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HomeMy WebLinkAboutAgenda Packet - July 23, 2007 - UB A 9 '; "' "Y '` &1 1% w ' .Y:F � � " AZUSA IIGNT l WAYEt AGENDA REGULAR MEETING OF AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL AZUSA LIGHT &WATER JULY 23, 2007 729 N. AZUSA AVENUE 6:30 P.M. AZUSA, CA 91702 AZUSA UTILITY BOARD KEITH HANKS CHAIRPERSON ANGEL A. CARRILLO IOSEPH R. ROCHA VICE CHAIRPERSON BOARD MEMBER URIEL E. MACIAS ROBERT GONZALES BOARD MEMBER BOARD MEMBER 6:30 P.M. Convene to Regular Meeting of the Azusa Utility Board and Azusa City Council • Call to Order • Pledge to the Flag • Roll Call A. PUBLIC PARTICIPATION 1. (Person/Group shalibe allowed to speak without interruption up to five (5)minutes maximum time, subject to compliance with applicable meeting rules. Questions to the speaker or responses to the speaker's questions or comments shall be handled after the speaker has completed his/her comments. Public Participation will be limited to sixty(60)minutes time.) 2. New Employee Introductions 001 The Consent Calendar adopting the printed recommended action will be enacted with one vote. lfStaff or Councilmembers wish to address any item on the Consent Calendar individually, it will be considered under SPECIAL C4LL ITEMS. B. CONSENT CALENDAR I. Minutes. Recommendation: Approve minutes of regular meeting on June 25, 2007 as written. B-I. Mhutes3unMdoc 2. La Tolteca's Request for Installment Payments. Recommendation: Approve La Tolteca Mexican Food's request to allow 12 monthly installment payments for the installation of electric service infrastructure at 429 North Azusa Avenue in amount of $8,703.83. B-2. LeToftecaRequest.do 3. Resource Adequacy Capacity Swap Confirmation Agreement with San Diego Gas and Electric Company (SDG8.E). Recommendation: Authorize swap arrangement of resource adequacy capacity between the City and SDG&E for calendar year 2008 in partial fulfillment of City's resource adequacy obligation to California Independent System Operator and authorize the Mayor to execute the Confirmation Agreements. B-3. RA swap with SDGBiE.doc 4. Transaction Services Agreement Between the City and the City of Riverside and Professional Services Agreement with The Structure Group. Recommendation: (a) Approve the Transaction Services Agreement between the City and City of Riverside for various scheduling services and authorize the Mayor to execute agreement; and (b) approve Professional Services Agreement between the City and Structure Group for power scheduling software interface and authorize the City Manager to execute agreement. B-4. Scheduring Svc Agnts.DDC 2 002{�h ssyy i 5. Request For Proposals for (a) Third Party to Process Mail-in Utility Payments and (b) Bill Print and Mail Service. Recommendation: Authorize the development and release of two Request For Proposals for third-party vendors to process mail-in utility payments, and bill print and mail service. ffin_Ll &5. RFP Authodzation.DOC 6. Purchase of Itron Mc-Lite Meter Reading System: Recommendation: Waive formal bidding procedures and award the purchase of MC-Lite meter reading system to Itron Incorporated at a cost of. $16,200. &6. MeterRead'ngEquipm 7. Additional Compensation to SSC Construction Incorporated for Additional Work Required for Prosect WVF-207 Canyon Filtration Plant Membrane Upgrade and Expansion. Recommendation: Approve additional $100,642.76 compensation and 10 additional calendar days time extension to the SSC Construction, Incorporated contract for Project WVF-207, Canyon Filtration Plant Membrane Upgrade and Expansion. &7. SSC Change Order No. t.doc 8. Purchase of Copier from Konica Minolta Under California Multiple Award Schedule (CMAs). Recommendation: Waive formal bidding procedures and award the purchase of one Konica Minolta BizHub 600 Digital Networkable Work Center Copier to Konica Minolta under CMAS in amount of $12,403.29, plus monthly maintenance cost of $0.06 per copy. NR I Copier Purchase.doc 9. Suspension of Enforcement Hours of Operation Requirements Included in Owner Participation A,greements and Conditional Use Permits for Electric Load Reduction. Recommendation: Authorize the City Manager to suspend enforcement of hours of operation requirements included in Owner Participation Agreements (OPA's) and Conditional Use Permits (CUP's)- for electric load reduction purposes; and provide the stipulation that the City Manager can revert to current conditions in the event of valid citizen complaints. &9:Load Reduction Authy.doc 3 003 10. Utilities Department Budget Amendment. Recommendation: Approve amendment to the Fiscal Year 2007-2008 operating budget in amount of $34,259.83 to cover encumbrances carried over through contract purchase orders approved in Fiscal Year 2006-2007. E B-10. Budget Annendment.doc AQ10JIM FROM UTILITY BOARD MEETING AND CONVENE MEETING OF AZUSA VALLEY WATER COMPANY I. Annexation of Parcel 8684-023-900 (water Treatment Plant Site) to County Sanitation District No. 22 of Los Angeles. Recommendation: Approve the following resolution: A RESOLUTION OF THE AZUSA VALLEY WATER COMPANY REQUESTING ANNEXATION OF PARCEL 8684-023-900 TO COUNTY SANITATION DISTRICT NO. 22 OF LOS ANGELES. AVWC-1.Annexatbn Itemdoc OURN OM AZUSA VALLEY WATER COMPANY AND CONVENE MEETING OF THE AZUSA UTI OARD/CITY CO C. SCHEDULED ITEMSv� e���� I. Discontinue the Rate Stabilization Fund for Stranded Investments Within the Electric Fund. Recommendation: (1) Make a finding to discontinue the rate stabilization fund for stranded investment within the electric fund; and (2) direct the Director of Administrative Services to coordinate necessary accounting and investment activities to accomplish the recommended action of (1). MI Ll C-1. Res Fund Temination.doc 2. Utilities Department Reserve Policies. Recommendation: Approve the following resolution: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA SETTING CERTAIN RESERVE POLICIES FOR THE UTILITIES DEPARTMENT, C-2. Reserve Policy.doc 4 004 e 3. Electric Rate Adjustment for Fiscal Year 2007-2008. Recommendation: (a) Receive staff report and presentation regarding cost of service studies and proposed electric rate adjustments for Fiscal Year 2007-2008; and (b) authorize staff to prepare final rate documents necessary to implement rate adjustments for Utility Board/City Council approval at its September 23 regular meeting and implement new rates commencing October 1, 2007. C-3. Electric Rate Adjustment.doc D. STAFF REPORTS/COMMUNICATIONS I. Monthly Update on Water Treatment Plant Project . 0 D-1. Moly WTP Update.pdf . 2. Drought Activities Report &Water Purchases Update D-z.Drought Update.doc 3. Monthly Power Resources Update D-3. Moly Res Update.ppt E. DIRECTOR'S COMMENTS I. Proclamation for Korean War Veterans Armistice Day 2. Request for Certificate of Recognition for first year anniversary to Mr. C's Barber Shop F. CLOSED SESSION REAL PROPERTY NEGOTIATIONS (Gov. Code Sec. 54956.8) Address: 1900 N. San Gabriel Canyon Road, Azusa, CA 91702 Agency Negotiators: Assistant Director Water Operations—Anderson Negotiating Parties: Canyon View Homeowners Association . Under Negotiation: Price and Terms of Payment for easement on Daybreak 5 005 2. CONFERENCE WITH LABOR NEGOTIATOR (Gov. Code Sec. 54957.6) Agency Negotiators: City Manager Delach and Assistant City Manager Person Organizations/Employee: APOA G. ADIOURNMENT I. Adjournment. %n compliance with the Americans with Disabilities Act, If you need special assistance to participate in a city meeting,please contact the City Clerk at 626-812-5219. Notification three (3) working days prior to the meeting or time when special services are needed W11 assist staff in assuring that reasonable arrangements can be made to provide access to the meeting." 6 G0'E; t. ty m �.p 'T.p "'P.a - .�p♦ kC v� `�y � N n 1-'`TJl a' oocn� a'a ° �'o.m � w •< .rty P � �O ..r. mm ••y p'. 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Roll Call ROLL CALL PRESENT: BOARD MEMBERS: GONZALES, CARRILO, MACIAS, HANKS, ROCHA ABSENT: BOARD MEMBERS: NONE Also Present ALSO PRESENT: City Attorney Martinez, City Manager Delach, Assistant to the Utilities Director Kalscheuer, Assistant Director of Resource Management Tang, Assistant Director of Water Operations Anderson,Assistant Director Customer Care and Services Vanca, Police Captain Gonzales, Public Information Officer Quiroz, Director Recreation and Family Services Jacobs, Administrative Services Director/Chief Financial Officer Kreimeier, City Clerk Mendoza, Deputy City Clerk Toscano. Public Participation Pub Part Mr. Jorge Rosales thanked staff for providing responses to his question in advance to items B-2, J. Rosales B-4, B-5, B-6, B-10, B-1 1 and B-13. He gave his personal opinion in opposition to procurements Comments without competitive bidding with regard to Civiltec Engineering and Wren and Associates; and also regarding the Quarterly Fuel Cost Adjustment in agreement with staff. Mr. Art Morales addressed the Board Members suggesting that bottled water be provided to A. Morales those in attendance at the meeting. He stated that the City needs an aggressive program Comments regarding artificial turf due to the drought conditions and talked about funds being moved around in the community and noted his stance in favor of money going towards kids programs. 007 The CONSENT CALENDAR consisting of Items B-1 through B-13, was approved by motion of Consent Cal Board Member Macias, seconded by Board Member Rocha and unanimously carried with the Approved exception of items B-1, (Board Member Rocha abstained), B3. B-5 and B-13 which were considered under the Special Call portion of the Agenda. I. The Minutes of the regular meeting of May 17, 2007, were approved as written. Board Min Appvd Member Rocha abstained from the minutes as he was not present at that meeting. 2. Approval was given for Amendment No. 2 to Temporary License Agreement with Northrop Tem Lic Agmt Grumman for use of a portion of the southeast parking lot for a temporary 12-inch waterline. Northrop 3. SPECIAL CALL ITEM. Spec Call 4. Approval was given to extend the modified DRIP Rebate Program until such time that the Extend & program is deemed unneeded,due to sufficient water suppliers, and approval was given of Modify DRIP funding level of $100,000 per fiscal year from the water fund until the program was either Rebate modified or terminated. Program 5. SPECIAL CALL ITEM. Spec Call 6. Authorization was given for the procurement of standard capacity products from Dynegy for Standard calendar year 2008 and Shell Trading for calendar year 2009 in partial fulfillment of the City's Capacity resource adequacy obligations to California Independent System Operator(CAISO),and the Dynegy Mayor was authorized to execute Confirmation Agreements. 7. Approval was given to award contract to BnB Engineering, Incorporated in amount not-to- BnB Engr exceed $7,200 to furnish and install underground electric conduits at Foothill Boulevard and Conduits Palm Drive. Palm Drive 8. A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING 07-054 A CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDING THEREOF. (Ceres Accept Grant Court, LLC). Of Easement 9. A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING 07-055 A CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDATION THEREOF. (Eurila Accept Grant Enterprises, Incorporated). Of Easement 10. Approval was given to approve the award of contract for the construction of Gladstone Yard Gladstone Yd Improvement Project to MG Enterprizes and amend the capital improvement project budget MG in the amount of $74,000. Enterprises 11. Approval was given for the addition of reimbursable compensation for Civiltec Engineering, Reimburse Incorporated in the amount of$90,000 pursuant to Azusa Municipal Code section 2-517(h) Civiltec for continuing Inspection of the Rosedale Development water storage reservoirs and water Engineer pump stations. Rosedale 12. A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA 07-056 AUTHORIZING SUBMITTAL OF FUNDING REQUEST FORM TO THE DEPARTMENT OF Authorizing CONSERVATION'S DIVISION OF RECYCLING. Rqst Form 13. SPECIAL CALL ITEM. Spec Call 06/25/07 PAGE TWO 008 S Special Call Items Spec Call Items Board Member Rocha questioned the funding source and administrator of the new Light and Rocha Water Customer Service Uniform Policy. City Manger Delach responded stating that it is budgeted Comments in fiscal year 07/08. Assistant Director Customer Care and Services Vanca stated that a professional fitting company will be making sure that the uniforms fit each person correctly. Moved by Board Member Carrillo,seconded by Board Member Gonzales and unanimously carried Customer to approve (1) uniform wardrobe recommendations, (2) the attached Light &Water Customer Service Service Representative Uniform Policy, (3) contract to be awarded to Cintas, and (4) a budget Uniform amendment for $14,000 for initial uniform purchase. Policy Board Member Rocha addressed the Pilot eMAC program stating that it is being funded by CIP Rocha 07-08,which has not been approved yet. City Manager Delach responded stating that the items eMAC would only be valid if the CIP budget is approved. Assistant Director of Resource Management Program Tang responded that one of the reasons he presented this item was due to SB 2021, which requires that all Electric Utility Governing Boards have to consider cost effective energy efficiency programs no later than June I"of the year, and this is making a good faith effort to comply with the law. Further, this program is the controlling of air conditioning and it makes sense to implement it at the beginning of summer. Moved by Board Member Carrillo,seconded by Board Member Gonzales and unanimously carried Purchase of to waive formal bidding procedures to award the purchase and installation of a pilot wireless Pilot eMAC internet-based Heating,Ventilating,and Air Conditioning(HVAC) monitoring and control system to HVAC Control Maximum Performance Group, a Lime Energy Company, at a cost of$108,000 to be paid from System Public Benefit funds and to approve 2007-08 Capital Improvement Project(CIP) budget in amount of $108,000 from Fund 24 for this project. City Manager Delach addressed item regarding the Reimbursement Agreement between the City City Manager and JAR-University Commons, LLP, clarifying that the City is proposing this on the water side Agmt w/JAR because the water main is on private property and it is a benefit to the surrounding water system. Comments He responded to questions posed by Board Members regarding deadlines, time frame, etc. Discussion was held regarding the Reimbursement Agreement which surrounds certain existing utility infrastructure which must be replaced by new infrastructure in order to properly serve the proposed development. The Developer has agreed to design and contract the required utility infrastructure, the water lines, fire hydrants and underground electrical distribution line,and they will be reimbursed for actual and documented costs. Moved by Board Member Rocha, seconded by Board Member Carrillo and unanimously carried to Reimburse- approve the agreement in its substantial form, and the City Manager was authorized to execute Ment agmt the final agreement upon completion of a few minor revisions. approved THE UTILITY BOARD/CITY COUNCIL RECESSED AT 6:58 P.M.AND THE AZUSA VALLEY WATER UB/Cncl COMPANY CONVENED. THE UTILITY BOARD/CITY COUNCIL RE CONVENED AT 6:59 P.M. recess/recon Scheduled Items Sched Items Assistant Director of Resource Management Tang presented several legislative bills in which B. Tang Municipal Utilities have taken a position to support or oppose, and due to the fast pace of State Presentation legislative session, staff recommends that the Board adopt the positions and authorize the Mayor Legislative to sign legislative letters to advocate the adopted positions during the remainder of the legislative Bills session. 06/25/07 PAGE THREE 009 Discussion was held between Mr. Tang and Board Members regarding SB 1368,which prohibits Discussion municipal cities with coal fire power plants from extending their contracts more than five years. SB 1368 Moved by Board Member Macias, seconded by Board Member Rocha and unanimously carried Legislative to adopt the legislative positions and authorize the Mayor to sign letters addressed to legislators Positions as may be required during the remainder of legislative session to advocate the adopted positions. Staff Reports/Communications Staff Rpts Assistant Director of Water Operations Anderson presented the monthly report for the Water WTP update Treatment Plant stating that they are progressing well; the concrete work is the best he has seen; they are doing a good job, and stated there were some unexpected site problems. Assistant Director of Resource Management Tang presented the Water Cost Adjustment Factor Replacement stating that due to the drought the adjustment factor is higher than usual,which went for$0.05 to Water Cost $.1306 as of July 1, 2007. Adjust Factor Assistant Director of Resource Management Tang also presented information on the drought and Info on steps that have been taken to encourage water conservation and compliance with the Stage I Drought Drought Requirements. He noted that one additional staff member will be dedicated to water conservation in order to provide education to customers. Discussion was held between Board Members and staff regarding process for holding local car Discussion washes, no to businesses Le. ALP to be aware of the conditions as well as APU and Drought AUSD and the use of recycled water; staff advised that they would look into the matter. Assistant Director of Resource Management Tang presented the Power Resources Division Pwr Res Monthly Report, highlighting the San Juan Environmental Project upgrade stating that it is on Monthly Rpt schedule. Assistant Director of Resource Management Tang presented as an information item, the North Info on NERC America Electric Reliability Council (NERC) mandatory reliability requirements that went into effect June 18',which was created due to the massive power outages in the eastern U.S. in the summer of 2003. The electric industry regulators have taken notice of the clear deficiencies in the electric industry's approach to service reliability and have set up the program to address the problems. Assistant Director of Resource Management Tang presented Quarterly Fuel Cost Adjustment for Fuel Cost San Juan Resource, but there was no discussion held. Adjustment Directors Comments Dir Cmts Assistant Director of Resource Management Tang stated the Staff is planning a trip to San Juan Trip to San Power Plant and invited Board Members to attend; timeline includes, three days, travel, tour and Juan Power return. Plant Board Member Rocha thanked staff for securing the off-site meeting locations, stating that there Off-Site should be others in the months of September, December and March,and asked his colleagues if Utility Board they would like to direct staff to secure locations for those months. City Manager Delach Meetings responded that a site has been selected for September which is Mountain View Elementary School. 06/25/07 PAGE FOUR 010 Moved by Board Member Rocha, seconded by Board Member Macias and unanimously carried to Adjourn adjourn. TIME OF ADJOURNMENT: 7:25 P.M. SECRETARY NEXT RESOLUTION NO. 07-057. 06/25/07 PAGE FIVE Oil • B _ w. a swe A7U5A I illi A W\Ifs CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES J DATE: JULY 23, 2007 SUBJECT: LA TOLTECA'S REQUEST FOR INSTALLMENT PAYMENT ON ELECTRIC SERVICE INFRASTRACTURE RECOMMENDATION It is recommended that the Utility Board/City Council approve a request by La Tolteca Mexican Foods allowing payment for the installation of the electric service infrastructure at 429 N. Azusa Avenue in 12 monthly payments. BACKGROUND Mr. Tim C. Arrietta of La Toteca Mexican Foods has requested that the City approve the payment of installation of the electric infrastructure (primary cabling etc.,) in 12 monthly installments. The estimated cost for the installation is $8,703.83, which would be $725.32 per month for 12 months. FISCAL IMPACT Small loss of interest income. Prepared by: D. M. Ramirez, Assistant Director - Electric Operations 012 v AZUSA CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES ,-� DATE: JULY 23, 2007 <, N SUBJECT: RESOURCE ADEQUACY CAPACITY SWAP CONFIRMATION AGREEMENT WITH SAN DIEGO GAS AND ELECTRIC COMPANY (SDG&E) RECOMMENDATION It is recommended that the Utility Board/City Council authorize the swap arrangement of .resource adequacy capacity between the City and SDG&E for calendar year 2008 in partial fulfillment of City's resource adequacy obligations to the California Independent System Operator (CAISO) and authorize the Mayor to execute the Confirmation Agreements (Agreement) with SDG&E upon finalizing the terms and conditions of the Agreement. BACKGROUND The Utility Board established a Resource Adequacy (RA) program for the City in April 2006 to ensure adequate power resources to serve our customers and In partial fulfillment to California Independent System Operator's (CAISO) tariff requirements. The City's RA program among other requirements dictates that the City procure sufficient electric power capacity plus 15% for reserve margin ahead of time to ensure adequate supply of electricity. The CAISO's tariff requirement dictates where such electric power capacity should be located to ensure that electric power can be delivered to serve customer consumption without encountering transmission bottleneck problems. In the past several months, the Utility Board/City Council approved the following resource adequacy capacity purchases from various suppliers in partial fulfillment of City's resource. adequacy obligations: I. 15 megawatts (MW) resource adequacy capacity purchase from Reliant for calendar year 2008 approved in February 2. 10 MW resource adequacy capacity purchase from Reliant for calendar year 2009 approved in May 3. 10 MW resource adequacy capacity purchase from Dynegy for calendar year 2008 approved in June 013 4. 15 MW resource adequacy capacity purchase from Shell Trading for calendar year 2009 approved in June Although the quantities of resource adequacy capacity the City has purchased above are sufficient to meet the reserve margin of 15%, one important aspect is still missing, the locational component, i.e., the resource adequacy has to be at the 'right' location to be effective. The procurement of resource adequacy capacity at the right "location" has been the most difficult task to date. In the previous RFPs Issued, the City did not receive a single offer to "sell" capacity at the right location. An offer to "swap" capacity, however, was made by SDG&E, which would address our location concerns. The offer involves a capacity swap not an outright sale of capacity, i.e., the City gives to SDG&E resource adequacy capacity at one location in exchange SDG&E provides to the City resource adequacy capacity at a location that will fulfill our obligations. The attached Confirmation Agreement in calendar year 2008 effectuates the capacity swap. It should be noted that with this agreement, the City will be completely fulfilling its resource adequacy or "RA" requirement for calendar 2008 including the locational aspect of RA requirement. FISCAL IMPACT The capacity swap with SDG&E will cost $120,000 in fiscal year 2007-08 which has been budgeted; and $120,000 in fiscal year 2008-09 Funds will be budgeted accordingly. Prepared by: Bob Tang, Assistant Director of Resource Management 0.14 AZUSA ucxr�wun CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITI DATE: JULY 23, 2007 SUBJECT: APPROVAL OF TRANSACTION SERVICES AGREEMENT BETWEEN THE CITY AND THE CITY OF RIVERSIDE (RIVERSIDE) AND THE PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY AND THE STRUCTURE GROUP (STRUCTURE) RECOMMENDATION It is recommended that the Utility Board/City Council: (a) approve the Transaction Services Agreement between the City and Riverside for various power scheduling services and authorize the Mayor to execute the Agreement upon preparation of final execution copy; and (b) approve the Professional Services Agreement between the City and Structure for the power scheduling software interface work and authorize the City Manager to execute the Agreement upon preparation of final execution copy. BACKGROUND On April 23, 2007, the Utility Board conceptually approved the selection of Riverside to provide various power scheduling services subject to the terms and conditions of a mutually acceptable agreement. The Board also conceptually approved the Professional Services Agreement with Structure to design power scheduling software interfaces to fully utilize Riverside's power scheduling and settlement software for power scheduling. Staff has successfully completed negotiations with Riverside and Structure and the --� agreements are attached for your consideration and approval. Under the agreement with Riverside, Riverside will provide the following scheduling services to the City: I. Real time scheduling services in the CAISO markets before and after the CAISO market redesign project. 2. Full use of Riverside's proprietary power scheduling and settlement system to interface with the CAISO scheduling and settlement system. (Riverside's scheduling system is licensed and maintained by the Structure Group). 0i5 3. Real time scheduling services for intermittent renewable resources the City might procure in the future. 4. Limited day-ahead scheduling backup services (2 days per month or as agreed upon if more than 2 days) when Azusa's power scheduling personnel are unavailable due to vacation, sick, or in training. Riverside's service charges are: 1. $19,700 per month from October 1, 2007 through June 30, 2008, inclusive of software and hardware license and maintenance fees for Riverside's scheduling/settlement product. In addition, one-time fee of $12,000 will be paid to Riverside to install and maintain a server for City's power scheduling and settlement activities. 2. $20,300 per month from July 1, 2008 through June 30, 2009, inclusive of software and hardware license and maintenance fees for Riverside's scheduling/settlement product. 3. Monthly service charge beyond July 1, 2009 will be determined by a proportional share of Riverside's actual cost of providing scheduling services to be reviewed and agreed upon by both parties. 