Resolution No. 6112
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RESOLUTION NO. 6112
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF VERNON APPROVING AND AUTHORIZING THE
EXECUTION OF AN AMENDMENT NO. ONE TO THE
TRANSMISSION SERVICE AGREEMENT BY AND BETWEEN
SUNLAW COGENERATION PARTNERS I AND THE CITY OF
VERNON FOR COGENERATION FACILITY AT DOWNEY
ROAD AT 50TH
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WHEREAS, the City of Vernon and Sunlaw Cogeneration
7 Partners I (hereinafter "Sunlaw") entered into a Transmission
8 Service Agreement dated July 19, 1984 for a cogeneration facility
9 located at Downey Road and 50th Street within the City of Vernon;
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WHEREAS, the City of Vernon and Sunlaw dispute some of
12 the rights and duties of the parties under the Transmission Service
13 Agreement; and
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WHEREAS, the City of Vernon and Sunlaw desire to resolve
15 their dispute and to amend the Transmission Service Agreement as
16 set forth in Amendment No. One to the Agreement; and
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WHEREAS, as part of this dispute resolution, Sunlaw
18 agrees to pay to the City of Vernon before July 1, 1992 the sums
19 owed as the Fuel Use Franchise Fees for both this facility and the
20 cogeneration facility located at the southwest corner of Vernon and
21 Alcoa Avenues.
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
23 CITY OF VERNON AS FOLLOWS:
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SECTION 1: The City Council of the City of Vernon hereby
25 finds and determines that the recitals contained hereinabove are
26 true and correct.
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SECTION 2: The City Council of the city of Vernon hereby
28 approves the Amendment, a copy of which has been presented to the
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1 City Council concurrently with this resolution, and the City
2 Council hereby orders said Amendment to be received and filed by
3 the City Clerk.
SECTION 3: The City Council of the City of Vernon hereby
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5 authorizes the Mayor and the City Clerk to execute said Amendment
6 for, and on behalf of, the City of Vernon.
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SECTION 4: The City Clerk of the City of Vernon shall
8 certify to the passage of this resolution, and thereupon and
9 thereafter the same shall be in full force and effect.
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APPROVED AND ADOPTED this 16th day of June, 1992.
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15 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 ci ty of
4 Vernon, do hereby certify that the foregoing Resolution, being
5 Resolution No. 6112, was duly adopted by the City Council of the
6 City of Vernon at a regular meeting of the City Council duly held
7 on Tuesday, June 16, 1992, and thereafter was duly signed by the
8 Mayor of the City of Vernon.
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BRUCE V. MALKENHORST, city Clerk
( SEAL)
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AMENDMENT NUMBER ONE TO TRANSMISSION SERVICE
AGREEMENT FOR FACILITY LOCATED AT LOCATED AT
DOWNEY ROAD AT 50TH
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This Amendment Number One to Transmission Service
originals, at
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Agreement
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BY AND BETWEEN
CITY OF VERNON, a Municipal
corporation (hereinafter referred
to as "Vernon"), 4305 Santa Fe
Avenue, Vernon, CA 90058
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SUNLAW COGENERATION PARTNERS I, a
California Limited Partnership
(her~inaftarraferredto as
"cogenerator"), 2045 East Vernon
Avenue, Los Angeles, CA 90058
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RECITALS
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WHEREAS, Vernon and cogenerator entered into that
15 certain Transmission Service Agreement dated July 19, 1984 for
16 facilities located at the southwest corner of Vernon and Alcoa
17 Avenues in the City of Vernon; and
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WHEREAS, Vernon and cogenerator dispute some of . the
19 rights and duties of the parties under the Trans1l\ission service
20 Agreement; and
21 WHEREAS, Vernon and cogenerator desire to resolve their
22 disputes and to amend the Transmission Service Agreement so as
23 to reflect the agreement set forth herein; and
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WHEREAS,
as part of this dispute resolution,
25 cogenerator agrees to pay to Vernon on or before July 1, 1992,
26 as a Fuel Use Franchise Fee, for the period prior to January 1,
27 1991, the lesser of (a) the total sum of Three Hundred Twenty
28 Thousand Dollars ($320,000.00) or, (b) based on verifiable
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records, a fee equal to one percent (1%) of the purchase price
of all fuel purchased from sources other than southern
California Gas Company, and consumed in the cogeneration
Facility, plus interest on the amount paid at the rate Of nine
percent (9%) per annum from January 1, 1991, until paid (sums
stated herein being the total amount due and payable. for both
facilities, each facility being subject to a separate
agreement); and
WHEREAS, as part of the dispute resolution, . Vernon
agrees that the payments received from cogenerator to date
constitute full payment of all capital costs for the
construction of the interconnection facilities; and
WHEREAS, as part of the dispute resolution, Vernon
shall maintain the Interconnection Facilities and cogenerator
shall pay to Vernon the actual cost thereof, estimated to be
approximately Five Thousand Dollars ($5,000.00) per year.
