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Home My WebLink AboutAgenda Packet - October 24, 2005 - UBu.. AGENDA REGULAR MEETING OF AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL AZUSA LIGHT & WATER MONDAY, OCTOBER 24, 2005 729 N. AZUSA AVENUE 7:00 PM AZUSA, CA 91702 AZUSA UTILITY BOARD DIANE CHAGNON CHAIRPERSON DAVE HARDISON VICE CHAIRPERSON KEITH HANKS BOARD MEMBER IOSEPH R. ROCHA BOARD MEMBER ANGEL A. CARRILLO 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 A o (PersonlGroup shall be 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 of comments shall be handled after the speaker has completed his/her comments. Public Participation will be limited to sixty (60) minutes time.) The Consent Calendar adopting the printed recommended action will be enacted with one vote. if Staff or Councilmembers wish to address any item on the Consent Calendar individua&,, it will be considered under SPECIAL CALL ITEMS. B. CONSENT CALENDAR Minutes. Recommendation: Approve minutes of regular meeting of September 26, 2005, as written. M-11 I La J B-1. UB Minutes for 9-26-05.doc 2. Roofing Repair and Maintenance Service Contract. Recommendation: Award roofing repair in amount of $264,312 and a three-year maintenance service contract in amount of $18,000 to Best Roofing and Waterproofing Inc., postpone carpet replacement & interior painting projects until next fiscal year, and authorize budget amendment in amount of $148,870 to cover added cost of repair. B-2. Roof Repair -Bid Award.doc Additional Compensation to Layne Christensen Inc. Recommendation: Approve additional payment of $8,374.60 to Layne Christensen for extra costs due to additional work done on Project W- 230. PE B-3. Extra Ant to layne Christensen. do 4. Acceptance of Easement for Northern Transmission Line. Recommendation: Approve the following resolution: A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDING THEREOF. B-4. LA County Easement.doc 5. Acceptance of Grant of Easement from Arrow Partners, LLC. Recommendation: Approve the following resolution: A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING CERTAIN GRANT EASEMENT AND DIRECTING THE NOTARIZE THEREOF. B-5. Easerent - CVS.doc 6. Sale of 10 Foot Strip of Real Property. Recommendation: Accept offer by Mr. Samuel Baldon in amount of $29,568 plus $5,000 for lot line adjustment fees in sale of 10 foot strip of land located at 275 W. Paramount Ave. and authorize the Chairperson or Mayor to execute sale documents. 0V NlYll B-6. -Paramount Yard Property.doc C. SCHEDULED ITEMS I. Authorization to Negotiate Contract Termination or Restructuring with Duke Energy. Recommendation: Authorize the Director of Utilities and/or his designee to negotiate contract termination or restructuring with Duke Energy Merchant America LLC in accordance with pre -specified parameters. C-1. Duke Energy Contracts.doc D. STAFF REPORTS/COMMUNICATIONS I . Pomona Lawsuit Update D-1. Porton Lawsut.doc 2. AB 939 Update and Athens Services Proposal E D-2. AU939 UpdateAm 3. Monthly Legislative and Regulatory Update EL D-3. Legislative Update.ppt 4. Monthly Power Resources Update EL D-0. Power Res Moly Update.ppt 5. Monthly Update on Customer Information System (verbal) t-" 003 6. Water Rights Update for Rosedale Project (verbal) E. DIRECTORS' COMMENTS F. ADIOURNMENT 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 626-811-5229. Notification three (3) working days prior to the meeting or time when special services are needed will assist staff in assuring that reasonable arrangements can be made to provide access to the meeting" M'. CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE AZUSA UTILITY BOARD/CITY COUNCIL MONDAY, SEPTEMBER 26, 2005 - 6:30 P.M. The Utility Board Members of the City of Azusa met in regular session, at the above date and time, in the Azusa Light and Water Department Conference Room, located at 729 N. Azusa Avenue, Azusa, California. Chairperson Chagnon called the meeting to order. ROLL CALL PRESENT: BOARDMEMBERS: HARDISON, CARRILLO, ROCHA, HANKS, CHAGNON ABSENT: BOARDMEMBERS: NONE ALSO PRESENT: City Attorney Ferre, Assistant Director Resource Management Tang, Assistant Director of Water Operations Anderson, Assistant to the Utilities Director Kalscheuer, Assistant Director of Electric Operations Ramirez, Assistant Director of Customer Care and Solutions Vanca, Administrative Technician Yang, Senior Electrical Engineer Langit, City Manager Delach, Assistant City Manager Person, Public Information Officer Quiroz, City Clerk Mendoza, Deputy City Clerk Toscano, Public Participation Mr. Jorge Rosales addressed the Board thanking Assistant Director of Resource Management Tang for the quick response to all of his questions regarding the agenda. He also advised of his attendance at the City of Duarte meeting regarding the Vulcan expansion. Lastly he announce that the group Committee, Save Van Tassel Ridge, will be having a meeting in the Azusa Auditorium on Thursday, October 13, 2005, at 7 p.m. Call to Order Roll Call Also Present Pub Part The CONSENT CALENDAR consisting of items II -A and II -F, was approved by motion of Board Consent Cal. Member Rocha, seconded by Board Member Carrillo and unanimously carried. Approved A. The Minutes of the regular meeting of July27, 2005, were approved as written. Min appvd 005 Approval was given for an increase in the purchase order issued to Henry Woo Architects in PO Inc Henry the amount of $32,000 for extra work (elated to the electric Yard Renovation Project. Woo Arch. C. Formal bidding procedures were waived for the purchase of turnkey interactive conservation LivingWise program for Azusa sixth grade students to Living\kise in the amount of $38,650. Cons. Pgrm D. The award of contract to AEC Company in the amount not -to -exceed $13,395 was ratified AEC Co maint for preventive maintenance service of existing 12 kV circuit breakers at Azusa Substation. Svs Az Sub E. A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA Res. 05-C90 ACCEPTING CERTAIN GRANT EASEMENT AND DIRECTING THE RECORDING THEREOF. (Los Grant Esmt Angeles County for the Northern Transmission Line through the Spreading Grounds). A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING Res. 05-C91 CERTAIN GRANT EASEMENT AND DIRECTING THE RECORDING THEREOF. Grant Esmt Spec Call Special Call Items Items None. Scheduled Items Sched Items Moved by Board Member Hardison, seconded by Board Member Hanks and unanimously carried Message Brd to (a) Approve proposed policy for posting messages on the Azusa Light & Water's proposed Policy & sign/display board; (b) Authorize staff to proceed with wireless option for updating message Wireless board; and (c) Receive staff responses to inquiries made by the Utility Board at its July 25, 2005, Option meeting. Update Administrative Technician Yang provided an update of the cost estimates for a proposed marquee S. Yang at City Hall as follows: $36,000 - $39,000 — six line, six inch character in height, monotone Comments amber color, $51,000 - $54,000 for color. A three line would be at a lower cost but may not be Estimates enough lines for messages needed. The purchase would be considered under Capital Budget if City Hall Council or Board Members request it. Marquee Staff Reports/Communications Staff Rpts The Work Plan Update for the Utilities Department was presented. Chairperson Chagnon Work Plan questioned if in fact someone would be working on Sunday, which was listed under the Interior Question Painting & Replace Carpet for L&W Admin. Bldg. Administrative Technician Yang responded that he would be coordinating those phases which will S. Yang begin on Thursday and end on Sunday with IT coming