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Resolution No. 775012 13 14 15 16 17 18 19 20 21 22 23 24 25 RESOLUTION NO. 7750 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF CALIFORNIA INDEPENDENT SYSTEM OPERATOR DEMAND RELIEF AGREEMENTS AND ACCOMPANYING DEMAND RELIEF PROGRAM PARTICIPATION AGREEMENTS TO ENABLE SYSTEM LOAD CURTAILMENT WHEN THERE IS INSUFFICIENT GENERATION CAPACITY WHEREAS, the California State Legislature adopted Assembly Bill 1890 which created the California Independent System Operator (hereinafter the "ISO") to control the scheduling and access to - electric transmission facilities and be responsible for the efficient use and reliable operation of the ISO controlled grid and the reliable operation of the ISO Control Area; WHEREAS, the ISO, pursuant to its Tariff, seeks to enter into load curtailment contracts, to reduce loads when there is insufficient generation capacity to satisfy those loads in addition to all other loads; WHEREAS, the ISO issued a Request for Bids to participate in the Summer 2001 Demand Relief Program and the City submitted bids, made up of a portfolio of participating businesses located within the City (the "Bids") WHEREAS, the ISO has accepted the Bids submitted by the City and is now requiring the City to both enter into agreements with the ISO for Demand Relief and enter into program participation agreements with the City's participating businesses; and WHEREAS, the City Administrator has recommended to the -1- ■ ` ' 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 City Council that a resolution be adopted which approves the Demand Relief Agreements with the ISO and the Demand Relief Program Participation Agreement with each of the individual participating businesses and authorizes the execution of said agreements. 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 does hereby find and determine that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves: the Demand Relief Agreements (the "DRA"), attached hereto as Exhibit A, each DRA being designated City of Vernon Load 1, Load 2, Load 3, Load 4 and Load 5, by and between the City of Vernon, California and the California Independent System Operator; and the form of the Demand Relief Program Participation Agreement (the "Participation Agreement"), attached hereto as Exhibit B, by and between the City of Vernon, California and each of the participating City businesses, set forth in Exhibit C of this Resolution. SECTION 3: The City Council of the City of Vernon hereby authorizes the City Administrator, or his authorized designee, which may include the Director of Utilities, to execute the DRA and the Participation Agreement, for, and on behalf of, the City of Vernon. SECTION 4: The City Council of the City of Vernon hereby authorizes the City Administrator to make or approve of whatever changes to either the DRA or the Participation Agreements which may -2- 1 y become necessary, upon the advice of counsel, in order to carry out the intent of this Resolution. SECTION 5: 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 18th day of April 2001. LEONTS C. MALBU Mayor- ATTEST: BRUCE V. MALKENHORST, City Clerk -3- 1 STATE OF CALIFORNIA ) 2 COUNTY OF LOS ANGELES 3 4 L, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, 5 do hereby certify that the foregoing Resolution, being Resolution 6 No. 7750, was duly adopted by the City Council of the City of Vernon 7 at a regular meeting of the City Council duly held on Wednesday, 8 April 18, 2001, and thereafter was duly signed by the Mayor of the 9 City of Vernon. 10 �'54� -11 G BRUCE V. MALKENHORST, City Clerk 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -4- 1 EXHIBIT 0 Exhibit A Demand Relief Agreement DEMAND RELIEF AGREEMENT (DRA) THIS AGREEMENT is dated this day of , 2001 and is entered into, by and between: (1) City of Vernon, California, having its registered and principal place of business located at 4305 Santa Fe Avenue, Vernon, California 90058 (the "Contracted Load"); and (2) California Independent System Operator Corporation, a California nonprofit public benefit corporation having a principal executive office located at such place in the State of California as the ISO Governing Board may from time to time designate, initially 151 Blue Ravine Road, Folsom, California 95630 (the "ISO"). Whereas: A. ISO is responsible for the efficient use and reliable operation of the ISO Controlled Grid and the reliable operation of the ISO Control Area. B. The ISO Tariff provides that ISO may enter into Load curtailment contracts giving ISO the right to reduce the Loads of those parties that win the contracts when there is insufficient Generation capacity to satisfy those Loads in addition to all other Loads. C. ISO issued a Request for Bids ("RFB") on December 4, 2000 to solicit bids from Loads for participation in ISO's "Summer 2001 Demand Relief Program" for up to 1000 MW between June 1, 2001 and September 30, 2001 (the "Program"). D. Contracted Load submitted a bid for the Reserved Demand specified in Schedule 1 in response to ISO's RFB and acknowledges that ISO desires to rely on the Demand Reduction supplied by Contracted Load to support the reliable operation of the ISO Controlled Grid and the ISO Control Area. DRAr1.0301 1 ► -r Demand Relief Agreement E. The Parties are entering into this Agreement in order to establish the terms and conditions on which ISO and Contracted Load will discharge their respective duties and responsibilities under the Program. NOW THEREFORE, in consideration of the mutual covenants set forth herein, THE PARTIES AGREE as follows: ARTICLE 1 DEFINITIONS AND INTERPRETATION Terms, when used with initial capitalization in this Agreement and the attached Schedules shall have the meanings set out below. Terms used with initial capitalization in this Agreement and the attached Schedules, but not defined below, shall, if defined in Appendix A to the ISO Tariff, have the meanings set forth therein. The singular shall include the plural and vice versa. "Includes" or "including" shall mean "including without limitation." References to a Section, Article or Schedule shall mean a Section, Article or Schedule of this Agreement, unless another agreement or instrument is specified. Unless the context otherwise requires, references to any law shall be deemed references to such law as amended, replaced or restated from time to time. Unless the context otherwise requires, any reference to a "person" includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having separate legal identity. References to "Contracted Load" or "ISO" shall, unless the context otherwise requires, mean Contracted Load and ISO respectively and their permitted assigns and successors. References to sections or provisions of the ISO Tariff include any succeeding sections or provisions of the ISO Tariff. "Business Day" means any of Monday through Friday, excluding any day which is a federal bank holiday. "Contracted Load" means the Party entering into this Agreement, other than ISO, and, for purposes of individual toads aggregated by Contracted Load, references to Contracted Load in Sections 4.4, 5.3, 5.7, 12.2, and 14.3 of this Agreement shall include each individual Load DRAr1.0301 2 Demand Relief Agreement from which the Reserved Demand identified in Schedule 1 is derived, including those aggregated by Contracted Load. Contracted Load may organize DR Load into groups at its discretion and in accordance with this Agreement, provided each such group represents at least one (1) MW. "Curtail" or "Curtailment" means to reduce Demand in the ISO Control Area and for which Contracted Load has submitted a plan for and received ISO approval for implementation in the case of aggregated individual Loads. "Curtailment Order" means a notice issued by ISO to Contracted Load's DR Scheduling Coordinator in accordance with Section 4.1 requesting Contracted Load to Curtail its Reserved Demand pursuant to this Agreement. "Curtailment Payment" means the amount determined pursuant to Sections 5.4 and 5.7. "Demand Reduction" or "DR" means the amount of MW (or associated MWh) Contracted Load Curtails in accordance with a Curtailment Order. "DR Load means Demand Reduction provided by exercising control over connected Load, including by use of Generation with a rated capacity less than 1 MW operating in parallel with the electric grid for which the requirements of Section 12.2 have been satisfied. "DR Load