HomeMy WebLinkAbout2019-11-19; Clean Energy Alliance JPA; ; Approve Agreement Among the Clean Energy Alliance and the Cities of Carlsbad, Del Mar and Solana Beach Providing for the Payment and Reimbursement of Initial CostsDATE:
TO:
FROM:
ITEM2:
November 19, 2019
CLEAN ENERGY ALLIANCE
STAFF REPORT
Clean Energy Alliance Board
Jason Haber, City of Carlsbad, Assistant to the City Manager
Approve Agreement Among the Clean Energy Alliance and the Cities of
Carlsbad, Del Mar and Solana Beach Providing for the Payment and
Reimbursement of Initial Costs
RECOMMENDATION:
Approve an agreement (Attachment 1) among the Clean Energy Alliance (CEA) and the cities of
Carlsbad, Del Mar and Solana Beach providing for the payment and reimbursement of initial
costs.
BACKGROUND AND DISCUSSION:
Government Code Section 6504 authorizes the parties to a Joint Powers Agreement (JPA) to
make advances of monies to the Joint Powers Authority for its operations that may be repaid to
the parties in the manner provided by the JPA. Section 7.3.2 of the CEA JPA provides that the
initial costs of establishing CEA and implementing its CCA program shall be divided equally
among the founding members. This section further provides that if the CCA program becomes
operational, CEA will repay these advances to the founding members.
Section 7.3.3 of the JPA similarly provides that CEA may establish a reasonable time period over
which the costs of CCA Feasibility and Governance Reports prepared by the parties to the JPA
may be recovered from CCA customers and reimbursed to the parties.
The current founding members of CEA are the cities of Carlsbad, Del Mar and Solana Beach
(Member Agencies). At the first meeting of the CEA Board of Directors on November 5, 2019,
the Board approved an initial budget for CEA of $450,000 to cover the operations through June
30, 2019. The Member Agencies have agreed to each pay $150,000 to CEA in accordance with
the JPA.
The attached Agreement Among the Clean Energy Alliance and the Cities of Carlsbad, Del Mar
and Solana Beach Providing for the Payment and Reimbursement of Initial Costs (Agreement)
addresses the payment and reimbursement of CEA's initial costs and the reimbursement of the
costs incurred by the Member Agencies in preparing Feasibility Studies and Governance
Reports in connection with establishing a CCA program.
The Agreement includes the following provisions:
• Each Member Agency shall pay CEA the sum of $150,000 within 15 days after receiving
written notice from CEA that it has established a bank account for operations.
• In the event that CEA's CCA program becomes operational, the contribution of the
Member Agencies to the initial costs will be repaid by CEA within three years of the
commencement of electricity service by CEA. Electricity service by CEA is planned to
commence in May 2021. There will be no repayment of initial costs if the CCA program
does not become operational.
• In the event that CEA's CCA program becomes operational, the costs incurred by the
Member Agencies in preparing CCA Feasibility and Governance Reports will be
reimbursed by CEA within three years of the commencement of electricity service by
CEA. There will be no repayment of these costs if the CCA program does not become
operational.
• The Agreement has a fixed term expiring on June 30, 2025, unless extended by the
mutual agreement of the parties, to accommodate the time period for repayment of the
costs incurred by the Member Agencies in connection with the establishment of CEA.
Attachment
1. Agreement Among the Clean Energy Alliance and the Cities of Carlsbad, Del Mar and
Solana Beach Providing for the Payment and Reimbursement of Initial Costs
Attachment 1
AGREEMENT BY AND AMONG THE CLEAN ENERGY ALLIANCE AND THE
CITIES OF CARLSBAD, DEL MAR AND SOLANA BEACH PROVIDING FOR THE
PAYMENT AND REIMBURSEMENT OF INITIAL COSTS
THIS AGREEMENT is entered into this ___ day of ______ , 2019, by and
among the CLEAN ENERGY ALLIANCE, an independent Jomt powers authority, (the
"Authority"), and the CITIES OF CARLSBAD, DEL MAR AND SOLANA BEACH (the
"'Members''). Collectively all the parties to this Agreement shall be referred to as the --Parties.''
