Resolution No. 5888
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RESOLUTION NO. 5888
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A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF VERNON RESCINDING RESOLUTION NO.
5718 WHICH APPROVED AND AUTHORIZED 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
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WHEREAS, the City Council of the city of Vernon adopted
7 Resolution No. 5718 on September 4, 1990, which approved and
8 authorized the execution of a Firm Power Sale Agreement with
9 Salt River Project AgricUltural Improvement and Power District
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WHEREAS, the Firm Power Sale Agreement with SRP was
12 never executed because SRP proposed certain modifications; and
13 WHEREAS, in order to purchase from SRP, Vernon had
14 requested firm transmission service from the Department of Water
15 and Power of the city of Los Angeles (ltDWplt); and
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WHEREAS, DWP is unable to make firm transmission
17 available in a timely manner in order to provide economic
18 benefits to Vernon; and
19 WHEREAS, Vernon and Southern California Edison Company
20 entered into a Settlement Agreement in November of 1990 in FERC
21 Docket No. ER88-83 which affected the benefits to be derived
22 from the Firm Power Sale Agreement; and
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WHEREAS, by letter dated February 14, 1991, Bruce V.
24 Malkenhorst, the City Administrator/City Clerk, has recommended
25 that Resolution No. 5718 be rescinded.
26 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
27 THE CITY OF VERNON AS FOLLOWS:
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SECTION 1: The City council of the city of Vernon
hereby finds and determines that the recitals contained
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hereinabove are true and correct.
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SECTION 2: The City Council of the City of Vernon
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hereby repeals Resolution No. 5718.
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SECTION 3: The City Clerk of the City of Vernon shall
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certify to the passage of this resolution and thereupon and
thereafter the same shall be in full force and effect.
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APPROVED AND ADOPTED this 19th day of February, 1991.
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ATT~./~~~~~~~.
BRUCE V. MALKENHORST, City Clerk
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1 STATE OF CALIFORNIA )
) ss
2 COUNTY OF LOS ANGELES )
3 I, BRUCE V. MALKENHORST, City Clerk of the City of
4 Vernon, do hereby certify that the foregoing Resolution, being
5 Resolution No. 5888, was duly adopted by the city Council of the
6 ci ty of Vernon at a regular meeting of the City Council duly
7 held on Tuesday, February 19. 1991. and thereafter duly signed
8 by the Mayor of the City of Vernon.
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/L-/~~
BRUCE V. MALKENHORST, City Clerk
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(SEAL)
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>' .' CltvCOUNCILct1 rb11~
LEONIS C, MALBURG, Mayor ~ \ ~
THOMAS A, YBARRA, Mayor pro-T.~ \
Wrn, "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
OFFICERS
BRUCE V. MALKENHORST,
City Administrator I City Clerk
DA VID B, BREARLEY,
City Attorney
VICTOR H, VAITS,
Director of Community Services
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KENNETH J. DEDARIO
Director of Water & Power
LARRY SPADT,
Fire Chief
CITY HALL
LOUIS ROSENKRANTZ
Police Chief
In Reply Refer to:
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
February 14, 1991
City Council
City of Vernon
Honorable Members:
The Light and Power Department staff has been reviewing various
resource options at the City Councills direction. Vernon has now
entered into a Settlement Agreement with Edison for rate issues
in Rate Case FERC Docket No, ER88-83. This agreement gives us a
firm rate for settlement.
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Council had previously approved resolutions for agreements and
negotiations with Utah Associated Municipal Power Systems (Resolution
No. 5808), caalifgrnia Dcparttnel1L of WdLt::.l. RcseurG~~ (n~c;nl11tion No.
57J~ and Salt River Project (Resolution No. 5718); and based on
the firm settlement rate and the present negotiation stand of the
other agencies, it is hereby reconnnended that the aforemmtionedresolutions
and agreements be rescinded. This matter has been reviewed in depth
by the Light and Power staff and the City Attorney.
Very truly yours,
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City Clerk
""..,.....:.;---"
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. ';. CITY COUNCIL
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LEONIS C. MA.LBURG, Mayor
THOMAS A, YBARRA, Mayor Pro-Tern
Wm, "BILL" DAVIS
H, "LARRY" GONZALES
W. MICHAEL McCORMICK
TELEPHONES
CITY CLERK . . . . . . . . . . . . . . , . 583-88\1
POLICE DEPT, ..........,...587-5\7\
FIRE DEPT, . . . . . . . . . . . . . . . . .583-482\
BUILDING DEPT, . . .. .. .. . . . . 583-88\\
PUBLIC WORKS DEPT, . . . . . . . 583-88\\
HEALTH DEPT, .............583-8811
~ ~ ~ ~ ~ ~E ~F;~=::HORST,
2 U \99 I City Administrator/City Clerk
-Dtt~D B, BREARLEY,
ISiMiOR'S Orr City Attorney
'( OF '\JERNON VICTOR H, V AITS,
Director of Community Services
LEWIS R, ADAMS,
Director of Water & Power
LARRY SP ADT,
Fire Chief
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
LOUIS ROSENKRANTZ
Police Chief
In Reply Refer to:
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 bea 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
,.-..._. ~
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Mr. Bruce V. Malkenhorst
February 14, 1991
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economically disadvantageous to Vernon. A combination of both of
these factors now makes these power supply arrangements
uneconomical to Vernon in 1ight 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,
:f2i~.~r~~r~
City Attorney
DBB:jl
cc: Mr. Ken DeOario