Resolution No. 2012-166RESOLUTION Mi 2012-166
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF
INTERIM INTERRUPTIBLE SERVICE RATE AGREEMENT BY AND
BETWEEN THE CITY OF VERNON AND MATHESON TRIGAS
WHEREAS, the City of Vernon provides interruptible electric
service to Matheson Trigas ("Matheson") pursuant to an Interruptible
Service Agreement (the "Agreement") executed on September 18, 2006;
and
WHEREAS, under the Agreement Matheson receives monthly bill
credit per kW -month for all interruptible demand Matheson committed to
curtail at a time of interruption; and
WHEREAS, City staff has determined that the bill credit
offered by the City is lower than the credit offered by another.
utility; and
WHEREAS, by memorandum dated August 14, 2012, the Director
of Light & Power has requested the approval of an Interim
Interruptible Service Rate Agreement (the "Interim Agreement") to
provide incentive to Matheson to keep its operations in Vernon and
maintain its electricity usage at historical levels while further
studies are conducted; and
WHEREAS, the Interim Agreement would increase the bill
credit from the current effective rate of $4.46 per kW month to. $14.70
per, kW month for all interruptible demand.
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 Interim Interruptible Service Rate Agreement (the "Interim
Agreement") with Matheson Trigas, in substantially the same form as the
copy which is attached hereto as Exhibit A.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor or Mayor Pro-Tem to 'execute the Interim Agreement
for, and on behalf of, the City of Vernon and the City Clerk, or
Deputy City Clerk, is hereby authorized to attest thereto.
SECTION 4: The City Council of the City of Vernon hereby
instructs the City Administrator, or his designee, to take whatever
actions are deemed necessary or.desirable for the purpose of
implementing and carrying out the purposes of this Resolution and the
transactions herein approved or authorized, including but not limited
to, any nonsubstantive changes to the Interim Agreement attached
herein.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or the City Clerk's designee, -to send a fully
executed Interim Agreement to Matheson.
_2
SECTION 6: The City Clerk of the City of.Vernon shall
certify to the passage, approval and adoption of this resolution, and
the City Clerk of the City of Vernon shall cause this resolution and
the City Clerk's certification to_be entered in the File of Resolutions
of the Council of this City.
APPROVED AND ADOPTED this 21st day of August, 2012.
P`A �
Name William J. Davis
Title/ Mayor Pro-Tem
ATT
lard Yam ur, OC ty Clerk
STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES )
I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution
No. 2012-166, was duly passed, approved and adopted by the City Council
of the City of Vernon at a regular meeting of -the City Council duly
held on Tuesday, August 21, 2012, and thereafter was duly signed by the
Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this day of August, 2012,-at Vernon, California.
(SEAL)
EXHIBIT A
INTERIM INTERRUPTIBLE SERVICE RATE AGREEMENT
This Interim Interruptible Service Rate Agreement ("Interim Agreement") is entered into this
day of August; 2012 by and between the CITY OF VERNON ("Vernon") and Matheson
Trigas ("Customer").
WHEREAS, Vernon provides interruptible electric service to Customer,_ under Schedule
TOU-1 pursuant to an Interruptible Service Agreement executed on September 181h, 2006
("2006 Agreement"); and
WHEREAS, pursuant to the 2006 Agreement, customer agreed to disconnect load within
30 minutes of receiving notice from Light and Power Department; and
WHEREAS, under Schedule TOU-I, Customer receives monthly bill credit per kW month
for all interruptible demand Customer committed to curtail at a time of interruption; and
WHEREAS, at Customers request; Vernon staff reviewed the interruptible service bill
credit offered by another utility where Customer's other facility is located; and
WHEREAS, Vernon staff analysis confirmed that the bill credit offered by Vernon is lower
than the credit offered by the other utility; and
WHEREAS, exhibit -IA to this Interim Agreement shows the additional billing under the
current effective Vernon rate schedule; and
WHEREAS, Vernon has committed to conduct further studies to determine terms and
conditions for the provision of interruptible services in the future; and
WHEREAS, customer is among the largest electric users in Vernon; and
WHEREAS, this Interim Agreement will provide incentive for Customer to keep its
operations in Vernon and maintain its electricity usage at historical levels while further studies
are conducted; and
WHEREAS, the interruptible service purchased by customer is a resource to Vernon as it
is a component of Vernon's resource adequacy requirement compliance portfolio; and
WHEREAS, this Interim Agreement gives Vernon sufficient time to study terms and
conditions for the provision of interruptible services in the future.
NOW, THEREFORE IT IS AGREED AS FOLLOWS:
1. Subject to approval by the Vernon City Council, this Interim Agreement will be in effect for
the twelve (12) month period beginning July 1, 2012 and ending June 30, 2013.
2. Customer agrees to continue receiving interruptible electric service pursuant to the terms
and conditions of the 2006 Agreement and the TOU-1 rate Schedule, except as provided for
below.
3. Customer agrees to maintain a minimum monthly electricity and demand usage level no
lower than Customer's lowest monthly electricity usage and lowest peak demand set during the
period between July 1, 2011 and June 30, 2012 ("Minimum Load.")