NOW, THEREFORE, in consideration of the mutual
covenants, promises, and conditions contained herein, and the
Recitals heretofore stated, cogenerator agrees to pay Vernon the
sum set forth above, plus interest as stated, and the parties
hereto agree to amend the Transmission Service Agreement as
follows:
1. section 7.1 is amended to read as follows:
"7.1 Vernon shall render a monthly billing to
cogenerator for Transmission Service and Fuel Use
Franchise Fee for the preceding month. The amount of
the billing shall be the monthly charge computed in
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1 accordance with the charges provided for in Article 5,
2 Article 6 and Article 35."
3 2. Article 27.0 is amended to read as follows:
4 "27.0 Ownership andOoeration of Interconnection Facilities
5 "27.1 Cogenerator has commenced parallel operation
6 of. the Cogeneration Facility and written approval
7 for operation of the Interconnection Facility has
8 been given by Vernon.
9 "27.2 Cogenerator shall own and operate the
10 Interconnection Facilities.
11 "27.3 Vernon shall maintain the Interconnection
12 Facilities.
13 "27..4.1 Cogenerator shall pay to Vernon the
14 actual cost of maintenance labor and material,
15 plus a fifteen percent (15%) administrative
16 fee.
17 "27.4.2 Vernon shall periodically submit to
18 Cogenerator bills for payment of maintenance
19 labor and materials. Such bills shall specify
20 date(s) of service, type of service, man-
21 hours, hourly rate and cost of materials, plus
22 the fifteen percent (15%) administrative fee.
23 Payment of these bills shall be subject to the
24 same conditions set forth in section 7.4.
25 "27.4.3 Vernon shall supply miscellaneous
26 parts and materials routinely carried in stock
27 by Vernon. Non-stock items and all major
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1 components required for maintenance or repair
2 will be supplied by cogenerator, and will.not
3 be subj ect to the fifteen percent (15%)
4 administrative fee.
5 "27.4.4 cogenerator shall have the right,
6 dur ing regular business hours and upon
7 reasonable notice, to audit Vernon's books and
8 records for the purpose of confirming the
9 accuracy of the monthly reports of the actual
10 cost of maintenance, labor and materials."
11 3. Article 35.0 is amended to read as follows:
12 "35.0 Fuel Use Franchise Fee - Cogenerator acknowledges that
13 Vernon has reduced its transmission fees in recognition that the
14 cogeneration Facility will consume natural gas as its primary
15 fuel source and that Vernon therefore will receive additional
16 franchise fees from Southern California Gas Company at the. rate
17 of one percent (1%) of "gross billing" of all natural gas
18 consumed in the cogeneration Facility. If cogenerator should
19 acquire its fuel (whether natural gas or otherwise) from its own
20 source or a third party source which is not obligated to pay to
21 Vernon a franchise fee for the use by cogenerator of such fuel,
22 then Cogenerator shall pay to Vernon a fee equal to one percent
23 (1%) of the purchase price or cost, as applicable, of such fuel
24 which is consumed in the Cogeneration Facility. Such. purchase
25 price or cost shall include all transportation charges not
26 otherwise paid to Southern California Gas Company and, in the
27 case of natural gas, shall include all charges paid to any party
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1 other than Southern California Gas Company (whether .outside or
2 within the State of California), except that such purchase price
3 or cost shall not include legal and accounting fees. The Fuel
4 Use Franchise Fee also shall not be applied to those amounts of
5 fuel other than natural gas used for up to three hundred (300)
6 hours per year for testing or reliability purposes.
