113 239,764 438,529 SUBTO7AI. 20W 597,790 12,977 190,313 243,568 446,858 0 20(15 2007 597.790 12,122 190,313 243,124 445,559 0 20(g, 2008 597.790 12,478 190.313 242,714 445,505 0 2007 2009 597,790 12.953 190.313 242,329 445,495 0 2008 2010 597.790 13,246 190.313 241,945 445.504 0 2009 2011 597.790 13,246 190,313 235,675 439,234 0 2010 2012 597,790 13,246 190,313 223,832 427.391 0 2011 2013 597.790 13,246 190313 211,478 415,037 0 2012 2014 597,790 13,246 190,313 209,517 413.076 0 2013 2015 597,790 13,246 190313 209,084 412,643 0 2014 2016 597,790 13.246 190,313 202,047 405.606 1 0 2015 2017 597,790 13,246 190313 189,835 392.394 0 201 2018 597,790 13.246 190313 175,680 379,239 0 2017 2019 597,790 13,246 190,313 162,849 366,408 1 0 2019 2020 597,790 13.246 190.313 149.803 353,362 1 0 2019 2021 597,790 13,246 190,313 136,872 340,431 ( 0 2020 2022 597,790 13,246 190.313 t27,135 330,694 ( 0 2021 2023 597,790 13,246 190,313 126.706 330,265 l 0 2022 2024 597,790 13,246 190,313 122,583 326,142 ( 0 2023 2025 597,790 13,246 190,313 119,069 321,628 ( 0 2024 2026 597,790 13,246 190.313 110.913 314,472 ( 0 2025 2027 597.790 13,246 190,313 103,665 307,224 C 0 2026 2028 597,790 13,246 190,313 96,230 299,789 C 0 2027 2029 597,790 13,246 190,313 93.294 296,853 C 0 2029 2010 597,790 13.246 190,313 94,719 298,278 C 0 2029 2031 597.790 13,246 190,313 86,959 290.519 0 0 2030 2032 597,790 13246 190,313 78,998 282,557 0 0 2031 2033 597,790 13,246 190,313 70,830 274399 0 0 2032 2034 597,790 13,246 190,313 62,451 266,010 0 0 2033 2035 597,790 13,246 190313 53,854 257,413 0 0 2034 2036 597,790 13.246 190313 45.035 248.594 0 0 2035 2037 597,790 13,246 190,313 35,997 239,546 0 0 2036 2038 597.790 13.246 190,313 28,750 232,309 0 0 2037 2039 597.790 13,246 190,313 28380 231,939 0 0 2039 2040 597,790 13,246 190,313 13377 216,936 0 0 2039 2041 597,790 13.246 190,313 1,932 205.511 0 0 2040 FUTURE 1R 327.227 2041 SUBTOTAL 21,717,230 482.753 7,041,591 5,059,001 12,583335 0 F(,'TUREYR STUDY TOTAL 327.227 SUBTOTAL 25.131, 077 2376,242 8274.2 0_ 93,1238 19,968,710 (2,5127. STUDY 0 0 0 327,227 TOTAL APPENDIX C Average Cost of Washoe Project to be Included in the CVP PRR 7 3 APPENDIX D Additional Items Available upon Request 1. Historical Stampede Generation 2. Project Use Load Information 3. Delegation Order for the Administrator to approve short term power rates b 4 - rf - .H � Public Utility District 1 Pr q(1/�PORA OF .N�_1 P V Ms Sandee Peebles June 7, 2006 Public Utilities Specialist Sierra Nevada Region Western Area Power Administration 114 Parkshore Drive-N600 Folsom CA 95630-4710 Dear Sandee: In accordance with your request for an expression of interest in replacing the contract WAPA has with Sierra Pacific Power Company for energy exchange services, Truckee Donner Public Utility District and the City of Fallon desire to submit the attached Power Purchase Agreement. This proposal is consistent with the letter we sent Tom Boyko on March 24, 2006. Truckee and Fallon believe that we can provide equivalent service to that offered by Sierra at a price more consistent with today's energy market, with substantially reduced administrative costs and transmission fees. Our proposal specifically addresses the following items: 1. Service to Project Use loads We understand that Sierra banks a portion of the energy payment for later distribution by Western to project use loads. We are prepared to distribute a portion of our payment for Western's distribution to project use loads. 2. Administrative fees We propose to eliminate the administrative charges, the transmission fees and losses in your current contract. Truckee and Fallon are both transmission customers of Sierra Pacific and as such are paying network transmission access and losses based on our individual load requirements. 3. Energy Pricing Our pricing proposal of $32.78/MWh is consistent with non-firm purchases in today's market and is offered for 20 years, a substantial premium over the discounted pricing in your current contract. 4. Energy Banking It is our understanding that the energy banking and replacement energy portions of your current contract are features currently unused and of limited value to Western and we have elected not to include those provisions. P.0. Box 309-Truckee,CA 96160-Phone 530-587-3896-www.tdpud.org Sandee, as you know. Truckee and Fallon are preference customers of Western and existing network tranornission customers of Sierra Pacific, inside their control area. We have agreed, between ourselves to arrange to share the energy from Stampede and will take the energy directly to our respective retail customers in California and Nevada. Truckee's Board of Directors and Fallon's City Council have approved going forward with this contract under the terms offered and we are prepared to complete this contract with no delays. As a separate matter, should Western resolve their dispute in some manner with Sierra that has Sierra providing replacement energy, we are prepared to acquire such energy under similar temp offered here. Thank you for your consideration. We look forward b working with you for the beneflit of all concerned. Sincerely. i ephen Hoilabaugh Steven D.King Assistant General Manager Assistant City Attorney Truckee Donner Pl?D City of Fallon i P.a rev 39-TnKk,CA%16d-Mow 530-5e7-3M-ww.r.wru-wg PURCHASED POWER AGREEMENT AMONG UNITED STATES DEPARTMENT OF ENERGY WESTERN AREA POWER ADMINISTRATION (WASHOE PROJECT STAMPEDE PLANT) AND TRUCKEE DONNER PUBLIC UTILITY DISTRICT AND THE CITY OF FALLON Dated: June , 2006 i PURCHASED POWER AGREEMENT 2 3 This Purchased Power Agreement (this "Agreement") is made and 4 entered into effective the day of June 2006, pursuant to the Acts of 5 Congress approved June 17, 1902 (32 Stat.388) (Reclamation Act); August 6 4, 1939 (53 Stat. 1187) (Reclamation Project