4. Services can be terminated with a 180-day written notice by either party or by mutual agreement. It should be noted that the service fees by Riverside have been increased to $432,900 from the original estimate of $396,000, an increase of $36,900 for the 21-month period. The cost increase is attributable to a better identification of scope of work to be performed by Riverside for the transitional period to CAISO market redesign. Under the agreement with Structure, Structure will provide the following scheduling services to the City: 1. Installation, testing, and the ongoing maintenance of software interfaces to enable the City to utilize Riverside's scheduling and settlement system remotely 2. Training of City personnel in utilizing the scheduling and settlement system 3. Ongoing technical support Structure's service charges are: 1 . One-time service fee in the first year of $114,000 2. Annual service charge of $16,500 commencing on the second year It should be noted that the service fees by Structure have increased from $70,000 from the 016 original estimate to $114,000, an increase of $44,000. The cost increase is attributable to a better identification of scope of work to be performed by Structure for the transitional period to CAISO market redesign. In aggregate, the overall cost (both Riverside and Structure) for the transition of 21 months has increased by $80;900. Given the highly complex nature of this undertaking, staff believes the cost increase due to better scoping is unavoidable and reasonable, especially since costs are 'one-time" in nature. FISCAL IMPACT The fiscal impact of Riverside and Structure agreements in FY 07-08 is projected to be $303,300 and $243,600 in FY 08-09. Funds have been budgeted in the Electric Fund budget account 33-40-785-560-6493 for FY 07-08 and will continue to be budgeted in future FYs. Prepared by: Bob Tang, Assistant Director of Resource Management %_ In %1 ProposalforMRlU RV PU&733297-v1- Azusa Services Readiness support foAzusa-Professional!Agreement--7-2-07 - 017 `X] _ 2000 West Sam Houston Parkway South The Structure Group Suite 1600 Houston,TX 77042 KNOWLEDGE POWERING SUCCESS Voice: 713.243.7160 Fax: 713.243.7199 ' Bob Tang Assistant Director of Resource Management City of Azusa 729 N. Azusa Ave. Azusa, CA 91702 Proposal to Provide MRTU Readiness Services for the City of Azusa Dear Mr. Tang, At The City of Azusa(Azusa)'s request, The Structure Group (Structure) is submitting a proposal to assist Azusa in preparation for the upcoming CAISO market changes (MRTU). The proposal outlines the tasks necessary to set-up Azusa's SCID using the City of Riverside's current nMarket system Settlement and Scheduling system. This proposal describes scope of services for MRTU, Project Timeline, Major Tasks, project assumptions, required resources, and level of effort and fees. I. Scope of Work for City of Azusa Service for MRTU In preparation for MRTU the City of Azusa would like to have the ability to remotely access the City of Riverside's nMarket Scheduling and Settlement system, which will be required to complete Azusa's CAISO Scheduling and Settlements functions for MRTU. This scope of work includes the activities necessary to install, implement and test these functions for MRTU. The activities required to complete the scope of work are listed below: • Remote set-up for Azusa to allow remote access to scheduling and settlements • Installation and configuration of a new instance of PositionManager at Riverside for Azusa • Set-up Scheduling in nMarket (interface with SIBR through nMarket) for all relevant CAISO markets (IFM, HASP, real time) • Set-up nMarket shadow settlements (CAISO MRTU and SaMC upcoming) • Set-up bilateral deals to capture necessary information • Settlement statement downloads into nMarket(MRTU) • OMAR Meter data downloaded into nMarket (MRTU) • Final Schedules loaded into nMarket (MRTU) • Settlement estimates created by Azusa • Training for nMarket Scheduling and Settlement Functions These tasks are based on current estimates and maybe changed upon mutual agreement with MRTU changes. www.thestructuregroup.com 018 The Structure Group Y M_EME GOwEUNC SUCCESS I1. Proposed Timeline Structure is proposing the following timeline for scope of work above. The services to be preformed are outlined in the task list below where Structure is identified in parenthesis. As identified below, Riverside and Azusa are also responsible for performing certain tasks each is identified respectively in parenthesis. Week Task Week 0 Determine technology for remote access i.e. VPN, remote client etc. (Azusa/Riverside) Set-up connections between Riverside and Azusa (Azusa/Riverside) Test connections (Azusa/Riverside) Week I Structure onsite Project Kick-off meeting (Structure/Azusa/Riverside) Install new instance of PositionManager at Riverside (Structure/Riverside) Install Azusa Client (nMarket) on-site and set-up remote access (Structure/Azusa/Riverside) Begin Set-up for remote connection between Azusa and Riverside (Structure/Azusa/Riverside) Week 2 Complete Set-up for remote connection between Azusa and Riverside (Azusa/Riverside) Begin Configuration—PositionManager at Riverside (Structure) Begin Configuration—nMarket at Azusa (Structure) Week 3 Continue Configuration—PositionManager at Riverside (Structure) Complete Configuration—nMarket at Azusa (Structure) Determine reports for Azusa MRTU (Structure/Azusa/Riverside) Week 4 Complete Configuration—PositionManager at Riverside (Structure) Begin Testing—Remote to PositionManager at Azusa(Structure/Azusa) Begin Testing—Remote to Riverside's nMarket at Azusa(Structure/Azusa) Week S Complete Testing—Remote to PositionManager at Azusa (Structure/Azusa) Complete Testing—Remote to Riverside's nMarket at Azusa(Structure/Azusa) Azusa Training—PositionManager (Structure/Azusa) Azusa Training—nMarket and Reports (Structure/Azusa) www.thestructuregroup.com 019 The Structure Group KNp DCE POWERING SUCCESS III. Major Tasks Azusa Tasks: 1. Set-up network connectivity between City of Azusa and City of Riverside. 2. Complete agreement with Riverside for system support. 3. Acquisition of CAISO certificates and permissions 4. Complete configuration data spreadsheet for Settlements (resource names, operational parameters, etc.) 5. Complete scheduling data loading tool spreadsheet (contracts, schedules, etc.) 6. Execution of test scripts during go-live and acceptance testing 7. Attend all training sessions 8. Reserve and set up appropriate training facility, and ensure that attendees are available for training sessions. Structure Tasks: 1. Installation and configuration of additional PositionManager instance at Riverside 2. Installation of initial environment nMarket and installation validation 3. Azusa specific PositionManager configuration 4. Azusa specific nMarket configuration 5. Initial set up of nMarket user accounts and security 6. Testing of PositionManager via remote connection 7. Testing of nMarket via remote connection 8. Training on PositionManager, nMarket and reports IV. Assumptions: • All services listed will be provided by Structure for Azusa, any changes may affect project schedule. • MRTU services are based on current CAISO published timeline and documentation and may change based on MRTU updates • MRTU services must start prior to CAISO MRTU go-live for successful implementation • Structure will have access to Riverside and Azusa personnel as needed. • Riverside will have the necessary hardware ready, including Oracle installation, by the kickoff meeting. • Structure will have access to Riverside hardware/software as needed. • Azusa and Riverside have complete responsibility for establishing and testing the remote connection. • The remote connection must be established, tested and ready for use by the kickoff meeting. • No user acceptance testing will be performed during the project. The applications are assumed to meet Azusa's requirements based on their selection of Riverside as a strategic partner. • Testing of the application through the remote connection at Azusa's facilities will be performed. • This project will be a five (5) week project barring any delays. • Time and fee estimates are based on current system implementation. • Services fees are estimated based on hourly resources. V. Resources: . www.thestructuregroup.com 020 . The Structure Group KNUWE E PDW ING SUCCESS • Structure Business &Technical Consultant: (Full Time) Consultant will have responsibility for product configuration, documentation, delivering training, and support. • Structure Project Manager: (Full Time) Project Manager will have responsibility for the overall project including coordination of implementation, testing, training, and go-live. • Structure OA Account Manager: (Part Time) Manager will have Riverside account management, project, and deliverables QA responsibilities. • Azusa Resources: (Part Time) Staff will be available as needed for testing and training support. • Riverside Resources: (Part Time) Staff will be available as needed for testing and training support. I1. Fees Services Fees: The total implementation fees for MRTU Services are Time and Materials based for the above tasks (fees are based on tasks listed in the scope section above) Expenses are estimated at 18% of services but will be billed as incurred. • MRTU Consulting Services (Time and Materials) for New Server Install for New Instance of PositionManager at Riverside • Services $71,800 • Expenses (estimated at 18%) $12,924 Total Estimated Services and Expenses $84,724 Software Fees: Item Description Fee nMarket PositionManager Additional Peak MW's above the 60OMW current $10,000 one-time Additional License license are$10,000/100MW, plus the corresponding additional annual maintenance fee. nMarkct PositionManager Annual maintenance fee. Full product maintenance $15,000/year Annual Maintenance to give Azusa full access to Structure Support. nMarket Riverside purchased an unlimited MW license for $0 SettlementsManager SettlementsManager, no additional fees are incurred License and Maintenance nMarket Additional Peak MW's above the 60OMW are $3,000 one-time OperationManager and $3,000/100MW, plus the corresponding additional TransactionManager Base annual maintenance fee. and Extended Maintenance nMarket Annual maintenance fee. 20% of license fee ($600) $1,500/year OperationManager and for base maintenance. 30% of license fee ($900) for TransactionManager Base extended (market change) maintenance. Includes and Extended Maintenance upgrades necessary for market changes (e.g., MRTU). Total First Year Fee One-time fees and first year's maintenance $29,500 one-time Total Annual Fee After Includes above modules. $16,500/year First Year www.thestructuregroup.com 021 The Structure Group KN EOGE MWENNG SUCCESS Project Fees: • Estimated Services and Expenses $84,724 • Software and Maintenance (first year) $29,500 • Total Estimated Project Fees $114,224 I11. Payment Terms Implementation Services The following payment structure will apply to the Implementation Services Billing: • 40% of Implementation Services invoiced upon installation of nMarket Software • 40% of Implementation Services invoiced upon configuration of nMarket • 20% of Implementation Services invoiced upon completion of functional testing Software Billing The following payment structure will apply to the Software Billing: • 40% of Implementation Services invoiced upon installation of nMarket Software • 40% of Implementation Services invoiced upon configuration of nMarket • 20% of Implementation Services invoiced upon completion of functional testing Payment and Pricing Terms—All fees for installation Services are due and payable thirty (30) days after receipt of invoice and per the terms of the Agreement. Let me know if you have any questions or concerns. We look forward to working with Azusa on this effort. Thank you, Corey Berg, Director The Structure Group www.thestructuregroup.com 02e CITY OF AZUSA PROFESSIONAL SERVICES AGREEMENT 1. PARTIES AND DATE. This Agreement is made and entered into this 28h day of June,2007 by and between the City of Azusa, a municipal organization organized under the laws of the State of California with its principal place of business at 213 East Foothill Boulevard, Azusa, California 91702-1295 ("City") and THE STRUCTURE GROUP,LLC.The Straetare group,a California limited liability company 1—[INSERT TYPE OF ENTITY CORPORATION, PARTNERSHIP, S9; F PR Q RR W-T-OR SHIP OR OT14ER[ LEGAL ENTIT-Yj=4 with its principal place of business at i`- -P!S£RT- ADPR-HSS_1 98 Main Street, Suite 300, Tiburon, CA 94920("Consultant"). City and Consultant are sometimes individually referred to as "Party" and collectively as "Parties." 2. RECITALS. 2.1 Consultant. Consultant desires to perform and assume responsibility 'for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing [—INSERT TYPE 0 SERVICE -MRTU Readiness services to public clients, is licensed in the State of California, and is familiar with the plans of City. 2.2 Project. City desires to engage Consultant to.render such services for the[_PjSnoT NAA4F n� PR.9JI;ET MRTU Readiness}project("Project') as set forth in this Agreement. 3. TERMS. 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor,materials,tools,equipment,services,and incidental and customary work necessary to fully and adequately supply the professional [-PISERT TYPF OF SPA --}MRTU Readiness consulting services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to,and performed in accordance with,this Agreement,the exhibits attached hereto and incorporated herein by reference,and all applicable local,state and federal laws,rules and regulations. 1 RVPUB\NSTUBBS\689961.2 023 3.1.2 Term. The term of this Agreement shall be from August 151 2007 to December 31512010, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. 3.2 Responsibilities of Consultant. 3.2.1 Control and Payment of Subordinates:Independent Contractor. The Services shall be performed by Consultant or under its supervision. Consultant will determine the.means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including,but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 3.2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant's conformance with the Schedule,City shall respond to Consultant's submittals in a timely manner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be.subject to the approval of City in accordance with the following. Upon completion of the Services in an Exhibit to this Agreement,Consultant shall send a final invoice to City that City shall pay in accordance with Section 3.3 below. City shall have ten(10)calendar days after delivery of the final invoice to provide Consultant with a written objection ("Objection") if City believes that the Services for that Exhibit has not been completed in accordance with the specifications in the Exhibit. Any Objection must include a detailed identification of each element within the Exhibit that has not been completed. Objections as to matters outside the specific Services set forth in the Exhibit shall not constitute a proper basis for an Objection. Upon receipt of an Objection, Consultant's sole obligation shall be to perform the Services in a manner that is consistent with the Exhibit. Acceptance by City of all Services performed by Consultant shall be deemed to have occurred(a) if no Objection is delivered to Consultant within ten(10)calendar days after the final invoice date,or (b) when the deficiencies noted in an Objection have been cured by Consultant. 3.2.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As 2 RVPUB_\NSTUBBS\669961.2 024 discussed below,any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property,shall be promptly removed from the Project by the Consultant at the request of the City. The key personnel for performance of this Agreement are as fellows! '=HNSEDRTwill be aereed upon project approval. 3.2.5 City's Representative. The City hereby designates [_INSERT NAME OR TI1 LE -4B2b Tang, or his or her designee, to act as its representative for the performance of this Agreement("City's Representative"). City's Representative shall have the power to act on behalf of the City for all purposes under this Contract. Consultant shall not accept direction or orders from any person other than the City's Representative or his or her designee. 3.2.6 Consultant's Representative. Consultant hereby designates Corey Berg, Director for the Structure Group;—INSERT DIAMF OR TITLE-1, or his or her designee,to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times. 3.2.8 Standard of Care: Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project,a threat to the safety of persons or property,or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project. 3.2.9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the 3 RVPUB\NSTUBBS\684961.2 025 performance of the Project or the Services, including all Cal/OSHA requirements,and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant performs any work knowing it to be contrary to such laws,rules and regulations and without giving written notice to the City, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials,directors,officers,employees and agents free and harmless,pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations. 3.2.10 Insurance. 3.2.10.1 Time for Compliance. Consultant shall not commence Work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the City that the subcontractor has secured all insurance required under this section. 3.2.10.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents,representatives,employees or subcontractors. Consultant shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers'Compensation and Employer's Liability:Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance. Consultant shall maintain limits no less than: (1) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability:Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of$1,000,000 per accident for bodily injury or disease. 3.2.10.3 Professional Liability. Consultant shall procure and maintain, and require its sub-consultants to procure and maintain, for a period of five (5) years following completion of the Project, errors and omissions liability insurance appropriate to their profession. Such insurance shall be in an amount not less than $1,000,000 per claim, and shall be endorsed to include contractual liability. RVPUB\NSTUBBS\684961.2 3.2.10.4 Insurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to add the following provisions to the insurance policies: (A) General Liabilitv. The general liability policy shall be endorsed to state that: (1)the City, its directors,officials, officers,employees, agents and volunteers shall be covered as additional insured with respect to the Work or operations performed by or on behalf of the Consultant, including materials,parts or equipment furnished in connection with such work;and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers,employees, agents and volunteers,or if excess,shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant's insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1)the City,its directors,officials,officers,employees,agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance,use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and(2)the insurance coverage shall be primary insurance as respects the City, its directors,officials,officers,employees, agents and volunteers,or if excess,shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage. Any insurance or self-insurance maintained by the City,its directors,officials,officers,employees,agents and volunteers shall be excess of the Consultant's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the City, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Consultant. (D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A)coverage shall not be suspended,voided,reduced or canceled except after thirty(30)days prior written notice by certified mail,return receipt requested, has been given to the City; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, employees, agents and volunteers. 3.2.10.5 Separation of Insureds;No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City,its directors, officials, officers, employees, agents and volunteers. 3.2.10.6 Deductibles and Self-Insurance Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. Consultant shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents and RVPUB\NSTUBBS\6 69 961.2 5 027 volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. 3.2.10.7 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the City. 3.2.10.8 Verification of Coverage. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements must be received and approved by the City before work commences. The City reserves the right to require complete,certified copies of all required insurance policies, at any time. 3.2.11 Safetv. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services,the Consultant shall at all times be in compliance with all applicable local,state and federal laws,rules and regulations,and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life saving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors,such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures. 3.3 Fees and Payments. 3.3.1 Compensation. Consultant shall receive compensation,including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed L=iNS DT 117DTTTEN POLL UR AM-0- iNT i ($i==1NSERT NUMERICAL AL DOLL 4tF nN40U`�the amount set forth in the individual Task orders) without written approvAo-f Extra Work may be authorized,as described below,and if authorized C1ty s� y , will be compensated at the rates and manner set forth in this Agreement. 3.3.2 Payment of Compensation. Consultant shall submit to City a monthly itemized statement which indicates work completed and hours of Services rendered by Consultant. The statement shall describe the amount of Services and supplies provided.since the initial commencement date,or since the start of the subsequent billing periods,as appropriate,through the date of the statement. City shall, within 30 days of receiving such statement, review the statement and pay,all approved charges thereon. 3.3.3 Reimbursement for Expenses. Consultant shall not-be reimbursed for any expenses in accordance with the task orders unless authorized in writing by City. 6 RVPUB\NSTUBBS\689961.2 023 3.3.4 Extra Work. At any time during the term of this Agreement,City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project,but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from City's Representative. 3.3.5 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720,et Leg.,and 1770,et seg.,as well as California Code of Regulations,Title 8, Section 1600, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable"public works"or"maintenance"project,as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. Consultant shall defend, indemnify and hold the City, its elected officials, officers, employees and agents free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. 3.4 Accounting Records. 3.4.1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three(3)years from the date of final payment under this Agreement. 3.5 General Provisions. 3.5.1 Termination of Agreement. 3.5.1.1 Grounds for Termination. City may,by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination,and specifying the effective date thereof,at least seven(7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause. 7 RVPUB\NSTUBBS\684961.2 029 3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request. 3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein,City may procure,upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.5.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: Consultant: The Structure Group ATTN: Corey Berg 98 Main Street, Suite 300 Tiburon, CA 94920 i—INSERT NAME. ADDRESS & CONTACT PERSON-1 City: City of Azusa 729 N. Azusa Avenue P.O. Box 9500 Azusa, CA 91702-9500 Attn: Director of Utilities Light and Water Department Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48)hours after deposit in the U.S. Mail,first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.5.3 Ownership of Materials and Confidentiality. 3.5.3.1 Documents & Data: Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to use, demonstrate and display any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies,drawings, estimates,other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes and software, which are prepared or caused to be prepared by 8 RVPUH\NSTUESS\689961.2 030 Consultant under this Agreement("Documents&Data"). Consultant shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents &Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time,provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. 3:5.3.2 Confidentiality. All ideas, memoranda, specifications, plans, procedures,drawings,descriptions,computer program data, input record data,written information, and other Documents and Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known,or has become known,to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia,photographs of the Project,or any publicity pertaining to the Services or the Project in any magazine,trade paper, newspaper,television or radio production or other similar medium without the prior written consent of City. 3.5.4 Cooperation;Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 3.5.5 Attorney's Fees. If either party commences an action against the other party; either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reason- able attorney's fees and all other costs of such action. 3.5.6 Indemnification. Consultant shall defend, indemnify and hold the City,its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of Consultant,its officials,officers,employees,agents,consultants and contractors arising out of or in connection with the performance of the Services, the Project or this Agreement, including without limitation the payment of all consequential damages and attorneys fees and other related costs and expenses.Consultant shall defend,at Consultant's own cost,expense and risk, any and all such aforesaid suits,actions or other legal proceedings of every kind that may be brought or instituted against City, its directors, officials; officers, employees, agents or volunteers. Consultant shall pay and satisfy any judgment,award or decree that may be rendered against City or its directors,officials,officers,employees,agents or volunteers,in any such suit,action or other legal proceeding. Consultant shall reimburse City and its directors,officials,officers,employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall 9 RVPUB\NSTUBBS\684961.2 031 not be restricted to insurance proceeds, if any, received by the City, its directors, officials officers, employees, agents or volunteers. [**SIF FOR DESIGN PROFESSIONAL SERVIG�c > 1 USE THE FOLLOWINC, ALIPER-NA-TIVE LANGUAGE AND PELETE TME -A—MO-1w LANGUAGE. To the fullest emen�pefmiaed by law,Contfaetershall def�and, indemnif�,and hold 64e Cit.. its ..fF7eial.. offleers,a .,levee,. yalu.,tee. and agents free and l>afmiess free a aiqd all eatisei of oosts,expen.ses,liability,less,damage or injury,in law or equit-�- t,. .t. per+ elud:ng+ gf,.l dea, h, in any manner afising .t bf Pertaining1�r expenses.with the peFferinanee of the Gentraeter's Serviees, ineludingwithout limitation the payment - -------- defend,at Gef4Faeter's own eest,expense and r-isk,any and All quid----M-i- t4s; aetief;q A-f PsI;e4: legal p�aeeediags of every kind that may be brought eF instituted against Qty.-45 ll , • legalemplayees, agents, E)r-volunteer-s,in any sueh suit,action oi-other-legal pr-eeeeding. Centraetor all of them in ce;;npetie4; enses and costs ineuFfed b Ids, if agents, o 'YtlSmii2@i'S. ' , , , 3.5.7 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both parties. 3.5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. 3.5.9 [reserved] 3.5.10 City's Rit to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project. 3.5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties. 3.5.12 Assignment or Transfer. Neither party shall assign,hypothecate,or transfer, either directly or by operation of law,this Agreement or any interest herein without the prior written consent of the other party. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. 10 RVPUB\NSTUBBS\684961.2 032 3.5.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time,days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subcontractors of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 3.5.14 Amendment;Modification. No supplement,modification,or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 3.5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver,benefit,privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. 3.5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. 3.5.17 Invalidity: Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.5.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant,to solicit or secure this Agreement. Further,Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement,no member,officer or employee of City,during the term of his or her service with City, shall have any direct interest in this Agreement,or obtain any present or anticipated material benefit arising therefrom. 3.5.19 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor,employee or applicant for employment because of race,religion,color,national origin,handicap,ancestry,sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 11 RVPUB\NSTUBBS\684961.2 033 3.5.20 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 3.5.21 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 3.5.22 Counterparts. This Agreement may be signed in counterparts,each of which shall constitute an original. 3.6 Subcontracting. 3.6.1 Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein,without prior written approval of City. Subcontracts,if any,shall contain a provision making them subject to all provisions stipulated in this Agreement. 