HomeMy WebLinkAbout1998-06-16; City Council; 14726; SANDAG Electrical RestructuringMEMORANDUM OF UNDERSTANDING
DEPT. PW FOR ELECTRICAL RESTRUCTURING
RECOMMENDED ACTION: ~CSOLK~~~ n NO. 98- 190
Adopt attached Resolution executing a Memorandum of Agreement with SANDAG for
participation in a San Diego Regional Power Pool to purchase discounted electrical power
and a Contract with Commonwealth Energy Corporation for guaranteed savings on monthly
electrical bills for the City of Carlsbad.
ITEM EXPLANATION:
The opportunity to save money on electrical costs has been created by the restructuring of
the state electrical industry initiated by AB 1890 (Brulte) last year. Competition for electrical
power and associated services such as metering and billing began on March 31, 1998.
The SANDAG Board of Directors completed a final review of a possible San Diego Power
Pool at its April 24, 1998 meeting. SANDAG has authorized the formation of the Power
Pool and the formal offer of electrical rate discount to all interested public agencies. The
necessary documents to implement the City of Carlsbad’s participation in the Regional
Power Pool to obtain a guaranteed discount of monthly electrical bills were subsequently
sent to the City and are attached to the Resolution executing the documents. City staff has
reviewed SANDAG’s proposed restructuring plan and recommends the City of Carlsbad join
the SANDAG Power Pool.
SANDAG and participating agencies in the process developed and met the following
primary objectives in this proposal:
a) guaranteed electrical cost savings.
b) no financial risk to participating agencies.
c) relating short-term power purchase contracts to allow the most flexibility for
participating agencies to take advantage of positive developments in the
competitive market for electricity.
Key points of the Power Service Agreement are as follows:
1. There is an expected savings of between 1 Z/2% and 3X% off the total energy bill. This is
in addition to the 10% savings on power mandated by the State, January 1, 1998:
a) any savings beyond the guaranteed savings will be distributed with 75% going to
the participant and 25% going to Commonwealth.
2. The savings are based on SDG&E profile data. This means that all those agencies that
indicated an interest in this program were profiled and the load factor was calculated.
The more level the load factor is, the better the proposal.
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3. Units, or sites, that demand over 50kw will require an hourly meter:
a) the new meter for these sites will be either a cellular modular meter or a standard
meter connected to a phone line. Commonwealth has agreed in a recent letter to
install the appropriate meter which will rent for $22.00 per month.
b) SANDAG is providing the City of Carlsbad with a list of sites requiring a new
hourly meter (+5Okw).
c) all the City’s meters and accounts may participate, or specific meters can be
chosen for participation.
4. Billing will continue to be provided by SDG&E at no additional cost.
5. This is a one-year agreement starting July 1, 1998.
Key points of the Memorandum of Understanding are as follows:
a) There is no cost to public agencies for entering into this Memorandum of
Understanding.
b) There is no legal or financial liability created between SANDAG and public
agencies participating in the San Diego Regional Power Pool, nor among power
pool participants, as a result of entering into this Memorandum of Understanding.
Both documents which must be signed by July 1, 1998 to activate the City’s participation.
These documents have been reviewed by members of the City/County Attorney’s
Association:
a) The first document is a Commonwealth Energy Power Service Agreement.
b) The second document is a Memorandum of Understanding between SANDAG
and the City of Carlsbad.
FISCAL IMPACT:
The execution of this agreement will provide savings to the City of Carlsbad and the various
districts including the Benefit Assessment and Water Districts. An expected IX% to 3X%
savings on the total energy bill over and above the existing 10% savings on power
mandated to the State, January 1, 1998 (AB 1890), is activated by this agreement. It is
estimated that the yearly electrical bill for the City of Carlsbad is $789,000. The actual
amount expected to be saved is approximately $11,835 (1 ‘X/2%) to $27,615 (3’/2%) per year.
EXHIBITS:
I. Resolution No. 9-8 - 19 0 with attached Memorandum of Agreement (SANDAG)
and Contract (Commonwealth Energy Corporation)
2. Letter to Interested Power Pool Participants dated May 14, 1998 from Steve Sachs
3. SANDAG Agenda Report No. 98-3-8
4. Letter to City Manager from SANDAG dated May 8, 1998.
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RESOLUTION NO. 98-190
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE EXECUTION OF A
MEMORANDUM OF AGREEMENT WITH THE SAN DIEGO
ASSOCIATION OF GOVERNMENTS (SANDAG) FOR PARTICIPATION
IN A SAN DIEGO REGIONAL POWER POOL TO IMPLEMENT THE PURCHASE OF DISCOUNTED ELECTRIC POWER AND RELATED SERVICES; AND
AUTHORIZING THE EXECUTION OF A CONTRACT WITH COMMONWEALTH ENERGY CORPORATION, THE REGIONAL POWER POOL’S ENERGY SERVICE PROVIDER, FOR GUARANTEED SAVINGS ON THE MONTHLY ELECTRICITY BILLS OF THE CITY OF
CARLSBAD
WHEREAS, SANDAG, based on the recommendation of its Ad Hoc Committee on
Electric Utility Restructuring and a Working Group made up of representatives of 110 interested
public agencies in the San Diego region, has authorized the formation of a San Diego Regional
Power Pool to implement the purchase of discounted electric power and related services on
behalf of interested public agencies; and
WHEREAS, SANDAG has selected Commonwealth Energy Corporation through a
competitive bidding process and has negotiated a master contract with Commonwealth to
provide guaranteed savings on the monthly electricity bills of public agencies that participate in
the San Diego Regional Power Pool; and
WHEREAS, the City of Carlsbad wishes to receive the benefits of lower cost electric
power and understands that there are no costs and no risks involved in participation in the San
Diego Regional Power Pool.
NOW, THEREFORE, BE IT RESOLVED, BY THE City Council of the City of Carlsbad as
follows:
1. The above recitations are true and correct.
2. The Memorandum of Agreement with SANDAG for participation in a San Diego
Regional Power Pool to implement the purchase of discounted electric power and
related services is hereby approved; and
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3. The agreement with Commonwealth Energy Corporation, the Regional Power Pool’s
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Energy Service Provider, is hereby approved.
4. That the Mayor of the City of Carlsbad is hereby authorized and directed to sign the
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aforementioned documents on behalf of the City.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Carlsbad at its
regular meeting held on the 16 day of June , 1998, by the following vote, to wit:
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8 AYES: Council Members Lewis, Finnila, Nygaard, Hall & Kulchin
All-EST:
17 /I (SEAL)
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MEMORANDUM OF UNDERSTANDING
BETWEEN THE SAN DIEGO ASSOCIATION OF GOMRNMENTS (SANDAG)
AND THE PUBUC AGENCY PARTICIPANTS IN THE SAN DIEGO REGIONAL POWER POOL
The purpose of this Memorandum of Understanding (MOU) is to: Pumose.
A. Provide public agencies in the San Diego area an opportunity to save money on electricity costs as a result of industry
restfucturing;
B. Transfer knowledge to public agencies on efficient and effective methods for achieving cost savings in the
restructured electdcity market;
C. Set forth the basic structure for public agencies to receive electricity cost savings from electtic resbuctuting in
California without having to individually bear the total costs of procurement, contracting, and administration necessary
to achieve the energy service cost benefits;
D. Position the San Diego Regional Power Pool to make effective and timely decisions and to increase future savings as
opportunities arise and the market matures; and
E. Create a structure for the San Diego ama public agencies that will facilitate competitive power suppliers responding to
the particular needs of the participating public agencies and their constituents.
