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HomeMy WebLinkAbout8 Contract NCPA Agenda Item # - Rublic Utility District Memorandum To: Board of Directors From: Stephen Hollabaugh Date: July 13, 2007 Subject: Updating the Power Scheduling Services Contract with NCPA Background The District has had a contract with NCPA to do our scheduling service since 1997. This contract has been updated from time to time to incorporate minor cost increases and better define the work being done by Northern California Power Association (NCPA). The need for a new form of agreement with the District arises primarily from the expiration of the prior agreement(s). Therefore, NCPA staff is once again requesting that the NCPA Commission approve an updated supplemental arrangement to provide the District with schedule coordination and short-term power supply services. These services will be provided according to the terms of the attached Power Management Agreement, and will continue to be offered to the District. At the same time, the contract is to be considered by the District's Board. The Power Management Services Agreement Under the new agreement, NCPA will purchase and take title to energy on behalf of Truckee Donner (as they are currently) through third-party power purchase contracts with terms of one month or less. These purchases will be made to assist the District in optimizing its short-term power portfolio. NCPA will also procure any transmission rights necessary to schedule the delivery of short-term energy purchased on behalf of the District under the agreement. Finally, NCPA staff will provide supplementary scheduling services, such as the completion of E-Tags, required by the control area. No changes to billing arrangements are necessary to serve the District — the NCPA All Resources Bill ("ARB") will continue to be utilized to bill for services provided under the agreement. In addition, because of the District's Base Resource entitlement from Western, and its prior assignment of these rights to NCPA, the District has typically been due a credit under the ARB. This credit and NCPA's advance billing method under the ARB, operate jointly to nearly eliminate any risk to NCPA of procuring short-term power on behalf of the District. As such, the District need only maintain and set aside in the General Operating Reserve the sum of thirty-thousand dollars as security for transactions contemplated under the Agreement. Fiscal Impact No adverse fiscal impact is anticipated through the provision of services by NCPA under the Power Management Services Agreement with the District. The cost is the same as is currently being billed the District. Recommendation: The Board of Directors authorize the Board President to execute the Power Management Services Agreement with NCPA subsequent to the NCPA Commission's approval of the contract. 180 Cirby Way,Roseville,CA 95678 4A PUBLIC AGENCY N CPA phone (916)781-3636 fax (916)783-7693 93 NORTHERN CALIFORNIA POWER AGENCY web www.ncpa.com Commission Staff Report AGENDA ITEM NO.: Date: July 12, 2007 To: NCPA Commission Subject: Power Management Agreement: Truckee Donner Public Utility District. Background This staff report recommends that the NCPA Commission authorize the NCPA General Manager to execute an updated agreement for the provision of power management services to the Truckee Donner Public Utility District ("District") as more fully described below. The District has distinct power management and supply needs due to the fact that it is electrically connected with the Sierra Pacific transmission system. In contrast, since the bulk of NCPA's members maintain transmission interconnections with the California ISO, common contract forms have been established to govern NCPA's provision of power management services to the group. For example, NCPA provides short-term power supply services to the larger group of NCPA members through the Pooling Agreement, and similarly provides for scheduling services under the Scheduling Coordinator Program Agreement ("SCPA"). Therefore, to enable NCPA to assist the District in meeting its power management and supply needs, staff has previously requested that the Commission establish supplemental arrangements to account for the corresponding differences in control area requirements and operational realities applicable to the District. These supplemental arrangements, although distinct and unique to the District, have always been constructed on a comparable basis to those offered the broader group of NCPA Members, as evidenced most recently through the implementation of the Western Area Power Administration ("Western") Base Resource assignments. The need for a new form of agreement with the District arises primarily from the expiration of the prior agreement(s). Therefore, staff is once again requesting that the Commission approve an updated supplemental arrangement for NCPA to provide the District with schedule coordination and short-term power supply services. These services will