4. Customer's monthly bill will be credited $14.70 per KW month for all kW in excess of the
Customer specified Firm Demand level as described in the 2006 Agreement.
5. If, for any month the Customer's usage falls below the Minimum Load level, unless due to
reasons beyond Customer's control which does not include economic reasons by Customer,
Customer will not be entitled to the monthly bill credit.
6. Vernon has appointed a new City Attorney who is scheduled to assume office on September
10, 2012. Vernon and Customer agree that the new City Attorney may review and revise this
agreement provided, however, that the negotiated provisions of Sections 1-5 above shall not be
substantively changed.
City Of Vernon
Matheson Trigas
BY: BY:
William Davis, Mayor Pro-Tem
ATTEST:
Willard G. Yamaguchi, City Clerk
APPROVED AS TO FORM:
.Willard G. Yamaguchi,
Chief Deputy City Attorney
Month
Billing Difference
January
$152,285.90
February
$152,900.95
March
$139,969.47
April
$152,172.67
May
$183,814.94
June
$55,878.63
July
$269,188.56
August
$209,172.14
September
$259,272.17
October
$187,041.83
November
$153,899.70
December
$152,229.44
Total
$2,067,826.40
Juarez, Debbie
From:
Muro, Eva
Sent:
Wednesday, August 22, 2012 5:18 PM
To:
Hunter, Audra
Cc:
Juarez, Debbie
Subject:
FW: Matheson Trigas Resolution No. 2012-166 - Mailing Address for Matheson Contact
Person
Ok thanks
Eva Muro
City Attorney Dept., City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Work; (323) 583-8811 x 273
Fax: (323) 826-1438
CONFIDENTIALITY NOTICE: This e-mail transmission, and any documents, files or previous e-mail messages attached to it may
contain confidential information that is legally privileged. If you are not the intended recipient, or a person responsible for delivering
it to the intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained
in or attached to this transmission is STRICTLY PROHIBITED. If you have received this transmission in error, please immediately
notify the sender. Please destrM the original transmission and its attachments without reading or saving in any manner..
From: Hunter, Audra
Sent: Wednesday, August 22, 2012 5:12 PM
To: M u ro, Eva
Subject: RE: Matheson Trigas Resolution No. 2012-166 - Mailing Address for Matheson Contact Person
I still have them. They will not be executed until the new City Attorney reviews the agreement, and Matheson Trigas
expanded on the language under Section 5, so there will be a slight change.
From: Muro, Eva
Sent: Wednesday, August 22, 2012 12:00 PM
To: Hunter, Audra
Cc: Juarez, Debbie
Subject: RE: Matheson Trigas Resolution No. 2012-166 - Mailing Address for Matheson Contact Person
Audra, I do not have the contact information Debbie is requesting below. Could you please provide the
information to her?
Can you also provided status of the executed agreements from Matheson (given to you on August 16cn) .
Thanks.
Eva Muro
City Attorney Dept., City- of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Work: (323) 583-8811 x 273
Fax: (323) 826-1438 ,
CONFIDENTIALITY NOTICE: This e-mail transmission, and any documents, files or previous e-mail messages attached to it may
contain confidential information that is legally privileged. If you are not the intended recipient, or a person responsible for delivering
it to the intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained
in or aaachec' to this transmission is STRICTLY PROHIBITED. If you have received this transmission in error, please immediately
notify the sender. Please destroy the original transmission and its attachments without reading or saving in any manner.
From: 3uarez, Debbie
Sent: Wednesday, August 22, 2012 11:32 AM
To: M u ro, Eva
Subject: Matheson Trigas Resolution No..2012-166 - Mailing Address for Matheson Contact Person
Hi Eva. Can you please email me the person's name and address that I need to mail the agreement to? Thank you.
Oefiorah juarez
Records WanagenaentAssistant
City of Vernon - City Cferk!s Office
4305 Santa TeArienue
`Vernon, C%190058
(323) 583-88.11
2
RECEIVED
AUG 16 2012
ale CITY ADMINISTRATION
AEG � s zo,2 STAf F REPORT
Oil CLERKSO kICE LIGHT & POWER
DATE: August 14, 2012
TO: Mayor and City Council.
FROM: Carlos R. Fandino, Jr., Director of Light and Power
RE: INTERIM INTERRUPTIBLE SERVICE RATE AGREEMENT
PURPOSE
Pursuant to an Interruptible Service Agreement executed on September 18th, 2006, the City provides
interruptible electric service to Matheson Trigas (Customer). Under the agreement, Customer receives
monthly bill credit per kW -month for all interruptible demand Customer committed to curtail at a time of
interruption.
Recent analysis by Light and Power Department staff shows that the bill credit offered to Customer by
Vernon is lower than credit offered by another utility where Customer's other facility is located. Staff seeks
the City Council's adoption of an Interim Interruptible Service Rate Agreement that will be in effect for fiscal
year 2013. Customer is among the largest electric users in Vernon. This Interim Agreement will provide
incentive for Customer to keep its operations in Vernon and maintain its electricity usage at historical levels
while further studies are conducted. The proposed interim agreement would increases the bill credit from
the current effective rate of $4.46 per KW month to $14.70 per kW month for all interruptible demand.