Upon execution, this MOU between the public agency participant and SANDAG shall remain in effect for the period of time
during which the public agency participant is purchasing power from a competitive supplier using a master bilateral contract with
a energy service provider selected by the San Diego Regional Power Pool.
There is no cost to pubtic agencies for entering into this Memorandum of Understanding.
There is no legal or financial liability created between SANDAG and public agency participants in the San Diego Regional
Power Pool, nor among the power pool participants, as a result of entering into this Memorandum of Understanding.
Definition of Public Agencies. Public agencies include agencies and their subsidiary non profit cotporations.
San Dieao Rmional Power Pool. The San Diego Regional Power Pool was created to pursue maximum electricity setvice
cost savings, with limited or no financial risk, through the use of a power purchase contract that provides the flexibility for public
agencies to take advantage of competition in the restructured electric service industty. The San Diego Regional Power Pool
will operate through a Power Pool Committee created by the SANDAG Board. The Committee’s membership will consist of
one representative from each public agency that has an effective MOU with SANDAG. The Responsibilities and duties of the
Committee will include:
A. Review and selection of a competitive energy service provider(s) that is viewed as offering cost savings of most
interest to the San Diego Regional Power Pool participants;
B. Develop a master bilateral contract(s) for the purchase of power and other energy setvices by the participants;
C. Administer the Memorandum of Understanding between participating public agencies and SANDAG regarding
participation in the power pool and its administration; and
D. Provide guidance to SANDAG staff on program administration and other matters necessary for the successful
operation of the San Diego Regional Power Pool.
The Committee will choose its own operating tules and procedures including voting formula, selection of officers, and
subcommittee stmctute, if necessary.
ResPonsibilities of SANDAG. The responsibilities and duties of SANDAG in the ongoing operation and administration of the
San Diego Regional Power Pool will include:
A. Facilitating creation of the Power Pod Committee and authorizing agreements and other actions necessary for the
pool to make decisions on power purchases and related energy setvices;
B. provide staff and administrative support to the Power Pool Committee in managing the electricity setvlce provider(s)
and in performing other functions necessary for the success of the San Diego Regional Power Pool;
C. Receive payments fmm electricity se&e provider(s) selected by the San Diego Regional Power Pool to fund
administration and support activities provided by SANDAG; account for payments received over the costs of
administration and support and disttibute those payments to benefit the power pool and its members, as determined
by the Power Pool Committee;
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D. Consider Pcrwer Pool Committee recommendauons, and take appmpliate ectlons, regaKilng developments, tmlds,
issues and oppo&mities for achieving the contemplated electric energy cost savings and communicate with the
region’s gowmments, businesses end residents on these melters; ad
E. Consider legislative and regulatory recommendations from the Power Pool Committee and communicate with local,
state, and federal mpresentatives on these issues.
Responsibilities of Particioatina Public Aaencies. The responsibilities and duties of participating public agencies in the m
going operation and administration of the San Diego Regional Power Pool will include:
A.
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C.
D.
Dettine if it will enter into bilateral contract, negotiated by SANDAG, with the electricity service provider(s), and
select meters to be entered in the San Diego Regional Power Pool;
Patticipate as a member of the Power Pool Committee, if desired by the public agency;
Sqply the Power Pool Committee and SANDAG with notice of any verifiable written offer mceived fmm an
est&lished supplier to supply electricity at a rate lower than the rate cwrently being delivered through the Power
Pool.
Through the Power Pool Committee, make recommendations to SANDAG on legislative and regulatory issues, and
developp# trends, issues and %qrtunities for electricity purchases to the region’s goialmnts, businessesand / n
SAN DIEGO ASSOCIATION OF GOVERNMENTS
Signature
Claude A. Name
Title Mayor Title
Date June 18, 1998 Date
AMess 1200 Carlsbad Villaqe Drive
Carlsbad, CA 92008
Agency Citv of Carlsbad
Address
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COMMONWEALTH ENERGY POWER SERVlCES AGREEMENT
This Agreement ('Agtwmeny) is entered into by and between Commonwealth Energy Corporation (‘COMMONWEALTK),
a California Corporation, and San Diego Regional Power Pool participant (‘PARTICIPAN7J effective the Qte written
below and based lpon the following recitals, covenants and con&ions:
WHEREAS, PARTlClPANTcontrols the electricity purchases for the meter or meters listed on Schedule A contained herein
or separately attached hereto (individually, a ‘Meter” and, collectively, the “Meters’);
WHEREAS, COMMONWEALTH is in the business of providing low cost electricity and related services and is registered by
the California Public Utilities Commission as an Electric Service Provider (ESP #1092) and with the Federal Energy
Regulatory Commission as a Power Marketer;
WHEREAS, COMMONWEALTH has been selected through a competitive bidding process and has entered into an
Agreement with the San Diego Association of Governments (the “SANDAG Agreement”), the administrator of the San
Diego Regional Power Pool, and has furnished a performance bond to SANDAG for use by the San Diego Regional Power
Pool to pay the costs of conducting another Power Procurement Process if COMMONWEALTH were to default under the
SANDAG Agreement or this Agreement;
WHEREAS, COMMONWEALTH hereby offers to PART/C/PANT electric power purchasing services under California’s
competitive power supply program created by AB 1890 and known as the Direct Access program (‘Direct Access’), at a
discount to the rates offered by CUSTOMER’S Utility Distribution Company (‘UDC’);
WHEREAS, PART/C/PANTwisks to participate in COMMONWEALTH’S pwpmhasing program;
NOW THEREfORE, in consideration of the covenants, recitals and conditions contained herein and for other good and
valuable consideration, receipt of which is hereby acknowledged, COMMOMMALTH and PART/C/PANT hereby enter into
this Agreement:
DERNll7ONS
All capital&d terms used herein and not otherwise defined shall have the respective meanings set forth in Schedule B
attached hereto.
AGREEMENT
1. COMMONWEALTH SERVICES: COMMONWEALTH shall procure electric power to serve the full requirements of the
meter loads specified by PART/C/PANT and listed in Schedule A, and shall perform, manage or acquire all functions
necessary, including scheduling through a CAlSOcertified Scheduling Coordinator, to effect delivery of such power to
PARTICIPANT through the California Direct Access system. PART/C/PANT shall have the right to include any meters
(existing or-new) into this Agreement at any time during the term of the Agreement upon thirty (30) days written notice
to COMMONWEALTH. COMMONWEATH shall be PARTICIPANTS’ exclusive electrical supply purchasing agent for
the loads specified in schedule A during the term of this Agreement, with the exclusive right to pursue, evaluate and
negotiate any and all electric supply procurement opportunities for the purpose of reducing PARTlClPAND electric
supply procurement costs. PART/C/PA/VT shall keep COMMONWEALTH apprised of other energy cost reduction
optbns it may pursue and shall forward to COMMOAWALTH any proposals from any other sources that may lead to a
reduction in PARTlCIPANPS e/ecfric@ unit costs for electric supply pmcumment
2. PRICING:
2. I Guararrteed S8vinc.x COLfMOMEALTH shall provide electrical energy to PART/C/PANT at a rate such that
PA/?T/C/PANTis guaranteed a minimum savings of (‘Guaranteed Savings’):
m Three and one-half percent (3.5%) discount below the othetwlse applicable total bill from the
PART/C/PAWS UDC provided the San Diego Regional Power Pool has an Aggregated Monthly Load Factor
greater than or equal to .60,
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n Two and one-half percent (2.5%) discountbelow the otherwise applicable total bill from the PART/C/PANTS
UDC provided the San Diego Regional Power Pool has an Aggregated Monthly Load Factor greater than or
equal to 55 but less than .60,
n Two percent (2%) discount below the ottterwfse applicable total bill from the PARTICIPANT’S UDC provided
the San Diego Regional Power Pool has an Aggregated Monthly Load Factor greater than or equal to 50 but
less than 55,
. One and on&half percent (1.5%) discount below the other&e applicable total bill from the PART/C/PANT’S
UDC provided the San Diego Regional Power Pool has an Aggregated Monthly Load Factor less than 50.
