HomeMy WebLinkAbout1991-01-08; City Council; 10977; ACCEPTANCE OF NEGOTIATED REIMBURSEMENT FROM SDG&E FOR CITY'S PARTICIPATION IN N.O.I..
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MTG, 1-8-91 CITY ATTYU ACCEPTANCE OF NEGOTIATED REIMBURSEMENT DEPT. RES FROM SDG&E FOR CITY’S PARTICIPATION IN N.O.I.
RECOMMENDED ACTION:
Authorize the Mayor
ITEM EXPLANATION:
In late December 1989 San Diego Gas & Electric Company (SDG&E) filed a Notice of Intention (N.0
to build a 460 MW combined cycle plant at one of five sites in California (Blythe, Heber, Sycamo
Chula Vista, Encina). Construction was proposed after regulatory approvals were obtained from t
California Energy Commission (C.E.C.) and the California Public Utilities Commission.
The City Council of the City of Carlsbad adopted the following at its meeting of January 13, 1990:
1.
to sign the negotiated reimbursement on behalf of the City of Carlsbad.
Established an emergency moratorium on SDG&E expansion activities pending studies
and possible changes in the General Plan, Local Coastal Program and the Zoning
Ordinance.
Authorized staff to select consultants to prepare the studies associated with the land use
moratorium and to seek expert consultant assistance to protect City interests.
2.
Subsequently, a staff team, composed of Assistant City Attorney Ron Ball, Principal Planner Dent
Turner, and Research Manager James Hagaman, participated in and coordinated all City activiti
associated with the N.O.I. process.
Legal counsel and environmental consultants were hired to assist in this City effort. The Chairman
the California Energy Commission, Charles Imbrech, encouraged the City of Carlsbad’s participati
in the N.O.I. process, indicating we should seek available reimbursement for our efforts.
The State Regulations provide some guidance on what costs may be reimbursed as follows:
(1) Local agencies shall be reimbursed for the actual and added costs reasonably incurred
in complying with requests for comments from the C.E.C., and,
Reimbursement shall not be authorized for any costs incurred by a local agency for the
presentation or defense of positions not reasonably related to the matters on which the
agency is requested to comment.
(2)
The City’s total of all costs associated with the N.O.I. are approximately $207,000.00. This represei
both reimbursable and non-reimbursable amounts. The reimbursable amount of $1 61,270.64 was arriv
at after extensive discussions with the C.E.C. staff and SDG&E. In December 1990, SDG&E announc
that it was suspending the N.O.I. process and no further costs would be incurred without filing nl
documents. If proceedings were recommenced by SDG&E, further reimbursement would be due.
As a result of the N.O.I., the City discovered its General Plan needed updating and revising for the ar
surrounding Encina. This process is underway and will continue notwithstanding the fact that SDG
has discontinued its expansion plans.
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PAGE 2 OF AGENDA BILL NO. id, 9 7 7
Staff believes this agreement is reasonable and fair. Staff, therefore, recommends that the City COL
authorize the City Manager to sign the negotiated reimbursement on behalf of the City of Carlsbac
FISCAL IMPACT:
At the City Council meeting of January 23, 1990, it was estimated that consultant Contracts to meet
City needs would range from $150,000 to $300,000, including the land use studies. The City
expended approximately $207,000.00 to the date of the Energy Commission’s suspension order. 1
negotiated reimbursement of $1 61,273.64 was not anticipated by the City Council at its January 23,l
meeting, but subsequently surfaced during the N.O.I. proceedings.
EXHIBITS:
1.
2.
Negotiated agreement for reimbursement to the City of Carlsbad by SDG&E.
California Energy Commission Order suspending the N.O.I. until the Commission reinstates
proceedings.
LI.II.Y. 1 I m - SDGE San Diego Gas & Electric
PO BOX 1831 * SAN DIEGO. CA 92112 * 6191696 2000
CAQ 130 FILE NO 89-NO I - 1
December 12, 1990
Mr. Jim Hagaman
Research Manager
City of Carlsbad
1200 Carlsbad Village Drive Carlsbad, CA 92008-1989
Re: SDG&E Reimbursement to the
City of Carlsbad for Costs
Carlsbad Incurred in Participating in SDG&E's Combined Cycle Power Plant
Notice of Intention (89-NOI-1)
Dear Mr. Hagaman:
This letter will confirm and memorialize the agreement between the City of Carlsbad and San Diego Gas & Electric Company negotiated by yourself, Ronald Ball, and Allan Thompson for the
City, and Jeffrey M. Parrott, SDG&E Senior Attorney, regarding
reimbursement to the City for its actual and added costs
reasonably incurred in complying with requests for comments on
SDG&E1s Combined Cycle Power Plant NO1 as provided in Section
25538 of the California Public Resources Code.
California Public Resources Code Section 25538 allows a
local agency such as the City to request reimbursement from the California Er,sryy Comissicn for the az",rzal ani! aciiiec?, costs
reasonably incurred by the City in commenting upon the adequacy
of the NO1 filing and for responding to the Commission's request
for comments on the design, location, or operation of the
proposed facility as designated in the NO1 in relation to
environmental quality, public health and safety, and other
factors in which the City has expertise. The Siting Regulations *
enacted by the Commission do not provide much guidance on what costs fall within the aforementioned criteria except to stipulate
that:
(1) Local agencies shall be reimbursed for the actual and added
costs reasonably incurred in complying with requests for
comments and,
- SDGE San Diego Gas & EIecfric
Mr. Jim Hagaman
December 12, 1990
Page 2
(2) Reimbursement shall not be authorized for any costs incurred
by a local agency for the presentation or defense of
positions not reasonably related to the matters on which the
agency is requested to comment.
