Resolution No. 5259
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF VEHNON APPROVING AND AUTHORIZING THE
EXECUTION OF A LETTER AGREEMENT BY AND BETWEEN
THE CITY OF VERNON AND THE SOUTHERN CALIFORNIA
EDISON COMPANY ("EDISON") PROVIDING FOR
F.;E:GULATORY FILING ACTIVITIES ASSOCIATED WITH
THE DEVERS-PALO VERDE NO. 2 TRANSMISSION LINE
WHEREAS, the City of Vernon is a resale city that
pLlrchases pOwer and energy from Edi son pursuant to whol esal e
tari.ffs approved by t.he Federal Energy Regulatory Commissi.on;
and
WHEREAS, Edison solicited interest in participation in
the Devers-Palo Verde No. 2 Trans~ission Line; and
WHEREAS, in response to such solicitation, the City of
Vernon requested 40 megawatts of part.icipation in said Devers-
Palo Verde No. 2 Transmission Line; and
WHEREAS, Edison allocated to Vernon a .9% entitlement
for cost sha,'"ing purposes, which is equal to appro>:imately 10.8
mw which is far less than Vel'"non's ,'"equested amount .of 40 mw,
and less than Vernon's entitlements in the Palo Verde Nuclear
Gene''"at.ing Station, Units I, 2 and 3; and
WHEREAS, Vernon's e>:ecution of said Letter Agreement
is not intended to constitute a waiver of its asserted right to
induce ,or compel Edison to allocate addi ti onal capacity to
Vernon in said Transmission Line; and
WHEREAS. the City of Vernon intends to execute the
Letter Agreement establ i shed by Edi son wt"d ch provi des the terms
and c:onditions under which the City of Vernon has the right to
participate in said Line and to provide for the !haring of costs
,
incurred by Edison in obtaining all the necessary regulatory
"".Pi:::.t-oval s to construct. t.he Li ne.
NOteJ, THEREFORE, BE, IT RESOLVED BY THE CITY COUNC I L OF
THE CITY OF VERNON AS FOLLOWS:
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That the City Council of the City of
Vernon hereby determines that the recitals contained hereinabove
are true and correct.
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That t.he City Council of the City of
Vernon hereby approves the Letter Agreement by and between the
City of Vernon and Edison providing for regulatory filing
aC,t i vi ties
associated with the Devers-Palo Verde
No.
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Transm.ission Line, without waiving its asserted right to induce
or 'compel Edison to allocate additional capacity to Vernon in
said Line, a copy of which has been presented to the City
COlmcil concurrently with this Resolution, and the City Council
hereby orders said Agreement to be lpeceived and filed by the
City Clerk.
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That the City Council of the City of
Vernon hereby authorizes the Mayor t.o eNecut.e said Agreement
for, and on behalf of, the City of Vernon.
@'~~IIg~_1: The Cit.y Clerk of the Cit.y of Vernon shall
certify to the passage of this Resolut.ion and thereupon' and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 4th day of March, 1986.
ATTEST,,' ',4', //" ,~,.
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BRUCEV. MALKENHORST, City Clerk
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1 STATE OF CALIFORNIA )
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2 ,;'.OS ANGELES )
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I, BRUCE V. tvl.ALKENHORST, City Clerk of the City of
G 11 Vernon, do hereby certify that the foregoing Resolution, being
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Resolution No. 5259
, was duly adopted by the City Council of
the City of Vernon, and was approved by the Mayor of said City
an adjourned
at ~fregular meeting of the City Council held on Tuesday,
March 4
, 19 86
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BRUCE V. ~~LKENHORST, City
Clerk
(SEAL)
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Southern California Edison Company
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P. 0, BOX BOO
2244 WALNUT GROVE AVENUE
ROSEMEAD, CALIFORNIA 91770
EDWARD A. MYERS, .JR.
VICE PRESIDENT
January 29, 1986
TELEPHONE
818-302-2001
Mr. Bruce V. Ma1kenhorst
City Administrator/City Clerk
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Dear Mr. Ma1kenhorst:
SUBJECT: 1986 Letter Agreement for Regulatory
Filing Activities Associated with the
Devers-Palo Verde No. 2 Transmission Line
In response to Edison's April 23, 1985, letter regarding the
Devers-Palo Verde No.2 Transmission Line ("Line"), each of you
expressed an interest for participation in the Line. Since the
interest exceeded the capacity for which Edison was soliciting
participation, Edison allocated such capacity to each of you
based on your need for transmission of power from firm
resources for which you have made existing commitments. Edison
hereby proposes that each participant enter into this 1986
Letter Agreement to provide for: (1) the right to participate
in the Line; and (2) the sharing of costs incurred by Edison in
obtaining all necessary regulatory approvals to construct the
Line.
Therefore, Edison and each entity ("Participant") who signs and
returns an original of this 1986 Letter Agreement to Edison,
within forty-five (45) days after receipt thereof, agree as
follows:
1. Edison shall be Project Manager of the Line and act for
itself, and as agent for the Participants, in endeavoring //
to obtain the necessary regulatory approvals required for
construction and operation of the Line. //
2. Each Participant shall be entitled to participate in the
Line in an amount up to the Cost Sharing Percentage
shown in Attachment A and in accordance with Edison's
June 25, 1985 letter to that Participant regarding this
Line, unless otherwise mutually agreed by Edison and such
Participant; provided that each such Participant has not
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Mr. Bruce V. Malkenhorst
Page 2
January 29, 1986
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materially breached the provlslons of this 1986 Letter
Agreement and the agreements provided for in Paragraph 8.
3. During 1985 and 1986, Edison proposes to prepare all
material necessary for filing with various regulatory
agencies to obtain approvals required for construction and
operation of the Line. Such material, supplemented as
necessary, will be used by Edison to concurrently prepare
and submit applications to the Bureau of Land Management
("BLM"), the Arizona Power Plant and Transmission Line
Siting Committee ("ASC"), the California Public Utilities
Commission ("CPUC"), and other regulatory agencies as may
be required.
Following the submittal of such appl[cations, Edison
proposes to assist the regulatory agencies in processing
the applications by means of hearings and other efforts in
order to obtain decisions from such regulatory agencies by
mid-1987.
3.1 Edison and the Participants shall share costs
incurred by Edison acting as the Project Manager, or
by the Participants acting when requested by Edison,
for the preparation, submittal and processing
activities described above. Unless otherwise agreed
to by the Participants and Edison, the total of such
costs (including overheads) to be shared by Edison
and the Participants pursuant to this 1986 Letter
Agreement shall not exceed $3.52 million, as
estimated in Attachment B. Edison and the
Participants shall share such costs in proportion to
their Cost Share Percentages indicated in
Attachment A.
3.2 Edison shall furnish the Participants progress
reports at least one every two months. Such reports
shall include information on items such as the
following:
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Mr. Bruce V. Malkenhorst
Page 3
January 29, 1986
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4. Edison shall bill each Participani for its share or the
costs incurred herein and each Participant shall pay such
bills in accordance with the following procedure:
4.1 As soon as practicable after the execution of this
1986 Letter Agreement by Edison and the Participant,
Edison shall submit a bill to the Participant for
such Participant's share of costs recorded and
estimated by Edison to have been incurred by Edison,
or by others at Edison's request, in performing
activities pursuant to Paragraph 3 through the month
following the month such bill is submitted.
4.2 By the twentieth day of each succeeding month, Edison
shall submit a bill to each Participant for such
Participant's share of costs estimated to be incurred
by Edison during the following month in performing
activities pursuant to Paragraph 3. Within ninety
(90) days following such estimated bil1ing,Edison
shall include adjustments to billings previously made
so that payments made will reflect the recorded cost
incurred by Edison during the preceding periods.
4.3 Each Participant shall pay to Edison its share of
costs billed pursuant to Paragraphs 4.1 and 4.2 by
not later than fifteen (15) days after the date of
receipt of such bill. Bills which are not paid in
full by a Participant by said due date shall
thereafter bear interest at the rate of one and one-
half percent (1-1/2%) per month of the unpaid
balance, or at the maximum legal interest rate,
whichever is less, prorated by days until payment
is received by Edison.
4.4 Each Participant shall have the right to initiate an
audit of the costs or payments resulting from this
1986, Letter Agreement. Such audit shall be ,/'
conducted upon reasonable advance notice to Edison
and during normal business hours. All costs incurred /'
by Edison and the Participants for such audit shall
be paid by the Participant(s) initiating said audit..
Ir the audit reveals inaccuracies in the payments,
Edison shall make any necessary adjustment as soon
as practicable. The amount of such adjustment shall
accrue interest from the date of payment being
adjusted to the date the adjustment is made. Such
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Mr. Bruce V. Ma1kenhorst
Page 4
January 29, 1986
interest shall be computed by using the lesser of
(i) the applicable first of the month reference
rate, or successor, of the Bank of America
N.T. & S.A., San Francisco, California, corresponding
to the aforementioned period, or (ii) the maximum
interest rate permitted by law.
5. A Participant shall; at any time during the term hereof,
have the right to terminate its entitlement to participate
in the Line under this 1986 Letter Agreement. If such
Participant, by registered mail, notifies Edison and all
the other Participants of its decision to so terminate, it
shall pay to Edison all unsatisfied cost obligations
incurred on its behalf up to the da~e such notice is
received by Edison. Edison shall credit all of the
terminating Participant's payments to costs of obtaining
regulatory approvals for the Line.
6. If any Participant serves notice pursuant to Paragraph 5
or does not return an executed original of the 1986 Letter
Agreement within forty-five (45) days after receipt,
Edison shall assume the Project benefits and obligations
of such Participant.
7. Edison may, on thirty (30) days advance written notice to
all other Participants, elect to terminate this 1986
Letter Agreement. In the event of such termination, all
unsatisfied cost obligations incurred on behalf of the
Line up to and including the date such notice is given
shall be shared by all Participants in proportion to their
Cost Sharing Percentages shown in Attachment A.
7.1 If Edison elects to terminate this 1986 Letter
Agreement, but proceeds with the project within five
years after the date of such termination, the
Participants hereto who are not included in such
future project shall be reimbursed for their costs //
incurred pursuant to this 1986 Letter Agreement by
Edison and any of the Participants included in the ./
project on a pro-rata basis. Such costs shall
include interest accrued from the date of termination
to the date the project proceeds. Interest shall
be computed by using the method set forth in
Paragraph 4.4.
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Mr. Bruce V. Ma1kenhorst
Page 5
January 29, 1986
8. Edison and each Participant shall negotiate and prepare
agreements which provide terms and conditions for
participation rights, construction, operation,
maintenance, and other matters, as required for the Line.
Each Participant hereby agrees that said agreements
shall be agreed upon by the date when all regulatory
approvals for the Line have been received by Edison or by
a later date as agr~ed by Edison and each then involved
Participant. Costs incurred by Edison and each
Participant for preparation of such agreements shall be
borne by the party incurring the cost.
9. Each Participant shall be ob1igated~0 make any
arrangements necessary for the de1iv~ry to its own system
of the Participant's power which was transmitted utilizing
its capacity in the Line. Edison is willing to provide
transmission service from Devers to the preferred delivery
points as specified in Attachment A. Transmission service
will be dependent upon, among other things, Edison having
or being able to add needed transmission capability to
provide the service. If Edison is unable to provide such
transmission service, the Participant(s) shall be
reimbursed for costs incurred pursuant to this 1986 Letter
Agreement. Nothing contained herein shall be deemed to
supersede or modify the obligations of the parties
pursuant to the Integrated Operations Agreements between
Edison and each of Azusa, Banning, Colton, and Riverside.
10. No Participant may assign any rights provided herein
without the express written consent of Edison, which
consent shall not be unreasonably withheld. Any
assignment in contravention of this provision shall be
null and void.
11. This 1986 Letter Agreement shall, with respect to Edison
and each Participant, become effective as of the date when
executed by both Edison and the Participant, and shall
continue in effect until the earlier of (i) execution of
the agreement(s) as provided for in Paragraph 8, (ii)
completion of the Participant's obligations as provided
for in Paragraph 5, or (iii) termination pursuant to
notice given by Edison under Paragraph 7.
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Mr. Bruce V. Malkenhorst
Page 6
January 29, 1986
Please indicate your approval of these terms and conditions by
signing both originals of this letter and returning one to
me within forty-five (45) days of its receipt by you.
~ASTOroRM:
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By
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, 1986.
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TITLE:
Mayor
A/t--/;/~
City Clerk
APPROVED AS TO FORM
BY~
DAVID B. BREARLEY
CITY ATTORNEY
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ATTACHMENT A
DEVERS-PALO VERDE NO. 2 500 kV TRANSMISSION LINE PROJECT
COST SHARING PERCENTAGES AND DELIVERY POINTS
Azusa
Banning
Burbank
Colton
Glendale
Cost
Sharing Pre ferred
Percentage Delivery
% Point
0.2 Azusa
0.2 Banning
0.8 Sylmar
0.2 Colton
0.8 Sy1mar
1 .2 Mirage
30.7 Victorvi11e-Lugo
12.5 Midway
0.8 Goodrich
1.0 Vista
0.9 Laguna Bell
50.7
Imperial Irrigation District
Los Angeles DW&P
M-S-R Pub. Pwr. Agency
Pasadena
Riverside
Vernon
Edison
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ATTACHMENT B
DEVERS-PALO VERDE NO. 2 500 kV TRANSMISSION LINE PROJECT
ESTIMATED LICENSING COSTS THROUGH JULY 1 , 1987
Direct Costs
Transmission Lines (Ca. & Ariz.)
Engineering Support for Licensing
Substations (Devers and Palo Verde)
Engineering Support for Licensing
Series Capacitors (East and West)
Engineering Support for Licensing
Real Properties Easements
Project Contingency
Subtotal Direct Costs
Memo Costs
Overheads and Miscellaneous Costs
Total Costs
$1,618,000
440,000
450,000
100,000
164,000
$2,772,000
j748,000
j3,520,000
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