2.2 incremental Savinas: In addition, COMMONWEALTH will Share with PART/C/PANT any malized cost saving
beyond the applicable Guaranteed Savings (“fncremental Savings’) according to the following schedule: seventy
five percent (75%) of Incremental Savings to PART/C/PANT and twenty five percent (25%) of Incremental Savings
to COMMONWEALTH. Incremental Savings is defined as the difference between (1) the amount PART/C/PANT
would have paid for electrical energy during the billing period under PX pricing as a bundled utility customer under
its Applicable Tariff and (2) COMMONWEALTH’s Cost of Power, less the GU8f8nf88d Savings, provided that the
lncremenfal Savings cannot be negative. COMMONWEALTH’s Cost of Power is defined as its purchased
generation costs plus any out-of-pocket costs for functions required to utike the /SO controlled grid for energy
delivered to PART/C/PANT, provided that the cost for such fvnct/ons shall not exceed what PARTlClPANrS cost
would have been with bundled uf//ity service.
2.3 Enercv Ch8rU8 C8kuMion: COMMONWEALTHS bill amount for the energy and services provided to
PART/C/PANT by COMMONWEALTH shall be equal to COMMONWEALTH’s actual Cost of Power for the
electrical energy delivered to PART/C/PANT, plus 25% of any Incremental Savings, provided that in no event will
COMMONWEALTH’s bill amount to PART/C/PANT exceed an amount which ensures that PART/C/PANT real&
the Guaranteed Savings. There shall be no additional charges to PART/C/PANT related to COMMONWEALTHS
provision of electrical energy service beyond those described above and in section 4 of this Agreement The above
pricing includes the provision of all services or functions which are, or may be required, to be performed, managed,
or acquired by COMMONWEALTH including without limitation billing, Meter Data Management Agent (MDMA)
functions, and all schedule coordination services, to effect delivery of power to PARTICIPANT whether or not they
are specifically enumerated in this Agreement.
3. SCHEDULE COORDINATION SERVICES: Schedule coordination services required to effect delivery of power to
PART/C/PANT shall be performed by COMMONWEALTH or by contractors approved by the California public Utilities
Commission and the Independent System Operator and under contract to COMMONWEALTH.
4. METERING: If required, COMMONWEALTH shall provide, install, own and maintain at a cost of $22 per month per
meter Direct Access Maters to PART/C/PANT. COMMONWEALTH shall own, insure, warrant, and provide meter
support services including corrective maintenance services for all meter8 installed under this Agreement at no
additional cost to the $22 per month metering charge. If required, additional communications equipment (extension of
phone/modem line beyond 10 feet from meter installation location) shall be the responsibility of the PART/C/PANT,
Upon the expiration or sooner termination of this Agreement, PART/C/PANT may purchase meter(s) at a fair market
value or COMMONWEALTH will remove the meter at no additional cost at PART/C/PANTS option.
COMMONWEALTH shall allow PART/C/PANT to own, install, and maintain its own Direct Access Meter at
PARTICIPANT?? option without PART/C/PANT incurring the $22 per month per meter charge. PARTICIPANT grants
COMMONWEALTH, its contractors and agents the right to enter its premises to install, repair, maintain, and remove
meters provided by COMMONWEALTH.
5. BILLING: PART/C/PANT elects to receive a consolidated invoice submitted by the UDC for UDC charges and
COMMONWEALTH’S charges. COMMONWEALTH shall take the necessary steps to fulfil the ESP obligations set forth
under the UDC’s direct access rules, with no charge to PART/C/PANT, to ensure that PART/C/PANT is billed through
the Consolidated UDC Billing option for the energy services to be provided by COMMONWEALTH according to the
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pricing terms specified in this Agreement. All meter reading and data processing functions are included as a part of this
billing service obligation.
6. ENERGY CONSUMPTION INFORMATION: PARTICIPANT shall designate COMMONWEALTH to PART/C/PANTS
current electricity supplier(s) as an authodzed recipient of PARTICIPANTS current and historical electricity cost and
usage data. PART/C/PANT shall provide facility descriptions, operating information and such other information
available to PART/C/PANT as COMMONWEALTH may reasonably require in the performance of its services under this
Agreement and that PART/C/PANT is comfortable providing; provided that such requests shall be reviewed and
approved by SANDAG ptior to COMMONWEALTH making the request to PARTICIPANT . Except as specifically
authorized by PART/C/PANT to disclose such information and except for use by SANDAG for the purpose of verifying
the calculation of its Aggregation Fee, COMMONWEALTH shall maintain in accordance with CPUC rules and decisions
any and all such information provided by PARTICIPANT’S current electricity supplier(s) as confidential.
COMMONWEALTH shall provide semi-annual consolidated summary reports to each PART/C/PANT regarding
PARTICIPANTS historical monthly energy usage and savings achieved compared to PX costs for each meter. At no
additional cost, PART/C/PANTS with installed Direct Access Meters will be able to view and electronically download
historical energy use data through a secure intemet server on a daily basis or more frequently, if required.
7. QUALITY: COMMONWEALTH shall procure and provide firm electric power supplies to meet the full energy
requirements of PART/C/PANTS loads specified in Schedule A.
8. EFFECTIM DATE: This Agreement shall commence on July 1,1998.
9. TERM OF AGREEMENT: This Agreement shall commence on the effective date for a term of one (I) year from the
date PART/C/PANT begins receipt of service from COMMONWEALTH, or until June 30, 1999, whichever occurs first,
with PART/C/PANT having the option to renew at the existing terms of this Agreement for up to four (4) adcktional one
year periods beginning on July 1 of every year. PART/C/PANT may exercise its option to renew by giving written notice
thereof to COMMONWEALTH at least thirty (39) days prior to expiration of the then current term.
10. LOW PRICE GUARANTEE: If, after at least six (6) months from the execution of this Agreement, The San Diego
Regional Power Pool receives a verifiable written offer by an Established Supplier to supply The San Diego Regional
Power Pool’s electricity at a rate which The San Diego Regional Power Pool believes is below the COMMONWu\LTH
delivered rate, then COMMONWEALTH shall have thirty (30) days from notice of the offer to elect to supply
PARTICIPANT The San Diego Regional Power Pool the electricity and equivalent service, if any, as described in the
offer on terms equivalent to the offer. If after thirty (36) days’ notice of the offer, COMMONWEALTH has not elected in
writing to supply The San Diego Regional Power Pool the electricity and services under terms equivalent to the offer
and The San Diego Regional Power Pool accepts the offer, then the PART/C/PANT will terminate this Agreement
without penalty or liability.
11. COMMUNLCATIONS: AtI communications shall be in writing and sent or delivered to the address set forth opposite the
Party’s signature hereto or such other address as may be designated by written notice, and shall be deemed given when
lBCf3iVed
12. AUDIT AND INSPECTION OF RECORDS: COMMONWEALTH shall maintain complete and accurate records with
respect to the Guaranteed Savings, Incremental Savings, and Cost of Power calculations under Section 2 under this
Agreement All such records shall be maintained on a generally accepted accounting basis and shall be clearly
identified. COMMONWEALTH shall provide reasonable access to the representatives of PARTICIPANT, or their
appointees, to such books and records. PARTICIPANT reserves the right to examine and audit such books and records
and to make transcripts or copies of them as necessary. COMMONWEALTH shall allow inspection of all work data,
documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final
payment .under this Agreement. In addition to the above accounting records, COMMONW&ALTH shall maintain
records to show actual costs for its Cost of Power.