Act); August 1, 1958 (70 Stat. 7 775) (Washoe Project, Stampede Hydroelectric Facilities Authorization); 8 August 4,1977 (91 Stat.565) (DOE Organization Act); and Acts amendatory 9 or supplementary to the foregoing Acts by and among the UNITED STATES io OF AMERICA, acting by and through the Administrator, Western Area Power 11 Administration, Department of Energy, herein after called "Western" or 12 "Seller", represented by the officer executing this contract or a duly 13 appointed successor, hereinafter called the "Contracting Officer"; and the 14 Truckee Donner Public Utility District, a public utility district organized and 15 existing under the laws of the State of California, hereinafter called 16 "Truckee"; and the City of Fallon, a political subdivision organized and 17 existing under the laws of the State of Nevada ("City"). Truckee and City, is hereinafter, referred to as "Buyers". Truckee, City and Western hereinafter i9 are sometimes referred to individually as "Party" and collectively as 20 "Parties". 21 22 WHEREAS, Western owns, operates and maintains a hydroelectric 23 generating facility with a total of approximately 3.65 Mw of electric 24 generating capacity, together with their auxiliaries, accessories, 25 and housings located at the Stampede Hydro Plant approximately 26 5 miles east of Truckee, California on the Stampede Reservoir in 27 California ("Project"); and 28 29 WHEREAS, the Project is connected to the Transmission System of 30 Sierra Pacific Power Company ("Sierra") under a separate interconnection 31 agreement between Sierra and Western; and 32 33 WHEREAS, The Buyers own and operate electrical utility systems 34 serving electric retail customers; and 35 36 WHEREAS, The Buyers are experiencing rapid growth and are in need 37 of new electrical resources to help meet those loads; and 38 39 WHEREAS, The Buyers are transmission customers of Sierra; and 40 41 WHEREAS, Pursuant to Section 203 of the Department of Energy 42 Organization Act (42 U.S.C. 7152), Western is authorized to market the 43 energy produced by Stampede; and WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 3 Stampede Hydro Plant M 1 Defaulting Party shall mean a Party that is in Default of this 2 Agreement. 3 4 Delivered Amount means, with respect to any Dispatch Hour, the 5 actual amount of Energy delivered by Supplier to Buyer at the Delivery Point 6 during such Dispatch Hour. 8 Delivery Point means the Western owned disconnect switch (6001-B) 9 at Sierra's Stampede substation. 10 11 Dispatch Hour means each hour from the Operation Date through the 12 end of the Term. 13 14 Effective Date shall mean the date on which this Agreement becomes 15 effective, upon execution by the Parties. 16 17 Emergency means any circumstance or combination of circumstances 18 or any condition of the Generating Facility, the Interconnection Facilities, the 19 Transmission System, or the transmission system of other electric utilities, 20 which is reasonably likely to endanger life or property and necessitates 21 immediate action to avert injury to a person or persons or serious damage 22 to property or is reasonably likely to adversely affect, degrade or impair 23 Transmission System reliability or transmission system reliability of other 24 electric utilities. 25 26 Energy means electrical energy (measured in MWh) that is generated 27 by the Generating Facility. 28 29 FERC shall mean the Federal Energy Regulatory Commission or its 30 successor. 31 32 Force Majeure shall mean any act of God, labor disturbance, act of 33 the public enemy, war, insurrection, riot, fire, storm or flood, explosion, 34 breakage or accident to machinery or equipment. It shall also include 35 regulatory charge by a Governmental Authority which would impose severe 36 impediments to a Party's performance of its obligations hereinabove. A 37 Force Majeure event does not include economic hardship or an act of 38 negligence or intentional wrongdoing. 39 40 Generating Facility means Supplier's hydro generating power 41 plant, located at the Stampede Plant near Truckee, California with 42 an aggregate installed total nominal nameplate capacity of WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 5 Stampede Hydro Plant 1 Non-Defaulting Party shall mean the Party other than the Defaulting 2 Party. 3 4 OATT shall mean Transmission Provider's or Control Area Operator's 5 then effective Open Access Transmission Tariff, which has been accepted for 6 filing by the FERC. 7 8 Operating Representative of a Party means any of the individuals 9 designated by that Party, as set forth in Article 14.8.2, to transmit and 10 receive routine operating and Emergency communications required under 11 this Agreement. A Party may change its Operating Representative by 12 providing notice of the change to the other Party in accordance with the 13 notice procedures set forth in Article 14.8. 14 15 Parallel Operation shall mean the two-way flow of power between a 16 generator and a Transmission System. Generators that operate in parallel 17 with a Transmission System require additional protection and control 18 devices. This may be contrasted with a stand-alone generator that operates 19 isolated from the utility company's electric system. 20 21 Product shall mean (i) all Energy produced by the Generating Facility, 22 except Station Usage and (ii) all RECs associated with the energy produced 23 by the Generating Facility. 24 25 PUCN shall mean the Public Utilities Commission of Nevada and any 26 successor entity thereto. 27 28 RECs shall mean all renewable energy credits, offsets or other benefits 29 allocated, assigned or otherwise awarded or certified to Supplier or Buyer by 30 any Governmental Authority that are derived from the ownership or 31 operation of, or production of Energy or purchase of Energy from the Project 32 or due to the Project's use of hydro or "water power" resources for 33 generation. 