Block" means the categorization established pursuant to Section 5.1(c). "DR Scheduling Coordinator" means the Scheduling Coordinator(s) designated by Contracted Load, subject to ISO'approval, to receive Curtailment Orders, submit a separate set of SQMD, and perform settlements pursuant to this Agreement. "Energy Price" or "EP" means the price of $500/MWh at which Contracted Load has agreed to provide Demand Reduction pursuant to Section 5.4 of this Agreement or pursuant to Section 5.7. "Invoice" means an invoice issued by ISO to Contracted Load's DR Scheduling Coordinator under Section 6.3. DRAr1.0301 3 r Demand Relief Agreement "ISO Tariff" means the California Independent System Operator Tariff, including the ISO Protocols, on file with Federal Energy Regulatory Commission (FERC) and in effect from time to time. "MDAS" means the ISO Meter Data Acquisition System. "Month" or "Monthly means a calendar month. "MW" means megawatt or megawatts. "MWh" means megawatt hour or megawatt hours. "Optional Curtailment Request" means a notice issued by ISO to Contracted Load's DR Scheduling Coordinator in accordance with Section 5.7 requesting Contracted Load to undertake optional Curtailment of its Reserved Demand pursuant to the terms of Section 5.7. "Party" means either ISO or Contracted Load, and "Parties" means ISO and Contracted toad. "Peak Hour" means an hour within Peak Hours. "Peak Hours" means each of the hours from 1100 hours to 1900 hours on any given Business Day during the Peak Period. "Peak Period" means the period from June 1 to September 30-of calendar year 2001. "Reservation Payment" means the amount determined pursuant to Section 5.5. "Reservation Price" means the price of $20,000/MW-Month at which Contracted Load has agreed to provide Demand Reduction pursuant to this Agreement. "Reserved Demand" means the MW amount of each individual or aggregated Load(s) identified in Schedule 1 that Contracted Load has agreed to Curtail in response to a Curtailment Order issued pursuant to this Agreement. "SOMD" means Settlement Quality Meter Data. DRAri .0301 4 2.1 2.2 2.3 Demand Relief Agreement ARTICLE 2 TERM Term. This Agreement shall become effective as of the date first indicated above and shall continue in full force and effect through September 30, 2001 or until terminated in accordance with the provisions of Section 2.2 of this Agreement. Termination. This Agreement may be terminated: (i) by ISO pursuant to Article 11 in the event of default by Contracted Load; or (ii) by Contracted Load pursuant Article 11 in the event of default by ISO. Effect of Expiration or Termination. Expiration or termination of this Agreement shall not affect the accrued rights and obligations of either Party, including either Party's obligations to make all payments to the other Party pursuant to this Agreement or to provide information necessary to determine the amount of such payments. ARTICLE 3 TESTING Demonstration of Demand Reduction of the Contracted Load. On a date between May 15, 2001 and May 31, 2001, to be mutually agreed upon between Contracted Load and ISO, ISO shall issue a test Curtailment Order to Contracted Load's DR Scheduling Coordinator. Contracted Load's DR Scheduling Coordinator shall confirm receipt of the test Curtailment Order by Contracted Load within thirty-five (35) minutes of the issuance of the test Curtailment Order by ISO. In addition, Contracted Load's DR Scheduling Coordinator shall deliver test SQMD for the Business Day of the test Curtailment Order such that ISO can verify bid point delivery of SQMD for Contracted Load. Contracted Load is not required to Curtail Demand Reduction in the amount specified in the test Curtailment Order and ISO is not required to pay Contract Load for any Demand Reduction should Curtailment actually occur.. If Contracted Load and its DR Scheduling Coordinator fail to demonstrate receipt of the Curtailment Order or ability to deliver SQMD, ISO shall repeat the test no more than two DRAr1.0301 5 a � i Demand Relief Agreement times. If such repeated test(s) fail to demonstrate the Contracted Load and its DR Scheduling Coordinator's capability to receive the test Curtailment Order(s) or deliver SQMD, ISO shall have the right to terminate this Agreement pursuant to Article 11 (Termination for Default). ARTICLE 4 ISSUANCE OF CURTAILMENT ORDERS 4.1 ISO's Right to Order Curtailment. Subject to the limitations set forth in this Agreement, ISO shall have the right to require up to twenty-four (24) hours per Month of DR Load during Peak Hours by issuing a Curtailment Order to Contracted Load's DR Scheduling Coordinator. Each Curtailment Order issued under this Section 4.1 shall be of a four (4) consecutive hour duration and shall automatically terminate four (4) hours after the time specified in the= Curtailment Order for commencement of such DR Load, unless the time so specified is less than four (4) hours prior to 1900 hours, in which case the Curtailment Order will automatically terminate at 1900 hours. Further, ISO may not issue a Curtailment Order after 1700 hours. 4.2 Timing of Curtailment Orders.ISO may issue a Curtailment Order for DR Load at any time consistent with ISO Tariff Section 2.3.5.1.3, and will endeavor to issue Curtailment Orders for DR Load to avoid firm load shedding. ISO will only issue Curtailment Orders for DR Load indicating that Demand Reduction shall commence at the top of a Peak Hour, unless system conditions on the ISO Controlled Grid and in the ISO Control Area require otherwise. 4.3 Form and Content of Curtailment Orders. (a) ISO will issue all Curtailment Orders to Contracted Load's DR Scheduling Coordinator by alphanumeric electronic page (e-page), with electronic mail (e-mail), and voice telephone used as additional or alternate notification methods as may be necessary. ISO will issue only one Curtailment Order per DR Scheduling Coordinator to the contact identified by the DR Scheduling Coordinator.. Contracted Load's DR Scheduling Coordinator must maintain a dedicated pager capable of receiving 1 DRAr1.0301 6 i Demand Relief Agreement times. If such repeated test(s) fail to demonstrate the Contracted Load and its DR Scheduling Coordinator's capability to receive the test Curtailment Order(s) or deliver SQMD, ISO shall have the right to terminate this Agreement pursuant to Article 11 (Termination for Default). ARTICLE 4 ISSUANCE OF CURTAILMENT ORDERS 4.1 ISO's Right to Order Curtailment. Subject to the limitations set forth in this Agreement, ISO shall have the right to require up to twenty-four (24) hours per Month of DR Load during Peak Hours by issuing a Curtailment Order to Contracted Load's DR Scheduling Coordinator. Each Curtailment Order issued under this Section 4.1 shall be of a four (4) consecutive hour duration and shall automatically terminate four (4) hours after the time specified in the= Curtailment Order for commencement of such DR Load, unless the time so specified is less than four (4) hours prior to 1900 hours, in which case the Curtailment Order will automatically terminate at 1900 hours. Further, ISO may not issue a Curtailment Order after 1700 hours. 4.2 Timing of Curtailment Orders.ISO may issue a Curtailment Order for DR Load at any time consistent with ISO Tariff Section 2.3.5.1.3, and will endeavor to issue Curtailment Orders for DR Load to avoid firm load shedding. ISO will only issue Curtailment Orders for DR Load indicating that Demand Reduction shall commence at the top of a Peak Hour, unless system conditions on the ISO Controlled Grid and in the ISO Control Area require otherwise. 