HomeMy WebLinkAboutAgenda Packet - April 26, 2010 - UB Fr
AZUSA
LIGHT t, '',ATER
AGENDA
REGULAR MEETING OF
AZUSA UTILITY BOARD
AZUSA LIGHT & WATER APRIL 26, 2010
729 N. AZUSA AVENUE 6:30 P.M.
AZUSA, CA 91702
AZUSA UTILITY BOARD
URIEL E. MACIAS
CHAIRPERSON
ROBERT GONZALES JOSEPH R. ROCHA
VICE CHAIRPERSON BOARD MEMBER
KEITH HANKS ANGEL CARRILLO
BOARD MEMBER BOARD MEMBER
6:30 P.M. Convene to Regular Meeting of the Azusa Utility Board
• Call to Order
• Pledge to the Flag
• Roll Call
A. ELECTION OF OFFICERS
1. Select and approve by majority vote the election of Utility Board Chairperson and Vice Chairperson to
serve as officers of the Utility Board.
Election of Attachment.pdf
Officers.pdf
1 001
B. PUBLIC PARTICIPATION
(Person/Group 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 or comments shall be handled after the speaker has completed his/her comments.
Public Participation will be limited to sixty(60) minutes time.)
C. UTILITIES DIRECTOR COMMENTS
D. UTILITY BOARD MEMBER COMMENTS
1. May 24, 2010 Utility Board Meeting
E. CONSENT CALENDAR
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 individually, it will be considered under
SPECIAL CALL ITEMS.
1. Minutes. Recommendation: Approve minutes of regular meeting on March 22, 2010 as written.
4
March Minutes.pdf
2. Project WV-263 Water Main Cement Mortar Lining Project. Recommendation: Approve addition
of 55 calendar days to time of completion and approve Notice of Completion.
l 1;4-
NOC-3 Fletcher NOC Form pdf
Creamer.pdf
3. South Coast Air Quality Management District (AQMD) Local Government Match Program
Contract. Recommendation: Approve AQMD contract no. ML08030 to secure $25,000 grant for clean
transportation vehicles and offset purchase cost of aerial truck in Electric Division.
AQMD Match AQMD-Contract.pdf
Program pdf
2
002
4. AB 2021 Cost Effective Energy Conservation Targets. Recommendation: Approve extension of
previously adopted annual program target of 0.89% for fiscal years 2011-2020 as prescribed in AB 2021
and defined in Table 13 of the Ca1EERAM report.
I .
Energy Eff
Targets.pdf
5. Rubber Glove Training. Recommendation: Approve Professional Services Agreement for Rubber
Glove Training by Skills Incorporated in amount not to exceed $30,000.
1;11y
-imb irw
Rubber Glove Attachment.pdf
Training.pdf
6. 2010 Refuse Rate Adjustment. Recommendation: Approve public hearing date on June 21, 2010 and
mailing of public notice to property owners.
Refuse Rate Public Attachments.pdf
Notice.pdf
7. Merchant Processor Agreement. Recommendation: Approve termination of agreement with
BankSery and approve five-year agreement with EPX as merchant processor for electronic automated
clearing house(ACH)payment transactions related to online billing and payment.
Merchant Svcs.pdf EPX Agreement.pdf
8. Master Meter Delinquent Accounts. Recommendation: Approve the following resolution to modify
Light & Water Rules and Regulations to address master meter delinquent accounts as required by Senate
Bill 120:
A RESOLUTION OF THE AZUSA UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA,
AMENDING THE AZUSA LIGHT & WATER RULES AND REGULATIONS GOVERNING THE
ELECTRIC AND WATER SERVICE SUPPLIES BY AZUSA LIGHT& WATER.
0,/ I
j/).
Master Meter Rule Resolution.pdf
Amend.pdf
3
003
F. SCHEDULED ITEMS
1. Lodi Energy Center Environmental Findings and Project Agreements. Recommendation: Approve
resolution entitled:
RESOLUTION OF THE CITY COUNCIL AND UTILITY BOARD OF THE CITY OF AZUSA
MAKING FINDINGS AS A RESPONSIBLE AGENCY UNDER CEQA; APPROVING THE LODI
ENERGY CENTER POWER SALES AGREEMENT AND THE PROJECT MANAGEMENT AND
OPERATION AGREEMENT AND AUTHORIZING THE MAYOR TO EXECUTE THEM ON
BEHALF OF THE AGENCY; AND AUTHORIZING THE UTILITIES DIRECTOR TO DESIGNATE
REPRESENTATIVES TO THE LODI ENERGY CENTER PROJECT PARTICIPANT COMMITTEE.
•_4
LEC Report.pdf LEC Ex-A-Attnt-1. Ex-A-Attnt-2. Ex-B-PSA.pdf Ex-C-PMOA.pdf
Resolution&Ex-A.pdf PMPD.pdf ERRATA.pdf
191
Black&Veatch LEC
Report.pdf
2. Adoption of Legislative Positions. Recommendation: 1) Adopt the following: a) Oppose position on
AB 155 (Mendoza), Municipal Bankruptcy; b) Oppose position on HR1521 (Lofgren), The Cell Tax
Fairness Act of 2009; and c) Support position on HR4812 (Miller), Local Jobs of America Act; and
2) authorize the Mayor to sign position letters to be sent to bill authors and others as appropriate.
9-
„a,
LegislativePositions.p
df
G. ADJOURNMENT
"In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a city
meeting, please contact the City Clerk at 626-812-5229. 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."
"In compliance with Government Code Section 54957.5, agenda materials are available for inspection by
members of the public at the following locations: Azusa City Clerk's Office - 213 E. Foothill Boulevard,
Azusa City Library- 729 N. Dalton Avenue, and Azusa Light& Water-729 N. Azusa Avenue,Azusa CA."
4 004
s
1
AZUSA
r.ur 4 N'SRp
ELECTION OF OFFICERS
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE • 1T.A TILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
41,
DATE: APRIL 26, 2010
SUBJECT: ELECTION OF OFFICERS
RECOMMENDATION
It is recommended that the Utility Board elect by majority vote a Chairperson and Vice Chairperson to
serve as officers of the Utility Board.
BACKGROUND
The Utility Board was formed in May 2001 pursuant to ordinance 01-03, which was later amended by
ordinance 01-07 (attached). The Utility Board is composed of City Council Members acting as Utility
Board Members, with the Director of Utilities serving as executive advisor to the Board. The Utility
Board meets monthly on the fourth Monday of each month in the downstairs conference room at Azusa
Light & Water offices to conduct business related to the City's electric and water utilities.
Section 2-415 of the Azusa Municipal Code requires the Utility Board to elect a Chairperson, Vice
Chairperson, and a Secretary annually no later than the second meeting following appointment of the
Mayor Pro Tem by the City Council. Since new Mayor Pro Tern was selected on March 15, 2010, the
Utility Board must elect by majority vote a Chairperson and Vice Chairperson. The functions of
Secretary are delegated to the City Clerk.
FISCAL IMPACT
There is no fiscal impact of electing officers.
Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities
Attachment: Ordinance 01-07
005
ORDINANCE NO.01-O7
AN ORDINANCE OF THE CITY OF AZUSA, CALIFORNIA,
AMENDING CHAPTER 2,ARTICLE V,DIVISION 5 OF THE
MUNICIPAL CODE REGARDING THE COMPOSITION,
OFFICERS,POWERS AND DUTIES OF THE UTILITY BOARD
THE CITY COUNCIL OF THE CITY OF AZUSA,CALIFORNIA,DOES
ORDAIN AS FOLLOWS:
SECTION 1. Chapter 2,Article V,Division 5,Section 2-413 of the Azusa
Municipal Code is hereby replaced,in its entirety,with the following:
"Sec.2-413 Composition. The board shall consist of five members. The city
council may choose by a majority vote of the council to appoint its five members
as the ex officio members of the board. All members shall be appointed by a
majority vote of the city council and shall serve pursuant to section 2-32.
Members of the board may be removed pursuant to section 2-32."
SECTION 2. Chapter 2,Article V,Division 5,Section 2-414,of the Azusa
Municipal Code is hereby replaced,in its entirety,with the following:
"Sec. 2-414 Powers and Duties. When the board members are acting in their
capacity as both members of the board and members of the city council,the board,
acting jointly with the city council,shall have the following powers and duties:
1. To establish electric power and water rates,capacity and connection
charges,meter charges and such other fees and charges as may be appropriate and
to generally regulate,control,manage,renew,repair and extend the water system
and the electric power generation and distribution system of the City of Azusa.
2. To make rules and regulations governing the conduct of the board and its
members and the employees of Azusa Light and Water.
3. To control and order the expenditure of all money received from the sale
or use of water and electric power for defraying of expenses,maintenance,repairs,
construction,extension and operation of the water and electric power system and
for any expenses for additions to same.
4. To supply Azusa Light and Water's customers with water and electric
power for any and all purposes and adopt all necessary rules and regulations for
the provision of service.
5. To enter into contracts with any public or private agency for the exchange
RVPUBVFF\618015
006
of water or electric power, provided that any such water or electric power so
exchanged by the city shall be repaid in full to the city within a reasonable period.
6. To hold, lease, acquire and purchase property in the name of the city.
7. To dispose of property surplus to the needs of the water or electric power
systems, provided that any sale, lease or disposal of its assets, including property
used in the generation of electrical energy, other than those unnecessary to the
operation of the water and electric power systems.
8. To engage such legal services as may be required or require the services of
the city attorney."
SECTION 3. Chapter 2, Article V, Division 5, Section 2-415 of the Azusa
Municipal Code is hereby replaced, in its entirety, with the following:
"Sec. 2-415 Chairperson,Vice Chairperson and Secretary The board shall elect
one of its members as chairperson, one as vice chairperson, and one as secretary.
Each of these three (3)board officers shall hold office for one (1) year and until
their successors are appointed. Initially, officers shall be selected no later than the
second meeting of the board following its appointment. Subsequent selection of
officers shall occur no later than the second meeting following the selection of the
mayor pro tern of the city council. The secretary may delegate to the city clerk
duties such as making tape or other recordings of meetings of the board and
developing draft Minutes of such meetings for consideration and possible
approval by the board."
SECTION 4. Chapter 2,Article V, Division 5, Section 2-418 of the Azusa
Municipal Code is hereby replaced, in its entirety, with the following:
"Sec. 2-418 Budget. While the board members are acting in their capacity as
both members of the board and members of the city council, the board shall
initially adopt a budget for Azusa Light and Water within four months of its first
meeting, and thereafter shall annually adopt a budget for Azusa Light and Water,
showing the expected expenses and revenues of the water and electric power
enterprise. The city manager will present the budget to the board for adoption.
The annual budget shall be incorporated into the budget of the city."
SECTION 5. Chapter 2, Article V, Division 5, Section 2-419 of the Azusa
Municipal Code is hereby replaced, in its entirety, with the following:
"Sec. 2-419 Loans. While the board members are acting in their capacity as
both members of the board and members of the city council, the board may
approve and authorize loans to or from the funds subject to its control from or to
RVPUBUFF\618015
007
city funds on a temporary basis."
SECTION 6. Severability. If any section, subsection, sentence, clause, phrase or
portion of this ordinance is for any reason deemed or held to be invalid or unconstitutional by the
decision of any court of competent jurisdiction, such decision shall not affect the validity of the
remaining portion of this ordinance. The city council hereby declares that it would have adopted
this ordinance and each section, subsection, sentence, clause, phrase or portion thereof,
irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or
other portions might subsequently be declared invalid or unconstitutional.
SECTION 7. This ordinance shall be in full force and effect thirty (30) days after
its passage.
SECTION 8. A summary of this ordinance shall be published in the manner
required by law.
PASSED, APPROVED AND ADOPTED.., a • - day of October, 2001 .
•
Cristina Cruz-Madrid
Mayor
ATTEST:
er
/ -
Vera Mendoza, City Clerk
RVPUBUFF\618015
008
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I, Vera Mendoza, City Clerk of the City of Azusa, do hereby certify that the
foregoing Ordinance No. 01-07 was duly introduced and placed upon its first reading at a
regular meeting of the City Council on the 17 day of September2001, and that thereafter, said
Ordinance was duly adopted and passed at a regular meeting of the City Council on the i day
of October , 2001,by the following vote, to wit:
AYES: COUNCILMEMBERS: HARDISON,STANFORD,ROCHA,CHAGNON,MADRID
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
,- A-2-ze:7Ve-e2i ._
Vera Mendoza,
City Clerk
APPROVED AS TO FORM:
OrYii.u. 0.6'14-1AL(Z-
Ci
y Attorney
RVPUBVFF\618015
009
EXCERPTS FROM ORDINANCE 01-03
Sec.2-416 Meetings. The board shall establish a regular time and place ofmeeting and
shall meet regularly at least once a month or more frequently as workload requires. The regular
place of meeting shall be in the Azusa Light and Water building. At least once every three(3)
months,or more frequently if the board desires,the board may meet in other places and locations
throughout the city for the purpose of encouraging interest and facilitating attendance by people in
the various neighborhoods in the city at the meetings.
Special meetings may be called by the chairperson or by three(3)members of the
board,upon personal notice being given to all members or written notice being mailed to each
member and received at least 36 hours prior to such meeting,unless such notice is waived in writing.
All board meetings,and agendas for such meetings,shall be publicized in advance
by written notice given to newspapers serving the city at least three(3)days prior to regular meetings
and at the same time as members are notified of special meetings. In addition,notice of meetings
shall be posted regularly at locations normally utilized by the city for such purposes.
All meetings shall be open to the public pursuant to the provisions of the Ralph M.
Brown Act. (Gov.Code§54950 et seq.) The board shall cause to be kept a proper record of its
proceedings. The records and files of the board and its officers shall include,but not be limited to,
all official correspondence,or copies thereof,to and from the board and its members received in their
official capacities and shall be kept open for inspection by the public at reasonable times in the office
of the city clerk.
Sec.2-417 TechnologicalSupport.The members of the board may receive technological
support in the form of hardware,software or reimbursement for telecommunications services used
in connection with serving on the board. Members shall also be reimbursed for any reasonable and
necessary expenses incurred by them in the performance of their duties as members of the board. •
010
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A7_US.A
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LIGHT G 'TATER
CITY OF AZUSA
MINUTES OF THE REGULAR MEETING
OF THE AZUSA UTILITY BOARD/CITY COUNCIL
MONDAY, MARCH 22, 2010 — 6:32 P.M.
The Utility Board/City Council of the City of Azusa met in regular session, at the above date and time, at the
Azusa Light and Water Conference Room, located at 729 N. Azusa Avenue, Azusa, California.
Chairman Macias called the meeting to order. Call to Order
ROLL CALL Roll Call
PRESENT: BOARD MEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA
ABSENT: BOARD MEMBERS: NONE
ALSO PRESENT: Also Present
City Attorney Ferre, City Manager Delach, Director of Utilities Morrow, Assistant City Manager Makshanoff,
Director of Customer Care and Solutions Vanca, Administrative Services Director— Chief Financial Officer
Kreimeier, Senior Management Analyst Yang, Assistant Director of Water Operations Anderson, Finance
Controller Michaels-Aguilar, Distribution Supervisor Kjar, Director of Recreation and Family Services Jacobs,
Library Director Johnson, Director of Information Technology Graf, Chief of Police Garcia, Assistant Director
of Economic and Community Development McNamara, Director of Public Works Haes, City Clerk Mendoza,
Deputy City Clerk Toscano.
PUBLIC PARTICIPATION Pub Part
Mr. George Gomez addressed the Board Members and alleged that there are improprieties in the building and G. Gomez
water departments; he requested an investigation and provided his contact information. Comments
UTILITIES DIRECTOR COMMENTS Dir Comments
Director of Utilities Morrow provided updates on the following items: (1) Proposition 16, the ballot initiative Dir of Util
for June 8th ballot, being funded by PG&E. (2) Ballot initiative being funded by two oil companies for G. Morrow
November ballot which will stop implementation of AB 32, requiring all sectors to get back to 1990 Asst. Dir Wtr
greenhouse gas levels by 2020 and will ask to stay the process until the unemployment levels goes down to Operations
5.5%. (3) EPA Endangerment finding on greenhouse gases. EPA has come out that they are not going to C. Anderson
regulate greenhouse gases for power plants until 2011 at the earliest. (4) Assistant Director of Water
Operations Anderson provided an update on the City's water supply stating that the canyon basin is filling up,
water is going into the river by MWD, water is coming down the river and the spreading grounds is getting
full.
011
UTILITY BOARD MEMBER COMMENTS Brd Mbr Cmts
Board Member Rocha asked if the Board is going to continue with off site meetings. Discussion was held Off site
regarding the subject and the upcoming ICSC meeting and it was consensus of the Board Members to look into meetings
the policy regarding off site meetings.
The CONSENT CALENDAR consisting of Items D-1 through D-4, was approved by motion of Board Consent Cal
Member Carrillo,seconded by Board Member Gonzales and unanimously carried. Board Members Hanks and D-1 -4
Macias abstained from the January meeting and Board Members Hanks and Rocha abstained from the Approved
February meeting.
1. The minutes of the regular meeting of January 25, 2010, were approved. Board Member Hanks and Minutes
Macias abstained as they were absent from that meeting. Appvd Jan
2. The minutes of the regular meeting of February 22, 2010 were approved. Board Member Hanks and Minutes
Rocha abstained as they were absent from that meeting. Appvd Feb
3. Approval was given for the selection of Applied Engineering Concept(AEC)to perform maintenance on AEC Maint
five Square D outdoor vacuum circuit breakers at the Azusa Substation at a cost not-to-exceed$11,900. 5 Vac Cir
4. Approval was given for the adoption of the Azusa Light&Water Rubber Glove Program Manual dated Rubber Glove
January 2010 as per the recently adopted International Brotherhood of Electrical Workers (IBEW) Program
Memorandum of Understanding.
Distribution Supervisor Kjar displayed the Rubber Glove that will be utilized in the"rubber gloving"program. D. Kjar
He stated that they are class II good for 20 thousand volts and responded to question posed. Board Member Rubber Gloves
Gonzales modeled the gloves for Board Members and audience.
SCHEDULED ITEMS Sched Items
Director of Customer Care and Solutions Vanca presented the request for approval to award contract for K. Vanca
Walk-In cash payment centers item stating that the program is in response to residents wanting to make Comments
payments on the weekend. They researched the subject and found six local businesses who would be Contract IPP
interested in being cash payment centers. She responded to questions posed. Moved by Board Member Of American
Hanks, seconded by Board Member Carrillo and unanimously carried to approve awarding of a three-year Cash pmt
contract with a two-year renewal option to IPP of America, Inc. for walk-in cash payment centers.
STAFF REPORTS/COMMUNICATIONS Staff Rpts
Director of Utilities Morrow provided an update on the Lodi Energy Center stating that CEC is expected to G. Morrow
issue a construction license for the project and next steps involve Participant approval of the CEQA work Lodi Energy
performed by the CEC and a Power Sales Agreement and a Project Management&Operating Agreement. Center
Director of Utilities Morrow presented the Quarterly Fuel Cost Adjustment for San Juan Resource stating that G. Morrow
staff recommends no Fuel Cost Adjustment be assessed for period of April 1,2010 through June 30,2010,due Quarterly FCA
to a planned maintenance outage; FCA credits will be carried over to offset the foreseeable San Juan FCA San Juan
charges next month.
Moved by Board Member Carrillo,seconded by Board Member Gonzales and unanimously carried to adjourn. Adjourn
TIME OF ADJOURNMENT: 7:12 P.M.
SECRETARY
NEXT RESOLUTION NO. 10-C20.
012
E . a
AZUSA
r.ur S werr►
CON T CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF HE • USA UTILITY
BOARD AND AZUSA CITY COUNCIL
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE
dimPrair
DATE: APRIL 26, 2010
SUBJECT: APPROVAL OF NOTICE OF COMPLETION -PROJECT WV-263, WATER
MAIN CEMENT MORTAR LINING PROJECT AND ADDITIONAL TIME TO
COMPLETE THE PROJECT
RECOMMENDATION
It is recommended that the Utility Board/City Council approve the addition of 55 calendar days
to the Time of Completion, accept Project WV-263, and direct the City Clerk's Office to execute
the Notice of Completion and have the same recorded at the Office of the Los Angeles County
Recorder.
BACKGROUND
The Water Division has a program of replacing water mains that are experiencing problems with
leaks and that are, for various reasons, experiencing flow and pressure problems. Instead of
replacing the water mains, in its first large scale water main relining project, the Water Division
requested contractors who do cement mortar relining of water pipelines to submit bids for this
relining project. Two bids,both from responsible contractors, were received.
At its regular meeting held on June 22, 2009, the City Council approved the award of contract
for pipeline cement mortar lining services for approximately 30,000 linear feet of pipeline to J.
Fletcher Creamer & Son, Inc. of Sylmar, California for a bid amount of $1,198,103.50.
Completion date for all work was February 27, 2010. Subsequently, at its February 10, 2010,
regular meeting the Utility Board approved a Change Order in the amount of$290,000 for the
addition of 29 access holes to J. Fletcher Creamer's contract increasing the total contract to
$1,488,103.50.
Due to the addition of 29 extra access holes and the additional related work, and additional time
spent by J. Fletcher Creamer's crew waiting for the installation of a line valve by the Water
Crew, an additional 55 calendar days is requested by the contractor to adjust the contract
completion date to April 23, 2010.
0r3
Notice of Completion for WV-263
April 26, 2010
Page 2
FISCAL IMPACT
The fiscal impact of approving Notice of Completion involves the return of $140,474.70
currently held by the City as retainage on this project following the statutory 35 day waiting
period. The addition of 55 calendar days to the time of completion has no fiscal impact.
Prepared by: Chet F. Anderson, P.E., Assistant Director, Water Operations
Attachment: Notice of Completion
014
RECORDING REQUESTED BY
City of Azusa
AND WHEN RECORDED MAIL TO:
NAME Azusa City Clerk
STREET
ADDRESS 213 E.Foothill Blvd.
CITY,STATE& Azusa,CA 91702
ZIP CODE
L.
NOTICE OF COMPLETION
Notice pursuant to Civil Code Section 3093,must be filed within 10 days after completion.(See reverse side for Complete requirements.)