be provided according to the terms of the attached Power Management Agreement, and will continue to be offered to the District on a comparable basis to corresponding services offered our other Members under the Pooling Agreement and SCPA provisions. The Power Management Services Agreement Under the new agreement NCPA will purchase and take title to energy on behalf of Truckee Donner through third-party power purchase contracts with terms of one month or less. These SR: 101:7 purchases will be made to assist the District in optimizing its short-term power portfolio. This arrangement is intended to mirror a planned update to the NCPA Pooling Agreement which will limit the term of supply acquisitions for the Pool Members to "balance of month" transactions. NCPA will also procure any transmission rights necessary to schedule the delivery of short-term energy purchased on behalf of the District under the agreement. Finally, NCPA staff will provide supplementary scheduling services, such as the completion of E-Tags, required by the control area. No changes to billing arrangements are necessary to serve the District—the NCPA All Resources Bill ("ARB")will continue to be utilized to bill for services provided under the agreement. In addition, because of the District's Base Resource entitlement from Western, and its prior assignment of these rights to NCPA, the District has typically been due a credit under the ARB. This credit and NCPA's advance billing method under the ARB, operate jointly to nearly eliminate any risk to NCPA of procuring short-term power on behalf of the District. As such, the District need only maintain and set aside in the General Operating Reserve the sum of thirty-thousand dollars as security for transactions contemplated under the Agreement. Fiscal Impact No adverse fiscal impact is anticipated through the provision of services by NCPA under the Power Management Services Agreement with the District. Recommendation Staff recommends that the NCPA Commission authorize the NCPA General Manager to execute the attached Power Management Services Agreement with Truckee Donner Public Utility District. Respectfully submitted, Prepared by: JAMES H. POPE J. Rudolph General Manager Power Contract Specialist Attachment (1) SR: 101:7 NORTHERN CALIFORNIA POWER AGENCY AND TRUCKEE-DONNER PUBLIC UTILITY DISTRICT POWER MANAGEMENT AGREEMENT 1. Parties: This Power Management Agreement ("Agreement") is entered into as of August 1, 2007 by and between NORTHERN CALIFORNIA POWER AGENCY, ("NCPA") and TRUCKEE-DONNER PUBLIC UTILITY DISTRICT ("District") hereinafter referred to individually as "Party" and collectively as "Parties." 2. Recitals: This Agreement is made with reference to the following facts, among others: NCPA is a California joint powers agency organized and engaged in among other things generating, transmitting and delivering electric power, energy and other utility services for the benefit of its members District is a public utility district formed under the provisions of Sections 15501 et. seq., of the Public Utilities Code of the State of California, acting by and through its Board of Directors to provide, among other services, retail electric service to its customers. District desires that NCPA provide it with certain Power Management Services to supplement District's ability to optimize it's power supply requirements. NCPA desires that terms under which it provides Power Management Services to District be updated and formalized. Now Therefore, the Parties agree as follows: 3. Definitions: 3.1. Agreement: This Power Management Agreement as it may be amended from time to time. 3.2. Authorized Representative: A person designated by a Party pursuant to the provisions of subsection 10 hereof. 3.3. Billing Month: Each Period beginning at 0000 hours PPT on the first calendar day of each month and ending at 2400 hours PPT on the last calendar day of such month during the term of this Agreement. 3.4. Delivery Point(s): The interface points on SPPCo' s Electric System that interconnect SPPCo with other control area's in the WECC. 3.5. Effective Date: August 1, 2007 3.6. HE: Hour ending. 3.7. PPT: Pacific Prevailing Time, i.e., Pacific Standard Time or Pacific Daylight Time, whichever is in effect. 3.8 Power Management Services: are those services provided by NCPA to assist District with further optimizing its short-term power supply portfolio under this Agreement. Power Management Services include: (a) NCPA purchasing and taking title to balance-of-month Third Party Energy purchases for subsequent delivery to District for terms not to exceed thirty (30) days, (b) arranging for the transmission of such energy to District, and (c) providing related Scheduling Coordination Services with affected transmission providers. 