34 35 REC Administrator shall mean an entity appointed by the PUCN to 36 administer any REC trading program, pursuant to any law, including, without 37 limitation, the requirements of Nevada Revised Statutes §§ 704.7801 to 38 704.7828, inclusive, as amended or superseded, and regulations 39 promulgated thereunder by the PUCN, which impose an obligation on Buyer 40 to meet a required percentage of its retail load or energy requirements by 41 purchasing or generating electricity derived from renewable energy 42 generating facility systems or which provide for the trading of RECs, as such 43 laws may be amended or superseded. 44 WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 7 Stampede Hydro Plant 1 (including scheduling) for delivery of electricity with the 2 Transmission Provider. 3 2.2 Responsibilities of the Parties. 4 2.2.1 The Parties shall perform all obligations of this Agreement 5 in accordance with all applicable laws and regulations, 6 operating requirements, and Good Utility Practice. 7 2.2.2 Seller shall operate and maintain its Generating Facility 8 and operate and maintain its Interconnection Facilities in 9 accordance with the applicable manufacturer's 10 recommended maintenance schedule, in compliance with 11 all aspects of the rules therefore and, in accordance with 12 this Agreement, and with Good Utility Practice. 13 2.2.3 Each Party shall operate, maintain, repair, and inspect, 14 and shall be fully responsible for the facilities that it now 15 or subsequently may own. 16 2.3 Parallel Operation Obligations. Seller shall abide by all rules and 17 procedures pertaining to the Parallel Operation of the Generating 18 Facility in the applicable Control Area, including, but not limited to, 19 the rules and procedures concerning the operation of generation set 20 forth in the OATT or by the system operator for Transmission 21 Provider's Transmission System. WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 9 Stampede Hydro Plant 1 Article 6 - Rate 2 6.1 Payment for Energy. Seller shall be paid monthly for the Energy 3 as determined from monthly meter readings. Buyer shall pay Seller 4 at the Yearly Rate for all Energy delivered pursuant to the terms of 5 this Agreement. The Yearly Rate is based upon a base price of 6 $32.78/Mwh for the term of the contract. 7 Article 7 - Renewable Energy Credits s 7.1 Transfer of RECs. Seller hereby transfers to Buyer all RECs 9 derived from the ownership or operation of, or production of Energy 10 from, the Project, if any. Seller shall timely take all reasonable 11 actions necessary under Nevada law or regulation or other laws to 12 cause the RECs to vest in or be transferred to Buyer, including the 13 registration of the Project with the PUCK or other Governmental 14 Authority, the provision of periodic production data to the PUCN or 15 any REC Administrator and the filing of requests for transfers of 16 RECs to Buyer. The quantity of RECs, transferred to Buyer shall be 17 the amount of RECs, measured in kWh's, attributable to the 1s ownership or operation of the Project pursuant to the terms of this 19 Agreement. 20 Article 8 - Metering 21 Seller's Delivered Amount shall be determined by Meters installed at or 22 compensated to the Delivery Point. The metered quantities shall be the gross 23 Project output less Station Usage. Either Party, at its own expense, may 24 install check meters. Any check-metering equipment to be installed by one 25 Party on the other Party's facilities shall be mutually agreed upon and 26 installation procedures shall be developed. All Meter data will be made 27 electronically accessible to Buyer for Scheduling and billing purposes. If 28 additional equipment is required to make such data electronically available, 29 Seller will work with Buyer to install the necessary equipment, the cost of 30 which shall be borne by the Buyer. 31 Article 9 — Invoicing & Payment 32 9.1 Invoicing and Payment. On or before the thirtieth (30th) day of 33 each month, Seller shall send to Buyer an Invoice for the prior 34 month ("Billing Period"). The Invoice shall be calculated based upon 35 Meter data available to Buyer and Seller and shall comply with this 36 Article. WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 11 Stampede Hydro Plant a 1 Buyer's option, Buyer may offset such amount against a 2 subsequent monthly payment to Seller. 3 9.4.3 If Seller fails to provide notice of an alleged error within 4 twelve (12) months of receipt of an Invoice, then Seller 5 shall be deemed to have waived all rights to object to the 6 Invoice for the subject Billing Period. 7 9.4.4 Buyer may correct any Invoice errors it discovers and s make adjustments in payments as a result thereof within 9 twelve (12) months of each Invoice. 10 9.5 Overdue Amounts and Refunds. Overdue amounts shall bear 11 interest from and including the due date to the date of payment of 12 such overdue amounts at a rate of six (6) percent per anum. 13 9.6 Right to Review. Buyer and Seller each shall have the right to 14 review during normal business hours the relevant books and records 15 of the other Party to confirm the accuracy of such as they pertain 16 only to transactions under this Agreement. The review shall be 17 consistent with standard business practices and shall follow 18 reasonable notice to the other Party. Reasonable notice for a review 19 of the previous month's records shall be a minimum of seven (7) 20 business days. If a review is requested of other than the previous 21 month's records, then the requesting Party shall provide notice of 22 that request with a minimum of fourteen (14) business days. The 23 notice shall specify the period to be covered by the review. WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 13 Stampede Hydro Plant 1 satisfactory to it in order to settle and terminate a strike or other labor 2 disturbance 3 Article 12 - Default 4 12.1 General. No Default shall exist where such failure to discharge an 5 obligation (other than the payment of money) is the result of Force 6 Majeure or the result of an act or omission of the other Party. Upon 7 a Default, the Non-Defaulting Party shall give written notice of such 8 Default to the Defaulting Party. The Defaulting Party shall have 9 thirty (30) days from receipt of the Default notice within which to to cure such Default; provided however, if such Default is not capable 11 of cure within thirty (30) days, the Defaulting Party shall commence 12 such cure within thirty (30) days after notice and continuously and 13 diligently complete such cure within ninety (90) days from receipt of 14 the Default notice; and, if cured within such time, the Default 15 specified in such notice shall cease to exist. 16 12.2 Right to Terminate. If a Default is not cured as provided in this 17 article, or if a Default is not capable of being cured within the period 18 provided for herein, the Non-Defaulting Party shall have the right to 19 terminate this Agreement by written notice, and be relieved of any 20 further obligation hereunder and, to recover from the Defaulting 21 Party all amounts due hereunder, plus all other damages and 22 remedies to which it is entitled at law or in equity. The provisions of 23 this article will survive termination of this Agreement. 24 Article 13 - Remedies 25 Upon either Parry's failure to perform any obligation under this Agreement, 26 the other Party, except to the extent specifically limited by this Agreement, 27 may exercise, at its election, any rights or remedies it may have in law or in 28 equity including but not limited to compensation for monetary damages, 29 injunctive relief and specific performance; provided, however, that neither 30 Party shall be liable to the other Party for any indirect, consequential, 31 incidental, punitive or exemplary damages. The definition of consequential 32 damages shall include a claim for lost profits by Seller or Buyer. 33 Article 14. Miscellaneous 34 14.1 Governing Law, Regulatory Authority and Rules. The validity, 35 interpretation and enforcement of this Agreement and each of its 36 provisions shall be governed by the laws of the State of California, 37 without regard to its conflicts of law principles. WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 15 Stampede Hydro Plant P I Authority permits, licenses, or other documents necessary for the 2 operation of the Project and the sale of Product to Buyer. In the 3 event any approvals or authorizations are required from any 4 Governmental Authority for the continued operation of the Project, 5 Supplier shall be responsible for obtaining and maintaining such 6 approvals or authorizations. If Seller has not obtained and 7 maintained such permits, licenses and authorizations that are 8 material and necessary for the operation of the Project or 9 maintained the status and approvals they represent, Seller shall not 10 be required to deliver Product to Buyer and Buyer shall have no 11 obligation to accept same until the appropriate approvals or 12 authorities are obtained or reinstated. Buyers' obligation to 13 purchase shall be reinstated only upon receipt of proof that such 14 permits, licenses and authorizations have been obtained or 15 reinstated. Seller shall provide Buyer prior written notice of its 16 intent to seek any application, modification, extension or other 17 change to any FERC licenses required for the operation of the 18 Project. 19 14.8 Notices. Unless otherwise provided in this Agreement, any notice, 20 demand or request required or permitted to be given by either Party 21 to the other and any instrument required or permitted to be 22 tendered or delivered by either Party in writing to the other shall be 23 effective when delivered and may be so given, tendered or 24 delivered, by recognized national courier, or by depositing the same 25 with the United States Postal Service with postage prepaid, for 26 delivery by certified or registered mail, addressed to the Party, or 27 personally delivered to the Party, at the address set out below: 28 Western 29 Area Manager 30 Western Area Power Administrator 31 Truckee Donner Public Utility District 32 General Manager 33 Peter Holzmeister 34 P.O. Box 309 35 Truckee CA 96160 36 (530) 582 3916 37 38 39 40 41 WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 17 Stampede Hydro Plant 1 deemed separate and independent; (2) the Parties shall negotiate in 2 good faith to restore insofar as practicable the benefits to each Party 3 that were affected by such ruling; and (3) the remainder of this 4 Agreement shall remain in full force and effect. 5 14.13 Indemnity. The Parties shall at all times indemnify, defend, and 6 save the other Party harmless from, any and all damages, losses, 7 claims, including claims and actions relating to injury to or death of 8 any person or damage to property, demand, suits, recoveries, costs 9 and expenses, court costs, attorney fees, and all other obligations 10 by or to third parties, arising out of or resulting from the Party's 11 action or inaction of its obligations under this Agreement, except in 12 cases of gross negligence or intentional wrongdoing by the other 13 Party. 14 14.14 Authority to Execute. The Parties acknowledge and agree that 15 their below designated representative to this Agreement has the 16 requisite authority to act for said Party and execute this Agreement. 17 18 Article 15. Signatures 19 20 IN WITNESS WHEREOF, Parties have caused this Agreement to be 21 executed by their respective duly authorized representatives as of the 22 effective date set forth above. 