Notice is hereby given that:
1. The undersigned is owner or corporate officer of the owner of the interest or estate stated below in the property hereinafter described:
2. The full name of the owner is The City of Azusa
3. The full address of the owner is 729 N. Azusa Avenue, Azusa, CA 91702
4. The nature of the interest or estate of the owner is:In fee.
(IF OTHER THAN FEE,STRIKE IN FEE AND INSERT,FOR EXAMPLE,PURCHASER UNDER CONTRACT OF PURCHASE,OR LESSEE)
5. The full names and full addresses of all persons,if any,who hold title with the undersigned as joint tenants or as tenants in common are:
NAMES ADDRESSES
None
6. The full names and full addresses of the predecessors in interest of the undersigned,if the property was transferred subsequent to the commencement of
the work or improvements herein referred to:
NAMES ADDRESSES
None
7. A work of improvement on the property hereinafter described was completed on April 23, 2010. The work done was:30,000 linear ft of
Cement Mortar Pipeline Lining Various locations in Azusa Light& Water Water System-Project W-263_.
8. The name of the contractor,if any,for such work of improvement was
J. Fletcher Creamer& Sons Inc.,12874 San Fernando Rd., Sylmar,CA 91342 June 22, 2009
(IF NO CONTRACTOR FOR WORK OF IMPROVEMENT AS A WHOLE,INSERT NONE) (DATE OF CONTRACT)
9. The property on which said work of improvement was completed is in the City of Azusa,County of Los Angeles,and State of CA;and is described as
follows:
Cement Mortar Pipeline Lining Various locations in Azusa Light& Water Water System—Project W-263.
10. The street address of said property is None
Joseph R. Rocha,Mayor
Dated:
(SIGNATURE OF OWNER OR CORPORATE OFFICER OF OWNER NAMED IN PARAGRAPH 2 OR HIS AGENT)
VERIFICATION
I,the undersigned,say:I am the person who signed the foregoing notice. I have read said notice of completion and know its contents,and the facts stated
therein are true of my own knowledge.
I declare under penalty of perjury that the foregoing is true and correct.
Executed at Azusa,California,this day of April, 2010.
Joseph R. Rocha, (SIGNATURE)
015
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AZLJ4A.
aur a v.arro
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE :ZUSA UTILITY
BOARD
'Pf
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 26, 2010
SUBJECT: AUTHORIZATION TO ENTER INTO A LOCAL GOVERNMENT MATCH
PROGRAM CONTRACT (#ML08030) AND SECURE A $25,000 FUNDING
GRANT FOR CLEAN TRANSPORTATION VEHICLES.
RECOMMENDATION
It is recommended that the Utility Board: (1) approve the South Coast Air Quality Management
District (AQMD) Local Government Match Program Contract; and (2) authorize the Director of
Utilities to execute the contract subject to review by utility's legal counsel.
BACKGROUND
In January 2009, the City of Azusa Public Works Department applied for clean transportation
matching grant funding from the AQMD for the expressed purpose of purchasing a street
sweeping vehicle that will help reduce air pollution, pursuant to the provisions contained in the
California Clean Air Act.
Last year, the Public Works Department deferred the purchase of the street sweeper, and elected
to forego the grant funding when it was determined that the intended street sweeper was no
longer needed due to the use of outside contract services.
Azusa Light & Water inquired as to whether the match grant funding could be modified,
substituted and applied to a qualified purchase of another vehicle by other City departments. The
response was affirmative.
Azusa Light & Water purchased a heavy duty compressed natural gas (CNG) fueled aerial truck
for use by electric field personnel which qualified for the AQMD grant.
016
Local Government Grant
April 26, 2010
Page 2
Staff is recommending approval of the grant contract and is seeking Utility Board's authorization
to enter into, sign and execute the matching grant funding contract in order to secure the $25,000
grant.
FISCAL IMPACT
Approval of the contract will enable Azusa Light&Water to secure the grant which will be used
to offset the purchase cost of the aerial truck.
Prepared by: Dan Kjar, Electric Operations Supervisor
Attachment: AQMD Contract
017
CD
South Coast 41! Contract No. ML08030
Mean Transportation
Funding from the MSRC
Air Quality Management District ° •w °°� •°°
AQ r'
LOCAL GOVERNMENT MATCH PROGRAM CONTRACT
1. PARTIES - The parties to this Contract are the South Coast Air Quality Management District (hereinafter
referred to as"AQMD") whose address is 21865 Copley Drive, Diamond Bar, California 91765-4178, and the
City of Azusa (hereinafter referred to as "CONTRACTOR") whose address is 213 East Foothill Boulevard,
Azusa, California 91702,
2. RECITALS
A. AQMD is the local agency with primary responsibility for regulating stationary source air pollution within
the geographical boundaries of the South Coast Air Quality Management District in the State of
California (State). AQMD is authorized under State Health & Safety Code Section 44225 (Assembly Bill
(AB) 2766) to levy a fee on motor vehicles for the purpose of reducing air pollution from such vehicles
and to implement the California Clean Air Act.
B. Under AB 2766 the AQMD'S Governing Board has authorized the imposition of the statutorily set motor
vehicle fee. By taking such action the State's Department of Motor Vehicles (DMV) is required to collect
such fee and remit it periodically to AQMD.
C. AB 2766 further mandates that thirty (30) percent of such vehicle registration fees be placed by AQMD
into a separate account for the sole purpose of implementing and monitoring programs to reduce air
pollution from motor vehicles.
D. AB 2766 creates a regional Mobile Source Air Pollution Reduction Review Committee (MSRC) to
develop a work program to fund projects from the separate account. Pursuant to approval of the work
program by AQMD'S Governing Board, AQMD Board authorized a contract with CONTRACTOR for
services described in Attachment 1 - Statement of Work, expressly incorporated herein by this reference
and made a part hereof of this Contract.
E. CONTRACTOR has met the requirements for receipt of AB 2766 Discretionary Funds as set forth in
CONTRACTOR's Local Government Match Program Application dated January 14, 2008.
3. DMV FEES - CONTRACTOR acknowledges that AQMD cannot guarantee the amount of fees to be
collected under AB 2766 will be sufficient to fund this Contract. CONTRACTOR further acknowledges that
AQMD'S receipt of funds is contingent on the timely remittance by State's DMV. AQMD assumes no
responsibility for the collection and remittance of motor vehicle registration fees by DMV to AQMD in a timely
manner.
4. AUDIT - Additionally, CONTRACTOR shall, at least once every two years, or within two years of the
termination of the Contract if the term is less than two years, be subject to an audit by AQMD or its
authorized representative to determine if the revenues received by CONTRACTOR were spent for the
reduction of pollution from Motor Vehicles pursuant to the Clean Air Act of 1988. AQMD shall coordinate
such audit through CONTRACTOR'S audit staff. If an amount is found to be inappropriately expended,
AQMD may withhold revenue from CONTRACTOR in the amount equal to the amount which was
inappropriately expended. Such withholding shall not be construed as AQMD'S sole remedy and shall not
relieve CONTRACTOR of its obligation to perform under the terms of this Contract,
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Contract No. ML08030
5. REPORTING - CONTRACTOR shall submit reports to AQMD as outlined in Attachment 1 - Statement of
Work. AQMD reserves the right to review, comment, and request changes to any report produced as a
result of this Contract.
6. TERM - The term of this Contract is for seventy (70) months from the date of execution by both parties,
unless terminated earlier as provided for in Clause 7 below entitled Termination, extended by amendment of
this Contract in writing, or unless all work is completed and a final report is submitted and approved by
AQMD prior to the termination date. No work shall commence prior to the Contract start date, except at
CONTRACTOR'S cost and risk, and no charges are authorized until this Contract is fully executed. Upon
written request and with adequate justification from CONTRACTOR, the MSRC Contracts Administrator may
extend the Contract up to an additional six months at no additional cost. Term extensions greater than six
months must be reviewed and approved by the MSRC.
7. TERMINATION - In the event any party fails to comply with any term or condition of this Contract, or fails to
provide the services in the manner agreed upon by the parties, including, but not limited to, the requirements
of Attachment 1 - Statement of Work, this shall constitute a material breach of the Contract. The
nonbreaching party shall have the sole and exclusive option either to notify the breaching party that it must
cure this breach within fifteen (15) days or provide written notification of its intention to terminate this
Contract with thirty (30) day's written notice. Notification shall be provided in the manner set forth in Clause
15 below, entitled - Notices. Termination shall not be the exclusive remedy of the nonbreaching party. The
nonbreaching party reserves the right to seek any and all remedies provided by law. AQMD will reimburse
CONTRACTOR for actual costs incurred (not to exceed the total Contract value), including all
noncancellable commitments incurred in performance of this Contract through the effective date of
termination for any reason other than breach.
8. EARLY TERMINATION —This Contract may be terminated early due to any of the following circumstances:
A. The vehicles or equipment become inoperable through mechanical failure of components or systems
directly related to the alternative fuel technology being utilized and such failure is not caused by
CONTRACTOR'S negligence, misuse, or malfeasance.
B. The fueling station becomes inoperable, and is either not technically able to be repaired, or is too costly
to repair, and such failure is not caused by CONTRACTOR's negligence, misuse, or malfeasance.
9. INSURANCE — CONTRACTOR represents that it is permissibly self-insured and will maintain such self-
insurance in accordance with applicable provisions of California law throughout the term of this Contract.
CONTRACTOR shall provide evidence of sufficient coverage during the term of this Contract and any
extensions thereof that meet or exceed the minimum requirements set forth by the South Coast AQMD
below. CONTRACTOR shall furnish certificate of self-insurance to: South Coast Air Quality Management
District, Attn: Risk Management Office. The AQMD Contract Number shall be included on the face of
the certificate. If CONTRACTOR fails to maintain the required insurance coverage, AQMD reserves the
right to terminate the Contract or purchase such additional insurance and bill CONTRACTOR or deduct the
cost thereof from any payments owed to CONTRACTOR. Minimum insurance coverages are as follows:
A. Worker's compensation insurance in accordance with either California or other state's
applicable statutory requirements.
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Contract No. ML08030
B. General Liability insurance with a limit of at least$1,000,000 per occurrence, and
$2,000,000 in general aggregate.
C. Automobile Liability insurance with limits of at least$100,000 per person and $300,000 per
accident for bodily injuries and $50,000 in property damage, or$1,000,000 combined
single limit for bodily injury or property damage.
10. INDEMNIFICATION — CONTRACTOR agrees to hold harmless, defend, and indemnify, AQMD, its officers,
employees, agents, representatives, and successors-in-interest against any and all loss, damage, cost, or
expenses which AQMD, its officers, employees, agents, representatives, and successors-in-interest may
incur or be required to pay by reason of any injury or property damage caused or incurred by
CONTRACTOR, its employees, subcontractors, or agents in the performance of this Contract.
11. PAYMENT
A. AQMD shall pay CONTRACTOR a Firm Fixed Price of Twenty Five Thousand Dollars ($25,000) upon
completion of the project on a reimbursement basis. Any funds not expended upon early contract
termination or contract completion shall revert to the AB 2766 Discretionary Fund. Payment of charges
shall be made by AQMD to CONTRACTOR within thirty (30) days after approval by AQMD of an
itemized invoice prepared and furnished by CONTRACTOR.
B. An invoice submitted to AQMD for payment must be prepared in duplicate, on company letterhead, and
list AQMD'S contract number, period covered by invoice, and CONTRACTOR'S social security number
or Employer Identification Number and submitted to:
South Coast Air Quality Management District
21865 Copley Drive
Diamond Bar, CA 91765-4178
Attn: Cynthia Ravenstein, MSRC Contract Administrator
C. No funds shall be paid out to CONTRACTOR pursuant to this Contract, until the project described in
Attachments 1 and 2 is completed and proof of completion is provided to AQMD. If the project
described in Attachments 1 and 2 is not completed and satisfactory proof of completion is not provided
to AQMD, no monies shall be due and payable to CONTRACTOR. Proof of completion shall include a
Final Report detailing the project goals and accomplishments.
D. Additional AB 2766 Discretionary Match Funds will not be available to fund project cost overruns. Any
project cost overruns must be funded from other than AB 2766 Discretionary Funds.
E. The Firm Fixed Price amount of this Contract shall not exceed the total AB 2766 Funds applied to the
project described in Attachments 1, 2, and 3 of this Contract.
F. If, at the completion of the Project described in Attachment 1, the vehicle expenditures and/or
infrastructure expenditures are less than the Total Cost amount(s) contained in Attachment 2, the actual
amount of AB 2766 Discretionary Funds reimbursed to CONTRACTOR shall be adjusted on a prorated
basis as described in Attachment 2.
G. CONTRACTOR must submit final invoice no later than ninety (90) days after the termination date of this
Contract or invoice may not be paid.
12. MOBILE SOURCE EMISSION REDUCTION CREDITS (MSERCs)
A. The MSRC has adopted a policy that no MSERCs resulting from AB 2766 Discretionary Funds may be
generated and/or sold.
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Contract No. ML08030
B. CONTRACTOR has the opportunity to generate MSERCs as a by-product of the project if a portion of the
air quality benefits attributable to the project resulted from other funding sources. These MSERCs,which
are issued by AQMD, are based upon the quantified vehicle miles traveled (VMT) by project vehicles or
other activity data as appropriate. Therefore, a portion of prospective MSERCs, generated as a result of
AB 2766 Funds, must be retired, The portion of prospective credits funded by the AB 2766 program, and
which are subject to retirement, shall be referred to as"AB 2766-MSERCs."
C. The determination of AB 2766-MSERC's is to be prorated based upon the AB 2766 program's
contribution to the cost associated with the air quality benefits, In the case where AB 2766 Discretionary
Funds are used to pay for the full differential cost of a new alternative fuel vehicle or for the retrofitting or
repowering of an existing vehicle, all MSERCs attributable to AB 2766 Discretionary Funds must be
retired. The determination of AB 2766-MSERCs for infrastructure and other ancillary items is to be
prorated based upon the AB 2766 program's contribution to the associated air quality benefits.
Determination of the project's overall cost will be on a case-by-case basis at the time an MSERC
application is submitted. AQMD staff, at the time an MSERC application is submitted, will calculate total
MSERCs and retire the AB 2766-MSERCs. CONTRACTOR would then receive the balance of the
MSERCs not associated with AB 2766 funding.
13. DISPLAY OF MSRC LOGO - CONTRACTOR agrees to permanently display one MSRC decal in a
prominent location on each vehicle purchased pursuant to this Contract. CONTRACTOR also agrees to
permanently display one MSRC decal in a prominent location on each fueling or charging station
constructed or upgraded pursuant to this Contract. Decals will be provided by MSRC upon notification that
subject fueling station equipment and/or vehicles are placed into service. Decals are approximately twelve
(12) inches in height and eighteen (18) inches in width (Note: a smaller decal may be provided if
CONTRACTOR demonstrates that application of the standard decal is not feasible). CONTRACTOR shall
maintain decal for life of vehicle or equipment subject to this Contract. Should any decal become damaged,
faded, or otherwise unreadable, CONTRACTOR shall request replacement decal from MSRC and apply new
decal in the same or other prominent location. MSRC shall not be responsible for damage to paint or other
vehicle surfaces arising from application or removal of decals. In addition, all promotional materials related to
the project, including, but not limited to, press kits, brochures and signs shall include the MSRC logo. Press
releases shall acknowledge MSRC financial support for the project.
14. ACCRUAL OF MILEAGE WITHIN SOUTH COAST AIR QUALITY DISTRICT— CONTRACTOR is obligated
to comply with the geographical restriction requirements as follows:
A. Each of the vehicles funded under this Contract must accrue at least 85% of its annual mileage or engine
hours of operation within the geographical boundaries of the South Coast Air Quality Management
District for a period of no less than five (5) years from the date the vehicle enters service (new vehicles)
or returns to service (repowered vehicles). Should CONTRACTOR deviate from or fail to comply with this
obligation, for reasons other than those stated in Clause 8.A., CONTRACTOR shall reimburse AQMD for
a prorated share of the funds provided for the vehicle as indicated in the table below:
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Contract No. ML08030
5 year Operations Obligation Percentage of MSRC Funds
Termination Occurs to be Reimbursed
Within Year 1 100%
Between Years 1-2 80%
Between Years 2-3 60%
Between Years 3-4 40%
Between Years 4-5 20%
After Year 5 0%
B. The appropriate reimbursable amount shall be paid to AQMD within sixty (60) days from the date the
vehicle ceases to operate in accordance with the geographical restriction. CONTRACTOR shall not be
responsible for any reimbursement to AQMD if the obligation is terminated as a result from one or more
reasons set forth in Clause 8.A.
C. Should CONTRACTOR sell, lease, transfer, assign or otherwise divest itself of the vehicles during the
five year period referred to in clause 14.A, notice shall be provided to AQMD no less than 30 days
preceding the sale, lease, transfer, or assignment is effectuated. The agreement effectuating the sale,
lease, transfer or assignment shall state that the AQMD is an intended third-party beneficiary of the
agreement and shall include the following requirement: the obligation to accrue mileage within the South
Coast Air Quality Management District shall be a continuing obligation of the subsequent purchaser,
lessee, transferee, successor in interest, heir or assign and shall remain in full force and effect until the
expiration of the five year operation period. This obligation shall be passed down to any subsequent
purchaser, lessee or transferee during this five year term and AQMD shall be an intended third-party
beneficiary of any subsequent agreement. Upon receiving notice of any subsequent sale, lease, transfer,
assignment or other divestiture, AQMD may elect to either require the reimbursement specified in Clause
14.A and 14.B, or require the subsequent purchaser, lessee, transferee or assignee to comply with the
continuing obligation to operate the vehicle for a period of no less than five (5) years from the date the
vehicle entered service (new vehicles) or re-service (re-powered vehicles). Notice of AQMD's election of
remedies shall be provided to CONTRACTOR and any subsequent purchaser, lessee, transferee or
assignee in a timely fashion.
15. NOTICES -Any notices from either party to the other shall be given in writing to the attention of the persons
listed below or to other such addresses or addressees as may hereafter be designated in writing for notices
by either party to the other. A notice shall be deemed received when delivered or three days after deposit in
the U.S. Mail, postage prepaid, whichever is earlier.
AQMD: South Coast Air Quality Management District
21865 Copley Drive
Diamond Bar, CA 91765-4178
Attn: Cynthia Ravenstein, MSRC Contract Administrator
CONTRACTOR: City of Azusa
P.O. Box 9500
Azusa, CA 91702
Attn: Dan Kjar
5
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Contract No. ML08030
16. EMPLOYEES OF CONTRACTOR
A. CONTRACTOR warrants that it will employ no subcontractor without written approval from AQMD.
CONTRACTOR shall be responsible for the cost of regular pay to its employees, as well as cost of
vacation, vacation replacements, sick leave, severance pay and pay for legal holidays.
B. CONTRACTOR shall also pay all federal and state payroll taxes for its employees and shall maintain
workers'compensation and liability insurance for each of its employees.
C. CONTRACTOR, its officers, employees, agents, or representatives shall in no sense be considered
employees or agents of AQMD, nor shall CONTRACTOR, its officers, employees, agents, or
representatives be entitled to or eligible to participate in any benefits, privileges, or plans, given or
extended by AQMD to its employees.
D. CONTRACTOR warrants that it has no interest and shall not acquire any interest, direct or indirect,
which would conflict in any manner or degree with the performance of services required to be performed
under this Contract. CONTRACTOR further represents that in performance of this Contract, no person
having any such interest shall be employed by CONTRACTOR or any subcontractor.
17. NON-DISCRIMINATION - In the performance of this Contract, CONTRACTOR shall not discriminate in
recruiting, hiring, promotion, demotion, or termination practices on the basis of race, religious creed, color,
national origin, ancestry, sex, age, or physical handicap and shall comply with the provisions of the
California Fair Employment & Housing Act (Government Code Section 12900, of seq.), the Federal Civil
Rights Act of 1964 (P.L. 88-352) and all amendments thereto, Executive Order No. 11246 (30 Federal
Register 12319), and all administrative rules and regulations issued pursuant to said Acts and Order.
CONTRACTOR shall likewise require each subcontractor to comply with this clause and shall include in
each such subcontract language similar to this clause.
18. COMPLIANCE WITH APPLICABLE LAWS - CONTRACTOR agrees to comply with all federal, state, and
local laws, ordinances, codes and regulations and orders of public authorities in the performance of this
Contract and to ensure that the provisions of this clause are included in all subcontracts.
19. ASSIGNMENT - The rights granted hereby may not be assigned, sold, licensed, or otherwise transferred by
either party without the prior written consent of the other, and any attempt by either party to do so shall be
void upon inception.
20. NON-EFFECT OF WAIVER— CONTRACTOR'S or AQMD'S failure to insist upon the performance of any or
all of the terms, covenants, or conditions of this Contract, or failure to exercise any rights or remedies
hereunder, shall not be construed as a waiver or relinquishment of the future performance of any such
terms, covenants, or conditions, or of the future exercise of such rights or remedies, unless otherwise
provided for herein.
21. ATTORNEYS' FEES - In the event any action (including arbitration) is filed in connection with the
enforcement or interpretation of this Contract, each party in said action shall pay its own attorneys' fees and
costs.
22. FORCE MAJEURE - Neither AQMD nor CONTRACTOR shall be liable or deemed to be in default for any
delay or failure in performance under this Contract or interruption of services resulting, directly or indirectly,
6
023
Contract No. ML08030
from acts of God, civil or military authority, acts of public enemy, war, strikes, labor disputes, shortages of
suitable parts, materials, labor or transportation, or any similar cause beyond the reasonable control of
AQMD or CONTRACTOR.
23. SEVERABILITY - In the event that any one or more of the provisions contained in this Contract shall for any
reason be held to be unenforceable in any respect by a court of competent jurisdiction, such holding shall
not affect any other provisions of this Contract, and the Contract shall then be construed as if such
unenforceable provisions are not a part hereof,
24. HEADINGS - Headings on the clauses of this Contract are for convenience and reference only, and the
words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation,
construction, or meaning of the provisions of this Contract.
25. DUPLICATE EXECUTION - This Contract is executed in duplicate. Each signed copy shall have the force
and effect of an original.
26. GOVERNING LAW - This Contract shall be construed and interpreted and the legal relations created
thereby shall be determined in accordance with the laws of the State of California. Venue for resolution of
any dispute shall be Los Angeles County, California,
27, PRECONTRACT COSTS - Any costs incurred by CONTRACTOR prior to CONTRACTOR receipt of a fully
executed Contract shall be incurred solely at the risk of the CONTRACTOR. In the event that a formal
Contract is not executed, neither the MSRC nor the AQMD shall be liable for any amounts expended in
anticipation of a formal Contract. If a formal Contract does result, precontract cost expenditures authorized
by the Contract will be reimbursed in accordance with the cost schedule and payment provision of the
Contract.
