Resolution No. 7862in
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`M
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RESOLUTION NO. 7862
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF
AN AMENDMENT NUMBER TWO TO THE TRANSMISSION SERVICE
AGREEMENT BETWEEN JEFFERSON SMURFIT CORPORATION
(US), SUCCESSOR TO CONTAINER CORPORATION OF
AMERICA, AND THE CITY OF VERNON FOR A COGENERATION
FACILITY LOCATED AT 2001 EAST 57T" STREET
WHEREAS, on November 26, 1984, the City Council of the City
of Vernon adopted Resolution No. 5155 approving a Transmission Service
Agreement (the "Agreement") with Container Corporation of'America for a
cogeneration facility located at 2001 East 57th Street; and
WHEREAS, on May 16, 1995, the City Council of the City of
Vernon adopted Resolution No. 6623 approving an Amendment Number One
to the Agreement with Jefferson Smurfit Corporation, formerly known as
Container Corporation of America, ("Jefferson") to resolve some
disputes over certain rights and duties of the parties under the
Agreement; and
WHEREAS, the Agreement provides transmission service to
Jefferson for delivery of capacity and energy to the Southern
California Edison Company ("Edison"), the purchaser of the capacity
and energy pursuant to a Power Sales Agreement; and
WHEREAS, the California State Legislature adopted Assembly
Bill 1890 (approved by the Governor September 23, 1996, filed with the
Secretary of State September 24, 1996), which provided for the
restructuring and partial deregulation of the electric industry in the
State of California; and
WHEREAS, after holding hearings and soliciting public
comment, the California Public Utilities Commission issued rulings
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restructuring and partially deregulating the electric industry in the
State of California and created the Independent System Operator (the
"ISO") to control the scheduling and access to electric transmission
facilities; and
WHEREAS, the ISO filed its tariffs describing rules,
regulations and operating criteria with the Federal Energy Regulatory
Commission; and
WHEREAS, Jefferson desires to operate its power generation
facility as a participating generator under the ISO tariff in
accordance with the restructuring and partial deregulation of the
electric business in the State of California; and
WHEREAS, Jefferson and Edison have agreed to terminate the
Power Sales Agreement; and
WHEREAS, Jefferson and the City of Vernon wish to amend the
Agreement to accommodate Jefferson's delivery to the ISO rather than
Edison; and
WHEREAS, by letter dated October 31, 2001, Bruce V.
Malkenhorst, City Administrator/City Clerk, has recommended that an
Amendment Number Two to the Agreement be approved and executed.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Amendment Number Two to the Transmission Service
Agreement with Jefferson Smurfit Corporation (US), a copy of which is
attached hereto as Exhibit "A" and made a part hereof.
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SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor and the City Clerk to execute said Amendment for,
and on behalf of, the City of Vernon.
SECTION 4: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send one fully executed
Amendment to:
Jefferson Smurfit Corporation (U.S.)
c/o Smurfit Stone Container Corp.
Attn. John Ewing, Controller
2001 E. 57th Street
Vernon, CA 90058-3494
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 7th day of November, 2001.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
EONIS C. MALB RG, May r
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STATE OF CALIFORNIA )
) ss
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.
7862, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday, November 7,
2001, and thereafter was duly signed by the Mayor of the City of
Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
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EXHIBIT
0
AMENDMENT NUMBER TWO TO THE TRANSMISSION
SERVICE AGREEMENT BETWEEN JEFFERSON SMURFIT
CORPORATION (US), SUCCESSOR TO CONTAINER
CORPORATON OF AMERICA AND THE CITY OF VERNON
FOR A COGENERATION FACILITY LOCATED AT 2001 EAST
57TH STREET
This Amendment Number Two to the Transmission Service Agreement is
made and entered into and executed in duplicate originals, either copy of which may be
considered and used as the original hereof for all purposes, and to be performed in
Vernon, California, effective 2001.