13. INDEMNIFICATION: At no time shall PART/C/PANT, including its officers, agents and employees, parent or subsidiary
company be liable or forced to pay penalties, fees, fines or any other sanction levied against COMMONWEALTH by the
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Independent System Operator, the California Public Utilities Commission, the Federal Energy Regulatory Commission
or any other entity as a result of any default on the part of COMMONWEALTH in regards to performance of duties
required by this Agreement. Should, for any reason, PART/C/PANT be directly assessed any fine, fee or penalty by
any entity because of COMMONWEALTH’S activities regarding this Agreement COMMONWEALTH will be fully
responsible for payment thereof. COMMONWEALTH will defend, indemnify, and hold PART/C/PANT harmless from
losses, claims or costs of any kind caused or alleged to have been caused by COMMONWEALTH’S negligence, actions
or inactions.
14. INSURANCE: COMMONWEALTH shall maintain comprehensive general liability insurance in minimum limits of $1
million/occurrence and $3 million aggregate and shall maintain workers’ compensation insurance as required by California law. COMMONWEALTH will provide proof of insurance to PART/C/PANT upon signature and request.
15. ASSIGNMENT: Neither COMMONWEALTH nor PART/C/PANT may assign this Agreement without the prior written
consent of the other. If written consent to assignment is not given within 15 days after a written request themfor, which
consent will not be unreasonably withheld, then the party proposing the assignment may terminate this Agreement
without penalty or liability upon 30 days written notice, provided that COMMONWEALTH may not terminate for failure of
PARTICIPANT to consent to COMMONWEALTH’S proposed assignment unless its proposed assignee is an
Established Supplier, An Established Supplier is defined as an entity possessing all of (1) all requisite certifications,
permits and authorities to pedorm COMMONWEALTH’S obligations under this Agreement, (2) a demonstrated track
record in the provision of electric power indicative of an ability to fully perform COMMONWEALTH’S obligations under
this Agreement, and (3) a net worth at least the equivalent of that of COMMONWEALTH’S as of the date of this
Agreement,
16. FORCE MAJEURE: ‘Force Majeure’ shall be defined 8s an event that is not within the reasonable control of the Party
claiming suspension (.the Claiming Paw), and that by the exercise of due diligence, the Claiming Party is unable to
overcome in a commercially reasonable manner or obtain or cause to be obtained a commercially reasonable substitute
performance therefor, and such event shall not be deemed to be a default under this Agreement. Force Majeure
includes, but is not limited to: acts of God; fire; war; flood; earthquake; civil disturbance, sabotage; failure of facilities or
breakage of machinery or equipment of parties otherthan the Claiming patty; supply curtailment due to UDC equipment
failure; declaration of emergency by the ISOIPX; regulatory or legislative action, or action or restraint by court order or
governmental authority (so long as the Claiming Party has not applied for or assisted in the application for, and has
opposed where and to the extent reasonable, such governmental action). Specifically excluded from Force Majeure
events is economic hardship due to market conditions, whatever their cause.
If either party shall be unable to carry out any obligation under this Agreement (other than the obligation to make
payments) due to Force Majeure, this Agreement shall remain in effect but such obligation shall be suspended for the
period necessary as a result of the Force Majeum, provided that: (I) the Claiming Party gives the other Party prompt
written notice describing the particulars of the Force Majeure, including but not limited to the nature and date of the
occurrence and the expected duration of the disability; (ii) the suspension of performance is of no greater scope and of
no longer duration than is required by the Force Majeure; and (iii) the Claiming Party uses commercially reasonable
efforts to remedy its inability to perform.
17. DEFAULT: Failure by COMMONWEALTH, any affiliate, parent company, partner or principal of COMMONWEALTH, in
the performance of any obligation under this Agreement constitutes default of this Agreement In the event of such
default, in addition to any other remedies it may have available by law, PART/C/PANT may terminate this Agreement at
its option by written notice to COMMONWEALTH. PART/C/PANT shall attempt to provide 30 days notice in the event
of such termination, but may provide less notice as it determines is reasonable under the circumstances.
18. ENTIRE AGREEMENT: This Agreement, including any Exhibit or Schedule hereto, embodies the entire Agreement
and understanding, and supersedes all prior Agreements and understandings between the parties with respect to the
subject matter hereof. This Agreement may not be amended except by writing executed and delivered by the parties
hereto.
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19. LAWS, MNUE, AND ATTORNEY’S FEES: This Agreement shall be interpreted in accordance with the laws of the
State of California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be
brought in a state OT federal court situated in the County of San Diego, State of California. In the event of any such
litigation between the parties, the prevailing patty shall be entitled to recover all reasonable costs incumd, indting
reasonable attorneys’’ fees, as fktteimined by the court.
COMMONWEALTH ENERGY CORPORATION
Signature
Name
Title
Date
Name - 'Claude A. Lewis
Title Mayor
Date June 18, 1998
Agency
1200 Carlsbad Village Drive
Carlsbad, CA 92008
City of Carlsbad
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Schedule B
Aggregated Monthly Load Factor: Represents the Load Factor calculated for the period of a month for an aggregated
group. Aggregated Monthly Load Factor is calculated by summing the total kWh for all participants of an aggregation,
dividing that total by the number of hours in the month, and then dividing that number by the coincident peak kW for all
participants of the aggregation for the same month. For every meter that is eligible to use load profiling, COMMONWEALTH
shall apply California Public Utility Commission (CPUC) approved load profiles provided by San Diego Gas and Electric
(SDG8E) to the PART/C/PANT’S actual monthly kWh usage for that meter as recorded by SDG&E to calculate that meter’s
demand for every hour of the period. The calculated hourly demand for each meter will then be used in conjunction with
actual hourly interval metered data to calculate the aggregated group’s coincident peak kW. For each meter not eligible to
use load profiling, COMMONWEALTH shall usa actual recorded kWh usage for the month and actual recoded kW for each
hour in the month in its calculated of the aggregated group’s coincident peak demand. A meter’s eligibility (less than 58 kW)
to use load profiling is defined by the CPUC in D. 97-10-886. The approved load profiles may be found on the Internet at
http:l/l62.15.5.2lwk-group/dai/dai/.
Applicable Tariff: The current or subsequent public rate or tariff schedule detailing utility rates, rules and terms of service
that are filed with and approved by a regulatory agency and for which the customer is qualified to obtain service,
California Independent System Operator (CAJSO): The entity responsible for the operation and control of the statewide
transmission grid pursuant to AB 1898.
California Public Utilities Commission (CPUC): The regulatory agency established to regulate privately owned utilities and
to ensure adequate service to the public at rates which are just and reasonable both to customers and shareholders of the
utilities.
Cost of Power: As defined in Section 2.2 of this Agreement.
Direct Access (DA): A service election which allows customers to purchase competitive energy services from non-utility entities registered with the State of California known as ESPs.
Direct Access Meters: An interval meter that complies with CPUC meter design specifications and is required by certain
customers to participate in Direct Access. This meter must meet CPUC meter design specification at the time of meter
installation. An interval meter is defined as a meter capable of reading and storing electric consumption data at specified
time intervals of no greater than one hour as required for Direct Access settlement and data required to bill applicable UDC
tariffs.
Electric Service Provider (ESP): An entity which provides electric service to a retail or end-use customer, but which does
not fall within the definition of an electrical corporation under Public Utilities Code Section 218.