in to reinstall lines. Response Board Member Rocha asked a question regarding the Paramount Yard and the 10' strip, but was Rocha advised that this item will be discussed in the Closed Session portion of the meeting. Question Assistant Director Resource Management Tang provided the Monthly Power Resources Update B. Tang noting that gasoline as well as power prices costs are twice as much as last year and general Comments commodity prices are up due to the hurricanes in the gulf coast. He urged customers to conserve Power natural gas. He then responded to questions posed by Board Members regarding coal fire and Resources inconsistencies in FY 03-04 Light Fund financial statements. Update 09/26/05 PAGE TWO l;1 Quarterly Fuel Cost Adjustment for San Juan Resource was presented and Board Member Update on Chagnon reiterated that there would be no Fuel Cost Adjustment on customer electric billings for Fuel Cost the billing period of October 1, 2005 through December 31, 2005 and that the total replacement Adjustment power cost incurred above the budgeted amount for the period is $65,395. Legislative Update was presented, but no discussion was held regarding the report. Legislative Discussion was held regarding a professional services agreement with Pacific Technical Resources, Discussion Inc., due to an urgent need to reset the relay setting at the Kirkwall Substation. Comments were Relay Setting heard from Assistant Director of Resource Management Tang, Senior Electrical Engineer Langit, Azusa Sub - and Assistant Director of Electric Operations Ramirez regarding issue. Station Moved by Board Member Hardison, seconded by Board Member Hanks and unanimously carried to retain the services of Pacific Technical Resources, Inc. to reset the relay settings at Kirkwall Substation. Assistant to the Utilities Director Kalscheuer presented a brief update of the proposed Water Rate Adjustment, stating that the City has sent out notices of the Public Hearing to be held on October 17, 2005 to consider a 3% water rate increase. He stated that he has received less than ten phone calls in response to the notice that was sent to 26,000 customers. He pointed out a link to a rate survey conducted in August which compares Azusa water rates with surrounding utility rate, which shows even with the proposed 3% increase Azusa Light and Water will have the lowest utility rates. Assistant Director of Customer Care and Solutions Vanca provided an update on the Systems & Software Customer Information System, detailing the success of the system since they went live on September 5, 2005. She noted other areas of the system that are still being tested but she feels confident that all will continue to run smoothly. She noted that they will withhold final payment until all training and aid from the company is accomplished. She then answered questions posed by Board Members. Director's Comments Pacific Technical Resources C. Kalscheuer Update Water Rate Adjustment K. Vanca Update new Customer Information System Dir Com Assistant Director Resource Management Tang announced that the dedication of the Electric B. Tang Office Building will be held on October 24, 2005, and since that is a scheduled Utility Board they Ancmt would like to begin the meeting at 7:30 p.m. (Since that time the meeting has been was scheduled for 7:00 p.m.) Chairperson Chagnon noted that the building was tagged at some point and wanted to know if Chagnon there were security cameras for the outside of the building. Comments Board Member Rocha requested that copies of a complaint he received from a resident to be Rocha distributed to other Board Members. Comments Board Member Hanks advised of a Rehabilitation Road Show in Fresno California, which he stated Hanks maybe worth sending someone from Light and Water to attend as a training option as one of the Comment sessions has to do with waterline. Board Member Hardison reminded staff to remove the roman numerals from the Utility Board Hardison agenda format. Comment 09/26/05 PAGE THREE 007 Closed Sess Closed Session Recess The Utility Board Members recessed to Closed Session at 7:24 p.m. to discuss the following: REAL PROPERTY NEGOTIATIONS (Gov. Code Sec. 54956.8) Property: 275 W. Paramount Ave. Azusa CA 91702 - City negotiator: Cary Kalscheuer, Assistant to the Director of Utilities Negotiating party: Samuel Baldon, 242 S. Angelino Ave. Under negotiation: Terms and conditions of sale of 10 foot strip of lot The Utility Board Members reconvened at 7:55 p.m. Reconvened City Attorney Ferre advised that there was no reportable action taken in Closed Session. City Attny Comments It was consensus of the Utility Board Members to adjourn. TIME OF ADJOURNMENT: 7:56 P.M. SECRETARY NEXT RESOLUTION NO. 05-C92. 09/26/05 PAGE FOUR Adjourn 3A CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES�� DATE: OCTOBER 24, 2005 ` 1� SUBJECT: AWARD ROOFING REPAIR AND A THREE-YEAR MAINTENANCE SERVICE CONTRACT TO BEST ROOFING & WATERPROOFING INC. AND AUTHORIZE ADDITIONAL FUNDS TO CONDUCT REPAIR BY POSTPONING TWO REPAIR PROJECTS AND APPROVING A BUDGET AMENDMENT RECOMMENDATION It is recommended that the Utility Board/City Council approve the followings: 1. Award roofing repair to Best Roofing & Waterproofing Inc. in the amount of $264,312 and a three-year maintenance service starting FY 2006-07 in the amount of $18,000 per year for Azusa Light & Water Administration Building. 2. Postpone the carpet replacement and interior painting projects until next fiscal year and apply the savings of $49,530 to fund roof repair project. 3. Authorize a budget amendment in the amount of $148,870 to cover the added cost of repair. BACKGROUND On September 6, 2005, the Utility Board/City Council approved the specifications for roofing repair and a three-year maintenance service contract for Azusa Light 8_ Water Administration Building and authorized formal bidding. On September 19, 2005, seven roofing companies attended the pre-bid job walk but only two sealed bids were received at the bid opening in the City Clerk's Office on October 4, 2005. The results of the bid opening are as follows: Bidder's Name Roof Repair Cost Annual Maintenance Cost Best Roofing & Waterproofing $264,312 $18,000 Adco Roofing $297,400 $42,000 The lowest bidder was Best Roofing & Waterproofing Inc. and they are the most qualified roofing contractor based on the qualification survey result. For example, they have their own sheet metal shop which makes them more competitive than other roofing companies. After the bid opening, Best Roofing also offered 2% discount from their original low bid of $291,924 if all itemized repairs are awarded. The cost breakdown is attached for reference. The total repair cost of $264,312 is significantly over the FY 2005-06 budget of $50,000 based on our roofing consultant, Weatherproofing Design Consultants, estimate back in May 2005. The reasons are as follows: 1M • Additional essential weatherproofing tasks were identified and included in our specifications after the pre-bid job walk on October 19, 2005 as follows: o Waterproofing of stucco walls around all sides in the skylights roofing area o Waterproofing of elastomeric decking areas • Union labor cost has gone up $3.75 per hour. • The existing concrete tile roof is obsolete and it's more expensive to find a close match plus the roofing industry overall has been very busy since January rain storm and the increased demand has driven up the cost of materials • Higher petroleum and energy costs due to Katrina and Rita Hurricanes also impacted the cost of some roofing Materials that are made from petroleum. • Crane equipment will be used and a section of the wood beam cover