3.7 Warranty and Limitation of Liability. CONSULTANT WARRANTS THAT ITS SERVICES WILL BE PERFORMED IN A PROFESSIONAL AND WORKMANLIKE MANNER AND THAT ANY SOFTWARE PROVIDED UNDER THIS BY CONSULTANT WILL BE FREE OF SIGNIFICANT DEFECTS WHICH SUBSTANTIALLY AFFECTS SYSTEM PERFORMANCE AND WILL CONFORM AS TO SUBSTANTIAL OPERATIONALFEATURES TO THE SPECIFICATIONS IN THE APPLICABLE EXHIBIT. THE WARRANTY IS GOOD FOR NINETY (90) DAYS FROM THE ACCEPTANCE DATE UNDER SECTION 3.2.2 OF THIS AGREEMENT. HOWEVER CONSULTANT MAKES NO REPRESENTATION OR WARRANTY THAT ANY SOFTWARE OR OTHER WORK PRODUCT PROVIDED TO CITY BY CONSULTANT WILL BE FREE FROM DEFECT OR WILL OPERATE ON A CONTINUOUS OR ERROR FREE BASIS. CITY MUST NOTIFY CONSULTANT IN WRITING WITHIN THE WARRANTY PERIOD DESCRIBED ABOVE ANY DEFECTS IN THE SERVICES OR THE SOFTWARE. IF THE SERVICES OR THE PROPRIETARY SOFTWARE IS FOUND DEFECTIVE BY CONSULTANT, CONSULTANT'S SOLE OBLIGATION UNDER THIS WARRANTY IS TO REPERFORM THOSE SERVICES NECESSARY TO REMEDY SUCH DEFECT IN A MANNER CONSISTENT WITH CONSULTANT'S REGULAR BUSINESS PRACTICES. IF THIS CANNOT BE DONE TO THE REASONABLE SATISFACTION OF THE CITY AND IN ACCORDANCE WITH THIS AGREEMENT,THE PURCHASE PRICE FOR THE SOFTWARE MUST BE REFUNDED. THE ABOVE IS A LIMITED AND EXCLUSIVE WARRANTY AND STATES THE SOLE AND EXCLUSIVE REMEDY AGAINST CONSULTANT FOR ANY BREACH OF WARRANTY 12 RVPUB\NSTUBBS\689961.2 0 3 4 OR FOR ANY OTHER CLAIM AGAINST CONSULTANT BASED ON ANY DEFECTS IN OR NONPERFORMANCE OF SERVICES,EQUIPMENT OR SOFTWARE UNDER ANY THEORY. CONSULTANT . EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES AND REPRESENTATIONS,INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CONSULTANT AGREES TO DEFEND AND INDEMNIFY CITY IN ANY CLAIM OR SUIT BY A THIRD PARTY REGARDING INFRINGEMENT OR MISUSE OF INTELLECTUAL PROPERTY ARISING OUT OF OR CONNECTED WITH THE SOFTWARE INSTALLED BY CONSULTANT. CITY AGREES THAT, EXCEPT WITH REGARD TO THE INDEMNIFICATION PROVISIONS ABOVE, CONSULTANT'S LIABILITY ARISING OUT OF THIS AGREEMENT AND THE SERVICES, SOFTWARE AND EQUIPMENT PROVIDED HEREUNDER, WHETHER UNDER THEORIES OF CONTRACT, NEGLIGENCE, STRICT LIABILITY IN TORT OR WARRANTY SHALL NOT EXCEED THE AMOUNTS PAYABLE BY CITY TO CONSULTANT FOR, AS THE CASE MAY BE, THE SERVICES, EQUIPMENT OR SOFTWARE THAT IS THE BASIS OF SUCH CLAIM. 3.8 Non-Solicitation. For purposes of this paragraph, "Employee" shall mean current employees or persons employed within three(3)months prior to the referenced activity. During the period of performance of services by Consultant and for twelve (12) months thereafter, (a) Consultant agrees not to solicit or induce any Employee of City to terminate his or her employment with City or to hire any Employee of City without the prior written approval of City, and (b) City agrees not to solicit or induce any Employee of Consultant to terminate his or her employment with Consultant or to hire any Employee of Consultant without the prior written approval of Consultant. [SIGNATURES ON FOLLOWING PAGE] 13 RVPUB\NSTUBBS\684961.2 0 CITY OF AZUSA THE STRUCTURE GROUP By. By. City Manager Michael Cutler'^ Nincipal[Tide} Attest: Vera, Mendoza City Clerk Approved as to Form: Best Best& Krieger LLP City Attorney .14 RVPUB\NSTUBBS\689961.2 036 ExHmIT"A" SCOPE OF SERVICES [INSERT SCOPE] A-1 RVPUB\NSTUBBS\684961.2 037 EXHIBIT"B" SCHEDULE OF SERVICES [INSERT SCHEDULE] B-1 RVPUB\NSTUBBS\689961.2 033 EXHIBIT "C" COMPENSATION [INSERT RATES & AUTHORIZED REIMBURSABLE EXPENSES] C-1 ftV@tiWW?§Y l4A\664961.2 039 1 DRAFT 7-2-07 2 3 4 5 6 7 s TRANSACTION SERVICES AGREEMENT 9 10 BETWEEN 11 12 CITY OF AZUSA 13 14 AND 15 16 CITY OF RIVERSIDE 17 16 19 20 21 22 23 24 25 26 040 1 AZUSA - RIVERSIDE 2 TRANSACTION SERVICES AGREEMENT 3 4 TABLE OF CONTENTS 5 SECTION PAGE 6 1. PARTIES................................................................................:.........................................1 7 2. RECITALS.......................................................................................................................1 8 3. AGREEMENT.................................................................................................................1 9 4. DEFINITIONS.................................................................................................................1 10 5. TERM AND RELATION TO OTHER AGREEMENTS............................................4 11 6. ADMINISTRATION AND IMPLEMENTATION......................................................5 12 7. RIVERSIDE COMPENSATION AND REIMBURSEMENT....................................8 13 8. MISCELLANEOUS TASK ASSIGNMENTS..............................................................8 14 9. BILLING AND PAYMENT...........................................................................................9 15 10. AUTHORIZED REPRESENTATIVES....................................................................10 16 11. INDEMNIFICATION.................................................................................................11 17 12. RELATIONSHIP OF THE PARTIES ......................................................................12 18 13. UNCONTROLLABLE FORCES...............................................................................12 19 14. AUDITS ........................................................................................................................12 20 15. THIRD PARTY BENEFICIARIES...........................................................................13 21 16. DISPUTE RESOLUTION..........................................................................................13 22 17. ASSIGNMENT OF INTERESTS ..............................................................................13 23 18. NO DEDICATION OF FACILITIES........................................................................14 24 19. PREVIOUS COMMUNICATIONS...........................................................................14 25 20. CONSTRUCTION OF AGREEMENT.....................................................................14 26 21. NONDISCRIMINATION............................................................................................14 041 1 22. EVENTS OF DEFAULT.............................................................................................15 2 23. AMENDMENTS................................................................................1524. WAIVERS 16 3 25. SECTION HEADINGS...............................................................................................16 4 26. GOVERNING LAW....................................................................................................16 5 27. NOTICES .....................................................................................................................16 6. 28. SIGNATURE CLAUSE..............................................................................................17 7 8 ATTACHMENT A - OPERATING INSTRUCTION FOR TRANSACTION 9 SCHEDULING SERVICES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 . 042 1 AZUSA - RIVERSIDE 2 TRANSACTION SERVICES AGREEMENT 3 4 1. PARTIES: The Parties to this Transaction Services Agreement ("Agreement") are the 5 CITY OF AZUSA ("Azusa") and the CITY OF RIVERSIDE ("Riverside"), municipal 6 corporations organized and existing under the laws of the State of California, each 7 hereinafter sometimes referred to individually as "Party" and collectively as "Parties." 8 2. RECITALS: This Agreement is made with reference to the following facts, among 9 others: 10 2.1 Each Party owns, operates, and maintains a municipal electric system for the 11 benefit of its citizen ratepayers. 12 2.2 Azusa has procured Power Resources to serve its Supply Obligations.and is a 13 Scheduling Coordinator in accordance with the California Independent System Operator 14 Corporation ("ISO") Tariff. 15 2.3 Azusa desires that Riverside perform certain Transaction Services, as set forth in 16 one or more Operating Instructions. 17 2.4 Riverside is willing to provide such services with the express understanding that in 18 no event shall the services provided by Riverside hereunder be construed to create any 19 liability, whether legal, financial, or otherwise, on the part of Riverside with respect to 20 Azusa, Azusa's retail customers, or any third party, except as provided in Section 11. 21 3. AGREEMENT: In consideration of the premises, covenants, and conditions herein, as 22 well as the foregoing recitals which are incorporated into this.Agreement, the Parties agree 23 as follows: 24 4. DEFINITIONS: Terms used herein with initial capitalization, whether in singular or 25 plural, shall have the meaning specified in the ISO Operating Agreement and Tariff, dated 26 March 1, 2006, as it may be modified from time to time. Terms used herein with initial 1 043 I capitalization, whether in the singular or the plural, which are not defined in the ISO Tariff 2 shall have the following meanings: 3 4.1 Authorized Representative: The representative designated by each Party, in 4 accordance with Section 10, to act in such Party's behalf with respect to those matters 5 specified-herein to be the functions of such Authorized Representative. 6 4.2 Confirmation Agreement: A confirmation between Azusa and Riverside for the 7 purchases and sales of energy, ancillary services, or transmission services that the Parties 8 may enter into from time to time by mutual agreement.[i.e., a WSPP Confirmation] 9 4.3 Corrective Actions: Actions taken by Riverside in the name of Azusa with respect 10 to Azusa's Power Resources in response to planned or unplanned electric system or power ]l market circumstances. Corrective Actions also include actions taken at the direction of 12 Azusa or third parties, including the ISO, having authority to give operational instructions 13 with respect to Azusa's Power Resources. 14 4.4 Edison: The Southern California Edison Company, or its successor. 15 4.5 ISO Transactions: Transactions entered into or conducted through the markets 46 administered by the ISO or its successor in accordance to the ISO Tariff. 17 4.6 Native Load: The electrical capacity and energy requirements of Azusa's retail 18 customers, as measured at its interconnection point with Edison for ISO electric load 19 measurement and reporting purposes. 20 4.7 NERC: The North American Electric Reliability Corp, or its successor. 21 4.8 Operating Instruction: Written instructions agreed upon by the Parties' Authorized 22 Representatives pertaining to Riverside's performance of Transaction Services hereunder. 23 4.9 Power Resources: Azusa's contractual or equity interests in sources of capacity, 24 energy, Ancillary Services, and transmission service including, but not limited to, Azusa's 25 Term Transactions, Prescheduled Transactions, Real-time Transactions, and ISO 26 Transactions. -2- 044 1 4.10 Prudent Utility Practice: Any of the practices, methods, and acts which, in the 2 exercise of reasonable judgment in light of the facts (including but not limited to the 3 practices, methods, and acts engaged in or approved by a significant portion of the electrical 4 utility industry prior thereto)known at the time the decision was made, which would have 5 been expected to accomplish the desired result at the lowest reasonable cost consistent with 6 good business practices, reliability, safety, and expedition, taking into account the fact that 7 Prudent Utility Practice is not intended to be limited to the optimum practice, method, or act 8 to the exclusion of all others, but rather to be a spectrum of possible practices, methods, or 9 acts which could have been expected to accomplish the desired result at the lowest 10 reasonable cost consistent with reliability, safety, and expedition. Prudent Utility Practice I 1 includes due regard for manufacturers' warranties and requirements of governmental 12 agencies of competent jurisdiction. 13 4.11 Settlement Services: Activities undertaken by Riverside in accordance with an 14 Operating Instruction for the settlement of Azusa's Power Resource transactions, limited to 15 the verification of Real-time transactions and Prescheduling transactions Riverside conducts 16 on Azusa's behalf. 17 4.12 Supply Obligations: Azusa's electricity supply requirements including, but not 18 limited to, Azusa's Native Load requirements and its obligations to supply capacity, energy, 19 transmission service, Ancillary Services, or any combination thereof to Riverside or to third 20 parties pursuant to Azusa's contractual arrangements, including Confirmation Agreements, 21 or as contemplated in an Operating Instruction. Such obligations may also include the 22 supply of transmission service, energy, Ancillary Services, or capacity to the ISO. 23 4.13 Task Assignment: Services, in addition to Transaction Services, provided by 24 Riverside to Azusa pursuant to Section 8 of this Agreement. 25 4.14 Transaction Services: Services as specified in Operating Instruction for 26 Transaction Scheduling Services, shown as an Attachment to this Agreement. - 3- 045 1 4.15 Workday: Each weekday recognized by Riverside as a normal day of work. 2 Initially, Workday shall mean each Monday through Friday, excluding those holidays 3 observed by Azusa or Riverside. 4 4.16 WECC: The Western Electricity Coordinating Council, or its successor. 5 4.17 WSPP Agreement: The WSPP, Inc. Agreement, as the same may be amended, 6 supplemented or superseded from time to time. The most recently adopted version of the 7 WSPP Agreement is available through the WSPP's Internet web site (http://www.wspp.org). 8 5. TERM AND TERMINATION: 9 5.1 This Agreement shall be effective upon its execution and delivery by both Parties. 10 5.2 Unless otherwise agreed by the Authorized Representatives, this Agreement shall 11 terminate upon the earliest to occur of any of the following: 12 5.2.1 One hundred eighty (180) days advance written notice by either Party to 13 the other Party; or 14 5.2.2 Termination of either Party's status as a Scheduling Coordinator; or 15 5.2.3 Failure of the Parties' Authorized Representatives to establish the amount 16 of Riverside's compensation as provided in Section 7.1, or the method for allocating costs 17 pursuant to Section 7.2; or 18 5.2.4 The date Azusa is no longer a party to the WSPP Agreement; or 19 5.2.5 The thirtieth(30'x)day after written notice of termination by the non- 29 defaulting Party as provided in Section 22; or 21 5.2.6 The date upon which the duties and functions currently performed by the 22 ISO are transferred to a successor entity. 23 5.3 An obligation of one Party that arises hereunder to make payments to the other 24 Party shall survive termination or expiration of this Agreement until discharged by the 25 obligated Party. 26 5.4 By approval of this Agreement,the Parties authorize their Authorized -4- a s I Representatives,or his/her designee, to provide the written notice contemplated under 2 Section 5.2.1 herein. 3 6. ADMINISTRATION AND IMPLEMENTATION: 4 6.1 Azusa Contracts and Agreements: Azusa shall promptly provide to Riverside 5 copies of all contractual arrangements entered into by Azusa and reasonably required by 6 Riverside to perform the services described herein or in an Operating Instruction. 7 Furthermore, Azusa shall notify Riverside as soon as practicable regarding any change, or 8 proposed change, in such arrangements which may affect Riverside's performance of its 9 duties under this Agreement or an Operating Instruction. 10 6.2 Telemetered Native Load Data: Azusa shall provide, or cause to be provided, to 11 Riverside telemetered measurement of Azusa's Native Load. Such Native Load information 12 shall be provided using time intervals no greater than that required by the ISO with respect 13 to Settlement Quality Meter Data and shall include all information reasonably required for 14 Riverside to effectively perform the Transaction Services. 15 6.2.1 Azusa currently uses a third party service to monitor the loads at Azusa 16 Substation and Kirkwall Substation, the two substations exclusively serving Azusa's electric 17 system. The service is internet based and provides hourly load data a few minutes after the 18 hour. Azusa shall provide Riverside with the necessary access to the hourly meter data. 19 6.3 Settlement Ouality Meter Data: Azusa shall authorize the ISO to grant Riverside 20 access to Azusa's billing quality meter data held by the ISO's meter data collection and 21 storage systems. 22 6.4 Operating Instructions: The Parties' Authorized Representatives may establish 23 Operating Instructions as guidelines for Riverside in its performance.of the services 24 provided hereunder. Riverside shall act in accordance with all Operating Instructions to the 25 extent such instructions do not conflict with this Agreement, Prudent Utility Practice, any 26 applicable contractual arrangements governing the subject matter thereof, or the policies and -5 - 047 I practices of Riverside, the ISO, the WECC, or the NERC. Operating Instructions shall be 2 executed by the Parties' Authorized Representatives, or their respective designees. In no 3 event shall an Operating Instruction be construed to amend or modify this Agreement. If a 4 conflict should arise between the terms and conditions of this Agreement and the methods, 5 policies, practices, or directions set forth in an Operating Instruction, the terms and 6 conditions of this Agreement shall prevail to the extent of any such conflict. 7 6.5 Non-Solicitation of Employees: During the term of this Agreement, each Party 8 agrees that absent the consent of the other Party, it shall not attempt to employ as employees, 9 consultants, or in any other capacity those individuals performing work or who have 10 performed work covered by this Agreement. For a period of one (1)year following the 11 termination or expiration of this Agreement,neither Party shall solicit, influence, or attempt 12 to influence any employee to terminate his or her employment with the other Party. Both 13 Parties acknowledge this section is not applicable to an open recruitment process by either 14 Azusa or Riverside. 15 6.6 Right to Compete: The Parties acknowledge that each is a competitive provider of 16 electric power in the Western United States, and each is likely to be a competitor for electric 17 power transactions. This Agreement is not intended to limit the right of either Party to 18 compete with the other Party to purchase or sell electric power, electric transmission services, 19 or Ancillary Services to any person, including any person with whom a Party negotiates or 20 executes agreements for thepurchase or sale of said electric power products or services; 21 provided,however, that if a Party believes that performing the duties contemplated herein 22 will cause it to be in direct competition with the other Party and that such competition will 23 adversely affect its performance under this Agreement,the Party shall promptly disclose such 24 information to the other Party. Parties shall use their best efforts to resolve such conflict. 25 Each Party agrees that it shall not compete to provide electric power products or services to 26 the other Party's existing retail customers. 6 43 1 6.7 Ownership and Control: Azusa shall maintain ownership and control of its Power 2 Resources and ultimate authority and responsibility for its planning and operating decisions. 3 Riverside shall not be obligated to procure or supply electric power or electric power supply 4 instruments from or to Azusa, although such transactions shall not be precluded by this 5 Agreement. 6 6.8 Transaction Risk: Notwithstanding any other provision of this Agreement or 7 Azusa's reliance on Riverside's assistance or advice,Azusa assumes all liability, 8 responsibility, and risk and, pursuant to Section 11, agrees to defend, indemnify, and hold 9 harmless Riverside, its officers, agents, and employees from and against any and all 10 liability, claims, demands, and costs arising out of or associated with any Prescheduled 11 Transactions or Real-time Transactions entered into, modified, or terminated by Riverside 12 in Azusa's name, including but not limited to the operation of its Power Resources, its 13 purchases and sales of electric power and transmission service, and the extending of credit 14 to third parties. All signatories to the WSPP Agreement shall be deemed counterparties 15 suitable to Azusa with respect to creditworthiness..Provided, however, if Azusa's 16 Authorized Representative timely provides written notice to Riverside's Authorized 17 Representative that one or more signatories to the WSPP Agreement do not meet Azusa's 18 counterparty creditworthiness requirements, thereafter Riverside shall not enter into 19 Prescheduled Transactions or Real-time Transactions with such counterparties in Azusa's 20 name. 21 6.9 California Public Records Act Requests (Government Code Section 6250 et seq.) 22 and Confidential Information: Parties are both public entities with a responsibility and, in 23 many cases, legal obligation to conduct business in a manner that is open and available to 24 the public. Accordingly, Parties acknowledge that any information provided by either 25 Party with respect to this Agreement or the services to be provided hereby, may be 26 disclosed to the public either purposely, inadvertently, or as a result of a public demand or -7- 049 I order. If either Party intends to or determines that it is required under applicable law to 2 disclose any information associated with this Agreement or the services provided hereby, 3 the Party shall notify the other Party at least five business days before disclosure of such 4 information. Upon notification, the Parties shall review the information to be disclosed 5 and either Party may seek a protective order preventing such disclosure if appropriate. 6 7. RIVERSIDE COMPENSATION AND REIMBURSEMENT: 7 7.1 Monthly fees and charges assessed by Riverside hereunder shall be as set forth in 8 the applicable Operating Instruction(s) or Task Assignment(s); provided, that such monthly 9 fees and charges shall not be less than Riverside's cost including, but not limited to, labor, 10 overhead, administration, and general fund transfer costs, of providing the services specified 11 in the Operating Instruction. 12 7.1.1 As part of its monthly fees, Azusa shall pay to Riverside its proportionate 13 share of all computer hardware, software, and telecommunication costs for existing 14 infrastructure as identified in Attachment B and its proportionate share of costs incurred by 15 Riverside after the effective date of this Agreement in connection with Riverside's 16 performance hereunder. Azusa's share of such costs shall be set forth in one or more 17 Operating Instructions. The Authorized Representatives shall determine from time to time 18 the method for determining the appropriate allocation of such costs. 19 7.2 For costs incurred, or to be incurred, by Riverside in connection with the services 20 provided by Riverside hereunder, or in connection with a Task Assignment, Riverside shall 21 bill Azusa for all such costs. In cases where the Authorized Representatives have 22 established procedures whereby computer, consulting, or vendor service costs are allocated 23 between Azusa and Riverside, Riverside shall bill Azusa for its share of such costs in 24 accordance with the allocation methodology agreed to by the Authorized Representatives in 25 the applicable Operating Instruction or Task Assignment. 26 8. MISCELLANEOUS TASK ASSIGNMENTS: - 8- 50 1 8.1 Azusa may request that Riverside provide additional task specific services related 2 to the Transaction Services defined in this Agreement. If Riverside elects to provide such 3 additional related services, the Parties' Authorized Representatives shall execute a Task 4 Assignment specifying the rates, terms, and conditions applicable thereto. The provision, by 5 Riverside, of additional.services that would expand the scope of the Agreement shall require 6 an amendment to the Agreement pursuant to Section 23 herein. 7 8.2 The terms and conditions of this Agreement shall govern the Parties' performance 8 of their obligations under any Task Assignment. In no event shall the terms and conditions 9 of a Task Assignment be deemed to amend or modify the terms and conditions of this 10 Agreement. 11 9. BILLING AND PAYMENT: 12 9.1 Bills shall be rendered and payments made under this Agreement as follows: 13 9.1.1 Riverside shall render bills hereunder to Azusa by the tenth (10th) day of 14 each month. Azusa shall pay such bills not later than the twenty-fifth (25h) day of the 15 month in which the bill is issued, or on the first business day thereafter if the twenty-fifth 16 (25h) day falls on a Saturday, Sunday or holiday. 17 9.1.2 Payments which are not made in full by Azusa by said due dates shall 18 thereafter accrue interest at the lesser of(i) one percent(I%) per month of the unpaid 19 balance, or (ii) the maximum rate otherwise permitted by law applicable to this Agreement, 20 prorated by days until payment is sent by Azusa. 21 9.1.3 In the event any portion of any bill is disputed, Azusa shall pay the bill, 22 including the disputed amount, under protest when due. If the protested portion of the 23 payment is found to be incorrect, Riverside shall promptly refund any amount due, 24 including interest at the lesser of(i) one percent (1%) per month or, (ii) the maximum rate 25 otherwise permitted by law applicable to this Agreement, prorated by days from the date of 26 payment to the date the refund check is sent by Riverside. -9- 0 Q 1 1 9.1.4 If the Parties are each required to pay an amount to each other in the same 2 calendar month under this Agreement, then such amounts with respect to each Party may be 3 aggregated and the Parties may discharge their obligations to pay through netting of the 4 respective amounts due, in which case the Party, if any, owing the greater aggregate amount 5 may pay to the other Party the difference between the amounts owed- 6 10. AUTHORIZED REPRESENTATIVES: 7 10.1 Each Party shall designate by written notice to the other Party a representative 8 who is authorized to act on its behalf in the implementation of this Agreement and with 9 respect to those matters contained herein which are the functions and responsibilities of the 10 Authorized Representatives. Each Authorized Representative may delegate actual 11 performance of such functions and responsibilities; provided, that any agreement of the 12 Authorized Representatives required to be in writing shall be signed by the Authorized 13 Representatives. Initially, the Parties' Authorized Representatives shall be the chief 14 executive officer of their respective public utilities departments. Either Party may at any 15 time change the designation of its Authorized Representative by written notice to the other 16 Ply. 17 10.2 Azusa's Authorized Representative may, upon at least thirty(30) days advance 18 written notice to Riverside's Authorized Representative, elect to discontinue or reduce 19 Riverside's provision of the services pursuant to this Agreement or any Operating 20 Instruction. In the event that Azusa so elects to discontinue or reduce a service, (i) Azusa 21 shall make such notifications and arrangements with third parties as may be required in 22 connection therewith, and (ii) any subsequent request by Azusa that Riverside resume such 23 service shall be subject to the agreement of Riverside's Authorized Representative. This 24 provision shall not constitute a method of termination in addition to those methods specified 25 in Section 5.2 herein. 26 10.3 For any reduction in or termination of the services provided by Riverside pursuant 10- 052 I to this Agreement or any Operating Instruction established hereunder, the Authorized 2 Representatives shall attempt in good faith to adjust Riverside's monthly compensation 3 established pursuant to this Agreement or any Operating Instruction established hereunder, 4 as appropriate, upon the effective date of such reduction or termination. If the Authorized 5 Representatives are unable to agree on the adjustment to Riverside's monthly compensation, 6 then the reduction or termination of services specified by Azusa shall not commence until 7 the first date for which the Authorized Representatives have agreed that Riverside's monthly 8 compensation reflects such reduction or termination of services. 9 10.4 The Authorized Representatives shall confer from time to time with each other in 10 the performance of Operating Instructions established herein and promptly notify and 11 resolve any issues arising from the performance under this Agreement and Operating 12 Instructions. 13 11. INDEMNIFICATION: 14 11.1 Except as to the sole negligence or willful misconduct of Riverside, Azusa shall 15 defend, indemnify, and hold Riverside, its officers, and employees harmless from any and 16 all loss, damage, claim for damage, liability, expense, or cost, including attorney's fees, 17 which arises out of or is in any way connected with the performance of work under this 18 Agreement.by Riverside or any of Riverside's officers, employees, or agents. The parties 19 expressly agree that any payment, attorney's fee, costs, or expense Riverside incurs or 20 makes to or on behalf of an injured employee under Riverside's self-administered workers' 21 compensation program is included as a loss, expense, or cost for purposes of this Section 22 provided such claim is the direct result and solely attributable to the scope of work 23 authorized herein, and that this Section shall survive the expiration or early termination of 24 the Agreement. 