3.9. Prudent Utility Practice: Those practices, methods and procedures, as modified from time to time, that are currently and commonly used by electric utilities to design, engineer, select, construct, operate, maintain and replace electric power facilities and equipment, dependably, reliably, safely, efficiently and economically, with due regard to the state of the art in the electric power industry as applied in the geographic area governed by the Western Electric Coordinating Council. 3.10 Scheduling Coordination Services: NCPA shall perform those services necessary to submit generation and load schedules on behalf of the District's Network Resources and Network Loads as required in accordance with SPPCo's Network Integration Transmission Service tariff and/or California Independent System Operator tariff as applicable. The completion of necessary and related E-Tags shall be considered part of this service. 3.11. SPPCo: Sierra Pacific Power Company. 3.12. Third Parties: A person or entity other than NCPA or District. 3.13 Third Party Energy — Energy and/or capacity, and related transmission, procured by NCPA from Third Parties on behalf of District under power purchase agreements with terms not to exceed 31 days, and for delivery within the current or next effective calendar month. 3.14. Uncontrollable Force: Any cause or causes beyond the control of a Party rendering a Party unable to perform an obligation under this Agreement including, but not limited to, failure or threat of failure of equipment or facilities, flood, earthquake, volcanic activity, wind, storm, fire, pestilence, lightning and other natural catastrophes, epidemics, war, riot, civil disturbance or disobedience, sabotage, vandalism, strike, lockout, labor disturbance, labor or material shortage, government actions, and restraint by court order or public authority and action or nonaction by, or inability to obtain the necessary authorizations or approvals from any governmental agency or authority, any of which by the exercise of due diligence such Party could not reasonably have been expected to avoid and by the exercise of due diligence it has been unable to overcome. 4. Term And Termination: 4.1. Effective Date: This Agreement shall become effective when: (i) both Parties have executed the Agreement. 4.2. Termination: This Agreement shall automatically terminate at 2400 hours PPT, June 30, 2008; All obligations accrued prior to termination shall be preserved until satisfied. 5. Charges and Reserves: 5.1. Monthly Charges: Charges for monthly deliveries of Network Resources energy shall be the sum of the following: 5.1.1. Third-Par Energy: Each Billing Month, District shall pay NCPA for all charges NCPA incurs to procure Third Party Energy for District and/or Transmission on an as-billed basis. 5.1.2. Scheduling Coordination Services: Each Billing Month, District shall pay NCPA a charge of $5,280 for Scheduling Coordination Services. 5.1.3. Reserves: District shall maintain on deposit in its General Operating Reserve Account held at NCPA the sum of thirty- thousand dollars ($30,000) as security to NCPA for liabilities NCPA could incur by procuring and taking title to Third Party Energy on behalf of District under this Agreement. District hereby authorizes NCPA to reserve and commit this sum in its General Operating Reserve Account for the payment of the aforementioned liabilities should same become necessary. 6. Metering. Telemetering and Interconnection Facilities: 6.1. All electric power deliveries by NCPA to District under this Agreement shall utilize the revenue meters installed by SPPCo in accordance with District's agreements with SPPCo and shall be used to obtain the information necessary to perform in accordance with this Agreement. Any initial or subsequent cost associated with metering and communications modifications required to accommodate the delivery of power by NCPA during the term of this Agreement, shall be paid for by the District. 6.2. District shall be responsible for ensuring that all revenue meters at the Points of Interconnection are installed, tested, serviced and maintained by SPPCo in accordance with Prudent Utility Practice as provided in agreements between District and SPPCo. 6.3. Unless otherwise agreed, District shall provide, install, own, operate, test, service, maintain and replace recording or telemetering equipment at the Points of Interconnection required for proper load dispatch, billing and accounting purposes. 6.4. District shall be responsible for designing, furnishing, installing, owning, testing, maintaining and replacing its interconnection facilities from the Point of Interconnection to the rest of District's electric system in a manner sufficient to meet the District's Network Load. 7. Billing and Payment: 7.1. As part of its All Resources Bill, prepared in the usual and ordinary course of business, NCPA shall render a monthly billing to District for all charges incurred by District hereunder. District shall pay such bill within thirty (30) calendar days of the due date indicated on on the bill. Any amount due on a day other than a Business Day, i.e., any day except a Saturday, Sunday, or a Federal Reserve Bank holiday, may be paid on the following Business Day. 7.2. If all or any portion of a bill is disputed by District, the entire amount of the bill shall be paid when due, and NCPA's Authorized Representative shall be concurrently provided written notice of the disputed amount and the basis for the dispute. NCPA shall reimburse any amount determined to have been incorrectly billed, within ten (10) days after such determination. 