Established Supplier: As defined in Section 15 of this Agreement
Federal Energy Regulator Commission: The federal regulatory agency responsible for regulating the activities of key
portions of the nation’s natural gas utilities, electric utilities, natural gas pipeline transportation utilities, and hydroelectric
pow~producers.
Guaranteed Savings: As defined in Section 2.1 of this Agreement
Incremental Savings: As defined in Section 2.2 of this Agreement
Kilowatt (kW): Often referred to as electric demand, kW is the amount of energy drawn by a customer at a specific time.
Kilowatt-hour (kWh): Electric energy expressed in kilowatt-hours is measured by multiplying the amount of electric power
delivered (measured in watts) by the amount of time over which the energy was consumed (measured in hours). Kilowatts
equal one thousand watt-hours. Megawatts equal a million watt-hours or one thousand kilowatt-hours.
‘. :
Load Factor: Load Factor indicates to what degree a participant’s actual energy consumption (kwh) during a given time
period compared to the consumption that would have occurred had consumption been fully sustained at the participant’s
maximum demand (kw) level. Load Factors are expressed in percentages, and higher load factors represent a more even
distribution of load. Load Factor is calculated by dividing the total kWh for a period by the hours in the period, and then
dividing that number by the peak kW for the same period.
Meter Data Management Agent (MDMA): MDMAs must be approved by the customer’s UDC and is responsible for meter
reading, usage calculations and data access.
Participant: An agency that executes a Memorandum of Understanding with SANDAG to join the San Diego Regional
Power Pool. A Participant may be a subsidiary public agency or non profit otganization of the entity executjng this
Agreement.
Power Exchange (PI@ A California state chattered, non profit organization charged with providing an efficient competitive
auction, open on a nondiscriminatory basis to all suppliers, that meets the loads of ail exchange customers at efficient prices. The PX is a scheduling coordinator and is independent of the CAISO and other market participants.
Power Procurement Process: The process which includes identifying qualified Electrical Service Providers, developing a
Request for Proposals, solicitation of ESP responses, evaluation of such proposals, negotiation of power purchase
agreements, and development of final contracts for competitive power purchases.
Meter (or Meters): As defined in the first Recital of this Agreement.
San Diego Regional Power Pool: An aggregated group of agencies established to coordinate the purchase of electric
energy, transmission, and other services on behalf of the participating agencies.
San Diego Association of Governments (SANDAG): SANDAG is the regional planning agency, as well as a key technical
and informational resource, for the area’s eighteen incorporated cities and the county government who collectively are the
Association of Governments. Through this voluntary association, local governments work together to solve current problems
and plan for the future. SANDAG is a joint powers agency authorized under California State law.
Scheduling Coordinator (SC): An entity certified by the Federal Regulatory Commission through the CAISO that acts as a
go-between with the IS0 on behalf of generators, supply aggregators (wholesale marketers), retailers, and customers to
schedule the distribution of electricity.
Utility Distribution Companies (UDCs): The entities which will continue to provide regulated services for the distribution of
electricity to customers and serve customers who do not choose direct access,
EXHIBIT 2
May 14.1998
TO: Interested Power Pool Participants
FROM: Steve Sachs
SUBJECT: Metering for the San Diego Regional Power Pool
The attached letter fbom Commonwealth, the Power Pool’s Energy Service Provider, certifies
that cellular modules will be provided at no cost. Therefore, there will be no need to actend
phone lines to meters that are remote from phone lines. The terms of the deal have improved,
The cellular network covers all of the San Diego metro area. You should subtract the $135 cost
fix the cellular mod&a 1 gave you previously. The contract with Commonwealth guarantees that
Commonwealth takes care of all maintenance and operations.
16
“Califomn&‘s New Ckoice for Pbwfr”
May 13.1998
Mr. Steve Sachs
San Dicgo Association of Governments 40 1 “B” Sttect Suite 800
San Diego. CA 92101-423 1
Dear Steve:
This letter shall senre M official notice that all meters installed pursuant to the Regional
Power Pool Services Agreement, executed on May 12 and 13, between Commonwealth
Energy Corporation and the San Dicgo Association of Governments and individual
Commonwealth Energy Power Services Agreements subsequently executed with Power
Pool members, shall include celluiar modules and I or tclcphane modems (where
applicable) to provide for remote acquisition of metering data.
The model number fir tie meters is ABB AID. Meter data is available at rnvo . Appropriate access codes will be given at the time of installalion. These services are ali pact of the 522.00 per month meter fee. There are no up front costs whatsoever.
Please feel free to contact me should you have any questions.
l ommonwealth Energy Corporation
FMB:svc
1599 J R&ill Avenue. Suite 201 ‘lbdn, California 92780 (800) 952-4655 (714) 258-0470 fax (714) 258-0480
17
-.
. r . ’ L,a Diego Association of Governments
EXHIBIT 3
BOARD OF DIRECTORS
March 27,1998 AGENDA REPORT No.: 99-s 8
Action Requested: APPROVE
RECOMMENDATION FROM THE AD HOC COMMITTEE
ON ELECTRIC UTILITY RESTRUCTURING
Introduction
The Board of Directors created the Ad Hoc Committee on Electric Utility Restructuring and a
public agency staff Working Group to explore reducing the region’s electricity costs through a
regional power pool. The Ad Hoc committee members are:
l Mayor Dick Lyon, City of Oceanside, Chair
l Mayor Pro Tern Ramona Finn&, City of Carlsbad
l Councilmember Darrell Gentry, City of San Marcos
l Councihnember Dick Ramos, City of El Cajon
l Supervisor Pam Slater, County of San Diego
The Working Group consists of staff representatives of 110 public agencies, 86 of which have indicated that they will consider participating in a regional power pool if the pool can provide
electricity prices lower than their other alternatives. The agencies include all of the region’s
cities, the County of San Diego, sewer and water districts, school districts, fire districts, colleges
and universities, transportation agencies, and the Port of San Diego. These agencies are listed in
Attachment A to this report.
The Ad Hoc Committee, with the assistance of the Working Group, has solicited and evaluated
proposals for electricity supply and services during the past six months. An offer of electric
power at a guaranteed discount of 1.5% to 3.5% below the total SDG&E electric bill for 12
months has been negotiated. It is anticipated that typical savings will be about 2.5%. This
discount is over and above the discount legislated in AB 1890 for small electricity consumers. In
addition, the offer agrees to provide up to $80,000 to cover the region’s costs for administering
the pool. It is the Committee’s
RECOMMENDATION
that SANDAG approve Resolution 98-30 authorizing the formation of a San Diego Regional
Power Pool to implement the purchase of electric power and related services on behalf of
interested public agencies, including:
. . ’
1. Authorization of a formal offer of electric power and related services to public agencies in
the region for their individual decisions on participation, as described in the attachments;
2. Creation of a Regional Power Pool Committee within SANDAG, composed of
participating agencies, to be responsible for administration of a program for purchase of
power and related services as described in the attachments;
3. Amendment of the FY98 and FY99 Overall Work Programs and Program Budgets to
reflect SANDAG stafIing and consultant support for the Regional Power Pool Committee
and program at a level of up to $80,000 for a 1Zmonth period; authorizing the Executive
Director to contract with the energy service provider for program funding; and author&g
the Executive Director to contract for up to $40,000 of the total of $80,000 for support to
the Regional Power Pool Committee for consultant assistance to SANDAG and the Power
Pool Committee in monitoring the new California market for electricity and the regulatory
and legislative issues related to it, and in soliciting, evaluating and negotiating new bids for
power, if necessary.
Discussion
Background
The opportunity to save money on electricity costs has been created by the restructuring (partial
deregulation) of the state’s electric industry initiated by AB 1890 (Brulte) last year. Competition
for electric power and associated services, such as metering and billing, is scheduled to begin on
March 31,1998.