BY AND BETWEEN CITY OF VERNON, a Municipal Corporation
(hereinafter referred to as "Vernon"), 4305
Santa Fe Avenue, Vernon, CA 90058
AND JEFFERSON SMURFIT CORPORATION
(U.S.), a Delaware Corporation, Successor
via a merger to Container Corporation of
America (hereinafter referred to as
"Cogenerator"), One First National Plaza,
Chicago, Illinois 60603
RECITALS
WHEREAS, Vernon and Container Corporation of America ( now known as
Jefferson Smurfit Corporation (U.S.) and hereinafter referred to as "Cogenerator")
entered into that certain Transmission Service Agreement ("Agreement") dated
November 26, 1984, for a cogeneration facility located at 2001 East 57th street within the
City of Vernon; and
WHEREAS, Vernon and Cogenerator entered into that certain Amendment
Number One to Transmission Service Agreement ("Amendment Number One") dated on
or about May 16, 1995; and
WHEREAS, the California State Legislature adopted Assembly Bill 1890
(approved by the Governor September 23, 1996, filed with the Secretary of State
September 24, 1996), which provided for the restructuring and partial deregulation of the
electric industry in the State of California; and
WHEREAS, the California Public Utilities Commission (hereinafter TPUC")
pursuant to said legislation held hearings and solicited public comment and issued
rulings restructuring and partially deregulating the electric industry in the State of
California (R.94-04-031 filed April 20, 1994; 1.94-04-032 filed April 20, 1994); and
WHEREAS, a nonprofit entity known as the Independent System Operator
(hereinafter "ISO") was formed to control the scheduling and access to electric
transmission facilities on a nondiscriminatory basis in order to implement the
development of a competitive generation market; and
WHEREAS, the ISO has filed its tariffs describing rules, regulations and
operating criteria with the Federal Energy Regulatory Commission (hereinafter TERV)
(EC96-19-003 and ER96-1663-003); and
WHEREAS, the Agreement provides transmission service for Cogenerator to
assist Cogenerator in scheduling capacity and delivering energy to "Edison," the
purchaser of said capacity and energy pursuant to the Edison agreement (hereinafter
"Power Sales Agreement") between Cogenerator and Edison; and
WHEREAS, Cogenerator and Edison have agreed to terminate the Power
Sales Agreement; and
WHEREAS, Subsequent to the termination of the Power Sales Agreement,
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Cogenerator intends to operate the power generation facilities as an independent
generator and as an exempt wholesale generator ("EWG") which status will require
changes in the agreement in order to comply with the establishment and operation of the
ISO; and
WHEREAS, Vernon and Cogenerator desire to restructure the Agreement in
order to operate the power generation facility consistent with the restructuring and partial
deregulation of the electric business in the State of California; and
NOW, THEREFORE, in consideration of the mutual covenants, promises,
and conditions contained herein, and the Recitals heretofore stated, the Parties hereby
amend the Agreement as follows:
1. Section 1.27 is added to the Agreement to read as follows:
1.27 Independent System Operator - The California Independent System
Operator Corporation (ISO), a state chartered, nonprofit corporation that
controls the transmission facilities of all Participating TOs (Transmission
Owners) and dispatches certain Generating Units and Loads."
2. Section 1.28 is added to the Agreement to read as follows:
1.28 Vernon's Interconnection with ISO - The point where
Vernon, pursuant to the Laguna Bell -Vernon Interconnection
Service Agreement between Edison and Vernon, is connected to
the ISO controlled grid that is under the ISO's operational
control."
3. Section 1.29 is added to the Agreement to read as follows:
111.29 The Laguna Bell -Vernon Interconnection Service
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Agreement The agreement between Vernon and Edison which
provides Vernon the right to schedule, transmit and deliver
capacity and energy to Vernon's interconnection with ISO."
4. Section 1.30 is added to the Agreement to read as follows:
"1.30 Any reference herein to the scheduling of capacity and
delivering of energy to Edison shall be deemed to be schedules
and deliveries made pursuant to the ISO tariff."
5. The old Section 2.1 of the Agreement is modified to read as follows:
"2.1 Vernon shall receive at 66 kV, Capacity and Energy
generated by Cogenerator and transmit and deliver at 220 kV
said Capacity and Energy to Vernon's interconnection with ISO
subject to the terms and conditions provided for herein.
Vernon's Capacity obligation to provide Firm Transmission
Service herein shall be limited to a maximum of 40,000 kilowatts
and shall be further subject to the Laguna Bell -Vernon
Interconnection Service Agreement and any future modifications
thereto. Said transmission service is subject to this Agreement,
the terms and conditions of the agreements and protocols
required by the ISO, and further subject to the decisions of
FERC and the CPUC that will impact or affect the ability of
Cogenerator to schedule, transmit and deliver capacity and
energy to third parties, and Vernon's ability to schedule, transmit
and deliver said capacity and energy requested by Cogenerator
in accordance with the rules, regulations, protocols, tariffs and
agreements of the ISO; provided further, however, that
Cogenerator shall continue to be obligated to pay and shall
make payment for charges for maintenance of the
Interconnection Facilities pursuant to Article 27 and the Fuel Use
Franchise Fee payable pursuant to Article 35."