4.3 Form and Content of Curtailment Orders. (a) ISO will issue all Curtailment Orders to Contracted Load's DR Scheduling Coordinator by alphanumeric electronic page (e-page), with electronic mail (e-mail), and voice telephone used as additional or alternate notification methods as may be necessary. ISO will issue only one Curtailment Order per DR Scheduling Coordinator to the contact identified by the DR Scheduling Coordinator.. Contracted Load's DR Scheduling Coordinator must maintain a dedicated pager capable of receiving 1 DRAr1.0301 6 4.4 5.1 Demand Relief Agreement alphanumeric electronic pages, an e-mail address, and a dedicated telephone voice line for purposes of the Curtailment Order process. Unless otherwise agreed by ISO, the DR Scheduling Coordinator for Contracted Load shall be responsible to ensure that Contracted Load is informed of the details of the Curtailment Order. At the option of ISO, ISO may agree to include up to five (5) multiple pager addresses per Contracted Load in a broadcast alphanumeric electronic page Curtailment Order such that notification of ISO's issuance of a Curtailment Order is received concurrently by additional parties that may be involved in the notification process. However,, unless . otherwise agreed to by ISO, the issuance of such a broadcast notification of a Curtailment Order will not relieve the DR Scheduling Coordinator of its responsibility to ensure that Contracted Load is informed of the details of the Curtailment Order. (b) Each Curtailment Order shall specify the Peak Hour for commencement of the Demand Reduction and the DR Load Block(s) subject to the Curtailment Order. ISO Tariff Authority and Obligations. Nothing in this Agreement shall limit the obligations of Contracted Load under the ISO Tariff to obey any dispatch instructions issued by ISO with respect to Contracted Load. ARTICLE 5 CONTRACTED LOAD DEMAND REDUCTION Curtailment. (a) If Contracted Load intends to Curtail an aggregation of individual Loads, Contracted Load shall submit an implementation plan to ISO and shall obtain ISO approval of that implementation plan prior to commencement of providing service and receiving payment under this Agreement. The implementation plan must, at a minimum, provide the mapping of the meters for the Loads from which the associated Reserved Demand DRAr1.0301 7 Demand Relief Agreement is derived, the manner of delivery of SOMD from those meters to ISO, and identification of Contracted Load's DR Scheduling Coordinator(s). (b) Subject to the limits in this Agreement, Contracted Load shall provide Demand Reduction in the amount of the Reserved Demand for the full four (4) hours required by each Curtailment Order within thirty-five (35) minutes of issuance of each Curtailment , Order unless ISO has specified a later time for commencement of the Curtailment. The time stamp indicated on the e-mail transmitting the alphanumeric electronic page Curtailment Order described in Section 4.3(a) shall be used as the basis for response time calculations, unless ISO has found it necessary to utilize an alternate means of communicating the Curtailment Order, in which case the response time calculations shall be based on the applicable record of the time of issuance of the Curtailment Order. (c) Each individual or aggregated DR Load set forth in Schedule 1 shall be divided into two blocks of, at the sole and absolute discretion of ISO, approximately equal size and uniform distribution across the ISO Control Area (each a "DR Load Block"). ISO shall notify Contracted Load of assigned DR Load Block(s) on or before May 15, 2000. (d) When only one DR Load Block is specified in a Curtailment Order or the DR Load Blocks are staggered, the DR Load Block not identified in the Curtailment Order or the DR Load Block ordered to Curtail at the later time may, at Contracted Load's discretion, elect to Curtail in accordance with the Curtailment Order. Further, either DR Load Block may elect to continue Curtailment of DR Load after expiration of the four (4) hour period should termination of the Curtailment Order occur prior to 1900 hours. Contracted Load must notify ISO of any additional Curtailment within forty-eight (48) hours to be eligible for Curtailment Payment regarding such additional Curtailment (if any); however, in no event shall Contracted Load be eligible for Curtailment Payment pursuant to Section 5.4 with regard to any Curtailment undertaken before the time DRAr1.0301 8 y Demand Relief Agreement specified for Curtailment of the first DR Load Block, after termination of the last DR Load Block, or after 1900 hours. Further, in no event shall Contracted Load be eligible for additional Reservation Payment pursuant to Section 5.5. Any additional Curtailment provided pursuant to this Section 5.1(d) shall not in any way limit ISO's right to require up to twenty-four (24) hours per Month of Curtailment in direct response to Curtailment Orders in accordance with Section 4.1. (e) Contracted Load's DR Scheduling Coordinator shall comply with the metering and related requirements set forth in the ISO Tariff. (f) Contracted Load's DR Scheduling Coordinator(s) shall report SQMD to ISO for Loads from which Reserved Demand is derived for purposes of this Agreement separate from other Loads and separate from SQMD submitted by Contracted Load's Scheduling Coordinator(s) for ordinary settlements for those Loads. This separate reporting of the SQMD by Contracted Load's DR Scheduling Coordinator(s) shall be submitted to ISO by Contracted Load's DR Scheduling Coordinator(s) on a schedule specified in writing by ISO prior to May 15, 2001 and must: (i) commence on May 15, 2001; (ii) continue through September 30, 2001 or until the termination or expiration of this Agreement; and (iii) include at a minimum SQMD for all Peak Hours. For purposes of reporting meter data, Contracted Load may aggregate Loads across Demand zones; however, ISO shall not be obligated to accept aggregation of Loads represented by different Scheduling Coordinators unless ISO provides Contracted Load express written notice that it is able to do so. 5.2 Contracted Load's Notification of Inability to Curtail. Contracted Load shall promptly notify ISO if Contracted Load will not be able to Curtail pursuant to a Curtailment Order or of the occurrence of a forced outage or Uncontrollable Force, as set forth in Article 8 below, that would affect Contracted Load's ability to Curtail if a Curtailment Order is issued. Contracted DRAr1.0301 E Demand Relief Agreement Load's delivery of such notice shall not limit the ability of ISO to issue Curtailment Orders, or to exercise any other remedies available under this Agreement. 5.3 Curtailment Calculation. The amount of Demand Reduction actually Curtailed by Contracted Load pursuant to each Curtailment Order shall be determined as follows: An hourly expected Demand (ED) of Contracted toad in any given hour "j" is calculated by taking the average of the MWh consumed during that particular hour for the 10 days with the highest MWh consumption, during Peak Hours, of the immediately preceding 11 Business Days "k" for Contracted Load, excluding those days for which a Curtailment Order or Optional Curtailment Request was issued or on which the ISO implemented involuntary service interruptions, or (for j =1 to n) EDj = (Y-k=140 MWhj,kY10 Demand Reduction (DR) during a given hour "j" under the Curtailment Order is calculated by taking the difference between the ED for that hour and the MWh consumed during that hour on the Business Day for which the Curtailment Order was issued, or (for j = 1 to n) DPq = EDj MWh 5.4 Curtailment Payment Calculation. The amount of Curtailment Payment in each Month (Energy_PmV shall be determined as follows (and as shown in Figure 1 below): Energy_Pmt, = DR, * $500/MWh For purposes of the foregoing calculation, DRj will be limited to between 150% and -10% of the amount(s) specified in Schedule 1. Although the Curtailment Payment may be negative in any given hour, based on DR provided, the total of all the hourly Curtailment Payments plus the performance adjusted Reservation Payment will never be less than $0 in any given Month. If Contracted load elects to provide additional Curtailment pursuant to Section 5.1(d) or Section 5.7, DRAr1.0301 10 f Demand Relief Agreement the DR Load provided in each hour of such additional Curtailment will be limited to between 0% and 100% of the amount(s) specified in Schedule 1.. Figure 1- Curtailment Payment 1 /070 150% m W-125%a 010 ae io c E 100% mG E a 75% tx d ¢ 50% c« W d d d 25% si} Y 0%p a -25% -- - -- - - - ---------+------ ----- - - ---- _____ ______L_____ J______L_____J_____-y,rq_ J__-_-_ 1 1 I I Oe I , -- - --- -- - - -' ----- '------' ----- I 1 ----- i 1 I. ----,------ j- I� , , 1 1 1 000 , II I 1 _ ' 000 I I I I I 1 1 1 I I I 1 I I I 1 1 7 -25% 0% 25% 50% 75% 100% 125% 150% 175% Hourly Performance (%of Reserved Demand) 5.5 Monthly Reservation Payments. The monthly average performance (MAP) in each Month is calculated as the average of each hourly DR, where the DR has been limited to between zero percent (0%) and one -hundred percent (100%) of the Reserved Demand. The Reservation Payment for each Month is determined based on the MAP as follows (and as shown in Figure 2 below): Monthly Avg. Perf. (MAP) >_ 50% < 50% and >_ 25% < 25% Monthly Reservation Payment MAP * $20,000/MW * Reserved —Demand (2 * MAP — 500/6) * $20,0001MW * Reserved —Demand $0 DRAr1.0301 11 Demand Relief Agreement Figure 2 — Monthly Reservation Payment 125% m 100% avE c io 75% a� c m os 50% da` � e c 25% O a fsA 41 c 0% ----' '' i�....