7.3. Amounts which are not paid when due shall bear interest computed on a daily basis until paid at the lesser of (i) the per annum prime rate (or reference rate) of the Bank of America NT & SA, or its successor, then in effect, plus two per cent (2%) or (ii) the maximum rate permitted by law. Payments received by mail will be accepted without assessment of such interest provided the postmark indicates the payment was mailed on or before the due date. The provisions of this Section 7 shall survive expiration of this Agreement until satisfied. 7.4. The address to which invoices shall be sent is: General Manager Truckee-Donner Public Utility District P. O. Box 309 Truckee, CA 96160 8. Uncontrollable Forces: 8.1. Obligations of the Parties, other than those to pay money when due, shall be excused for so long as and to the extent that failure to perform such obligations is due to an Uncontrollable Force; provided, however, that if either Party is unable to perform due to an Uncontrollable Force, such Party shall exercise due diligence to remove such inability with reasonable dispatch. Nothing contained in this Agreement shall be construed as requiring a Party to settle any strike, lockout, or labor dispute in which it may be involved, or to accept any permit, certificate, contract, or any other service agreement or authorization necessary for the performance of this Agreement which contains terms and conditions which a Party determines in its good faith judgment are unduly burdensome or otherwise unacceptable. 8.2. Each Party shall notify the other promptly, by telephone to either Party's operating personnel and Authorized Representative, upon becoming aware of any Uncontrollable Force which may adversely affect performance under this Agreement. A Party shall provide written notice to the Authorized Representative of the other Party within 24 hours after telephonic notice. Each Party shall notify the other promptly, when an Uncontrollable Force has been remedied or no longer exists. 9. Curtailment of Service: NCPA may be required to temporarily interrupt certain of the Power Management Services in the event of interruption or curtailment of firm transmission service provided by Third Parties to NCPA in accordance with the applicable interconnection agreements or open access tariffs that is used by NCPA to arrange for delivery of electric energy to the District. 10. Authorized Representative: 10.1. Each Party hereby designates the following person(s) as their Authorized Representative(s). Each Party shall notify the other Party promptly of any subsequent change in such designation. District NCPA Stephen Hollabaugh Tom Lee 10.2. The Authorized Representatives shall establish written procedures, if necessary, for implementing the provisions of this Agreement. Such procedures shall be adopted by agreement of the Authorized Representatives. 10.3. The Authorized Representatives shall have no authority to modify any provision of this Agreement. 11. Disputes: Disputes on any matter relating to this Agreement shall be discussed and resolved by the Authorized Representatives, who shall use their best efforts to promptly resolve the dispute. Should the Authorized Representatives be unable to resolve the dispute, the matter shall be referred to the individuals who at such time are specified to receive notices pursuant to Section 13 below. Such individuals shall use their best efforts to resolve the dispute. If such individuals have not resolved the dispute within 90 days, despite having used their best efforts to do so, either Party may pursue whatever other remedies may be available to it. 12. Assignment of Agreement: No Party shall transfer or assign this Agreement or any part hereof without the prior written consent of the other Party, which consent may be granted or denied at such Party's sole discretion. 13. Notices: Unless this Agreement requires otherwise, any notice, demand or request provided for in this Agreement, or served, given or made shall become effective when delivered in person, or sent by registered or certified first class mail, to the persons specified below: 13.1. To NCPA Northern California Power Agency Attention: General Manager 180 Cirby Way Roseville, CA 95678 13.2. To District General Manager Truckee-Donner Public Utility District P. O. Box 309 Truckee, CA 96160 13.3. Either Party may, from time to time, by written notice to the other Party, change the designations or address of the person so specified to receive notices pursuant to this Agreement. 