above the HVAC unit will be removed to unload debris and old roofing materials. Although staff was intending to replace Light & Water Office carpets this year and paint the interior of the building, it is now recommended that these projects be postponed until next fiscal year and that budgeted funds for these projects totaling $49,530 by applied to the roof repair work. Additional funding to cover the cost of the essential roof repair work is included below under Fiscal Impact section of this report. The annual maintenance cost of $18,000 for three years starting FY 2006-07 will be budgeted in the respective fiscal years. FISCAL IMPACT The total fiscal impact for the roof repair is $264,312. It is recommended that the repair cost to be funded as follows: • $50,000 from Building Maintenance & Repair account number 31-40-702-935-6815 under FY 2005-06 operating budget • $9,614.84 from Federal Emergency Management Agency (received $7,800 so far) • $6,300 from insurance company (pending for approval) • $49,530 from postponing the carpet replacement and interior painting projects until next early fiscal year • $148,870 from budget amendment; 35% (or $52,104.50) from Electric Fund Balance 33-00-000-000-3605 and 65% (or $96,765.50) from Water Fund Balance 32-00-000- 000-3605. The total fiscal impact for the three-year maintenance service is $54,000 (or $18,000 per year) starting FY 2006-07. The maintenance cost will be budgeted annually in the respective fiscal years. Prepared by: Steven Yang, Administrative Analyst Attachment: Bids Cost Breakdown.doc 010 CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES DATE: OCTOBER 24, 2005 SUBJECT: ADDITIONAL COMPENSATION TO LAYNE CHRISTENSEN, INC. FOR EXTRA COST RELATED TO ADDITIONAL WORK REQUIRED ON W-230 RECOMMENDATION It is recommended that the Utility Board/City Council approve the additional payment of $8,374.60 to Layne Christensen, Inc. for extra costs due to additional work on project W-230. BACKGROUND At its April 25, 2005, Board meeting, the Utility Board/City Council approved the solicitation of bids for Project W-230, Destruction of Genesis Water Well I. In the subsequent solicitation of bids, Layne -Christensen submitted a bid of $22,488.40 which allowed the award of contract to Layne under the City's informal bidding process because the bid submitted by Layne was less than -the $25,000 limitation of the City's informal bidding process. In filling the casing according to State, County and Watermaster requirements, more cement fill material and labor was required than was originally bid. Apparently some of the cement fill was going outside the casing due to a hole in the casing. This Change Order amount of $8,374.60 takes the total contract amount over $25,000. FISCAL IMPACT The fiscal impact of this addition to the Layne Christensen, Inc. contract is $8,374.60 to be funded from Operation and Maintenance funds budgeted and approved for the destruction of the subject well. Prepared by: Chet Anderson, Assistant Director- Water Operations Oil CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES DATE: OCTOBER 24, 2005 SUBJECT: ACCEPTANCE OF EASEMENT FROM LOS ANGELES COUNTY FOR THE NORTHERN TRANSMISSION LINE THROUGH THE SPREADING GROUNDS RECOMMENDATION It is recommended that the easement be accepted and executed for recording. BACKGROUND In 2004 the Water Division installed a 12 -inch water transmission line (Northern Transmission Line) from the Spreading Ground well field to Miller Brewing Company to provide water service to Miller Brewing. A portion of the water transmission line runs through the Spreading Grounds which are owned and operated by Los Angeles County Public Works Department. The Northern Transmission Line project was completed in 2004 and has been in service since then. This easement was requested by the Water Division, and this Grant of Easement was received by the Water Division September 27, 2005. Acceptance of Parcel 4 of the same_ easement was approved by the Utility Board at its September 26 meeting; this approval is for Parcel 9F of the same easement. FISCAL IMPACT Aside from minor recording fees, acceptance of this easement has no fiscal impact. Prepared by: Chet F. Anderson, P.E., Assistant Director- Water Operations Attachment: Resolution LA County Spread Grour 012 RESOLUTION NO. A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDING THEREOF. THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA DOES HEREBY RESOLVE AS FOLLOWS: SECTIONS 1. That certain Grant of Easement executed by Los Angeles County, under date of the 30th of August, 2005 to the CITY OF AZUSA a Municipal Corporation in Los Angeles County, State of California, its successors and assigns, the right of perpetual easement and right of way solely for the purpose of constructing, laying, maintaining, operating, using, altering, repairing, replacing, inspecting and relocating therein and thereupon and / or removing there from pipeline and related facilities, with any and all connections and devices necessary thereto for the service of water over, under, across and along the following described real property situated in the CITY OF AZUSA, Los Angeles County, State of California, to wit: See Exhibit "A" attached hereto a Grant of Easement Said Grant of Easement is hereby accepted and the City Clerk 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 City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED AND ADOPTED THIS 24`" day of October, 2005 Diane Chagnon, Mayor ATTEST: Vera Mendoza, City Clerk 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 24'° day of October, 2005. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Vera Mendoza, City Clerk 013 i. P1 %0 CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES r, DATE: OCTOBER 24, 2005 �} SUBJECT: ACCEPTANCE OF GRANT OF EASEMENT FROM ARROW PARTNERS, LLC RECOMMENDATION It is recommended that the Utility Board/City Council accept a Grant of Easement by attached Resolution for the subject location and authorize the City Clerk to file it in the Office of the Los Angeles County Recorder. BACKGROUND Landowner is required to grant an easement to Azusa Light & Water Department for any electric facilities to be installed in his or her property. This grant of easement allows the Utility -owner the right-of-way for operation & maintenance of such facilities. Attached herewith is the grant of easement and its "Exhibit A" and "Exhibit B" for the electric facilities located within the property at 915 E. Arrow Hwy, North-East corner of Citrus &Arrow Hwy. This property is occupied by CVS pharmacy. This easement was secured and will be used for right-of-way access in the operation & maintenance of underground electric conduits, cables and related substructures installed at this property. FISCAL IMPACT All costs associated with the processing of this grant of easement are borne by the developer. There is no cost to the City. Prepared by: Hien K. Vuong — Associate Engineer Attachments: .f� ResolutionCVS.doc GrantOfPermEaseme nt. pdf 014 RESOLUTION NO. A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING A CERTAIN GRANT OF EASEMENT AND DIRECTING THE NOTARIZE THEREOF. THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA DOES HEREBY RESOLVE AS FOLLOWS: SECTIONS 1. That certain Grant of Easement executed by Arrow Partners, LLC, under date of the October ffh, 2005 to the CITY OF AZUSA a Municipal Corporation in Los Angeles County, State of California, its successors and assigns, the right of perpetual easement and right of way solely for the purpose of constructing, laying, maintaining, operating, using, altering, repairing, replacing, inspecting and relocating therein and thereupon and / or removing there from electrical utility lines and related facilities, with any and all connections and devices necessary thereto for the transportation, distribution and /or supply of electricity to the property, in, on, over, under across and along the following described real properties situated in the CITY OF AZUSA, Los Angeles County, State of California, to wit: See Exhibit "A" and `B" attached hereto each Grant of Easement Said Grants of Easements are hereby accepted and the City Clerk 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 City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED AND ADOPTED THIS day Diane Chagnon, Mayor ATTEST: Vera Mendoza, City Clerk 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 Utility Board and City Council on the 24`" day of October, 2005. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Vera Mendoza, City Clerk 015 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Citv of Azusa Light and Water Department 729 North Azusa Avenue R O. Box 9500 Azusa, CA 91702 TIES DOCUMENT is FILED AT THE - REQUEST OF THE CITY OF AZUSA PURSUANT TO SECrIoN 6103 OF THE GOVERNMENT CODE. NO FEE SHALL BE C1 LARGED THEREFOR. (SPACE ABOVE THIS La1E FOR RECORDERS USE) GRANT OF PERMANENT EASEMENT OR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, N j2RzW J)kp; N or lL_C ("Grantor"), does hereby grant to the CITY OF AZUSA, CALIFORNIA, a municipal corporation, its successors and assigns, and its and their employees, contractors and agents ("Grantee"), the permanent easement and right-of-way to construct, maintain, operate, use, repair, alter, replace, and remove -electrical systems and communications systems consisting of, but not limited to, overhead power lines, poles and fixtures, guy wires, underground conduits, pull boxes, transformers, pads, vaults, cables, conductors and other fixtures and appliances, with the necessary appurtenances, for conveying electric energy to be used for light, heat, power and for transmitting data by electrical means and/or other purposes ("Systems") over, under, in, along, and across the following described parcel of real property situated in the City of Azusa, County of Los Angeles, State of California: As described in Exhibit "A" and depicted in Exhibit "B" attached hereto and made a part hereof. Together with all necessary and convenient means of ingress and egress to and from said right-of- way or strip or parcel of land, free from any and all buildings, equipment, vegetation, combustible materials, or obstructions of any kind, for the purpose of constructing, reconstructing, maintaining, operating, repairing, renewing, replacing, using, altering, or removing in any manner the Systems together with any and all of the purposes hereinbefore mentioned. TO HAVE AND TO HOLD the above granted and described premises unto the CITY OF AZUSA, CALIFORNIA, its successors and assigns forever. IN WITNESS HERETO, Grantor has executed this Grant of Permanent Easement this I.7_ day of 2005 t By:y Type Full Name Its: Title i K1V1�(-- ) CAPACITY CLAIMED BY SIGNER {� ) ❑ INDIVIDUAL(S) I TS r(N� - ) �� (/LW�—, 2027 before me, 'Q/Y.�I wl rson lly ppearedC OR - to me. on the basis of satisfactory evidence to be the person hose subscribed to the within ns[rument and acknowledged to me that y executed the sa"me iin his/ tyirf�authorized capaci (ipwrand that -t r signature' o�-the instrunent the person or tie entity upon rr behalf of ulfich the person(,eracted, executed the instrument. U CORPORATE OFFICERS)TITLES) ❑ PARTNERS) ❑ ATTORNEY-IN-fALTs/ ❑ TRUSTEE(S) ❑ SUBSCRIBING WITNESS ❑ GUARDIAN/CONSERVATOR Witness my hand and official seal. LILLY—AREVSHATYAN ❑ OTHER_ _ CoFmdslon N 1581253 zz ( t Notary KM - CaRfoTnlo 5 L% Angeles CoWrify — SIGNER IS REPRESENTING: SIGNATURE 0 NOT RY ICoMnBVftMcrjl, 2Txtq NAME OF PERSONS) OR ERTITY(IES) ATTENTION NOTARY: Although the information requested below is OPTIONAL, it could Title or Type of Document prevent fraudulent attachment of this certificate to unauthorized documents. Number of Pages THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Date of Document Signerts) Other Than Named Above 017 --^ "'-111 nv T ATJT) (1(1N'f ATN.Q AN ART -A (1F 9OnA QnT1ADF cr:c'r EXHIBIT "A" LEGAL DESCRIPTION FOR ELECTRIC PURPOSES TWO PARCELS OF LAND LYING WITHIN THAT PORTION OF THE SOUTHWEST QUARTER OF TIIF. SOUTHWEST QUARTER OF SUCTION 1, TOWNSHIP 1 SOUTH, RANGE 10 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF AZ.USA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ACCORDING TO OFFICIAL PLAT OF SAID LAND, DESCRIBED AS FOLLOWS: PARCEL"A" BEGINNING AT THE INTERSECTION OFTHE NORTHERLY LINE OF THE SOUTHERLY 300.00 FEET OF THE WESTERLY 264.00 FEET OF SAID SOUTHWEST QUARTER OF TIIF. SOUTHWEST QUARTER OF SECTION 1, AND THE EASTERLY RIGHT-OF-WAY LINE OF CITRUS AVENUE (40.00 FOOT HALF -WIDTH); THENCE, SOUTH 89°33'45" EAST. ALONG SAID NORTHERLY LINE, 131.80 FEET; THENCE, SOUTH 0°22'15" WEST 25.42 FEET; THENCE, NORTH 89033'45" WEST 21.18 FEET; THENCE, NORTH 0°22'15" EAST 12.15 FEET; THENCE, NORTH 89033'45" WEST 110.61 FEET TO SAID RIGHT-OF-WAY; THENCE, NORTH 0°22'15" EAST. ALONG SAID RIGHT-OF-WAY, 13.27 FFET TO THE POINT OF BEGINNING_ THE ABOVE DESCRIBED PARCEL OF LAND CONTAINS AN AREA OF 2006 SQUARE FEET, MORE, OR LESS. PARCEL"B" BEGINNING AT A POINT ON THE NORTHEASTERLY LINE OF THAT CERTAIN DEED FOR ROAD PURPOSES, RECORDED AS INSTRUMENT NO. 3860, OF OFFCIAL RECORDS, DISTANT SOUTH 44022'48" EAST, 2.55 FEET FROM THE NORTHWESTERLY TERMINUS OF SAID NORTHEASTERLY LINE , SAID NORTHWESTERLY TERMINUS BEING ALSO A POINT ON THE EASTERLY RIGHT-OF-WAY LINE OF CITRUS 'AVENUE (40.00 FOOT HALF -WIDTH); THENCE, SOUTH 89007'52" EAST 24.04 FEET; THENCE, SOUTH 0°52'08" WEST 15.20 FEET TO THE NORTHERLY RIGHT- OF -WAY LINE OF ARROW HIGHWAY (50.00 FOOT HALF -WIDTH): THENCE, NORTH 89°07'52" WEST, ALONG SAID NORTHERLY LINE, 8.71 FEET 1.0 THE SOUTHEASTERLY TERMINUS OF SAID INSTRUMENT NO. 3860; THENCE, NORTH 44022'48" WEST, ALONG SAID NORTHEASTERLY LINE OF SAID INSTRUMENT NO. 3860, A DISTANCE OF 21.59 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED PARCEL OF LAND CONTAINS AN AREA OF 249 SQUARE FEF,T, MORE OR LESS. SEE EXHIBIT "B" ATTACHED AND BY THIS REFERENCE MADE A PART LAND J � oy s MICHAEL SIMON, .L.S. 6034 Exp. 6/30/05 * No. 6034 REGISTRA"1'iON EXPIRES 06/30/05 N9> �\I K:\Drawings\SP\SP5l33A\SURVEY\OFFICE\LEGAL\020205-Electric Easement.doc Last printed 2/2/2005 3:23 PM HE 0 40 60 BO ( I ) T1 SW 1/4. SW 1/4.y 264 1 0r FEETHE 1 INCH =40 FEET' I SECTION 1-1-10. SBM. , P 0.6. PARCEL' "A" SCALE: 1•_40' ; .. 