28. CHANGE TERMS - Changes to any part of this Contract must be requested in writing by CONTRACTOR,
submitted to AQMD and approved by MSRC in accordance with MSRC policies and procedures.
CONTRACTOR must make such request a minimum of 90 days prior to desired effective date of change. All
modifications to this Contract shall be in writing and signed by both parties.
29. ENTIRE CONTRACT - This Contract represents the entire agreement between the parties hereto related to
CONTRACTOR providing services to AQMD and there are no understandings, representations, or
warranties of any kind except as expressly set forth herein. No waiver, alteration, or modification of any of
the provisions herein shall be binding on any party unless in writing and signed by the party against whom
enforcement of such waiver, alteration, or modification is sought. The Statement of Work - Attachment 1,
The Payment Schedule - Attachment 2, and Supporting Documentation -Attachment 3, are incorporated by
reference herein and made a part hereof.
30. AUTHORITY - The signator hereto represents and warrants that he or she is authorized and empowered
and has the legal capacity to execute this Contract and to legally bind CONTRACTOR both in an operational
and financial capacity and that the requirements and obligations under this Contract are legally enforceable
and binding on CONTRACTOR.
7
024
Contract No. ML08030
IN WITNESS WHEREOF, the parties to this Contract have caused this Contract to be duly executed on their
behalf by their authorized representatives.
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT CITY OF AZUSA
By: By:
Dr.William A.Burke,Chairman,Governing Board Name:
Title:
Date: Date:
ATTEST:
Saundra McDaniel, Clerk of the Board
By:
APPROVED AS TO FORM:
Kurt R.Wiese, General Counsel
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Updated 22 October 2008
8 025
Attachment 1
Statement of Work
City of Azusa
Hereinafter Referred to as CONTRACTOR
Contract Number ML08030
Project Description
CONTRACTOR will purchase one heavy-duty vehicle as specified below.
Statement of Work
Vehicle
CONTRACTOR shall purchase one heavy-duty compressed natural gas (CNG) vehicle
as follows:
Vehicle Life Miles Per Year
Expectancy
Aerial truck, with gross vehicle weight
rating greater than 14,000 pounds, 9 years 9,000
equipped with dedicated CNG engine
Each model year 2006 or earlier engine must be certified to a low-emission or optional
NO, standard by the California Air Resources Board (CARB). Each model year 2007 or
later alternative fuel engine must have a CARB NO„ certification at least 30% lower than
the comparable diesel-fuel engine. AQMD staff shall be the final arbiters of
comparability between engines.
CONTRACTOR shall be reimbursed for vehicle according to the costs stated in
Attachment 2 — Payment Schedule.
Promotion
CONTRACTOR shall prepare and submit a proposed Public Outreach Plan to promote
the acquisition of the MSRC co-funded vehicles. Acceptable outreach may include, but
is not limited to, notices in CONTRACTOR mailings to residents, newspaper notices,
flyers, and information items at CONTRACTOR Board meetings and community events.
The Public Outreach Plan shall automatically be deemed approved 30 days following
receipt by AQMD staff, unless AQMD staff notify CONTRACTOR in writing of a Public
Outreach Plan deficiency. CONTRACTOR shall implement the approved Public
Outreach Plan in accordance with the Project Schedule below.
Project Schedule (based on date of Contract execution)
Task Completion
Order vehicle Month 4
Submit Public Outreach Plan Month 4
Take delivery and place vehicle in service Month 7
Implement Public Outreach Plan Month 9
Quarterly reports Months 4 and 7
Final Report Month 10
026
Attachment 1
Statement of Work — continued
City of Azusa
Hereinafter Referred to as CONTRACTOR
Contract Number ML08030
Hardware: CNG vehicle as listed above.
Reports
Quarterly Reports: Until subject vehicle is entered into service, CONTRACTOR shall
provide quarterly progress reports that summarize the project results to date including,
but not limited to: tasks completed, issues or problems encountered, resolutions
implemented, and progress to date. Progress reports that do not comply will be
returned to the CONTRACTOR as inadequate.
Final Report: A Final Report shall be submitted by the CONTRACTOR in the
format provided by AQMD staff. Report shall include, at a minimum: a) an executive
summary; and b) a detailed discussion of the results and conclusions at this project.
CONTRACTOR will identify any barriers encountered and solutions developed to
overcome the barriers, and impact of project on future alternative fuel projects.
In the event the CONTRACTOR files for bankruptcy or becomes insolvent or
discontinues this project, no items revert to the AQMD for disposition into the AB 2766
Discretionary Fund account.
2
027
Attachment 2
Payment Schedule
City of Azusa
Hereinafter Referred to as CONTRACTOR
Contract Number ML08030
Cost Breakdown
Maximum AB2766 Local Gov't
Purchase Discretionary Funds Total Cost
Category Funds payable Applied
under this
Contract
Heavy Duty
Alternative $25,000 $300,000 $325,000
Fuel Vehicles
CONTRACTOR shall be reimbursed according to the amounts stated above per vehicle
upon proof of vehicle delivery, vehicle acceptance, and placement of vehicle into
service. Documentation of the specific engine installed in the vehicle, including the
year, manufacturer, and model, must accompany each request for reimbursement.
If, at the completion of the Project, the expenditures are less than the Total Cost amount
above, the actual amount of AB 2766 Discretionary Funds reimbursed to
CONTRACTOR shall be adjusted on a prorated basis, so that the amount reimbursed to
CONTRACTOR shall not exceed the amount of local funds applied, up to a maximum of
$25,000 per heavy-duty vehicle.
3
028
Attachment 3
Supporting Documentation
City of Azusa
Hereinafter Referred to as CONTRACTOR
Contract Number ML08030
The supporting documents attached hereto as Attachment 3, represent obligations of
the CONTRACTOR. Nothing herein shall be construed as an assumption of duties or
obligations by the AQMD or granting any rights to third parties against the AQMD.
1. Proof of Insurance.
4
029
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AZLISA
CHT s Witifir
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 26, 2010
SUBJECT: ADOPTION OF AB 2021 COST EFFECTIVE ENERGY CONSERVATION
TARGETS
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council extend the previously adopted
annual program target of 0.89% for fiscal years 2011-2020 as prescribed in Assembly Bill 2021
and defined in Table 13 (see below) of the Ca1EERAM report.
BACKGROUND
California Assembly Bill 2021 (Levine), signed into law in September 2006, expanded upon
several of the energy efficiency polices in Senate Bill 1037 previously adopted by Azusa Light &
Water in September 2005. Among the many provisions of AB 2021 is a statewide commitment
to cost-effective and feasible energy efficiency, with the expectation that all utilities consider
energy efficiency measures before investing in any other resources to meet growing demand. In
particular, Section 3 of the statute requires publicly owned utilities to:
"On or before June 1, 2007, and by June 1 of every third year thereafter, each local publicly
owned electric utility shall identify all potentially achievable cost effective electricity
efficiency savings and shall establish annual targets for energy efficiency savings and demand
reduction for the next 10 year period."
In order to meet the triennial requirement for updating targets, California Municipal Utilities
Association (CMUA), in partnership with Northern California Power Authority (NCPA) and
Southern California Public Power Authority (SCPPA), initiated a collaborative framework for
the 36 Publicly Owned Utilities (POU's) in California to further analyze market potential and
update individual utility program targets. To that end, a consultant was hired to develop an
energy efficiency resource model for estimating efficiency savings potential.
The California POU Energy Efficiency Resource Assessment Model (Ca1EERAM) is an energy
efficiency potential model designed to estimate technical, economic, and market energy
030
AB 2021 Conservation Targets
April 26, 2010
Page 2
efficiency potential for a utility's service area. The model, developed by Navigant Consulting,
forecasts energy savings and demand reduction potential within the residential, commercial, and
industrial sectors for years 2011-2020 and is customized for each of the 36 POU's.
The Azusa Light & Water's preliminary annual program target for fiscal years 2011-2020 as
prescribed in Assembly Bill 2021 is estimated at 0.89% of forecasted MWh's of sales. As seen in
Table 13 of the Ca1EERAM report, of the 36 participating POU's, only 5 utilities have goals that
exceed those of Azusa Light & Water.
Table 13
Preliminary Annual Program Targets for 2011-2020
- Mnua Ta• taH -- ,:'•' -,--.'%of Sales
2011 2012 2013_" 2014" 2016 2016 2017 2018 2010 2020 10 yr Total forecast
Alameda 1,574 1,675 1,771 1,833 1,887 1,935 1,964 1,982 1,996 2,014 18,631 0.46%
Anaheim 24,264 22,542 26,296 32,291 37,785 36,956 34,802 32,568 30,339 28,238 306,081 1.12%
Azusa 2,068 1,904 2,071 2,367 2,591 2,736 2,738 2,715 2,692 2,669 24,551 0.89%
Banning 962 706 782 894 944 975 979 970 945 918 9,076 0.59%
Biggs 44 33 35 38 42 45 42 39 35 32 385 0.21%
Burbank 8,768 7,549 8,301 9,523 10,553 11,125 10,894 10,524 10,225 9,928 97,391 0.77%
Cotton 3,162 2,902 3,508 4,594 5,064 5,043 4,827 4,574 4,317 4,092 42,082 1.05%
Corona 166 167 190 227 256 288 312 335 358 381 2,678 0.34%
Glendale 11,060 11,520 11,280 11,320 11,380 11,430 11,490 11,550 11,620 11,680 114,330 1.00%
Gridley 75 75 75 87 98 107 111 114 117 120 979 0.23%
Healdsburg 420 420 420 515 557 603 614 617 617 614 5,396 0.52%
Hercules 75 74 86 102 113 122 130 137 145 153 1,137 0.52%
IID 19,743 16,480 18,381 21,281 24,147 26,614 27,674 28,234 28,576 28,910 240,041 0.56%
Industry - - - - - - -
Lassen 375 375 375 501 650 849 1,043 1,177 1,203 1,219 7,767 0.49%
Lodi 2,296 1,667 1,905 2,242 2,587 2,873 2,948 2,985 3,019 3,053 25,575 0.51%
Lompoc 517 336 395 459 544 630 708 760 776 785 5,911 0.40%
Merced 1,316 1,117 1,258 1,483 1,765 2,054 2,143 2,191 2,242 2,297 17,866 0.33%
Modesto 16,207 15,136 16,154 18,161 20,252 21,857 21,102 20,074 19,258 18,623 186,824 0.67%
Moreno Valley 274 219 234 260 288 304 292 276 261 247 2,655 0.30%
Needles 205 160 181 211 246 280 299 312 323 334 2,549 0.33%
Palo Alto 5,799 6,290 6,782 7,276 7,906 7,927 7,950 7,973 7,999 8,026 73,929 0.75%
Pasadena 14,500 14,500 14,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 166,000 1.23%
Pittsburg Power/Island 42 37 40 46 55 64 64 62 60 59 529 0.29%
Plumes Sierra 237 230 247 279 346 491 778 1,191 1,546 1,688 7,033 0.36%
Port of Oakland 406 420 424 430 437 488 523 529 533 541 4,731 0.53%
Rancho Cucamonga 46 49 55 65 74 85 93 101 110 118 796 0.12%
Redding 2,523 2,496 3,076 3,776 4,457 4,655 4,649 4,518 4,402 4,350 38,903 0.38%
Riverside 14,017 12,526 13,705 16,071 18,159 19,617 19,994 20,037 20,082 20,169 174,378 0.75%
Roseville 8,390 8,360 8,604 8,639 9,054 10,032 10,903 10,470 9,874 9,387 93,713 0.62%
Shasta Lake 300 300 300 713 833 934 1,016 1,073 1,108 1,143 7,719 0.29%
Silicon Valley Power 23,055 25,415 26,255 28,502 29,506 28,413 25,456 23,052 21,328 20,020 251,003 0.77%
Trinity 14 13 14 14 14 14 14 14 14 14 139 0.01%
Truckee Donner 1,978 1,640 1,706 1,727 1,762 2,017 2,257 2,317 2,214 2,263 19,880 1.13%
TID 12,900 12,644 13,829 15,846 17,814 19,269 19,075 18,675 18,379 18,172 166,603 0.73%
Ukiah 250 250 310 341 375 413 454 499 549 604 4,045 0.33%
Vernon 8,020 7,863 7,992 8,655 9,766 10,716 9,468 8,073 6,962 6,087 83,601 0.63%
Total 186,049 178,089 191,538 218,268 239,807 249,462 245,305 238,221 231,723 226,444 2,204,905
Azusa Light & Water will continue to focus on the most cost effective conservation measures
that will continue to produce a cost savings by offsetting the cost of purchasing power during
peak demand periods.
FISCAL IMPACT
None. The cost of meeting the energy efficiency targets is collected and paid for through the
state-mandated Public Benefits charge.
Prepared by: Paul Reid - Business Development/Public Benefit Programs Coordinator
031
AZUSA
FIIT A bvarrp
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF T. ' AZUSA
UTILITY BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE �de
/
DATE: APRIL 26, 2010
SUBJECT: APPROVE THE SELECTION OF SKILLS INCORPORATED FOR
PROVIDING RUBBER GLOVE TRAINING TO ELECTRIC
EMPLOYEES AND AUTHORIZE CITY MANAGER TO SIGN
PROFESSIONAL SERVICES AGREEMENT (PSA)
RECOMMENDATION
It is recommended that the Utility Board (1) Approve the selection of Skills Incorporated
for providing rubber glove training to our electric field personnel; and (2) Authorize the
City Manager to enter into and sign the Professional Services Agreement (PSA) in an
amount not to exceed $30,000., subject to review and approval of contract terms and
conditions by legal counsel.
BACKGROUND
During the regular meeting held on March 22, 2010, the Azusa Utility Board adopted the
Electric Division Rubber Glove Program Manual pursuant to the IBEW MOU. As
envisioned in the program manual, the employees within specified job classifications
would undergo rubber glove training, consisting of at least 4 days training in the use of
rubber gloves. Thereafter, trained electric employees will be certified to perform live line
work using rubber gloves under certain specified conditions.
Staff solicited informal proposals from local vendors to provide in-house rubber glove
training and found Skills Incorporated, a company specializing in lineman maintenance
training for electric utility companies. Skills Incorporated is the training company of
choice by utilities in this region, and no other vendor is known that will provide on
premise training. Thus, pursuant to AMC Section 2-519-d, staff is recommending Skills
032
Rubber Glove Training
April 26, 2010
Page 2
Inc. to provide the training. Moreover, in-house training is cost effective as there will be
no travel expenses and other associated costs for off site training, and employees will
remain in the area in case of emergency. Lastly, upon completion of training and for
record purposes, Skills Inc. will furnish the Certificates of Completion, to the employees
who passed the required training in the safe use of rubber gloves.
FISCAL IMPACT
This cost of the rubber glove training will be paid for from the approved Electric Division
Operating budget for Fiscal Year 2009-10 using account 33-40-735-880-6220.
Prepared by: Dan Kjar, Electric Operations Supervisor
Attachment: Skills Inc. Proposal
033
Skills, Inc.
340 N. Riverside Avenue (909) 820-0600
Rialto, CA 92376 FAX 820-0603
April 8,2010
Azusa Light and Water
PO Box 9500
Azusa,CA 91702
Attn: Mr.Dan Kjar—Operations Supervisor for Light Department
Electric Building,1020 W 10th Street
Via e mail-dkjar@ci.azusa.ca.us
Dear Mr.Kjar,
Skills,Inc.proposes to provide services for Insulate/Isolate Rubber Glove Training to the City of
Azusa Light and Water Department.
Each of our instructors has over 10 years of lineman experience with special knowledge and
experience on energized lines and high voltage rubber gloving. We are currently providing
lineman maintenance training for So California Edison,Anaheim,Glendale and Burbank.
Our 2010 billing rates:
Instructor $112.00/hour, $896.00 per day
Initial Training Session(4 day class)
To teach 2 employees at a time:1 Instructor 4 days @ 896=$3,584.00
To teach 4 employees at a time a 2nd instructor is needed for 3 days
Total 7 instructor days @ 896=$6,272.00
If you have 11 employees to train it will require 4 Sessions x 6,272=$25,088.00
To schedule classes please call Lonnie Osborn at 909-633-0224.
Sincerely,
Gary Johnson
Skills,Inc.
034
EgriaPe
r s.
_
A Z SA rf
CMT i WOE/.
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZU A UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 26, 2010
SUBJECT: 2010 REFUSE RATE ADJUSTMENT AND PUBLIC HEARING NOTICE
RECOMMENDATION
It is recommended that the Azusa Utility Board: (1) set public hearing for refuse rate adjustment
for June 21, 2010; and (2) authorize mailing of public notice to property owners.
BACKGROUND
The City of Azusa has an Exclusive Franchise Agreement with Athens Services for refuse
collection and recycling services and is obligated to adjust service rates annually by July 1 .
Following summarizes proposed rate changes for July 1, 2010. A Customer Service charge is
also proposed for your consideration and is shown below.
FY 2009-10 FY 2010-11 Customer
Service Moly Rate Moly Rate % Svc Charge Total
Single Family $22.38 $21 .94 -1 .9% $0.67 $22.61 1%
Multifamily $18.44 $19.31 4.72% $0.67 $19.98 8.4%
3 Cubic Yard Bin $106.67 $111 .68 4.70% - - -
Rate adjustments are made based on changes in: (1) the Consumer Price Index (CPI); (2) per ton
rates at the Puente Hills Landfill; and (3) amount of tonnage collected from Azusa residents and
businesses. For purposes of the annual rate adjustment, refuse rates are broken down into four
rate components, plus an additional amount apportioned to single family and multifamily
customers to offset uncollectable accounts. Each rate component is described below along with
the proposed Customer Services charge for residential services.
(1) Service Fees. These are used to pay for trucks, personnel, and operating expenses such as
diesel fuel. Service fees or collection costs are adjusted by the consumer price index (CPI)
change from January to January. The CPI change from 2009 to 2010 went up slightly by
1 .76%.
035
Refuse Rate Adjustment
April 26, 2010
Page 2
(2) Processing and Disposal Charges. These are used to pay for the cost to process waste through
Athens' material recovery facility (MRF), as well as the cost to dispose of yard waste and
solid waste at the Puente Hills landfill. The non-landfill portion of the per ton MRF rate is
adjusted by change in CPI, and the landfill charges are passed on to ratepayers on a dollar-
for-dollar basis such that Athens does not profit on changes in landfill costs or fluctuations in
tonnage amounts. Landfill costs are expected to increase next year from $38.26 to $42.66
per ton. The Agreement requires that costs and revenues be tracked and"trued-up" each year,
rather than just applying the CPI to a particular rate component. Following shows processing
and disposal costs and revenue from rates by customer class for 2009-2010:
Single Family Barrel Customers
MRF+Landfill Costs $852,161.86
Yard Waste $52,036.04
Total: $904,197.90
Revenues to Athens ($926,389.00)
Revenue Excess: ($22,191.10)
Prior Yr Excess: ($91,264.08)
Credit to Customers: ($113,455.18)
Multifamily Bin Customers
MRF+Landfill Costs $557,054.39
Revenues to Athens ($531,336.30)
Revenue Shortfall: $25,718.09
Prior Year Excess: ($26,255.89)
Credit to Customers: ($537.80)
Commercial Customers
MRF+Landfill Costs $808,906.96
Revenues to Athens ($768,817.53)
Revenue Shortfall: $40,089.44
Prior Yr Excess: ($62,364.32)
Credit to Customers: ($22,304.88)
Tracking above costs and revenues helped save rate payers $136,297.86 through this rate
adjustment.
(3) Franchise Fees. These fees represent City fees that are used to administer the contract and
pay for wear and tear on City streets caused by disposal trucks. The franchise fee represents
10% of the sum of the service fee, disposal/processing fee, and franchise fee itself for each
customer class.
(4) AB 939 Fees. These fees are used by the City to pay for costs related to the City's
compliance effort with the State's recycling mandate, AB 939. This fee has not been
adjusted for next year.
036
Refuse Rate Adjustment
April 26, 2010
Page 3
(5) Uncollectible Accounts. The Agreement requires the City to pay all amounts billed by the
Utilities Department to Athens Services. Any bad debts or uncollectible accounts need to be
made up by an uncollectible accounts service charge. In FY 2010-2011, uncollectible
account costs are expected to be about$40,000.
(6) Customer Service Billing Fee. The City's contract requires that the City bill for residential
refuse services, however, the cost incurred by Azusa Light & Water for billing services has
not been included in the refuse rate schedules to date. To address this issue, staff have
reviewed costs associated with customer support and billing functions, and are proposing that
a monthly charge of$0.67 per household be added to the rate schedule based on following:
The cost base for customer support and billing services for water, electric, refuse and
sewer services is about $2.5 million annually based on the proposed FY 2010-11 budget.
Of the 63,706 residential and commercial services billed last year, refuse services
represented about 18% of the total customers. A proportionate cost allocation of
customer service to refuse services for customer services and billing would equate to
about$438,000 per year. However, Athens also provides customer service and so cost
apportionment should largely be based on billing services and call referral costs.
Therefore, staff proposes to discount the cost for refuse customer support and billing by
75%, which equates to $109,500 per year or$0.67 per household per month.
FISCAL IMPACT
The cost to print public notices will be about $2,000 plus postage. The fiscal impacts of
proposed rate adjustments will vary by customer class, from 1% for single family residents or
$0.23 per month, to 8.4% for multifamily residents or$1.54 per month. Commercial rates will
increase 4.7% or$5.01 per month for most common service level, a 3-cubic yard bin serviced
one time per week.
Prepared by:
Cary Kalscheuer, Assistant to the Director of Utilities
Liza Cawte, Sr. Administrative Technician
Attachment: June 21, 2010 Refuse Rate Adjustment Public Hearing Notice
037
ofq
NOTICE OF PUBLICE OF PUBiow
REFUSE RATE ADJUSTMENT
c4tiro ' JUNE 21, 2010
AZUSA A 1 t. S ;
NOTICE IS HEREBY GIVEN that pursuant to Article XIIID of the California Constitution,the City Council of the City of Azusa will hold a
PUBLIC HEARING to consider an increase in rates for trash collection and recycling services effective for bills rendered on or after July1,
2010. This notice is being mailed to the owner of record of each identified parcel subject to the trash rate increase.
Said PUBLIC HEARING will be held at the regular meeting of the City Council of the City of Azusa on MONDAY, JUNE 21, 2010, at 7:30
P.M.,or as soon as possible thereafter, in the Civic Auditorium,213 E.Foothill Blvd.,Azusa.
The City Council will be considering adoption of a trash collection and recycling rate schedule effective from July 1,2010 through June 30,
2011, as set forth below for typical residential and commercial services. Read below for more information.