-.....--- I I. 1 1 1 i i i 1,00 ----------�---------- -- ------ -------- - -- 000 _________1_________ _-_-__1_____-____I__________ -- 1 1 _________{____� _,_____-____{________-_,-_________ I _ _ _ I 1 I 1 I I I 25% 50% 75% 100% Monthly Average Performance Percentage If a Curtailment Order is not issued in one or more Months, the MAP shall be equal to the MAP for the most recent Month in which a Curtailment Order was issued and the Reservation Payment calculated accordingly. If a Curtailment Order is not issued in the Month of June, the MAP shall be equal to one -hundred percent (100%) and the Reservation Payment calculated accordingly. 5.6 Partial Hour Curtailment Issues. Should ISO issue Curtailment Orders or Optional Curtailment Requests requiring Curtailment other than at the top of a Peak Hour, the Demand for the portion of the hour prior to the commencement of Demand Reduction will be assumed to continue at the same level as the prior hour and the effective MWh for the hour for purposes of calculating the Demand Reduction (DR) for that hour pursuant to Section 5.3 will be calculated as follows: Eff_MWh, = (60 * MWh, — MWho * Time) / (60 - Time) For purposes of the foregoing calculation, "Time" is the number of minutes into the hour at which compliance with the curtailment order is expected. If DR terminates prior to the top of the hour, the DRAr1.0301 12 a f Demand Relief Agreement compliance for that hour will be deemed identical to that of the immediately preceding hour. Curtailment Payments will be pro -rated for the portion of the hour for which DR has been requested. 5.7 Additional Optional Curtailment. If during any Month of the Program ISO has exhausted its right to issue Curtailment Orders pursuant to Section 4.1, ISO may issue an Optional Curtailment Request. The Optional Curtailment Request will be initiated in the same manner as set forth in Article 4 for a Curtailment Order. Should ISO issue an Optional Curtailment Request for additional Curtailment, Contracted Load may choose, at its option, either to decline or participate in the optional Curtailment. If Contracted Load chooses to Curtail, Contracted Load must notify ISO within 48 hours after the Optional Curtailment Request that it Curtailed. The Demand Reduction actually Curtailed by Contracted Load shall be determined in accordance with the formula set forth in Section 5.3. The amount of Curtailment Payment for additional Curtailment provided pursuant to this Section 5.7 shall be calculated in accordance with Section 5.4. In no event shall Contracted Load be eligible for additional Reservation Payment pursuant to Section 5.5 for any additional Curtailment provided pursuant to this Section 5.7 and, accordingly, any participation or lack of participation in response to an Optional Curtailment Request shall not be considered in the Reservation Payment calculation set forth in Section 5.5. Further, any additional Curtailment provided pursuant to this Section 5.7 shall not be deemed in any way to limit ISO's right to require up to twenty-four (24) hours per Month of Curtailment in direct response to Curtailment Orders in accordance with Section 4.1. ARTICLE 6 BILLING AND SETTLEMENT 6.1 Payment. Subject to Section 6.2, commencing as of June 1, 2001 ISO shall pay Contracted Load, through its DR Scheduling Coordinator, for each Month during the term of this DRAr1.0301 13 6.2 6.3 Demand Relief Agreement Agreement a Curtailment Payment determined in accordance with Section 5.4 and a Reservation Payment determined in accordance with Section 5.5. Such payments shall be made in accordance with the settlement process, billing cycle, and payment timeline for ISO settlements with Scheduling Coordinators pursuant to the ISO Tariff. Payment Condition. ISO's obligation to make any payments required under Section 6.1 is expressly conditioned on ISO having any and all required regulatory authorizations to bill and receive payment for costs incurred by ISO under this Agreement, specifically including ISO Tariff Sections 2.3.5.1.8 and 11.2.10, and ISO's receipt of payment for costs incurred under this Agreement pursuant to the ISO Tariff. Invoicing. ISO shall Invoice the amount due Contracted Load for the Month under this Article 6 as part oftheDR Scheduling Coordinator's Settlement Statement issued pursuant to the ISO Tariff. ISO will issue a performance report to Contracted Load at the time Preliminary Settlement Statements are issued for the trade date of each Curtailment Order issued in that Month. The report will include the hourly Demand for each hour from 1000 hours through 2000 hours for the trade date, the expected Demand and each day included in the expected Demand. The report will also include such information as the date, effective times of the Curtailment Order, the Reserved Demand, the hourly performance, Curtailment Payments, and any payment due as a result of additional optional Curtailments pursuant to Sections 5.1(d) or 5.7, if any. Payment. Subject to Section 6.2, ISO shall pay Contracted Load's DR Scheduling Coordinator all Invoiced amounts whether or not disputed by Contracted Load. DRAr1.0301 14 Demand Relief Agreement ARTICLE 7 COSTS Operating and Maintenance Costs. Contracted Load shall be responsible for all its costs incurred in meeting its obligations under this Agreement for the Reserved Demand identified in Schedule 1. ARTICLE 8 UNCONTROLLABLE FORCES Uncontrollable Forces. The provisions of Section 15 of the ISO Tariff shall apply with respect to the obligations arising under this Agreement, except that all references in Section 15 of the ISO Tariff to Market Participants shall be read as references to Contracted Load and references to the ISO Tariff shall be read as references to this Agreement. ARTICLE 9 DISPUTE RESOLUTION Dispute Resolution. The Parties shall make reasonable efforts to settle all disputes arising out of or in connection with this Agreement. In the event any dispute is not settled, the Parties shall adhere to the ISO ADR Procedures set forth in Section 13 of the ISO Tariff, which is incorporated by reference, except that any reference in Section 13 of the ISO Tariff to Market Participants shall be read as a reference to Contracted Load and references to the ISO Tariff shall be read as references to this Agreement. ARTICLE 10 LIABILITY Liability. The provisions of Section 14 of the ISO Tariff shall apply to liability arising under this Agreement, except that all references in Section 14 of the ISO Tariff to Market Participants shall be DRAr1.0301 15 Demand Relief Agreement read as references to Contracted Load and references to the ISO Tariff shall be read as references to this Agreement. ARTICLE 11 TERMINATION Termination. If either Party shall fail to perform any material obligation imposed on it by this Agreement or an ISO audit of Contracted Load pursuant to Section 14.3'of this Agreement confirms that Contracted Load would have been unable to Curtail in all Peak Hours in any Month that ISO did not issue a Curtailment Order pursuant to this Agreement and that obligation or inability to Curtail has not been suspended due to a Uncontrollable Force pursuant to Article 8, the other Party, at its option, may terminate this Agreement by giving the Party in default notice setting out specifically the circumstances constituting the default and declaring its intention to terminate this Agreement. ISO's right to terminate this Agreement shall accrue only with regard to the Loads associated with a particular Reserved Demand set forth in Schedule 1 that have failed to perform the material obligation or demonstrated the inability to Curtail in all Peak Hours of the Month, as referenced in the preceding sentence. If the Party receiving the notice disputes the notice, it shall notify the other Party within seven (7) days after receipt of the notice setting out specifically the grounds of such dispute. Time is of the essence in remedying a default. If the Party receiving the notice does not, within ten (10) days after receiving the notice, remedy the default or refer the dispute to the ISO ADR Procedures, the Party not in default shall be entitled