1-1 _ S893345"E —131.80' 00'2215 E 1n INN 13.27 �I l N89':53'45' W 110.61' wl I N89.37'45"W I 40.00' cr I 1 ' U) NYlLY TERMIN JS, INST 35E 44'22'48"EG P.O.B. 2.55' PARCEL "Bll---� NE'LY LINE) INST 3860- I NOO'2215"E 1, INo 12.1 s' J I I PARCEL "A" N8933'45"W 21.18' PROPOSED POWER UTILITY TRANSFORMER. PAD BY 'CONTRACTOR PER -. ...... POWER UTIUTYS SPECIFICATION 6X8 ED 7 t EX. R/W L... it EXISTING ELECTRICAL UTILITY i IRAN5 DRYER PAD TO BE CONVERTED TO PULLBOX BY S89'07.52 "E CONTRACTOR _ II 24.04' PARCEL "B EX. R/W vRIf `Ds 1 500"52'08"W f�Lll/jll ? y vre 15.20' wevrorsz-w t9B.b' — _ of ARROW HIGHWAY i S'LY LINE SEC. 1-1-10 & OLD C/L ARROW HWYl 264• no.,r, — v \nrnwincs\SP\SP573�SurveY\Off c \Legol Description\legcl.dwq\Legcl Description\Iegcl.dwq SE'LY TERNINUS. INST 3860 – 3: EXHIBIT '"B"" 1 OF 1 ELECTRICAL EASEMENT EXHIBff CITY OF AZUSA 7`K & ASSOCIATES INC. 701 PARKCENTER DRM SANTA ANA. CALIFORWA 92705 TEL. (714) 560-8200 019 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: OCTOBER 24, 2005 SUBJECT: SALE OF 10 FOOT STRIP OF REAL PROPERTY RECOMMENDATION It is recommended that the Utility Board/City Council: (a) Accept offer by Mr. Samuel Baldon in the amount of $29,568 plus $5,000 for lot line adjustment fees in sale of 10 foot strip of land located at 275 W. Paramount Avenue in Azusa; and (b) Authorize the Chairperson or Mayor to sign all documents on behalf of the City to effect sale of said property. BACKGROUND In considering the sale of water utility property located at 275 W. Paramount Avenue, it was discovered that a 10' X 140' strip of the property was being used by the adjacent property owner, Mr. Samuel Baldon. An appraisal was conducted of the Paramount Avenue property and the Utility Board agreed to sell the 10' strip to Mr. Samuel Baldon at a price within the range of comparable properties listed in the appraisal report, plus fees to make the strip part of the Mr. Baldon's lot located at 242 S. Angeleno Avenue. Mr. Baldon has accepted the Utility Board's offer and has submitted a $6,000 deposit along with a signed real property purchase agreement. FISCAL IMPACT Sale of the 10 foot strip will result in proceeds to the City of about $29,568 less minimal transaction costs. Lot line adjustment fees of $5,000 will be paid by the Buyer. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities 020 AGENDA ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES DATE: OCTOBER 24, 2005 SUBJECT: AUTHORIZATION TO NEGOTIATE CONTRACT TERMINATION OR RESTRUCTURING WITH DUKE ENERGY RECOMMENDATION It is recommended that the Utility Board authorize the Director of Utilities and/or his designee to negotiate contract termination or restructuring with Duke Energy Merchant America, LLC ("DEMA") in accordance with the pre specifiedparameters defined below. BACKGROUND On two separate occasions in the past three years, the staff conducted comprehensive reviews of city's long term power resource needs. As part of those review processes, the City issued two Requests for Proposals (RFPs) for power resources over the long term. The first RFP process conducted in mid 2002 resulted in a four-year summer firm energy peaking contract with Duke Energy Trading and Marketing (DETM), commencing summer 2004 through summer 2007. The second RFP process conducted in early 2004 resulted in a seven- year summer peaking contract with Duke Energy Merchant America, LLC (DEMA), commencing summer 2008 through summer 2014. DETM and DEMA were selected due to: (a) their product pricing; (b) creditworthiness; and (c) responsiveness to tailoring products to our needs. The Utility Board agenda items approving the two contracts are attached herein in Attachments A and B. Both DETM and DEMA are wholly owned subsidiaries of Duke Energy. On September 13`h of this year, Duke Energy announced its intention to exit the wholesale power merchant business by the end of next year (Duke's announcement is attached herein as Attachment C). Duke Energy intends to "unwind" all its wholesale power business in the coming months by either transferring the existing contracts to third parties or "buyout" the existing contracts from the existing counterparties. Duke Energy has recently contacted staff to discuss "unwinding" of these contracts. Both of these contracts are currently substantially below the prevailing market pricing for similar power products thus providing substantial ongoing economic values to the City. It is imperative that the City preserve the economic value of these contracts during the Duke Energy operation "unwinding" process. 021 Staff recommends the following parameters be used for the purpose of discussing contract "unwinding" with Duke Energy: t. Contract Buvout OP—tion. To the extent Duke Energy desires to buyout either or both contracts, and then the valuation shall be made at the current prevailing market pricings for power products substantially similar to the power products under the contracts. Staff will request quotes from no less than three parties and compute the net present value of the contracts. If it is determined that the contracts have positive values, i.e., the contracts are below the current: prevailing market prices, then a termination payment amount due to the City shall be determined and negotiated to preserve the economic value of the contracts for the City. Staff will concurrently seek replacement power contracts from third parties to replace the Duke contracts. Final agreements to buyout the contracts and to replace contracts with Duke Energy will be subject to Utility Board's approval. If it is determined that the contracts have negative values, i.e., the contracts are above the current prevailing market prices, and then City will insist on Contract Assignment Option below. 2. Contract Assignment Option: To the extent Duke Energy desires to assign contracts to third parties or if the City insists on Contract Assignment Option, then staff will negotiate with Duke to have the contracts assigned to third party (ies) with financial credit standing no less favorable than Duke Energy's financial credit standing. Final agreements to assign contracts will be subject to Utility Board's approval FISCAL IMPACT This contract buyout/restructuring effort is anticipated to be fiscal neutral to the Light Fund Prepared by: Bob Tang, Assistant Director Resource Management Attachments: 9A Inm ►O" Attachment A.ppt AttachmentB.doc AttachrrentC News Release. pdf 022 ATTACHMENT A Medium Term Summer Peaking Power Purchase Council Meeting June 24, 2002 023 Issue: The City will need to replace two power contracts which will terminate in the next 15 months. Bonneville Power Administration: 12 MW of peaking capacity and energy (June — September) terminates on September 30, 2003 Pasadena Contract: 8 MW of peaking capacity and energy terminates on December 31, 2002. 2 024 City's Prospective Power Needs June - September 2003 10 MW ON -PEAK June - September 2004 15 MW ON -PEAK June - September 2005 1 15 MW ON -PEAK June - September 2006 15 MW ON -PEAK June - September 2007 15 MW ON -PEAK 3 Considerations • Why purchase now? Buyer's market • Why not consider building own power plant? Much more expensive and too much operational hassle • Why 5 years? Long enough to provide cost stability, but not long enough to foreclose city's ability for mid -course corrections in planning for future resources • Purchase from whom? Parties who have signed the EEI or EEI equivalent agreements with the City. Currently there are three parties: 1) Duke 2) American Electric Power 3) IdaCorp 4) Sempra and UBS agreements are in the works. M 026 A H Current Purchasing Authority By Staff • Up to one-year . Multi-year purchases need City Council approval *Due to the price volatility, it makes the execution of mutt -year transactions almost impossible to achieve. Suppliers are unwilling to keep the price quotes for more than a few hours. 5 027 Proposed Process For Multi -Year Procurement . Utility Board approves the purchasing amounts a priori . Utility Board approves the price range for the multi- year power purchase • Utility Board conveys the purchasing authority to the Director of Utilities and through the execution by the Assistant Director — Resource Management to effectuate the purchase if price for the specific product falls within established range . The mayor will execute the power purchase confirmation agreement upon preparation one Staff's Recommendation Staff recommends the Utility.Board/City Council approve the following: �. The procurement of the following specific power product ("Product': 5 - year summer only (June -September) on -peak power product either @ PV or SP15. On -peak hours are as defined by NERC. 2. The establishment of not -to -exceed price ("ceiling price') of $50/MWh for all years for the product. 