25 11.2 The provisions of this Section 11 shall be binding upon the Parties to the fullest 26 extent permitted by law. 11 - 053 1 12. RELATIONSHIP OF THE PARTIES: The covenants, obligations, and liabilities of 2 the Parties are intended to be several and not joint or collective, and nothing herein 3 contained shall ever be construed to create an association,joint venture, trust, or partnership, 4 or to impose a trust or partnership covenant, obligation, or liability on or with regard to 5 either Party. Each Party shall be individually responsible for its own covenants, obligations, 6 and liabilities as herein provided. Neither Party shall be under the control of nor shall be 7 deemed to control the other Party. Neither Party shall be the agent of or have a right or 8 power to bind the other Party without such other Party's express written consent, except as 9 provided in this Agreement. 10 13. UNCONTROLLABLE FORCES: If the existence of an Uncontrollable Force I 1 disables a Party from performing its obligations under this Agreement (except for such 12 Party's obligations to make payments hereunder), such Party shall not be considered to be in 13 default in the performance of any such obligations while such disability of performance 14 exists. A Party rendered unable to fulfill any of its obligations under this Agreement by 15 reason of an Uncontrollable Force shall exercise due diligence to remove such inability with 16 all reasonable dispatch. Nothing contained herein shall be construed so as to require a Party 17 to settle any strike or labor dispute in which it may be involved. 18 14. AUDITS: Azusa shall have the right to audit any costs, payments, settlements, or other . 19 supporting information pertaining to this Agreement. Any such audit shall be undertaken by 20 Azusa or its representative at reasonable times and in conformance with generally accepted 21 auditing standards. Riverside shall fully cooperate with any such audit, the cost of which 22 shall be paid by Azusa. The right to audit a billing shall extend for a period of three (3) 23 years following the rendering of the bill. Riverside shall retain all necessary records or 24 documentation for the entire length of such three (3) year period and shall, to the extent 25 permitted by law, take all steps reasonably available to assure the confidentiality of Azusa's 26 accounting records and supporting documents. 12- 54 1 15. THIRD PARTY BENEFICIARIES: Unless otherwise specified in this Agreement, 2 there are no third party beneficiaries to this Agreement. This Agreement shall not confer any 3 right or remedy upon any person or entity other than the Parties and their respective successors 4 and assigns permitted under Section 17. No action may be commenced or prosecuted against 5 any Party by any third party claiming to be a third party beneficiary of this Agreement or the 6 transactions contemplated thereby. This Agreement shall not release or discharge any 7 obligation or liability of any third party to any Party or give any third party any right of 8 subrogation or action over or against any Party. 9 16. DISPUTE RESOLUTION: The Parties' Authorized Representatives shall attempt to 10 amicably and promptly resolve any dispute arising between the Parties' under this 11 Agreement. Nothing in this Agreement shall preclude either Party from taking any lawful 12 action it deems appropriate to enforce its rights under this Agreement. 13 17. ASSIGNMENT OF INTERESTS: 14 17.1 Neither Party shall assign this Agreement to any person or entity("Assignee") 15 without the prior written consent of the other Party, which consent shall not be unreasonably 16 withheld or delayed. Azusa expressly understands and agrees that it shall not be unreasonable 17 for Riverside to withhold or delay its consent to Azusa's proposed or purported assignment to 18 any person or entity that has not demonstrated to Riverside's reasonable satisfaction that 19 Riverside's provision of the services contemplated herein will not be adversely affected 20 thereby. 21 17.2 Any assignment by a Party of its interest in this Agreement which is made without 22 the prior written consent of the other Party shall not relieve the assigning Party from primary 23 liability for any of its duties and obligations under this Agreement, and in the event of any 24 such assignment, the assigning Party shall continue to remain primarily liable for payment of 25 any and all money due the other Party as provided under this Agreement, and for the 26 performance and observance of all covenants,duties, and obligations to be performed and - 13 - 55 I observed under this Agreement by the Party to the same extent as though no assignment had 2 been made. 3 17.3 Whenever an assignment of a Party's interest in this Agreement is made with the 4 written consent of the other Party,the Assignee shall expressly assume in writing the duties 5 and obligations under this Agreement of the assigning Party and, within thirty(30)days after 6 any such.assignment and assumption of duties and obligations, the assigning Party shall 7 furnish, or cause to be furnished, to the other Party a true and correct copy of such 8 assignment and assumption of duties and obligations. Upon the effective date of such 9 assignment, the assigning Party shall be relieved of is obligations and duties under this 10 Agreement, except outstanding payment obligations. 11 17.4 Subject to the foregoing restrictions on assignment, and as described in Section 15, 12 this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the I 3 Parties and their respective successors and assigns. 14 18. NO DEDICATION OF FACILITIES: Any undertaking by either Party to the other 15 Party under this Agreement shall not constitute the dedication of the system, or any portion 16 thereof, of that Party to the public or to the other Party, nor affect the status of that Party as 17 an independent system. 18 19. PREVIOUS COMMUNICATIONS: This Agreement contains the entire agreement 19 and understanding between the Parties as to the subject matter of this Agreement and 20 supersedes all prior commitments, representations, and discussions between the Parties. 21 20. CONSTRUCTION OF AGREEMENT: Ambiguities or uncertainties in the wording 22 of this Agreement shall not be construed for or against either Party, but shall be construed in 23 a manner that most accurately reflects the intent of the Parties when this Agreement was 24 executed and is consistent with the nature of the rights and obligations of the Parties with 25 respect to the matter being construed. 26 21. NONDISCRIMINATION: During the performance of this Agreement, no Party shall 14 Gb5c I deny the Agreement's benefits to any person, nor shall any Party discriminate unlawfully 2 against any employee or applicant for employment, on the ground or because of race, color, 3 creed, national origin, ancestry, age, sex, sexual orientation, marital status, or disability 4 including the medical condition of Acquired Immune Deficiency Syndrome (AIDS) or.any 5 condition related thereto. Each Party shall insure that the evaluation and treatment of 6 employees and applicants for employment are free of such discrimination. 7 22. EVENTS OF DEFAULT: In the event that Riverside or Azusa shall materially 8 default in the performance of its obligations under this Agreement, the non-defaulting Party 9 shall give written notice of the default to the defaulting Party. If after thirty(30) days after 10 the non-defaulting Party shall have given such written notice to the defaulting Party, the 11 defaulting Party shall have failed to cure the default in its performance of this Agreement, or 12 if such default requires more than thirty(30) days to cure and the defaulting Party fails to 13 commence such cure and diligently prosecute such cure to completion, in addition to any 14 other remedies provided by law, the non-defaulting Party may terminate this Agreement by 15 written notice of termination as provided for in Section 5.2.5. In addition to any other cause 16 of default arising hereunder, a Party shall be in default if: 17 22.1 It becomes insolvent; or 18 22.2 It makes a general assignment of substantially all of its assets for the benefit of its 19 creditors, files a petition for bankruptcy or reorganization or seeks other relief under any 20 applicable insolvency laws; or 21 22.3 It has filed against it a petition for bankruptcy, reorganization or other relief under 22 any applicable insolvency laws and such petition is not dismissed within sixty(60) days after it 23 is filed. 24 25 23. AMENDMENTS: This Agreement may be modified, supplemented or amended only 26 by a writing duly executed by the.Parties. - 15 - 57 1 24. WAIVERS: Any waiver at any time by either Party of its rights with respect to a 2 default under this Agreement or with respect to any other matter arising in connection with 3 this Agreement, shall not be deemed a waiver with respect to any subsequent default or 4 other matter arising in connection therewith. Any delay, short of the statutory period of 5 limitation in asserting or enforcing any right, shall not be deemed a waiver of such right. 6 25. SECTION HEADINGS: All captions and headings appearing in this Agreement are 7 inserted to facilitate reference and shall not govern, except where logically necessary, the 8 interpretations of the provisions hereof. 9 26. GOVERNING LAW: This Agreement shall be interpreted, governed by, and 10 construed under the laws of the State of California or the laws of the United States as 1 I applicable, as if executed and to be performed wholly within the State of California. 12 27. NOTICES: 13 27.1 Any notice, demand or request provided for in this Agreement, or served, given or 14 made in connection with it, shall be in writing and shall be deemed properly served, given or 15 made if delivered in person or sent by United States mail, postage prepaid, to the persons 16 specified below unless otherwise provided for in this Agreement: 17 City of Azusa: 18 City of Azusa Director, Light &Water Department 19 729 North Azusa Avenue P. O. Box 9500 20 Azusa, California 91702 21 City of Riverside: 22 City of Riverside Public Utilities General Manager 23 3901 Orange Street Riverside,California 92501 24 25 27.2 Either Party may at any time, by notice to the other Party, change the designation 26 or address of the person so specified as the one to receive notices pursuant to this - 16- ��E7 I Agreement. 2 28. SIGNATURE CLAUSE: The signatories hereto represent that they have been 3 appropriately authorized to enter into this Transaction Services Agreement on behalf of the 4 Party for whom they sign. Executed as of this day of 5 2007. 6 CITY OF AZUSA 7 By: 8 Title: 9 Attest: 10 City Clerk 11 APPROVED AS TO FORM: 12 13 City Attorney ' 14 15 16 CITY OF RIVERSIDE 17 18 By: 19 Title: 20 Attest: 21 City Clerk 22 APPROVED AS TO FORM: 23 24 Mark L. Parsons 25 Deputy City Attorney 26 - 17- Q 59 I AZUSA - RIVERSIDE 2 TRANSACTION SERVICES AGREEMENT 3 Attachment A 4 OPERATING INSTRUCTION FOR TRANSACTION SCHEDULING SERVICES 5 6 This Operating Instruction for transaction scheduling services is entered into this day 7 of 2007 pursuant to the Transaction Services Agreement between the City 8 of Azusa and the City of Riverside, dated ' 2007. 9 1. Definitions: Terms used herein with initial capitalization, whether in singular or plural, 10 shall have the meaning specified in the Transaction Services Agreement. Terms used herein I i with initial capitalization, whether in the singular or the plural, which are not defined in the 12 Transaction Services Agreement shall have the following meanings: 13 1.1 Business System: [e.g., Position Manager, nMarket, etc.] 14 1.2 Business System Vendor: [e.g., Structure Group, AT&T, etc.] 15 1.3 Normal Working Hours: The hours Azusa's power schedulers work each week 16 day, typically 6:00 a.m. to 3:00 p.m. which excludes Saturdays, Sundays and Holidays. 17 1.4 Prescheduled Transaction: Transactions involving Azusa's Power Resources, 18 including any purchase, sale, or exchange of transmission service, Ancillary Services or 19 electric energy or capacity, or any combination thereof, entered into, terminated or modified by 20 Azusa or in Azusa's name by Riverside's prescheduling function, as such function is defined 21 by Riverside from time to time. Normally, Prescheduled Transactions are agreed to by the 22 seller and purchaser in advance of the first day involving deliveries or product availability and 23 cover a period of time up to the remainder of the month in which the first day involving 24 deliveries or product availability occurs. Prescheduled Transactions may also include 25 transactions entered into between Riverside and Azusa to the extent such transactions are set 26 forth in a Confirmation Agreement or are contemplated in an Operating Instruction. A- 1 360 1 1.5 Real-time Transaction: Transactions involving Azusa's Power Resources, 2 including any purchase, sale, or exchange of transmission service, Ancillary Services or 3 electric energy or capacity, or any combination thereof, entered into, terminated, or modified in 4 Azusa's name by Riverside's real-time function, as such function is defined by Riverside from 5 time to time. Normally, Real-time Transactions are agreed to by the seller and purchaser during 6 the day involving deliveries or product availability and may cover a period up to and including 7 the next timeframe for which Prescheduled Transactions may be established. Real-time 8 Transactions may also include transactions entered into between Riverside and Azusa to the 9 extent such transactions are set forth in a Confirmation Agreement or are contemplated in an 10 Operating Instruction. 11 2. Effective Date and Term: 12 2.1 This Operating Instruction shall be effective upon the later of: 13 2.1.1 12:01 a.m. on October 1, 2007, or 14 2.1.2 Execution and delivery of this Operating Instruction by the Authorized 15 Representatives. 16 2.2 Either Party's Authorized Representative may give written notice of termination of 17 this Operating Instruction; provided, that such notice shall be provided in accordance with 18 Section 10 of the Transaction Service Agreement. 19 3. Transaction Scheduling Services: 20 3.1 Prescheduled Transactions: 21 3.1.1 For each scheduling day, Azusa shall project its Supply Obligation and 22 arrange for the Power resources to meet its obligations. Azusa shall submit this scheduling 23 data to the ISO and make all required notifications, confirmations and submit the NERC tags 24 for such schedules. 25 3.1.2 For each scheduling day 3.1.2 Azusa shall confirm the status of 26 Prescheduled Transactions with Riverside before the end of Normal Working Hours. A-2 061 1 3.1.3 On a limited basis, initially no more than two (2) days per month unless 2 otherwise agreed to by Riverside, and as requested by Azusa, Riverside shall provide limited 3 Power Resource prescheduling representation in Azusa's name for the purpose of establishing, 4 modifying, or terminating Prescheduled Transactions in accordance with the direction provided 5 by Azusa in Operating Instructions; provided, that Riverside shall not be obligated to establish 6 or modify Prescheduled Transactions which are inconsistent with or contrary to (i) any 7 contractual arrangements governing such transactions, (ii) Prudent Utility Practice, (iii) any 8 applicable Operating Instruction, or (iv) the requirements of the ISO, NERC or the WECC. 9 For days which Riverside provides such prescheduling services, Azusa shall provide to 10 Riverside Azusa's hourly projected Supply Obligations and an hourly detail of Power 11 Resources to meet Azusa's obligations. 12 3.1.4 Where Riverside determines that circumstances require action to be taken 13 with respect to Azusa's Prescheduled Transactions after Normal Work Hours, and where no 14 Operating Instruction adequately addresses the circumstances giving rise to Riverside's 15 determination, Riverside may modify or enter into Prescheduled Transactions in Azusa's name, 16 or take such other Corrective Action as Riverside deems appropriate and consistent with 17 Prudent Utility Practice in its sole judgment. 18 3:1.5 Riverside shall act as Azusa's point of contact for third party 19 communications related to Azusa's Prescheduled Transactions after Normal Working Hours. 20 3.1.6 Azusa hereby authorizes Riverside to enter into, modify or terminate 21 Prescheduled Transactions in Azusa's name. Azusa expressly acknowledges that Prescheduled 22 Transactions entered into, modified or terminated by Riverside in Azusa's name shall be 23 binding commitments of Azusa for all purposes. 24 3.2 Real-Time Transaction Scheduling: 25 26 3.2.1 Each day, Riverside shall provide Power Resource real-time A- 3 062 I representation in Azusa's name for the purpose of establishing, modifying, or terminating 2 Real-time Transactions in accordance with the direction provided by Azusa in Operating 3 Instructions; provided, that Riverside shall not be obligated to establish or modify Real-time 4 Transactions which are inconsistent with or contrary to (i) any contractual arrangements 5 governing such transactions, (ii) Prudent Utility Practice, (iii) any applicable Operating 6 Instruction, or (iv) the requirements of the ISO, NERC or WECC. 7 3.2.2 Where Riverside determines that circumstances require action-to be taken 8 with respect to Azusa's Real-time Transactions, and where no Operating Instruction adequately 9 addresses the circumstances giving rise to Riverside's determination, Riverside may modify or 10 - enter into Real-time Transactions in Azusa's name, or take such other Corrective Action as 11 Riverside deems appropriate and consistent with Prudent Utility Practice in its sole judgment. 12 3.2.3 Riverside shall be designated as the Azusa point of contact for third party 13 communications Real-Time transactions. 14 3.2.4 Azusa hereby authorizes Riverside to enter into, modify or terminate 15 Real-time Transactions in Azusa's name. Azusa expressly acknowledges that Real-time 16 Transactions entered into, modified or terminated by Riverside in Azusa's name shall be 17 binding commitments of Azusa for,all purposes. 18 19 4. Riverside Fees and Charges: 20 For the services provided by Riverside to Azusa, Azusa shall be charged: 21 4.1 $19,700 per month for the period of October 1, 2007 through June 30, 2008 plus a 22 $12,000 one-time charge for one computer server to be used solely for Azusa's nMarket 23 Position Manager software application. 24 4.2 $20,300 per month for the period of July 1, 2008 through June 30, 2009. 25 4.2 The Authorized Representatives shall agree on the methodology and monthly 26 charges for beyond June 30, 2009 by no later than April 30, 2009, and by April 30 for each A-4 063 I succeeding year(s) if any. 2 5. General Provisions: 3 5.1 Azusa shall purchase,have installed and maintained for use by Azusa, the 4 necessary computer software to successfully connect to and interface with Riverside and 5 Riverside's Business System software. Riverside shall provide Azusa with remote computer 6 access to Azusa's data within Riverside's Business System software in order for Azusa to 7 perform Transaction Services on behalf of Azusa as described herein. Azusa shall be 8 responsible for, including but not limited to, purchasing, installing and maintaining the 9 Business Systems for Azusa from the Business System Vendor that is necessary for Azusa to 10 interface with Riverside. Riverside shall provide Azusa with access to Azusa's data kept 11 separate by Riverside. Azusa shall have no obligations as to the purchase, installation or 12 maintenance of Riverside's Business System software except as expressly stated in the 13 Agreement. 14 5.2 Riverside personnel shall exercise independent judgment to the best of their ability 15 in the performance of the Operating Instruction. If any issues remain, Riverside shall promptly 16 contact Azusa for resolution. 17 6. Signature Clause: The signatories hereto represent that they have been appropriately 18 authorized to enter into this Operating Instruction on behalf of the Party for whom they sign. 19 Executed as of the date first specified above. 20 CITY OF AZUSA 21 22 By: 23 Title: Public Utilities Director/Authorized Representative 24 25 Date: 26 A-5 . 064 I CITY OF RIVERSIDE 2 3 By:' 4 David H. Wright Title: Public Utilities General Manager/Authorized Representative 5 6 Date: 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 AZUSA - RIVERSIDE 23 TRANSACTION SERVICES AGREEMENT 24 Attachment B 25 26 YEAR 1 Monthly A-6 065 I Description Charge 2 Scheduling/Dispatching 16,831 3 Computer,Telecommunications, 4 Equipment 1,496 5 MRTU Readiness Software-Hardware-Equipment 5-yr 6 Depreciation 1,048 Personnel 299 7 TOTAL 19,674 8 TOTAL ROUNDED 19,700 9 YEAR 2 10 Monthly 11 Description Charge 12 Scheduling/Dispatching 16,831 13 Computer, Telecommunications, Equipment 1,496 14 MRTU Readiness 15 Software-Hardware-Equipment 5-yr Depreciation 1,048 16 Sub total 19,375 17 w-5% Escalator 20,344 18 TOTAL ROUNDED 20,300 19 20 21 22 23 24 25 26 A-7 Q i3 law ..- AZUSA S OMT CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CIN COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES^� DATE: JULY 23, 2007 ' SUBJECT: AUTHORIZATION TO DEVELOP AND RELEASE TWO REQUEST FOR PROPOSALS FOR: (1) A THIRD PARTY TO PROCESS MAIL-IN UTILITY PAYMENTS (UTILITY LOCK BOX SERVICE) AND (2) BILL PRINT AND MAIL SERVICE RECOMMENDATION It is recommended that the Azusa Utility Board/City Council authorize development and release of two Request For Proposals for: (1) a third-party vendor to process mail-in utility payments and (2) bill print and mail service. BACKGROUND Azusa Light &Water receives and processes 160,000 mail-in payments each year. Each envelope must be opened, the bill stub and payment removed and matched, and the stubs and checks balanced and batched. Payments are electronically updated to each customer's . utility account. The checks are also run through an endorsing machine before sending to the bank for deposit. Three years ago, through the Utility Board approval process, we contracted with RT Lawrence Corp. for this service in order to have this process performed at a lower cost than Azusa Light &Water could do it. Every business day a courier picks up mail-in payments received in the Azusa post office box and delivers them to RT Lawrence Corp for processing. Until 2002 Azusa Light &Water processed bill print and mail internally. Early that year it was learned that the mail room equipment was old and required many repairs. Replacing it was very costly. It was determined that outsourcing was more cost-effective than replacing the equipment and dedicating staff to this function. Infosend, Inc. was the vendor selected through the Request For Proposals process. The contract with Infosend expires July 2007. Since these contracts both expire in July 2007 we are requesting approval to proceed with the development and issuance of new Request For Proposals for each service. FISCAL IMPACT None. Prepared by: Karen Vanca, Assistant Director Customer Care &Solutions Q6,7 g � AZUSA IIGYT R %'AT[[ CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES,n DATE: JULY 23, 2007 �Y' SUBJECT: WAIVE FORMAL BIDDING PROCEDURES AND AWARD PURCHASE OF AN ITRON MC-LITE METER READING SYSTEM RECOMMENDATION It is recommended that the Azusa Utility Board/City Council waive formal bidding procedures and award the purchase of MC-Lite meter reading system to Itron Incorporated at a cost of $16,200. BACKGROUND For 20 years Itron, Inc. has been Azusa Light &Water's sole supplier of meter reading infrastructure, including meter reading handheld computers, docking stations and programs. Itron is widely used by utilities across the country, is reliable, provides good technical support and strives to improve meter reading technology so utilities can work more efficiently. For several years we have been installing Automatic Meter Reading (AMR) electric meters at properties where access is difficult due to locked gates or bad dogs. The AMR meters broadcast a radio signal that allows meter readers to read these meters without having to enter the customer's property. Additionally, two years ago, we began upgrading to FC200R handheld meter reading computers because the older system was no longer supported by Itron and the new computers offered additional features. A new meter reading product offered by Itron, Inc. is the MC-Lite. It is designed to increase the radio strength and speed of the FC200R, allowing faster reading of electric and water meters. Currently, Itron, Inc. has a package special that includes one MC-Lite, a FC200R handheld computer and a pallet of 96-Centron AMR electric meters for a total cost of $16,200, including tax and shipping. If the items were purchased individually the total cost would be $19,654, including tax. The savings of purchasing the package is $3,454. The FC200R will supplement our present stock of meter reading computers. The Centron AMR meters will be placed in the regular stock in Stores. We request that these items be purchased using the alternative, sole-source purchasing procedure, since this equipment is proprietary and consistent with our existing meter reading infrastructure. FISCAL IMPACT For the fiscal year 2007-08, $10,000 was budgeted for the MC-Lite in account 31-40-711- 902-7140. Purchasing normally buys and stocks the AMR electric meters and has agreed to share the cost of this purchase by paying the balance from budget item 33-00-000-000- 1601, then passing the cost along to the Electric Division as meters are checked out. Prepared by: Karen Vanca, Assistant Director Customer Care &Solutions 069 Nam AZUSA 116X1 t WATIR CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES DATE: JULY 23, 2007 SUBJECT: ADDITIONAL COMPENSATION TO SSC CONSTRUCTION, INC. FOR ADDITIONAL WORK REQUIRED ON PROJECT.WVF-207 CANYON FILTRATION PLANT MEMBRANE TREATMENT UPGRADE AND EXPANSION RECOMMENDATION It is recommended that the Utility Board/City Council approve the addition of $100,642.76 and 10 additional calendar days time extension to the SSC Construction, Inc. contract for construction of Project WVF-207, Canyon Filtration Plant Membrane Treatment Upgrade and Expansion. BACKGROUND At their November 20, 2006 regular meeting, the Azusa City Council accepted the bid of SSC Construction, Inc. to construct Project WVF-207, Canyon Filtration Plant Membrane Treatment Upgrade and Expansion. This Change Order No. I covers the cost of materials and installation of electrical cables and conduits for the potassium permanganate system area and the chemical metering pump area in the Chemical Feed Facility of the Water Treatment Plant. The electrical cables and conduits covered by the Change Order No.1 were inadvertently omitted during the Design Phase of the project, and consequently were not included in SSC's bid. A time extension of 10 days to accomplish the extra work is included as part of this Change Order No. 1. FISCAL IMPACT This request has a fiscal impact of $100,642.76 to be funded from the Capital Improvement Project 72107C budget. Prepared by: Chet Anderson, Assistant Director- Water Operations SSC Change Order 1.pdf 070 BLACK & VEATCH Wabuilding a world of difference- ENERGY WATER IN FDR MAT IDN GOVERNMENT City of Azusa B&V Project 140777 Canyon Filtration Plant Membrane Treatment Upgrade and B&V File A.5 Expansion July 2, 2007 Mr. Chet,Anderson, P.E. Assistant Director of Utilities-Water Operations Azusa Light&Water 729 N. Azusa Avenue Azusa, CA 91702 Subject: Change Order No. 1 Dear Mr. Anderson: Black & Veatch (B&V) is furnishing this letter and the supporting documentation in response to Change Order No. 1 for the additional electrical cables and conduits that are needed for the chemical feed facility received from SSC Construction Inc. (SCC) dated May 15, 2007. There are two parts in this change order which consist of 1) electrical cables and conduits for the potassium permanganate system area, and 2) electrical cables and conduits for the chemical metering pump area The initial change order estimate including bonds, insurance etc. was approx. $123,000. Based on the subsequent correspondences including obtaining backup information from SCC, cost review, and feedback received during a conference call with you, SSC, and B&V, on June 1, 2007, SSC submitted a revised change order including bonds, insurance, etc. totaling $100,642.76 and 10 days time extension. B&V has reviewed the revised Change Order No. 1 and recommends acceptance, including changes to the contract price and . contract time. Please contact us if there are any questions. Very truly yours, RECEIVED BLACK& VEATCH JUL 0 5 2007 AZUSA LIGHT & WATER Steven N. Foellmi, P.E. Project Manager AS Jsh Attachments 071 AZUSA LIGHT AND WATER CHANGE ORDER Order No. 1 Date June 27 2007 Agreement Date January 17, 2007 Sheet I of 3 Owner: Azusa Licht and Water Project: Canyon Filtration Plant Uperade and Expansion Contractor: SSC Construction Inc. The following changes are hereby made to the Contract Documents: I. CHANGES IN BID QUANTITIES ADD DEDUCT II. EXTRA WORK DUE TO DESIGN ERRORS AND OMISSIONS ADD DEDUCT I. Davis Electric MPCP-5110 Work $77,254 2. Davis Electric LCP-5400 Work $17,692 Subtotal $94,946.00 Bond and Insurance $949.46 Subtotal $95,895.46 5%Mark Up $47747.30 Total $100,642.76 072 Justification 1. The responses to RFIs 39, 41, and 46 (attached) resulted in items being added to the electrical scope of work. These additions included labor and materials to provide additional conduit and wire from MCPC-5110 associated with the chemical metering pump control panels . Materials included raceway, fittings, and boxes as well as wire and cables and underground/site work. Supporting information from SSC and Davis is attached. 