RECITALS:
A. Authority is an independent joint powers authority duly organized under the
provisions of the Joint Exercise of Powers Act of the State of California (Government Code
Section 6500 et seq.) ("Act") with the power to conduct its business and enter into agreements.
B. The Authority has been formed to conduct a community choice aggregation
('"CCA'') program within the jurisdictions of the Members.
C. Government Code Section 6504 authorizes the Members to make advances of
monies to the Authority for the purposes of the Authority and the Authority is authorized to repay
such advances as provided in the Authority's Joint Powers Agreement ("JPA Agreement").
C. Section 7 .3 .2 of the Authority's Joint Powers Agreement ('"JP A Agreement'")
provides that the initial costs of establishing the Authority and implementing its CCA program as
defined by the JP A Agreement shall be divided equally among the founding members subject to
repayment by the Authority from customer revenues in the event that the CCA program becomes
operational.
D. The Cities of Carlsbad, Del Mar and Solana Beach are the current founding
members of the Authority and have agreed to each contribute $150,000 at this time to fund the
initial costs of the Authority.
E. The Parties desire to enter into this Agreement to provide funding for the initial
costs of the Authority and establish the terms under which the Members will be reimbursed for
their payments from the revenues of the CCA program if it becomes operational. This Agreement
also provides for the reimbursement of the costs incurred by the Members in preparing CCA
Feasibility or Governance Reports in connection with establishing the Authority in the event that
the CCA Program becomes operational as provided in Section 7.3.3 of the JPA Agreement.
NOW, THEREFORE, the Parties mutually agree as follows:
1. TERM
The term of this Agreement shall commence on November 19, 2019, and shall terminate
on June 30, 2024, unless terminated earlier upon the mutual written agreement of the Parties.
Attachment 1
2. PAYMENT OF INITIAL COSTS
The Members shall each pay to the Authority the sum of $150,000 within 15 days after
receiving written notice from the Authority that it has established a bank account for the
Authority's operations. Any additional payments by the Members for the payment of initial costs
shall be subject to the approval of the City Council of each Member.
3. REIMBURSEMENT OF MEMBER PAYMENTS FOR INITIAL COSTS
In the event that the CCA Program becomes operational, the initial costs paid by the
Members shall be included in the customer charges for electric services to the extent permitted by
law. The Authority shall reimburse the Members for their payments of initial costs made pursuant
to Section 2 above no later than three years after the commencement of CCA electricity services
by the Authority. In the event that the CCA Program does not become operational, no Member
shall be entitled to any reimbursement for the payment of initial costs from the Authority or any
other Member.
4. REIMBURSEMENT OF CCA FEASIBILITY AND GOVERNANCE REPORT
COSTS
In the event that the CCA Program becomes operational, any costs incurred by the
Members in preparing CCA Feasibility or Governance Reports in connection with establishing the
Authority shall be included in the customer charges for electric services to the extent permitted by
law. The Authority shall reimburse the Members for these costs no later than four years after
commencement of CCA electricity services by the Authority. In the event that the CCA Program
does not become operational, no Member shall be entitled to any reimbursement from the
Authority or any other Member.
5. PARTY REPRESENTATIVES
The Chief Executive Officer shall represent the Authority in all matters pertaining to this
Agreement. Each Member shall be represented by its City Manager in all matters pertaining to this
Agreement.
6. NOTICES
All notices, demands, requests or approvals to be given under this Agreement shall be given
in writing and conclusively shall be deemed served when delivered personally or on the second
business day after the deposit thereof in the United States Mail, postage prepaid, addressed as
hereinafter provided.
All notices, demands, requests, or approvals shall be addressed as follows:
TO AUTHORITY:
Chief Executive Officer
1200 Carlsbad Village Drive
Carlsbad, CA 92008
TO CARLSBAD:
City Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
TO DELMAR
City Manager
I 050 Camino Del Mar
Del Mar, CA 92014
TO SOLANA BEACH
City Manager
635 S. HWY 101
Solana Beach, CA 92075
7. WAIVER
Attachment 1
A waiver by Authority of any breach of any term, covenant, or condition contained herein
shall not be deemed to be a waiver of any subsequent breach of the same or any other term,
covenant, or condition contained herein, whether of the same or a different character.