Initial Scope of the Power Pool
In its work to evaluate the potential benefits for the region, the Ad Hoc Committee has
concluded that initially a power pool should include only public agencies’ electric usage. If the power pool proves that it can operate to successfully save money on electricity costs, and the
new market for electricity in California proves to be stable and reliable, expansion of these
benefits to businesses and residences can be evaI& The Committee believes it is important
to test the performance of the new electricity market and the pooled purchase program before
considering a more widespread aggregation of customers.
Cumulative electricity cost savings of several hundred thousand dollars annurdly are expected to
be achieved by the participating public agencies. Other important long-term benefits anticipated
include:
l Gpportunity for public agencies (and indirectly all their citizens and businesses) to receive
electricity cost savings from electric restructuring in California without having to bear the
costs of procurement, contracting, and administration.
2
. I . ’
l Opportunity to learn the most efficient and effective methods for achieving cost savings in
the electricity market, and to position the Regional Power Pool to make effective and timely
decisions and to increase future savings as the market matures.
l Opportunity to help create and structure the demand side of the new electricity market so
power suppliers can develop responses to the particular needs of public agencies and their
constituents.
Objectives for the Power Pool
The Ad Hoc Committee has used the following objectives in pursuing, evaluating and
negotiating electricity purchases for a San Diego Regional Power Pool:
l Guaranteed electricity cost savings.
l No financial risk to participating agencies.
l Relatively short-term power purchase contracts to allow the most flexibility for participating
agencies to take advantage of po$itive developments in the competitive market for electricity.
Operation of the Power Pool
The Ad Hoc Committee and Working Group have developed mechanisms for operating the
Regional Power Pool as identified in the attachments:
l The Principles and Requirements for Administering a Public Agency Power Pool in the San
Diego Region (Attachment B).
l The Framework for Administering a San Diego Regional Power Pool (Attachment C).
l The Process for Administration of San Diego Region Power Pool (Attachment D).
In summary, the Ad Hoc Committee recommends that the power pool operate through a
committee created by the SANDAG Board whose voting membership consists of a
representative from each public agency participating in the pool. The Power Pool Committee
would be staff&i by SANDAG. The Committee would make decisions on future master power
contracts on behalf of the participating agencies. Each participating agency would sign a
bilateral contract with the Energy Service Provider (ESP) selected by the Power Pool Committee
to provide electricity and related services. Each agency would also enter an agreement with
SANDAG regarding the operation of the power pool and its administration. Each participating
agency will continue to receive its monthly electricity bill from SDG&E and will continue to make payments directly to SDG&E, at the lower rate specified in the contract with the ESP.
Each interested public agency would be responsible for deciding if it should participate in the
power pool and execute the contract with the ESP and the agreement with SANDAG. The master bilateral contract with the ESP and master agreement with SANDAG will be prepared for
3
20
submittal to interested public agencies if the Board of Directors approves the creation of the
power pool.
Electricity Purchase Offer to the Power Pool
Attachment E describes the offer for purchase of electricity developed by the Ad Hoc
Committee. The offer is valid for public agencies which decide to participate in the pool. The
provisions of the offer will be incorporated into the master bilateral contract between
participating public agencies and the ESP. The contract will extend for 12 months and offer a
guaranteed 1.5% to 3.5% savings per kilowatt hour based on the total load factor of all of the
electric meters in the power pool. Analysis of historic electricity use f&tom for public agencies
indicates that savings should be in the range of 2.5% or 3.0%. The ESP will also provide an
additional .5% savings &om the total power pool electricity bill to SANDAG for the costs of
administering the pool and consultant assistance, up to $80,000. Finally, an additional potential
savings (not guaranteed) based on additional electricity price discounts below the state power
exchange achieved by the ESP is beiig offered.
Meter reading and accounting of kilowatt hours consumed will continue to be the responsibility
of SDG&E, and SDG&E will continue to bii electric customers. Electric customers will
continue to make payments directly to SDG&E at the discounted rate specified in the contrack
Any potential additional costs or charges that the ESP might incur in providing power will be its
full responsibility and will not reduce the savings to the customer. Bach public agency will be able to determine the meters and accounts it wants to designate for participation in the pool.
There are no restrictions on the number or electricity consumption of meters that can participate.
In some cases, there may be valid reasons for withholding meters and accounts with large
consumption from the pool. Meters with a demand of over 50 kilowatts (Kw) are required by the
state Public Utilities Commission to install new meters that can be read hourly. Net cost savings
will be reduced by the costs of the new meters. ‘Ihe cost effectiveness of including them in the pool will have to be determined on a case-by-case basis by each agency. The electric purchase
offer developed by the Ad Hoc Committee includes an option to provide the new meters for over
50 Kw meters at a competitive cost Of the 5,000 meters at the 86 public agencies that have
expressed interest in participating in the power pool, less than 500 have demands over 50 Kw.
Schedule
The Electricity Purchase offer described above is valid through July 1, 1998, for a 12-month
period starting then. If SANDAG approves the creation of the power pool, the offer will be extended to public agencies immediately. The master contracts and agreements described in this
report will be developed and distributed within a few weeks. Agencies will then have over two
months to evaluate and sign the documents. SANDAG staff will be available to discuss the details with agency staffs and decision-making bodies during that time.
In order to achieve a power pool size that can be adminktered without reducing savings to the-
participating agencies to an unacceptably low level, participation in the pool will have to include
approximately l/2 to 2/3 of the 86 interested agencies. Therefore, the Ad Hoc Committee and
4
SANDAG should review the responses to the power purchase offer and determine if the power
pool should proceed, prior to July 1st.
Once this process is successfully completed, the Power Pool Committee can be formed and
agencies will begin receiving reductions in utility bills. SANDAG will continue to receive
periodic status reports and recommendations from the Power Pool Committee.
KENNETH E. SULZER
Executive Director
Key Staff Contact: Steve Sachs, (6 19) 595-5346; e-mail: ssa@andag.cog.ca.us
Funds are Requested in Overall Work Program #105.06
22
San Diego ASSOCLWION OF GOVERNMENTS
REsoLu!rION
No. 98-30 401 B Streel, Suite 800
San Diego, California 92101
(619) 5955300 l Fax (619) 5955305
htlp://Www.sandag.cog.ca.us
AUTHORIZING THE FORMATION OF A SAN DIEGO REGIONAL POWER POOL
TO IMPLEMENT THE PURCHASE OF ELECTRIC POWER AND RELATED SERVICES
ON BEHALF OF INTERESTED PUBLIC AGENCIES, INCLUDING:
AUTHORIZING THE FORMAL OFFER OF ELECTRIC POWER AND
RELATED SERVICES TO PUBLIC AGENCIES IN THE REGION
FOR THEIR INDIVIDUAL DECISIONS ON PARTICIPATION;
THE CREATION OF A REGIONAL POWER POOL COMMITTEE
WITHIN SANDAG, COMPOSED OF PARTICIPATING AGENCIES,
TO BE RESPONSIBLE FOR ADMINISTRATION OF A PROGRAM
FOR PURCHASE OF POWER AND RELATED SERVICES;
AMENDING THE FY98 AND N99 OVERALL WORK PROGRAMS
AND PROGRAM BUDGETS TO REFLECT SANDAG STAFFING
AND CONSULTANT SUPPORT FOR THE REGIONAL POWER POOL
COMMITTEE AND PROGRAM AT A LEVEL OF $SO,ooO FOR A 12-MONTH
PERIOD; AUTHORIZING THE EXECUTIVE DIRECTOR TO CONTRACT WITH .