23 24 25 26 Western Area Power Administration 27 28 29 Name: 30 31 Signature: 32 33 Title: 34 35 Date: 36 37 38 39 40 WAPA/TDPUD/City of Fallon Purchased Power Agreement Page 19 Stampede Hydro Plant Agenda Item # TRUCKEE DONNER Public Utility District Memorandum To: Board of Directors From: Stephen Hollabaugh Date: June 1, 2006 Subject: Submission of a proposal to the Western Area Power Administration for purchase of generation from the Stampede Power Plant. History: Truckee Donner PUD has been involved and interested in the Stampede Generation for a long time. This generation is located on the Little Truckee River approximately eight miles above the confluence of the Little Truckee and the Truckee River. The dam and reservoir are in Sierra County, California, about 11 miles northeast of the town of Truckee. The Stampede power plant was completed in 1987 and Western initially allocated the remaining energy (after project use) to Truckee Donner Public Utility District, a preference entity within the service area of Sierra Pacific, on October 25, 1985. Due to unsuccessful negotiations with Sierra, Truckee Donner was unable to enter into a contract with Western to take delivery of the energy from the power plant. New information: Truckee Donner staff has been working with Western to try to take delivery of the energy from Stampede Generation. Western has recently requested solicitation for eligible customers to provide the same service which Sierra Pacific Power Company (Sierra) is providing WAPA pursuant to certain Contract for Energy Exchange Services between Western and Sierra dated April 30, 1994. A copy of the Contract for Energy Exchange Services together with Western's May 17, 2006 e-mail solicitation for proposals is attached. The Truckee Donner PUD and the City of Fallon are the only two Western "preference customers" located in Sierra's control area which are readily able to receive the electric energy generated from the Stampede Power Plant under said contract. Staff recommends the District respond to Western's solicitation to enter a contract with Western to provide the required services and to, with a proposal that Truckee Donner PUD in coordination with the City of Fallon, submit a joint (or individually coordinated) proposal to purchase energy in the $30.00 to $35.00 per megawatt hour range by June 9, 2006. Recommendation: I recommend the Board authorize the Assistant General Manager to submit a proposal to the Western Area Power Administration to provide the required services and to, with a proposal that Truckee Donner PUD in coordination with the City of Fallon, submit a joint (or individually coordinated) proposal to purchase energy in the $30.00 to$35.00 per megawatt hour range by June 9, 2006. Page IofI TRUCKEE DONNER Public PO Box 309, 11570 Donner Pass Road Truckee, Ca. 96160 M inu t Order June 7, 2006 No. 2006 — 60 CONSIDERATION OF AUTHORIZING SUBMISSION OF A PROPOSAL TO THE WESTERN AREA POWER ADMINISTRATION FOR PURCHASE OF GENERATION FROM THE STAMPEDE POWER PLANT. Director Sutton moved and Director Thomason seconded, a motion to authorize the Assistant General Manager to submit a proposal to the Western Area Power Administration to provide the required services and to, with a proposal that Truckee Donner PUD in coordination with the City of Fallon, submit a joint (or individually coordinated) proposal to purchase energy generation from the Stampede Power Plan in the $30.00 to $35.00 per megawatt hour range by June 9, 2006. ROLL CALL: Director Aguera, absent; All other Directors, aye. SO MOVED. Post Office Box 309- 11570 Donner Pass Road- Truckee, CA 96160 Phone 530 587-3696-Fax 530 587-1 189 Stephen Hollabaugh From: Sandee Peebles[PEEBLES�&wapa.gov] Sent: Wednesday, May 17,2006 12:37 PM To: Don Battles; Matt Foskett; Steven King; marshall n@psin.com; Stephen Hollabaugh Cc: Tom Boyko; Jeanne Haas Subject: Stampede Energy AR-M450U_200605 17.pdf(457 KB)... Hi, A3 you are probably aware, SNR has a contract with the Sierra Pacific Power Company to serve 2 project use scads, the Lahontan National Fish Hatchery and :''he Marble Bit..ff Fish Far-ility, :.:,cated near the Washoe Pro 'ect. Under that contract, SPPC our^hases the generation from t-e stampede Powerplant. The funds from that sale are held `.n .in wiccount by SPPC and are used to pay f r serving the PU loads and SPPC's adminiscraLiie charges. We have recently reviewed the rate at which SPPC is crediting the account fcr Stampede e::ergy and have determined that Western is not receiving the full value of the energy. Tris e-mail is to solicit interest from those SNR customers who may have the ability to provide the same ser•✓'_ ;es SPPC is providing at a rate which is more reflective of today's energy market. I -.ave attached a copy of SDTR's contract with SPPC for the specific details of the se r,ices provided by =2PC. If you are interested in submitting a proposal, please send it to me by close of busi.iess on Friday, June 9, 2006. If you have any questions with regard ro the above, please feel free to contact me. Thank you. Sandee Lea Peebles Public Utilities Specialist Sierra Nev ,da Region Western Area Power Administration (916) 353-4454 t • Contract No. 94-SAO-00010 UNITED STATES DEPARTMENT OF ENERGY WESTERN AREA POWER ADMINISTRATION WASHOE PROJECT, CALIFORNIA-NEVADA CONTRACT WITH THE SIERRA PACIFIC POWER COMPANY FOR ENERGY EXCHANGE SERVICES / Gam_ r. c Contract No. 94-SAO-00010 UNITED STATES WESTERN ARARTMENT OF ENERGY ApT,�t WASHOE PROJECT, CALIDFORNIATNEVADA q4,ta COPS. CONTRACT WITH THE SIERRA PACIFIC POWER COMPANY FOR ENERGY EXCHANGE SERVICES Table of Contents Section Page I. PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. EXPLANATORY RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . 1 3. AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4. TERMINATION OF EXISTING CONTRACT . . . . . . . . . . . . . . . . . . 3 5. EFFECTIVE DATE AND TERM . . . . . . . . . . . . . . . , , . , . 3 6. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 7. DEFINITIONS . . . . . . . . . . . . . . . . . . 4 8. WSPP AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 5 • 9. DELIVERY OF STAMPEDE ENERGY TO SIERRA . . . . . . . , , , , , . . 6 ' 10 OPERATION OF THE STAMPEDE EXCHANGE ACCOUNT 11. DELIVERIES TO WESTERN . . . . . . . . . . . . . . . . . . . . . . . . 9 12. SIERRA'S RATES AND CHARGES . . . 10 . . . . . . . . . . . . . . . . 13. BILLING AND PAYMENT . . . . . . . . . 11 14. OPERATING GUIDELINES AND PROCEDURES . . . . . . . . . . . . . . . . 11 IS. METERING . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 15. REGULATORY APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . 12 17. AUTHORIZED REPRESENTATIVES . . . . . . . . . . . . . . . . . . . . . 12 18. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 19. GENERAL CONTRACT PROVISIONS . . . . . . . . . . . . . . . . . . . 13 20. ENTIRE AGREEMENT . . . . . . . . 15 . . . . . . . . . . . . . . . . . CERTIFICATE Appendix A Olt i ��E�Ct► l^ f AUrNEHTlC,q�'D Apr '. 2.2 Sierra is an investor-owned electric utility engaged in the 2 generation, transmission, distribution, and sale of electric power in 3 the States of Nevada and California. 4 5 2.3 Pursuant to Section 203 of the Department of Energy Organization 6 Act (42 U.S.C. 7152), Western is authorized to market the energy 1 ' produced by Stampede. a 9 2.4 The Parties hereto have entered into Contract No. DE-MS65- 10! 85WP59076, which provided, among other things, for the Contractor to 11 construct, at Western's expense, a 60-kV transmission line, with 12 necessary appurtenant facilities, between the Stampede Switchyard and 13 the interconnecting point on the Contractor's 60-kV transmission line. 14 15 2.5 The Parties hereto have entered into Contract No. DE-MS65- 16 86WP59067, which provided for Western to sell the energy produced by 17 Stampede to Sierra. 18 19 2.6 Sierra and Western are both signatories to the Western Systems 20 Power Pool ('WSPP) Agreement (WSPP Agreement), which was accepted for f 21 filing by the Federal Energy Regulatory Commission (FERC) on October 18, 22 1991, in FERC Docket No. 91-195-000, and are members of WSPP. i 23 24 2.7 Sierra and Western are entering into this Contract, pursuant to 25 the WSPP Agreement, to facilitate Sierra's drought water storage 26 arrangements in Washoe Project reservoirs and the disposition of energy �27 produced by Stampede. 1 COPY 28 2 n , 1 6.2 Sierra does not receive notification from Western on or before Co py 2 March 1st of any year of Western's intent to extend the term of the 3 Contract. 4 5 6.3 Sierra receives an Adverse Regulatory Action and the Parties fail 6 to renegotiate the Contract as prescribed in Section 16. 7 8 6.4 Western provides sixty (60) days notice of termination of the g Contract. 10 11 6.5 In the event that the terms of this Contract become an undue 12 burden to either Party as mutually agreed upon by both Parties. 13 14 7. DEFINITIONS: 15 The following terms, when used in this Contract with initial capitalization, 16 whether in the singular or plural , shall have the following meanings: 17 ' is 7.1 Adverse Regulatory Action: 19 An action by any regulatory authority with jurisdiction .over the 20 Contract disapproving this Contract. i 21 j 22.1 7.2 ' Authorized Rep esentatives: 23 The individual or individuals designated by the Parties to carry out the i ' 24 duties and functions provided in Section 17. 25 26 7.3 CSPP: )27 Sierra Pacific Power Company's California quarterly Short-Term Purchase y 28 Price Schedule For As-Available Purchases From Qualifying Facilities 1 4 AUTHEATICATED COPY n , Aft �CMED Copr 1 that it no longer accommodates this Contract, the Parties shall use their best 2 efforts to amend this Contract as may be necessary for filing by Sierra with 3 FERC. Sierra shall then promptly file the amended Contract with FERC, which 4 filing shall be supported by Western, and all reasonable associated filing 5 costs, excluding attorney's fees, paid by Western, and will be subject to the 6 provisions of Section 16. 7 8 9. DELIVERY OF STAMPEDE ENERGY TO SIERRA: 9 Sierra agrees to accept delivery into its electrical system of all energy 10 generated by Stampede. Unless otherwise agreed by the Parties, the points of 11 receipt for such deliveries shall be the Western-owned disconnect switch 12 (6001-8) at the Stampede Switchyard adjacent to Stampede. The quantity of 13 energy delivered to Sierra shall be determined by metering installed, owned, 14 and operated at Western's expense. Metering data will be provided to Sierra -15 by Western an a monthly basis with generation records accounted for and 16 maintained by both Parties. Stampede Energy delivered to Sierra shall be 17 accounted for pursuant to Section 10. 18 19 10. OPERATION OF THE STAMPEDE EXCHANGE ACCOUNT: 20 On the effective date of this Contract, Sierra shall establish, and thereafter 21 maintain, the Stampede Exchange Account, as provided in this section. 22 Appendix A, attached hereto and incorporated herein, sets forth an example 23 month. calculation that illustrates the operation of the Stampede Exchange 24 Account. At no time will a debit entry be made to the Stampede Exchange 25 Account in excess of the credit balance of such account, unless otherwise 26 agreed to by both Parties. Amounts owed to Sierra for services provided to i27 Western that exceed the credit balance will be billed by Sierra pursuant to 28 Section 13. { A�{�1ttiCASE�Copy 6 AUTJ' EAMCATED Copy 1 10.1.6 If directed by Western, a debit entry shall be made equal 2 to the dollar value of the Stampede Energy purchased by Sierra as 3 valued in Paragraph 10.1.1. Payment by Sierra to Western 4 associated with such debit entry shall be made in accordance with 5 Section 13. 