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Resolution No. 80171 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 8017 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND RATIFYING THE EXECUTION OF A COMBINED SYSTEM PLANNING AND FACILITIES STUDY AGREEMENT BY AND BETWEEN THE CITY OF VERNON AND SOUTHERN CALIFORNIA EDISON COMPANY REGARDING THE MALBURG GENERATING STATION PROJECT WHEREAS, the City of Vernon ("City") is proceeding at this time to develop a 134 MW Combined Cycle Power Plant officially named the Malburg Generating Station (the "Malburg Project") for the purpose of installing additional generating capacity that will yield an efficient, cost-effective, and reliable source of electric generation to the City; and WHEREAS, on September 2, 1997, the City Council of the City of Vernon adopted Resolution No. 7017 approving a Laguna Bell -Vernon Interconnection Service Agreement wherein Southern California Edison Company ("SCE") provides firm bi-directional transmission service over its transmission system for the transportation of generation between the Vernon City limits and the Independent System Operator grid at SCE's Laguna Bell 220 KV Substation; and WHEREAS, the City's Utilities Department has determined that studies need to be performed (i) to determine the adequacy of SCE's electrical system to interconnect the Malburg Project to the City's 66 KV transmission system and to produce power and/or ancillary services and (ii) to determine the transmission system upgrades and any other equipment modifications and/or additions required to accommodate the City's interconnection of 134 MW of capacity at the Vernon Substation; and WHEREAS, City staff have proposed engaging the services of 1 SCE to perform a System Planning Study (Phases I and II) and a 2 Facilities Study in accordance with the terms and conditions of a 3 proposed Combined System Planning and Facilities Study Agreement (the 4 "Agreement"); and 5 WHEREAS, by letter dated June 26, 2002, Bruce V. 6 Malkenhorst, City Administrator/City Clerk, recommended that the 7 Agreement with SCE be approved and executed for the performance of the 8 necessary studies at a cost of approximately Fifty -Five Thousand 9 Dollars and No Cents ($55,000.00); and 10 WHEREAS, because SCE was unable to supply the signed 11 Agreement prior to the Council meeting on July 3, 2002, the City 12 Council deferred consideration of the matter to its next meeting; and 13 WHEREAS, in order to meet the urgent need to proceed with the 14 studies and to comply with the terms and conditions of the offer by SCE 15 which was deemed rescinded if certain conditions were not met, the City 16 Administrator executed the Agreement and advanced the necessary costs 17 on July 16, 2002, subject to ratification by the City Council; and 18 WHEREAS, the City Council of the City of Vernon desires to 19 approve and ratify the Agreement, as executed by the City 20 Administrator, and the advancement of costs; and 21 WHEREAS, the City Council of the City of Vernon has 22 determined that, pursuant to the provisions of subsection (a) of 23 Section 2.27 of the Vernon City Code, it is in the public interest and 24 necessity to enter into an agreement with SCE to proceed with the 25 System Planning Study and Facilities Study for the Malburg Project to 26 enhance services provided to the Vernon community. 27 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE 28 CITY OF VERNON AS FOLLOWS: 2 f 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 26 27 28 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 and ratifies the execution of the City of Vernon -Southern California Edison Combined System Planning and Facilities Study Agreement (Malburg Generating Station Project), a copy of which is attached hereto as Exhibit "A" and made a part hereof. SECTION 3: The City Council of the City of Vernon hereby approves and ratifies the advance payment of costs in accordance with Section 13 of the Agreement. SECTION 4: 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 24t" day of July, 2002. ATTEST: BRUCE V. MALKENHORST, City Clerk LEONIS C. MALB G, May r - 3 - 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 26 27 28 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. 8017, 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, July 24, 2002, and thereafter was duly signed by the Mayor of the City of Vernon. (SEAL) BRUCE V. MALKENHORST, City Clerk - 4 - EXHIBIT 0 THE CITY OF VERNON- SOUTHERN CALIFORNIA EDISON COMPANY COMBINED SYSTEM PLANNING AND FACILITIES STUDY AGREEMENT (Malburg Generating Station Project) 1. Summary: The City of Vernon ("Vernon") notified Southern California Edison Company ("SCE") of its intention to develop its proposed 134 MW Malburg Generating Station ("MGS") Project within Vernon's City limits. The MGS Project will be interconnected to Vernon's 66 kV transmission system at the existing Vernon Substation. Vernon has stated that such generation will not be sold into the California wholesale energy market. A System Planning Study is needed to determine the adequacy of SCE's electrical system to accommodate the interconnection of the MGS Project to Vernon's 66 kV transmission system. In addition, a Facilities Study is required to determine the transmission system upgrades, equipment modifications or additions, and any other modifications and additions needed to accommodate the MGS project. Accordingly, SCE and Vernon wish to enter into this Combined System Planning Study and Facilities Study Agreement ("Agreement") providing the terms for SCE to perform a System Planning Study and Facilities Study ("Study"). 