2. The responses to RFIs 39, 41, and 46 (attached) resulted in items being added to the electrical scope of work. These additions included labor and materials to provide additional conduit and wire from LCP-5400 associated with the Potassium Permanganate Feed System. Materials included raceway, fittings, and boxes as well as wire and cables and underground/site work. Supporting information from SSC and Davis is attached. SUMMARY Section I—Changes in Bid Quantities $0.00 Section I1—Change Orders $100.642.76 $100,642.76 Add(Net) 073 CHANGE TO CONTRACT PRICE Original Contract Price $ 35,905,500.00 Current Contract Price Adjusted By Previous Change Order(s) $ 0.00 Contract Price due to this Change Order will be (increased) $ 100.642.76 New Contract Price, Including this Change Order $ 36.006,142.76 CHANGE TO CONTRACT TIME: Contract Time Will Be Increased by 10 (Calendar Days) Date of Completion of All Work September 30, 2008 APPROVED: Owner: Azusa Light&Water Contractor: SSC Construction, Inc. By: By: •� Chet Anderson Authorized Signature Engineer: Black& Veatch By: Steven N. Foellmi, Project Manager 074 SSC Construeflon, I rtc, CHANGE ORDER RFQUEST 2073 Railroad St. No. 00002 R l Phone: 9Ji 275-1177 Corona,CALIFORNIA 92880 - T[TLK: Additional [electrical in Chem Feed DATE:6i25/2007 PRO.JECT:Canyon I iitraticn Plant JOB: 657 TO: AtIm Aslmtosh S. Shirolkar CONTRAC['NO: I Black & Veatch Corporation 1561 Alton Parkway - Suite 300 Irvine. CA 92618 Phone: 949-751-9354 Fax: 949-753-1252 RE: To: From: Number: DESCRIPTION OF PROPOSAL Lump Sum item 0001 is for additional electrical material and labor for work requested by Black&Veatch in the Chemical Feed Building to LCP•5400 Lutnp Sum item D002 is for adeiConai electrical material and labor for work requested by Black& Veatch in the Chemical Feed Building to MPCP-5110 Time extension required lb-, the requested work is 10 days,plus any additional time delays that may arise pending final resolution to this issue. Additionally.SSC reser cs its right ur any time drieen coils should this wort:impact Cie critical path o the pmieet. Item Description Stocky Quantitv Units Unit Price Tax Rate Tax Amount Net Amount 00001 Additional Mctt,iLl ax!la:m: - 1MC! $17602.00 .q:;t W;, Salon SI7,592 U0 for inslallatior.at So a:h end aF cheinkal Peed 13�1.krle to t.CP-540L) (X*02 Addi:innal mate.ia1 end taMrc 1 OT)C. 477,254,07 Ii91145 x0011 $7-'SJ(N1 - rut installation unaer slab a: sauth end of Che,w);recc DAIding to MPI:P-5110 Unit Cost: S94,946.00 Unit Tax: 50.00 Unit Total: $94,946.011 Subtotal: $94,946.00 Description Markup Percent Markup Amount Contractor Markup 5.000% 54,717.30 Bond & Insurance 1.000% 5949.46 Total Cost: $100,642.76 APPROVAL: By: By: Ashuto0j S. Shirolkar Alf.•edo Bautista Date: Date: 075 BLACK & VEATCH 15615 Alton Parkway,Suite 300 Black&Veatch Corporation Irvine,California 92616 Tel:(949)753-0500 Fax:(949)753.1252 April 18th, 2007 To: Angel Bautista, Project Engineer SSC Construction, Inc. From: Ashu Shirolkar, Project Engineer Rajan Puthuveedu, Electrical Engineer, Andy Doerflinger, Civil Engineer Black&Veatch Regarding: Canyon Filtration Plant Membrane Treatment Upgrade and Expansion, SSC RFIs#039, 4041, and#046 Black&Veatch Project Number 140777 ❑ Shop Drawing 0 RFI ❑ Letter ❑ Other Date RFT Spec Section/Drawing Description Number Number 04/13/07- 4039,041, Electrical Drawings Electrical Drawings 04/17/07 #046 RESPONSE(from Engineer): We have modified the MCC-3 and LCP-5400 one-lines to reflect the additional conduits and cables needed. Also attached is a markup of the power plan of the chemical feed facility that shows the locations of the valves and instrumentation associated with the Potassium Permanganate system that is shown on the P&IDs but not indicated on the power plan. Please verify these locations with the Potassium Permanaganate System Supplier. We have not received the shop drawing on this system yet so can not comment on the locations of these devices, especially the devices associated with the skid. We have also provided the one-line diagram and circuit numbers for all the metering pumps that show additional conduits and cables needed for the metering pump control panels. The additional conduits and cables on the attachments are indicated in the clouded format. Please provide the additional cost to install these cables and conduits for review and approval of.Azusa prior to performing the work. Page 1 of 1 076 C PGN-172B DO NOT WRITE IN THIS SPACE 5 n x r D a =A kvf ra=5 iv _Ps t, , 32, airy,3y ' _ A 99. R Jf 1d6TEr Jk?-�F:.. ` �CPs+vo rp .f NIA tu[n -�A;Jr 101Li k^ ((( kc - :1)dY 7A tifi o�J7L(,+ KhF-.vC J-I LrPS4ot5 + _ =m _ N . . -o SCP a4 c � . I-1Pa�l SS,3rd,_ 4n4 PS-.L �� icP i,c• 7 Vie" t o r •' .. '�XlR,ei 4i'.�°: LLP 3YsU 8: o yy< t ��.rvati str LcP SpGL-i 1 � S - LE' 5J).10 077 a...c:,t .rn ;`� 2:R •.1L:�i� ..n "I n[.m. ._t[w.ma: y n[.nai .nn r�L�� v._ �L�•vn ur.a..rn. � � [ �� .� v u - »u a.xvxw Cfr: cwt.vr.• �„Mi �w.o.mn i '1i^moi\i•-`..._\.._�ti..` - cayrr_g_ LCP SkPD mce3-32A .raw erre..,rrw r 1—J�i mr,.d reef new: l�—� an.rwro„an �£ a —`��w naw mu.a.0 (�6J ”"'•"' �— ,`ELS.„ _» �r---�-•n ,,.„, rpt-=---- .� a� €a � i L� �rTTTi 1444• g � . .,.,.r,„ n^ (-���:�,..,a.r.a, I x 3 AZUSA L0.YIGHT ANO WATERTfl£A O O 6 Si� GrN�W!FtL)MlIPLAVT/IEYBRANE IIPG/{gpE AND EXPANSzQ BLACK S VEATCH EIECTAIGL F-207 1 MCC ON£i fN£5 LINll1MIE0 0.7 i I i is E E i - 3 r e --r A2USA LIGHT AND VIATEI _ BLACKS V'ATCH , — tV�F 707 079 • Owner Computed By ©' BLACK &VEATCH Plant Unit Date 20_ ' Project No. File No. Verified By Title Date 20 Page of MPC P- 5110 CONTROL PANEL C4 i Ln In I N LLJ In tlF N tt N N QC:)Ot L IL N to )1 (n t^ 4. trt o z p [_n to all 11)al z Q~ ki . ki � J t Z LSI w F- ry P Lu O J u_ O O Z e o! w W. o ti J J Y Pc P- 5110 CONTROL PANEL ONE Lw C- -PIAL-1RAM m SlrnLfxlr FOR MPGP- 5f2o� - 5230 - 52[}0 -5250, -52bo -5270 _ 5331, - 5332-5333 5- 5334, - 533 - 5336, - 5337, -5338 - 533q, -531f0, -5341, - 5341, - 5313, - s344 - 6410, - sy20 . z n. N012 REFER TO ArrACHED TASLE F09 C(RLutr J✓VMS &RS, REVISED, SUPERSEDED, AND VOID CALCULATIONS MUST BE CLEARLY IDENTIFIED, INITIALED, AND DATED BY THE RESPONSIBLE INDIVIDUAL. 080 Table for Meterin Pum Circuits-AZUSA Pro ect Pum Name LP-5 Circuit pLC-Circults Motor Circuit Stroke Length Controller Circuit HS Circuit Pressure Switch Circuit MPCP-5120 LP5-1 PLC001•D27-A26 MPCP5120-1 MPCP5120.2 MPCP5120-3 MPCP51204 MPCP-5230 LP5-2 PLC001-D31,-A29 MPCP5230-1 MPCP5230-2 MPGP5120-3 MPCP52304 MPCP-5240 LP5-2 PI rnm D32 A30 MPCP5240-1 MPCP5240.2 MPCP5240.3 MPCP52404 MPCP-5250 L1 PLC001•D33,-A31 MPCP5250-1 MPCP5250-2 MPCPS250-3 MPCP52504 MPCP-5260 LP5-3 PLC001-034:A32 MPCP5260.1 MPCP5260-2 MPG P5260-3 MPCP52604 MPCP•5330 LP54 PLCool-D38-A59 MPCP5330.1 MPCP5330.2 MPCP5330.3 MPCP53304 MPCP-5331 LP54 PLCool-D66•A60 MPCP5331-i MPCP5331.2 MPCP5331-3 MPCP53314 MPCP-5332 LP5-5 PLC001•D39-A36 MPCP5332.1 MPCP5332-2 MPCP5332-3 MPCP53324 MPCP•5333 LP5-5 PLC001-D40,-A37 MPCP5333-1 MPCP5333-2 MPCP5333.3 MPCP53334 MPCP-5334 LP5{ PLC001•D41,-A38 MPCP5334.1 MPCP5334-2 MPCP5334-3 MPCP53344 MPCP-5335 LP5.o PLC001-D42,-A39 MPCP5335-1 MPCP5335-2 MPCP5335-3 MPCP53354 MPCP-5336 LP5-7 PLC001-D43,A40 MPCP5336.1 MPCP5336-2 MPCP5336-3 MPCP53364 MPCP-5337 LP5-7 PLCO01-D44,-AAI MPCP5337.1 MPCP5337.2 MPCP5337-3 MPCP533)4 MPCP-5338 LP5.8 PLC001-045;A42 MPCP5338-1 MPCP5338-2 MPCP5338-3 MPCP53384 MPCP-5339 LP5-8 PLC001-D46,A43 MPCP5339.1 MPCP5339-2 4 MPCP5339.3 MPCP5339 MPCP-5340 LP5.9 PLC001-D47,-A44 MPCP5340.1 MPCP5340.2 MPCP5353 3939-3 MPCP4 MPCP-5341 LP5•9 PLC001-D48,-A45 MPCP5341.1 MPCP5347-2 MPCP53U4MPCP53414 MPCP-5342 LP10 PLC001-D49,-A46 MPCP5342.1 MPCP5342.2 MPCP5342-3 MPCP53424 MPCP-5343 LPS-5-10 PLC001•D50;A47 MPCP5343.1 MPCP5343.2 MPCPS343.3 MPCP53434 MPCP-5344 LP5-11 PLC001-D51,-A4B MPCP5344.1 MPCP5344-2 MPCP5344.3 MPCP53444 MPCP-5410 1-125-12PLC001•D53,-A51 MPCP5410.1 MPCP5410-2 MPCP5410-3 MPCP54104 MPCP-5420 LP5-12 PLCDOI-D54-A50 MPCP5420.1 MPCP5420-2 MPCP5420-3 MPCP54204 Q 0 M SSC construlctio-n9 Inc. REQUEST FOR INFOWNI #TION 2073 Railroad Sircet fro. €l0039 Phone: 951-278-1177 Corona,CA 92830 TITLE: Conduit Wirc lurLCI' 5400 DATE:4/13/2007 PROJECT:Canyon Piltretion Plant JOB: 657 TO: Attn: Jake S. 1lolden Black K Veatch Corporation 15615 Aiion Parkway Suite 300 Irvine , C_1 92618 REQUIRED: 4/13/2007 Phone: (949) 788-1252 Fax: (949) 153-1252 REQUEST: Davis Electric is requesting conduit and wire information for the conduit run from LCI' 5400 to MCC 3-32. The LCP -5400 diagram is shown on Sheet 13013. Thanks. ANSWER: r f1 l� Requested �p:$ C Co r ct,::r.,il i�. ISafc: 4113/2007 Signe An.,e auticta 082 SSC Construction, Inc. REQUEST FOR INFORMATION 2073 ItaErrad Stree. No. 00041 Phone: 951-278-1177 Corona, CA 92880 TITLE: LIT 8 541o. & .;w5420 DATE:4/13/2007 PROJECT:Canyon Filtration Plant J013: 657 TO: Attn:Jake S. Ilolden Black & Veatch Corporation 15615 Alton Parkway Suite 300 Irvine, CA 92618 REQUIRED: 4/16/2007 Phone: (949) 788-1252 Fax: (949) 753-1252 REQUEST: There are no c onduiUwire designations shown in the Conduit Schedule or on the plans for instruments LIT/LE H 5410 & # 5420 located on Sheet E025. Please provide the requested information. ANSWER: Requested Ity: L-lonsiiUCaon In Dale: J�'I:%2007 i . f - Signed. ��- Anv4mlmutista ._........_x. 083 SSC Construction REQUEST FOR INFORD'IATION 1870 N. Ranch Road No. 00046 Construction Trailer Phone: 626-969-7156 Azusa,CA 91702 - Fax: 626-969-7150 - TITLE: F"lectrical drawings DATE: 4/17/2007 PROJECT:Canyon Filtration Plant JOB: 657 TO: Attn: Jakc S. Holden Black & Veatch Corporation 15615 Alton Parkway Suite 301) Irvine , CA 92618 REQUIRED' 4/24/2007 Phone: (949) 788-1252 Fax: (949) 753-1252 REQUEST: Our electrical sub-contractor has brought a potential problem to our attention, in that no electrical (E) drawing, showing conduit size or schedule and Type of material,wire sizes, or power requirements have been provided 1'or all of the instrument, motors, motor operated valves, meters, load cells,tank instrumentation, or mixer etc. to and from LCP-5400, plus power requirements to LCP-5400. All of the instrumentation is shown on drawing 1026, but very little information on this subject is shown on E025. Can you please provide the necessary information so our electrical sub-contractors can proceed with take offs and installation of the necessary conduit in the Chem. feed building before we place the concrete for the floor? ANSWER: Requested 11y:SSC Construction Dale: 4!17/2007 Knl crt Backin�he�n y . [� A7CI 'A r.nr � wuro CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES/ DATE: JULY 23, 2007 " SUBJECT: WAIVE FORMAL BIDDING PROCEDURES AND AWARD PURCHASE OF A KONICA MINOLTA COPIER TO KONIKA MINOLTA UNDER CALIFORNIA MULTIPLE AWARD SCHEDULE (CMAS) RECOMMENDATION It is recommended that the Utility Board/City Council waive formal bids in accordance with the Municipal Code Section 2-523(e) and award the purchase of one Konica Minolta BizHub 600 Digital Network able Work Center copier to Konica Minolta under the California Multiple Award Schedule in the amount of $12,403.29, plus monthly maintenance cost of approximately $0.06 per copy. BACKGROUND The Utility Department periodically replaces equipment based on breakdowns and age. The current copier is over 10 years old and has become increasingly unreliable. The copier being replaced will be declared surplus property and sold. Other city copiers requiring replacement have been replaced with similar models. It is digital as opposed to the current analog copier. Our office is already digital network compatible. FISCAL IMPACT Purchase cost, including sales tax, delivery, set-up and training, is $12,403.29. Budgeted funds in account number 31-40-711-903-7150 are adequate to make this purchase. Ongoing maintenance costs have been budgeted in account number 31-40-711-903-6530. Prepared by: Karen Vanca, Assistant Director Customer Care &Solutions !?85 Owct A7US;�1 CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES DATE: JULY 23, 2007 SUBJECT: AUTHORIZE THE CITY MANAGER TO SUSPEND ENFORCEMENT OF HOURS OF OPERATION REQUIREMENTS INCLUDED IN OWNER PARTICIPATION AGREEMENTS AND CONDITIONAL USE PERMITS FOR ELECTRIC LOAD REDUCTION RECOMMENDATION It is recommended that the Azusa Utility Board/City Council: 1. Authorize the City Manager to suspend enforcement of hours of operation requirements included in Owner Participation Agreements (OPA's) and Conditional Use Permits (CUP's) for electric load reduction purposes. 2. Provide the stipulation that the City Manager can revert to current conditions in the event of valid citizen complaints. BACKGROUND The California Independent System Operator (ISO) can assess large fines on utilities that do not comply with electricity demand reduction rules, which require utilities to shed load during peak demand periods that can be expected in the upcoming summer months. As part of the City's demand reduction strategy, it is recommended that the City Manager be authorized to suspend hours of operation requirements included in Owner Participation Agreements (OPA's) and Conditional Use Permits (CUP's) to enable businesses to reduce electric load during periods of high energy consumption. During the 2001 energy crisis this proved to be an effective load reduction strategy. Large electricity users voluntarily chose to operate their facilities during off-peak hours when the demand for electricity was lower. 086 By operating during the off-peak hours customers were able to reduce their electricity bills substantially, thus allowing them to remain competitive within their various industries. This shift in operating hours also allowed Azusa Light &Water to avoid purchasing additional power during the expensive peak periods to meet the demands of the electric system and generally helped keep electric rates lower. To implement this strategy it is important to authorize the City Manger to allow customers to suspend the "hours of operation" requirements included in OPAs and CUPS so that they can voluntarily shift their operations completely off-peak hours. Allowing such flexibility in complying with ISO demand reduction requests may also help the City avoid city-wide blackouts. It is understood that this approval includes a stipulation that the City Manager may reverse his position and enforce hours of operation requirements if valid citizen complaints are received. FISCAL IMPACT . The cost of electricity is a pass through cost and there is minimal negative fiscal impact on Azusa Light &Water. There is also the potential savings through lower energy requirements during on-peak hours. Prepared by: Paul Reid, Business Development/Public Benefit Programs Coordinator 087 P' AZUSA CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES DATE: JULY 23, 2007 v �' SUBJECT: BUDGET AMENDMENT RECOMMENDATION It is recommended that the Azusa Utility Board/City Council approve a budget amendment to the FY 2007-08 operating budget to cover encumbrances carried over through contract purchase orders approved in FY 2006-2007 that are listed in this report. BACKGROUND Budget appropriations that are not expended by June 30 expire at the end of the fiscal year. However, some contract purchase orders issued last fiscal year for goods and services carryover financial obligations beyond June 30—in cases where the goods and services are not received by June 30. In order to pay for these "carryover" obligations from last fiscal year, it is necessary to amend the FY 2007-2008 operating budget. The following multi-year contract purchase orders were issued and encumbered against last year's budget, but were not included in the FY 2007-2008 Operating Budget: Vendor/Purpose Amount Downtown Ford Sales (P.O. #012319) $30,423.58 For two Ford F 150 pickup trucks to replace 1997 Ford Ranger truck (WT-26) and 1999 Ford F150 pickup truck (WT-06) -approved by the Board on April 23, 2007 State of California Department of General Services $636.25 For service charge of using State's Procurement Contract to purchase these two trucks System &Software, Inc. (P.O. #012444) $3,200.00 For the remaining balance of development of unbilled revenue report (original P.O. amount $12,800) - approved by the Board on May 17, 2007 Total: $34,259.83 FISCAL IMPACT The following amounts and accounts will be amended to cover the fiscal impacts of these contract purchase orders in the FY 2007-2008 operating budget: Contracts/Accounts Amount Downtown Ford Sales and State of California Dept. of General Services 32-40-722-700-7135 $31,059.83 System &Software, Inc. 31-40-711-903-7142 $3,200.00 Total: $34,259.83 Amendment amounts will be funded from respective fund balances, and in the case of the Fund 31, the amendment will be funded through a Consumer Service Allocation to Water and Electric Funds. Prepared by: Cary Kalscheuer, Assistant to Director of Utilities Steven Yang, Administrative Analyst r Aftcoo _• � r i- M- 1 WO I - AZUSrI tIGNT R WATF0. AZUSA VALLEY WATER COMPANY TO: PRESIDENT AND BOARD MEMBERS OF THE AZUSA VALLEY WATER COMPANY FROM: JOSEPH F. HSU, CHIEF OPERATIONS OFFICER DATE: JULY 23, 2007 SUBJECT: APPROVAL OF REQUEST FOR ANNEXATION OF PARCEL 8684-023-900 (WATER TREATMENT PLANT SITE) TO COUNTY SANITATION DISTRICT NO. 22 OF LOS ANGELES RECOMMENDATION It is recommended that the Board of the Azusa Valley Water Company adopt the attached Resolution approving the Request For Annexation of Parcel 8684-023-900 to County Sanitation District No. 22 of Los Angeles, and authorize the President to sign all documents related to this Annexation. BACKGROUND Parcel No. 8684-023-900 is owned by the Azusa Valley Water Company as a site for the Canyon Water Treatment Plant. The Water Treatment Plant is being improved and a connection to a sanitary sewer is necessary. Azusa Valley utilized a septic tank and percolation bed system to treat its sanitary waste from the Plant Operators' trailer office. The new connection to the Los Angeles County Sanitation Districts' sewer system will be used to collect and process wastewater as well as collect sanitary waste from the new Operations and Maintenance Building. FISCAL IMPACT There is an Annexation fee of $8,590 associated with this Board action and these fees will be paid out of the Capital Improvement Project budget for this project, #72107C. Prepared by: Chet Anderson, Assistant Director of Water Operations Attachments �R It AVWC Reso.doc Request for Annexation.pdf 090 RESOLUTION NO. A RESOLUTION OF THE AZUSA VALLEY WATER COMPANY REQUESTING ANNEXATION OF PARCEL 8684-023-900 TO COUNTY SANITATION DISTRICT NO. 22 OF LOS ANGELES THE AZUSA VALLEY WATER COMPANY BOARD DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Parcel No. 8684-023-900 is owned by the Azusa Valley Water Company, a subsidiary of the City of Azusa, as a site for its Water Treatment Plant. Said Water Treatment Plant is being improved and a connection to a sanitary sewer is necessary. Said Request For Annexation to County Sanitation District No. 22 of Los Angeles is hereby approved and the Secretary is hereby authorized and directed to cause the same to be filed for record in the office of the County Recorder of said County. SECTION 2. The Secretary shall certify to the adoption of this Resolution. PASSED, APPROVED AND ADOPTED THIS 23rd day of July, 2007 Joseph Rocha, President ATTEST: Vera Mendoza, Secretary I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Board Members of the Azusa Valley Water Company at a regular meeting of the Board on the 23rd day of July, 2007. AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Vera Mendoza, Secretary 091 A - (0--V-3e) c A— — REQUEST FOR ANNEXATION TO COUNTY SANITATION DISTRICT NO. ;Z'9- OF LOS ANGELES The undersigned, owners of the property listed in this application, hereby request the Board of Directors to annex said property to said District,and represent that the property is: 1. Contiguous to said District, or if not contiguous, may be drained by gravity to a trunk sewer of the District. 2. Not included in whole or in part in any District formed for purposes similar to those of the District. 3. To be benefitted by its inclusion in the District. It is further understood and agreed to by the undersigned that: A. In the event a connection directly or indirectly to the sewerage system of said District, from sewers of the property to be annexed is permitted prior to completion of annexation proceedings, said connection shall be considered temporary and will become permanent only upon final completion of the annexation proceedings. If for any reason the annexation to said District, of the subject property severed by the temporary connection is not completed, said property will be required to disconnect, unless a contract is entered into with the District providing for compensation to the District for off- site sewage disposal services for said property. B. In the event the annexation and proceedings are not completed by reason of any action or inaction of any of the undersigned, all costs and expenses incurred by the District in processing the annexation shall be deducted from any deposit made by the undersigned in payment of the required annexation fees. PROPERTY IDENTIFICATION SIGNATURE OF OWNER 'Print or type name and title below signatures ASSESSOR MAPBOOK NO. 8684 PAGE 23 PARCEL 900 TRACT MAP NO. BOOK PAGE TRACT MAP NO. BOOK PAGE PARCEL MAP NO. BOOK PAGE PARCEL MAP NO. BOOK PAGE DATE: July 23, 2007 092 PLEASE NOTE: THESE QUESTIONS ARB ADDRESSED TO THE PROPERTY BEING ANNEXED ONLY, NOT THE CITY OR COUNTYAREA THE PROPERTYIS LOCATED IN. I. JUSTIFICATION A. What are the reasons for the initiation of this proposal?(Be specific): City of Azusa is upgrading its Water Treatment Plant which requires a connection to sewer, replacing currently used septic tank. 11. GENERAL DESCRIPTION A. Description ofproposallocation: Located southeast of intersection of San Gabriel Canyon Road (Azusa–San Gabriel Canyon Road) in the City of Azusa, CA. B. Major Streets and Highways: South side of San Gabriel Canyon Road and Fast side of Ranch Road C. Proposal Area — Give a detailed description of the proposal area and what it consists of (e.g. Existing commercial corridors,residential communities,existing redevelopment area,public utility right-of-way,relevant structures,etc.) Existing Water Treatment Plant site D. Land Area: square miles 8.45 acres E. General description of topography: Gently sloping to the West F. Describe physical boundaries (rivers, mountains, freeways, etc.) and natural boundaries of the subject territory: Mountain to the Fast side III. SOCIAL FACTORS A. Population (please see note at the top of this page) 1. Total population in subject area(within the parcel to be annexed only): —�— City employees only ' 2. If the proposal includes development, what is the estimated population of the proposed area? N/A L'1FPTALMMnlionsUmevtion�Fo�m,U�'NIX4PP dx 2 093 PLEASE NOTE: THESE QUESTIONS ARE ADDRESSED TO THE PROPERTY BEING ANNEXED ONLY, NOT THE CITY OR COUNTY AREA THE PROPERTY IS LOCATED IN. 3. Number of registered voters(indicate source of information): None 4. Estimated population increase in the subject area within the next ten years: None B. Housing 1. Number and types of existing dwelling units in the subject area (indicate source of information): N/A 2. Estimated increase in dwelling units in the subject area within the next ten years: N/A IV. LAND USE A. What is the present land use? Municipal Water Treatment Plant 1. In the subject area: Municipal Water Treatment Plant 2. In the surrounding area: Residential condominium complex & municipal water treatment plant B. What are the existing zones in the subject area? Open Soace C. Describe any proposed change in land use and/or zoning related to this proposal: None D. Does this proposal involve development of property? Yes ❑ No ❑x (Ijansver is "yes",answer I thru 7 below and supply development plan or tentative tract map.) J. Type of development proposed: ❑ Residential ❑Commercial ❑ Industrial Other(explain): 4ff!'1PM.Awe.atiom\Aaxv:bn�FenmUP;�BX.tPP 6x 3 094 LOCAL AGENCY FORMATION COMMISSION (0,4 _ —:w') PARTY DISCLOSURE FORM A DESIGNATED TITLE OF PROPOSAL: Annexation of Parcel 8684--23-900 to County sanitation District 22 of Los Angeles PARTY'S NAME: Joseph R. Rocha, President, Azusa Valley Water Company CHECK THE APPROPRIATE RESPONSE AND COMPLETE AND SIGN THIS FORM. RETURN IT WITH THE LAFCO APPLICATION. PLEASE USE ONE FORM PER RESPONDENT. _ x _ I have not made a contribution greater than $250 to any member of the Los Angeles County Local Agency Formation Commission (LAFCO)listed below within twelve (12) months of the LAFCO filing date of July 23, 2007 I have made the following contribution(s)greater than$250 to the following member(s)of LAFCO within.twefve (12) months of the LAFCO filing date of NAME OF MEMBER DATE OF CONTRIBUTION AMOUNT Signature: Date: July 23, 2007 Commissioner Representinq Henri F. Pellisier, Chair General Public at large Margaret Finlay City of Duarte Greig Smith City of Los Angeles Carol Herrera, Second Vice Chair City of Diamond Bar Judith Mitchell City of Rolling Hills Estates,Altemate Vacant City of Los Angeles,Alternate Yvonne B. Burke Supervisor, Second Supervisorial District Zev Yaroslaysky Supervisor,Third Supervisorial District Don Knabe Supervisor, Fourth Supervisorial District James DiGiuseppe General Public-San FemandoValfey Kenneth Chappell General Public, Alternate Richard Close San Fernando Valley Statistical Area,Alternate Donald L. Dear West Basin Municipal Water District Jerry Gladbach, First Vice Chair Castaic Lake Water Agency Norm Ryan Water Replenishment District of Southern California,Alternate This form must be complete and filed with your application. . L:1FPtPM-Annemtions/AnnomtionTormsllAFCOdisdosure.dm 095 PLEASE NOTE: THESE QUESTIONSAREADDRESSED TO THE PROPERTY BEINCANNEXED ONLY, • NOT THE CITYOR COUNTYAREA THE PROPERTYIS LOCATED IN. 2. If commercial or industrial development is proposed, describe the project to include type of business or industry to be located on the site(include square footage). Municipal Water Treatment Plant 3. If residential development is proposed, indicate type (single-family, apartment, etc.), number of units,and the number of dwelling units per acre: N/A 4. At what stage is the proposed development (include permits, license, etc., which have been issued to date and what remains to be accomplished in this project)? $35,000,000 Water Treatment Plant project underway, approximately 17% complete. 5. What effect would denial of this proposal have on the proposed development? Waste plant process water would have to be handled onsite and sanitary wastewater would have to be handled by septic tank possibly degrading ground water. 6. What other government services will be required for the development, which are not now available? All other services are available 7. Are there any agricultural or open-space lands within the proposal area? What is the effect of this proposal on agricultural or open-space lands? No V. ENVIRONMENTAL DATA A. Indicate what action, if any,has been taken pursuant to the California Environmental Quality Act: ❑ An Environmental Impact Report has been adopted. (Submit five copies each of the Final EIR and the Notice of Determination approved by a city or County Regional PIanning Commission.) ® A Negative Declaration has been adopted. (Submit twenty-six [26] copies of the Initial Study, Final Negative Declaration, Final Mitigated Negative Declaration, Notice of Determination, and Mitigation Monitoring and Reporting Program approved by a city or County Regional Planning Commission.) ❑ The project is exempt pursuant to Section of the State EIR Guidelines. L�FTPM-AnrcatuMAmev,cn\For w.'NEXrrr.ex 4 a�� COUNTY SANITATION DISTRICTS OF LOS ANGELES COUNTY 1955 Workman Mill Road I Room 1301 Whittier California STEPHEN R.MAGUIN Mailing Address:P.O.Box 4996,Whittier California 90607 FarSm¢¢rand General Marra8lir Telephone:(562)908-4288 or(323)685-5217,Extension 2727 Chief Roues: 7:30 a.m.-4:00 p.m.Mon.-Thum. 7:30 a.m.