6 7 10.2 Sierra shall notify Western of the balance of the Stampede 8 Exchange Account as of the first day of each calendar quarter, and 9 provide Western with a summary of Stampede Exchange Account transactions 10 for the immediately preceding quarter. Within fourteen (14) days after lI the last day of March following the effective date of this Contract, and 12 within fourteen (14) days after the last day of March of each year . 13 thereafter in the event the Contract term is extended, Sierra shall 14 notify Western of the balance of the Stampede Exchange Account after all 15 ' debit and credit entries, described above, have been made for the annual 16 period ending with the month of March. Sierra and Western shall then 17 agree as to the disposition of the balance in the Stampede Exchange 18 Account. Unless otherwise agreed by the Parties, the balance in the 19 Stampede Exchange Account as of the last day of March shall be reduced 20 to zero by April 30th through one of the applicable debit methods 21 described in Subsection 10.1; gxcept, That the time limit on such annual 22 reduction shall be extended for a mutually agreeable period of time in 23 the event that operating constraints as described in Subsection 11.3 24 prevent the delivery of energy as contemplated in Paragraph 10.1.3. 25 26 11. DELIVERIES TO WESTERNi 27 11.1 Upon notification by Western, Sierra shall deliver to Western a 28 quantity of energy specified by Western on a non-firm basis. The 8 AUTHEIMCATED COPY . A�F 1 11.3 Sierra shall not be obligated to deliver Stampede Energy to D COPY 2 Western at any time when Sierra determines, consistent with Prudent 3 Utility Practice, that transmission constraints or unacceptable 4 operational conditions exist on Sierra's system. 5 6 12. SIERRA'S RATES AND CHARGES: 7 ' 12.1 Sierra shall provide Western's Authorized Representative a copy of 8 the CSPP rates on or before the effective date of the Contract and as 9 such rate may be from time to time revised and approved or accepted for 10 filing by the California Public Utilities. Commission. 11 12 12.2 Sierra's rate for non-firm transmission service, for deliveries of 13 energy to Western as provided in Section 11, shall be established 14 pursuant to the WSPP Agreement, Service Schedule D, which is included 15 herein by reference. The Parties have agreed that the rate for such 16 service shall be $0.003/kWh. In addition, Western shall compensate 17 Sierra for its system transmission losses associated with such 18 deliveries. Sierra's' system transmission loss factor, for purposes of 19 '� this Contract, is four percent (4%). The transmission service rate 20 shall. be renegotiated if such rate is found to be in violation of the 21 WSPP Agreement. 22 23 12.3 Western shall pay Sierra an administrative services charge of 24 Three Hundred Twenty Dollars ($320.00) per month each month when a debit 25 and/or credit is made to the Stampede Energy Account. 26 • 28 /// 1CI► p COO 10 4 1 AUTH�.jm���Cop,, 1 operate, maintain, replace, and test the demand tape recorders, all at 2 the expense of Sierra. Sierra shall be given access to the tape demand 3 recorders at reasonable times arranged in advance with Western. 4 5 15.3 Sierra shall have the right to install its own meter seals on 6 Western-owned revenue meters. 7 8 15.4 Sierra reserves the right to review and approve any modifications 9 performed by Western on the metering facilities referenced in 10 Subsection 15.1 above. 11 12 16. REGULATORY APPROVAL: 13 In the event of any Adverse Regulatory Action, the Parties shall make best 14 efforts to renegotiate the provisions of this Contract in an attempt to 15 restore balance of benefits and burdens to the Parties originally established 16 and contemplated by this Contract. If, after ninety (90) days from the date 17 of any such Adverse Regulatory Action, the Parties have failed in their 18 attempts to renegotiate the Contract, the Contract shall terminate. 19 ' 20 17. AUTHORIZED REPRESENTATIVES OF THE PARTIES: 21 Each Party to the Contract, by written notice to the other, shall designate 22 the representative(s) who is (are) authorized to act in its behalf with 23 respect to those matters contained in the Contract which are the functions and 24 responsibilities of the Authorized Representatives of the Parties. Each Party 25 may change the designation of its Authorized Representative(s) upon oral 26 notice given to the other, confirmed promptly by written notice delivered 17 pursuant to Section 18. 28 /// Oto a� j 12 a "iMCAft Copy 1 � Congress making the necessary appropriations required for the continued 2 performance of Western obligations under this Contract. In case such 3 appropriation is not made, Sierra hereby releases Western from its 4 contractual obligations and from all liability due to the failure of 5 Congress to make such appropriation. 6 7 19.2 Officials Not to 3enefit 8 No member of or delegate to Congress or resident commissioner shall be 9 admitted to any share or part of this Contract or to any benefit that 10 may have arisen therefrom, but this restriction shall not be construed 11 to extend to this Contract if made with a corporation or company for its 12 general benefit. 