by a further notice to terminate this Agreement. The Party not in default shall have a duty to mitigate damages. Termination of this Agreement pursuant to this Article 11 shall be without prejudice to the right of Contracted Load or ISO to collect any amounts due to it prior to the time of termination. ■ DRAr1.0301 16 Demand Relief Agreement ARTICLE 12 REPRESENTATIONS AND WARRANTIES 12.1 Representations and Warranties of the Parties. Each Party represents and warrants that the execution, delivery and performance of this Agreement by it has been duly authorized by all necessary corporate actions, to the extent authorized by law. 12.2 Additional Representations and Warranties of Contracted Load. Contracted Load additionally represents and warrants to ISO as follows: (i) Except as may be expressly authorized in writing by ISO, Contracted Load is not a participant in any of the UDC interruptible and/or curtailable Load programs or any other program under which it is providing Demand responsiveness or curtailment, and Contracted Load was not provided electric service pursuant to a UDC interruptible rate schedule as of November 1, 2000 for any of the Reserved Demand under this Agreement. (ii) Contracted Load does not have a Participating Load Agreement for any of the Reserved Demand under this Agreement (i.e., Contracted Load is not a participant in ISO's Ancillary Services Load Program). (iii) Generation from any Generating Unit of Contracted Load that has a Participating Generator Agreement or is equal to or greater than 1 MW rated capacity operating in parallel with the electric grid will be entirely independent from the Demand Reduction provided in response to a Curtailment Order, and this will be easily verifiable by Contracted Load's scheduling, metering, and settling with regard to the Generation from that Generating Unit separately from the Demand Reduction associated with Contracted Load and providing ISO separate Meter Data for such Generating Unit or by means of another method approved in advance by ISO. (iv) Contracted Load will not use any emergency back-up generating facilities in providing Demand Reduction pursuant to this Agreement. DRAr1.0301 17 Demand Relief Agreement (v) Contracted Load has one or more interval meters approved by the Local Regulatory Authority that meter only Load from which the Reserved Demand is derived. (vi) Contracted Load will under no circumstances provide Demand Reduction pursuant to this Agreement and, at the same time, increase Demand at another meter(s) to account for the Demand Reduction. (vii) All necessary leases, approvals, permits, licenses, easements, rights of way or access to install, own and/or operate the Loads from which its Reserved Demand is derived have been or will be obtained by Contracted Load prior to May 15, 2001, including without limitation documentation executed by the relevant local air pollution control district or air quality management district positively stating that operation of any Generating Units less than 1 MW to provide Reserved Demand will not violate applicable regulations through fulfillment of Contracted Load's duties and obligations under this Agreement. (viii) ISO is authorized to release the identity of Contracted Load, but not individual or aggregated Loads from which Contracted Load's Reserved Demand is derived, except that ISO is authorized to release the identity of individual Loads as may be necessary to verify Contracted Load's compliance with Section 12.2, or in accordance with a statutory duty, or an order, subpoena or other lawful process issued by a court or other governmental authority of competent jurisdiction. ISO is authorized to make public a redacted summary of the information contained in the performance reports described in Section 6.3. (ix) All Meter Data submitted to ISO represents the actual Settlement Quality Meter Data for Contracted Load. (x) Contracted Load has entered into all agreements that may be necessary and appropriate to fulfill the requirements of Article 13 of this Agreement. DRAr1.0301 118 Demand Relief Agreement ARTICLE 13 DR SCHEDULING COORDINATOR AS AGENT FOR CONTRACTED LOAD DR Scheduling Coordinator as Agent for Contracted Load. It is expressly understood that Contracted Load's DR Scheduling Coordinator shall be Contracted Load's exclusive agent and shall represent Contracted Load in all matters arising under or related to this Agreement, other than simple administrative matters, including disputes arising out of an Invoice submitted by ISO under this Agreement. The rights of the DR Scheduling Coordinator as agent for Contracted Load shall be no greater than Contracted Load's rights against ISO and shall be subject to the ISO ADR Procedures specified in Article 9. Only the DR Scheduling Coordinator shall be entitled to enforce any claim and shall be the disputing party under this Agreement with respect to any such claim so that ISO shall not be subject to duplicate claims or recoveries. Contracted Load shall have the right to intervene for the purpose of participating in the proceeding. Contracted Load shall cooperate with the DR Scheduling Coordinator in a timely manner as necessary or appropriate to most fully effectuate the DR Scheduling Coordinator agency obligations related to such enforcement, including using its best efforts to enforce ISO's payment obligations if, as, to the extent, and within the time frame, requested by the DR Scheduling Coordinator. Subject to the foregoing, Contracted Load shall intervene and participate where procedurally necessary to the assertion of a claim by the DR Scheduling Coordinator. ARTICLE 14 MISCELLANEOUS 14.1 Assignments. Either Party may assign or transfer any or all of its rights and/or obligations under this Agreement with the other Party's prior written consent in accordance with Section 17 of the ISO Tariff. Such consent shall not be unreasonably withheld. Any such transfer or assignment shall be conditioned upon the successor in interest accepting the rights and/or DRArl .0301 19 ■ Demand Relief Agreement obligations under this Agreement as if said successor in interest was an original Party to this Agreement. 14.2 Notices. Any notice, demand, or request which may be given to or made upon either Party regarding this Agreement shall be made in accordance with Section 20.1 of the ISO Tariff. A Party must update the information in Schedule 2 of this Agreement as information changes. Such changes shall not constitute an amendment to this Agreement. 14.3 Audits. The provisions of Section 10.5 of the ISO Tariff apply to Contracted Load, except that all references in Section 10.5 of the ISO Tariff to ISO Metered Entities shall be read as references to Contracted Load and references to the ISO Tariff shall be read as references to this Agreement. ISO shall also have the right to audit records of Contracted Load relating to operation of generating facilities associated with DR Load. 14.4 Waivers. Any waivers at any time by either Party of its rights with respect to any default under this Agreement, or with respect to any other matter arising in connection with this Agreement, shall not constitute or be deemed a waiver with respect to any subsequent default or other matter arising in connection with this Agreement. Any delay, short of the statutory period of limitations, in asserting or enforcing any right under this Agreement shall not constitute or be deemed a waiver of such right. 14.5 Confidentiality. Except as otherwise provided in Section 12.2(viii), all documents, data and information provided by the Parties to one another pursuant to this Agreement shall be treated in accordance with the confidentiality provisions specified in Section 20.3 of the ISO Tariff. 14.6 Governing Law and Forum. This Agreement shall be deemed to be a contract made under, and for all purposes shall be governed by and construed in accordance with, the laws of the State of California, except its conflict of law provisions. The Parties irrevocably consent that any legal action or proceeding arising under or relating to this Agreement to which the ISO ADR Procedures do not apply, shall be brought in any of the following forums, as appropriate: any court of the State of California, any federal court of the United States of America located in DRAr1.0301 20 Demand Relief Agreement the State of California, or, where subject to its jurisdiction, before the Federal Energy Regulatory Commission. 