THE ENERGY SERVICE PROVIDER FOR PROGRAM FUNDING; AND
AUTHORIZING THE EXECUTIVE DIRECTOR TO CONTRACT FOR UP TO
$40,000 OF THE TOTAL OF $80,000 FOR SUPPORT TO THE REGIONAL POWER
POOL COMMITTEE FOR CONSULTANT ASSISTANCE TO SANDAG
AND THE POWER POOL COMMITTEE IN MONITORING THE
NEW CALIFORNIA MARKET FOR ELECTRICITY, AND THE
REGULATORY AND LEGISLATIVE ISSUES RELATED TO IT, AND IN
SOLICITING, EVALUATING AND NEGOTIATING NEW BIDS
FOR POWER, IF NECESSARY
WHEREAS, SANDAG Overall Work Program Work Element #105.06 has the purpose of
assisting public agencies in decisions on purchasing pooled power; and
WHEREAS, SANDAG’s Ad Hoc Committee on Electric Utility Restructuring, with
assistance from a Working Group made up of representatives of 110 interested public agencies in the
San Diego region, has recommended that SANDAG authorize the formation of a San Diego Regional
Power Pool to implement the purchases of electric power and related services on behalf of interested
public agencies; NOW THEREFORE2
BE IT RESOLVED that the Board of Directors of the San Diego Association of
Governments, subject to final action at a subsequent meeting, authorizes the formation of a San
Diego Regional Power Pool to implement the purchase of electric power and related services on
behalf of interested public agencies, including:
MEMBER AGENCIES: Cities of Cadsbad, Chula Vista, Coronado, Del Mar, El Cajon, Encfnitas, ExxJndido, Imperial Beach, Le Mesa, Lemon Grove,
National City. Oceanside, Poway. San Diego. San Marcos, Santee. Solana Beach, Vista, and County of San Diego. ADVISOAYILIAISON MEMBERS: California Department of Transportation, U.S. Department of Defense, S.D. Unified Port District,
S.D. County Water Authority, and Tijuana/Baja California.
RESOLUTION 98-30
Page 2
1.
2.
3.
Authorization of a forma1 offer of electric power and related services to public agencies in the
region for their individual decisions on participation;
Creation of a Regional Power Pool Committee within SANDAG, composed of participating
agencies, to be responsible for administration of a program for purchase of power and related services; and
Amendment of the FY98 and FY99 Overall Work Programs and Program Budgets to reflect
SANDAG staffing and &onsuItant support for the Regional Power Pool Committee and program at a level of $80,000 for a 12-month period; authorization fir the Executive Director to contract
with the energy service provider for program funding; and authorization for the Executive
Director to contract for up to.$40,000 of the-total of $80,000 for support to the Regional Power
Pool Committee for consultant assistance to SANDAG and the Power Pool Committee in
monitoring the new California market for electricity and the regulatory and legislative issues
related to it, and in soliciting, evaluating and negotiating new bids for power, if necessary
PASSED AND ADOPTED this 27th day of March, 1998.
Attachment A
AFencv Tvpe
Local Government
City of Carl&ad
Civ of Chula Vista
City of Coronado
City of De1 Mar
City of El Cajon
City of Encinitas
City of Escondido
City of Imperial Beach
City of La Mesa
City of Lemon Grove
City of National City
City of Oceanside
City of Poway
City of San Diego
City of San Marcos
City of Santee
City of Solana Beach
City of Vista
County of San Diego
Wbter & Sewer District3
Borrego Water District
~Descfmso Water District
En&a Wastewater Authority
Fallbrook Public Utility District
Leucadia County Water District
Olivenhain Municipal Water District
Otay Municipal Water District
Pa&e Dam Municipal Water District
Rambow Municipal Water District
Ramona Municipal Water District
R.&on De1 Diablo Municipal Water District
San Dieguito Irrigation District
San Elijo Joint Powers Authority
Valley Center Municipal Water District
Vallecitos Water District
Vista Irrigation District
Yuima Munioipal Water District
County Water Authority
Fire Districts
Alpine Fire Protection District
Borrego Springs Fire Protection District
Lakeside Fiie Protection District
North County Dispatch JPA
Ranch0 Santa Fe Fire Department
Other
Port of San Diego
School Districts
Alpine Union School District
Bonsall Union School District
Cajon Valley School District
Carl&ad Unified School District
Chula Vista Elementary School District
Coronado Unified School District
Dehesa School District
De1 Mar Union School District
Escondido Union School District
Fallbrook Union Elementary School District
Fallbrook High School District
Grossmont Union High School District
Jamul-Dulzura USD
Julian Union School District
La Mesa-Spring Valley School District
Lakeside Union School District
Lemon Grove School District
Mountain Empire Unified School District
National School District
Oceanside Unified School District
Pauma School District
Poway Unifed School District
Eamona UnifX School District
Ranch0 Santa Fe School District
Santee School District
San Diego City School District
San Diego County Office of Education
San Dieguito Union High School District
San Manxs Utied
San Ysidro School District
Solana Beach School District
South Bay Union School District
Spencer Valley School District
Sweetwater Union School District
Vallecitos School District
Valley Center School Distict
Vista Unified School District
Warner Unified School District
Colleges and Universities
Grossmont-Cuyamaca Community College
Minx Costa College
Palomar College
Southwestern College
Transit
San Diego Transit Corporation
San Diego Trolley, Inc.
North County Transit District
Metropolitan Transit Development Board 8
Attachment B
Principles and Requirements for Administering a
Public Agency Power Pool in the San Diego Region
General
l No new bureaucracy should be created; ,a power pool should be administered in an existing
organization.
l The organization should have the ability to create a decision-making structure which includes
all of the agencies involved in the power pool.
Administrative
l The organization should have the capability to staff and administer the power purchase
decision process, and manage (through consultant services) the technical and financial
aspects of power purchases and related services.
l The organization should minimize administrative effort and cost.
l The organization should maintain flexibility and minimize long-term financial commitments
by limiting staff and using consultant assistance where feasible and cost effective.
Legal
l All participant members must be protected against financial liabilities of other members.
l All participants should be protected against all potential liabilities that could arise as a result
of actions by the electricity supply and services providers.
Contractual
l Contracts with electricity supply and service providers should require the demonstration of technical and financial capabilities that will assure reliable, high quality performance.
l Contracts with electricity supply and service providers should include provisions to ensure
that all products and services are cost-competitive with available alternatives.
Lepislative
l The organization should be involved and proactive in state legislative and regulatory issues
that could impact the power pool and electricity rates.
9
. Attachment C
E
i! & 2
2 a
E 0 ‘c; Q ‘Z 0
P /I 2 I
$ $= .- E E 8
2 ,o
8- 40”
&-p EP Esi .
-0 8 OE 8E ‘a0
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‘g- 2
ZE &4 ab 8: a5 .
GE l?qp = Etj;.ZS 0 o- 0 on 0 .E z$ E &
CE 0-z-g 3
po- Q& .E!z L=
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PrEg a,aoL-(IIs UC0 QQ) P’-
aw as-~ E XJ=ZQ)‘-E to.=- m= 0 13Boa w QO
.
ti .r g-” al s?!a $3
3:
SO gG2
an 'do 02 ii Ea z dng Br c .t: a w 35 . .
Attachment D
Process for Administration of a San Diego Regional Power Pool
A. The SANDAG Board takes action to create a Power Pool Committee and define the
responsibilities and duties of the Committee. These responsibilities and duties would
include all issues regarding administration of the pool, and would consist of:
l decisions on master bilateral contracts for the purchase of power.
l development of master bilateral agreements between public agency participants and
SANDAG regarding participation in the power pool and its administration.
l guidance to SANDAG staff on program administration.