6. Section 2.4 is added to the Agreement to read as follows:
"2.4 Cogenerator shall be responsible for meeting all scheduling
requirements imposed by ISO including a Scheduling
Coordinator, if necessary, in order to meet such scheduling
requirements."
7. The old Section 5.9 of the Agreement is modified to read
as follows:
115.9 As compensation for capacity transmission losses
incurred by Vernon as a result of Vernon's providing
Cogenerator Firm Transmission Service hereunder, the parties
hereby agree as follows: six -tenths of one percent (0.6%) of the
peak kilowatts delivered to Vernon at the Point of
Interconnection with Vernon in each month shall be determined.
This amount shall be multiplied by the on peak capacity charge
per kilowatt in effect for General Service -Large retail customers
of Vernon for such month; the product shall be paid by
Cogenerator to Vernon in accordance with the provisions set
forth in 5.1.1.
8. Section 20.6 is added to the Agreement to read as follows:
"20.6 Notwithstanding Sections 20.1 through 20.5, Cogenerator
shall be responsible for meeting all of the metering requirements
imposed by the ISO at the time it elects to become an
independent generator and schedule and deliver capacity and
energy to the ISO controlled grid. Further, however,
Cogenerator also agrees to be responsible for meeting the
metering requirements of Edison and Vernon as they discharge
their responsibilities pursuant to: (1) the ISO requirements; and
(2) the requirements of their respective transmission and
interconnection agreements. Said requirements include, but are
not limited to, audit rights, native load provisions, ancillary
services, and to make data available to parties other than
Vernon.
However, to the extent that the existing provisions are
compatible with the ISO requirements, they will continue to be
applicable. In addition, Cogenerator shall be responsible for
making any and all changes required by ISO in the future."
9. Section 20.7 is added to the Agreement to read as follows:
"20.7 Cogenerator shall be responsible to submit metering data
to Vernon. Presently, Edison provides such data to Vernon.
However, in the event Edison no longer will or is unable to
provide such data, Cogenerator will be responsible to provide
such data to Vernon or any other party in accordance with
Vernon and ISO rules and regulations."
10. In all other respects, the Agreement shall remain in full force and
effect and, in the event of any inconsistencies between Amendment
Number Two and the Agreement, Amendment Number Two shall
control.
IN WITNESS WHEREOF, the Parties have executed this Amendment Number Two to be
effective , 2001, on the date(s) adjacent to their respective
signature blocks.
DATED: , 2001
ATTEST:
BRUCE V. MALKENHORST, City Clerk
APPROVED AS TO FORM:
Eduardo Olivo, City Attorney
M
CITY OF VERNON
LEONIS C. MALBURG, Mayor
DATED: Z' —Oc f .
JEFFERSON
SMURFIT CORPORATION,
a Delayvare Corporation
2001 By:
Name:
Title: V 6'
DATED: 2001 By:
Name:
Title: i c c i��et cYe�T f c re-�'cy�
+ atn Pl4 l CO vn .t-t
SUPPORTING
DOCUMENTS
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro -Tern
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator / City Clerk
FAX (323) 826-1438
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
November 27, 2001
Jefferson Smurfit Corporation (U.s.)
c/o Smurfit Stone Container Corp.
Attn: John Ewing, Controller
2001 E. 57th Street
Vernon, CA 90058-3494
EDUARDO OLIVO
City Attorney
FAX: (562) 927-8722
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
Re: Amendment No. 2 to Transmission Service Agreement
Dear Mr. Ewing
KENNETH J. DeDARIO
Director of Municipal Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323)826-1481
Transmitted herewith is a duplicate original Amendment No. 2 to the
Transmission Service Agreement approved by the Vernon City Council on
November 7, 2001.
If you have any questions regarding this matter, please call Mr.
Kenneth DeDario at 323/583-8811 ext. 211.
Very truly yours,
CITY OF VERNON
AoriaoAco
Chief Depu y City Clerk
GJO:ng
CC: Kenneth DeDario
Resolution No. 7862
Agreement File No. 01-078