July-June July-June
2009-2010 2010-2011
2010-2011
SERVICES Current Proposed Change
Total Monthly Total Monthly
Rate Rate % $
Residential Barrel
Service $22.38 $22.61 1.03% $0.23
Multifamily Bin $18.44 $19.98 8.35% $1.98
Commercial Bins
Size-3 Cubic Yards
1 Day/Week $106.67 $111.68 4.70% $5.01
2 Days/Week $158.77 $167.83 5.71% $9.06
3 Days/Week $210.94 $224.03 6.21% $13.09
4 Days/Week $262.94 $280.07 6.51% $17.13
5 Days/Week $315.19 $336.39 6.73% $21.20
Size-2 Cubic Yards
1 Day/Week $94.95 $98.71 3.95% $3.76
2 Days/Week $137.24 $143.83 4.80% $6.59
3 Days/Week $179.33 $188.76 5.26% $9.43
4 Days/Week $222.42 $234.68 5.51% $12.26
5 Days/Week $264.26 $279.36 5.71% $15.10
Size-1.5 Cubic Yards
1 Day/Week $72.42 $75.25 3.91% $2.83
2 Days/Week $121.36 $126.62 4.33% $5.26
Further details regarding the bases and reasons for the proposed trash rate changes are set forth in a report available at the City Clerk's
office at 213 E. Foothill Boulevard in Azusa which may be reviewed by any interested person. Proceeds from this rate adjustment will be
used to pay Athens Services for trash collection and recycling services. Recycling services include processing all waste collected in Azusa
through a material recovery facility where all glass, plastics, metal and paper products are removed and recycled. Other portions of the
trash rate include City fees, such as 10% franchise fee, AB 939 or Recycling fee, billing fee, and fee to make up for non-payments. These
fees are used by the City to administer the trash hauling contract, comply with the California Integrated Waste Management Act of 1989,
and cover customer service and billing costs.
At the time of the public hearing, the City Council will hear and consider all protests and objections concerning the proposed trash rate
adjustments. Upon conclusion of the hearing,the City Council will consider, and may adopt,the proposed trash rate adjustments. If written
protests against the proposed rate adjustments and fee schedule are not presented by a majority of owners of the identified parcels upon
which the rates and fee schedule are proposed to be imposed,the City Council will be authorized to impose the rates and fee schedule.
Comments or protests to the proposed trash rate adjustments must be delivered in writing to the City Clerk, City of Azusa,213 East Foothill
Boulevard,Azusa, CA 91702, prior to the public hearing on June 21, 2010. Written protests may also be submitted at the public hearing so
long as they are received prior to the conclusion of the public hearing. Please include your service address(es) or parcel number(s), your
name and contact telephone number in your written protest.
If you have any questions about this notice or proposed changes to trash rates, please call Customer Service at(626)812-5225. Copies of
the proposed report and resolution for adoption of the trash rate changes are available by calling the above-mentioned telephone number or
at http://www.ci.azusa.ca.us/index.aspx?nid=137. Thank you. 038
Jun-Jul Jul-Jun Jun-Jul Jul-Jun Jun-Jul Jun-Jul Jun-Jul Jul-Jun Jun-Jul Jun-Jul Jun-Jul Jun-Jul
Year 2009-10 2010-2011 2009-10 2010-2011 2009-10 2010-2011 2009-10 2010-2011 2009-2010 2010-2011 2009-10 2010-2011 2010-2011
New New New New Uncollectible New
Service Processing/ Service Service Franchise Franchise AB 939 AB 939 Uncollectible Accounts Total Total % $
Disposal Fee Disposal Fee Fee Fee Fee Fee Fee Fee Accounts +CS Charge Rate Rate Change Change
Single Family
(Trash 8 Green) 9.76 9.20 9.46 9.63 2.15 2.10 0.75 0.75 0.26 0.93 22.38 22.61 1.03% $0.23
Multifamily Bin 7.58 8.22 8.21 8.35 1.76 1.85 0.67 0.67 0.22 0.89 18.44 19.98 8.35% $1.54
Commercial Bins
3 Cubic Yard
1 Day/Week 36.11 39.62 56.59 57.59 10.30 10.80 3.67 3.67 106.67 111.68 4.70% $5.01
2 Day//Week 72.22 79.24 64.06 65.19 15.14 16.05 7.35 7.35 158.77 167.83 5.71% $9.06
3 Day//Week 108.34 118.86 71.59 72.85 19.99 21.30 11.02 11.02 210.94 224.03 6.21% $13.09
4 Days/Week 144.45 158.48 78.98 80.37 24.83 26.54 14.68 14.68 262.94 280.07 6.51% $17.13
5 Days/Week 180.56 198.10 86.60 88.13 29.67 31.80 18.36 18.36 315.19 336.39 6.73% $21.20
2 Cubic Yard
1 Day/Week 24.07 26.41 59.18 60.22 9.25 9.63 2.45 2.45 94.95 98.71 3.95% $3.76
2 Day//Week 48.15 52.83 70.95 72.20 13.23 13.89 4.91 4.91 137.24 143.83 4.80% $6.59
3 Days/Week 72.22 79.24 82.56 84.02 17.19 18.14 7.36 7.36 179.33 188.76 5.26% $9.43
4 Day//Week 96.30 105.65 95.05 96.73 21.26 22.49 9.81 9.81 222.42 234.68 5.51% $12.26
5 Days/Week 120.37 132.07 106.46 108.34 25.19 26.71 12.24 12.24 264.26 279.36 5.71% $15.10
1.5 Cubic Yard
1 Day/Week 18.06 19.81 45.47 46.27 7.06 7.34 1.83 1.83 72.42 75.25 3.91% $2.83
2 Days/Week 36.11 39.62 69.82 71.05 11.77 12.29 3.66 3.66 121.36 126.62 4.33% $5.26
3 Days/Week 54.17 59.43 93.53 95.18 16.41 17.18 5.49 5.49 169.60 177.28 4.53% $7.68
Saturday Service 36.11 39.62 56.59 57.59 10.30 10.80 3.67 3.67 106.67 111.68 4.70% $5.01
Locked I Bin Change Out n/a n/a 59.65 60.70 6.63 6.74 n/a n/a 66.28 67.44 1.76% $1.17
Ongoing Service n/a n/a 6.63 6.75 0.74 0.75 n/a n/a 7.37 7.50 1.81% $0.13
Temp Bins 8.34 9.15 89.50 91.08 10.87 11.14 0.84 0.84 109.55 112.21 2.43% $2.66
X-Tra DL Same Day 8.34 9.15 36.77 37.42 5.01 5.18 0.84 0.84 50.96 52.59 3.19% $1.63
Different Day 8.34 9.15 56.09 57.08 7.16 7.36 0.84 0.84 72.43 74.43 2.76% $2.00
Commercial Barrels 7.58 8.22 18.21 18.53 2.87 2.97 0.67 0.67 29.33 30.39 3.62% $1.06
Roll Offs Ton Based Ton Based 246.48 250.83 Ton Based Ton Based 7.11 7.11_ Ton Based Ton Based Ton Based Ton Based
Notes: ,
1 Uncollectible Accts Charge includes Customer Service(CS)Billing Charge of$0.67 for FY 2010-11
C%
W
CO
2010 Single Family Residential Rates Survey
Claremont $29.63
San Dimas $27.57
El Monte $27.32
Pomona $26.22
West Covina $25.75
Glendora
$25.23
Azusa-Cty Areas $24.73
Covina
$24.22
La Puente $23.32
Monterey Park $22.68
Azusa (New Rate) $22.61
La Verne $20.99
Walnut $20.04
Arcadia 61NOMIMMIIMMENOMENIMMININ $18.42
Monrovia $16.06
$ $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00
Monthly Rate
2010 Commercial Rates Survey (3 CY/1x per Week)
West Covina ; $158.31
Glendora $149.66
fIIIIIIIIIII 1
Monterey Park $14658
I
San Dimas $145.'4
_11111111 1
Covina I$137.67
.,,,a4ia El Monte $121.98
La Puente , $119.70
Claremont $114.11 I
Upland $112.28
111111111111111
La Verne $112.21
1 � ,� iI
Azusa (New Rate) $111.68
Walnut $10692
$- $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 $180.00
Monthly Rate
Q
!.s
Cost For Billing and Customer Services Per Trash Customer - 2010-11
2010-11 Proposed Budget
' 1. Cost Base for Cust. Service Fee to Refuse Billing 2,451,687 (See Sheet 2)
Method of allocation:
2. Number of customers: (2008-09)residential and business except trash whwich is residential only
Electric-all customers 15,462 24% _
Water-all customers 22,512 35%
Sewer-all customers 14,350 23%
Trash-residential 11.382 18% 438,029
Total 63,706 100%
3. Monthly Cost to provide Customer Service to Refuse Service Customer:
Cost for All Customers 2,451,687
Revenue Requirement for Refuse Count Portion $ 438,029
Discount for Trash Support Services 75%
Adjusted Revenue Requirement $ 109,507
Monthly Adjusted Revenue Requirement $ 9,126
Rate Adjustment Customer Count 13,625 (1)
Adjusted Moly Cust. Support Svc. and Billing Charge 0.67
(1)Equalized count based on unit billings. Count of 11,382 includes some multiple units.
(SHEET 2)COST BASIS FOR ALLOCATING CUSTOMER SERVICES TO REFUSE SERVICE RATES FOR REFUSE RATE SETTING PURPOSES
ORGKEY Cost Center Description In or Out/Rationale Amount Adjustments
3140702920 Utility Administration Personnel Out/Certain Staff Budgeted to Fund 39 -
3140711903 Field Services Personnel Out/Refuse Service has no meters -
3140711903 Cust.Records&Collection Personnel In/Sign up residential customers/bill 1,304,320 1
3140711920 Cust.Svc.Supervision Personnel In/Sign up residential customers/bill 184,265 2
3140701928 Utility Board O&M Out/AMC doesn't authorize action -
3140702921 Cust.Records&Collection O&M In/Sign up residential customers/bill 119,950 3
3140702927 Utilities Admin O&M In/Citywide overhead associated with FTEs 1,618,735 4
3140702935 General Plant O&M In/Office Supplies and Maintenance 151,800 5
3140711902 Field Services O&M Out/Supports Meter Reading -
3140711903 Cust.Records&Collection O&M In/Supports Cust.Svc Staff 1,020,565 6
3140711920 Employee Related O&M In/Supports Cust.Svc Staff 36,100
Total of Eligible Costs: 4,435,735
Adjustments-(See Notes Below)
1 Reduced by 5%for time spent on Public Benefits Program (65,216)
2 50%for supervision of CS staff;(15%for Public Benefits/35%for Field Services) (92,133)
3 Exclude donation amount of$57,440 (57,440)
4 FTEs of Utilities Dept=80.75; Involved FTEs: 17.75;Ratio:21.98%; 78.02%X Citywide Overhead (1,262,937)
5 FTEs of Utilities Dept=80.75; Involved FTEs: 17.75;Ratio:21.98%;78.02%X Supplies and Maint. (118,434)
6 FTEs of Utilities Dept=80.75; Involved FTEs: 17.75;Ratio:21.98%;78.02%X IT Allocation (387,888)
Total Adjustments (1,984,048)
Cost Base for Customer Services 2,451,687
Adjustments-Notes
•
1 5%of Customer Service staff time spent on Public Benefits Program activities
2 15%of Time Spent Managing Public Benefits Program-15%of this budget amount therefore should be budgeted to fund 24.
Also,supervision of 9 Field Staff take 35%of time. Budgeted amount should be multipled by 50%therefore.
3 Donation of$57,440 should be excluded from total.
4 Amount should be adjusted to FTE count of involved Customer Service Division staff,excluding Field Personnel.
5 Amount should be adjusted to FTE count of involved Customer Service Division staff,excluding Field Personnel.
6 Amount of IT Alton($497,165)should be reduced in proportion to FTE count of involved staff
4lib
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LIGAZUSA
ilT & WATER
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZU UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 26, 2010
SUBJECT: TERMINATION OF MERCHANT PROCESSOR AGREEMENT WITH
BANKSERV AND APPROVAL OF AGREEMENT WITH EPX
RECOMMENDATION
It is recommended that the Azusa Utility Board: (1) terminate agreement with BankServ; and (2)
approve agreement with EPX to replace BankSery as merchant processor for electronic
automated clearing house (ACH) payment transactions related to online billing and payment.
BACKGROUND
Two years ago Azusa Light & Water contracted with Infosend, Inc. for online billing and
payment services. Customers who enroll in online bill presentment receive an e-mail when their
bills are ready for viewing. Customers can simply click on the link to get to the Light & Water
web site and view their bills exactly as they would see them as paper bills, including any bill
inserts or messages. From there they can then click to make an ACH payment online from their
checking or savings account at no cost to the customer. Behind the scenes the merchant
processor, now BankServ, processes these types of payments. The small fee is absorbed by
Light & Water.
Late last fall BankSery made a computer software change and inadvertently double charged 48
of our customers, which in turn caused a few customers to incur nonsufficient funds check
charges. We expected BankSery to correct the errors and reimburse our customers for their bank
charges. BankServ's service was very poor and took over two months to finally clear up.
Because of this unsatisfactory service, we would like to terminate our contract with BankSery
and contract with another merchant processor, EPX. Infosend verified EPX's reputation with
other customers of EPX and found EPX consistently provides good service. Additionally, with
EPX we will save about $ 1 ,000 per year in merchant processing fees.
042
Terminate BankSery And Enter into Agreement With EPX
April 26, 2010
Page 2
The proposed contract with EPX is for five years and annual costs are expected to be about
$4,200 per year, which equates to approximately $21,000 over the term of the agreement.
Ordinarily staff would use a request for qualifications to select a professional services provider,
however, Infosend is our primary online payment processor and is capable of only using a
limited number of merchant account service providers due to software configuration limitations.
Therefore, it is recommended that this contract be awarded in the best interest of the City
pursuant to Azusa Municipal Code (AMC) section 2-517(g) with consideration of the limited
market for such services AMC 2-522(b).
The contract with EPX has been reviewed by our city attorney and is attached for signature.
FISCAL IMPACT
The online fees to EPX will be approximately $4,200 per year for five years and this is about
$1,000 savings per year over Bankserv.
Prepared by: Karen Vanca, Assistant Director Customer Care & Solutions
Attachment: EPX Agreement
043
i
W
°'°`"°"'"''''"'"'"'"' BUYERWALL ELECTRONIC TRANSACTION PROCESSING AGREEMENT
This Agreement is made this day of ,by and between,City of Azusa
with an address at 213 E,Foothill Ave,Azusa,CA 91702("Company")and Phoenix Payment Systems,Inc.,a Delaware
corporation, (dba Electronic Payment Exchange) with an address at 1201 N. Market Street, Suite 701, Wilmington, DE
19801 ("EPX").
Company wishes to initiate electronic debit transactions through EPX to bank accounts maintained by its customers. EPX
will utilize the Automated Clearing House at the United States Federal Reserve("Federal Reserve") in order to provide
this service.
Now,therefore,in consideration of the promises contained herein,it is agreed as follows:
1. For purposes of this Agreement and the Schedules referred to herein, the following definitions apply unless the
context otherwise requires. Capitalized terms used, but not defined, in this Agreement shall have the respective
meanings as set forth in the NACHA Operating Rules.
A. NACHA —means the National Automated Clearing House Association that establishes the standards, rules
and procedures (the "NACHA Operating Rules") that enable depository financial institutions to exchange
payments on a national basis.
B. ACH — means Automated Clearing House Network, which is a funds transfer system, governed by the
NACHA Operating Rules that provides for the interbank clearing of electronic entries for participating
financial institutions.
C. Internet (WEB) Initiated Entries— means origination of debit entries (either recurring or single entry) to a
consumer's bank account pursuant to Written Authorization that is obtained from the consumer via the
Internet.
D. Written Authorization—for Internet(WEB) Initiated Entries, means that (1)consumer must be able to read
the authorization language displayed on a computer screen or other visual display; (2) Company should
prompt the consumer to print the authorization and retain a copy;and(3)Company must be able to provide
the consumer with a hard copy if the authorization is requested.
E. Banking Day—means any day on which a participating financial depository institution is open to the public
during any part of the day for carrying on substantially all its banking functions.
F. Settlement—means a transfer of funds between two parties in cash, or on the books of a mutual depository
institution, to complete one or more prior transactions, made subject to final accounting. Settlement for the
ACH system usually occurs through the Federal Reserve.
G. Settlement Date-means the date on which a transfer of funds with respect to a transaction is reflected on the
books of the Federal Reserve.
2. EPX will transmit bank account entries initiated by Company to the ACH as provided in the NACHA Operating
Rules. Company may utilize the EPX BuyerWall technology in the processing of ACH transactions. `BuyerWall"
shall mean the EPX patent pending technology that utilizes the EPX hosted front-end applications in conjunction with
a unique transaction identifier allowing Company to eliminate contact with bank account information during the
processing,transmission and storage of ACH data.
3. Company and EPX will comply with the NACHA Operating Rules insofar as applicable,and the applicable NACHA
Operating Rules are incorporated into this Agreement by reference. EPX agrees to keep Company advised of
NACHA Operating Rules as they are applied and updated by NACHA. The specific duties of Company and EPX
provided in the following paragraphs of this Agreement in no way limit the foregoing undertaking.
Company represents and warrants that it has obtained all necessary regulatory approvals, certificates and licenses to
provide any services it intends to offer and that it is in compliance with the regulations of the Federal Trade Commission
and the Federal Communications Commission and shall comply with all present and future federal,state and local laws
and regulations pertaining to Transactions,including,without limitation,the Federal Fair Credit Reporting Act,the Federal
Truth-in-Lending Act,the Electronic Fund Transfers Act,the Federal Equal Credit Opportunity Act,as amended,and the
Telephone Disclosure and Dispute Resolution Act,as applicable.
4. Company shall obtain all Consents and Authorizations (including without limitation Written Authorization for
Internet (WEB) Initiated Entries) required under the NACHA Operating Rules and shall retain such Consents and
Authorizations for two(2)years after they expire. Company shall bear the full liability for,and shall indemnify EPX
from, ACH items returned by the consumer whose account was debited whether or not proper Consent and
Authorization was obtained. In accordance with NACHA Operating Rules, EPX shall reject return items deemed
"untimely" and shall dispute return items at Company's request. In no event, however, shall EPX be liable for
Company's ACH return items. �}
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044
5. Company shall transmit each ACH file to EPX,in accordance with EPX's rules and policies,no later than 6:30 P.M.,
Eastern Time one (1) Banking Day prior to the Settlement Date. Failure to do so may result in a delay in the
availability of funds.
6. Company shall not initially need to establish at EPX a reserve fund equal to at least Company's average four(4)day
ACH gross dollar volume. EPX shall maintain the right to review and adjust the reserve requirement based upon the
Company's actual performance, which is deemed reasonable and Company will be contacted regarding this change.
EPX shall hold this reserve fund to offset returned ACH items and for other liabilities that Company may incur under
this Agreement. If the amount of returned ACH items exceeds the balance in the refundable fee account, EPX shall
fund the excess via the Merchant's operating account. Changes in reserve fund requirements will be determined by
EPX according Company's ACH gross dollar volume and Company's ACH return history; any such changes shall be
effective immediately. Notwithstanding the reserve fund, Company shall be liable and reimburse EPX for any
returned items. The reserve fund shall be funded, maintained and/or replenished by EPX withholding from
remittances hereunder. EPX may hold any or all reserve funds for a period of up to one hundred-eighty (180)
Banking Days following the termination of this Agreement by either party to offset returned or disputed ACH items
or other liabilities under this Agreement. After such period, any amounts remaining in the reserve fund will be
promptly returned to Company.
7. Company represents,warrants and covenants that Company will(1)advise EPX in writing of any errors in any ACH
transactions submitted hereunder; (2) conduct Company's business in an ethical manner, in accordance with this
Agreement, all applicable government rules and regulations and the NACHA Operating Rules; and (3) not use, or
allow Company's employees or agents,to commit any acts of fraud,dishonesty or misrepresentation.
8. Company hereby indemnifies EPX against any claim, loss, damage, cost, expense, attorneys' fees and liability
(collectively, "Claims")incurred by EPX or third parties on account of Company's breach of this Agreement or any
representations, warranties or covenants herein, other than Claims arising from EPX's negligence or willful
misconduct. If at any time EPX becomes aware of, or has reason to believe that EPX may have, a Claim for
indemnification hereunder, EPX has the right to refuse transmittal. Company will be held responsible for all fees,
retums/rejects,fines and/or assessments..
9. Company will compensate EPX for providing the services referred to herein according to the EPX rate and fee
schedule. EPX shall provide Company with thirty(30)days written notification of all rate and fee changes. If such a
change occurs, Company has the right to terminate this Agreement upon written notice to EPX, provided that EPX
receives such written termination notice within thirty(30)days following the date of the increase notice. A copy of
the current rate and fee Schedule is attached hereto.
10. Either party may terminate this Agreement upon at least thirty(30)days prior written notice to the other party in the
event that a party is in material breach of this Agreement(including without limitation payment obligations),and such
breach is not cured within such period. In addition,either party may terminate this Agreement without cause upon at
least thirty (30) days prior written notice to the other party. EPX may immediately terminate this Agreement, or
suspend transmittal hereunder,without notice to Company under any of the below listed circumstances:
A. Based on financial information concerning Company obtained by EPX, Company poses an unsatisfactory
financial risk,as determined by EPX;
B. Any act of fraud,dishonesty or misrepresentation is committed by Company,its employees and/or agents or
EPX believes in good faith that Company, its employees and/or agents have committed, are committing or
are planning to commit any acts of fraud,dishonesty or misrepresentation;
C. Any representation, warranty or application made by Company is not true and correct in all material
respects;
D. Company files a petition, or has a petition filed against it under any bankruptcy or insolvency law, or is
otherwise unable to pay its debts as they become due;or
E. Company fails to provide financial statements in a format reasonably acceptable to EPX within three (3)
days of EPX's written request.
F. Company's reason entry codes for unauthorized transactions are equivalent to or exceed NACHA Operating
Rules for reason entry codes pertaining to such transaction thresholds.
G. Company is not within the parameters set forth in the EPX Underwriting Terms and Conditions.
EPX may selectively terminate one or more of Company's approved locations without terminating this entire
Agreement. In the event of termination, all obligations of Company and EPX incurred or existing under this
Agreement prior to termination shall survive the termination.
