Resolution No. 6332
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RESOLUTION NO. 6332
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION
OF THE SDG&E-VERNON POWER SALES AGREEMENT
(VERNON CONTRACT NO. 93-10-03) BY AND BETWEEN
SAN DIEGO GAS & ELECTRIC COMPANY AND THE CITY OF
VERNON
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WHEREAS, the City of Vernon receives power from the
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Southern California Edison Company pursuant to tariff schedules
approved by the Federal Energy Regulatory Commission ("FERC"); and
WHEREAS, FERC approved tariff schedules provide at
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Special Condition 12 that Vernon may purchase power from other
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suppliers in accordance with certain prescribed notice provisions;
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and
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WHEREAS, SDG&E is engaged in the generation,
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transmission, sale and purchase of electric power and energy; and
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WHEREAS, the City of Vernon has provided notice to Edison
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that it intends to purchase capacity and associated energy as a
nonintegrated resource; and
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WHEREAS, the City of Vernon believes that the SDG&E is
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able to meet its needs and concerns in a prudent and reliable
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manner; and
WHEREAS, the City Council of the City of Vernon and SDG&E
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wish to enter into a Power Sales Agreement to provide for the
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purchase of capacity and energy from SDG&E.
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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 does
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hereby find and determine that the recitals contained hereinabove
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are true and correct.
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SECTION 2: The City Council of the City of Vernon hereby
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approves the SDG&E-Vernon Power Sales Agreement (Vernon Contract
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No. 93-10-03), a copy of which has been presented to the City
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Council concurrently with this resolution, and the City Council
hereby orders said Agreement to be received and filed by the City
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Clerk.
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SECTION 3: The City Council of the City of Vernon hereby
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authorizes the Mayor and City Clerk to execute said Agreement for,
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and on behalf of, the City of Vernon.
SECTION 4: The City Clerk of the City of Vernon shall
certify to the passage of this resolution and thereupon and
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thereafter the same shall be in full force and effect.
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APPROVED AND ADOPTED this 20th day of October, 1993.
T1~//iJJ~r Pro Tem
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BRUCE V.
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STATE OF CALIFORNIA }
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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. 6332, was duly adopted by the City Council of the
City of Vernon at an adjourned regular meeting of the City Council
duly held on Wednesday, October 20, 1993, and thereafter was duly
signed by the Mayor Pro Tern of
the df ver/Hd~
BRUCE V. MALKENHORST, City Clerk
( SEAL)
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If ..
POWER SALES AGREEMENT
San Diego Gas & Electric Company
and
City of Vernon
1. PARTIES: The Parties to this Power Sales Agreement (Agreement) are San Diego Gas
& Electric Company (San Diego), a California corporation and City of Vernon (Vernon),
a municipal corporation of the State of California, hereinafter sometimes referred to
individually as "Party" and collectively as "Parties".
2. AGREEMENT: The Parties agree as follows:
3. EFFECTIVE DATE AND TERM:
3.1 This Agreement shall become effective as of the date it has been executed by the
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Parties and accepted for filing by the Federal Energy Regulatory Commission
(FERC); provided however, that if upon such filing 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 FERC determining this Agreement to be just and reasonable
without changes or new conditions unacceptable to either Party.
3.2 Vernon shall have no obligation to purchase and San Diego shall have no
obligation to sell capacity and associated energy under this Agreement until such
time Vernon provides San Diego written notice on or before December 15, 1993
that Southern California Edison Company (Edison) has accepted schedule of
capacity and associated energy from San Diego, pursuant to Special Condition 12
of Edison's Tariff Schedule R~7.4 Time-of-Use Resale Service applicable to the
City of Vernon.
3.3 Either Party may terminate this Agreement prior to November 15, 1993 if San
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Diego fails to provide Vernon with adequate proof that San Diego has, prior to
November 15, 1993, obtained sufficient firm transmission service to deliver the
capacity and associated energy provided herein, effective January 1, 1994 from
San Onofre Nuclear Generating Station (SONGS) to Sylmar Switching Station
(Sylmar).
3.4 This Agreement shall continue in effect until all obligations of the Parties under
this Agreement have been satisfied.
SERVICES TO BE RENDERED: Subject to Section 8 hereof, San Diego shall make
available to Vernon and Vernon shall purchase firm capacity and energy at the Point of
Delivery as follows:
4.1 During the months of January through April, and November and December 1994,
San Diego shall deliver 40 MW of firm capacity and associated energy to Vernon,
and Vernon shall schedule such firm capacity and associated energy at a minimum
of five (5) hours per Workday from HE 1800 to HE 2200.
4.2 During the months of May through October 1994, San Diego shall deliver 60
MW of firm capacity and associated energy to Vernon, and Vernon shall schedule
such firm capacity and associated energy at a minimum of six (6) hours per
Workday from HE 1400 to HE 1900.