-3:00 p.m.FrLACCOUnt N0: SEWERAGE SYSTEM CONNECTION FEE District No: Complete Items 1 through 10-PLEASE TYPE OR PRINT Date: ! ! nuparN) w.n trEwzl 1. Property Owner A I Z I U IS JA I I V I A I L I L I E I YJ I W I A I 'F I E I R I I C 1 0 2. Facility Name Canyon Filtration Plant S. Address.of Property 1879 Ranch Road (Azusa & San Gabriel Camp Road) Azusa CA 91702 (TIEErnyler. J ISTATF I" MajorCross Streets San Gabriel Caon Road Thomas Guide Page 4. Contact Chet F. Anderson, P.E. PhoneNumber.t626 ) 812-5209 5. Mailing Address P.O. Box 9500 Azusa CA 91702-9500 IF o6FERExT F.ABO I t.J , 1 6. County Assessor Map Book Page.and Parcel Number. 7. Structure is: ®Proposed Existing,pate of Construction 8 User Category and Units of Usage: (Check the appropriate box arM provide the epprxeNe information) a.Residential: Sing*Famiy Homes) Tmde Lots ► Numberd Units: Duplex Triplex Fourpkx ► Number. Five Units or More ► Numbw of Units: Mobde Home Park ► Numberof Spaces: CondominWm 0. Numberof Units: b. Commercial: HWeVAbtel ► Number of Rooms: Convalescent HospiRpHom,fW the Aged ► Number of Beds: Other(S ): ► improvement Square Footage: c Institutional: C niversity ► Number of Students: Pr'rvale Srlwol ► brrpmvement Square Footepe: Church ► ImprovementSquare Foofage- d. Industrial: ®Ag Categof%S ► All fi, a trial discharges must obtain a pennh for Industrial wastenater d1schaMe. 9. In order to process this application a complete set of architectural We prints must be submitted. This is not required for convorsion from septic tank to sewer connection. 10. 1 certify that the information provided in this application is true and correct to the best of my knowledge. ❑OWNER (Signature) (Dace) ®AGENT FOR OWNER Pbefp pay DyfMGk IXnlp'q'TATI N0 TRlCvplFL lip ANGPF.) kRakp 4wcks payaDre me: CDUNTY SAMT W Subject o en OF IDS ANGELES COUNTY. R lvn dmeekA xN lie SuDjectbpemlb. FEE CALCULATION FOR RESIDENTIAL COMMERCIAL AND INSTITUTIONAL CATEGORIES x S = S K.W of uMz W usage Cmrrmon F.Per um ar Usage Gonmegn Fee SPECIAL CREDITS(Duly it Applicable) -h order to receive credit,proof of demolition or ❑OEMOUT*N CREDT former use must be submibed With your ❑CHANGE IN USE CREDIT- application (e.g. Demolition Pmmty, original ❑AD VALOREM TAX CREDIT plans). — S Annexation Data la Less Thnn iem,Over Zrm) Z C vmnFro Due (F—DaM.'GI,o W FEE PAYMENT RECEIVED: processed by. From: D.C. ❑Yes ❑No Approved oy Amounts Ck.No. Permit No, Date: Dec T!W<]•1 �f 09 BOUNDARY MAP DISTRICT NO. 22 SAN r' 048R/EL / MOUNTAINS r' J COUNTY OF LOS ANGELES J✓ i ; T , iS i; r FCbtH1LL;BI,VD; _ � �_ ! M GLENDORA • • 9 M` AZU�A yl IftWINDALE ; r �ti.aRiztyt Wr . f . . . . a SAN bIMAS . . :' COVINA r F \ /� �a{rte l WESTCOVIFI' . ., HOLTAV=--{ 60 • ~ .A SAL[-, I � i t • 1, . CCLIM_Rp Copyright 2095,Ali Rights Reserved. The ! • 6( �"" `J information contained herein is the proprietary jJ propery of the following owners suppled under license and may not be reproduced except as 110 licensed by Digital Map Products;Thomas Bros. . / ( maps. County Sanitation Districts of Los Angeles County 0 10,000 20,000Feet CONNECTION FEE SCHEDULE FOR COUNTY SANITATION DISTRICT NO. 22 EFFECTIVE JULY 1,2007 USER CATEGORY UNIT OF USAGE CONNECTION FEE Residential __ _ Si Fami Home Parcel Condominium Pend /.388.00 MdtFUnit Residential Parcel Motile Home Park No.of 5 cos --1.110.00 Commercial HoteVMotel/Roomlrq Hotae No.N Rooms 870,00 '&q .� _._ ____—_ t000,agft .._ 703.00 r5 rkd ...,_._ _[000 sgft _ 7.739.00__... __ shopping Cesrkr j i000 sg ft 2,886.00 Re iorunl Mall _ 1000 99 It 1,670.00 Office,auumg 1000 sq R - - 1.406.00 MedicaMeotaWaterinaryViric or Budd"mp ---- .--__ 1000 sq ft .�. _ 2_109.00 Restaurant 1000 so It 11211.00 Indoor Theatre 1000 sq(t__...-_ .•• ,._..__ 870.D0 Car Wash:Tunnel-No R - 1000 sy ti,_ _ __ 25,993.00 Car Wash:Tunnel-R i _ _ ) _ 1000 sqR __ 19,055.00 Car Wash: Wand Type ......i _ 10W sgft _ 4,921.00 Bar"redk Union -__.-_• 1000 sift - ,._-.- 703.00 _..:_. �. SarvitdVehige MaintenancdR "us - .1000 sgft _..._...... 705.00 Gas Station/Auto Saks .._ .• 1000 ad ft 705.00 Animd Kennel 1000 sq ft 703.00 VMdesale Outlet 1000 tt 703.00 Nun fGmentouse 100D as ft ! 165.00 'Ware -: I 1000 ft ___...�122200 Open ytora a 129Osg1t222.00 Light Manufaclutl 10110 W tt 1__•. ---• 222.00 Wmber Yam - 1000 sq R 22200 Drive-in Theatre 1000 ut ft 148.00 _ CIDb6 Lodge HallajFratemal or Civic) __ 7000 sq ft 870.00 461 _ Bowlin9/yka4rg,,,-^ 10005gM. Auddonum/Amus enl -�-_ _1000 sgft ---^ 2,461.00 _Golf CouraNParlc,(Structures 6 imprwemeiRs)�..� - 7000 s fl. 703.00_. Cam ___r.MV Park _,� _ ____No_of Sdes mi s aces 426.00 e Lamm orrat 1000 sq ft 26,8B1.00 Moauay/Funeral Home 1000 sq ft _._._ ..-_.._— 7166.00 HealthSpa/G 'thou[showers 1000 N ft _.— Health S _HealthS "th showers 1000 SRR °Convalesced Home No.of Beds 870.00 Com nboNF " =ndRa Cenkf Average Daily Atkndance 74.00 Irtstitudonal r Cd ni Student 148.00 'Private Schad 1000 q ft 1006.00 Library/Museum 1000 sq ft 703.00 Post Off. oral 1000 sq ft 703.00 —__ Porth Re bna 1000sg3 ..._._.._._ ____._.. 222.00 Chump [000 8 �� -���352.00 -� INDUSTRIAL The cormecdon Fee for an industrial dscn cr w11 be calculated by 01e Las Angeles Coonty Sanitation Districts based on projected wastewater quantity and strength contained in the Application for Pennk for Industrial Wastea4ter Discnaige and you will be bilod separately. 1 Bakories which sell the majority of their pedeco o8-skc aM baw waAtwater Be"grotto than 500 gdiom per day are cluvfiM ae vtAavial wase discbugos. s Cematised food pro=m %firerlhicsfar dismbadwmnrpenrmrkem ac clamificd miralmtriil wawa mat5ugm. s Radius shops am cIns[ficd as i ...wave&selurgoa • Wucboascs wbkh star.h..,dous cb..k h utd bavc floor dram we clusi6rd as industrial waste discbueers. s laundries -Wcb arc coin opmramd we ebud6ed as bdmuiil waar dhclw8os a Hospiw,wbkhpovideawtecarosenicesuecLvi6edukdvsnialwwfedecbwgers. Seaiorcitaeo hassia,wid<irdividuil caokiog I.Oitm arc dassi5ed as u lusvW wase d6chw ors t Stodoot mudences we dasi5ed s roo nob boo wkn indisidrnl emirs h.nao..cooks g F'lidos b whkh cmc Ouy we cb3,ifiod lmdedx rmlit- n; cesid..0 cwce _ LOCATION OF DISTRICTS' OFFICE � .cM i 099 Budget Outline for The Canyon Institute Project Development, Grant-Writing, and Open Space Policy Recommendations to Preserve the Natural and Cultural History of The Canyon City } � s Gr y wi 011 � ♦: submitted to CITY OF AZUSA Mayor Joseph Rocha Honorable City Council Members re-submitted by CALIFORNIA RESOURCE CONNECTIONS, INC. July 23, 2007 SECTION 3: OPERATIONAL BUDGET Itemized budget for annual requested funds: BUDGET ITEM FUNDING REQUEST Item 1A: The Canyon Institute Overhead Operational $18,000.00 Costs Funding assistance to operate The Canyon Institute including, but not limited to, Water, Electricity, Gas, Insurance (Liability), DSL/Cable, Telephone). **Amounts listed represent approximate monthly expenses Water **$400/month $4,800 Electrical **$150/month $1,800 Gas **$100/month $1,200 Insurance — Liability **$550/month $6,600 DSUCable **$100/month $1,200 Telephone **$200/month $2,400 Item 1B: The Canyon Institute Capital Improvement $34,500.00 Program Project management of capital improvement projects at The Canyon Institute including, but not limited to, contractor and volunteer coordination, project design oversight, community coordination, financial management, fundraising, and quality control. Funding would also assist in accommodating the needs of the use of California Conservation Corps (CCC) crews in improvement and maintenance of structures, designed landscapes, and protection of the natural integrity of the sit and throughout the greater river. Paint Exterior of 3 Structures $1,000 Window Repair $1,000 Flooring $1,000 Plumbing $600 Electrical $600 Restroom U rade $3,500 Roof Repair $1,200 Septic System $500 Chimney $600 Wood Sidin $1,000 Grape Arbor $1,000 3 Gardens (Medicinal, Food, Native Plant) $10,500 Pathways $4,500 Interpretive Security Gates (based on student design $7,500 competition) 2 Item 1C: The Canyon Institute Program Implementation $10,000.00 Develop, at a minimum, one environmental program per month, during a 12-month cycle; including materials and supplies needed to adequately develop, advertise, and conduct, each program. Each program will focus on the City of Azusa and have a rotating purpose, including hands-on workshops, environmental roundtables, and youth involvement activities, such as such as Think River! and Watershed University, among others. `* Intent to partner with existing programs to maximize success, i.e. but not limited to: Chamber Mixer $400 Library Reading Program/Friends of Library event $600 Homework House After School Program Eco Club $800 Police Department— Explorers/SWAT Team $400 Recreation and Family Services— Summer Program $600 Azusa Light and Water— Green and Clean Month $1000 Azusa Pacific University—Think River! $1,800 Mariachi Event $600 AUSD Environmental Programs $1,000 Community Gardens $800 Mosquito Vector Control — Public Information $400 River Clean-Up Da — National Trails Da $600 Earth Day Event $1,000 TOTAL BUDGET REQUEST $62,500.00 Additional Services: \1 Item 2: Grant Writing for Azusa Greening Projects / $95.00/hour' Assist the city in developing project concepts, identifying grant programs, and writing grant proposals that seek funding and develop partnerships for beautification projects within the City of Azusa. Project concepts could include, but are not limited to, parks, trails, freeway ramp entry design, gateways, and river restoration. N N Iv ✓ m 3 , SAMPLE In-Kind Donations from the City of Azusa (others based on project needs): CITY DEPARTMENT IN-KIND DONATION Engineering Building inspections, design services Light &Water Participation in April's Green &Clean campaign, promote recycling effort, develop conservation programs Information Services Software and hardware donations and support services, host e-mail addresses and web site Park Maintenance Arborist lead with CCC landscape maintenance training Public Works Used furniture Recreation & Family Services Program coordination for participation in after school and summer programs 4 z A listing of The Canyon Institute partners to date and their role in the program: ORGANIZATION ROLE Azusa, City of Landowner, in fee, of Taylor House parcel. Increased partnership role through items outlined in this proposal. Azusa Historical Society Historical advisors for interpretive design, educational support for programs. In-kind Azusa Canyon Historical Displays. Azusa Neighborhood Homework House Partnership to help Azusa Homework House teens develop environmental stewardship behaviors and skills California Conservation Corps At-risk youth recruiting for site improvements and watershed education training mentors for educational programs. 5 corps members, recruited from the community, employment on site operating a CCC satellite office. Canyon City Foundation $15,000 Grant for site design and planning; program development; staffing and volunteer strategy. Rainbow Canyon Ranch Informed and involved neighbor and partner. San Gabriel River Water Committee Site activity advisor ensuring safe, reliable water supply, educational support for programs San Gabriel Valley Mosquito and Vector Development and contribution to site educational Control District programs. USDA Forest Service, an Gabriel Program and funding coordination for San Gabriel River Ranger District Can on Watershed Conservation Authority/ Owners, operators of Azusa River Wilderness Park. Rivers and Mountains Conservancy Rent free occupancy for implementing educational programs, In-kind ranger patrol, via the Mountains Recreation & Conservation Authority, as part of greater Azusa River Wilderness Park, Advisors for regional programs and site connectivity opportunities to other San Gabriel River public open space sites. 5 i'G`_ i' yI, i�j���jj ¢"fib +p,_.t�. '1'.T/ •.`i: �� �Y ITS}'S AZUSA s CMI i WRfF. AGENDA ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: FRAN DELACH, CITY MANAGER JOSEPH F. HSU, DIRECTOR OF UTILITIES�y DATE: JULY 23, 2007 6� SUBJECT: DISCONTINUE THE RATE STABILIZATION FUND FOR STRANDED INVESTMENTS WITHIN THE ELECTRIC FUND RECOMMENDATION It is recommended that the Azusa Utility Board/City Council: (1) make a finding to discontinue the rate stabilization fund for stranded investments within the electric fund; (2) direct the Director of Administrative Services to coordinate necessary accounting and investment activities to accomplish the recommended action of (1). BACKGROUND In 1997, the City Council established via Resolution No. 97-05 and Ordinance No. 97-01, a rate stabilization fund (Rate Stabilization Fund) for stranded investment within the electric fund. The rationale of the Rate Stabilization Fund was to buy down the cost of power resources that would be rendered uneconomic due to the electricity industry retail competition or commonly known as deregulation that California was embarking on at that time. Subsequent events of the deregulation have proven disastrous: (a) not enough power plants were built to maintain service reliability causing the energy crisis of 2000-2001; (b) price of wholesale electricity skyrocketed causing the bankruptcy of one major investor owned utility (IOU) and brought another IOU on the brink of bankruptcy; (c) the state of California via its Department of Water Resources (CDWR) had to step in to buy power under long term contracts to keep the lights on; and (d) the customer's right to choose electricity suppliers commonly known as direct access, was suspended until such time CDWR's long term power contracts expire, currently anticipated no sooner than year 2012. Further, the cost of natural gas has increased substantially causing the cost of electricity to increase commensurately. The power resources that were previously considered stranded assets with above market costs in the mid 1990's are again very economic due to these changed circumstances. 100 In accordance with Ordinance No. 97-01, the City Council can make a finding that the reasons for maintaining Rate Stabilization Fund for Stranded Investment are no longer applicable and can direct the staff to transfer this special reserve fund to electric fund general reserves. Staff is continuing to monitor and evaluate some major policy initiatives that California legislature and regulators are currently undertaking that are likely to have significant impacts to the City's electric utility, e.g., the greenhouse gas reduction and accelerated Renewable Portfolio Standard (RPS) Initiatives. Staff may recommend the Utility Board/City Council at a later date to reengage the establishment of restricted reserve funds for special purposes similar to Rate Stabilization Fund for stranded investment. FISCAL IMPACT There is no fiscal impact to the electric fund for making such declaration. There is a beneficial impact to the general fund as the interest earned on Rate Stabilization Fund will become eligible to be transferred to the General Fund at the fiscal year end as opposed to being reinvested within the Rate Stabilization Fund not affording its use by the General Fund. Prepared by: Bob Tang, Assistant Director of Resource Management Attachments: 1997 Stranded Investment Resolution and Ordinance Resolution 97-CS.pdf Ordinance 97-01.pdf 104 RESOLUTION NO. 97-05 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,CALIFORNIA,AUTHORIZING THE TRANSFER OF SIX MILLION DOLLARS FROM THE ELECTRIC FUND'S UNRESTRICTED RESERVE TO THE RESERVE FOR STRANDED INVESTMENT AND SETTING ASIDE ANNUAL ELECTRIC OPERATING NET INCOME FOR STRANDED INVESTMENT WHEREAS, the California Legislature has enacted Assembly Bill 1890 which restructures the electrical services industry in California for investor-owned utilities('IOU's') and municipally owned utilities; and WHEREAS, the Legislature requires IOU's to provide direct access to alternative electricity suppliers for all of their customers no later than March 21, 2002,and permits IOU's and municipal utilities to recover certain costs resulting from industry restructuring;and WIIEREAS, the California Public Utilities Commission and the Federal Energy Regulatory Commission are currently engaged in proceedings to establish a restructured industry and a regional power pool,which proceedings may, in part identify other costs; and WHEREAS, the City has already procured power resources to serve its existing customers for years in the future and the wholesale prices for these energy resources are projected to be greater than the market retail price; and WHEREAS,the City must establish adequate cash reserves to mitigate financial impacts of the restructuring; and WHEREAS, the City Council has adopted an ordinance creating Section 78-40 of the Azusa Municipal Code which creates the Reserve for Stranded Investment to accumulate adequate cash reserves, _ NOW,THEREFORE,be it resolved by the City Council of the City of Azusa as follows: Section 1. On January 16, 1997, the director of finance shall transfer Six Million Dollars ($6,000,000) from the City's unrestricted reserve in its Electric Fund to the Reserve for Stranded Investment created in accordance with Section 78-40 of the Azusa Municipal Code (the 'Reserve'). Section 2. On or before lune 30, of each year, beginning in the 1996-97 fiscal year, the director of finance, in consultation with the director of the light and water department, shall transfer electric operating net income into the Reserve. Section 3. In accordance with subsection (g) of Section 78-40 of the Azusa Municipal - Code, all activities pertaining to The Reserve shall be reported in the City's annual financial report and the director of finance and the director of the light and water department shall make a written report on the Reserve to the City Council on an annual basis. Section 4. The City Clerk shall certify the passage and adoption of this Resolution and the same shall take effect on January 15, 1997. 102 1 r PASSED,APPROVED AND ADOPTED this 13 day of January , 1997. �T —Mayor I HEREBY CERTIFY that the foregoing Resolution No. 97-05 was duly _ adopted by the City Council of the City of Azusa, at a regular meeting thereof, held on the 13 day of January , 1997, by the following vote of the Council. AYES: CITY COUNCIL MEMBERS: Hardison,Kadrid,Naranjo,Beebe, Alexander NOES: CITY COUNCIL MEMBERS: None ABSENT: CITY COUNCIL MEMBERS: ne /_CITY CLERK APPROVED AS TO FORM: By: �' " CITY ATTORNEY 103 ORDINANCE NO 97-0 AN ORDINANCE OF THE CITY OF AZUSA, CALIFORNIA, AMENDING ARTICLE II OF CHAPTER 78 OF THE AZUSA MUNICIPAL CODE BY ADDING A NEW SECTION 78-40 CONCERNING A RATE STABILIZATION FUND FOR STRANDED INVESTMENT WITHIN THE ELECTRIC FUND THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, DOES ORDAIN AS FOLLOWS: SECTION 1. Article II of Chapter 78 of the Azusa Municipal Code is hereby amended to add Section 78-40 to read as follows: 'Sec. 7840 Reserve for Stranded Investment (a)There is hereby created a separate account within the City's Electric Fund to be known as the Reserve for Stranded Investment(the"Reserve'). (b)For purposes of this section,Stranded Investment shall mean: (1) The difference between the City's prudently-incurred costs of electricity from its generation-related assets and obligations and the local market price of electricity as established by a regional power pool approved by the Federal Energy Regulatory Commission;and (2) Appropriate values associated with ancillary services, reliability and self-sufficiency;and (3) Such industry restructuring related costs as may be expressly approved or which are appropriate for recovery by California municipal utilities under the decisions of either the Federal Energy Regulatory Commission or the California Public Utilities Commission;and (4) Such industry restructuring related costs as may be authorized by slate law, (c)Funds collected and placed into the Reserve shall be used exclusively to pay for Stranded Investment and for no other purpose. (d) No monies in the Reserve shall be. expended or transferred without prior approval by a majority vote of the city council. The director of the light and water department and the director of finance shall make written recommendations to the city council on the manner in which monies should be transferred between the Electric Fund and the Reserve. (e)The director of finance shall administer the Reserve in consultation with the city administrator and the director of the light and water department. (0 All activities pertaining to the Reserve shall be reported in the City's annual financial report. At least once a year,the director of the light and water department and the director of finance shall present a written report on all activities pertaining to the Reserve to the city council at a public meeting. (g) All interest earned on monies in the Reserve shall remain in the Reserve and become a part thereof. 104 (h) At such time as the city council determines that the Reserve is no longer necessary to compensate for Stranded Investment, the city council shall direct the director of finance to transfer all monies in the Reserve into the Electric Fund's unrestricted reserve and those monies shall be used in the most reasonable manner to reduce electricity rates for the City's electric customers. SECTION 2. This Ordinance shall be in full force and effect thirty days after its passage. SECTION 3. A summary of this Ordinance shall be published in the manner required by law. PASSED,APPROVED AND ADOPTED this 21stday of January , 1997 SIEVED EXA DER MAYOR ATTEST ADOLP OLIS, �- CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES CITY OF AZUSA ) I, Adolph Solis, City Clerk of the City of Azusa, do hereby certify that the foregoing Ordinance No97=olwas duly introduced and placed upon its first reading at an _ adjourned meeting of the City Council of the 13 day of January., 1997,and that thereafter, said Ordinance was duly adopted and passed at a regular mewling of the City Council on the 21st day of-January. 1997 by the following vote,to wit: AYES: COUNCILMEMBERS: HARDISON, BEEBE, ALEXANDER NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: MADRID, NARANJO ADOLPH,(S LIS, ` CITY CLEKK APPROVED AS TO FORM: STEPHEN P. DEITSCH, CITY ATTORNEY 3 _ cow AZUSA t CXI i A'RiE4 AGENDA ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES /�Jr/ DATE: JULY 23, 2007 V`� SUBJECT: UTILITIES DEPARTMENT RESERVE POLICIES RECOMMENDATION It is recommended that the Azusa Utility Board/City Council deliberate and approve the augmented reserve policies for the electric and water utilities by adopting attached resolution. BACKGROUND The Utility Board/City Council adopted via resolution the current reserve policies for the electric and water utilities in February 2006. The utilities' reserve policies establish guidelines for maintaining adequate cash on hand to meet the operating financial needs of the utilities, including foreseeable extra-ordinary one-time costs, and costs that may result form unforeseen events or emergencies. Current reserve categories are set forth below, including their rationale and dollar amounts: Electric Utility 1. Operating Reserve— It establishes 60 days of operating cash flow or $6.5 million. 2. Capital Reserve — It establishes reserve to carry out identifiable capital projects when projects are not financed via bond issuances; current capital reserve policy is $2.5 million. 3. Contingency Reserve — It establishes reserve for specified contingencies. Existing contingency reserve is set at $9 million. In February 2006, Electric Reserve policy totaled $18 million, and cash reserves at that time were about $19.5 million. 106 Water Utility 1 . Operating Reserve — It establishes 60 days of operating cash Flow or $3.7 million. 2. Capital Reserve — It establishes reserve to carry out identifiable capital projects when projects are not financed via bond issuances. Current capital reserve policy is $12.5 million. 3. Contingency Reserve —Separate financial planning was carried out for major water capital improvement projects this last year. Projects, such as the Water Treatment Plant, were funded through a bond issuance in December of 2006; the balance of bond proceeds in the Acquisition Fund was $43.3 million as of June 30, 2007. These funds are deemed adequate to meet foreseeable expenses for large, one-time capital improvement projects. , In February 2006, Water Reserve policy total was set at $16.2 million and cash on hand at fiscal year end was $24 million. Augmentation to Existing Reserve Policies: Electric Reserve Funds Due to the changed operational, regulatory and legislative landscape in the electric industry, staff recommends the following augmentation to the electric utility reserve policy as follows: 1 . Include San Juan major capital project costs in the San Juan outage reserves Rationale: Major capital project costs are normally financed via bond issuances for recovery over time, however, improvements or upgrades to San Juan are not treated as capital costs under the contract with SCPPA; such costs are treated as operating and maintenance costs payable as incurred. Thus, to avoid retail rate shocks and to comply with electric utility's bond covenants, funds will need to be reserved for this special purpose when San Juan undertakes major capital improvements such as the environmental upgrade project. 2. Activate the electric utility's legal and regulatory risk contingency reserve at this time Rationale: The regulatory and legislative landscape has substantially changed last year in two fundamental ways: (a)the acceleration of state's Renewable Portfolio Standard (RPS) policy to achieve 20% renewable energy by year 2010 instead of year 2017; and (b) the passage of greenhouse gas (GHG) legislation (SB 1368 and AB 32) and the impending regulatory implementation of the GHG laws. Both, the accelerated RPS and GHG issue will have uncertain albeit likely substantial financial impact to the electric utility. Thus, it is warranted that we activate a legal and regulatory risk contingency reserve. 107 Water Reserve Funds Due to foreseeable increases in annual capital improvement project spending to maintain infrastructure, it is recommended that the Capital Reserve be changed from $12.5 million to $20 million. This amount represents approximately 3-years of expense for capital projects largely geared toward infrastructure maintenance, plus $5 million for additional capital improvement projects on the planning horizon, such as a water diversion that eventually needs to be installed in the San Gabriel River. This additional $5 million may also be used for change orders during this next couple years related to large one-time capital improvement projects or for emergencies that may result from natural disasters such as an earthquake. The augmented reserve policies are set forth in more detail 1n the Exhibits to the attached Resolution, and are summarized here: Reserve Policy,Type -. 3 i Electric e i=r Water? ' Operating Reserve 60 days/$6.9 million 60 days/$2.9 million Capital Reserve $2.5 million $20.0 million Contingency Reserve $14.0 million 0 Total $23.4 million $22.9 million lExisfinq Cash Reserve" $26.0 million $24.0 million Unencumbered Reserves 2.6 million $1.1 million * Existing cash reserves reflect the estimated-cash-b`alances at FY 2006--07—end FISCAL IMPACT Since the Utilities Department currently has positive unencumbered balance sufficient to cover the proposed policy for both electric and water utilities, the augmented reserve policy does not affect retail rates nor does it affect the transfers from utility funds to the general funds. Prepared by: Bob Tang, Assistant Director of Resource Management Cary Kalscheuer, Assistant to the Director of Utilities Attachment: Resolution and Reserve Policies �u Reserve Policy Resolution.doc 1,OS RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, SETTING CERTAIN RESERVE POLICIES FOR THE UTILITIES DEPARTMENT. WHEREAS, the Utilities Department operates an electric and water utility (hereinafter "Utilities") on an enterprise basis; and WHEREAS, for the Utilities enterprises to be managed in a fiscally responsible way, proper financial reserve policies must be set, monitored and updated from time to time; and WHEREAS, on February 27, 2006, the City Council acting in its capacity as the Utility Board, adopted a resolution setting forth reserve policies for the electric and water utilities; and WHEREAS, changes have occurred since February 2006 in the operations, regulatory and legislative environment, that financially affect the Utilities and will have a significant impact on the capital needs of the electric utility in particular and thus warrant an update of the reserve policies for the Utilities; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. That the Utilities Department shall maintain the following reserves for financial planning and risk management purposes as set forth below: Reserve Policy Type Electric Water Operating Reserve 60 days/$6.9 million 60 da s/$2.9 million Capital Reserve $2.5 million $20.0 million Contingency Reserve $14 million 0 Total $23.4 million $22.9 million SECTION 2. That the background for the above amounts is set forth in Exhibit A, which is attached to this Resolution and made a part hereof. SECTION 3. That these reserve levels shall be reviewed annually during the budget preparation process, and if warranted, changes will be proposed and made through an updated resolution. 