11. In the event Company incurs any loss due to the mishandling of a particular file by EPX,EPX's liability to Company
shall be limited to the actual direct damages incurred by it resulting from EPX's negligence o miscondu and shall
Initials ,
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•
045
in no event exceed the amount represented by the applicable transaction record, less the fees payable to EPX under
this Agreement. In addition, EPX, its affiliates and agents shall not be liable for any incidental, consequential,
reliance or special damages in any way connected or arising out of this Agreement or the services provided hereunder,
but EPX will here by correct any issues that arise out of this Agreement in a timely manner. EPX HEREBY
DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
12. In the event an agent of Company delivers any entry or file of entries to EPX,EPX may act in reliance on such entry
or file of entries, and it need not inquire of Company as to whether the agent is duly authorized. Company shall be
fully liable for the acts and omissions of its agents hereunder.
13. Company shall submit all ACH Transactions for the particular entity,dba or web property processed by EPX during
the term hereof solely to EPX for processing.If Company fails to comply with this provision,Company agrees to pay
EPX, a liquidated damages sum within ten (10) days of the date of non compliance. The amount shall equal the
greater of
i. $250;or
ii. 80%of the product of:
I. The average net monthly fees;and
2, The number of months, including any pro rata portion of a month, then remaining prior to the
date on which Company may terminate this Agreement in accordance with it terms.
Company agrees that the damages suffered as a result of such non compliance would be extremely difficult to
calculate with precision. For that reason,the parties hereto agree that the liquidated damages should be computed as
set forth above.Any exceptions to this exclusive arrangement must be approved by EPX in advance in writing.
14. This Agreement shall commence on the date first specified above and shall remain in effect for a period five(5)years.
This Agreement shall automatically renew for successive two(2)year terms unless either party provides written non-
renewal notice to the other at least one hundred twenty(120)days prior to the end of the then current term.
15. In the event a lawsuit is filed by Company,this Agreement shall be governed by, construed,and enforced in
accordance with the laws of the State of Delaware without regard to its conflicts of law rules. The parties agree
that any dispute arising out of and/or in the course of the relationship established by this Agreement,or by the
Agreement itself,shall be decided,unless mutually resolved by the parties hereto,in the state and federal
located in the State of Delaware,and,the parties hereby submit to said jurisdiction and venue.In the event a
lawsuit is filed by EPX,this Agreement shall be governed by,construed,and enforced in accordance with the
laws of the State of California without regard to its conflicts of law rules. The parties agree that any dispute
arising out of and/or in the course of the relationship established by this Agreement,or by the Agreement itself,
shall be decided,unless mutually resolved by the parties hereto,in the state and federal located in the State of
California,and,the parties hereby submit to said jurisdiction and venue.
16. In the event that any action is filed in relation to this Agreement or the relationship created hereby,the unsuccessful
party in the action shall pay to the successful party,in addition to all sums awarded by the court,reasonable costs and
expenses for the successful party's reasonable attorneys'fees.
17. All notices hereunder shall be in writing, in English, and shall be deemed properly given when (1)sent by certified
mail, return receipt requested, (2) sent by fax with confirmation of receipt by telephone, or (3) delivered by a
nationally recognized overnight delivery service,to the addresses listed herein for the respective parties.A party may
change such address by written notice to the other party hereto in accordance with this section at least thirty(30)days
prior to the initial use of the revised address.
18, If any provision of this Agreement or any application thereof to any person or circumstance shall be held to be invalid
by a court of competent jurisdiction or unenforceable to any extent, the remainder of the Agreement and the
application thereof to other persons or circumstances shall not be affected thereby and shall be limited or modified to
the minimum extent necessary to be enforceable.
19. This Agreement may not be assigned by Company without the prior written consent of EPX. EPX may assign this
Agreement without limitation to a subsidiary or parent entity which is wholly owned by, or which wholly owns, EPX.
Any other assignment may not be made by EPX without the prior written consent of Company,which consent shall not be
unreasonably withheld. This Agreement-shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
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046
20. Any modification of this Agreement or additional obligation assumed by either party in connection with this
Agreement shall be binding only if in writing and signed by each party or an authorized representative of each party.
This Agreement, together with the Schedules attached hereto, supersedes any other agreement, whether written or
oral,that may have been made or entered into by any party(or by any officer or officers of any party)relating to the
matters covered herein and constitutes the entire agreement of the parties hereto.
IN WITNESS WHEREOF, the parties to this Agreement have caused it to be executed by their duly authorized
representatives,with a complete understanding of the contents hereof,on the day and year first set forth hereinabove.
Agreed and Accepted:
City of Azusa
Authorized Representative,Title Date
Authorized Representative,Title Date
Phoenix Payment Systems,Inc.
Auth�Representati a itle Ddte
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047
Electronic Transaction Processing Agreement
Pricing Exhibit
ACH Processing
Transaction Fee $0.19
Return/Reject Fee $5.00
Unauthorized Returns $15.00
Miscellaneous Fees
Monthly Account Maintenance Fee(Per Merchant ID) $15.00
NSF(EPX debiting Merchant) $50.00
Initials \71-
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048
r
E.-R .
,;,e S„ ”, — .., to - d -'' s.' t y, t'Y. s u.. '
rj--
L._. , WATER
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 26, 2010
SUBJECT: RESOLUTION TO MODIFY THE LIGHT & WATER RULES AND
REGULATIONS TO ADDRESS MASTER METER DELINQUENT ACCOUNTS
RECOMMENDATION
It is recommended that the Azusa Utility Board approve the attached resolution modifying the
Light & Water Rules and Regulations to address master meter delinquent accounts as required by
Senate Bill 120.
BACKGROUND
Senate Bill 120 made changes to the California Public Utilities Code, in the section that applies
to municipally-owned utilities, effective January 1, 2010. Revisions to the Code require that
residential tenants be notified in writing before utility service billed to the landlord is
disconnected. Further, the Senate Bill requires notices be in six languages: English, Spanish,
Chinese, Tagalog, Vietnamese and Korean on each door, or if not practical, in a common area to
inform tenants of this situation and when delinquent amount needs to be paid to avoid service
disconnection. To keep service on, tenants can do one of the following:
1 . Come to Light & Water office and pay the total amount owed by a specified date; or
nof the occupants of individual units mayassume responsibility for i\-fri/
2. one p p ty
�a-
subsequent charges to the account and get the service put in his/her name.
-Pt-i- eJaili
In order to prevent service termination and to establish service, an occupant choosing to take
financial responsibility for the utility bill for the master meter will be re wired to pay a new
service fee, provide proper ID and either pass a credit check or pay a prepayment. A new
ccount o er will not have to pay the delinquent amount and will start out with a zero balance.
A list of each occupant and their unit number is also required.
Light & Water will provide contact information for assistance in this process and also contact
information for legal services.
04 9
Master Meter Delinquent Accounts
April 26, 2010
Page 2
FISCAL IMPACT
Attorney fees for reviewing SB 120 and advice, cost for translation of required information and
printing of pocket door hangers in six languages, is estimated to cost $2,000.
Prepared by: Karen Vanca, Assistant Director Customer Care & Solutions
Attachments: Resolution and Exhibit"A" Proposed Changes to Rules and Regulations
050
RESOLUTION NO.
A RESOLUTION OF THE AZUSA UTILITY BOARD/CITY
COUNCIL OF THE CITY OF AZUSA, AMENDING THE
AZUSA LIGHT & WATER RULES AND REGULATIONS
GOVERNING THE ELECTRIC AND WATER SERVICE
SUPPLIED BY AZUSA LIGHT & WATER
WHEREAS, pursuant to Section 78-37 of the Azusa Municipal Code, the City
Council may from time to time establish and amend the Rules and Regulations concerning utility
services provided by its Light and Water Department; and
WHEREAS, the Utility Board/City Council has determined that Water and Electric
Rules and Regulations should be changed to comply with newly adopted State laws; and
WHEREAS, SB 120 was adopted by the State in 2009 and established new
requirements for utilities with respect to providing notifications before shutting off utility
services provided through master meters; and
WHEREAS, Exhibit A of this Resolution amends Electric Rule No. 9 and Water
Rule No. 8 with language that is adequate to meet the intention of Senate Bill 120 to protect
master-meter tenants;
NOW, THEREFORE, THE UTILITY BOARD/CITY COUNCIL OF THE CITY
OF AZUSA, CALIFORNIA, DOES FIND AND DECLARE THAT:
SECTION 1. Adoption of Amendments. The City Council hereby adopts the
amendment to the Rules and Regulations set forth in Exhibit "A" which is attached to this
Resolution and is incorporated herein as set forth in full.
SECTION 2. Effective Date. The amendments to the Charges and Rules and
Regulations shall become effective on May 1, 2010.
PASSED, APPROVED AND ADOPTED this 26th day of April 2010.
Joseph R. Rocha
Mayor
ATTEST:
Vera Mendoza
City Clerk
051
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I, Vera Mendoza, City Clerk of the City of Azusa, do hereby certify that the
foregoing Resolution No. was duly introduced and adopted at a regular meeting
of the Azusa Utility Board/City Council on the 26th day of April 2010, by the following vote, to
wit:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
Vera Mendoza
City Clerk
052
EXHIBIT "A"
Proposed Changes to Rules and Regulations
Changes to take effect May 1, 2010,text to be deleted is highlighted in strikeout.
Changes to take effect May 1,2010,text to be added is highlighted in underline.
Text that is not highlighted is current and is being provided for context and reference.
Amendment to Electric Utility Rule No. 9 Discontinuance and Restoration of Service
N. Master-metered service
Master-metered service is when one meter serves several users or is provided through an
individual meter and is billed to the landlord. When the landlord is delinquent, Light&
Water will make a good faith effort to post notices in English,Spanish, Chinese, Tagalog,
Vietnamese and Korean in an available location such as a door hanger or in a common
area to inform tenants of this situation and when delinquent amount needs to be paid to
avoid service disconnection. To keep service on, tenants can do one of the following:
1. Come to Light&Water office and pay the total amount owed by a specified date, or
2. one or more of the occupants of individual units may assume responsibility for subsequent
charges to the account and get the service put in his/her name.
In order to prevent service termination and to establish service, an occupant choosing to take
financial responsibility for the utility bill for the master meter will be required to pay a new
service fee,provide proper ID and either pass a credit check or pay a prepayment. A new
accountholder will not have to pay the delinquent amount and will start out with a zero balance.
A list of each occupant and their unit number is also required.
Light&Water will provide contact information for assistance in this process and also contact
information for legal services.
If one or more residential occupants are willing to assume responsibility for the charges to the
satisfaction of Light&Water, Light&Water will make service available. All residents must
agree to this or Light&Water will not make service available.
Amendment to Water Utility Rule No. 8 Discontinuance and Restoration of Service
J. Master-metered service
Master-metered service is when one meter serves several users or is provided through an
individual meter and is billed to the landlord. When the landlord is delinquent, Light&
Water will make a good faith effort to post notices in English, Spanish, Chinese, Tagalog,
Vietnamese and Korean in an available location such as a door hanger or in a common
area to inform tenants of this situation and when delinquent amount needs to be paid to
avoid service disconnection. To keep service on, tenants can do one of the following:
3. Come to Light&Water office and pay the total amount owed by a specified date,or
053
4. one or more of the occupants of individual units may assume responsibility for subsequent
charges to the account and get the service put in his/her name.
In order to prevent service termination and to establish service,an occupant choosing to take
financial responsibility for the utility bill for the master meter will be required to pay a new
service fee,provide proper ID and either pass a credit check or pay a prepayment. A new
accountholder will not have to pay the delinquent amount and will start out with a zero balance.
A list of each occupant and their unit number is also required.
Light&Water will provide contact information for assistance in this process and also contact
information for legal services.
If one or more residential occupants are willing to assume responsibility for the charges to the
satisfaction of Light&Water,Light&Water will make service available. All residents must
agree to this or Light&Water will not make service available.
054
it 211
� '_ "
AZUSA
,IGaT d 'WATER
AGENDA ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 26, 2010
SUBJECT: APPROVAL OF LODI ENERGY CENTER ENVIRONMENTAL FINDINGS
AND PROJECT AGREEMENTS
RECOMMENDATION
It is recommended that the Utility Board approve a Resolution:
(1) Adopting the California Energy Commission (CEC) environmental analysis, findings, and
mitigation measures as responsible agency for the significant impacts of the Lodi Energy Center
(LEC) Project and direct the Utilities Director to record a Notice of Determination with the
Counties of Los Angeles and San Joaquin;
(2) Approving both LEC Power Sales Agreement (PSA) and the LEC Project Management and
Operation Agreement (PMOA) relating to the financing, construction and operation of the LEC
Combined Cycle 280 MW power plant, and authorize the Mayor to execute them on behalf of
the City of Azusa; and
(3) Designating the Utilities Director as the Azusa official responsible for appointing, and from
time-to-time, changing as necessary, Azusa's representative and alternate representative on the
LEC Project Participants Committee.
BACKGROUND
The Northern California Power Agency (NCPA) is developing a gas-fired power plant called the
Lodi Energy Center (LEC or Project) located in Lodi, California. The plant is nominally rated at
296 MW, but it is presently limited to 280 MW due to transmission rights.
On November 26, 2007, the Azusa Utility Board approved the Second Phase Agreement, and the
subsequent Amendment 1, which provided funding for LEC planning and development
activities. Azusa's Generation Entitlement Share (GES) as specified in the Second Phase
055
Lodi Energy Center
April 26, 2010
Page 2
Agreement is 2.7857% which is approximately 7.8 MW of capacity from the Project. There are
currently fourteen (14) Project Participants including the City of Azusa as identified in Appendix
A of the PSA.
As part of the initial development phase of the Project, NCPA filed an Application for
Certification (AFC) with the California Energy Commission (CEC) in September 2008. All LEC
related air emission reduction credits, water supply agreements, land use agreements, air permits
have been attained and the power island equipment ordered. Detailed Project engineering is
approximately 50% complete.
Current Status
The AFC was approved by the CEC on April 21, 2010 and the initial development phase of the
Project is nearing completion. In order to proceed with financing and construction of the Project,
the approval of the LEC Power Sales Agreement (PSA) and final determination of Generation
Entitlement Shares for the LEC Project Participants is necessary. Upon approval of the PSA by
all Participants, financing activities will begin, with construction scheduled to start in June 2010
and Project commercial operation date targeted for June 2012.
The Project construction budget, excluding the necessary financing expenses, is estimated to be
$375.3 million. Total projected capital cost, including financing and reserve fund, is $451.7
million.
On April 22, 2010, the NCPA Commission has approved the Power Sales Agreement (PSA), and
it is attached to this report. The PSA must additionally be approved by each Participant
including the City of Azusa. The Azusa City Attorney has reviewed the PSA and has approved it
as to form. A Project Participation Committee (PPC) was formed pursuant to the Second Phase
Agreement which is to be "re-established" pursuant to the terms of the PSA. The PPC will be
responsible for the governance of Project activities and will act and vote on Project related
matters in an official capacity. The decisions by the PPC will be binding upon Project
Participants and upon NCPA as the Project Manager. Each Project Participant will have one
representative on the PPC whose vote would be cast in accordance with the respective
Participant's GES. One of the actions to be taken as a part of this item is to authorize the
Utilities Director to formally designate to NCPA the name of Azusa's representative and
alternate representative to the PPC.
The PSA contains provisions for how the LEC Project will be financed, and establishes three (3)
separate indenture groups associated with Project financing. Indenture group A will consist of
the ten NCPA member Project Participants plus two (2) non-NCPA Participants (City of Azusa
and the Power and Water Resource Pooling Authority). Indenture Group B consists of the
California Department of Water Resources and Indenture Group C consists of the Modesto
Irrigation District. NCPA will separately sell bonds for the share of Project costs represented by
Indenture Group A and Indenture Group B. Modesto Irrigation District (Indenture Group C) will
finance its share independently.
056
Lodi Energy Center
April 26, 2010
Page 3
NCPA will proceed to finance the Project upon receipt of executed PSAs from all Project
Participants and completion of other necessary documentation. Upon financing of the Project,
Azusa will be bound and obligated to pay its share of Project Cost based on billing amounts to be
calculated by NCPA each month for a period of thirty (30) plus years or the life of the project.
The first monthly invoice from NCPA will be issued prior to the expected date of LEC
commercial operation in June 2012. In return, Azusa will receive its GES of Project capacity,
energy and other attributes (ancillary services, environmental attributes, etc.).
Key highlights of the Power Sales Agreement(PSA) include:
• Take or Pay Agreement: Each Participant will be obligated to pay its proportionate share
of the Project Cost based on the billing amount to be calculated by NCPA each month for
a period of 30 years or the life of the project, whichever is longer. Payments are required
whether or not power is produced from the Project.
• Proportionate Entitlement: Each Participant will receive its proportionate share of Project
output and other attributes (including capacity, ancillary services, environmental
attributes, etc.) from LEC.
• Option for Independent Fuel Purchases: Participants may provide physical fuel for the
plant up to their respective GES, or to rely on NCPA to obtain such fuel supply. Gas
hedging activities are not a part of the LEC Project. NCPA intends to develop a gas
hedging program separate from the LEC Project in which NCPA Members may elect to
participate.
• Rate Covenant: Participants covenant to raise rates, fees or other charges as necessary in
order to make requisite Project payments required under the PSA. However, the
obligation to pay is an obligation limited to the Electric System, and is not a general debt
of the City of Azusa.
• Step-up Obligations: The "step-up" obligation among Participants in case of payment
default is specific to each of the 3 indenture groups. However, operating and
maintenance step-up costs flow across all Participants. The defaulting participant
remains liable for all costs despite any step-up.
A second agreement entitled the Project Management and Operation Agreement (PMOA) is
also attached for approval. It is the desire of each Participant that NCPA manage and operate the
LEC Project based on NCPA's capabilities and experience in operating similar projects. NCPA
has agreed to operate the Project pursuant to the directives and guidelines of the PMOA, as such
the PMOA may be modified over time by the PPC. The roles, obligations and responsibilities of
the PPC and NCPA are addressed in the attached PMOA.
Key highlights of the PMOA include:
• Project Operation: NCPA shall be responsible for planning, operating, and maintaining
the Project, and to effectuate the delivery and sale to each Participant of its share of
057
Lodi Energy Center
April 26, 2010
Page 4
Capacity and Energy and other power products from the Project. NCPA will run the
Project only when it is `economical' to run. The Project will participate in the Balancing
Authority's energy, capacity and ancillary services markets to maximize the value of the
Project.
• Economic to Run: NCPA will schedule and run the Project only when the cost to
produce energy is competitive with alternative resources. The Project will participate in
the Balancing Authority's available energy, capacity, and ancillary services markets to
maximize the value of the Project.
• Governance: Governance shall be by the PPC which shall determine operational
guidelines for the Project, approve annual budgets, and oversee Project activities.
• JPA Cost Assessment: Participants that are not members of NCPA will be subject to the
JPA Cost Assessments, intended to recover NCPA overhead costs relating to the LEC
that are paid by the Members directly through annual JPA assessments. Such costs shall
be separately identified and billed to each non-NCPA member Project Participant.
• NCPA to Follow Directives: NCPA is obligated to follow the directions of the PPC in
managing the Project where such direction would affect only the Project. The LEC
Project and the PPC cannot override general NCPA procedures and policies which apply
to other NCPA projects in addition to the LEC Project.
Environmental Analysis
The AFC approval by the CEC includes various environmental analyses, findings and mitigation
measures under the terms of the Warren-Alquist Act (Public Resources Code section 25500 et
seq.) That analysis, the findings, and mitigation measures, constitute the equivalent of an
environmental impact report for purposes of the California Environmental Quality Act (CEQA,
Public Resources Code section 21000 et seq.) as a "certified regulatory program" pursuant to
CEQA Guidelines section 15251(j). The CEC in effect has acted as the "lead agency" for this
project for purposes of environmental analysis. As a consequence, rather than conducting its
own independent environmental analysis under CEQA, the City of Azusa is acting as a
"responsible agency" under CEQA and is responsible for considering the analysis, findings and
mitigation measures of the CEC and reaching its own independent conclusions on whether and
how to approve the LEC Project. (CEQA Guidelines section 15096.) Specifically, as a
responsible agency, Azusa must consider the lead agency findings for each significant effect of
the project and make its own appropriate findings. The attached resolution makes all necessary
findings for Azusa acting as responsible agency. Accordingly, the attached resolution
specifically accepts the CEC prepared environmental documents including the mitigation
conditions contained in the Approval for Certification document.
058
Lodi Energy Center
April 26, 2010
Page 5
FISCAL IMPACT
The estimated cost of the development and construction of this project is $375.3 million, not
including financing costs, or about $461 million with financing costs.
For Azusa, at its participation percentage of 2.7857%, the total financed cost including
construction, financing, reserves, etc., is estimated to be $12,845,000. Following financing in late
June 2010, Azusa's contributions toward development of the project will be refunded
(approximately $1 million). The entire cost of Azusa's share of construction will be funded by
NCPA through bond proceeds. Azusa would begin making payments following commercial
operation of the facility currently scheduled for June 2012.
The estimated production cost of electricity from this project is $67 per megawatt hour assuming
a gas price of$7 per mmbtu. To staff's knowledge, this will be the most efficient gas powered
power plant in California. As a result, it is expected to generate power at a cost lower than the
market for most periods. The net present value benefit of this difference between the estimated
market and the production cost of power from this plant is estimated at over $400 million over a
30 year life.
Black & Veatch performed an evaluation of Azusa's proposed participation in the Lodi Energy
Center. They found that although the plant increased Azusa's surplus energy in the early years
of the project, the LEC Project provided a hedge to the risk of having a large percent of its power
resources in the San Juan Generating Station. It will also reduce Azusa's average Green House
Gas (GHG) emissions. Black & Veatch also found that due to its high efficiency, energy from
the LEC Project is projected to perform well in the wholesale market from an economic
standpoint.
Prepared by: George F. Morrow, Director of Utilities
Attachments:
1. Resolution
Exhibit A—Environmental Findings
(Attachments below and Exhibits B and C have been distributed by Email only
and were posted for public review at the City Clerk's Office, Library, and Light &
Water Offices)
Exhibit A -- Attachments:
Attachment 1 —Presiding Member's Proposal Decision(PMPD), March 10, 2010
Attachment 2—ERRATA to PMPD, April 20, 2010
Exhibit B —LEC Power Supply Agreement
Exhibit C—LEC Project Management and Operations Agreement
2. Black & Veatch Evaluation of Azusa's Participation in Lodi Energy Center
059
RESOLUTION No.