7 "35.1 For purposes of calculating the Fuel USe
8 Franchise Fee applicable to fuel obtained by
9 Cogenerator from its own source (as opposed to third
10 party purchases), the "cost" of such fuel shall be the
11 reasonable cost and expense associated with obtaining
12 the fUel and delivering it to the Southern California
13 Gas Company system. Such "cost" shall include all
14 transportation charges not otherwise.. paid to Southern
15 California Gas Company and, in the case of natural gas,
16 shall include all charges as set forth above.
17 "35.2 For purposes of calculating the Fuel Use
18 Franchise Fee applicable to fuel obtained by
19 Cogenerator from a third-party source (as opposed to
20 Cogenerator's own source purchases), the "cost" of such
21 f u e 1 s hall be the pur c h a se p r ice or co s t , as
22 apPlicable, of such fuel which is consumed in the
23 Cogeneration Facility. Such "cost" shall include all
24 transportation charges not otherwise paid to Southern
25 California Gas Company and, in the case of natural gas,
26 shall include all. charges as set forth above.
27 "35.3 Cogeherator shall provide to Vernon by the tenth
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( lOth) day of each month a report disclosing the most
current information regarding the purchase price or
cost of fuel consumed in the Cogeneration Facility for
prior months. wi th r~spect to payments made by
Cogenerator to Southern California Gas Company, such
information shall disclose all payments made through
and including the second month preceding the month of
disclosure. With respect to all other payments,
Cogenerator shall disclose all payments made through
and including the month immediately preceding the month
of disclosure, to the extent such information is
available.
"35.4 It is agreed between the parties that the
obligation of Cogenerator to pay the Fuel Use Franchise
Fee according to the method set forth herein commenced
with the month of January, 1991."
"35.5 Vernon shall have the right, during regu1ar
business hours and upon reasonable notice, to audit
Cogenerator's books and records for the purpose of
confirming the accuracy of the .monthly reports of the
purchase price of fuel consumed. Cogenerator further
agrees to obtain from its own sources of fuel and from
third-party sources all information reasonably required
by Vernon to conf irm the accuracy of the entries
relating to all fuel purchased from sources other than
Southern California Gas Company in Cogenerator's books
and records."
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IN WITNESS WHEREOF, the Parties have executed this
Agreement to. be effective 1992 on the date(s)
adjacent to their respective
CITY OF VERNON
MALKENHORSr, city Clerk
ATTEST:
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BRUCE V.
APPROVED AS TO.. FORM:
CavJ\b" '0.~
DAVIO B. BIlEARLEY; city 'ttorney
By:
By:
DATED: ~ ~
, 1992 By:
DATED: ..:r~ ~
, 1992 By:
SUNLAW COGENERATION PARTNERS. I,
a California Limited Partnership
Operating Energy, L.P.,
its General Partner
Sunlaw Operating corporation,
General Partner of Operating
Energy, L.P.
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ACKNOWLEDGMENT:
The Trustee hereby acknowledges receipt of the Assignees'
Consent and, pursuant to Section 9.2 of the Indenture, consenys
to the Amendment Number One To Transmission Service Agreement
For Facility Located At Downey Road At 50th.
Dated:
June 10
, 1992
BANK OF AMERICA NATIONAL TRUST.
AND SAVINGS ASSOCIATION
BY:..~
Name-: SheriB. Ball
Its: Senior Authorized Officer
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