109 SECTION 4. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED AND ADOPTED THIS 23rd day of July, 2007. Joseph Rocha, Mayor ATTEST: Vera Mendoza, City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Utility Board/City Council of the City of Azusa at a regular meeting of the Azusa Light& Water Utility Board on the 23rd day of July, 2007. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Vera Mendoza, City Clerk 110 EXHIBIT A UPDATED ELECTRIC UTILITY'S RESERVES AT FY 06-07 END A. Operating Reserves At 60 days of FY 07-08 electric operating budget= $ 41,861,000/365 x 60 =$6,881,260 Recommendation: Set operating reserves at$6.9 million B. Capital Reserves Recommendation: Maintain capital reserves at $2.5 million C. Contingency Reserves CA San ,Tuan Outage Contingency Step 1: Calculate a minimum CONTINGENCY RESERVE for San .Tuan as follows: Deem a credible San Juan forced outage scenario (45-day in the summer season which has happened before in summer 2001). Compute the San Juan replacement power cost for this scenario valued at the immediately succeeding summer power prices. Subtract from replacement power cost so determined the amount that can be recovered through the FCA. The application of the above in today's environment will yield: Total replacement power in MWhs =45 days X 24 hours/day x 30 MW/hour=32,400 MWhs Summer 2008 power prices (as of May 7, 2007) _ $103/NM Total replacement power cost= 32,400 x 103 = $3,337,200 Total recoverable from FCA = $710,000/2 = $355,000 ($710,000 is the quarterly FCA cap, 45- day FCA cap is half) Minimum Contingency Reserve = $3,337,200 -$355,000= $2,982,200 Step 2: Calculate a maximum CONTINGENCY RESERVE for San Juan as follows: Deem a severe but credible San Juan forced outage scenario (180-day in the summer season which can happen with 20% probability in the next twenty years based on PNM survey of underground coal mines. The severe scenario can happen if the underground mine catches fire). Compute the San Juan replacement power cost for this scenario valued at the immediately succeeding summer power prices. Subtract from replacement power cost so determined the amount that can be recovered through the FCA. The application of the above in today's environment will yield: � 1 � Total replacement power in MWhs = 180 days X 24 hours/day x 30 MW/hour= 129,600 MWhs Summer 2008 power prices (as of May 7, 2007) _$103/MWh Total replacement power cost= 129,600 x 103 =$13,348,800 Total recoverable from FCA = $710,000 x 2 =$1,420,000 ($710,000 is the quarterly FCA cap, 180-day FCA cap is twice) Maximum Contingency Reserve = $13,348,800 - $1,420,000 = $11,928,800 Step 3: Determine the Appropriate Level of San .Tuan Contingency Reserve Recommendation 1: Maintain San Juan outage Contingency Reserve at$S million -�T.4 r'"t "rco¢'""" , 7 im—�°g 5- k - }}n 4 z..;.q..�. a.n �. Recommenlahon,2 Ma�ntam environmental protect contkngency reserve at$2 million Total San Juan Contingency Reserve is recommended to be $10 million C.2 Electric Utility "Net Short"Power Procurement Contingency The electric utility may have energy needs which are beyond the current level of energy supply. This is a situation referred to as a "Net Short" power resource condition. In this case, the Electric Utility needs to procure power at near term prices, which may not be supported by the current retail rates. Thus it is recommended that the following methodology be used to establish a CONTINGENCY RESERVE amount for "Net Short" Power Procurement as follows: Step 1: Calculate the Annual Net Short Requirements for the Immediately Three Years: In our case, we are almost fully covered for 2007 from the energy requirement perspective; we are not covered from the energy requirement for summer 2008 and 2009, thus: Net short 2008 =24,000 MWhs (15 MW on-peak power for June through September) Net short 2009 = 25,000 MWhs (assume 2% growth for summer consumption) Net short 2010= 26,000 MWhs (assume 2% growth for summer consumption) Choose the highest Net Short of the three years, i.e., 26,000 MWhs Step 2: Calculate the Power Cost That Can Support Net Short Procurement within Existing Revenue Structure This step can simply be accomplished by computing the average wholesale power cost of Azusa's existing resource portfolio, which is about$55/MWh. Step 3: Calculate the Cost above that can be supported by Azusa's retail rate for the Net Short Procurement This can be accomplished by computing: Total Net Short procurement Cost at the Summer Prices in 2010 (as of May 7, 2007) = 26,000 MWhs x $95/MWh = $2,470,000 Cost that can supported by retail rates for Net Short =26,000 MWhs x $55/MWh =$1,430,000 Cost not supported by existing retail rate for Net Short Procurement=2,470,000— 1,430,000= $1,040,000 Recommendation: Set Net Short Procurement Reserve at$1,000,000 C.3 Electric Utility Legal and Regulatory Risk Contingency Global Warming and.:GHG Ezuosures x; {,qy a a 'tH -ta, 44 t ..5 rx tf Cahformalegislature$Hatted AB32 m 2006 to regulate the greenhouse g`as emissions wi e goal d achieumg GHG reduction of about 25%sby 2020 from the current GHG level There is'a 2 1 7 reasonable"expectathon that some type of carbon tax m the form of dirercct tax on§ources'of GHG errussion5=or m the:form of erm�ssyyron allowances that sources of GHG will need to procure: .* L 4 +£ .,�'S5 � iQ.wRS{Ydi 51.6}x`'^.11 ^!At" S7'Jst y .t'�•' } S . , tyV 4 W - While the cost of cazbon_tax is unknown atFthrs time,.but,it iaexpected�to+be costly if 25°!0 reduction goalis to be acieyed by2020 Based on someahstic es imato by ndu by experts tliecos of carbon taxlcould ange from$5 u Nr (Std .r} r� {'� .rr >>G ,�, :`r� nGl�g�'k ;. k Y z .`? r Sur rt% '• to $50r penton of CO2 Thus tt translates mto about$5/MWh to$50/MWh,cost ad'ders_ui the electricity producrionueosbfromcoai°resources« 4i r r , i "r-mr'. b.F . �" n'+ .:- rrX' Staff%ecommends reserving some,money to:hedgeagamst such cazbon axrfor two years at tte i:i!1 t yX. .n0�`. t'. x4t` 4 , , 'i.S T t5� :•• mrd'zange of cast estunates, e g $20/MWI 'adder to the electnctty production from San Tuan., a• t -a e a'a. .' �1.�-7 �'[. a['S`v. r tta i s a *ew, Two:year electricity production from;San Juan ,30 xi8760 x.6:85 x 32 =;446,760:NIWfr Total,targeted eserve 446760x,20 $8935200 Staff:recomrriends that fire tazgeted reseive'lie achreved'm three yeazs filiustreservmg$3 000;000 t a ar each"yeaz for'tte nex�three }ears Accelerated�Renewable':Resource�rocucement:�. The City's current Renewable Portfolio Stapdazd (RPS) approved m 2003 established a goal-of 20%bf retail energy consumption commg from renewable resources by yeaz 2017 The RPS also a 4,z calls for retail rate7ncrease of no more§than:5%m abliievmg this goal We currently have 7%;in teeigy YS ai t„ .s s.. ,y�^t• YF�R x,,.t C�'i-a m,.i YF a renewable�ennd°ace fortunate to procure it,at below marhetpncesr However rsmceh2003 thestatehasaccel�ra ed th�Yr e e u meetuig the RPS'goal of 20%fr m 2017 to 2410, even ye�exs earlier Than the previous legislarioW:There are-alsosenous ongoing ra.�3a:c+Is .�y discussions methe current legslative sessroris to*mcrease the RPS10,330/6' y. yeaz 2020 The acceleratedtuneframe tom to1 wiith�the 'state RPS g al"and tl eipotential mcr`easo in the #' vs .'> t C F3'€R }x 'Z•i e p y procurement target from20% to;33%swill pose financial challenges forthe Crty toFkeep its rate increases four reneablee�nergy�pioc ement undeiy5% Thula reserve:for accelerat_e_d'renewable resource procurdiffil xs warranted as fo'll'ows: ,p e % StepA"- Calculate the,Remaming Amount of Renewable Resource to Meet the;_Tazget at;-20% and 33% RPS;at Current Energy Consumption Level FY &;'064 Consumption•,a259,000,MWY 20%`RPS re'qutres 51 800{MWIi_and 3.3°!o RPS iequuesz85 470 MW6-E' isg reriewatile - re`soirrces.proyrde 16 500 MWh� Remauung renewable.energy=to:be procured to met 20%oRPStu'51�800 ,'1635;300.IvIWh R'emarnurg renewable energy to b procured to meet 33°Jo.RPS,, 85;470 68,970 MUJa as Tn FS y5'"' :gr4-x"�S"" ,r:= S"tea 2 Compute the Cost Above C$ys,Average PowerrProcurement:Cosf ?5iCy s average power,;procurement cost,_;$55/fvlWh Current renewable`esorrce costs�'(CPUCIylarket{=Referent Price)�:'$80/MWt Cosf,above:C ty's average power.procu einent cost Q 20%:RPS (80 55) x,35;300 $882;500 Cost above City's average power-procur"ement cost'@,33%RPS. (8q;M. k 68;970'= $1'724,250 �i>�`..w�` Step 3Coniputerttie RequrredReserves;-Above 5% Retail'R'ate Increase ' s� "� NK3 ii �{Tl�" ..S n y:.-. psa'S '}y sx. ^'c�.npS.• 5%reta ,rate�ncrease tianslatessinto about$1A300.00O,ahus Reserves aY20% RPS ." 882,5001; 1 300;000 $467;500: Reserves at 33%`�R`PSA_"�1 724;250'i 1 300000��$424=250 ..r.'�: Fx —t•9 ex t a.... •. ,.,a'-zr,."scrAa "..s rre r•k ^s W, "`7' xE r xrs. Staff recommends not setting reserves exghcrtly at his Ume to accourit for additronal�accelerated RRS regttiirement as it;appeazs such_procurement,oan be achrvedwrthn 5,% retail rate increase target underCityas current RPS, SUMMARY: Staff recommends the Reserve targets to be updated to as follows: Operating Reserve Account= $ 6,900,000 Capital Reserve Account = $ 2,500,000 San Juan Contingency Reserve= $10,000,000 Net Short Procurement Reserve= $ 1,000,000 Legal and Regulatory Contingency= $ 3,000,000 114 Total $23,400,000 Projected Cash Reserves at FY End= $26,000,000 Unencumbered Reserves= $ 2.600.000 The targeted aggregate reserve level of$23,400,000 represents an increase of$5,250,000 from the current adopted reserve level of$18,150,000. The projected unencumbered reserve is projected to decrease by$1,750,000 from the current$4,350,000 to projected $2,600,000. UPDATED WATER UTILITY'S RESERVES AT FY 06-07 END. A. Operating Reserves It is recommended that the Water Utility keep sufficient liquidity in reserves to cover 60 days of operating expenses plus annual debt service payment at all times. At present time, the Water Utility's annual gross operating expense(including GF transfers as "operating" expenses) as budgeted is about$17.5 million and thus 60 days of operating expenses translate into about $2.9 million. B. Capital Reserves It is recommended that Water Utility keep sufficient reserves to equity fund well defined capital projects that are not intended to be debt funded or only partially debt funded. At present time, the Water Utility internally funds between $1.5 to $2.5 million per year in capital projects out of its operating revenues and such funding is anticipated to increase to $4-5 million per year in the foreseeable future. It is recommended that a capital reserve be established and be funded with $20 million as the target reserve level. This amount represents approximately 3-years of expense for capital projects largely geared toward infrastructure maintenance, plus $5 million for additional capital improvement projects on the planning horizon, such as a water diversion that needs to be installed in the San Gabriel River. This additional $5 million may also be used for change orders during this next couple years related to large one-time capital improvement projects and for emergencies that may result from natural disasters such as an earthquake. The target cash reserve level should be reviewed and reevaluated annually and adjusted accordingly. The Water Utility will prepare a list of capital projects with sufficient details as part of the annual review process to enable the Utility Board to make informed decision to adjust the target level of capital reserves the Water Utility should retain. The Water Utility will also prepare a report detailing the level of funding that might be required as part of the support services it receives from other divisions or departments of the City. C. Contingency Reserves At this time there are no specific contingencies that warrant a special reserve be established, although replacement for such things as an old water reservoir in the event of an earthquake could trigger unforeseen need for capital, however, this contingency is included above in the capital reserve section. 116 SUMMARY: Staff recommends the initial Reserve targets for the Water Utility as follows: Operating Reserve Account= $ 2,900,000 Capital Reserve Account = $20,000,000 Contingency Reserves= $ 0 Total $22,900,000 Existing Cash Reserves = $24,000,000 Unencumbered Reserves= $ 1.100,000 The target Reserve levels shall be reviewed and updated every fiscal year during the approval processes for the following fiscal year's budget. Any adjustment, including operating cost reduction and/or retail rate increase, should be considered in order to maintain the reserve level for each component described above. ��r r I i � S -- Am a ZUneeA m AGENDA ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIE$��pi DATE: JULY 23, 2007 SUBJECT: ELECTRIC RATE ADJUSTMENT FOR FISCAL YEAR 2007-2008 RECOMMENDATION It is recommended that the Utility Board/City Council: a) Receive the staff report and presentation regarding cost of service studies and proposed electric rate adjustments for Fiscal Year 2007-2008; and b) Authorize staff to prepare final rate documents necessary to implement rate adjustments for Utility Board/City Council approval at September 23rd regular Utility Board/City Council meeting and implement the new rates commencing October 1, 2007. BACKGROUND In May 2006 staff provided electric utility financial projections for the next five years. It was identified that the electric utility will require revenue enhancement of 5% commencing FY 07- 08 to fund ongoing electric utility operations. Staff updated the financial projections recently and the same conclusion still holds. In view of the need to adjust rates to ensure revenue adequacy in the coming years, staff conducted a comprehensive review of the allocation of cost of providing electric services to the various customer classes. This review differs from the rate adjustments made in the past in that the review starts with a bottom-up review of cost causation factors of the electric utility cost of services to the various customer classes and attempts to allocate costs based on cost causation principles. The rate adjustments done in the past applied across-the-board rate increase without regard to cost causation principles, i.e. the presumption is each customer class contributes equally to cost incurrence. Staff's bottom-up review shows that cost incurrence attributable to each customer class and 118 the resulting cost obligation by each customer class is not uniform across customer classes. As detailed in staff's report and the presentation, the resulting rate adjustments to yield a 5% overall revenue increase are as follow: Residential customer class 4.6% increase Small commercial G1 class 5.0% increase Medium commercial G2 class 5.5% increase Municipal class 7.0% increase Large Time of Use (TOU) class 6.0% increase It should be noted that the contributions to cost of service by each customer class are very likely to change over time as the customer usage patterns and the relative usages among customer classes change. Thus, the cost of service studies should be periodically reviewed to ensure that appropriate and accurate cost of service allocation among customer classes is used. FISCAL IMPACT The proposed rate adjustments effective October 1, 2007, are expected to add about $1,500,000 annually to the electric utility's revenues. Prepared by: Bob Tang, Assistant Director of Resource Management RETAIL RATE Rate STUDIES_Final VersioAdjustment_0707.ppi 119 RETAIL RATE STUDIES COST ALLOCATION ANALYSIS AZUSA LIGHT AND WATER PREPARED BY POWER RESOURCE DIVISION JULY 23, 2007 120 RETAIL RATE STUDIES COST ALLOCATION ANALYSIS EXECUTIVE SUMMARY.• Based on the cost of service studies, staff concludes the following. ■ Based on cost of service principles, the following rate increases will be required to produce an overall revenue enhancement of 5%in electric retail revenues: Residential customers 4.6%rate increase G1 customers 5% rate increase G2 customers 5.5%rate increase Municipal customers 7%rate increase TOU customers 6% rate increase 121 Background The Azusa electric utility is in the midst of conducting a cost of service study for retail electric services. The steps that staff will undertake for this study are as follow: ■ Conduct an in-depth analysis of the cost of service parameters by analyzing the usage patterns of each customer class (coincident peaks and MWh consumption) ■ Allocate the revenue requirement based on cost of service principles ■ Conduct the retail rate designs The following will describe each of the steps in more detail. Step 1—In-Depth Analysis of the Cost of Service Parameters byAnalvsis the Usage Patterns ofEach Customer Class Staff used the test year FY 05-06 Quly 05 through June 06) as the basis for data analysis. The following process was used to analyze the customer consumption data: 1. The actual hourly consumption data of TOU customers available from the MV-90 system was compiled 2. The fitted hourly consumption data for residential, Gl, G2, and Municipal customers was compiled by using the aggregated monthly consumption data of each of these customer classes and Edison's hourly load profile for each of these customer classes 3. Stress tests were conducted in the hourly data files for check for any errors and inconsistencies 4. The output of this process is the coincident peak load information for each month during the test year and the aggregated MWh consumption information by each customer class for the test year 122 The following tables summarize the results of this process: Table 1: Coincident Peak Load by Customer Class: _. 'SIMUtAYED COINCIDEMAL PEAKS FY 0506 DATE HE MJJH ,System FJS%¢f Actual Peak) Resid¢mi .G7 G7 Other ITOU I 7272505 ! 1/ ;, 59.211__ 55.30 18 f3if; 516'',; 1350 361'1 1531 82975505 16 58.74i 55.00 19721, &M _. 1350 350; 14.511 929/2Q05 16 .. 5569, ._. .- 52.90. _.16.33; 472._._1175 . 3.101 1701! _ ...._ IGG7V05 16 48.62', 46.19 11.70 4.51.. 1158 7%''1. 1536: 95 . 11l12W5 ;... 1/ 416T.:' ... . _- 39 58 763; 356 07 ,. .18 1.25', 15361 _. _.._ . 1717320D5 19_. 36.70'. 34.E 12.391 _2_6§._ 710 1 61 1079..- 3.79 121560 1d. 3524, ._.. _ 33.13 601.: 2.85: .50 915 1 1445' _ 2H13 2D06 � 15 37.62; _ 35.73 6.15'' 3,19, 9613 1.9G; to 451 32A2DW td 36.34; 34.52 _ _ 5.99, 3.03 916. 1.89'1 14.45 . 4/132006 15 3639:200645,80 34.57 6dY; 321: 6.6 1921 1350. :. ....601 . d5 45,801 ... 53.51 17631 4,W__ 10114. 2.531 Id 611 _ 1 601r,006 15 15 IS 59.x' ' 56.87 19.52':. SdBI 14.14- 3.40; 11.311 iDATE :HE MW}1 _ Srs1¢m @5%of Actual Peak) Rende32,9 G7 Gl Dlh , ITOV I_ -_..14 582E _._ 55,3J 7212050 3293% 933%,, 6 .2351% 53%; 2770% 150:50%1 1 B/19lIOD5 16 58.741_ .. _. .. ..55.50 35.33%•. 905%j._2336% 6.27%1 2599%; 150.50%1 9fDlA05 _ _J 16 5569_ ... 52.90 30.87%�. ,1393%'.._7120% S.BS%1 . 32 15b, 10D M0, iS2 7GW5 16 413.621 45,19 25.33%1 9.76%i 2523%. 6.38%1 3325% 100.50%i 11712[05 14 11.671, 39.58 1929W 950%i 2770%. 550% 3850% 100_.00%i, _._ 127132105 19 3670; _ 34.86 35.55%i ].6d%. 21.22% 463% 3096%_10000%,, I... 12/2506 : 14 3511: 33.48 1794%1, 851% Z7 ' 34%' 5AA% 4118% 10000%: 2,92506 15 - 3761--, 35.73 MOM 6.92%1 2_710% 559%; 4044%1100.00%I __. - - 26 H41(10�- 1d � ��- 3635': - - - 3152 1735%: 8.76%- 55%, 547 5186%1 100.00%.. 4/132050 .. _ 15 36.39';. -. 34.57 18.53%; 928% 2757%: 557%: 3105%' 100.00%! 6012506 16 45.50'1.. 4351'. 2673%�. 9.37% 2554% 5IBM' 3366% 100.50%: _ - _ _. __ __.-. _. _ ___ 6232050 1 15 99,66!_ - . 5687. 3433%' 964%,.2d 136% 598%1 2519%:.100.00%: . Wmer average 71.35% a90%1 2584% 551%! 3710% 100.00%:. :Summer arerege 33.36%r 924% 73./8% 6.16%': 2776%, 700.00%I . ... ... .. Annual M,.g. __.... 2602% _ 902%. 25D5% 572%, 3419% 100.00%: Table 2: Aggregated MWh Consumption By Customer Class: -- - --- --- -- ---- -- ---- .Rate Study(Simulated MWh Usages) _ .. _._ Winter(Octo-May)_ DOM-SIM GS-1 _GS 2 OTHER TOU Total 44,694 11,797 35,616 7,293 55017_ 154,417_ i _. _._. _ _ ..17 - -- .... _ _ 1 Mid 18,254 5,892 17,915 - _ 3 644 - 26,757 _ _72;462 OQ . . 26,440 5,905 17.7017_ 3,649 211: .-.. 81,955 Summer(Jun-Sept)1 DOM-S4GS-1 _GS 2 OTHER TOU - Total 30,793 7,440 4 22 172 4 966 30 879 96,250 On __ 7,066 1,999 . 1. _ 5397 __ 1,333 __ _ 7081 ,F 22 8'-77 _ Mi � d _ 9,658 2,498 1 7570 1,666 10419 31812_ OB. ._ i., 14_,069 2,943 ..9,204 - 1,966_. 13,378 1 41,561 . ._.... ...___ j.___ DOM-SIM GS-1 GS-2 _ _ j . j --TO-U. _ - ,,,TOTAI Jul-05 8,321 _ 1,�1 ;,_. .5641 j_ 1,331 _ 1 7,698 24,692 Aug-05 - 6,409 1,980 _ �. 5,828 1,371 8,188 25,776,.,_i .._.. .. .... _.. i. ._. Sep-05 6,648 - 1,641 4,834 1,076 7,696 1 21,896 Oct-05 1 5,974 1,596 1. 4,820 f _- 1,044 _ �_ 7,509, 20.942 1 Nov-05 1 5527 7,445 4 324 - 913 }_ 7,0L6 19,235_._ Dec-O5 5,947 1,521 _ 4,561 921 t 6471. 19.420 1 Jan-06 5,796 -..1,467 ,i_--_4,430_ L_ .- _,879 .x.__ 6,740 19,332 Feb-06 5,138 1,350 i_ _ 3998 I 831 6,405 17,722 ..- - - i .. __. Mar-06 - 5,560 1,509 4574 942_ - 6,987 19,580 Apr-06 1 4.959 _ 1,362 4,297 L-_ _ -829_______1.__6463_._... 17932__ MaY-06 5,785 1507 1 _ 4.613 _ 934 7,416 20,254..-_ . .. _. . Jun-06 7,415 1,917 5.869 �__ 11� 7,297 -- 23687 256,667 123 Step 2—Allocate Revenue Requirements Based on Cost of Service Principles There are seven cost "buckets" to be recovered and the proposed cost allocation methodology is described below. The seven cost"buckets" are: 1. Purchased poorer 2. Transmission 3. Distribution 4. Customer Service S. General Fund Contribution 6. Depreciation 7. Interest payment on bonds The allocation methodologies for each one of the cost buckets are described below: 1. Purchased Power Historically, the purchased power cost is about 84% fixed (or capacity related) and 16% variable (or energy related). Thus the allocation methodology is as follows: Capacity related cost (84% of the purchased power cost) is allocated to each customer class based on 12 Coincident Peak (CP) methodologies. Further, the capacity related costs are shaped on a monthly basis to reflect the differing values of capacity throughout the year (summer capacity is of much higher value than winter capacity) Energy related cost (16% of the purchased power cost) is allocated to each customer class based on the aggregated annual MWh consumption by each customer class. 2. Transmission Transmission cost in the CAISO markets is based on MWh consumption. Thus, transmission cost is allocated to each customer class based on the aggregated annual MWh consumption by each customer class. 3. Distribution Distribution related cost is allocated to each customer class based on 12 Coincident Peak (CP) methodology as distribution infrastructure costs in general relate to peak consumption. 4. Customer Service Customer service related cost is allocated 50%based on 12 Coincidental Peak and 50% to aggregated MWh consumption. Further refinement is possible to allocate the customer 124 service cost based on customer class counts. As an initial pass of the allocation, staff is using 50/50 allocation between 12 CP and aggregated MWh consumption 5. General Fund Contribution As the GF contribution is based on MWh consumed, thus allocation based on aggregated consumption by each customer class is appropriate 6. Depreciation As depreciation is infrastructure related, thus allocation based on 12-CP seems appropriate 7. Interest Payment on Bonds As interest payment is related to debt on infrastructure, thus allocation based on 12-CP seems appropriate Step 3- The Application of the Above Principles and Data to.FY06-07Financials The allocation principles in Step 2 were applied to the FY 06-07 estimated actual financials using the data gathered in Step 1 to gauge the revenue allocation among customer.classes. The following summarize the findings. IFY 07 bb Estimated Actuals _ I Purchased Power $17,345280 Transmission I -$1 .3 77 720 -- i ---- — . Distribution _ , $4,500,000- .' Customer Services1 $1 ,500,000 GF Transfer _ _ _ I $2,860,000: 'Depreciation -- _ $1 .000,000 1 bt Desernces onterest) {_ _ $500 pool Total $29.083.000, 125 1. Purchased Power Allocation u a vnxr osle - s -u,, -. 2525 r -u-,M.;. .., _... . . . !Categoryi? =Jc v,(,! 6^84%iFixed besetl onl2,Camntlent@eake lMh monthly%hepmg ta-reAaclfievelue of cepacily,�:• _ - _ - _ _ „ Total to be recoared= 51457U35: �;Allocation Methodology MonthlyMonthly Fixed - ! . ; Shaping Fador_, Recarery . Reswennew G1 G2 Olher TOU 2525_ _. _ ._ . 4% _ - _. _ _. Jan; 670% - j 19]6,14217.94% ;__ 8.51%„ 27.34% .5.49%_ 41.18% Feb. 5 W% _ __ $728,5@_ . 18.06% 8.92% 27.10% 5A9% 40.�G% Marl - --5 W% $728$02 77.35% 8.76%- 26.55% 5.47% 41;E6% Apri,_.S D% j_ _. -5845=_ : 18.53% _9.28% 27.67% .. 5.57% . . .51.51%..-. May's 630% i 591]y12 - -26.73% 9,37%_� � � 2E.,14% _��5.61% 33.66% . . _ _ -_- - _ _ . 2598_ _25.19 _ Juni_ 831% - - 51X09,313-._ 34.33% _964% 24.51% 5.51% 25.19% _.2525 -25.25 �. ._ _ _ _ .. _. . 9259 Jul;.__15 W% -25.25._ R�3@l1Hi__._ x_ .32,93%.. ;_ .933%. ...,,... 7351%_ J__.fi53%, 77]0%, ,Aug; 17 W% $1,519,751 2525 .35.33% 9.05% 23.36% ..._6.17% - . . ... 25.99% 2525_ ,. 2525 _.-_ 8939_ .2025 Sep;_2599 1118% . 2599 51,704_ 4 30.87% 893% - 72.40% 5.51% 32.15% .3325 .. .28% 25.9% 2525 __. Oct: .._.SWM_ 5815,062___ 2533% 9.76% 2526% 6.38% _33.25% : Nw: 631% �� -��� � $917912_ � 1929% 9.51% � 27.23% � 5.51% W.W% . . . _ Dec] 9_ -_ 25 - CRA _ 9N - .. 7R �,ss% � 7.64% 21,22% � 9.63% 31S.9sgc Dec;.._ SAM _ 5815. - 9925. . _ 2525 _ ,. -2525_ 9259 2599 ' ._ Monthly, _; _ Monthly Fixed_ 25. F _ 9 her _- Shaping Fader ; Recmery Residential G1 _ G2 Olher TOP Jan'; 670% 5976,192 _ $131,122 $64.988 $166996 S .987 $2942 61 _ Feb. 551% ', $7$1,5@, f131,567 764,967 ., _f197,395 (39.987 5294,566 Mar'. -551%.. 372B,5[M .,, 5726425 $3950 $143,401 _539976 $33,1,949 Apr, 551% 5845.462 $156,632 $78.416 $232y52 $47,D52 $341p1D _ 2525 May 631% 5917912 5245,372 5959B4 $224,304 - $53,303 $351,950 Jun' -630% 51,251,313 $415,166 $116$83 5341,613 50,314 ._,_$637,595 Jul, 1550% 8,349,051 _ 958,050 $11,1,751 3545243 25 25 5151,319 $637$96 _ _. _ .__. _ 2525 25.25 _ ._ -.Aug, 1750%.._ ..__.._$1,449166_ _ _ : . 3900,814. ... $130,857 , $595,432 - ft1,7011 5662,757 _. Sop., „1170%_ $11351,694 $526,201 1152,1]8 $378A67 ,6%111 5548.451 _. _. ._ 2582, .. _ .. - . . _ N. _ _5 W% , _j $9/5.462...,..,. $114,026 $B2,4]4 $243,664 $53921 5231,978 _ Nw4 651% _ .3917,912 f177,034_ 782$97 f249y3B _ $52.176 f:L56167 SW%_. :-- $145,062.. .. $100451 .-.. $6,1,591 $179,24! $39106 $251 h'63 .. _ •Total $14$70,Qi5 9999 54.126)317 $1,320,338 $!$73,645 $555.667 $1,511,351 28.32% 9.05% 24.53% 5.W% 32.21% Celegory2��`.,,:)y 3,.s:i16%Vadable based'o"n 14'72h salea;�Y;�'�t� _ - ' 2525$2,775245, _ .. . _... . . .. 'Total lobe recovered= --������ � 52,775 Z45, ; . 2525_.. 9925 - 9259 9 2 9259 ___. ! - _ Residential G1 ! G2 _ _Other ..:, TOU Sales 75.487 19A7 57,751 12A 85MB 91% .. 23.0 9925 - 1 %MJfi Sales _ 30.11% 7.--- 23.05% 451% 34.27%_ 'R-----Allocation ., $8357".62 R129B3.32 $651804.9 - $135,77049 $950,991.51 2. Transmission _- . asnsm�ss aa'..- _ _ana a ase 'in ea ea '� . -.-.. . . -9 .. .., (Totaall to be recwemd= s.$2W.72(1. ' ... . .. __ - : Resitlemial G7 G2 Other � TOU . MVJh Sales _ - _]546% 197% - 57,769 12.259. ,. 34.27 .. _ 9259 _- " 2525 - - %MJJh$alas 30.11% ]67% 23.51% 4.51% 34.27% Reenue Allocation $414,15128 510513177 3317619.51 567975.51 $472,102,65 126 3. Distribution - Thal to be mcwerbE= id$0091D: MoMMyFixed _ -Ra 5PM Reaid lel _ GI G2 Other TOU Jan 33755300 law%, 851% 27.30% _ 5.08% 41.18% 1WL0% Fab; 537 6 1806% 992% 2].%% 509% 4844% - Imm% _ :MM;. 53]5008 17.3% _6)6% ,.36,0% 567% -51ffi% _ 10850% ..53271. S3I51100 18.0% 9_R% 21_9% 59% „5395% IOO,W%._. May: INUM 26 T3% 937% 34534%. 581% 33.66% 100.00% Jun• $3!5900 30.33% 961% 24.66% 5.98% 25.19% IW.W% - ... .Jul, _. $ SPS 32.93% _933%_ _ 2351% _ 60% __27]0% ..1W_00% .Asa, _ 337S)m j 35.33% 9.08% __. 11.36% ... &W% _ 25'9% 100.W% ..` Sep. 5375900 3087% 8.93% V.TO 585% 33.15% 108.08% .Oct $3759x9 25.33% y. 976% 25.28% 63% 33.25% 108.00% }375 mD - .... 1929% 90833 27,4% _. _5,69% I_ 34_40%. _100,08% _ 35.5% 754% 214% 4.63% '� . .30:9651- .. 18850% Wably Fixed _ Recovery _Reaidmal GI G3 other TOU_ . - J ..53)553[0 , _76]x]2 _.. C315W S1W_ SMSB4 3151,100 _$315,(108.. .3 _._... . .. _ —:530 _- -, Feb 5375900 W,72S $33102 I f101,b10 520$& 3151,639 1 5375100 Mar Irfi M.. 1 765178 _ 532967 393551520,R27 $156,474 53!5(00 _ _Py( 5375,000 g,9)6 i._. P47% _. 