14. LIABILITY 14.1. Limitations: Except for any loss, damage, claim, cost, charge, or expense resulting from Willful Action, neither Party, its directors, commissioners, members, officers, or employees shall be liable to the other Party for any direct, indirect or consequential loss, damage, claim, cost, charge, or expense of any kind or nature incurred by the other Party (whether or not resulting from the negligence of a Party, its directors, officers, employees, or any person or entity whose negligence would be imputed to such party) resulting from the performance or nonperformance of the obligations of a Party under this Agreement; and each Party releases the other Party, its directors, commissioners, members, officers and employees from any such liability 14.2. Willful Action: For the purpose of this subsection, Willful Action shall be defined as: 14.2.1. Action taken or not taken by a Party at the direction of its directors, commissioners, members, officers or employees having management or administrative responsibility affecting its performance under this Agreement, which action is knowingly or intentionally taken or failed to be taken with conscious indifference to the consequences thereof or with intent that injury or damage would result or would probably result therefrom. 14.2.2. Willful Action does not include any act or failure to act which is merely involuntary, accidental or negligent. 14.2.3. The phrase "employees having management or administrative responsibility", as used in this subsection, means the employees of a Party who are responsible for one or more of executive functions of planning, organizing, coordinating, directing, controlling and supervising such Party's performance under this Agreement with responsibility for results. 15. No Dedication of Facilities: No undertaking by one Party to the other Party under any provisions of this Agreement shall constitute a dedication of the electric system of such Party (or any portion thereof) to the public or to the other Party. 16. No Third-Party Beneficiaries: None of the promises, rights or obligations contained in this Agreement shall inure to the benefit of any Third Party; and no action may be commenced or prosecuted against any Party by any Third Party claiming to be a third-party beneficiary of this Agreement or the transactions contemplated hereby. 17. Waivers: Except as otherwise provided herein, no provision of this Agreement may be waived except in writing. No failure by either Party to exercise, and no delay in exercising, short of the statutory period, any right, power or remedy under this Agreement shall operate as a waiver thereof Any waiver at any time by a Party of its right with respect to a default under this Agreement, or with respect to any other matter arising in connection therewith, shall not be deemed a waiver with respect to any subsequent default or matter. 18. Obligations Several: The duties, obligations and liabilities of the Parties are intended to be several and not joint or collective. Nothing contained in this Agreement shall ever be construed to create an association, trust, partnership or joint venture or to impose a trust or partnership duty, obligation or liability on or with regard to either Party. Each Party shall be individually and severally liable for its own obligations under this Agreement. 19. Severability: If any term, covenant, or condition of this Agreement or the application of any such term, covenant, or condition shall be held invalid as to any Party by any regulatory body or agency or court of competent jurisdiction, then such term, covenant or condition shall remain in force and effect to the maximum extent permitted by law, and all other terms, covenants and conditions of this Agreement and their application shall not be affected thereby but shall remain in force and effect unless an agency or court of competent jurisdiction finds that such provision is not separable from all other provisions of this Agreement. 20. Entire Agreement , Amendment, and Other Agreements: 20.1 This Agreement constitutes the complete and entire expression of agreement between the Parties and supersedes all prior and contemporaneous offers, promises, representations, negotiations, discussions, and circumstances which may have been made in connection with the subject matter of this Agreement. 20.2 This Agreement may not be amended or modified except by written agreement of NCPA and District. 20.3 This Agreement does not modify or amend any agreements between the Parties with respect to the rights to, or scheduling and dispatch of, Western Area Power Administration Base Resource energy. 21. Effect of Section Headings: Section headings and subheadings appearing in this Agreement are inserted for convenience only and shall not be construed as interpretation of text. 22. Signature Clause: The signatories hereby represent that they have been appropriately authorized to execute this Agreement on behalf of the Party for whom they sign. NORTHERN CALIFORNIA TRUCKEE-DONNER POWER AGENCY PUBLIC UTILITY DISTRICT By: By: Title: Title: Date: Date: