Resolution No. 5695
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RESOLUTION NO. 5695
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A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF VERNON APPROVING AND AUTHORIZING
THE EXECUTION OF A LETTER AGREEMENT BY AND
BETWEEN THE CITY OF VERNON ("VERNON" ) AND
THE SOUTHERN CALIFORNIA EDISON COMPANY
( "EDISON" ) PROVIDING FOR THE PURCHASE OF
REPLACEMENT CAPACITY BY VERNON FROM EDISON
FOR THE CITY CAPACITY RESOURCES INTEGRATED
BY VERNON (ENTITLEMENTS IN PALO VERDE
UNITS 1, 2 AND 3), DURING 1990
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WHEREAS, Vernon and Edison entered into an Integrated
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Operations Agreement ("IOA") on August 25,
1982,
to provide,
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among other things,
for the integration of the Resources
acquired by Vernon as a City capacity Resource; and
WHEREAS, the city council of the City of Vernon
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approved Resolution No.
5570 on November 22,
1988,
which
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16 Replacement capacity in 1989 by Vernon from Edison for the city
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capacity Resource; and
WHEREAS, both Vernon and Edison desire to establish the
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terms and conditions whereby Vernon could purchase Replacement
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Capacity from Edison for City Capacity Resources integrated by
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF VERNON AS FOLLOWS:
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SECTION 1: The City council of the City of Vernon
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hereinabove are true and correct.
SECTION 2: The City Council of the city of Vernon
hereby approves the Letter Agreement by and between Vernon and
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1 Edison providing Capacity by
for the purchase of Replacement
2 Vernon from Edison City Capacity integrated by
for Resources
3 (entitlements in Palo Verde units and 3) , of
Vernon 1, 2 a copy
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which has been presented to the City Council concurrently with
this resolution, and the City Council hereby orders said Letter
Agreement to be received and filed by the City Clerk.
SECTION 3: The City Council of the City of Vernon
hereby authorizes the Mayor and the City Clerk to execute said
Letter Agreement for, and on behalf of, the City of Vernon.
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SECTION 4: The city Clerk of the City of Vernon shall
certify to the passage of this resolution and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 5th day of December, 1989.
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18 BRUCE V. MALKENHORST, City Clerk
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STATE OF CALIFORNIA )
)ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of
Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 5695, was duly adopted by the City Council of the
City of Vernon at a regular meeting of the City Council duly
held on Tuesday, December 5. 1989, and thereafter duly signed by
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the Mayor of the City of Vernon.
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BRUCE V. MALKENHORST, City Clerk
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Southern Ca/lfornla Edison Company
P. O. BOX 800
2244 WALNUT GROVE AVENUE
ROSEMEAD. CALIFORNIA 91770
ROBERT DIETCH
VICE PRESIDENT
November 21, 1989
TELEPHONE
818-302-4144
City of Vernon
City Ha 11
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Mr. Bruce V. Malkenhorst
City Administrator/City Clerk
SUbject: Purchase of Replacement Capacity in 1990 by
the City of Vernon from Southern California
Edison Company for Vernon City Capacity Resources
The City of Vernon (Vernon) and the Southern California Edison Company
(Edison) entered into the Integrated Operations Agreement (lOA) on August 25,
1982, to provide, among other things, for the integration of the Resources
acquired by Vernon as City Capacity Resources. Vernon and Edison previously
entered into a November 4, 1988 agreement, the subject of which was IIPurchase
of Replacement Capacity in 1989 by the City of Vernon from Southern California
Edison Company for Vernon City Capacity Resources.1I That agreement terminates
as of midnight December 31, 1989. Vernon and Edison wish to replace that
agreement with this agreement for IIPurchase of Replacement Capacity in 1990 by
the City of Vernon from Southern California Edison Company for Vernon City
Capacity Resources II (IIAgreementll). Wherefore the Parti es agree as follows:
1. Vernon may be required to purchase Replacement Capacity to replace Rated
Capability unavailable from its City Capacity Resources. Section 16.1.3.2
of the lOA provides that Vernon may purchase Replacement Capacity from
Edison. Vernon may desire to purchase Replacement Capacity for its City
Capacity Resources from Edison pursuant to the terms and conditions of
the lOA.
2. Commencing with the effective date of this Agreement and pursuant to
Section 16.1.3.2 of the lOA, and with the exception provided in
Paragraph 4 hereof, Vernon, to the extent it does not purchase
Replacement Capacity from Third Parties in accordance with said
Section 16.1.3.2, shall purchase its full requirements of Replacement
Capacity for its City Capacity Resources from Edison for the period
specified in Paragraph 5 hereof. The amount of Replacement Capacity to
be purchased shall be calculated pursuant to Section 16.1.2 of the lOA.
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City of Vernon
Page 2
November 21, 1989
3. Section 16.1.4 of the lOA provides that the charge per kilowatt per day
for Replacement Capacity may be agreed upon by the Parties. Except as
provided pursuant to Paragraphs 4, 5, 6, and 9 hereof, Edison and Vernon
agree that Edison's charge for Replacement Capacity for Vernon's City
Capacity Resources shall be ten cents ($0.10> per kilowatt per day.