13 14 19.3 Covenant Against Contingent Fees 15 The Parties warrant that no person or selling agency has been employed 16 or retained to solicit or secure this Contract upon an agreement or 17 understanding for a commission, percentage, brokerage, or contingent 18 ,. fee, excepting bona fide employees or bona fide established commercial i3 or selling agencies maintained by the Parties for the purpose of 20 securing business. For breach of violation of this warranty, Western 21 shall have the right to withdraw from this Contract without liability 22 or, in its discretion, to deduct from the contract price or 23 consideration Western's share of the full amount of such commission, 24 percentage, brokerage, or contingent fee. 25 i 26 19.4 Contract Work Hours and Safety Standards 27 This Contract to the extent that it is of a character specified in Z8 Section 103 of the Contract Work Hours and Safety Standards Act (Act), 14 „ n EAMCATED (opr 40 U.S.C.A. Section 329 (1986) , is subject to the provisions of the Act, 1 2 40 U.S.C.A. Sa_ctions 327-333 (1984) , and to regulations promulgated by 3' the Secretary of labor pursuant to the Act. 4 5 19,5 EcUal 0 ortunit Em lovment practices �97a), 6 . Section 202 of Executive Order No. 11246, 43 Fed.Rag. 46501 (� 7 which provides, among other things, that the Parties will not 8 discriminate against any employee or applicant for employment because of eligion, sex, or national origin, is incorporated by g race, color, r 10 , reference in this Contract. 11 12 19.6 Use of Convict labor_ �3 The Parties agree not to employ any person undergoing sentence of + pt as provided imprisonment in performing work under this Contract exce 14 1 by 18 U.S.C. 4p82(c){2) and Executive Order 11755, Cecember 29, 1973. 16 17 , 24. ENTIRE A6REE�: 18 This Contract constitutes the entire agreement of the Parties and supersedes 19 all previous agreements for services provided for herein, whether written or 20 oral . This Contract may be amended only by an instrument in writing, executed 21i by both Parties. 23 24 25 2627 } �0 281 15 i o it t "m EMcqM Copy 1 IN WITNESS WHEREOF, the Parties have caused this Contract to be executed 2 the day and year first above written. 3 4 WESTERN AREA POWER ADMINISTRATION 5 i 6 BY C. e may 7 Title: Area Manager 8 Address: 1825 Bell Street. Suite 105 9 Sacramento, CA 95825 10 11 SIERRA PACIFIC POWER COMPANY 12. 13 (Seal) By; J A 91(91,IJ A 14 Attest: Title: Vice President Who a al ectric Business i5 By: Address wo Neil Road 16 Title: Reno, W 89520-0400 17 18 APPVD. 19 20 21 22 23 24 25 s 26 2 7 281C*�� 16 AUTHE,NTIC4TED copy Sierra Pacific Power Company Contract No. 94-SAO-00010 Appendix A Appendix A (Stampede Exchange Account — Example Month Calculation) Debit Credit Account Account Balance Gross Stampede Hydro Generation: 525,143 kWh x 85% Non-Time Diff. CSPP Energy Rate $0.021225 (1st Qrt) $11,146 $11,146 (§9 & 10.1.1) Payment to Accounts Specified by Western $(5,422) $ 5,724 (§10.1.2) Sierra Administrative Fee $ (320) $ 5,404 (§10i, 10.1 .5, & 12.3) Energy Delivered to Western With Losses 200,000 kWh x 85% Time-Diff. Off-Peak CSPP Rate $0.019610 (1st Qrt) x 1.04 $(4,079) $ 1,325 (§10.1.3 & 11) Transmission Service Charge 200,000 kWh Delivered to Western t $0.003 kWh _.. __ _ $ (600) _ $ 725 (§10.1.4 & 12.2) Stampede Energy Purchased by Sierra as Directed by Western $ (500) $ 225 (§10.1.6) ralance Remaining in Exchange Account at onth End" $ 225 Section 10 provides that "...at no time will a debit entry '>e made to the Stampede Exchange Account in excess of the credit balance of such account. unless otherwise agreed to by the Parties. Amounts owed to Sierra for services provided to Western that exceed the credit balance will be billed by Sierra." ' 2 Cptions for Disposition of Credit Balance: Alf (1) Sierra purchases and makes payment to Western per 110.1.6. (2) Balance is carried forward to next month (zero out annually March-end balance Q during April). 16, tr;;C &'ino_,G Office 5 C September 1, 2005 Melinda Grow Peter L.HOm.)iSter Public Utilities Specialist Rates Division Western Area Power Administration 114 Parkshore Drive Folsom CA 95630 Re: WAPA Stampede Hydro Generation Dear Ms Grow: Truckee Donner PUD and the City of Fallon notified you on June 1, 2005 of our interest in acquiring energy from the Stampede project. Since that date, we have reviewed the contract you have with Sierra Pacific Power Company for Energy Exchange Services, contract No. 94-SAO-00010. Our consultants, EnergySource are very familiar with the contract. The contract, sectionlO through 13, specifies that Sierra will make debit and credit entries to the Exchange Account based on a formula using the "then effective CSPP non-time differentiated energy rate". However, it appears from further research with Sierra and the CPUC that Sierra hasn't updated their California CSPP rate in a number of years. We believe that this tariff should have been updated at least annually. Sierra is currently paying another California based QF their Nevada CSPP tariff, which calls for a formula pricing based on the hourly COB index. We understand their justif'cation to the CPUC of the use of the Nevada CSPP tariff for a California QF, is that Nevada retail cust costs on an allocated basis. orners pay 90% of Sierra's total energy We are raising this issue for your consideration, as we believe the exchange account may have been credited with far less value than you have received. We further believe that resolving this matter could have substantial value to WAPA and potentially to us if we have an oportunity to pursue fu relative to acquiring Stampede hydro energy. We believe there is subsp tantial value in main tairtherningdiscussions the current exchange agreement with Sierra and taking advantage of delivery options under section I I of the Agreement. Regardless of the resolution to the CSPP tariff issue, TDPUD and the City of Fallon desire to explore the purchase of energy from the Stampede project. We would like to meet with WAPA at your earliest convenience to discuss this matter further. Sincerely Stephen Hollabaugh Assistant General Manager TDPUD cc Steve King, Assistant City Attorney, City of Fallon Randy Harris- EnergySource Tom Parker- EnergySource r