14.7 Consistency with Federal Laws and Regulations. This Agreement shall incorporate by reference Section 20.8 of the ISO Tariff as if the references to the ISO Tariff were referring to this Agreement. 14.8 Merger. This Agreement constitutes the complete and final agreement of the Parties with respect to the subject matter hereto and supersedes all prior agreements, whether written or oral, with respect to such subject matter. 14.9 Severability. If any term, covenant, or condition of this Agreement or the application or effect of any such term, covenant, or condition is held invalid as to any person, entity, or circumstance, or is determined to be unjust, unreasonable, unlawful, imprudent, or otherwise not in the public interest by any court or government agency of competent jurisdiction, then such term, covenant, or condition shall remain in force and effect to the maximum extent permitted by law, and all other terms, covenants, and conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effect and the Parties shall be relieved of their obligations only to the extent necessary to eliminate such regulatory or other determination unless a court or governmental agency of competent jurisdiction holds that such provisions are not separable from all other provisions of this Agreement. 14.10 Beneficiaries. Except as is specifically set forth in this Agreement, nothing in this Agreement, whether express or implied, confers any rights or remedies under, or by reason of, this Agreement on any persons other than the Parties and their respective successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligations or liability of any third party, nor give any third person any rights of subrogation or action against any Party. 14.11 Section Headings. Section headings provided in this Agreement are for ease of reading and are not meant to interpret the text in each Section. DRAr1.0301 21 Demand Relief Agreement 14.12 Amendments. This Agreement and the Schedules attached hereto may be amended from time to time by the mutual agreement of the Parties in writing. Nothing contained herein shall be construed as affecting in any way the right of ISO to unilaterally make application to the Federal Energy Regulatory Commission for a change in the rates, terms and conditions of the ISO Tariff under section 205 of the Federal Power Act and pursuant to the Commission's Rules and Regulations promulgated thereunder. 14.13 Counterparts. This Agreement may be executed in one or more counterparts at different times, each of which shall be regarded as an original and all of which, taken together, shall constitute one and the same Agreement. IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written. CITY OF VERNON, CALIFORNIA By: Name: Title: Date: CALIFORNIA INDEPENDENT SYSTEM OPERATOR CORPORATION By: Name: Title: Date: DRAr1.0301 22 Demand Relief Agreement SCHEDULEI RESERVED DEMAND (Load 1) June July August September Reserved Demand (MW): 2.74 2.74 2.74 2.74 DRAr1.0301 23 Contracted Load SCHEDULE 2 NOTICES Name of Primary Representative: John R. Sweeney Title: Resource and Project Planning Manager Address: 4305 Santa Fe Avenue City/State/Zip Code: Vernon, CA 90058 Email Address: Rsweeney@ci.vernon.ca.us Phone: (323) 583-8811, x242 Fax No: (323) 583-1983 Name of Alternative Representative: Ramon Abueg Title: Assistant Director of Engineering and Operations Address: 4305 Santa Fe Avenue City/State/Zip Code: Vernon, CA 90058 Email Address: Rabueg@ci.vemon.ca.us Phone: (323) 583-8811, x255 Fax No: (323) 583-1983 DRAr1.0301 24 T 1 • I Demand Relief Agreement ISO Name of Primary Representative: Don Fuller Title: Director, Client Relations Address: 151 Blue Ravine Road City/State/Zip Code: Folsom, CA 95630 Email Address: dfuller@caiso.com Phone: (916) 608-7055 Fax No: (916) 608-7074 Name of Alternative Representative: Deborah A. Le Vine Title: Director of Contracts Address: 151 Blue Ravine Road City/State/Zip Code: Folsom, CA 95630 Email Address: dlevine@caiso.com Phone: (916) 351-2144 Fax No: (916) 351-2487 DRAr1.0301 25 Exhibit A TEXT OF EACH DEMAND RELIEF AGREEMENT IS IDENTICAL FOR EACH LOAD Demand Relief Agreement SCHEDULE 1 RESERVED DEMAND (Load 2) June JuIV August September Reserved Demand (MW): 1.25 1.25 1.25 1.25 DRAr1.0301 23 4 1 Demand Relief Agreement DEMAND RELIEF AGREEMENT Exhibit A ■ TEXT OF EACH DEMAND RELIEF AGREEMENT IS IDENTICAL FOR EACH LOAD r Demand Relief Agreement SCHEDULEI RESERVED DEMAND (Load 3) June JuIV August September Reserved Demand (MW): 1.00 1.00 1.00 1.00 DRAr1.0301 23 i ` f i Demand Relief Agreement Rxhibit A TEXT OF EACH DEMAND RELIEF AGREEMENT IS IDENTICAL FOR EACH LOAD Demand Relief Agreement SCHEDULE 1 RESERVED DEMAND (Load 4) June July August September Reserved Demand (MW): 1.00 1.00 1.00 1.00 DRAr1.0301 23 Exhibit A ■ TEXT OF EACH DEMAND RELIEF AGREEMENT IS IDENTICAL FOR EACH LOAD 4 ! 4 Demand Relief Agreement SCHEDULEI RESERVED DEMAND (Load 5) June July August September Reserved Demand (MW): 1.20 1.20 1.20 1.20 DRAr1.0301 23 DEMAND RELIEF PROGRAM PARTICIPATION AGREEMENT THIS PARTICIPATION AGREEMENT is dated this day of 2001 and is entered into, byand between: having its registered and principal place of business located at (the "Participant") and the City of Vernon, a California municipal corporation, having its principal office located at 4305 Santa Fe Avenue, Vernon, California 90058 (the "City"). Also referred to collectively as the "Parties. WHEREAS: A. The City and the Participant intend to participate in a Demand Reduction program, termed Demand Relief Program the "Program"), being offered by the California Independent System Operator (the "ISO"), effective June 1, 2001 through September 30, 2001. B. The City has the right to terminate this Participation Agreement if, in the City's exclusive judgement, the City determines that participation in the Program is not in the best interest of the City. C. The Participant has submitted the bid specified in Schedule 1 of this Participation Agreement to the City in response to the Program solicitation. D. The Participant shall be required, as specified herein, to reduce Demand. E. The terms of the agreement for the Program specify that the - 1 - Exhibit B 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ISO shall pay the City, as a Contracted Load, up to $20,000 per megawatt ("MW") month reservation fee and $500 per Megawatt Hour ("MWh") for'load curtailment performance. The City intends to pay all Program Participants their respective net proportionate share of these payments. F. The Parties are entering into this Participation Agreement in order to establish the terms and conditions on which the City and Participant will discharge their respective obligations under the Program. NOW THEREFORE, in consideration of the mutual covenants set forth herein, THE PARTIES AGREE AS FOLLOWS: ARTICLE 1 ADMINISTRATION OF THE PROGRAM 1.1 ADMINISTRATION OF THE PROGRAM. Both Parties acknowledge and agree that the City shall only act as an administrator under the Program on behalf of the ISO, subject to the applicable tariff of the ISO (as amended from time to time, the "ISO Tariff") and the terms and conditions set forth in the Demand Relief Agreement referenced in Section 2.1 of this Participation Agreement. The City, in its capacity as an administrator of the Program, shall act as the Contracted Load to the ISO, aggregating individual loads to at least one (1) MW and facilitating the implementation of the Program. The City's primary functions shall include, but not be Limited to, the demonstration of Demand Reduction, the implementation ind timing of ISO Curtailment Orders, and acting as the conduit for - 2 - 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the ISO for the calculation, billing, settlement and remittance of payments by the ISO under the Program for transmittal to the various Participants in the Program. ARTICLE 2 DEMAND RELIEF AGREEMENT 2.1 DEMAND RELIEF AGREEMENT. This Participation Agreement shall be governed by the terms and conditions of the Demand Relief Agreement (the "DRA"). The DRA shall be entered into between the City and the ISO prior to the implementation of the Program. The DRA shall set forth the provisions,"under which the ISO and the City will discharge their obligations under the Program. The DRA (the pro forma of which is attached hereto as Exhibit B) is incorporated herein by reference. The final, executed DRA shall be given to each Participant as soon as it is available, prior to the start date of the Program on June 1, 2001. If for any reason the DRA is not executed or implemented by the City or the ISO, then this Participation Agreement is null and void and shall be canceled. 2.2 DEFINITIONS. Terms used with initial capitalization in this Participation Agreement and the attached Schedules, but not defined herein, shall have the meanings set forth in the DRA or the ISO Tariff. ARTICLE 3 TERM 3.1 TERM. This Participation Agreement shall become effective - 3 - � T 1 2 3 4 5 6 -7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 as of the date first indicated above and shall continue in full force and effect until the satisfaction and verification of all Program requirements, including the remittance of final payment, if any, due Participants or until terminated in accordance with the provisions of Article 9 of this Participation Agreement. ARTICLE 4 DEMAND REDUCTION 4.1 DEMAND REDUCTION. (i) The Participant shall be obligated to reduce demand by the quantity of MWs agreed to by Participant, as set forth in Exhibit A, Schedule 1 of this Participation Agreement, in response to and within thirty-five (35) minutes of the issuance of an ISO Curtailment Order, as set forth in the DRA. (ii) Demand Reduction shall be of the consecutive hour duration and shall automatically terminate either four (4) hours after commencement of Demand Reduction, or as provided in the DRA. ARTICLE 5 PARTICIPANT ENERGY AND MONTHLY RESERVATION PAYMENTS 5.1 ENERGY AND MONTHLY RESERVATION PAYMENT CALCULATIONS. The City will allocate Program revenues to the Participant based upon ,what the City actually receives from the ISO. (i) Energy Payment. The DRA establishes the Energy Payment at $500/MWh. (ii) Monthly Reservation Payment. The DRA establishes the Monthly Reservation Payment at $20,000/MW-Month. The sum of seven percent (7%) of the total Monthly Reservation Payment shall be - 4 - 1 2 3 4 5 6 7 8 9 10 11 1 12 13 t retained by the City to pay for the City's administration of the Program. All payments shall be made in accordance with the ISO's settlement procedures, which require at least seventy-five (75) days for reconciliation. The Participant agrees that the City's obligation to make any payments required under this Participation Agreement is subject to what the ISO remits to the City. Participant Demand, as accepted by the City and the ISO, may be characterized and treated by the ISO as either an aggregated load or as individual loads with different arrangements. If the Participant is part of an aggregated load, then the Participant compensation shall be contingent upon the entire portfolio's satisfaction of the Program's requirements. The Participant's ability to perform Demand Reduction when noticed by the City shall determine the amount of the payment the City shall receive from the ISO for participation in the Program. The City shall use its best efforts to administer the requirements of the Program. THE CITY SHALL NOT BE RESPONSIBLE (1) TO PARTICIPANTS FOR PAYMENTS DUE FROM THE ISO UNDER THE PROGRAM OR (2) FOR PARTICIPANTS WHO FAIL TO RECEIVE NOTICE FROM THE CITY FOR DEMAND REDUCTION THEREBY IMPACTING THE MONTHLY RESERVATION PAYMENT. 5.2 ADDITIONAL PAYMENTS FOR ADDITIONAL PARTICIPANT VOLUNTARY CURTAILMENTS. Subject to the DRA, the Participant shall be entitled - 5 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to additional compensation for voluntary curtailments in excess of the monthly performance bid and contract hours committed by the Participant to the Program. The Participant's voluntary curtailments do not count in the calculation of monthly performance or against the remaining contract hours for the Program. The Participant shall receive Energy Payments at the Energy Price for voluntary curtailment, as verified by the ISO and the City. ARTICLE 6 PENALTIES FOR NONPERFORMANCE 6.1 PENALTIES. Subject to the terms of the DRA, the Participant will not be billed by the ISO for non-performance. The Participant's penalty for non-performance in any given hour will offset payments for performance in other hours or the Monthly Reservation Payment. If penalties exceed all payments earned during a month, the ISO will limit the settlement for the month to a zero ( 0 ) payment. ARTICLE -7 COSTS 7.1 OPERATING AND MAINTENANCE COSTS. The Participant shall be responsible for all of the costs it incurs in meeting its obligations under the Program, the DRA, and this Participation Agreement for the Reserved Demand identified in Schedule 1. ARTICLE 8 LIABILITY 8.1 LIABILITY. The Participant agrees that the City is acting - 6 - 1 2 3 4 5 as an administrator of an ISO Program. The Participant further agrees that the City shall have no liability to the Participant for the City's willful or negligent acts in connection with the Program. ARTICLE 9 TERMINATION 9.1 TERMINATION. The Participation Agreement may be terminated (i) pursuant to the terms of the DRA; (ii) if the City determines, in its exclusive judgement, that participation in the Program is not in the best interest of the City; and (iii) if in the City's exclusive judgement, the Participant has defaulted on its obligations under or is noncompliant with the terms of the Program, the DRA or this Participation Agreement. ARTICLE 10 REPRESENTATIONS AND WARRANTIES 10.1 REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each Party represents and warrants that the execution, delivery and performance of this Participation Agreement by it has been duly authorized by all necessary corporate actions, to the extent authorized by law. 10.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF PARTICIPANT. Participant additionally represents and warrants to the City as follows: (i) Participant will under no circumstances provide Demand Reduction pursuant to this Participation Agreement and, at the same time, increase Demand at another meter(s) to account for the Demand Reduction. (ii) Participant will not undertake any action with other parties that can be characterized as an exchange of loads. (iii) All - 7 - 1 2 3 4 necessary leases, approvals, permits, licenses, easements, rights of way or access to install, own and/or operate the Loads from which its Reserved Demand is derived have been or will be obtained by the Participant prior to May 15, 2001. ARTICLE 11 MISCELLANEOUS 11.1 ASSIGNMENTS. Either Party may assign or transfer any or all of its rights and/or obligations under this Participation Agreement, subject to the provisions of Article 10 of this Participation Agreement. The Participant's right of assignment is expressly limited to (i) those actions permitted by the.DRA; (ii) the amount of its bid for Demand Reduction, as specified in Exhibit A, Schedule l of this Participation Agreement; (iii) the City's prior written consent, which shall not be unreasonably withheld; and (iv) the successor in interest accepting the rights and/or obligations under this Participation Agreement, the DRA and the ISO Tariff, as ifl said successor in interest was an original Party to the Participation Agreement. 11.2 NOTICES. Any notice, demand, or request which may be given to or made upon, either Party regarding this Agreement shall be made to the Party referenced in Exhibit C, Schedule 2 of this Participation Agreement. A Party must update the information in Exhibit C, Schedule 2 as information changes. Such changes shall not constitute an amendment to this Agreement. 11.3 WAIVERS. Any waivers at any time by either Party of its M= } 1 2 3 4 5 6 7 8 9 10 11 12 13 14 18 19 20 21 22 23 24 25 rights with respect to any default under this Participation Agreement, or with respect to any other .matter arising in connection with this Participation Agreement, shall not constitute or be deemed a waiver with respect to any subsequent default.or other matter, arising in connection with this Participation Agreement. Any delay, short of the statutory period of limitations, in asserting or enforcing any right under this Participation Agreement shall not constitute or be deemed a waiver of such right. 