8. INTEGRATED CONTRACT
This Agreement represents the full and complete understanding of every kind or nature
whatsoever between the Parties, and all preliminary negotiations and agreements of whatsoever
kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary
the provisions hereof. Any modification of this Agreement will be effective only by a written
document signed by both Authority and Consultant.
9. AUTHORITY
The individual(s) executing this Agreement represent and warrant that they have the legal
authority to do so on behalf of their respective party.
10. CAPTIONS AND TERMS
The captions in this Agreement are for convenience only, are not a part of the Agreement
and in no way affect, limit or amplify the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the date set forth above.
C
By
Title City Manager
CITY OF DEL MAR
A municipal corporation
By
Title
CLEAN ENERGY ALLIANCE
A Joint Powers Authority
By
Attachment 1
Title Chair =-=--------
ATTEST:
, , . ,.. . I~, l ,l:iJCJJ,.,0:-( c:!-!~
Authority Secretary
CITY OF SOLANA BEApl
A municipal corporation
By
Titl
Clean Energy Alliance
J U r✓ PU\,\' ~ r: ':i :\ l_ I ~ 0 °\ I ; ,··
Item 2: Agreement Among CEA and Member
Agencies for Payment and Reimbursement
of Initial Costs
Jason Haber
November 19, 2019
Item 2: Payment and Reimbursement of
Initial Costs Agreement
RECOMMENDED ACTION:
• Approve an agreement among the Clean Energy Alliance and the
cities of Carlsbad, Del Mar and Solana Beach providing for the
payment and reimbursement of initial costs.
11/19/2019
1
Item 2: Payment and Reimbursement of
Initial Costs Agreement
BACKGROUND AND DISCUSSION
• Gov. Code Sec. 6504 -authorizes parties to a JPA to make advances to the JPA that
may be repaid to the parties by the JPA.
• Sec. 7.3.2 of the CEA JPA provides that initial program costs:
• divided equally among founding members
• if program becomes operational, CEA will repay these advances to the
founding members
• Sec. 7.3.3 of the CEA JPA provides that CEA may establish a reasonable time
period over which the costs of CCA Feasibility and Governance Reports prepared
by the parties to the JPA may be recovered from CCA customers and reimbursed
to the parties.
Item 2: Payment and Reimbursement of
Initial Costs Agreement
• Nov. 5 -Board reviewed draft initial budget for CEA of $450,000 to
cover operations through June 30, 2020.
• Member Agencies have agreed to each pay $150,000 to CEA in
accordance with the JPA.
• Agreement provides for payment and reimbursement of CEA's initial
costs and the reimbursement of costs incurred by Member Agencies
in preparing Feasibility Studies and Governance Reports in connection
with establishing a CCA program.
11/19/2019
2
Item 2: Payment and Reimbursement of
Initial Costs Agreement
• Member Agencies each pay $150,000
• 15 days after receiving notice that CEA has established a bank account for operations
• Member Agency contributions to the initial costs will be repaid within
three years of commencement of electricity service by CEA
• Service by CEA is planned to commence in May 2021
• No repayment of initial costs if CCA program does not become operational
• Costs incurred in preparing feasibility and governance reports will be
reimbursed within three years of commencement of electricity service by
CEA
• No repayment of these costs if CCA program does not become operational
• Fixed term expires June 30, 2024, unless extended by mutual agreement of
parties, to accommodate time period for repayment of the costs incurred
by Member Agencies.
Item 2: Payment and Reimbursement of
Initial Costs Agreement
RECOMMENDED ACTION:
• Approve an agreement among the Clean Energy Alliance and the
cities of Carlsbad, Del Mar and Solana Beach providing for the
payment and reimbursement of initial costs.
11/19/2019
3