B. The Committee would be able to choose its own operating rules and procedures including
voting formula, selection of officers, and subcommittee structure.
C. SANDAG would staffthe Committee using its existing administrative structure.
D. The administrative costs for the Committee would be paid directly to SANDAG by the
power providers and involve no out-of-pocket costs to participating public agencies.
The responsibilities of SANDAG and of the Participating Public Agencies would be as follows:
SANDAG
l Creates Power Pool Committee (Committee determines voting, representative requirements,
chooses chair) and authorizes pool to make decisions on power purchases and related
stxviccs.
l Provides staff and administrative support to Committee.
l Receives payments from electricity supply providers to fund this support.
l Considers Committee recommendations on developments, trends, issues and opportunities for direct access, and communicates with the region’s governments, businesses and residents
on these issues.
l Considers legislative and regulatory recommendations from Committee and communicates
with local, state and federal entities on these issues.
l Assists Committee in dealing with electricity supply providers.
PARTICIPATING PUBLIC AGENCIES
l Signs bilateral contract with electricity service provider negotiated by SANDAG.
l Receives electricity and related services, and makes payments to SDG&E.
l Becomes a voting member of Power Pool Committee, which makes decisions on power
purchases and related services.
l Through the Power Pool Committee,’ makes recommendations to SANDAG on legislative
and regulatory issues, and on developments, trends, issues and opportunities for electricity
purchases to region’s governments, businesses and residents.
12
. . .
Attachment E
Proposed San Diego Regional Power Pool
Electricity and Related Services Offer to PubIic Agencies
Guaranteed Savings
1.5% to 3.5% off of utility bill based on aggregated monthly
load factor of all power pool meters. 1.5% if load factor is
under 50%; 3.5% if load factor is over 60%. Expected
average savings of 2.5% to 3.0%.
Other Savings
Additional savings above the guaranteed savings should the
Energy Service Provider (ESP) acquire energy at a cost
significantly lower than the State Power Exchange price.
Eligibility Criteria/Restrictions All public agency meters and accounts may participate; each
agency can choose the meters that will participate
New Meter Costs (for meters
over 50 Kw demand) $22/month through ESP.
I Billing Costs I No additional costs; billing can be done by SDG&E.
I Term of Offcer I One year starting July 1,1998.
I Expiration of Offer I July 1, 1998
Congestion Charges, line losses,
balancing schedules, ancillary
services, settling with UDC
All charges to be borne solely by ESP.
1 Performance Guarantee I Commonwealth Energy Corp.
I Schedule Coordinator I Illinova or Automated Power Exchange
I Resource Allocation I Paciticorp
Source of Power Pool Administration Costs
ESP will contribute an additional .5% of the power pool’s total
electric bill to SANDAG to cover up to $80,000 for costs of
administering the pool.
13
30
June 25,1998
San Diego Association of Governments
Mr. Steve Sachs, Senior Planner
401 B Street, Suite 800
San Diego, CA 92101-4231
RE: MEMORANDUM OF UNDERSTANDING FOR ELECTRICAL RESTRUCTURING
Enclosed for your records are copies of Council Agenda Bill No. 14,726 and Resolution
No. 98-190, which were approved by the Carlsbad City Council on June 16,1998. Also
enclosed are:
1. Two oriainal MOU’s between SANDAG and the Public Agency Participants in
the San Diego Regional Power Pool signed by the Mayor.
2. Two original Commonwealth Energy Power Services Agreements signed by
the Mayor.
Our instructions from Mr. Jim Hagaman, Administrative Services/Projects Manager,
were to send all four original agreements, (listed above), to your attention when they
were signed. Mr. Hagaman informed us that you would be processing the agreements
for further signatures.
When the documents are fully executed, please send one of each to the City Clerk’s
Office. We would appreciate your referencing City Council Aaenda Bill No. 14.726 in
your cover letter or transmittal form when you return the documents.
Thank you.
*--~j+JJ~~,( .k , ‘,<-, ‘; ), -4 ri.‘---p
KATHLEEN D. SHOUP
Sr. Office Specialist
L I .
I ‘.
WHIBIT 4 =YcIxwh
May 8, 1998
San Diego
ASSOCIATION OF
GOVERNMENTS
401 B Street, Suite 800
San Diego, California 92101-4231
(619) 5955300 l Fax (619) 5955305
http://www.sandag.cog.ca.us
Mr. Raymond Patchett
City Manager
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008-1989
Dear Mr. Patchett:
This letter follows the April 29, 1998 letter from SANDAG Executive Director Ken Sulzer
requesting your agency’s consideration of and action on participation in the San Diego Regional
Power Pool. Two copies of the final documents to be executed by your agency to initiate
participation in the power pool are enclosed. These final documents replace the final draft documents you received as enclosures with the April 29th letter.
Please sign one copy of the Commonwealth Energy Power Services Agreement and one copy of
the Memorandum of Understanding @IOU) with SANDAG, prior to July 1, 1998, and mail them
to SANDAG, care of Steve Sachs. The terms and language of the documents should not be
modified. Please call me at (619) 595-5346 if you believe there is some overriding need for a
change in the language of your power services agreement or MOU.
The Regional Power Pool has been authorized by SANDAG and these documents have been
developed and approved by SANDAG’s Ad Hoc Committee on Electric Restructuring, a llO-
member Public Agency Working Group, SANDAG staff, its consultants and their legal advisor.
These final documents contain several technical (non-substantive) changes based on review by
SANDAG’s Counsel and members of the San Diego region’s City/County Attorneys’
Association, including representatives from the County Counsel’s cftice, a Special District and
several cities. This final legal review improves the clarity of the documents and provides
additional safeguards for participating agencies.
Please note that each agency participating in the Regional Power Pool must fill out Schedule A
of the enclosed Commonwealth Energy Power Services Agreement. Schedule A is simply a listing of the electric meters that your agency will include in the power pool and which will
receive electricity bill discounts. Meters that are not listed in Schedule A will not receive the
discounts.
MEMBER AGENCIES: Cities of Carlsbad, Chula Vista, Coronado, De1 Mar, El Cajon, &tcinitas, Escondido, Imperial Beach, La Mesa, Lemon Grove,
National City, Oceanside, Poway, San Diego, San Marcos, Santee, Solana Beach, Vista, and County of San Diego.
ADVtSORY/LfAfSON MEMBERS: California Department of Transportation, U.S. Department of Defense, S.D. Unified port District,
S.D. County Water Authority, and TijuanaIBaja California.
For most public agencies, an additional enclosure is included which contains information on the
agency’s electric meters. It is suggested that all meters under 50 Kw be included in the pool, and
listed on Schedule A of the Commonwealth Energy Power Services Agreement. Over 50 Kw
meters are recommended to be included in the power pool and listed on Schedule A if
a. The expected annual billing for the meter (this information is included in the enclosure for
over 50 Kw meters) exceeds $17,000 per m; and
b. A phone line is located within 10 feet of the meter (this phone line does not need to be
dedicated for the exclusive use of the meter).
If an over 50 Kw meter does not meet these conditions, it is still possible that including it in the
power pool will result in net electricity bill savings for the meter.
It is recommended that you call Steve Sachs at SANDAG for assistance in determining meters
which are appropriate for inclusion in the pool. Agencies which have not received an enclosure
regarding their meter information, and do not have access to recent information on meters,
electric consumption and billing, should also call for assistance.
Finally, please feel free to call me at (619) 595-5346 if you have questions about the Regional
Power Pool, or would like to schedule a meeting or presentation.
Sincerely, n
/ STEVE SACHS
Senior Planner
S She
cc: Mayor Pro Tern Ramona Finnila
Enclosures
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