5108373 :.._.53153® $146444 SW5,® May 5315,_ $108,213 _ _ _mI ,i.. 59153 $21,776 $_26717 33]5,000_ 000 - - Jun -$NS. 5128.740 s3,153 $0740 $4,111 fm 5315,000 Jd- 53/5,008 :, $1R iB4 W,9W S®,1]B 324,487 $100953 53]5,0.3 :. 94 192 __. -!1u9._ _. _53751¢1 !. $132,165 j31, 5 jR,S:Ti -331,0]4 _ ..33!5,00 _0_ j ... ... . 3-_... Sw_. . _IW5900 - $115754 ..333176 50755 { _321,250 _.$131564 __ .. .. 5315100 . ., pcll 33]6,000 _ _ 591975 536588 394911 3 1R929 $124 5 $3759[0 Nov 53t5Pm ! %72,M5 M.714. 1102,108 $21,316 $14550 $375¢0 Da_ .1375,080 _ $133,38 $:4M .$79,563 317354 - $1.15,114 33tliam Tuall -39x0900 _.3 ?7ores NW714 51,11,419 5]50 515434 � ------ :. $1,500.080 4. Customer Senice _ . a o er o3 'a a a based on MJJh sales 370!xl to be recoveretl=. _ _f750p00 Morph!.,ed. are Recy Residential G1 G2 _ D1 100 Jan. $62,500 17.94% 8.51% . ., 4.34% 503%3% 41.14% Feb; $62500 18,06%_ 34.06% 8.92% 4.10% 549% 40.1% _. Mar: -.._$52590 _ 17.35% 976% 27.55% 547%_ --, 41,05% $62590 34.53% 9.24% .4.57X 5.57% 39.135% May, 5151 26.73% .-9,37% 24.44% _581% 33.66% Ji $62,5D0_ ,- -. 3433% 9,64% 24.86%. 594.b25,19% .. ... Jul. .. $2,500...__ 3243% 933% 23.51% y,653%_ .27.70% . Aug:,_...... .Sfi2,500 _- 3537% _.. 905% 23.36% .6.27% 25. 30.87% RAN. _. .. 22.20%_. _5,95% 32.15%15% . Oct _662,500 .- 2533% 976% 25.28% 6.38% , 33.25% Nm'i $62.500 19.29% 900% 27.23% 5.68% 311,60% .. .___ Dec! 562500__.... 35.55% 7.64% 21,22% ..-.463%. ,. 38.96% -_: J. Monthly Fined. .. . Recorery- Rm --dentistGI G2 ---- TOU •, Jan: $52,500 _ 111,212 $ ,318_ .. $17,938 f3.431 _ $Y,TdO _ - Febi 562,500 511,24] 55,574 _ $16,935 $35331 .f25,Z13- Mar: 562,STD 510906 _ 35,074__ $16,532 53121 526.767 APr. ._ 52.x.. . _., 511,53/.,,, .. S,BID $17,229__ 53080.. _ _$241407 _. 200 _ _. ..516707. .._s5P25 . _$1517.3. .. .$3� , $15,Qi6... . Jun: S652,5W (27,457 W,[RS - 315.540 (3,735 515,743 Jul$ 542.500 $8,581 5,831 $14,G95._,. N981 517310.-. , i. _. . ... . ... _7089!. _. 562,508 ,$12081__ _ f5,659 . .._. .514,590. . ..$3,917_. .$16,246 .Sept _ 562.500._. ._. ._519,241__.. 55,579 113@76 _ , _ 13959 f2Dp94__ .. i Oct: _._ $9,00 f15,629_... ._5.100 515,8@ $3.989 y No 562$00 _. .. - 512,054 _ SSGl4 5175313 _f3$53 524,251 - - _ - Dec- --- f67$00 14318 $4,777 573,760 _ $2,802 $19,352 55,99_ Total -- 5750,R10-_ 5555 _f1%,149. . SB/,G79. -$1B7,9N $9291] 515§ ,9,9 . 55 ,._.5555 . 5555 ',Cafegory2; S,`�. a 50%Vpdibla basatl on:M'Nh :Total to be recorered= f766p00 Residential G7 G2 Other TOU .. .. - 57.789_ - 22-9 ,9 sms _. �MY/h Sales 75,03] _19 37 4,89% - %,895 Sales ._ - %MWT Sales 30.11% 7.67% 73.115% 4.89% 34.27% Revenue Allocation 3225,85].00 59,667.58 $172,904.66 ; $36977.66 E29102.td 127 5. General Fund Contribution _. . ... _.. .. 25..25,_ .. i _ _... :Total m be recovered= ResiOenlia_I - G1._ G2 Done, TGV Sates - 75487 19237 57,789 12,259 - 85MG %MWS Selee 30.11% 7,67% 73.05% 4.89% 34.77% Rerenus PJlpcalien $661758.03 8219467.77 S659344;02 513986535 $980.034.82 G. Depreciation ]Total to be recovered= MonecmixeC - Recwary _ ,Residential G7 G2 Other YOU _- 94%. .51% ..25 3 _ I Jan;, _" 883,333_,_ 2525 17.9A% 851% 27.34% 5.03% _ 67.18K 2525_. ..25.25 .2525._ ..._... _ - -j Feb; $83,333 18.06% 6.92% 27.10% 549% 4064% .2525_ 2525...... .. _ . .2525 . . Marl $83,333 ! 17.35% 8.76% 26.55% Sd]% 67.86% . .. _ 2525_ . _ - .53% _ _ - 5725 25 05%.._ 16.53% 9.28% 27.57% 5.57% 39.65%.... , .. ". P➢.! .._. .94.25 .. .2525... ._ 2525. _ _ 2525 May'., $83,333 26.73% 9.37% 24.44% 581% 33.E6% Jun'. $83,333 - 34.33% - 9.u% 24.86% 598% 25.19% .Jul! 863,333 - 32.93% _ 9.33% 23.51% 6.53% 27.70% _ ..2525... .._.. 2525_ 2525- 25.25 .. . i._. . Aug,.. . 803.333.. _ 35.33% 9815% - 23.36% fi.27% 25.A% ._ .. _ .25.99% "Sept 583,333_ 30.67% 8.93% 22.20% 665% 32.15% _ " 38.3.333 - 2533% 9.76% '� 25.28% 6.38% 33_25% Rw - $33.333 - 19.55% 9.00% 27.23% % 38.60% - Dec: $83,333 35.55% 766% 21.71% 4,631.63% 30.96% Monthly Fixed _ SB3.333 _ R$1i,949 l ,.. 7. .7_ 4,her189 .TGV Jan; 88$,333 � 311,919 87,090 872.761 W 199 $31,320 - j__ _ Feb: $83,333815,0 _ 50560 , _ $7,432 - $22, _ .._" $4,576 539898 _.. . _ . . _. . - Marl. _ 183.931. .. _ $14_,462 $7" - 1],306 _$71123 16$61 . ..{36,883_ ..... _ ...... . .. 25;25_..., APIa'..._...... �M ._._. $15446. ... $7,733 _$72.972 $4640 ,May! ..," 183,333 $22,276 117,506 $20,364 _ $4639 $_78048 _. .. .. _I-_.. .. ._ _.. _ M _ _ $ ._ ...._. .. _t__ ". .. Jun:... $63,_._. . E2B.6R3. f6.1134.' 520,720 84,950 !_ . ..50,991 25.....25 id;i $83,333 $27,111 $7,775 $19,595 i $5,441 , 523pBi Aug' $83,333 $29441 $7,545 $19,164 $5223 $21,661 Sep! _ _ $83.333 825,723 $7439_ .9425 $10.501_ $4678 i _.$267.9,_2 !. oat!... $83333" _ ,$21109 $8,133. $2_1,500 85,317 - 827,708 - -333 - _ ' Nw�„ $m.339 . .sls,ln;. ._s�dgs s22,�i - s6,737 :_ $32.336, _ _. .. .... ".. i Oeci 383,333 $55.624 _ f6,369 $17,680 $3856 ..;. 525�BRi - .. Total, $i== 8260.199_ 590.159 $250.544 .. 557,236 5361862 1 �4 7. Interest Payment e a 1 asd i - ',� .Total to be recovered= _... - Monthlyfixed .. _Recovery _. . .; 17,R451 _ __OZ___ _ Other _ T04 Jan'. $11567 - 1].94%% 851% 27.34% 5.03% 47.18% ' Feb'. $41,687 1806% __ 1392% 77.10% 549% _ 40.44% $71]35% 6 .$41 _.. 76%__.._ 2655% 547% 41.138%_. .$4],)547__.. 16.53%__. 920% 2757%__. . 5.57% 39.05%._. may;j $41,6P24.73% 9.37% 24.44% 591% 33.56% Jun: $41,067.... 36.33% . .9.64%_ 25.136% .. .598%. Jui $ _ 41,%7_ 3293% ._9.33%., 031% _6.53% ._27:99-% _ _..._ _._ ._ ... X9:_ ...._$41$7...__ 3537%._._. 95%_._.., 036%._._ 6.27%,_. 25.89%_..: 541 fi67 3087% 8.93% 72.37% 585% 32.15% Oct- - $41$7 _ J _ 2533% - . .9 % ._ 25.28%_._ 638% _. _ 3325% Nw'. $41,567 _ 19.8% 9.0000% 27.23% 5.68% 38.80% . - Dec,. - 541)557 35.55% 7.64% 21.22% 5.63% 30.96% -. WrthlyR ad j Recoary Resitleglial_ G7 G2 _ „ ,Other TOU . ._; Jan[ .,., $41,977 _ 77575 511,392 52;096 617.160 _ Feb l 741,667 57,515 $3)75, $11,2.90_._ 62,28]. __$16,859. , - -- - Mai - 541,)567 $7.231 $3,652 511= .. $2zs1 $17442 Apr- $41,667 S7 T73 5396_6 - $11,486 $2,310 - --- ---2 May -$41,)567 511,138 339N .$10182._ _$2,420 514LIN _ An - 541,667_ _. 514,304 _ $4.017,_. . : 510,360 $2,490 $10,595_ Jut! $11,607 $13,720 53609 69,798 . 52,721 $11540 - _ _Au4 _ 747,667 514,721 $3,772 $9,732 $2rli _. _ 510,030 '; .. . SeP. _.._ $41,65]. _. 512,)567 S3,T1059,11._ . .. $2439 v5A 641,667 .. Sloga...._. 54A6o._ 510.535 S2g9._. 513,854 Nwl $41,667.___ 59,036 . ..y . . (3,749 $11,315_. 52,3817 $16.167 Dec ._ _$41,977 _ : 714,812 $3,195_.._ 78,840 51?28.__ f12,9R1 Total; 5500.000 51305199 $45,079 $18272 $28,618 $170y31 Summary of Revenue Requirement Allocation Based on Cort of Senice Principles.- [Total Revenue Requirement Allocation ResidentialGt G2 Other _TOU_ Tolal__ ...i ;PumM1ased Power - __ _ Fixed $4,124,B17., j _ _'. $5,691,360 $15,570,035._. 51,320,338. . _.S3S73bd5 . .l . 8856,667 ._ ._ _ _ - Variable; $935745 6212960 $639$5 $135720 $950,992 1 $2,775245 '':Transmissian_ - . -_5514,890 �- 532 ' 5317419 - $67,376 $472,703_ $1377,720 .. __. _ I__...._1057 +_. L._ D" islnbutton - 51,_770895 _$405714 I_ ,.$11274596257563 ,! 51,5.6378 $4500,000_ :Customer Services $0 .__ __ __. -- Fnadt . $195759 . . . _... ..- . .� %67619 �, _ $187,9M $42,927 $256,39.6 $750,000 Variable' 5226.0 _ $57,5513 _ .5172905 $36,678 1 $257,$160_ ._ $750,000 . 2 '— GF Transfer --; 31268. .. i. . $219659 ,488 5 ,344 5739,865 5960,035 _ 52,E60p08 Depreclabon 860199 _. i 590159 _ ! $250,544 $57,236 5341,862 $1,000_Poo YDeM Services_(mteresl) 5130,099_ _ 1 _555079 _j_ $125272 529618 $170,931 $500,000 _ :Total - t $8220919 -$2524.670 I . 57.054,692 $1622,652 ,S9970.067 827 __33 I i%Revenue Requirement i 2827%. 1368% j_ 24.74% I, 558% --: .22% � ; Thus based on cost of service principles, the percent of incremental revenue requirement should be allocated to each customer class based on the following percentages: Residential customers 28.27% Gl customers 8.68% G2 customers 24.26% Municipal customers 5.58% TOU customers 33.22% 129 Applying the above percentages to a 5% revenue enhancement or about $1,500,000 per year produces the following rate increases: Residential customers $424,050 4.6% Gl customers $130,200 5.0% G2 customers $363,900 5.5% Municipal customers $ 83,700 7.0% TOU customers $498,300 6.0% 130 Electric Utility Proposed Rate Adjustment 7/23/07 w �„ A Z U S A Outline • Updated five-year financial projections • Cost allocation studies • Proposed rate adjustment • Potential impact to various retail customer classes • Next steps TQw Updated Five-Year Financial Projections Minor updates to the previous financial projection presented to the Board on May 22, 2006. The minor updates are (a) use the estimated actual costs and revenues for FY 06-07; and (b) higher depreciation Retail Rates Bond Interest Depreciation 2% 4% GF Transfer a _ 10% .r Customer Service Purchased Power 5°/, ^ ' 59% j Distribution a'- 16% Transmission 4% F-� W W Updated Five-Year Financial Projections Basic conclusion still holds : ADDITIONAL 5% REVENUES OR ABOUT $15500,000 PER YEAR IS REQUIRED BY NO LATER THAN JANUARY 1 , 2008 TO PROVIDE SUFFICIENT FINANCIAL RESOURCES TO FUND ONGOING ELECTRIC UTILITY OPERATIONS AND COMPLY WITH VARIOUS REGULATIONS .A, Updated Five-Year Financial Projections FIIIAHCIAL PROJECTIOHS (ELECTRIC) - BASE CASE i i I j FY 06-07 FY07-08 ' FY 08-09 FY 09-10 FY 10-11 REVEHUEJSOURCE OF FUNDS _ PROJECTED RETAIL REVENUE I $28,600,0001 $27,441 ,700 $_27,716,117 $_27_993,278 $28,273,211 PROJECTED WHOLESALE REVENUE $15,000,000 $12,500,000, $15,000,000 $15_,0_00,000 $15,000,000 PROJECTED FCA REVENUE $272,000 $1 .590.0001 $1 ,500,000 $1 ,250,000 $750,000 SCPPA RESERVE FUNDS _ $0 $2,000,000 $0 $0 $0 TOTAL REVENUES —� $43,872,000 $43,441.7001 $44,216,117 $44,243,278 $44,023,211 COST COMPONENT POWER RESOURCE $30,854,000 $33,290.0001 $30,141,000 $31 ,350.000 $30,498,000 TRANSMISSION $2,880,000 $3,352,000 $3,400,000 $3,340,000 $3,355,000 DISTRIBUTION 8 CUSTOMER SERVICE $6,000,000 $5,947,000 i $6,137,000 $6,335,000 $6,540,000' Bond Payment (Interest Only) $542,000 $_542,000 $542,000 $542,000 $542,0001 GENERAL FUND TRANSFER & IN-LIEU-TAX $2,860,000 $2,744,170 $2,771,612 $2,799,328 $21827,321 DEPRECIATION (NON CASH ITEM) $1 ,000,000 $1 ,000,000 $1 .000,000 $1 ,000.0001 $1,000,000 TOTAL COSTS 1 $44.136,0001 $46,875,170 $-4i-9-91.6121 $45,366.3281 $44,762,321 OPERATING INCOME —� ($264,000) 8 ($3,433'470) $224.605.' ($,1'.1 BEGIHHING CASH BALANCE $24,000,000 $23,345,400 1 $19,521 ,330 1 $19.355,235 1$17,841 ,586 OPERATING INCOME ($264,000) ($3,433,470) $224,505 ($1,123,050) ($739,110) ADJUSTMENTS _ $1 ,000,000 $1 ,000,000 $1,000,000 $1 .000,000 $1 .29 1 ,000,000 BOND PAYMENT (PRINCIPAL) ($390,600) ($390,600) ($390,600) ($390,600) ($390,600), CAPITAL OUTLAYS AND RELATED ITEMS _ ($i 1 ,000,000) ($1_,000,000) ($1 ,000.00 ) ($1 ,000,000) ($1 ,000.000) M^► YEAR END CASH AND INVESTMENTS $23,345,400 $19,521,336 $19,355,235 $17,841,586: $16,711,876 W CA Updated Five-Year Financial Projections FFIIJAIICIAL PROJECTIONS (ELECTRIC) - SCENARIO 1 - 5°f° RATE INCREASE IM FY 07-08COMMENCIIJG Jan 1, 2808 I ' FY 06-07 I FY07-08 1 FY 08-09 I FY 09-10 ( FY 10-11 REVENUE _ PROJECTED RETAIL REVENUE $28,600,000 $28,127,743 $29,101 ,923 $29,392,942 $29,686,871 4PROJECTED WHOLESALE REVENUE $15,000,000 $12,500,000 $15,000,000 $15,0_00,000 $15,000,000 !PROJECTED FCA REVENUE $272,000 $1 ,500,000 $1 ,500,000 $1 ,250,000 $750,00_ 72_ 0 SCPPA RESERVE FUNDS $0$2,000,000 $0 $0 $0 TOTAL REVEWES $43,8 ,0_00 $44,127,743 $45.601 ,923 $45,642,942 $45,436,871 COST COMPOIJEIJT _ POWER RESOURCE $30,854,000 $33,290,000 $30.141 ,000 $31 ,350,000 $30,498,000 TRANSMISSION $2,880,000 $3,352,000 $3,400,000 $3,340,000 $3,355,000 DISTRIBUTION 8 CUSTOMER SERVICE �$6,000,000 $5,947,000 $6,137,000 $6,335,000 $6,540,0_0_0 Bond Payment (Interest Only) $542,000 $542,000 $542,000 $542,000 $542,000 GENERAL FUND TRANSFER 8 IN-LIEU-TAX $2,860,000 $2,744,170 $2,771,612 $2,799,328 $2,827,321 DEPRECIATION (NON CASH ITEM) $1 ,000.000, $1 ,000,000 ' $1 .000,000 $1 ,000,000 $1 ,000,000 TOTAL COSTS ,136,000 $46,875,170 $43,991 ,612 $45,366,328 $44,762,321 i !OPERATING 111COME ($264,000) ($2 747`,428) $1:,81!0,311 -;'. $276,69 4` $674,550 1 IBEGNJ111HG CASH BALAIICE I $24,000,000 ( $23,345,400 1 $20,207,373 1 $21 ,427,084 1 $21 ,313,098 1 OPERATING INCOME ($264,000) ($2,747,428) $1 ,610,311 $276,614 $674.550 ADJUSTMENTS $1 .000,000 $1 ,000.000 $1 ,000,000 $1 ,000,000 $1 ,000.000 BOND PAYMENT (PRINCIPAL) I ($390,600) ($390,600) ($390,600) ($390,600) ($390,600) ;CAPITAL OUTLAYS AND RELATED ITEMS ($1 ,000,000) ($1 ,000,000) ($1 ,000,000) ($1 .000.0m I ($1 ,000,000) F.+ !YEAR END CASH AND NIVESTMEtJTS $23,345,400 $20,207,373 $21 ,427,084 . $211,313,098 $21 ,597,048 W C� Cost Allocation Studies • Allocate each cost component based on causation principles to various customer classes • There are. seven cost components: — Purchased power — Transmission — Distribution — Customer Service — GF Transfer — Depreciation — Interest Payment on Bonds Measurement of Cost Causation • Capacity Based — One measurement of cost causation is based on the usage of electricity at the time of system peak usage, commonly known as coincidental peak usage — The rationale of this measurement is that infrastructures must be built to serve peak usage EVEN IF they are not fully utilized at all times. Thus, each customer class should be assigned cost obligation based on their contribution to the system peak usage • Usage Based — Another measurement of cost causation is based on the volume of electricity used Depending on the nature of the cost component, either of these two measurements will be used to assign cost responsibility Measurement of Cost Causation (co n ' d ) • Purchased Power is 86% capacity based and 16% usage based • Transmission is 100% usage based • Distribution is 100% capacity based • Customer Service is chosen to be 50% capacity based and 50% usage based 50% • GF Transfer is 100% usage based • Depreciation is 100% capacity based • Interest payment on bonds is 100% capacity based 9 Cost Allocation Based on Cost Causation The cost responsibilities of each customer class based on capacity and usage based contribution factors are summarized below: Cost Of Service Allocation ! Residential 28.27% I G1 8.68% G2 24.26% ( Municipal 5.58% ITOU 33.22% Proposed Rate Adjustments The magnitudes of rate adjustment for a 5% revenue increase based on cost of service principles are : Residential 4.6% increase O1 5% increase O2 6.5% increase Munici al 7% increase TOU 6% increase Potential Impact to Various Retail Customer Classes PERCENT ............ EmsfiNg" PROPOSED SAVINGS 1 SCE AZUSA 1 AZUSA VS SCE ------......... 12,000 kWh $469i-8-.---L__j258.25 $270.13 73.69% $157.53 $127.93 8133.81 17.72201 700 kWh 7 -�-- $96.29 $88.63 ��226!0. :RESIDENTIAL 1500 kWh $6072 $6277. _ .77 $65.66 -752% 400_kWh -$4810 $49.74 $52.03 � 300 kWh �156. $36.70 1 $38.39 -5. -- ........ 47_% f200 kWh $21-67 $24-.76 --1-09% 15,000 kWh $867.86 $642.53 $674.66 28.64% 61 -j--'-S2I56.85 i $282.29 25.70% CUSTOMERS 5,ff%CUSTOMERS 11,000_ J .kWh §183B2 j $144.28 -$151.49.......... 21.34% j 1500 kWh W832 $82.00 $86.10 u _ , .. . .. , - -fl ------- i5000 kWh $8U86 $501.07 $536.14 61 z7% MUNICIPAL -2,000 kWh $351.E13 $204.07 $218.35 62.50% CUSTOMERS 1,0M kWh $183.82 $105.07 -___$_112.42___ 50% $59.46 65.36% ;500 kWh ............. ........ ....... ....... G2 150.- CUSTOMER 000 kWh 150 <W 9,190.86 5� 4.10 5,638.03 63.02% SL� SUMMER 10,000kWh 40 kW 2.173.61 1.?;�S 78 1,304.80 66.59% -------- -- G2 'CUSTOMERS !60,000 kWh 150 kW $5,331�36 $5.344.10 $5.638.03 ..:5_44'/b WINTER 10,000 kWh 40 kW $1,220.87 $1-,236-7B- $1 304.80-- - -----6.-43% TOU CUSTOMERS i250.000 kWh 350 kW _$34,474Z8 $24.016.96 .05% SUMMER ' 100,C00kWh 300kW _Lj18,M02 $11.782.21 j $12,489.14 46.70% ----------- . .......................-------- CUSTOMERS i250,000 kWh 350 kW $22,873.83 $21.043. 9 $22.30642 264% WINTER ; 100,000kWh300kW $10,576.99 $9,682.29 $10,157.23 4.13% Next Steps • Staff to prepare the final rate documents • Seek the approval of Utility Board of rate adjustments in September and implement new rates by October 1 , 2007 MONTHLY REPORT JULY,2007 PROJECT: MEMBRANE TREATMENT UPGRADE OF THE CANYON FILTRATION PLANT PROJECT NO.: WVF-207 GENERAL CONTRACTOR: SSC CONSTRUCTION INC. DESIGN ENGINEER: BLACK&VEATCH INC. CONSTRUCTION MANAGER: BLACK&VEATCH, INC. PROJECT CONTRACT AMOUNT: $35,905,500.00 CHANGE ORDERS TO DATE: $100,642.76 10 DAYS MONTHLY ACTIVITIES Construction progress meetings were held July 5 and July 19 As of 7/19/2007 Pump station for the Reservoir being formed Pretreatment Building base slab has been formed and poured O&M Building Permit has not yet been granted-foundation only permit granted for O&M Building , O&M Building footings poured Subwalls and tank pedestals for the Chemical Feed Building have been poured and stripped Top slabs of channel diversion structure have been poured and stripped Southern California Edison pole relocation underway JUNE PROGRESS PAYMENT REQUEST: $1,326,666.85 TOTAL PAID TO DATE $6,915,667.46 AMOUNT TO ESCROW $691,566.75 PROJECT PERCENT COMPLETE 19.26% Y DIII SOME .. .. . " 1 �U SA SI4Ni R 'A'ATFR INFORMATION ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES` V DATE: JULY 23, 2007 SUBJECT: DROUGHT ACTIVITIES REPORT INCLUDING WATER PURCHASES UPDATE Southern California is currently in the grip of what is turning out to be the worst drought condition in recorded Southern California history. Following includes an information update on activities being carried out by Azusa Light &Water in response to the drought, including information on water purchases being made. Drought Activities Report On May 17, 2007, the Azusa Utility Board and Azusa City Council approved the declaration of a Phase I water shortage in the City of Azusa pursuant to Azusa Municipal Code. This requires residents and businesses in the Azusa Light &Water service area to take certain steps to conserve water as spelled out in Municipal Code Section 78-504. Since the Utility Board's declaration, a number of communications have been put in place to encourage all customers to conserve water: • Staff prepared an advice letter outlining the requirements and mailed it to all customers. • A water conservation article appeared with utility bills in the June Azusa Tomorrow. • On June 20, a Light &Water Customer Service Field Service employee was assigned to full-time Water Patrol. Code Enforcement and Light &Water Customer Service Field Services staffs are supplementing this effort. In order to cover the entire service area each week, the utility's service area was divided into four grids. Each day the Water Patrolman canvasses a grid area to identify water code violations.and meter leaks. • First-time violators receive automatic water shut-off hose nozzles, copies of a Conservation brochure, water conservation tips and/or other relevant giveaway items. Door hangers explaining the violation and how to correct it will be left for repeat violators. 145 Some homes with drip irrigation systems leave the water on too long and excess water runs down the street. If the owner is not home, a door hanger is left explaining the infraction. • A special phone number has been set-up to handle questions relating to water conservation. • Businesses that usually wash down their sidewalks in the morning have been advised of water-saving alternatives. • Face-to-face meetings are being held with our largest customers since they may offer the greatest water savings. • On July 10, the water patrolman did a water conservation briefing and answered questions for the Mountain Cove homeowner's association. He offered to do workshops on how to adjust drip irrigation systems and also offered to have a water conservation booth at upcoming Mountain Cove social functions. The homeowner's association was appreciative for all the information. • The water patrolman will be in charge of a water conservation booth at the August Concerts in the Park. • The July utility bill message advises the use of automatic water shut-off hose nozzles for car wash fundralsers. The response from the public has been very good. Water Purchases Update Southern California typically receives its water supply from four sources: 1 . Water is imported from the Colorado River to the Metropolitan Water District service area, which extends from San Diego to Thousand Oaks, and from the Pacific Ocean to the High Desert. 2. Water is transported from the Sierras to Los Angeles from the Owens Valley and to Southern California via the State Water Project Canal. 3. Water is pumped from the Bay Delta to Southern California via the State Water Project Canal. 4. Local water from snowmelt and rainfall in the local mountains. This year each of those water supply sources is deficient, which requires that extra water be purchased and brought to the San Gabriel Valley. A special purchase arrangement was made to purchase surface water from the Metropolitan Water District at its Agricultural Water Rate which is about $100 per acre foot (AF) above the Replacement Water Rate. This water is being delivered through the Upper San Gabriel #3 (USG-3) outlet in the San Gabriel Canyon directly below Morris Dam. Azusa is taking 12 cubic feet per second (cfs) (approximately 24 AF per day), which will result in an additional purchased water cost of about $72,000 per month. It is anticipated this purchase will continue through October, or even November depending on the ground water level, consumption, and other sources of import. Prepared by: Karen Vanca, Assistant Director— Customer Care and Solutions Chet Anderson, Assistant Director - Water Operations 1-47 Azusa Utility Board Meeting C� July 23, 2007 77] Power Resources Division Monthly Report ■ Power Resource Update ■ Power Consumption Comparison ■ Wholesale Market Trend ■ Power Resource Budget Update ■ FY Preliminary Financials ■ Preview of Long Term Power Supply Planning M Power Resource Update ■ Concluded the negotiations with Garnet Wind for long term power purchase agreement from a new wind power project. Staff is seeking Utility Board/City Council approval this month ■ Concluded the retail rate studies. Preliminary presentation to the Utility Board of possible electric rate adjustment is scheduled for this month ■ Concluded contract negotiation with the City of Riverside and Structure Group for the scheduling services agreement (Utility Board approval is sought in the Utility Board package) ■ Continuing the preparation for the CAISO new market structure to begin early 2008 ■ Actively participating in the ongoing debate on Greenhouse Gas issues in the regulatory forum ■ Conducting additional search for long term power supply. Staff will schedule a briefing for long term strategic power resource planning in the fourth quarter of this year Staff is investiclating the possibility of participating in a power generation feasibility study proposed by the Northern California Power Agency (NCPA). We intend to provide update to the Board in September to consider City's participation 0 CITY OF AZUSA ENERGY CONSUMPTION COMPARISON ENERGY CONSUMPTION IN MWH _ PERCENT MONTH FY 05-06 FY 06-07 CHANGE JUL _ _ . 25,839 29,287 _ ! ,.13.340/6 ' AUG - 26,758 25,912 SEP 22,725 24,379 7.280/6 OCT 21 746 21,700 - -0.21% NOV 19942„ .. ,. ., 20,456 .,, _,_..2.58% , DEC 20163 20,510 JAN _ _20,070 20,984 4.55% t FEB .,_18,397 18,414 0.09% MAR 20,326 2,916 , . 2.90°/, APR 18610..._. 19,719 __._.� ..._..._._.596%.._..._.. _. .j . AMY 21,021 21,064 0.20% JUN - 24,585 21,949 10.720/. TOTAL 260,184 265,291 2.040/6 CITY OF AZUSA PEAK DEMAND COMPARISON _. .... . ._ ._.__.._.... '... .. _._ __ .. PERCENT -i MONTFI FY05-06 FY06-07 CHANGE JUL57.4 60.8 5.78% , _ . . .. AUG _ 57.9 - 55.2 -4.66% SEP 54.9 63.7 16.006/. - OCT 48.0 43.9 NOV 41.1 46.0 11.81% DEC 36.2 36.6 1.19% JAN, 34.8 36.8 5.83% FEB 37.1 37.4 MAR 35.8 42.8 19.40% APR _35.9 _ 40.7 _ 13.27% ---_` MAY _.__._._.:._. 452...... 48.3 .__ . 6.98%.. _. JUN 59.1 47.5 -19.65% PEAK DEMAND PJ MW F-+ WHOLESALE ELECTRICITY SPOT MARKET PRICES IN CALIFORNIA AVERAGE AVERAGE MONTH ON PEAK PRICE OFF PEAK PRICE MAY 06 $48.92 $26.27 JUN 06 - $59.52 $30.03 JUL06 $83..86_. . .. _ _ AUG 66 i $63.02 $43.84 SEP1. OCT 06 $47.68 $35.03 NOV 06 DEC 06 ;63 JAN 07 $53.46 $44.36 FEB -7 $58.45_ ._. ._ $47.79 MAR 07 $49.82 $36.44 APR 07 $57.29 $43.12 MAY 07 $63.55 $41.24 JUN 07 $68.14 $42.36 ALL PRICES IN$/MWH H Ul tJ Power Resource Cost Accounting FY '06-07' ............. (2) 4- (6) 7L— LONGTERM SHO TTERM TRANSMISSION j MICILLPAV SCHEDULING TOTAL WHOLESALE NET MONTH CONTRACTS PURCHASES COSTS SERVICE COSTS DISPATCHING COSTS COSTS-- REVENUES COSTS 1 Jul-06 1,182,751.52 2,378.695.35 1 267,058.45 69,662.48 28,154.75 3;926,32255 (1,972,714.63) 1,953.607.92 Avg-06 1,174,610 1,�3� 3.410.562.61 _____1,943,359.23 296 14,84726 26,929-38 (1 A04.751.85) 1,60 10.76 -�837 d-- - ------- — T --Y.Tl5-,RFl.T2 7 -(I-.6-5f.4-513C)'--1,682.849.66 —1,185.734.80 d2 , --261,071.63, 11200-43 2WA562 Oct7R6 1,173,599.191 1,527,90427111 38,578-37 7,023.95 23240.14 2,970,345.92 (1243,204.41) 1.727,141.51 No"6 ----1237,724.38 4- 1,501.758.16 1 2217,220117� 7,39125 —22,T7-5—.56 --2.997 070.22 (1,291,75132) 1,705,318.90 0.02 235,648201 7,661.06 21,640 1 Dec-06 77 16-916 1.395.55 (1,439,283.43) 1,988,391.12 — -6,066.70 F __(859,928.37)-1.lf26,638.39 Jan-07 1,179,314.05 841,81.59 1 234,712.74 1 7,798.02 22,350SC—2,26 -Z7 813 1,096,747.64 597,4190.54 1 226,898.41 f 5,174.30 2TW5M N3.51 27L6�L3f.E81 NO-47 1.1-48-,7-7-7-55-T'-- 565.58421 236,9jl3 08 9,962-26 23,30194 9.04 (701266.13) 1283,27221 Apr-07 .1,175,394.04 1 734.61 6,401.44 27,573.13 I2,177,226.72 (00,187 07) il. 07k3 Y-07 1,176,989.58 1564.852.40 237,778.37 20,000.00 35.320.86 2,974,94921' 1 (1243,377.50 7 1.5 71.71 237,77987!'_20,000.00 -- 663.02 (1,403,086A5) 1.483,596.57 Jun� .07 1,204,68OA3 1,388,894.36 L 355 i28.86 2,88117 TOTAL $14.113,492.57 1 $16241,351.63 $2,877,720.53 $187,122.45 $314.350.77 $33,734.03725 ($15,153.565.97) $18,580,471.98 r..__._. .,1331. 1333__ __ —F—_. __ '. A_ _�_ --. 3311.___ - . 3331.._ .._.._. ._-1133 _. __ . ——- 7. I _ y 3333�..._._______�_... .—____� _. _ . . —_—__�1311_.—___..._,...113-,3 __�_ I1133. . t— ___�__._ L.�,.. 3113 (1) ----------- (1) INCLUDES SCPPALONG TERM INCLUDES ALL SHORT TERM PURCHASES FOR HEDGING,LOAD BALANCING PURPOSES,RAR CAPACITY (3) 3333.CWdLU—DE-S-A-L-L--SH!6-Afttt�MWEi- -N-G—TRANSMISSION CONTRACT COSTS -------------------- COSf§CHARGED 6YdA0Fd6kFk(Nb9VeKbIENT SYSTEM OPERATOR FOR SYSTEM RELIABILITY FUNCTIONS I EULF - - 691- -----4- 14C Diffdo-STS-056Sdaff 1146AND151SPATCHINGOFELECTRICITY __(6) SUM OF(1)THROUGH(5) 1111 _ - -- _ _ 'L) OLESAREVENESDERIVE D FROM SALES OF EXCESS POWER+PTO BENEFTSZN - IN LffOP IU F FY 06-07 Preliminary Financials for Electric Utility RETAIL SALES: 264,300 MWhs Approximately 2% HIGHER than FY 05-06 retail sales REVENUES: Retail Sales $28,600,000 Fuel Cost Adjustment: $ 272,000 Total Revenues: $28,872,000 EXPENDITURES: Purchased Power/Transmission (*) $18,723,000 General Fund Transfers $ 2,860,000 Operating and Maintenance $ 6,000,000 Debt Service $ 900,000 Total Expenditures: $28,492,000 NET REVENUES: $ 380,000 (*) wholesale revenues were netted against the gross purchased_ power/transmission costs F+ Ul Continue FY 06-07 Preliminary Financials ■ Positives: 1. Stable yet volatile power markets. Stable operation and maintenance costs 2. Moderately increased retail sales — retail sales increased by 2% on a year-to-year basis, however the increase is mostly attributable to increased sales in the above normal summer 06 3. Superior San Juan operating performance at 93% fiscal year availability, replacement power cost for the fiscal year came in more than $1 ,000,000 under budget ■ Negatives: 1. Increased cost of San Juan for the environmental project, an additional $1 ,500,000 compared to FY 05-06 San Juan cost 2. Increased cost to comply with CAISO Resource Adequacy capacity requirement, a total of about $500,000 3. CAISO and Edison's transmission costs have increased by $250,000 Preview of Long Term Power Supply Planning ■ City's core long term power resources: San Juan coal generation; Palo Verde nuclear generation; Hoover hydro resource; and long term renewable resources are currently providing almost 90% of City's power requirement ■ The remainder 10% comes from short term and medium term contracts ■ The current and anticipated regulatory and industry environment will put tremendous pressure on electric utilities to reduce the dependence on carbon-heavy resources (coal-fired generation) and significant emphasis on renewable resources ■ It is imperative that we start to shift the planning paradigm over time (in the next five to fifteen years) taking into account the paradigm shift in the industry ■ Staff intends to present a comprehensive overview of the issues facing power resource planning and specific recommendations for Utility Board's consideration in September cn