RESOLUTION OF THE CITY COUNCIL AND UTILITY BOARD OF
THE CITY OF AZUSA MAKING FINDINGS AS A RESPONSIBLE
AGENCY UNDER CEQA; APPROVING THE LODI ENERGY
CENTER POWER SALES AGREEMENT AND THE PROJECT
MANAGEMENT AND OPERATION AGREEMENT AND
AUTHORIZING THE MAYOR TO EXECUTE THEM ON BEHALF OF
THE AGENCY; AND AUTHORIZING THE UTILITIES DIRECTOR
TO DESIGNATE REPRESENTATIVES TO THE LODI ENERGY
CENTER PROJECT PARTICIPANT COMMITTEE.
WHEREAS, the City of Azusa has elected to participate in the nominal 280 MW
Lodi Energy Center (LEC) Project being developed by NCPA, and;
WHEREAS, the City of Azusa's Generation Entitlement Share in the Project is
2.7857% or approximately 7.8 MW, and;
WHEREAS, the California Energy Commission (CEC) has approved the project
Application for Certification (AFC) on April 21, 2010. The approval by the CEC
includes various environmental analyses, findings and mitigation measures under the
terms of the Warren-Alquist Act(Public Resources Code section 25500 et seq.). That
analysis, the findings, and mitigation measures, constitute the equivalent of an
environmental impact report for purposes of the California Environmental Quality Act
(CEQA, Public Resources Code section 21000 et seq.) as a "certified regulatory program"
pursuant to CEQA Guidelines section 15251(j). The CEC has acted as the "lead agency"
for this project for purposes of environmental analysis. As a consequence, rather than
conducting its own independent environmental analysis under CEQA, Azusa is acting as
a "responsible agency" under CEQA and is responsible for considering the analysis,
findings and mitigation measures of the CEC and reaching its own independent
conclusions on whether and how to approve the LEC Project. (CEQA Guidelines section
15096.), and;
WHEREAS, the City of Azusa acting as a responsible agency has independently
considered the analysis, findings, and mitigation measures prepared by CEC as reflected
in Exhibit A attached to this Resolution, and;
WHEREAS, NCPA has prepared a Power Sales Agreement (PSA) which upon
execution by all the LEC Project Participants and NCPA will permit financing,
construction and operation of the LEC Project, and;
WHEREAS, the City of Azusa is desirous of NCPA managing and operating the
LEC Project on its behalf, and on behalf of other Project participants, and NCPA has
prepared a Project Management and Operation Agreement(PMOA) which upon
060
execution by LEC Project Participants and NCPA provides for LEC Project management
and operation by NCPA, and;
WHEREAS, the City of Azusa acknowledges that the PSA establishes a Project
Participant Committee(PPC) which will provide LEC Project governance and to
establish, and from time to time revise, directives related to Project capital expenditures,
budgets, operations and maintenance, among other items, and that the City of Azusa is to
designate an Azusa official responsible for appointing its representative and alternate
representative on the PPC;
NOW, THEREFORE BE IT RESOLVED, by the City Council and Utility Board
of the City of Azusa, as follows:
1. That acting in its capacity as a responsible agency for purposes of the
California Environmental Quality Act (CEQA), the Azusa City Council and Utility Board
hereby make the findings as provided in Exhibit A of this resolution. The Utilities
Director is hereby directed to record a Notice of Determination in the Counties of Los
Angeles and San Joaquin reflecting these findings.
2. The Power Sales Agreement as provided in Exhibit B of this resolution and
the Project Management and Operation Agreement as provided in Exhibit C of this
resolution are hereby approved, and the Mayor of the City of Azusa is hereby authorized
to execute them on behalf of the City of Azusa.
3. The Director of Utilities is hereby designated as the City of Azusa official
responsible for appointing, and from time to time replacing, the City of Azusa's
representative and alternate representative on the PPC, and designating such
representatives to NCPA.
4. The City Clerk shall certify the adoption of this Resolution.
PASSED, ADOPTED and APPROVED this day of April 2010.
Joseph F. Rocha, Mayor
ATTEST:
Vera Mendoza, City Clerk
061
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City
Council/Utility Board of the City of Azusa at a regular meeting of the Azusa Utility
Board on the 26th day of April, 2010.
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
Vera Mendoza, City Clerk
062
EXHIBIT A
ENVIRONMENTAL FINDINGS
The City of Azusa makes the following findings pursuant to the California Environmental
Quality Act ("CEQA"), Public Resources Code section 21000 et seq., and the Guidelines
implementing CEQA("CEQA Guidelines") Code of Regulations, title 14, section 15000
et seq.
1. The California Energy Commission ("CEC") is the lead agency for this Project
under CEQA.
2. The CEC is a certified regulatory agency pursuant to CEQA section 21080.5 and
CEQA Guidelines sections 15250— 15253.
3. As a certified regulatory agency, rather than an Environmental Impact Report
("EIR"), the CEC prepares an "EIR substitute" as the CEQA documentation for
the Project.
4. The CEC's EIR substitute for this Project includes the Presiding Member's
Proposed Decision (PMPD) released on March 10, 2010 (ATTACHMENT 1),
and ERRATA to the PMPD dated April 20, 2010 (ATTACHMENT 2), as
approved by the CEC on April 21, 2010.
5. The City of Azusa is a responsible agency for the Project under CEQA.
6. The City of Azusa finds that the PMRD and the CEC's process meet all of the
conditions of CEQA Guidelines section 15253 that would allow the City of Azusa
to use and rely upon the PMRD as the appropriate CEQA documentation for the
City of Azusa's approvals. Specifically, the City of Azusa finds that:
a. The CEC is the first to grant a discretionary approval for the Project.
b. The CEC provided Azusa the opportunity to consult with the CEC and to
comment on the PMRD.
c. The PMRD considers both the significant environmental impacts of the
Project that are within the jurisdiction of the City of Azusa, if any, and
considers alternatives to the Project.
d. The CEC exercised its powers as lead agency by considering all of the
environmental impacts of the Project and made the appropriate findings
pursuant to CEQA Guidelines section 15091 for each significant impact of
the Project.
063
7. The City of Azusa has considered the PMRD and the environmental impacts of
the Project described in the PMRD, pursuant to CEQA Guidelines 15096
subdivision (0.
8. The PMRD concludes that, as conditioned, the Project will not have any
significant adverse effects on the environment. Thus, pursuant to CEQA
Guidelines 15096 subdivision (g), the City of Azusa finds that there are no
alternatives or mitigation measures within the powers of the City of Azusa to
adopt that would substantially reduce or avoid any significant environmental
impact of the Project.
9. Pursuant to CEQA Guidelines 15096 subdivision (h), the City of Azusa, is
required to make findings pursuant to CEQA Guidelines section 15091 for each
significant impact of the Project. The City of Azusa has considered the PMRD,
the description of the Project's environmental impacts contained therein, the
findings of fact and conclusions of law contained therein, and the conditions of
certification contained therein, and, exercising its independent judgment, the City
of Azusa finds the following:
a. For all environmental impacts of the Project, changes or alterations have
been required in, or incorporated into, the Project which will avoid or
substantially lessen the significant environmental effects as identified in
the PMRD.
b. These findings are supported by substantial evidence in the record.
c. The conditions of certification imposed on the Project by the CEC are
within the authority of the CEC and will be monitored and enforced by the
CEC.
10. That approval of both the Power Sales Agreement and Project Management and
Operation Agreement,providing for the financing, construction and operation of
the Project have no impacts on the environment not addressed within the prior
CEC analysis
064
ATTACHMENT 1
TO EXHIBIT A
Lodi Energy Center
Presiding Member's Proposed Decision
California Energy Commission
March 10, 2010
On file at the following locations:
City Clerk's Office
213 E. Foothill Blvd.
Azusa, CA 91702
Azusa City Library
729 N. Dalton Ave.
Azusa, CA 91702
Azusa Light & Water
2nd Floor Receptionist Desk
729 N. Azusa Ave.
Azusa, CA 91702
065
ATTACHMENT 2
TO EXHIBIT A
Lodi Energy Center
ERRATA to the Presiding Member's Proposed Decision
April 20, 2010
On file at the following locations:
City Clerk's Office
213 E. Foothill Blvd.
Azusa, CA 91702
Azusa City Library
729 N. Dalton Ave.
Azusa, CA 91702
Azusa Light & Water
2nd Floor Receptionist Desk
729 N. Azusa Ave.
Azusa, CA 91702
066
EXHIBIT B
Lodi Energy Center
Power Supply Agreement
On file at the following locations:
City Clerk's Office
213 E. Foothill Blvd.
Azusa, CA 91702
Azusa City Library
729 N. Dalton Ave.
Azusa, CA 91702
Azusa Light&Water
2°d Floor Receptionist Desk
729 N. Azusa Ave.
Azusa, CA 91702
067
EXHIBIT C
Lodi Energy Center
Project Management and Operation Agreement
On file at the following locations:
City Clerk's Office
213 E. Foothill Blvd.
Azusa, CA 91702
Azusa City Library
729 N. Dalton Ave.
Azusa, CA 91702
Azusa Light & Water
2nd Floor Receptionist Desk
729 N. Azusa Ave.
Azusa, CA 91702
068
BUILDING A WORLD OF DIFFERENCE®
..... .�iat P, .. ° _ __
.... A -"
a�
Evaluation of Azusa Light & Water Potential Participation
in Lodi Energy Center
Black & Veatch
April, 2010
§1BLACK & VEATCH
: Building a world of difference.
069
Evaluation of Azusa Light&Water Participation in Lodi Energy Center
PRIVILEGED AND CONFIDENTIAL
BLACK & VEATCH STATEMENT
• This report was prepared for Client by Black & Veatch Company ("B&V") and is largely based on
information not within the control of B&V._..As such B&V has not made an analysis, verified, or
rendered an 'n ependent judgment of the validiifN
the information provided by others, and,
therefore,B V does n guarantee the accuracy the
• In conducting our analysis and in-forming-an opinion of the projection of future operations
summarized in this report, B&V has made certain assumptions with respect to conditions, events, and
circumstances that may occur in the future. The methodologies we utilize in performing the analysis
and making these projections follow generally accepted industry practices. While we believe that
such assumptions and methodologies as summarized in this report are reasonable and appropriate for
the purpose for which they are used; depending upon conditions, events, and circumstances that
actually occur but are unknown at this time,actual results may materially differ from those projected.
• Use of this report, or any information contained therein, shall constitute the user's waiver and release
of B&V and Client from and against all claims and liability,including,but not limited to,any liability
for special, incidental, indirect or consequential damages, in connection with such use. In addition,
use of this report or any information contained therein shall constitute an agreement by the user to
defend and indemnify B&V and Client from and against any claims and liability, including, but not
limited to, liability for special, incidental, indirect or consequential damages, in connection with such
use. To the fullest extent permitted by law, such waiver and release, and indemnification shall apply
notwithstanding the negligence, strict liability, fault, or breach of warranty or contract of B&V or
Client. The benefit of such releases, waivers or limitations of liability shall extend to B&V and
Client's related companies, and subcontractors, and the directors, officers, partners, employees, and
agents of all released or indemnified parties. USE OF THIS REPORT SHALL CONSTITUTE
AGREEMENT BY THE USER THAT ITS RIGHTS, IF ANY, IN RELATION TO THIS REPORT
SHALL NOT EXCEED,OR BE IN ADDITION TO,THE RIGHTS OF THE CLIENT."
• Readers of this report are advised that any projected or forecasted financial, operating, growth,
performance, or strategy merely reflects the reasonable judgment of B&V at the time of the
preparation of such information and is based on a number of factors and circumstances beyond our
control.
• Accordingly, B&V makes no assurances that the projections or forecasts will be consistent with
actual results or performance. To better reflect more current trends and reduce to chance of forecast
error, we recommend that periodic updates of the forecasts contained in this report be conducted so
more recent historical trends can be recognized and taken into account.
• Any use of this report, and the information therein, constitutes agreement that: (i) B&V makes no
warranty, express or implied,relating to this report, (ii)the user accepts the sole risk of any such use,
and(iii)the user waives any claim for damages of any kind against B&V.
Black&Veatch Page 1 Draft Report
070
Evaluation of Azusa Light&Water Participation in Lodi Energy Center
PRIVILEGED AND CONFIDENTIAL
Table of Contents
1.0 EXECUTIVE SUMMARY 3
1.1 Study Methodology 3
1.2 Study Findings 4
2.0 INTRODUCTION 1
2.1 B&V Fall 2009 Energy Market Perspective-Overview 1
2.2 B&V Fall 2009 Energy Market Perspective—Major Assumptions 2
2.3 Lodi Energy Center Operating Characteristics 7
3.0 LODI ENERGY CENTER EVALUATION 8
3.1.1 Azusa Light&Water's Supply and Demand Profile 8
3.1.2 Location of Lodi Energy Center 9
3.1.3 Alternative Supply Resources 10
3.1.4 Dispatch Analysis of Lodi Energy Center 10
4.0 CONCLUSIONS 19
Table of Figures
Figure 1 —Comparison of AL&W Net Market Purchase and Sale Activity—Volume 5
Figure 2—Comparison of AL&W Net Market Purchase and Sale Activity—Revenue/Cost 6
Figure 3—Comparison of AL&W Energy Procurement Costs($/MWh) 6
Figure 4—Comparison of AL&W Carbon Dioxide Emissions(tons/MWh) 7
Figure 5-B&V Integrated Market Modeling Process 1
Figure 6—B&V EMP—SP 15 Spot Market Electricity Prices(2009$) 2
Figure 7—WECC Market Zones 3
Figure 8—WECC Energy Demand Forecast 4
Figure 9—WECC Renewable Energy Resource Expansion 6
Figure 10—Projected CO2 Emission Allowance Prices 7
Figure 11 —AL&W Supply and Demand Balance 8
Figure 12—Lodi Energy Center Participants 9
Figure 13—CAISO NP15/SP15 Locational Marginal Price Differences 10
Figure 14—Scenario 1 —AL&W Energy Balance 12
Figure 15—Scenario 1 —AL&W Market Purchase and Sales Activity 12
Figure 16—Scenario 1 —AL&W Market Purchase and Sales Activity—Average MW 13
Figure 17—Scenario 2—AL&W Energy Balance with Inclusion of LEC 14
Figure 18—Scenario 2—AL&W Market Purchase and Sales Activity with LEC—Average MW 14
Figure 19—Scenario 2—AL&W Variable Energy Procurement Cost 15
Figure 20—Scenario 2—AL&W All-In Energy Procurement Cost 16
Figure 21 —Scenario 2—Projected Capacity Factor of San Juan 3 and LEC 16
Figure 22—Scenarios 1 and 2—Comparison of AL&W Portfolio CO2 Emissions Rates 17
Figure 23—Scenario 3—AL&W Energy Balance with Loss of San Juan 3 18
Figure 24—Scenario 3—AL&W Market Purchase and Sales Activity without San Juan 3—Average MW 18
Black&Veatch Page 2 Draft Report
071
Evaluation of Azusa Light & Water Participation in Lodi Energy Center
PRIVILEGED AND CONFIDENTIAL
•
1.0 EXECUTIVE SUMMARY
Azusa Light & Water (AL&W) requested that Black & Veatch provide assistance in evaluating its potential
participation in the Lodi Energy Center (LEC). The Lodi Energy Center is a 280 MW natural gas-fueled
combined cycle power plant, being developed near the City of Lodi, CA. LEC is being developed by the
Northern California Power Agency. There are currently 14 public power entities that are potential partners in
LEC. Construction of the facility will begin within the next two months, shortly after anticipated approval is
received from the California Energy Commission. The project is expected to achieve commercial operation
by June,2012.
AL&W is considering participation in the Lodi Energy Center, both to supplement its existing power supply
resource portfolio, and to provide a hedge against potential disruptions in its portfolio of available power
supply assets. Of particular concern is the relatively large portion of its supply portfolio represented by the
San Juan 3 coal-fueled power plant located in New Mexico, and the potential for adverse cost and availability
of the plant if Greenhouse Gas emission regulations are enacted by the federal government.
In this study, Black & Veatch has completed a qualitative assessment of AL&W's potential participation in
LEC, in addition to a quantitative dispatch analysis examining how LEC would fit into AL&W's overall
supply portfolio.
1.1 Study Methodology
Black&Veatch completed a qualitative assessment of the construction cost estimates and financial pro forma
for LEC,as provided to us by AL&W.
Black &Veatch also completed a dispatch analysis of the LEC project and developed forecasts of generation,
market purchases and sales, and energy procurement activity for AL&W under three distinct scenarios. The
dispatch analyses were completed for the 2010 through 2029 period, and rely upon B&V's Fall 2009 Energy
Market Perspective energy price forecast. AL&W's supply portfolio is dispatched against projected spot
market energy price curves. The three scenarios examined are as follows:
• Scenario 1 — Existing Supply Portfolio Case: In Scenario 1, Black & Veatch completed a dispatch
analysis of AL&W's existing supply portfolio,without the addition of LEC. Given projected demand
growth and the expiration of purchase power contracts for a number of existing supply resources,this
scenario results in a small net energy sales position in early study years, and a moderate net energy
purchase position in middle to late study years.
• Scenario 2 — GEC Case: In Scenario 2, Black & Veatch completed a dispatch analysis of AL&W's
existing supply portfolio, but with LEC included starting in 2012, on its projected commercial
operation date. This scenario results in a moderate net energy sales position through the year 2020,
and a net energy purchase position beginning in 2021 and later years.
• Scenario 3 — San Juan Retirement Case: In the third scenario, Black & Veatch included LEC in
the AL&W supply portfolio, but assumed that San Juan 3 is retired, or that AL&W no longer
contracts for its energy output,beginning in 2015. This scenario is not meant to suggest that San Juan
Unit 3 retirement will actually occur at that time,but instead is meant to measure the risk impact upon
AL&W's overall energy procurement activities, if for some reason the San Juan resource is no longer
part of the supply portfolio. This scenario results in a large net energy purchase position beginning in
2016, which is the assumed date of San Juan dropping out of AL&W's supply portfolio. This net
energy purchase position would occur even with LEC included in AL&W's supply portfolio.
For the scenarios described above, Black& Veatch utilized the PROMOD IV simulation model to complete
the dispatch analyses of AL&W's supply portfolio.
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
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1.2 Study Findings
AL&W is in a current situation where it has a definite need for reserve capacity in its supply portfolio. It does
not have a substantial need for additional energy, in terms of the ability of its existing supply portfolio to
produce energy to serve native load. With continued inclusion of San Juan 3 in its resource portfolio, in
addition to a share of energy output from the Palo Verde nuclear plant,the Hoover Dam, and other hydro and
wind resources, AL&W's existing supply portfolio is capable of generating sufficient energy quantities to
serve its native load requirements. However, San Juan 3 represents a significant source of energy supply for
AL&W,which creates environmental cost and risk exposure in the face of potential greenhouse gas emissions
regulations.
The Lodi Energy Center (LEC) is an efficient,natural-gas fueled combined cycle plant which will be located
near the City of Lodi, in northern California. The plant's projected construction and operating costs are in-
line with cost projections of similar projects that have been developed and/or reviewed by Black& Veatch in
recent months. LEC may enjoy financing cost advantages relative to units being developed by private
companies, because the principal owner of LEC, the Northern California Power Agency (NCPA) is likely to
enjoy lower financing costs available from tax except financing. Because LEC will use new technology, it
will enjoy an efficiency and production cost advantage relative to the majority of combined cycle projects
operating in California and throughout the WECC region. LEC is also the most viable combined-cycle
project under development in California right now, as most projects being developed in Southern California
have been stalled due to the non-availability of emissions offsets necessary to satisfy South Coast Air Quality
Management District(SCAQMD)emissions restrictions currently in place.
While LEC is located somewhat distant from AL&W's load and service territory, it will inject energy into the
CAISO Northern California market, which typically has premium prices compared to the Southern California
market where AL&W resides. As such, AL&W is likely to earn a price premium for any energy it produces
at LEC and re-sells into CAISO day-ahead and real-time markets. Under CAISO locational marginal pricing,
AL&W would also benefit from congestion and loss savings opportunities available from injecting energy at
the Lodi bus in Northern California, and withdrawing energy at the Azusa bus in southern California.
Figure 1 summarizes net energy market purchase and sale activity for AL&W under each of the three
scenarios studied. In Figure 1, negative values reflect AL&W being in a net sales position, meaning that
market sales volumes are greater than market purchase volumes over the course of a given year. Positive
values reflect AL&W being in a net purchase position, where market purchase volumes are in excess of
market sales volumes. As shown,in all three cases,AL&W is in a net sales position in early study years,with
or without LEC in the supply portfolio. That pattern reverses in 2018 in Scenario 1, where LEC is not
included in the supply mix. In Scenario 2,where LEC is included in the supply portfolio,the net market sales
position has higher projected sales volume in early years, and transitions into a net market purchase position
beginning in 2021. For this case,the inclusion of LEC in the portfolio increases AL&W's market exposure to
sales revenue in the 2012 through 2020 period,but mitigates its exposure to market purchase costs in the 2021
and later time period.
In Scenario 3, which includes LEC but which further assumes San Juan 3 is no longer contracted after 2015,
AL&W shifts rapidly from a net sales position to a net purchase position with relatively large energy purchase
volumes. This is reflective of the relatively large proportion of San Juan 3 in AL&W's current supply mix.
In this case, the inclusion of LEC in the portfolio plays a mitigating role in limiting market purchase
exposure,but is still not large enough to offset the need for AL&W to procure additional resources
Black&Veatch Page 4 Draft Report
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
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Figure 1 —Comparison of AL&W Net Market Purchase and Sale Activity—Volume
Azusa Light&Water LEC Evaluation
Comparison of Net Market Purchases(MWh)
---_.------
■San Juan Retirement Case
OLEC Case
200,000 _ •LEC Not Included Case
150,000
i100.000
50.000 -.. - ki--- ---- II II 1111
II
0
o t
,
r ' ' . '
50.000 -
-100.000 Note:Positive values indicate Net "'i
Purchase position;Negative values
indicate Net Sales position
-150,000 —�
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Figure 2 illustrates the net market sales and purchase positions on revenue/cost basis,rather than by volume.
In Figure 2, net market sales revenue is shown as a positive quantity,and net market purchase cost is shown
as a negative quantity. As shown, the revenue from net market sales positions early in the study period ranges
from $1 million to$5 million per year. This net sales revenue exposure tends to be greatest for Scenario 2,
with LEC incorporated into AL&W's existing supply portfolio.