4.3 "Workday" shall mean Monday through Friday except the following holidays:
New Year's Day, Christmas Day, Independence Day, Thanksgiving Day,
Memorial Day, Labor Day, Veteran's Day and Washington's Birthday
(observed). If any of the above named holidays is a Sunday, the following
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7.2 Vernon shall pay San Diego at a rate of $3.30 per kilowatt per month for capacity
and 110 percent of San Diego's incremental cost of energy, as recorded in the
California Power Pool Transaction Log (adjusted for transmission losses from
SONGS to Sylmar), for associated energy made available to Vernon pursuant to
Section to Section 4.2 in the months of May through October. San Diego will
use reasonable efforts to notify Vernon if San Diego anticipates that its
incremental cost of energy will exceed $35/MWh in any hour prior to delivery.
of associated energy pursuant to Section 4.2.
7.3 If curtailments of capacity and associated energy are caused by transmission
outages which results in Vernon making payments for replacement capacity to
Edison or any other third party for two (2) or more continuous calendar months,
the monthly demand charge, pursuant to Section 7.2, for the amount of megawatts
for which Vernon incurred replacement capacity charges in the second and
successive calendar months, shall be waived by San Diego. If curtailments of
capacity and associated energy described in the preceding sentence are caused by
San Diego's inability to deliver such firm capacity to the Sylmar for any reason
other than transmission outages, San Diego shall waive two thirds (2/3) of the
demand charge for the amount of megawatts for which Vernon incurred
replacement capacity charges from Edison or any third party during the Edison
on-peak period.
7.4 If San Diego is unable to deliver or Vernon is unable to receive the full amount
of associated energy scheduled during any hour due to Uncontrollable Forces, the
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amount of associated energy Vernon is obligated to take and pay for shall be
reduced by the amount of such energy not delivered or received unless otherwise
agreed between the Parties. Except as provided in Section 7.3, Uncontrollable
Forces shall not reduce Vernon's obligation to pay for capacity made available
by San Diego.
BILLING AND PAYMENT:
8.1 San Diego shall render a bill to Vernon by the 10th day of the following month
for service made available hereunder during the preceding month. Vernon shall
pay such bill within fifteen (15) calendar days after receipt thereof.
8.2 If Vernon does not pay the bill by the due date, it shall thereafter bear interest at
the rate of one percent (1 %) per month or the maximum legal rate, whichever is
less, of the unpaid balance prorated by days until payment is received by San
Diego.
8.3 If any portion of any bill is disputed, Vernon shall pay the bill, including the
disputed amount, to San Diego when due. If the protested portion of the payment
is found to be incorrect by San Diego, San Diego shall refund to Vernon any
amount due including interest at the rate of one percent (1 %) per month or the
maximum legal rate, whichever is less, prorated by days from the date payment
is made by Vernon to the date the refund check is mailed by San Diego.
CURTAILMENTS: San Diego's obligation to make available firm capacity and
associated energy to Vernon provided for in Sections 4.1 and 4.2 is a firm obligation,
contingent only upon Uncontrollable Forces (defined in Section 16 below), and upon San
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Diego's ability to serve first its own firm retail customer load after fully committing all
of its then available resources. In the event it becomes necessary for San Diego to
curtail service to Vernon, San Diego shall use its best efforts to notify Vernon as far in
advance of the curtailment as possible.
AUDITS:
10.1 Either Party shall have the right to designate its own employee representative(s)
or its contracted representative(s) with a certified public accounting firm who
shall have the right to examine any cost, payment, settlement, or supporting
documentation resulting from any items set forth in this Agreement. Any such
audit(s) shall be at the auditing Party's" expense and undertaken at reasonable
times and in conformance with generally accepted auditing standards. The other
Party agrees to fully cooperate with any such audit(s).
10.2 The right to audit shall extend during the length of this Agreement and for a
period of not more than six (6) months following the date of final payment under
this Agreement. The Parties shall retain all neces~ records! documentation for
the entire length of this audit period.
10.3 In the event any exceptions are found during an audit, the Party finding the
exceptions shall promptly notify the other Party of such exception in writing.
The Parties will attempt to resolve all audit exceptions as soon as possible
thereafter. To the extent that resolution of an audit exception involves a
monetary payment from one Party to the other, the Party making payment shall
do so within sixty (60) days of the audit exception resolution. The payment
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amount shall include interest calculated at the rate of one percent (1 %) per month,
but in no event be greater than the amount of interest permitted by law, from the
original due date. Interest shall be computed on the basis of a thirty (30) day
month and applied to the actual number of days from the due date until payment.
