Resolution No. 4939
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RESOLUTION NO. 4939
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF VERNON APPROVING THE EXECUTION OFA LIMITED
INTEGRATED OPERATIONS AGREEMENT ("IOAn)BY AND
BETWEEN SOUTHERN CALIFORNIA EDISON COMPANY AND
THE CITY OF VERNON WHICH PROVIDES FOR THE
INTEGRATION OF THE CITY'S INTEREST IN THE PALO
VERDE NUCLEAR GENERATING STATION AND CERTAIN
NONFIRM ENERGY AND A LETTER AGREEMENT BY AND
BETWEEN SOUTHERN CALIFORNIA EDISON Cm1PANY
AND THE CITY OF VERNON WHICH PROVIDES THAT
VERNON MAY EXERCISE RIGHTS IN THE FUTURE IN
RESPECT TO MODIFICATIONS IN THE IOA
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WHEREAS, the City of Vernon is a member of the Southern
California Public Power Authority (hereinafter "SCPPA"); and
WHEREAS, as a member of SCPPA, the City of Vernon had
the option of participating in the acquisition of an interest
in the Palo Verde Nuclear Generating Station project (hereinafter
"PVNGS"); and
WHEREAS, the City of Vernon requested Southern Cali-
fornia Edison Company (hereinafter "SCE "), by letter dated ~1ay 18,
1981, to approve the integration of its proportionate share in
the acquisition of an interest in the PVNGS by SCPPA; and
WHEREAS, SCE refused to consider the integration of
Vernon's interest in PVNGS prior to its acquisition; and
WHEREAS, Vernon purchases energy and capacity from SCE
pursuant to a full-requirements tariff scheduled filed with the
Federal Energy Regulatory Commission (hereinafter "FERC"); and
WHEREAS, FERC has approved as a condition to the full-
requirements tariff schedules a Generic IOA which provides for the
integration of non-SCE resources to the combined SCE resale
cities' systems; and
1 WHEREAS, SCE requested that the City of Vernon execute
2 the Generic IOA prior to SCE's consideration of the
3 integratability of the City's interests in PVNGS; and
4 WHEREAS, the City Council of the City of Vernon was
5 unwilling to accept the restrictions on its future actions
6 contained in the Generic IOA and had attempted to negotiate a
7 different integration agreement with SCE since April of 1981; and
8 WHEREAS, SCE refused to modify the Generic IOA and
9 refused to include the modifications suggested by the City of
10 Vernon; and
11 WHEREAS, SCE finally indicated that it was willing to
12 negotiate an IOA limited in its application to the integration
13 of Vernon's proposed entitlement in PVNGS, replacement capacity,
14 if necessary, associated with Vernon's PVNGS entitlement and any
15 nonfirm energy acquired by Vernon from third parties and
16 delivered to Vernon's system to serve its load which was reduced
17 to a letter agreement; and
18 ~mEREAS, it was the opinion of the City's consultants
19 and the City Attorney that SCE would not agree to any further
20 modifications without resort to legal actions before FERC or a
21 court of competent jurisdiction; and
22 WHEREAS, the economic studies which had been prepared
23 for consideration by the City Council when considering the
24 City's participation in the PVNGS project have assessed the
25 detrimental impact of the Generic IOA on said project; and
26 WHEREAS, SCE's willingness to negotiate an IOA limited
27 in its application to the PVNGS project restricts the IOA's
28 detrimental affects to PVNGS; and
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1 WHEREAS, the City of Vernon was required to make a
2 binding commitment and approve a Power Sales Contract with SCPPA
3 in order to retain its interest in PVNGS on November 10, 1981,
4 without any assurances from SCE that said interest would be
5 integrated with the combined SCE/Vernon system; and
6 WHEREAS, SCE's attempt to require that Vernon sign a
7 Generic IOA before consideration of the integratability of the
8 PVNGS interest created a hardship and detriment to the City of
9 Vernon; and
10 WHEREAS, SCE has agreed to integrate Vernon's
11 interest in the PVNGS upon the execution of a letter clarifying
12 the acquisition agreement between SCPPA and the Salt River
13 Project; and
14 WHEREAS, SCE has agreed that Vernon may modify the
15 PVNGS IOA in the event FERC determines that the Generic IOA is
16 unreasonable, unjust and discriminatory and issues a final order
17 which provides for a different IOA; and
18 WHEREAS, SCE and Vernon have proposed a letter agreement
19 which would provide for said retroactive modification of the
20 PVNGS IOA; and
21 WHEREAS, SCE and Vernon have proposed that the PVNGS
22 IOA contain certain generic nonfirm energy and transmission
23 rights which may be terminated on or before December 31, 1983,
24 at Vernon's sole option; and
25 WHEREAS, the City Attorney recommends that the City of
26 Vernon approve and execute said PVNGS IOA and said letter
27 agreement after receipt of written confirmation that the City of
28 Vernon's interest in the PVNGS has been accepted by SCE for
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integration in accordance with the PVNGS IOA.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL
OF THE CITY OF VERNON AS FOLLOWS:
SECTION 1: That the City Council of the City of Vernon
5 hereby finds and determines that the recitals contained herein-
6 above are true and correct.
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SECTION 2: That the City Council of the City of Vernon
8 does hereby approve the PVNGS IOA and related letter agreement
9 with SCE which provides for the procedures to be followed in
10 integrating Vernon's interest in the PVNGS ahd certain nonfirm
11 energy transactions, copies of which have been presented to the
12 City Council with this Resolution.
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SECTION 3: That the City Council of the City of Vernon
14 hereby authorizes the Mayor and the City Clerk of the City of
15 Vernon to execute said PVNGS IOA and related letter agreement for,
16 and on behalf of, the City of Vernon after receipt of written
17 confirmation from SCE that the City of Vernon's interest in the
18 PVNGS has been accepted by SCE for integration in accordance with
19 the PVNGS IOA.
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SECTION 4: That the City Clerk of the City of Vernon
21 is hereby authorized to deliver an executed copy of said PVNGS
22 IOA and related letter agreement to SCE.
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SECTION 5: That the City Clerk of the City of Vernon
24 shall certify to the passage of this Resolution and thereupon
25 and thereafter the same shall be in full force and effect.
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APPROVED AND ADOPTED this 17th day of August, 1982
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ATTEST: ~.// ~HOMAS A. YBA ,'layorpro Tern
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BRUCE V. MALKENHORST, City Clerk
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STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
SSe
I, BRUCE V. MALKENHORST, City Clerk of the City of
Verno,n, do hereby certify that the foregoing Resolution, being
Resolution No. 4939 , was duly adopted by the City Council
of the City of Vernon, and was approved by the Mayor of said
City at a regular meeting of the City Council held on Tuesday,
August 17, 19 82.
(SEAL)
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