Resolution No. 5718
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RESOLUTION NO. 5718
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF VERNON APPROVING AND AUTHORIZING
THE EXECUTION OF A FIRM POWER SALE
AGREEMENT BY AND BETWEEN THE CITY OF
VERNON AND THE SALT RIVER PROJECT
AGRICULTURAL IMPROVEMENT AND POWER
DISTRICT
WHEREAS, the City of Vernon provided notice to the
Southern California Edison Company on June 30, 1989, that the
ci ty intended to purchase capacity and associated energy from
the Salt River Project (SRP) during the months of January
through May and October through December of 1991 and 1992; and
WHEREAS, the City of Vernon has concluded its
negotiations with SRP and desires to enter into a Firm Power
Sale Agreement to provide for the purchase of firm capacity and
associated energy from SRP.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF VERNON AS FOLLOWS:
SECTION 1:
The city Council of the City of Vernon
hereby finds and determines that the recitals contained
hereinabove are true and correct.
SECTION 2:
The City Council of the City of Vernon
hereby approves the Agreement, a copy of which has been
presented to the City Council concurrently with this resolution
and the City Council hereby orders said 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
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
3 certify to the passage of this resolution and thereupon and
4 thereafter the same shall be in full force and effect.
5 APPROVED AND ADOPTED this 4th day of September, 1990.
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BRUCE V. MALKENHORST, City Clerk
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.... LEONIS C. MAL . G, Mayor
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STATE OF CALIFORNIA )
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COUNTY OF LOS ANGELES )
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I, BRUCE V. MALKENHORST, City Clerk of the City of
Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 5718, was duly adopted by the City Council of the
ci ty of Vernon at a regular meeting of the City Council duly
held on Tuesday, September 4. 1990. and thereafter duly signed
by the Mayor of the City of Vernon.
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MALKENHORST, City Clerk
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BRUCE V.
( SEAL)
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.' J CITY COUNCIL
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LEONIS C. MALBURG, Mayor
THOMAS A. YBARRA, Mayor Pro-Tern
Wm. "BILL" DAVIS
H. "LARRY" GONZALES
W. MICHAEL McCORMICK
TELEPHONES
CITY CLERK................ 583-8811
POLICE DEPT. ..............587-5171
FIRE DEPT. .. . . . . . . . . . . . . . . . 583-4821
BUILDING DEPT. . . . . . . . . . . . . 583-8811
PUBLIC WORKS DEPT. . . . . . . . 583-8811
HEALTH DEPT. .............583-8811
~ I]. U ~ ~ B~~F:~=:HORST'
2. \) \99 \ City Administrator/City Clerk
.D\t~D B. BREARLEY,
\Si,,~iOR'S Orl" City Attorney
'( OF XJERNON VICTOR H. V AITS,
Director of Community Services
LEWIS R. ADAMS,
Director of Water & Power
LARR Y SP ADT,
Fire Chief
CITY HALL
LOUIS ROSENKRANTZ
Police Chief
In Reply Refer to:
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
VIA TELECOPIER AND MAIL
February 14, 1991
Mr. Bruce V. Malkenhorst
City Administrator/City Clerk
4305 Santa Fe Avenue
Vernon, CA 90058-0805
Re: Power Supply Arrangements Between
Vernon and Edison
Dear Bruce:
The staff of the Light and Power Department have been
reviewing the economics of various resource options and
finalizing negotiations for said resources with Salt River
Project, UAMPS and Los Angeles for the 1991-92 time frame. We
had previously authorized these transactions because we believed
that we were going to complete processing on them for in service
dates of January 1991. However, several agencies continued to
make changes in the economics which precluded the finalization of
these agreements.
In the meantime, Vernon and Edison entered into a Settlement
Agreement settling rate issues in the current rate case, FERC
Docket No. ER88-83. This settlement provided agreed firm rates
from 1987 through 1994. Edison had filed high rates subject to
refund at the inception of the litigation.
since Vernon was unable to accurately predict the final rates
at the conclusion of the litigation five or ten years hence, it
entered into negotiations with these other agencies for
alternative power supply resources based upon Vernon's assessment
of what would be a reasonable rate to be achieved in litigation.
Now we have a firm rate from the settlement, and we can
accurately quantify the economic benefits to be derived from
alternative power supply arrangements. At the same time, several
of these agencies have changed their position in a way that is
Mr. Bruce V. Ma1kenhorst
February 14, 1991
Page 2
economically disadvantageous to Vernon. A combination of both of
these factors now makes these power supply arrangements
uneconomical to Vernon in light of the current settled rates.
Therefore, I recommend that the following resolutions and
agreements which were approved be rescinded and negotiations on
those matters be terminated: Resolution Nos. 5808 (UAMPS) and
5718 (SRP)
If you have any questions concerning these matters, please
call me.
Very truly yours,
~~. ';r~~r~
City Attorney
DBB:j1
cc: Mr. Ken DeDario
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