3. Authorized the Director of Utilities through Assistant Director of Resource Management to execute the purchase if market price for Product is no more than the "ceiling price". Such authority shall automatically expire if not exercised by December 31, 2002. a. The Product shall be purchased only from third parties who have signed EEI or EEI equivalent credit support agreement with the City. s. The Mayor shall execute the confirmation purchase agreement upon its preparation. 7 029 ATTACHMENT B AGENDA ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES DATE: APRIL 26, 2004 SUBJECT: AUTHORIZATION TO ENTER INTO CONTRACTS WITH DUKE ENERGY MERCHANT AMERICA, LLC (DEMA) FOR THE PURCHASE OF FIFTEEN (15) MEGAWATTS OF SUMMER ELECTRIC CAPACITY RECOMMENDATION It is recommended that the Utility Board authorize the Mayor to execute the agreements with Duke Energy Merchant America, LLC ("DEMA") for the purchase of fifteen (15) megawatts of summer electric capacity commencing May, 2008 through October 2014. BACKGROUND: Earlier this year, staff began a comprehensive review of city's- long term power resource needs in view of the expiration of the existing summer peaking resource contract in 2007 and city's growing summer electric load. As part of this evaluation, the staff identified the need for at least fifteen megawatts of electric capacity and the associated energy to continue to reliably serve city's summer load. Upon this finding, staff commenced a planning process to meet the identified need. This process consisted of: 1. Survey of the power market for suitable power products 2. Preliminary analysis of market survey results and reporting of the findings to Utility Board in February 2004 3. Issuance of a formal Request for Proposal (RFP) on March 1, 2004 4. Evaluation of the proposals by staff and the independent consultant, Henwood Energy Services 5. Final analysis and recommendation for Utility Board's consideration 030 A detailed summary of the planning process is attached herein as Exhibit A, and the comprehensive report of the planning process is attached herein as Exhibit B. As the result of this process, staff is recommending the procurement of summer capacity product from DEMA as fully described below. A. SUMMARY OF THE DEMA AGREEMENT Source: DEMA will provide the contracted summer electric capacity from electric generation plants it owns in the Western US. DEMA currently owns more than 2,000 MW of electric generating capacity in California and Arizona. Quantity: 15 MW of electric capacity for the summer months, The City has the right but not the obligation to dispatch the electric energy on a daily basis under the contract. Delivery: Energy delivery is firm into Southern California market hub. Term: 7 years, commencing May 2008 through October 2004. The delivery will be for summer season only (May through October). Price: Fixed price for monthly capacity of $7.18/kW-month, and an additional energy charge based on a heat rate of 10,000 Btu per kWh and the prevailing natural gas price at the time of energy delivery. B. ECONOMICS OF THE RESOURCE Based on Henwood's evaluations and confirmed by staff's own analysis, the DEMA's summer capacity product is the most cost effective resource when compared to the other viable options: The fixed priced firm energy products are consistently of higher cost up to 40% higher. Firm energy product has the additional drawback that requires us to receive energy when we do not need it, potentially causing the city to sell the excess power at a loss. 2. The self -built base load or peaking resource options are not cost effective as it requires us incur fixed costs for the entire year even though there is no need for the power during non -summer months. 3. The power products with contract duration longer than 7 years have costs substantially higher than the DEMA's product up to 40% higher. Given the above, staff believes the DEMA's summer capacity product is the best resource option due to (a) it is below the cost of comparable self -built options, (b) it provides the operational flexibility of generating energy when needed and economical to do so, and (c) it provides the planning stability for a reasonable duration without foreclosing city's ability to consider other resource options in the foreseeable future. FISCAL IMPACT 031 This summer capacity agreement is expected to cost $646,200 per year in capacity payments and additional energy costs if energy is actually dispatched at City's discretion. Funds will be budgeted in the future fiscal years, commencing FY 07-08 to pay for the cost of the contract. Prepared by: Bob Tang, Assistant Director Resource Management 032 DUKE ENERGY ANNOUNCES PLANS TO EXIT DENA BUSINESSES -Duke Energy Page 1 of P�h. News Release (IF�roY• September 13, 2005 DUKE ENERGY ANNOUNCES PLANS TO EXIT DENA BUSINESSES • Approx. 6,200 megawatts of generation, trading book to be sold • Approx. $1.3 billion non-cash, pre-tax charge to be taken in third quarter 2005 • Company revising 2005 incentive target from $1.60 EPS to $1.65 EPS CHARLOTTE, N.C. - Duke Energy's board of directors today approved a plan to pursue the sale or other disposition of substantially all of Duke Energy North America's (DENA) physical and commercial assets outside the midwestern United States. In connection with the plan, Duke Energy will take a non-cash, pre-tax charge of approximately $1.3 billion, or approximately $0.88 per basic share, which will be reported in third quarter 2005 earnings. With the actions announced today, the company is revising its 2005 earnings per share (EPS) target for employee Incentive bonuses, which should track ongoing basic EAS, from $1.60 to $1.65. The DENA assets to be divested include approximately 6,200 megawatts of power generation located primarily in the western and northeast United States, as well as substantially all of DENA's trading book. The assets will be sold or otherwise divested within the next twelve months. "In recent years, we have devoted significant management attention to returning DENA to profitability and to developing a sustainable model for this business," said Paul M. Anderson, chairman of the board and chief executive officer. "We have made a great deal of progress, reducing DENA's portfolio of assets and its trading book. But ultimately, we've determined that achieving our objective of break- even for DENA by the end of 2006 is not realistic without taking on an extraordinary amount of additional risk. Because we are not willing to increase our risk profile, we believe it is best from a shareholder value standpoint to exit the remaining business. "Over the year ahead, we will be exiting DENA's trading book and working to achieve the highest value for DENA's remaining assets through sale or other disposition." Duke Energy will remain active In the merchant power sector. As envisioned in the proposed merger with Cinergy, announced in May, Duke Energy expects to combine DENA's existing Midwest assets, approximately 3,600 megawatts of power. generatlon,'with Cinergy's commercial operations, providing a sustainable merchant business model in the region. "Exiting DENA's business outside the Midwest provides us with a fresh start and allows us to fully focus on the future," Anderson continued. "The merger with Cinergy provides new opportunities and allows us to focus on the consolidation of the electric utility Industry and on growing our gas businesses. we continue to anticipate closing on the merger in the first half of 2006." Anderson and David Hauser, group vice president and chief financial officer, will discuss today's announcement during a conference call with analysts Wednesday, Sept. 14, at 10 a.m. EDT. The conference call can be accessed via the investor section of Duke Energy's Web site: bnp-•llwww.duke- energy.com/investors/ or by dialing 800/361-0912 in the United States or 913/981-5559 outside the United States. The confirmation code is 2834906. Please call in five to 10 minutes prior to the scheduled start time. A replay of the conference call will be available by dialing 888/203-1112 with a confirmation code of 2834906. The international replay number is 719/457-0820, confirmation code 2834906. The replay will run through midnight on Sept. 23, 2005. A replay and transcript also will be available by accessing the Investor's section of the company's Web site at bASP;//www.duke- energy.com/investors/. file://X:\Utility%20 Board%2O Mecting\CY2005%20UB%2OMeetings\October%2024%2... 