FISCAL IMPACT
The financial impact is estimated at about $1.8 million in reduced revenues.
RECOMMENDATION
Staff recommends the City Council approve the Interim Interruptible Service rate Agreement at its meeting
on August 21, 2012.
CF:AA
c: Document Control
R-L OF
h�l SVfy1Y IN9V R4,P
CITY ATTORNEY'S OFFICE
INTER -DEPARTMENT MEMORANDUM
DATE: August 16, 2012
TO: Carlos Fandino, Director of Light & Power
FROM: Willard G.'Yamaguchi, Chief Deputy City Attorne
RE: Interim Interruptible Service Rate Agreement
I have received and reviewed the Memorandum dated August 14, 2012, and
the attachments thereto.
The interim interruptible service rate agreement with Matheson Trigas
draft is approved as to form.
WY:em
Enclosures
INTEROFFICE.{ 1
Light & Power Department
WIN I
DATE: August 14, 2012
TO: Willard. Yamaguchi, City Attorney
FROM: Carlos R. Fandino, Jr., Director of Light & Power
SUBJECT: Interim Interruptible Service Rate Agreement
Please review the attached agreement between Matheson Trigas (Customer) and the
City of Vernon and approve as to form.
CRF:ah
Attachments
INTERIM INTERRUPTIBLE SERVICE RATE AGREEMENT
This Interim Interruptible Service Rate Agreement ("Interim Agreement") is entered into this
day of August, 2012 by and between the CITY OF VERNON ("Vernon") and Matheson
Trigas ("Customer").
WHEREAS, Vernon provides interruptible electric service to Customer, under Schedule
TOU-1 pursuant to an Interruptible Service Agreement executed on September 18th, 2006
("2006 Agreement")'; and
WHEREAS, pursuant to the 2006 Agreement, customer agreed to disconnect load within
30 minutes of receiving notice from Light and Power Department; and
WHEREAS, under Schedule TOU-I, Customer receives monthly bill credit per kW month
for all interruptible demand Customer committed to curtail at a time of interruption; and
WHEREAS, at Customers request, Vernon staff reviewed the interruptible service bill
credit offered by another utility where Customer's other facility is located; and
WHEREAS, Vernon staff analysis confirmed that the bill credit offered by Vernon is lower
than the credit offered by the other utility; and
WHEREAS, exhibit -IA to this Interim Agreement shows the additional billing under the
current effective Vernon rate schedule; and
WHEREAS, Vernon has committed to conduct further studies to determine terms and
conditions for the provision of interruptible services in the future; and
WHEREAS, customer is among the largest electric users in Vernon; and
WHEREAS, this Interim Agreement will provide incentive for Customer to keep its
operations in Vernon and maintain its electricity usage at historical levels while further studies
are conducted; and
WHEREAS, the interruptible service purchased by customer is a resource to Vernon as it
is a component of Vernon's resource adequacy requirement compliance portfolio; and
WHEREAS, this Interim Agreement gives Vernon sufficient time to study terms and
conditions for the provision of interruptible services in the future.
NOW, THEREFORE IT IS AGREED AS FOLLOWS:
1. Subject to approval by the Vernon City Council, this Interim Agreement will be in effect for
the twelve (12) month period beginning July 1, 2012 and ending June 30, 2013.
2. Customer agrees to continue receiving interruptible electric service pursuant to the terms
and conditions of the 2006 Agreement and the TOU-1 rate Schedule, except as provided for
below.
3. Customer agrees to maintain a minimum monthly electricity and demand -usage level no
lower than Customer's lowest monthly electricity usage and lowest peak demand set during the
period between July 1, 2011 and June 30, 2012 ("Minimum Load.")
4. Customer's monthly bill will be credited $14.70 per KW month for all kW in excess of the
Customer specified Firm Demand level as described in the 2006 Agreement.
5. If, for any month the Customer's usage falls below the Minimum Load level, unless due to
reasons beyond Customer's control which does not include economic reasons by Customer,
Customer will not be entitled to the monthly bill credit.
6. Vernon has appointed a new City Attorney who is scheduled to assume office on September
10, 2012. Vernon and Customer agree that the new City Attorney may review and revise this
agreement provided, however, that the negotiated provisions of Sections 1-5 above shall not be
substantively changed.
City Of Vernon Matheson Trigas
BY: BY:
William Davis, Mayor Pro-Tem
ATTEST:
Willard G. Yamaguchi, City Clerk
APPROVED AS TO FORM:
Willard G. Yamaguchi,
Chief Deputy City Attorney
EXHIBIT - IA
Month
Billing Difference
January
$152,285.90
February
$152,900.95
March
$139,969.47
April
$152,172.67
May
$183,814.94
June
$55,878.63
July
$269,188.56
August
$209,172.14
September
$259,272.17
October
$187,041.83
November
$153,899.70
December
$152,229.44
Total
$2,067,826.40