It was due to the ambiguity of the foregoing statutory and
regulatory specifications that the City and SDG&E have now agreed to what both believe to be a reasonable and fair formula for
determining the proportion of City expenses that will be
reimbursed by SDG&E.
The methodology agreed upon is the following:
sum is calculated from the following costs:
office, $16,375.15; Research Office, $20,089.29; Planning
Department, $19,474.84; Legal Counsel, Allan Thompson,
$117,120.72; Tetra-Tech, $30,766.45; Richard F. Ambrose,
coastal Consultant, $3,000.
From that total, the amount of $5,234.40 is deducted as clearly non-eligible reimbursement expenses. That results
in total potentially reimbursable expenses of $201,592.05.
After a summary review of the activities performed by the City and its consultants, it was agreed by the SDG&E and
City representatives that a fair estimate of SDG&E's
reimbursement obligation to the City of Carlsbad was 80% of the no+-~+i~~1~r y L-A*----&J reinburs&le expenses, which is the sun of
$161,273.64.
This letter is intended to memorialize the agreement between
(1) City expenses relating to SDG&E's NO1 are $206,826.45. This City Attorney's
(2)
SDG&E and the City of Carlsbad that the City will be adequately reimbursed as required by California Public Resources Code Section 25538 for all costs it has reasonably incurred to date in . providing comments to SDG&E's NO1 by SDG&E's payment to the City
of the sum of $161,273.64. Furthermore, this letter will
acknowledge that although the foregoing methodology was
determined to be fair and reasonable to both parties for
activities in the Combined Cycle NO1 to date, the methodology may
not be particularly relevant or reasonable for future costs incurred by the City in SDGbrE's NOI.
shall not establish a precedent for determining the fairness of
later incurred costs in future NO1 proceedings.
Therefore, this settlement
e e
San Diego Gas & Electric
Mr. Jim Hagaman December 12, 1990
Page 3
Should the City find the foregoing to be a fair representation of the agreement reached on reimbursable costs,
please so indicate by having the proper person sign where
provided below. Once I have received back from you a fully
executed original of this letter agreement, I will expedite
preparation of SDG&E's check in full payment of the settlement.
The courtesy and cooperation of yourself, Mr. Ball, and
Mr. Thompson in this matter have been greatly appreciated.
Very truly yours,
3-3 JJL- I
Bruce J. Williams Manager, Generation Projects
THE FOREGOING IS
AGREED AND ACCEPTED:
CITY OF CARLSBAD
By :
Title: Mayor
Dated: ,fib, BJW/JMP:laa
cc: Gary Fay (CEC)
Arlene Ichien (CEC)
David Mundstock (CEC)
G.D. Cotton (SDG&E)
M. P. Fleming (SDG&E) P.L. O'Neal (SDG&E)
J.M. Parrott (SDG&E)
EXHIBIT 2 0 e
STATE OF CALIFORNIA
Energy Resources Conservation and Development Commission
Docket No. 89-NOI-1 In the Matter of: 1 1
San Diego Gas and Electric Company's 1 Notice of Intention to File an 1 Application for Certification of a ) SUSPENDING THE NO1 Combined-Cycle Electric Generating 1 Facility 1 1
COMMITTEE ORDER
Pursuant to the Request of San Diego Gas & Electric Company
("SDG&E") filed November 28, 1990, for an immediate, indefinite
suspension of its Notice of Intention (NOI), the Committee hereby orders as follows:
1) Effective today, the processing of the NO1 is suspended
until SDG&E requests the Committee to reinstate the proceeding and
the Committee grants such a reinstatement.
2) Effective today, all discovery activities involving the
Applicant, the Commission staff, parties and intervenors are
suspended until the Committee reinstates the proceeding.
3) Also effective today, the closing briefs for the San Diego
County sites nonadjudicatory hearings as well as the Summary and
Hearing Order for those sites are suspended until the Committee
reinstates the proceeding.
4) Negotiations on reimbursement for appropriate work
completed prior to the Committee Order of November 1, 1990, should
continue toward settlement. That order stated the Committee's
presumption that work perTormed &iring the continuancz of the case
was not eligible for reimbursement. All other activities and
deadlines for this NO1 are suspended until the Committee grants a
reinstatement.
5) Commencing with the date of this Order, every 90 days
SDG&E shall inform the Hearing Officer for this proceeding, in
writing, of the Applicant's intention to continue the suspension.
In order that the Commission staff and other parties may remain
fully informed, any Motion to reinstate the proceeding shall be
filed at least 90 days prior to the intended date of reinstatement.
The Committee may schedule a hearing to discuss the merits of ay Motion for reinstatement.
W W
6) SDG&E has waived all statute of limitations periods that would apply but for this suspension including, but not limited to, California Public Resources Code sections 25510, 25513, 25514,
25515, and 25516-6. -- -
ENERGY RESOURCES CONSERVATION
AND DEVELOPMENT COMMISSION
Dated: gd YE,?. 70
*&WJA fLlq-\ 1
BARA CROWLEY, Vice C air
'and Presiding Committee Member -*
LkHd a, am
ART KEVOR#Im, Commissionbr and Committee Member
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