11.4 CONFIDENTIALITY. All documents, data and information provided by the Parties to one another pursuant to this Participation Agreement shall be kept confidential and shall be treated in accordance with the confidentiality provisions specified in the DRA. 11.5 GOVERNING LAW. This Participation Agreement shall be deemed to be a contract made under, and for all purposes shall be governed by and construed in accordance with, the laws of the State of California, except its conflict of law provisions. The Parties irrevocably consent that any legal action or proceeding arising under or relating to this Participation Agreement shall be subject to the dispute resolution procedures and forum requirements of the DRA. 11.6 MERGER. This Participation Agreement constitutes the complete and final agreement of the Parties with respect to the subject matter hereto and supersedes all prior agreements, whether written or oral, with respect to such subject matter. 11.7 SEVERABILITY. If any term, convenant, or condition of this Participation Agreement or the application or effect of any such x 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 term, convenant, or condition is held invalid as to any person, entity, or circumstance, or is determined to be unjust, unreasonable, unlawful, imprudent, or otherwise not in the public interest by any court or government agency of competent jurisdiction, then such term, conversant, or condition shall remain in force and effect to the maximum extent permitted by law, and all other terms, convenants, and conditions of this Participation Agreement and their application shall not be affected thereby, but shall remain in force and effect and the Parties shall be relieved of their obligations only to the extent necessary to eliminate such regulatory or other determination unless a court or governmental agency of competent jurisdiction holds) that such provisions are not separable from all other provisions of this Participation Agreement 11.8 BENEFICIARIES. Except as is specifically set forth in this Participation Agreement, nothing in this Participation Agreement, whether express or implied, confers any rights or remedies under, or -by reason of, this Participation Agreement on any persons other than the Parties and their respective successors and assigns, nor is anything.in this Participation Agreement intended to relieve or discharge the obligations or liability of any third party, nor give any third person any rights of subrogation or action against any Party. 11.9 SECTION HEADINGS.Section headings provided in this Agreement are for ease of reading and are not meant to interpret the text in each Section. - 10 - 1 2 3 4 5 6 7 8 9 10 it 12 13 14 15 16 17 18 19 20 21 22 23 24 25 11.10 AMENDMENTS. This Participation Agreement and the Schedules attached hereto may be amended from time to time by the mutual agreement of the Parties in writing. Nothing contained herein shall be construed as affecting in any way the right of the City to unilaterally change the terms of this Participation Agreement due to the requirements of the ISO and the DRA and the right of the ISO to make application to the Federal Energy Regulatory Commission for a change in the rates, terms and conditions of the ISO Tariff under section 205 of the Federal Power Act and pursuant to the Commission's Rules and Regulations promulgated thereunder. 11.11 COUNTERPARTS. This Participation Agreement may be executed in one or more counterparts at different times, each of which shall be regarded as an original and all of which, taken together, shall constitute one and the same Participation Agreement. ARTICLE 12 INTERPRETATION OF DEMAND RELIEF AGREEMENT AND ISO TARIFF 12.1 INTERPRETATION. The Parties shall be subject to all the provisions of the DRA and ISO Tariff, as they reasonably apply to the Parties for the transaction contemplated hereby. The City shall be the exclusive authority for interpreting the application of the DRA and ISO Tariff to this transaction and what provisions of each shall apply to the Participant. If the Participant does not comply with the City's interpretation of the DRA and ISO Tariff to this transaction, then the City shall have the immediate right to terminate this Participation Agreement, pursuant to Article 9. IN WITNESS WHEREOF, this Participation Agreement has been executed as of the date first above written. CITY OF VERNON BY: [NAME & TITLE] PARTICIPANT COMPANY BY: [NAME & TITLE] e 4 EXHIBIT A SCHEDULE 1 RESERVED DEMAND Account Number: Reserved Demand (MW) JUNE 2001 JULY 2001 AUGUST 2001 SEPTEMBER 2001 Account Number: Reserved Demand (MW) JUNE 2001 JULY 2001 AUGUST 2001 SEPTEMBER 2001 Account Number: Reserved Demand (MW) JUNE 2001 JULY 2001 AUGUST 2001 SEPTEMBER 2001 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 • � + Y EXHIBIT B DEMAND RELIEF AGREEMENT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 EXHIBIT C SCHEDULE 2 NOTICES CITY OF VERNON John R. Sweeney Resource and _Project Planning Manager City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 323-583-8811 Fax: 323-583-1983 EMERGENCY NOTIFICATION: 323-585-5.192 PARTICIPANT NAME ADDRESS PHONE FAX EMERGENCY NOTIFICATION - 15 - } �� « �� i � ti � ., a � � EXHIBIT C LIST OF PARTICIPATING BUSINESSES Clougherty Packing Co. U. S. Growers Geldin Meat Baker Commodities Sandberg Furniture Sears Logistics P & O Cold Logistics ■ SUPPORTING DOCUMENTS CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. `BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator / City Clerk FAX (323) 581-7924 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 EDUARDO OLIVO City Attorney FAX: (562) 927-8722 KEVIN WILSON Director of Community Services & Water FAX: (323) 588-2761 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 583-1983 STEVEN E. PARKER Fire Chief FAX: (323) 581-1385 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 April 12, 2001 City Council City of Vernon Honorable Members: Staff of the Utilities Department has reviewed the ISO's Summer 2001 Demand Relief Program. This program allows the City and its participating local businesses to be part of a load curtailment program. This has been reviewed by our Legal Counsel and it is hereby recommended that the ISO Relief Agreement and a Program Participation Agreement for participating City businesses be approved. Very truly yours, B ce V. Malke st City Administ for/City Clerk BVM/ng CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. "BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator / City Clerk FAX (323) 581-7924 April 12, 2001 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 Mr. Bruce V. Malkenhorst City Administrator City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 Dear Bruce: EDUARDO OLIVO City Attorney FAX: (562) 927-8722 KEVIN WILSON Director of Community Services & Water FAX: (323) 588-2761 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 583-1983 DAVE TELFORD Fire Chief FAX: (323) 581-1385 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 Subject: ISO's Summer 2001 Demand Relief Program; City Council Approval of Agreements The Utilities Department needs City Council approval of the various agreements required in order for the City and its participating local businesses to be part of the ISO's Summer 2001 Load Curtailment program. I have drafted a resolution to approve and authorize the execution of these agreements. I have reviewed and approve the form of the ISO Demand Relief Agreement (the "DRA"). I have drafted the Program Participation Agreement (the "PPA") for each of the participating City businesses. The City Council resolution approves the form of this Agreement and identifies each participant. The City must execute and deliver the ISO DRA by the end of next week. If approved, the Utilities Department will transmit the final document to the ISO. The PPAs shall be executed subsequent to the filing of the DRA with the ISO. I look forward to discussing this issue with you. Sincerely, Eric Fresch Legal Counsel EF: rmt APR-18-2001 15:39 LAW OFFICES OF ERIC T. FRMSCH GITIGORP CrNTMM. ONE SANBOMC STREET TWENTY-PIMMT FLOOR SAY F%ZANS7I5CO, CAI.IFOBNIA 94104 TELEPHONE (aig) 235-9312 FAX 14I63 43s-93496 April 18, 2001 Mr. Bruce V. Malkenhorst City Administrator City of Vernon 4305 Santa Fe Avenue Vernon, Ca 90058 Re: Authorization for Director of Utilities to Execute ISO Demand Relief Agreement I�-_ ._ City Council Resolution No. 7750 authorizes you or your authorized designee, to execute the ISO Demand Relief Agreement and the Program Participation Agreement on behalf of the City. If the City Council approves the Agreements, I request your authorization for Ken DeDario. This will allow the Utilities Department to transmit the Agreements to the ISO in a timely manner. Thank you for your consideration. Sincerely, ��Crz� c: Ken DeDario TOTAL P.02