INDEMNIFICATION:
11.1 Each Party shall indemnify and save the other Party harmless from liability, loss,
damage, claim, costs, and expenses (including attorney fees) on account of injury
to persons (including death), or damage or destruction of property, occasioned by
the negligence, whether active or passive, or the intentional wrongdoing, of the
indemnifying Party's officers, members of the governing body, directors,
employees, or contractors; provided however, that:
11.1.1
Each Party shall be solely responsible for the claims or any
payments to any employee or agent for injuries occurring in
connection with their employment or arising out of any Workers'
Compensation law.
11.1.2
Each Party shall to the extent permitted by law indemnify and save
the other Party harmless from any liability, loss, claim, cost
(including attorney fees) for any claims made by the indemnifying
Party's electric service customers as a result of any failure of a
Party to provide capacity and energy contemplated by this
Agreement for any reason or any cause whatsoever including the
negligence of the other Party.
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12. NO DEDICATION OF FACILITIES: Any undertaking by one Party to the other under
any provision of this Agreement shall not constitute the dedication of the system or any
portion thereof of either Party to the public or the other Party, and it is understood and
agreed that any such undertaking by either Party shall cease upon the termination of this
Agreement.
13. NO THIRD PARTY RIGHTS: Except as otherwise specifically provided in this
Agreement, the Parties do not intend to create rights in, or to grant remedies to, any
third party as a beneficiary of this Agreement or of any duty, covenant, obligation or
undertaking established herein.
14. WAIVERS: Any waiver at any time by either Party of its rights with respect to a default
under this Agreement, or with respect to any other matter arising in connection with this
Agreement, shall not be deemed a waiver with respect to any subsequent default or other
matter arising in connection therewith or otherwise. Any delay, short of the statutory
period of limitation in asserting or enforcing any right, shall not be deemed a waiver of
such right.
15. ASSIGNMENT: No transfer or assignment of all or any part of this Agreement or any
rights, benefits or duties under it by any Party shall be effective without the prior written
consent of the other Party which consent shall not be unreasonably withheld; provided,
that this Section shall not apply to interests which arise by reason of any deeds of trust,
mortgages, indentures or security agreements heretofore granted or executed by a Party.
Any successor to or transferee or assignee of the rights of a Party, whether by voluntary
transfer, judicial sale, foreclosure sale, or otherwise, shall be subject to all terms and
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conditions of this Agreement to the same extent as though such successor, transferee or
assignee were an original Party.
NOTICES: Any notice, unless otherwise provided in this Agreement, given or made in
connection with this Agreement, shall be in writing and shall be deemed properly served,
given or made if delivered in person or sent by United States mail, postage prepaid, with
facsimile transmitted by telecopier to the telecopier number set forth below to the person
specified as follows:
San Diego Gas & Electric Company
Power Contracts Supervisor
10 1 Ash Street
P. O. Box 1831
San Diego, 'CA 92112-4150
Telecopier Number (619) 569-5549
City of Vernon
City Administrator
4305 Santa Fe Avenue
Vernon, CA 90058
Telecopier Number (213) 581-7924
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UNCONTROLLABLE FORCES: Neither Party shall be considered in default in the
performance of any of its obligations under this Agreement (other than obligations of said
Party to make payments hereunder) when a failure of performance shall be due to
uncontrollable forces. A Party rendered unable to fulfill any of its obligations under this
Agreement by reason of an uncontrollable force shall exercise due diligence to remove
such inability with all reasonable dispatch. Nothing contained herein shall be construed
so as to require a Party to settle any strike or labor dispute in which it may be involved.
For the purposes of this Agreement, an uncontrollable force shall be any cause beyond
the control of the Party affected, including but not limited to, failure of or threat of
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failure of facilities, flood, earthquake, storm, fire, lighting, epidemic, famine, war, riot,
civil disturbance or disobedience, labor dispute, labor or material shortage, restraint by
court order or public authority, and action or nonaction by, or inability to obtain
necessary authorizations or approvals from any governmental agency or authority which,
by exercise of due diligence and foresight, such party could not reasonably have been
expected to avoid and which, by exercise of due diligence, it has been unable to
overcome.
8 18. GOVERNING LAW: This Agreement shall be interpreted, governed by, and construed
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under the laws of the state of California or the laws of the United States, as applicable,
as if executed and to be performed wholly in tile state of California.
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SIGNATURE CLAUSE: The signatories hereto represent that they have been authorized
to enter into this Agreement for the Sale/Purchase of Capacity and Energy on behalf of
the Party for whom they sign. Executed as of Be J, ~ 7 , 1993.
SAN DIEGO GAS & ELECTRIC COMPANY
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Senior Vice President, Energy Supply
CITY OF VERNON
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IfrkIrft/./Clj /t/IiU'rNrItA 1i4.'#ir
Thomas A. Ybarra, Mayor Pro Tern
APPROVED AS TO FORM:
BY p~ \l, S)~
David B. Brearley. City Attorney
/
ATIEST'
BY "/l...--
Bruce V. Malkenhorst, City Clerk
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