In later study years when AL&W is in a net market purchase position,Figure 2 illustrates that the cost
exposure is much greater in magnitude. For example, in 2021,net market purchase cost exposure ranges from
$281,000 in Scenario 2 with LEC included, up to$10.7 million in Scenario 3 with San Juan not in the supply
portfolio. By 2029,the cost exposure ranges between $7.7 million in Scenario 2 and $18.1 million in
Scenario 3. When AL&W is in a net market purchase position,the presence of LEC in the supply portfolio
mitigates its market cost exposure.
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
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Figure 2—Comparison of AL&W Net Market Purchase and Sale Activity—Revenue/Cost
Azusa Light&Water LEC Evaluation
Comparison of Net Market Purchase Procurement Costs($)
$20.000,000------- ---..__.._._..---------
I •San Juan Retirement Case
0 LEC Case
$15,000,000--I IN LEC Not Included Case
e, $10,000,000 _._--
I $5,000,000
$o o,o,a,d 11,11 _lir riflifirr
r
-$5,000,000
I410.000,000
1 -$15.000.000
-$20,000,000 -- -Note.Positive values indicate Net Sales
Revenue;Negative values indicate Net
Purchase Costs
-$25,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Figure 3 provides a comparison of AL&W energy procurement costs on a per MWh basis, for each of the
three scenarios. As shown, energy procurement costs on a$/MWh basis are comparable between Scenario 1
and Scenario 2,which reflects the fact that under current supply/demand conditions, combined-cycle
technology plays a key role in establishing spot market clearing energy prices. Energy procurement costs are
significantly higher for Scenario 3,with assumed retirement or re-contracting of energy from San Juan 3.
Figure 3 —Comparison of AL&W Energy Procurement Costs ($/MWh)
Azusa Light&Water LEC Evaluation
Comparison of Energy Procurement Costs($/MWh)
$80.0
•San Juan Retirement Case
LEG Case
$70.0 LEC Not Included Case
$60.0
$50.0
$40.0
1 $30.0
$20.0 -______._.
9 $10_0
$0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
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Figure 4 provides an illustration of Carbon Dioxide(CO2)emissions per MWh for AL&W under each of the
three scenarios. The measure reported reflects average CO2 emissions AL&W's thermal generation portfolio,
and uses an assumed CO2 emissions rate of 1,100 lbs/MWh for market purchases.
Figure 4—Comparison of AL&W Carbon Dioxide Emissions (tons/MWh)
Azusa Light&Water-Comparison of CO2 Emissions
(tons per MWh of Portfolio Generation)
1.50 -. _ _ ....._.. • __...__. ._f _. _._.__._.�._.,_.....�.__.__... ...._......__......._._
•Without LEC Case
1.40
LEC Case
1.30 ^-IL San Juan Retirement Case
1.20
1.10
1.00
0.90
0.80
0.60 ._-.
ppb
U 0.50
0.40 _. _
0.30
0.20
0.10 - — -- - -
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
As shown in Figure 4, the inclusion of LEC in the supply portfolio results in lower CO2 emissions in Scenario
2, which includes LEC, compared to Scenario 1 which does not. Early retirement or re-contracting of San
Juan 3 in Scenario 3 results in a substantial reduction in AL&W average CO2 emissions rate, reflecting the
much higher fuel use and carbon emissions rates of steam turbine coal plants, compared to natural gas-fueled
combined-cycle technology.
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2.0 INTRODUCTION
Black & Veatch was retained by Azusa Light & Water (AL&W) to complete an assessment of its potential
contractual participation in the Lodi Energy Center(LEC). The Lodi Energy Center is a 280 MW natural gas-
fueled combined-cycle plant being developed near the City of Lodi, California. The Northern California
Power Agency (NCPA) is developing the project. There are currently 14 partners interested in contracting for
energy and capacity output from LEC. Under current plans, AL&W would contract for a 7.7 MW share of
the plant. The project is expected to achieve commercial operation by June, 2012.
In completing its assessment, Black & Veatch reviewed a number of quantitative and qualitative aspects of
the LEC project, as they apply to AL&W's overall supply resource portfolio. Black&Veatch also completed
a dispatch analysis of LEC to assess how it will fit into AL&W's overall supply portfolio. In completing the
dispatch analysis, Black & Veatch utilized the PROMOD IV production simulation model, and dispatched
AL&W's supply portfolio against long-term forecast hourly energy prices in the Southern California (SP15)
market region. In completing this analysis, B&V used its recently prepared Fall 2009 Energy Market
Perspective(EMP)electricity price forecast as the base case expected values for hourly spot prices.
2.1 B8V Fall 2009 Energy Market Perspective - Overview
Black & Veatch has developed its Energy Market Perspective, which uses an Integrated Market Modeling
(IMM) process to prepare its integrated long term view on energy markets. In order to arrive at this market
perspective, B&V draws on a number of commercial data sources and supplements them with its own view on
a number of key market drivers, for example, power plant capital costs, environmental and regulatory
policies, natural gas exploration and development costs, and gas pipeline expansions.
B&V uses these data in a series of vendor-supplied and internally-developed energy market models to arrive
at its proprietary market perspective; vendor-supplied models include PROMOD (part of the PowerBase
Suite).
Figure 5 - B&V Integrated Market Modeling Process
B&V Gas Price
View
Near-Term Capital Costs Demand Coal Prices
Entry Forecast
PROMOD B&V Energy
Model and Capacity
Price View
Transmission
Environmental Costs and Regional
Costs Issues
Additions
From the IMM process, B&V has developed an independent forecast of the WECC wholesale electricity
market. This zonal analysis of WECC incorporates the results of B&V's assessment of market-based capacity
additions and retirements,the impact of potential green house gas legislation, and the inter-zonal transmission
transfer capabilities implicit in the existing transmission system and the new transmission facilities needed to
facilitate renewables development in the western U.S.
Black & Veatch's market perspective considers the resource adequacy value of capacity in the WECC with a
"Net Cost of New Entry" process, and to the extent that forecasted energy prices are insufficient to induce
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reliable levels of generation, B&V calculates the equivalent of a capacity price forecast that "fills the gap"
between energy market net operating revenues and new entrant revenue requirements.
In the course of preparing its Energy Market Perspective, B&V validates its WECC modeling by comparing
the near term results of its energy price forecast to recent historical values. B&V's forecast SP15 prices
exhibit real price escalation in early years, as natural gas prices rise, and as supply/demand balances tighten.
There is a permanent jump in 2014 with assumed implementation of greenhouse gas emission regulations,and
formal pricing of CO2 emissions allowances. Longer term, forecast energy prices continue to rise as both
natural gas and CO2 emissions allowances both exhibit strong real price escalation.
Figure 6 provides an illustration of historical and projected energy market and natural gas market prices in
Southern California. The B&V EMP forecast results are in line with recent historical spark-spread and
market heat rate levels although,as would be expected in a deterministic structural model,the forecast data
are less volatile than historical price levels. As shown in Figure 6,historical power and natural gas prices have
exhibited substantial price volatility.
Figure 6—B&V EMP—SP15 Spot Market Electricity Prices (2009$)
_ _...__...-._- $50.00
IMINI Historical SoCal Border Natural Gee Price(S/mmBtu)
$140.00 -' w.e,.Forecast SoCal Border Natural Gas Price(5/mmBtu) --_-
�Hislortcal SP 15 On-Peek Energy Price(S/MWh) -$45.00
I Historical SP 15 Ott-Peek Energy Price(S/MWS)
I Forecast SP 15 On-Peak Energy Price(S/MWh)
$120.00 --I Forecast SP 15 Off-Peak Energy Price($/MWh) —_.._ -----
_.___.._..-------_-.. .--.—_- $40.00
-- — -- ---. _ r
l $35.00
$100.00
$30.00
$80.00 - __. _. ----.1 , __ _ - ---.-
$25.00
$60.00 - - -_ _._ _._ _--_.__- - ------- ------._-_ $20.00
{ `t -$15.00
$40.00 ,_ _._ - __.. _ _ ___..__._ -
1 _ $10.00
$20.00 _. ----- .--_. - _._ –._.-__. . ._...-_.. .__._�._.___.__________
$5.00
n n nn n nIIII$0.00 I I n nnn n. n n n nn n n n n n n n n
$0.00
� 5pnA � n ° ,p � ' �eeeep
„ nn n , n „ nfi „ , „v„ „ „ nn n „ „�„ „ nl „p, „A„�n„ „ „ „
n n n
2.2 B&V Fall 2009 Energy Market Perspective- Major
Assumptions
B&V's Energy Market Perspective is a fundamental forecast, built up from base assumptions about supply
and demand characteristics governing regional energy markets. As such, there are a number of key
assumptions that influence the EMP results and price forecasts. Among the most important assumptions are
the underlying supply and demand forecast, the natural gas price forecast, policy assumptions about
greenhouse gas emissions regulation,and projections of renewable and thermal generator entry.
The EMP is developed as a zonal power price forecast, which means that the region is divided into a number
of separate supply/demand zones, with load and generation assigned within each zone. Generation is
dispatched within each zone to meet hourly demand, but the zones are also connected through existing
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transmission links, so that economic energy transfers occur between zones in the hourly dispatch. Figure 7
shows the 24 pricing zones reflected in the EMP, including transmission capacity levels connecting each
zone. Under the zonal pricing approach,transmission capacity between zones is generally static, and does not
vary with loadings of particular generators. Economic transfers are scheduled between zones up to the
amount of transmission capacity. The approach produces reasonable electricity price projections,particularly
over the long-term, but the transmission modeling is less detailed than a nodal modeling approach, or than
current operation of the CAISO locational marginal pricing markets.
Figure 7—WECC Market Zones
\ s� As
1----_._
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Table 1 provides a summary of current supply and demand in the WECC, with generators grouped by major
technology. Total projected supply is 219,132 MW with wind generation at full rated capacity. With wind
de-rated to 10% to reflect its expected capacity contribution during the peak hour, total WECC supply is
projected at 208,370 MW. With August non-coincident peak demand projected at 163,091 MW, the WECC
region has a projected reserve margin of 28%in 2010.
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Table 1 —WECC 2010 Supply and Demand Summary
WECC Resources (MW) 2010
Biomass 1,452
Coal 36,446
Combined Cycle 47,781
Combustion Turbine 17,114
Geothermal 3,442
Hydro 64,963
IGCC
Nuclear 9,552
Other 3,065
Pumped Storage 4,516
Renewable 11,957
Steam Turbine 18,845
Total Capacity (100%)Wind 219,132
Total Capacity (10%)Wind 208,370
August Non-Coincident Peak (MW) 163,091
Winter Non-Coincident(MW) 141,040
Average Energy Load (MWa) 102,901
Total Capacity Resources(MW) 208,370
WECC 2010 August Reserve Margin 28%
The demand forecast underling B&V's Fall 2009 EMP reflects projections developed by each of the load-
serving entities. The forecast reflects near-term conditions arising from the 2008-2009 economic recession.
Figure 8 provides an illustration of the WECC energy demand forecast. Peak demand is projected to grow at
1.6 percent annually, and energy demand at 1.5%annually.
Figure 8—WECC Energy Demand Forecast
1,300,000 - ..._.
1,200,000
1,100,000 -
Historical WECC Energy Demand
1,000,000 -
900,000 �- _ _
800,000 -
700,000 R
1 600,000
M500,000
400,000 -
I
300.000 ,
200,000
100,000
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
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Natural gas prices play a substantial role in determining energy prices in the WECC, because natural gas-
fueled resources are typically marginal over 90% of the time. As such, the natural gas price forecast is a key
component in developing long-term electricity price projections.
Major considerations underlying B&V's natural gas price forecast include:
Short-term(2009-2011)
• Demand weakens with global economic climate
• North American natural gas production decreases with lower prices, credit constraints, and reduced
drilling activity
Medium-term(2011 —2019)
• Natural gas prices track upward to an average of$5.50
• Unconventional gas(gas shales,Rockies tight gas and coal bed methane production) and LNG
imports keep pace with NG demand
Long-term (2019—2030)
• Power sector demand pushes new consumption
• Alaskan gas enters market in 2020 softening prices for a few years
• Prices then rise as WCSB decline accelerates and current unconventional gas plateaus
WECC projected power prices are also influenced by policy initiatives designed to reduce environmental
impacts of power generation, including renewable energy portfolio standards (RPS), and anticipated federal
legislation to reduce greenhouse gas emissions (GHG). In its Fall 2009 EMP, B&V reflected current
requirements for development of renewable energy resources in the WECC, and also assumed that federal
GHG legislation will pass, with pricing of CO2 emissions allowances beginning in 2014. Each of those
assumptions has a significant influence upon long-term electricity price projections.
Table 2 outlines the current RPS requirements in the WECC, as a percent of energy demand.
Table 2 —WECC Renewable Energy Portfolio Standards (% of Energy Demand)
RPS % 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
California 20% 20% 20% 20% 23% 23% 26% 26% 30% 30% 33% 33% 33% 33% 33% 33%
Colorado 5% 5% 10% 10% 10% 10% 15% 15% 15% 15% 15% 20% 20% 20% 20% 20% 20%
Montana 5% 10% 10% 10% 10% 10% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%
Nevada 12% 12% 15% 15% 18% 18% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%
New Mexico 10% 10% 10% 10% 15% 15% 15% 15% 15% 20% 20% 20% 20% 20% 20%
Oregon 5% 5% 5% 5% 15% 15% 15% 15% 15% 20% 20% 20% 20% 20% 25%
Washington 3% 3% 3% 3% 9% 9% 9% 9% 15% 15% 15% 15% 15% 15%
Based upon those RPS requirements, B&V included substantial expansion of renewable energy capacity in
developing the EMP. The balance of renewable expansion continues to use wind technology, but solar
contribution becomes increasingly meaningful through time. Figure 9 illustrates renewable energy expansion
underlying B&V's forecast. As shown, current RPS requirements suggest cumulative renewable additions
approximating 10,000 MW by 2015, 20,000 MW by 2020, 27,000 MW by 2025, and 38,000 MW by 2033.
Introduction of those levels of renewable energy influence WECC energy prices, due to the low variable cost
of renewable technologies, and the expected time-of-day and seasonal generation profiles of those resources.
Because the renewable resources have limited dispatch flexibility, energy from those resources is typically bid
as price-taking, and has influence upon which thermal resources are marginal price-setting units in the
respective market pricing zones.
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Figure 9—WECC Renewable Energy Resource Expansion
WECC Generic Renewable Capacity Additions
45,000
— —
■Wind-Alberta 0 Wind-Northwest
•Wind-Northern CA ■Wind-BC
40,000 ®Wind-Southern CA !Wind-Utah
■Wind-Nevada ■Wind-New Mexico '
III ❑Wind-Idaho III ' '
35,000 - MWind-Colorado Wind-Montana , _ _ 1
MI Wind-Wyoming ■Wind-Arizona '
■Wind-IID ■Geo IID _
30,000 - pGeo NV 0 Solar NV
■Solar SP15 O Solar CO
25,000 - D Solar AZ O Solar NP15 -
20,000 }
is
° 15,000
10,000
5,000 -
11 1
® 11I sY
111
2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
One of the key policy uncertainties underlying power markets throughout the U.S. concerns whether GHG
regulations will be enacted, and the exact form of such regulations if they are enacted. There is currently
major GHG legislation in front of Congress, and passage of such legislation has strong support from the
Obama Administration.
In recent months, significant legislative attention has been focused on HR 2454, the American Clean Energy
and Security Act of 2009 (ACESA), drafted by Reps. Henry Waxman and Ed Markey. The US House of
Representatives passed the bill on June 26, 2009. The Senate has not yet passed a companion bill, although
bills have been introduced. This legislation is intended to reduce domestic emissions of greenhouse gases,
and contains four main mechanisms for reducing GHG emissions in the economy:
• A cap and trade emissions trading system geared at the electric utility sector and large emitters of
greenhouse gases
• EPA enforced equipment performance standards for all other CO2 emitters
• A mandatory federal renewable electricity standard requiring electric utilities to generate 20 percent
of their power from renewable sources and through efficiency gains by 2020;
• Various energy efficiency standards for buildings,equipment, and appliances.
The legislation has targeted reductions in GHG emissions of 17% by 2020 compared to 2005 levels; 42% by
2030, and 83%by 2050. Eighty-five percent of GHG allowances will be allocated to retail electric companies
and generation owners, and 15%will be auctioned.
In developing the Fall 2009 EMP, B&V assumed that major elements of the Waxman/Markey legislation will
pass, with implementation of CO2 allowance pricing delayed to 2014, rather than 2012 as proposed in the
current legislation. B&V assumed that international offsets would be available as a compliance mechanism in
reducing GHG, consistent with the proposed legislation. That element plays a significant role in determining
expected prices for CO2 allowances. Figure 10 provides an illustration of projected prices for CO2 allowances
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based on the assumed legislative provisions of Waxman/Markey. These allowance prices are implemented in
the EMP beginning in 2014,and cause a significant increase in projected energy prices beginning in that year.
Figure 10 —Projected CO2 Emission Allowance Prices
100
90 -
80
° 70
w
8 60
U 50
I 40
'a I
I 30
20
10 —
0 -
2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
2.3 Lodi Energy Center Operating Characteristics
The characteristics of the Lodi Energy Center are listed in Table 3 and were provided by AL&W. These
parameter values were used in completing the dispatch analyses.
Table 3 —Lodi Energy Center Plant Characteristics
Lodi Energy Center Combined Cycle
Fuel Type Natural Gas
Start Fuel Natural Gas
Location Northern California
Commercial Operation Date June,2012
Number of Units 1 @ 280 MW
Variable O&M($/MWh) $1.00
Fixed O&M ($/kW-year) $37.56
Maintenance Rate(hours/year) 438
Forced Outage Rate(%) 2%
Min Up Time(hours) 4
Min Down Time(hours) 4
Heat Rate(Btu/kWh) 6,800
Start Costs -
Cash Start Costs($/start) 0.00
Fuel Start Costs(mmBtu/warm start) 1,483
Emission Rates(lbsiMMBtu)
CO2 119
NOx .02
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3.0 LODI ENERGY CENTER EVALUATION
3.1.1 Azusa Light &Water's Supply and Demand Profile
AL&W has a number of supply resources in its existing resource portfolio. The largest resource in AL&W's
supply portfolio is a share of the San Juan 3 coal unit in New Mexico. AL&W has a current and ongoing
need for resource adequacy/reserve capacity,even with the inclusion of LEC in its supply portfolio. AL&W is
basically short on capacity,but not on energy,due primarily to the dominance of San Juan 3 in its supply
portfolio.
Figure 11 provides an illustration of AL&W's current supply and demand balance for the 2010 through 2030
time period. As shown,AL&W's aggregate existing supply resources are below projected peak demand, and
below peak demand plus required reserves. This is true even with inclusion of LEC in the supply portfolio.
To cover needed reserves,AL&W must purchase short-term capacity products in the California market.
Figure 11 highlights the significance of San Juan 3 in AL&W's current supply portfolio,with that resource
contributing almost half of needed reserve capacity. San Juan's contribution to AL&W's energy balance is
even more substantial. In calculating reserve capacity for AL&W's portfolio,wind resources are given a 10%
capacity credit,which is reflective of the intermittent nature of the wind resource.
Figure 11 —AL&W Supply and Demand Balance
100.0-
BIM San Juan Unit 3 =NI Palo Verde
Hoover Inn MWD Hydro
11San Dimas Hydro ®Shell Trading
90.0- ®Iberdorla High Winds IIMM Garnet Wind -------- -"-------
MIM
Lonergy nter Peak Demand(MW))
tpediak EDemand Ceplus Reserves(MW)
80.0 --. _._..------ —-- - --
70.0- i....
`. 60.0------ ------ — -- -- - -----.....-_ -
50,0
40,0 - •r _
30.0
20.0
10.0
00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Year
Because of AL&W's need for reserve capacity,the proposed participation in LEC will provide value in
satisfying a portion of AL&W's resource adequacy needs. Absent participation in LEC,AL&W would have
to separately procure reserve capacity,through peaking or other generating resources. As shown in Figure 11,
the 7.7 MW share of LEC basically satisfies AL&W's reserve capacity need for the 2012 through 2015
period,and even with LEC there will be a need for additional reserve capacity after 2015,when the current
contract for the Shell Trading resource expires. Under B&V's projections,by the time LEC is on-line,the
value of the reserve capacity it will provide ranges from$80 to$140/kW/Year. Those values are based on
projected investment carrying costs of new peaking resources,with the$80/kW/Year estimate based on GE
7FA technology, and the$140/kW/Year estimate based on GE LMS 100 technology. Given the preference to
build the more flexible LMS100 peaking technology in California,B&V expects that resource adequacy
prices/value will be closer to the$140/kW/Year range in California.
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3.1.2 Location of Lodi Energy Center
The Lodi Energy Center will be located near the city of Lodi, in Northern California. The project is
somewhat distant from AL&W's service territory and primary load centers'. Figure 12 shows locations of
current participants in LEC.
Figure 12—Lodi Energy Center Participants
California Department
of Water Resources
(multiple locations)
Ukiah •Gridley/Biggs�lumas
•
Healdsburg It Power and Water
Santa Rosa IP Lodi Energy Conte Resources Pooling
0 Authority(multiple
Port of locations)
oaklanr... • Modesto
Bay
Area
Rapid
Transit
Lompoc Azusa Light&Water
V\ •
\40/
As shown,the majority of LEC participants are located in Northern California. However,AL&W is a
participant in California Independent System Operator(CAISO)day ahead,hour-ahead and real-time
locational marginal pricing energy and ancillary services markets. Under current CAISO market rules, energy
prices are established on a locational marginal pricing basis,with varying prices depending on supply and
demand conditions, and transmission system operational condition at each applicable generation and load bus,
and at pre-specified pricing aggregation points. Under this market structure,price differences between buses
are dependent upon transmission system congestion and loss differentials at each respective bus.
If AL&W schedules energy from LEC, for CAISO settlement purposes, it would receive the locational
marginal price at the Lodi bus as market revenue,and would pay for energy delivered based on the locational
marginal price at one of its two main load buses. This net settlement difference, plus the variable operating
costs and fixed cost payments due NCPA would represent AL&W's cost of energy from LEC.
In the time since CAISO began locational marginal pricing based markets, energy prices in Northern
California have been higher than energy prices in Southern California. This condition applied under previous
While LEC appears distant from AL&W's service territory,it is noteworthy that it is geographically closer than some
other components of AL&W's supply mix, such as San Juan 3 and Hoover Dam.
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market structures as well, and is projected to continue into the future based on relative supply and demand
conditions, and transmission system import capability into the respective market regions. Figure 13 illustrates
price differentials between the NP15 trading hub and SP15 trading hub since April, 2009, when CAISO LMP
markets began.