Unless otherwise agreed by the Parties, this charge shall revert to the
charge calculated in accordance with the formula specified in
Section 16.1.4 of the lOA, and this Agreement shall terminate, upon
ten (10) calendar days' written notice by Edison or Vernon. It is the
Parties' intent that such formula charge remain in effect so that a
charge shall be available for Replacement Capacity which cannot be
terminated upon ten (10) calendar days' written notice by either Party.
Vernon waives any challenge to such notice period for the charge of
ten cents ($0.10) per kilowatt per day specified herein. Vernon shall
not request a suspension or otherwise protest the termination of this
Agreement or the reversion to such formula charge under Sections 205 or
206 of the federal Power Act.
4. If, pursuant to Section 16.1.7 of the lOA, the then-current reserve
situation in the Control Area requires purchases of capacity from other
control areas in order to maintain or restore the reliability and
integrity of the Control Area, Vernon shall use its best efforts to
purchase Replacement Capacity from Third Parties outside of the Control
Area. In the event Vernon is unable to secure Replacement Capacity from
Third Parties, Vernon shall then purchase Replacement Capacity from
Edison at the charge calculated in accordance with the formula specified
in Section 16.1.4 of the lOA.
5. Edison shall make available Replacement Capacity in accordance with this
Agreement at midnight on December 31, 1989, or upon the effective date of
this Agreement pursuant to Paragraph 8 herein, whichever is later.
Unless otherwise agreed and confirmed in writing by the Parties, and
except as provided in Paragraphs 3, 4, 6, and 9 hereof, Edison shall
continue to make available Replacement Capacity at the charge of
ten cents ($0.10> per kilowatt per day specified pursuant to Paragraph 3
hereof, through December 31. 1990. Unless otherwise agreed by the
Parties, the charge for Replacement Capacity shall terminate and revert
to the charge calculated in accordance with the formula specified in
Section 16.1.4 of the lOA after that date. Vernon waives any challenge
to such termination. Vernon shall not request a suspension or otherwise
protest a reversion to such formula charge under Sections 205 or 206 of
the Federal Power Act.
6. Either Edison or Vernon may terminate Replacement Capacity purchases and
sales at the charge of ten cents ($0.10> per kilowatt per day, as
specified in Paragraph 3 hereof. by submitting written notice to the
other Party via certified mail return receipt requested, no later than
ten (10) calendar days prior to the requested termination date.
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City of Vernon
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November 21, 1989
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7. All written notices given herein shall be in accordance with Section 38
of the lOA.
8. Edison and Vernon agree that this Agreement is in implementation of and
entered into pursuant to the lOA. This Agreement shall become effective
on the date following execution by both Parties and acceptance for filing
by the Federal Energy Regulatory Commission (FERC) without suspension;
provided, however, if upon such filing the FERC enters into a hearing to
determine whether this Agreement is just and reasonable, it shall not
become effective until the date when an order no longer subject to
jUdicial review has been issued by the FERC determining this Agreement to
be just and reasonable without changes or new conditions unacceptable to
either Party. Vernon shall pay all the necessary fees for filing with
the FERC. Vernon agrees that is shall not contest such filing.
9. Nothing contained herein shall be construed as affecting in any way the
ri ght of (i) Edi son, in maki ng avail ab 1 e servi ce hereunder, to
unilaterally make application to FERC for a change in rates, charges,
classification, or service, or any rule, regulation, or contract relating
thereto under Section 20S of the Federal Power Act and pursuant to the
rules and regulations promulgated by FERC thereunder and have such change
become effective pursuant to Section 20S of the Federal Power Act or
(ii) the right of Vernon to oppose such changes, under Section 20S of the
Federal Power Act. No provision of this Agreement shall be deemed a
waiver by either Party of any position with regard to any rights or
duties under the lOA.
10. Except for the definition of ths IIAgreement,1I all terms used herein with
initial capitalization (whether in the singular or plural) shall have the
meanings specified in the lOA. Replacement Capacity arrangements
specified herein are in implementation of the lOA, and shall neither
alter nor amend the lOA. Nothing contained herein shall be construed so
as to impair Edison's future right to charge Vernon the charge calculated
in accordance with the formula specified in Section 16.1.4 of the lOA for
Replacement Capacity immediately upon termination of this Agreement.
11. The Parties agree that the November 4, 1988 Agreement is terminated as of
midnight December 31, 1989, and this Agreement supersedes it except for
any outstanding payment obligations referred to therein.
12. Unless terminated earlier in accordance with Paragraph 3 hereof, this
arrangement shall terminate at midnight on December 31, 1990.
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City of Vernon
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November 21, 1989
If Vernon finds the aforementioned acceptable, please so indicate by signing
both originals of this letter and returning one of them to Edison.
Sincerely,
SOUTHERN CALIFORNIA EDISON COMPANY
APPROVED AS TO FORM:
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By
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Vice President
CITY OF VERNON
Agreed and Accepted
thi s 5th day of
December ,1989.
By~~~~i .
Attest: /-/dd~~
City Clerk
APPROVED AS TO FORM
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