10/17/2005 033 DUKE ENFRGY ANNOUNCES PLANS TO EXIT DENA BUSINESSES -Duke Energy Page 2 of 3 Duke Energy is a diversified energy company with a portfolio of natural gas and electric businesses, both regulated and unregulated, and an affiliated real estate company. Duke Energy supplies, delivers and processes energy for customers in the Americas. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: http://coy vL.Ouke-energy.c�m. _ Duke Energy's management uses ongoing basic EPS, which is a non -GAAP financial measure as It represents basic EPS from continuing operations plus any discontinued operations from its Crescent Resources real estate unit, adjusted for the impact of special items, as one of the measures to evaluate operations of the company. Special items represent certain charges which management believes will not be recurring on a regular basis. Management believes that the presentation of ongoing basic EPS provides useful information to investors, as it allows them to more accurately compare the company's ongoing performance across all periods. Ongoing basic EPS Is also the basis used for employee incentive bonuses. The most directly comparable GAAP measure for ongoing basic EPS is reported basic EPS from continuing operations, which Includes the impact of special items. Due to the forward-looking nature of ongoing basic EPS for future periods, information to reconcile such a non -GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time as the company is unable to forecast any special items for future periods. This release includes statements that do not directly or exclusively relate to historical facts. Such statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Sectidn 21E of the Securities Exchange Act of 1934. Those statements represent Duke Energy's intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside Duke Energy's control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Those factors include: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures,.and affect the speed at and degree to which competition enters the electric and natural gas industries; the outcomes of litigation and regulatory investigations, proceedings or inquiries; the weather and other natural phenomena; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including any potential effects arising from terrorist attacks and any consequential hostilities or other hostilities; changes in environmental and other laws and regulations to which Duke Energy and its subsidiaries are subject or other external factors over which Duke Energy has no control; the effect of accounting pronouncements issued periodically by accounting standard- setting bodies; the amount of collateral required to be posted from time to time in Duke Energy's transactions; competition and regulatory limitations affecting the success of Duke Energy's divestiture plans, including the prices at which Duke Energy is able to sell its assets; the performance of electric generation, pipeline and gas processing facilities; the extent of success in connecting natural gas supplies to gathering and processing systems and in connecting and expanding gas and electric markets; conditions of the capital markets and equity markets during the periods covered by the forward-looking statements; and opportunities for Duke Energy's business units, including the timing and success of efforts to develop domestic and International power, pipeline, gathering, liquefied natural gas, processing and other Infrastructure projects. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Contact: Media Contact: Peter Sheffield Phone: 980/373-4503 24 -Hour Phone: 704/382-8333 e-mail: pvsheffleld@duke-energy.com Contact: Analyst Contact: Julie Dili Phone: •980/373-4332 file:l/X:\Utility%20Board%20Meeting\CY2005%20UB%20Meetings\October%2024%2... 10117/2005 ®34 DUKE ENERGY ANNOUNCES PLANS TO EXIT DENA BUSINESSES - Duke Energy Page 3 of 3 24 -Hour Phone: n/a e-mail: jadill@duke-energy.com file://X:\Utility%20Board%20Meeting\CY2005%20UB%20Meetings\October%2024%2... 10/17/2005 035 A A INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES^p/ DATE: OCTOBER 24, 2005 SUBJECT: UPDATE ON POMONA LAWSUIT On October 12, 2005, the City of Azusa received notice (attached) that our City was being dismissed as a defendant in the case of City of Pomona v. American Olean Tile Company. This dismissal followed a period of discovery where no evidence was found that Azusa disposed of waste in Pomona during the period of time cited in the lawsuit. The City of Glendora was also dismissed. Other cities are named in attached as continuing defendants in this case. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities Attachment: rA PomonaCase.pdf 036 10/12/2005 16:19 0/11/2005 TUE 14,31 Via Fax 19516620734 r FU 818715075'6 October 11, 2005 All Counsel (per attached Service List) Re: City of Pomona v American Olean Tile Company, et al. L.A.S.C. Case No. I(C 045354 Dcar Counsel: AS per the Notice of Ruling issued subsequent. to the September .30, 2005 Status Conference before judge Buckley, by this letter the City of Pomona ("Pomona") respectfully advises that Pomona will dismiss the following parties from the American Olean action as captioned above: The City of Azusa Amcord The City of Glendora Duran & Sons The following parties will remain defendants in the American Olean action: The City of 1_a Verne American Olean Tile Company The City of Claremont General Dynamics The Citv of Chino I -IM. LOW Company Please contact us if you have any questions or need additional information. Very truly yours, WOOD & BENDER, LLL By 7g�'�a-4�t h ( �, �I�oo U-,,_ THA SI -TARP, Esq. MS:dsa 14286A,1 cc: Ms. Julie Theirl (via email) David Wood, Esq. (via email) an.r, L;,., ,c ,..,> ern» , s::rrr w a 0 r3 I E3 M N 0 M R L L P 11011 lPirnrrr Gnrrr l.r• .• Srru Rr�.v:na'rv:r•�l t>n'!%n.nLr ')3na! ft,.lArud 11!ll. I f.:rlijirnd. 91}(s xq� :'.447,tINl .e/X•; l $.UJJ l n:n•nee�nd./.nrdreroln /,',a:•.[•1.Y :'I<1J.'r•SA' Inn; iYr�i..!•.•.c.l.Ip/ `r[rrS�{✓ - J 7\ 01 INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES' K� DATE: OCTOBER 24, 2005 SUBJECT: AB 939 UPDATE AND PROPOSAL BY ATHENS SERVICES In October 2000, the City approved a refuse collection and recycling contract with Athens Services which requires Athens to recycle 13,000 tons per year by extracting recyclables from mixed waste processed through their material recovery facility. This contract -specific recycling tonnage amount, or waste diversion amount, was believed to be adequate to enable the City to reach a 50% waste diversion rate required by state law and for three consecutive years (2001, 2002 and 2003) this proved to be the case. However, for 2004 and 2005, staff has observed higher than expected growth in waste being generated in Azusa. Staff, therefore, requested a proposal from Athens to divert an additional 2,500 tons of waste from landfills. On October 17, 2005, Athens submitted the attached proposal for an automated trash collection system for residential customers. Athens anticipates that 2,000 additional tons per year would be diverted if residents used large 96 gallon barrels to separate yard waste. Also, Athens suggested that the City consider paying for the separate collection of organic waste from restaurants, and then processing that waste so that it could be delivered to a compost facility in Victorville. Athens' proposal will be reviewed by staff and a recommendation will be formulated by the next Utility Board meeting on how this proposal, and the goal of achieving more waste diversion generally, should be approached. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities Attachment: 91 Athensftposal.pdf M, AZUSA RECYCLING OPTIONS Automated Residential Program Automated 2 container system with full MRF services and bulky item pickup for a rate increase of $2.94 per month per curb serviced unit. Based on converting from manual to automated collection in other cities, it is estimated that an additional 2,000 tions of green waste per year may be generated. Organic Recovery We anticipate'that approximately 500 tons of organics can be diverted from the commercial waste stream. We will employ special handling to sort targeted compostable organics and then transport the selected material to Victorville for composting. The incremental cost will be $61.50 per ton based on actual diverted tons. 039 .0, 3 Legislative & Regulatory Update October 24, 2005 M AB 380 — Resource Adeauacv Nunez . Requires all CPUC jurisdictional entities to have 15% power generation reserves commencing 2006 in a program administered by the California Independent System Operator (CAISO), . Mandates the municipal utilities to follow the spirit and the intent of the legislation, monitored by California Energy Commission (CEC) . The legislation was signed into law by the Governor . California Municipal Uti behalf of its members, for the implementation program in the context process !ties Association (CMUA) on s negotiating with the CAISO of a muni resource adequacy of CAISO market redesign 2 041 Independent Energy Producers (IEP) Complaint to Federal Energy Regulatory Commission: • IEP filed a complaint at FERC in mid August alleging that CAISO is not providing reasonable compensation to the merchant generators in Southern California to keep them financially viable • IEP requests the FERC to order the CAISO to provide financial compensation commensurate to that of new power plants • IEP further argues that all beneficiaries of electric reliability in Southern California including the municipal utilities pay for the costs • Municipal community is participating in the informal settlement discussions among the stakeholders to find acceptable solutions to keep the existing Southern California merchant power generation financially viable at a reasonable cost 3 042 CAISO Market Redesign Process: • CAISO is finalizing its market redesign and file tariffs to implement the redesign with the FERC • The new market redesign is slated to go into effect in February 2007 • The redesign remains very contentious and "half baked" • Many areas of concerns remain for the municipal community: the certainty for transmission services and costs for such services, the flexibility in using our own power resources to serve our customers etc.... • Efforts continue within the municipal community to fashion acceptable solutions in the context of market redesign 4 043 n 1 Federal Energy Legislation .Implementation: . The FERC is in midst of several rulemakings to implement the new mandates of EPACT 05 regarding: mandatory reliability measures; new merger and acquisition policy; implementation of regional economic dispatch of electric generation to promote competition and reliable electric services etc... . The implications of EPACT 05 to our operation remain unclear at this time, we will continue to monitor the developments 5 044 /Da 4 Power Resources Division Monthly Report ■ Power Resource Update ■ Energy Market Update ■ Power Consumption Comparison ■ Wholesale Market Trend ■ Power Resource Budget Update 045 Power Resource Update ■ Actively managing City's power resources in light of extreme energy commodity price volatility ■ Activelyparticipating in the negotiations between California Municipal Utilities Association (CMUA) and the California Independent System Operator (CAISO) regarding the implementation of state Resource Adequacy mandate ■ Finalized the preparation and reconciliation of the annual Transmission Revenue Balancing Account Adjustment (TRBAA), will file with the Federal Regulatory Energy Commission (FERC) by early November ■ Actively participating in the second Southern California Public Power Authority's (SCPPA) Request for Proposals (RFP) for renewable resources. There is one renewable resource closer to the City that warrants close scrutiny for contracting ■ Commenced negotiations with San Gabriel Valley MWD for contracting of a small hydro resource ■ Commenced discussions with Duke Energy to "unwind" long term power purchase agreement. Duke Energy intends to exit the merchant power marketing and trading business by the end of 2006 (see the scheduled agenda item) ■ Continued discussions and negotiations with Edison on Municipal Departing Load (MDL) exit fee issues ■ Prepared a Light and Water Department internal cross training procedure. The draft procedure is currently under review and slated for implementation in November after completing the reviews AM Energy Market Update ■ Hurricanes Katrina and Rita have caused major disruptions to the production and refining operations of oil and natural gas in the Gulf Coast region, further tightening the perceived supply and demand imbalances for the coming winter ■ Wholesale natural gas prices have tripled from last winter and remain more than twice as high for the next two years from the historical price levels ■ Wholesale power prices in the short and medium terms are also high at twice as much from the historical price levels, exceeding the retail electricity prices for almost all the electric utilities in the nation and in the west in particular. m Upward pressures to electric retail rates are building with many utilities seeking retail rate increases and the activation of fuel cost adjustment (FCA) clauses ■ All Palo Verde Units were offline due to the inability to demonstrate that the original design of the Emergency Core Cooling System (ECCS) could perform its safety function. The Units have been off-line since October 11, 2005 and there is no estimated time of return. 047 t .00T_ CITY OF AZUSA ENERGY CONSUMPTION COMPARISON _.. IENEBIW CCNSI TION IN MNIi _... ._ PERCENT :.. - M7MH FY0405 FY 0606 CHNJPE _ -..MAR 34.8 25839 _._ 032% _-_ 25,312 26756 659°k SEP 25213 ... .. ?2.725 .. 987°/ _... . ... .__.21561 . NOV 19.813 JAN 20127 k FEB _ 17998 -. ._ MAR 19,762 .... _ _. APR MAY JW 21204 TOTAL ,.. ... 258.065 _ _ 75323.. _ ..... 132Y .... CITY OF AZUSA PEAK DEMAND COMPARISON . .00T_ 46.0 .. _.. . NQV _.. 36.6 _.... .... __ ... -.. DEC .. 35) JAN _. 36.6 .. _ ._ _ FEB _._._ _33b _.__..�. _.... .. _. -..MAR 34.8 PEAK DEMANDINIAN -, ._.. .... i - ----------- -145-V 04 .... . ..... DEC 04 9 $47.80 $3695...-- 1 $47.79- $37.87 mkk m _ $51146 i $38.22 APR 05 $5.3.801... $40-23 -- .-I'-,- 11 my 05 $49.30 $3117 .... JUN 05 $.53.35 $30.81- JUL 05 $69.44 $43.14 AUG 05 $76.80 $54114 PEP 65. $84.09 $64.96 ;ALL PRrES Iq ------ 11 mj Power Resource Cost Accounting FY '04-051 - - - ------ ---- aW No-M� DM 000 owl =:H—G�w 0a0=— ts-; O.W 050