1 Scope and Content: The Study will consist of a System Planning Study (Phase I and Phase Ill and a Facilities Study to be performed by SCE as specified below. SCE will provide a report to Vernon upon the completion of each study. a. System Planning Study The System Planning Study will include the following scope of work: i. An assessment of the adequacy of the SCE's electrical system to accommodate 134 MW of generation to be interconnected to Vernon's 66 kV transmission system, consistent with Good Utility Practice and all applicable statutes and regulations. ii. Identification of any system constraints which would require curtailment of generation from the MGS Project, and possible transmission expansions or upgrades that may be required to accommodate the interconnection. iii. Study conditions and assumptions. iv. Load flow analysis. v. Short circuit duty analysis. The System Planning Study will consist of two phases which will be performed by SCE as follows: Phase I. Phase I of the System Planning Study will consist of a summary of the load flow analysis and short circuit duty analysis to identify the general electrical system impacts of the proposed facility and possible mitigation measures to maintain conformance with the North American Electric Reliability Council ("NERC"), the Western Systems Coordinating Council or its successor ("WSCC"), the California Independent System Operator ("ISO") or other applicable reliability or planning criteria. SCE will provide a summary report of the Phase I results to Vernon upon completion of Phase I of the Study. The summary will include the following: 1. Base case load flow plots for Summer and Spring, with and without the MGS Project, including system losses. 2. A one -line diagram showing interconnection of the project to the SCE electrical system. 3. Summary of overloaded lines and/or transformers (Base Case, N-1, N-2). 4. Amount of generation that may need to be curtailed from the MGS Project to relieve the overloads. 5. Summary of substations where circuit breakers may require review to determine if upgrades or replacements are needed. Phase H. Phase II of the System Planning Study will be a comprehensive analysis which will include the complete scope of work described above. -2- b. Facilities Study: The Facilities Study will include the following scope of work: i. A determination of the required transmission system upgrades, modifications or additions, and any other system facilities and upgrades required to interconnect 134 MW of capacity to the Vernon 66 kV transmission system. The facilities and upgrades may include substation facilities at the Laguna Bell Substation; transmission facilities, protection equipment, communication equipment, and controls at the Laguna Bell Substation; and facilities required at other substations and on other transmission and distribution lines. ii. An analysis of affected circuit breakers and a determination of whether affected circuit breakers should be replaced or upgraded. iii. An estimate of (i) the cost of the required transmission system upgrades, modifications or additions and any other system facilities and upgrades to be charged to Vernon, (ii) Vernon's appropriate share of the cost of any required system additions, modifications and upgrades, and (iii) the time required to complete construction of such transmission system upgrades, modification or additions and other required system facilities and upgrades and initiate the service. The Facilities Study will include a list of major equipment required for the service. The cost estimate will include an estimate of additional facilities cost (capital cost of the facilities), and one-time cost (expenses not capitalized). 3. Assumptions: The assumptions utilized in performing the Study shall be as follows: a. The MGS Project will be interconnected to Vernon's 66 kV transmission system at the existing Vernon Substation. b. Vernon's supplied technical data is correct. c. The maximum interconnection capacity to be utilized by Vernon is 134 MW. d. The MGS Project will be configured as a 2x1 combined cycle generating facility consisting of two 42 MW gas -fired combustion turbines/generators, one 55 MW steam turbine/generator, and a total auxiliary load of 5 MW. e. Vernon's estimated operating date is February 29, 2004. -3- f. Vernon will install, own, operate and maintain all ISO metering equipment. All ISO metering equipment will be located on Vernon's side of the point of interconnection. g. Projects with interconnection applications preceding Vernon are assumed in- service; however, potential system enhancements or modifications resulting from such projects, if any, are not assumed. 4. Time Required for Completion: SCE will use due diligence to complete the Study within the time periods specified below: a. System Planning Study: Within sixty (60) calendar days following receipt of a fully executed Agreement and payment pursuant to Sections 9 and 13 of this Agreement. SCE will use due diligence to complete Phase I of the System Planning Study by July 29, 2002. b. Facilities Study: Within sixty (60) calendar days following completion of the System Planning Study. 5. Additional Time for Completion: At any time that SCE determines that the Study cannot be completed within the time periods specified in Section 4 of this Agreement, SCE shall notify Vernon and provide an estimated completion date, along with an explanation of the reasons why additional time is required to complete the Study. 6. Exchange of Information: SCE and Vernon shall confer with one another as necessary to exchange information that will provide for the most accurate analysis possible with the information available at the time the Study is performed. 7. Third Party Review: The Study results will not reflect any review or analysis by any third party. SCE shall provide a copy of the Study results and related work papers to the ISO. If Vernon elects to proceed with the interconnection process, in order to determine the potential impact to any third party's electrical system, SCE may provide a copy of the Study results to the WSCC, and any transmission owner potentially impacted by the service. Requests for review and input from other potentially impacted transmission owners may arrive at any time prior to interconnection, and revision and reconsideration of the Study maybe required as a result of information -4- received from the ISO or WSCC, or any other such entity regarding any potential impact to a third party's electrical system. 8. Results Based on Information Available at Time of Study: Substantial portions of technical data and assumptions used to perform the Study, such as system conditions, existing and planned generation, and unit modeling, may change after SCE provides the Study results to Vernon. Study results will reflect available data at the time SCE provides the Study to Vernon. Additionally, Study results will reflect the ISO Tariff, rules and protocols in effect at the time SCE provides the Study to Vernon. Such Tariff, rules and protocols are subject to change. SCE shall not be responsible for any additional costs (including, without limitation, costs of new or additional facilities, system upgrades, or schedule changes) that may be incurred by Vernon as a result of changes in such data, assumptions, or the ISO Tariff, rules and protocols which occur following provision of this Study. 9. Payment: Vernon shall pay the full cost for SCE to perform the Study as follows: a. Vernon shall reimburse SCE for SCE's cost of performing the Study; provided, however, that Vernon shall not be required to reimburse SCE for amounts in excess of the estimated Study costs of $55,000, except as provided in Section 10 of this Agreement. b. Vernon shall advance to SCE $55,000 for the Study upon execution of this Agreement. c. SCE shall refund to Vernon, without interest, any amounts received by SCE which exceed the cost of the Study, even if terminated pursuant to Section 10 or 12 of this Agreement. 10. Increased Costs: If at any time SCE determines that the Study is expected to cost more than $55,000, SCE shall notify Vernon and provide an estimate of any additional costs. Upon receipt of such notice, Vernon shall either: (i) request that SCE terminate the Study; or (ii) provide a written request to SCE that SCE continue the Study, and agree to pay any additional costs to SCE. SCE shall be under no obligation to incur costs in excess of $55,000 for the Study, unless and until it -5- 4 'M ter � r � � ♦ . � e r receives notice pursuant to this Section 10 and an agreement from Vernon to pay costs in excess of $55,000. 11. Records and Accounts: SCE shall maintain records and accounts of all costs incurred in performing the Study in sufficient detail to allow verification of all costs incurred, including, but not limited to, labor and associated labor burden costs, materials and supplies, outside services, and administrative and general expenses. Vernon shall have the right, upon reasonable notice, within a reasonable time at SCE's offices and at its own expense, to audit SCE's records as necessary and as appropriate in order to verify costs incurred by SCE. Any audit requested by Vernon shall be completed, and written notice of any audit dispute provided to SCE's representative, within one hundred eighty (180) calendar days following receipt by Vernon of SCE's notification of the final Study costs. 12. Termination UiDon Demand: Vernon may demand that SCE terminate the Study at any time. Immediately following receipt of written notice of such termination from Vernon, SCE shall terminate the Study as demanded. In such case, Vernon shall reimburse SCE only for costs actually incurred or irrevocably committed to be incurred for the performance of the terminated Study. If Vernon so requests in its notice of termination, SCE shall submit to Vernon the results of the incomplete Study in a report including assumptions and calculations available at the time SCE receives 1. Vernon's termination notice. M 13. Signature Clause: This Agreement shall become effective on the date the fully executed Agreement and payment pursuant to Section 9 of this Agreement are received by SCE. If SCE does not receive the fully executed Agreement and payment within ten (10) business days of Vernon's receipt, then the offer reflected in this Agreement will be rescinded and this Agreement will be of no effect. APPROVED STEPHEN E. PICKETT Sr. vice President and General Counsel By SOUTHERN CALIFORNIA EDISON COMPANY By: aqlw�4�— Name: A. Larry Grant Title: Vice President 0*4 ACCEPTED AND AGREED to this day of , 2002 THE CITY OF VERNON By: v Name: Bruce V. Malkenhorst Title: City Administrator/CityClerk -7- Approved As To Form EDU RDO OL,IVO � CITY.ATTORNEY 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) 826-1438 City Council City of Vernon Honorable Members: CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 June 26, 2002 EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 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 d� A It is necessary at this time that an agreement be entered with Southern California Edison Company for a Combined System Planning and Facilities Study for the Malburg Generating Station Project (MGSP). The System Planning Study will determine the adequacy of Edison's electrical system to interconnect the MGSP to Vernon's 66kV transmission system and the production of power and/or ancillary services. The Facilities Study will determine the transmission system upgrades and any equipment modification or additions required. The cost for these services is approximately $55,000.00. This has been reviewed by the Director of Utilities and the City Attorney and it is hereby recommended that said agreement be approved and executed. Very truly yours, Bruce V. Malkenhorst City Administrator/City Clerk BVM/gm June 26, 2002 TO: Bruce V. Malkenhorst, City Administrator FROM: Kenneth J. DeDario, Director of Utilities SUBJECT: Malburg Generating Station Project I recommend approval of the attached City of Vernon— Southern California Edison Company Combined System Planning And Facilities Study Agreement for the Malburg Generating Station Project (MGSP). The System Planning Study will determine the adequacy of Edison's electrical system to interconnect the MGSP to Vernon's 66 kV transmission system and to produce power and/or ancillary services. The Facilities Study will determine the transmission system upgrades and any equipment modification or additions required. This Agreement is for a cost of $55,000.00. The City Attorney has reviewed this Agreement. If you have any questions or comments, please contact me. Thank you for your consideration. KJD:dm Attachment