As shown in Figure 13,NP15 prices have consistently traded at a premium to SP15 prices. That pricing
premium persists in most long-term projections of California electricity prices, such as Black& Veatch's Fall
2009 Energy Market Perspective. Under those conditions,AL&W could expect to earn a modest premium on
energy it schedules from LEC. In cases where AL&W is in a net energy surplus condition, it could also
expect to sell its output from LEC into the higher priced NP 15 market region. This element helps to mitigate
AL&W's risk associated with spot energy market sales.
Figure 13 —CAISO NP15/SP15 Locational Marginal Price Differences
CAISO Locational Marginal Prices
$55.00 .......... ____. ........ ....._ ._...__.-._.___.._.__ _,._...... ._...._...._.__. _._._._. .,. _........._..
Imo
NP15-SP15 Differential
$50.00-
�'�NP15 Trading Hub
$45.00- SP15 Trading Hub —
$40.00
$35.00
$30.00-
$25.00 ._._._--- - -------_---- ----- ------
1
$20.00
$15.00 -_
$10.00
(
$5.00
$0.00 $
Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10
3.1.3 Alternative Supply Resources
Black &Veatch reviewed construction cost estimates for LEC, developed by Siemens and by NCPA.
Estimated construction costs are consistent with other comparable projects that Black&Veatch has reviewed
in the last two years. The LEC estimated costs are slightly below Black&Veatch's recent projections of
costs for constructing similar technology.
Black&Veatch also reviewed competing projects under development in California power markets. In
Southern California,where AL&W is located, the bulk of natural-gas fueled power plants under advanced
development have been put on hold. With court decisions making it difficult to receive air emissions permits
and necessary emissions offsets, new natural-gas fueled power plants being developed in Southern California
have stalled. As such, LEC is one of only a handful of viable combined-cycle resources currently at advanced
development stages in California.
3.1.4 Dispatch Analysis of Lodi Energy Center
As discussed earlier, B&V completed dispatch analyses of AL&W's existing supply portfolio, both with and
without the inclusion of LEC. As a sensitivity case, B&V also completed a dispatch analysis of AL&W's
supply portfolio with LEC included, but assuming that retirement or re-contracting results in San Juan 3 no
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longer being part of AL&W's resource mix. B&V used the PROMOD IV market simulation tool to complete
the dispatch analysis, and dispatched AL&W's resources against SP15 forecast energy market prices. The
basic principle underlying that approach assumes that AL&W's existing supply resources will be rationally
dispatched based on SP15 wholesale market prices,and that AL&W will manage its overall portfolio and load
obligation by engaging in additional short-term purchase and sale transactions in CAISO energy and ancillary
services markets, as needed.
The three scenarios examined are as follows:
• Scenario 1 — Existing Supply Portfolio Case: In Scenario 1, Black & Veatch completed a dispatch
analysis of AL&W's existing supply portfolio, without the addition of LEC. Given projected demand
growth and the expiration of purchase power contracts for a number of existing supply resources, this
scenario results in a small net energy sales position in early study years, and a moderate net energy
purchase position in middle to late study years.
• Scenario 2 — LEC Case: In Scenario 2, Black & Veatch completed a dispatch analysis of AL&W's
existing supply portfolio, but with LEC included starting in 2012, on its projected commercial
operation date. This scenario results in a moderate net energy sales position through the year 2020,
and a net energy purchase position beginning in 2021 and later years.
• Scenario 3 — San Juan Retirement Case: In the third scenario, Black & Veatch included LEC in
the AL&W supply portfolio, but assumed that San Juan 3 is retired, or that AL&W no longer
contracts for its energy output, beginning in 2015. This scenario is not meant to suggest that San Juan
Unit 3 retirement will actually occur at that time,but instead is meant to measure the risk impact upon
AL&W's overall energy procurement activities, if for some reason the San Juan resource is no longer
part of the supply portfolio. This scenario results in a large net energy purchase position beginning in
2016, which is the assumed date of San Juan dropping out of AL&W's supply portfolio. This net
energy purchase position would occur even with LEC included in AL&W's supply portfolio.
3.1.4.1 Scenario 1 —AL&W Existing Supply Portfolio
Figure 14 provides a projected energy balance for AL&W under Scenario 1, where LEC is not included in the
supply portfolio. With existing resources, AL&W is projected to have an energy surplus in the 2010 through
2017 time period, and an energy deficit in the 2018 and later time period. An energy surplus position means
that AL&W will have net excess energy to sell into the spot market on an annual basis. In that case,
economic energy production from the supply portfolio exceeds forecast energy demand over the course of a
year. An energy deficit means that AL&W will have to purchase energy from the spot market to supplement
energy produced by its supply portfolio. As highlighted in Figure 14, San Juan 3 represents the largest share
of AL&W's energy supply.
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Figure 14—Scenario 1 —AL&W Energy Balance
Azusa Light&Water Energy Balance
Without LEC Included in Supply Portfolio
450.000.000
®Hydro Generation(MWh) Nuclear Generation(MWh)
MIMI Wind Energy(MWh) =San Juan 3 Generation(MWh)
400,000 000 Energy Load(MWh)
350,000.000
Generation Generation
Surplus Deficit
300,000 000
250,000000 .' "'�
200,000.000
San Juan 3 Generation(MWh
150,000 000
100,000 000
50,000.000-
Wind Energy(MWh)
Nuclear Generation(MWh)
Hydro Generation(MWh)
0.000 ....
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
While Figure 14 illustrates early period energy surplus, and late period energy deficits, AL&W would still be
active in both purchase and sale activity on a daily, weekly and monthly basis, as it manages its overall
resource portfolio to economically serve load. Figure 15 highlights that element, in showing both energy
purchase and sale activity, along with the net energy surplus and deficits. In this case, net energy surpluses
are shown as negative quantities,and net energy deficits are shown as positive quantities.
Figure 15—Scenario 1 —AL&W Market Purchase and Sales Activity
AL&W Market Purchase and Sales Activity
Without LEC Included in Supply Portfolio
150,000
140,000 4 Net Purchases/(Sales)
Energy Market Purchases
130.000 ��,Energy Market Sales --_ -
120.000110,000 �, ...,
100,000
90,000
80,000
70,000
60,000--_ _.
50,000
40,000 _
.w,........._, _ �. ,..
30,000--- `- - ---
20,000
10,000 - _ ---- - -- --_. -- _ -- --- — - — _
-10,000 . ■l-'
-20.000 _..
-30,000
-40,000 .
-50.000
-60,000 -__. __.._......___.._... ._.__.._...._...____ ____._..._ _..._. ......_ _. _.__.. ..,....._..___..........___... ___.....�
0 of ,
ry0� h0N ry0� ry0� ry°n ry°„ ,194) ry0�1 ryOn 'On ti6P
`,((.° ,61P ,t6ry0 ,f'LrO ry09' rydV°j
Black&Veatch Page 12 Draft Report
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
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Figure 16 also illustrates energy market purchase and sale activity under Scenario 1, with the data presented
on the basis of average MW per year rather than total energy. This measure provides a sense of the average
annual purchase and sale quantities that AL&W is projected to transact, in the absence of LEC in the supply
portfolio. As shown, early in the study period AL&W is projected to engage in energy sales activity
averaging 6 to 7 MW,which tailors down through time to the 2 to 3 MW range by the end of the study period.
Conversely,AL&W projected market purchase activity averages about 4 MW early in the study period, which
increases substantially toward the end of the study period to vary between 11 and 12 MW.
Figure 16—Scenario 1 —AL&W Market Purchase and Sales Activity—Average MW
AL&W Market Purchase and Sale Activity-Average MW
Without LEC Included in Supply Portfolio
15.0 . —..
O Energy Market Purchases(Avg MW)
14.0 .
■Energy Market Sales(Avg MW)
13.0
12.0 I
11.0 ----- -- -- ---- __ _.
—l
10.0— --_._. _--__-------- ---------- --_- _ __..
9.0
8.0
7.0 x I
6.0
5.0 - i
i
,yo^° P P P 1) f P^6 tip^^ P ,-P f tioti� tidy tioti' ,19 ,yoti`' ,yo'� ,yoti� f ,yo'�
3.1.4.2 Scenario 2—AL&W Supply Portfolio Including Lodi Energy Center
In Scenario 2, the dispatch analysis includes a 7.7 MW share of the Lodi Energy Center in AL&W's supply
portfolio, beginning in June, 2012. With LEC inclusion, the dispatch analysis was again conducted where
each of AL&W's supply resources was dispatched against SP15 forecast prices, and AL&W's energy
balances were re-computed. LEC represents a cost-competitive natural gas-fueled resource for AL&W,
reduces its greenhouse gas footprint, and helps to diversify its energy mix and risk exposure away from
substantial reliance upon San Juan 3. However, because AL&W is in an energy surplus position early in the
study period, inclusion of LEC in the supply portfolio initially adds to that surplus. In its initial years of
operation, assuming the rest of AL&W's supply portfolio remains in place, the addition of LEC will create
additional risk exposure to CAISO wholesale sales markets.
Figure 17 illustrates AL&W's annual energy balance with inclusion of LEC in the supply portfolio. As
shown, inclusion of LEC adds to net energy surpluses through 2020, but then substantially closes net energy
shortages in remaining study years. It is important to realize that despite net energy surpluses in early years,
AL&W will be active in both purchase and sale markets throughout the study, as it manages its overall
resource portfolio and reacts to fluctuating power market conditions.
While inclusion of LEC in the supply portfolio increases AL&W's risk exposure to sales transactions and
revenue in initial years of operation, that risk should be manageable. For example, as discussed earlier,
CAISO markets have shown a price premium for energy delivered in northern California, and that premium is
expected to continue. In addition, spot market power prices in California and throughout the WECC region
are heavily influenced by the production cost of natural-gas fueled resources. Because LEC will be one of the
Black&Veatch Page 13 Draft Report
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
PRIVILEGED AND CONFIDENTIAL
most efficient resources in operation, particularly during its first 10 years of operation, it will be cost
competitive in CAISO markets and will enjoy profit margins in virtually all hours when it is producing
surplus energy. LEC will also provide AL&W with a hedge against higher prices in the event greenhouse gas
regulation is implemented and CO2 emissions become regulated, as anticipated CO2 emissions from LEC will
be less than half the levels currently produced at San Juan 3.
Figure 17—Scenario 2—AL&W Energy Balance with Inclusion of LEC
Azusa Light&Water Energy Balance
LEC Included in Supply Portfolio
450,000.000,....:.., _._. .._ ,.,.:..- ...�:. m...�-,� ..... ,... .. .,_.a-.._....... ......__....._. __....___..._.
®Hydro Generation(MWh) IIII=Nuclear Generation(MWh)
MINIIIIWind Energy(MWh) San Juan 3 Generation(MWh)
400,000 000 LEC Generation(MWh) Native Energy Load(MWh)
350,000 000
LEC Generation(MWh)
300,000.000
250,000 000 t>
200,000 000
ISan Juan 3 Generation(MWh)
150,000 000 -
100,000.000-
50.000.000 Wind Energy(MWh)
Nuclear Generation(MWh)
Hydro Generation(MWh)..
0.000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Figure 18 illustrates AL&W's spot market purchase and sale activity on an average MW basis, with inclusion
of LEC. Compared to Scenario 1, LEC adds about 5 MWa to AL&W's initial surplus position in early study
years, and reduces its net energy deficit by 3 to 4 MWa in later study years.
Figure 18—Scenario 2—AL&W Market Purchase and Sales Activity with LEC—Average MW
AL&W Market Purchase and Sale Activity-Average MW
LEC Included in Supply Portfolio
15.0 . _ ____.. _ ..._ _......_ _. .. _
O Energy Market Purchases(Avg MW)
14.0 _
■Energy Market Sales(Avg MW)
_... _.
13.0
12.0
11.0
10.0__
I 8.0
7.0
,
111 s, ke
.
1.0 r
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Figure 19 lists projected production costs of AL&W's major thermal resources during the study period, in
comparison to projected SP15 spot market energy prices. The cost values in Figure 19 reflect variable cost
only. As shown, each of AL&W's supply resources, including LEC, is cost competitive relative to projected
SP15 spot market prices. Interestingly, with inclusion of anticipated CO2 pricing due to greenhouse gas
regulation, LEC and San Juan 3 have comparable production costs beginning in 2023, whereas San Juan 3
enjoys a cost advantage in earlier study years.2 With the inclusion of CO2 pricing, and given the higher
emissions rate and heat rate of San Juan 3, it is projected to lose the cost advantage it has historically enjoyed
relative to natural gas-fueled combined-cycle resources.
Figure 19—Scenario 2—AL&W Variable Energy Procurement Cost
Azusa Light&Water-Variable Energy Procurement Cost
LEC Included in Supply Portfolio
$140.0
....... .Palo Verde 1-Azusa
San Juan:3-AL&W
'`Lodi Energy Center-AL&W
$120.0 -_- i Portfolio Average
4,—SP15 Spot Market Energy Price
$100.0 -- --- -- ---
1
i $80.0 ._ .--
$60.0 . __.- _. - _.. _ _....--- - ---_—___ _
j $40.0 -_ -- --- -*` --
$20.0
$0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Figure 20 illustrates AL&W's resource costs on an all-in basis, which reflects both variable and fixed costs
associated with each supply resource. The all-in costs for AL&W's existing resources were provide by
AL&W. For LEC, B&V developed a fixed investment cost estimate based on LEC projected construction
costs, and then spread those fixed costs over LEC's expected energy production levels. B&V's estimated
fixed costs for LEC are $127/kW/Year, which translates into $18.36/MWh, based on an anticipated annual
capacity factor of 79 percent. For purposes of Figure 20, B&V also added estimated fixed costs to the spot
market energy forecast prices, simply to allow a full comparison.
As shown in Figure 20, with inclusion of energy, CO2 and fixed costs, San Juan 3 is projected to lose its
competitive advantage relative to both LEC and relative to SP15 market prices.
2 Black&Veatch utilized its own estimates of fuel and production costs for the supply resources,which may differ from
actual costs or from PPA terms governing AL&W's supply procurement contracts.
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Figure 20—Scenario 2—AL&W All-In Energy Procurement Cost
Azusa Light&Water-All-In Energy Procurement Cost
LEC Included in Supply Portfolio
$140.0 _. __ -. - _. _.-____ ---.._
*.'Palo Verde 1-Azusa
San Juan:3-AL&W
.... .....Lodi Energy Center-AL&W
$120.0Portfolio Average --_.- ___-_._ _____.--___---------- -- __ _. - _. _
0-SP15 Spot Market Energy Price
.. $100.0 - ....
L $80.0
$60.0
�`
c
-r
$40.0
$20.0 -- ------. ___— _---. ..-- ------
$0.0 ,
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Figure 21 further illustrates changing economics of supply resources, where projected utilization of San Juan
3 declines through the study period, as natural gas-fueled resources become relatively more competitive as
CO2 prices increase.
Figure 21 —Scenario 2—Projected Capacity Factor of San Juan 3 and LEC
AL&W Baseload Resources-Capacity Factor(%)
1 11-11
LEC Included in Supply Portfolio
100%- _. __ ___ __ ...... ..._._. ,_... _ __ ... ... .....,
■San Juan:3-AL&W
90% --- --------! O Lodi Energy Center-AL&W -�
80%
70%
3 60%
, _,
5n%
,„
40%
c
30%
-j
20% -- `- id-i- ,"
,�0 ,�N ,wry ^b ,�t ,°D c�,�CD ,�� ,47 ^0 `y0 `'es `l19. '5 1,1. 14,DA`y5, `y'1 ,{y0 rp
19 19 99 99
Inclusion of LEC in AL&W's supply portfolio has potential to reduce its overall carbon footprint, and to
reduce its risk exposure in the event that greenhouse gas emissions regulations are enacted and CO2 becomes
priced in the market place. Figure 22 provides an illustration of that impact, in comparing average CO2
Black&Veatch Page 16 Draft Report
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
PRIVILEGED AND CONFIDENTIAL
emissions rates for AL&W's supply portfolio with and without inclusion of LEC. As shown,with LEC in the
supply portfolio,projected portfolio CO2 emissions rates decline by approximately .04 tons per MWh.
Figure 22—Scenarios 1 and 2 —Comparison of AL&W Portfolio CO2 Emissions Rates
Azusa Light&Water-Comparison of CO2 Emissions
(tons per MWh of Portfolio Generation)
--
1.40
Without LEC Case LEC Case
1.30 H
1.20
1.10
1.00
0.90 —
•� 0.70 •
_--
o-so
g0.500.40
0.30
0.20
0.10
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
3.1.4.3 Scenario 3—AL&W Supply Portfolio with Potential Loss of San Juan 3
In Scenario 3, Black & Veatch completed a dispatch analysis of AL&W's supply portfolio under assumed
circumstances where San Juan 3 is no longer included after 2015. This scenario is not meant to be a
prediction of that actually occurring. Instead, Black & Veatch developed this scenario solely to better
understand the dynamics of AL&W's supply portfolio, and to more fully assess the fit of LEC into that
portfolio. Given the large contribution of San Juan 3 to AL&W's overall supply mix, loss of that resource
would have a substantial impact. The scenario also highlights how LEC can provide a hedge for AL&W in
case something happens at San Juan, due either to market or physical conditions.
Figure 23 shows AL&W's projected energy balance under Scenario 3. As shown, with assumed loss of San
Juan 3, AL&W would immediately face a substantial energy deficit, and would need to procure additional
supply resources, or rely heavily upon spot market purchase activity. Under such a scenario, inclusion of
LEC in its supply portfolio would help AL&W mitigate its supply risk and exposure to spot market purchase
price volatility.
Figure 24 illustrates projected spot market purchase and sale activity on an average MW basis for Scenario 3.
As shown, if San Juan 3 were no longer available, AL&W would immediately be in a net purchase situation,
and would not produce surplus energy at all, even with inclusion of LEC in its supply portfolio.
Black&Veatch Page 17 Draft Report
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
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Figure 23—Scenario 3—AL&W Energy Balance with Loss of San Juan 3
Azusa Light Sr Water Energy Balance
LEC Included in Supply Portfolio-San Juan Early Retirement
450,000 000--__ .,-x_H-._ydro GeneratoaMWh) Nuclear
uclear Generation
eneration
(MWh)
Wind Energy(MWh) =San Juan 3 Generation(MWh)
400,000.000 LEC Generation(MWh) Energy Load(MWh)
350,000 000-
300,000.000 - - - -----. _-_.._- ----_..----- --
250,000.000 "...."."•-•"*".'
200,000.000 ----- - ----- _ --
150,000.000
[San Juan 3 Generation(MWh)
100,000.000 LEC Generation(MWh)
50,000.000
Wind Energy(MWh)
Nuclear Generation(MWh)
Hydro Generation(MWh)
0.000 .. _
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Figure 24 — Scenario 3 — AL&W Market Purchase and Sales Activity without San Juan 3 —
Average MW
AL&W Market Purchase and Sale Activity-Average MW
LEC Included in Supply Portfolio-San Juan Early Retirement
30 0
29.0 ' C)Energy Market Purchases(Avg MW) -
28.0 ---_-_-
27,0. ■Energy Market Sales(Avg MW) - - - --- ------- —
26.0 ------ - _. -
25.0-- ------- -
24.0 - - - - -- ------._.._.----------
23.0 - - - ----- ----------- ------ -_-...-----
22.0--------- - ----- -- - ---- ----_.. —.- ----
21.0
20.0
19.0
18.0
17.0
16.0 - -
15.0.0
14 ..
Q 13.0
12.0 '` - - - - 1
11.0
10.0
8.0
5.0 - -- - ' - 1 - I
2.° 1111 11111i 'MI Ell
^^ ^ry ^'S ^ ^h ^, ^'1 ^, ^9 ryo ry^ rck ' r1,P rah tib ti� ryw `L9
'lp f '19 ry� f tiC f rti° rti° r� `Lo I' ryo ,P ,19
Black&Veatch Page 18 Draft Report
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Evaluation of Azusa Light&Water Participation in Lodi Energy Center
PRIVILEGED AND CONFIDENTIAL
4.0 CONCLUSIONS
This study provides an assessment of Azusa Light&Water's supply portfolio currently in place to serve its
load obligations, and examines the impact of adding a 7.7 MW share of the Lodi Energy Center to that supply
portfolio. The study concludes that LEC is one of the most efficient available combined cycle resources in
the region, and is cost competitive relative to competing supply resources. With projected changes in
environmental policy, and assumed implementation of greenhouse gas emissions regulation, LEC also
becomes competitive with AL&W's largest current supply resource, San Juan Unit 3.
In early years, LEC contributes to net energy surpluses for AL&W, and as such, increases exposure to spot
market sales risk. Conversely, inclusion of LEC would mitigate other risks faced by AL&W,such as pricing
risk arising in the event that GHG regulations are enacted, or supply procurement risk present given the large
role that San Juan 3 plays in AL&W's existing supply portfolio. Inclusion of LEC provides diversity to
AL&W's supply portfolio. It also provides a hedge against the risk of San Juan 3 becoming unavailable to
AL&W,either due to market, environmental or physical conditions.
Finally, despite current and near-term projected energy surpluses, AL&W is in a position where it needs to
procure additional reserve or resource adequacy capacity. As shown above, a 7.7 MW share of LEC will
meet AL&W's projected capacity need for the 2012 through 2015 timeframe. After 2015,AL&W will be
required to procure additional reserve capacity, in addition to LEC. B&V estimates the value of reserve
capacity in Southern California will range between $80/kW/Year and$140/kW/Year, and will most likely be
toward the upper end of that range. In comparison, LEC's projected fixed investment costs compare
favorably at$127/kW/Year, so the project has potential to recover most or all of its cost to AL&W through
the provision of reserve/resource adequacy capacity.
Black&Veatch Page 19 Draft Report
095
ar
iiiiiiizogemit.... __.......E.__:t_.__.....
vl�
vre...
iitata PIS
A,
'" 4.001007/1117411
. — ' 4-14114511k1441141461141*- .5, ..
4.
ry ,,
Azusa Utility Board
April 26, 2010 _
.
AZUSA
LIGHT & WATER
Recommendations
Approve CEQA findings as a Responsible
Agency
Approve execution of LEC Power Sales
Agreement
Approve Project Management and
Operations Agreement
Authorize Director of Utilities to appoint
representatives to Participant Committee
2 AZUSA
Background
Azusa and 13 other public agencies have been
participating in the development of the Lodi Energy
Center for past 3 years.
Plant to be located on 4.5 acres adjacent to 1-5
approximately 45 miles south of Sacramento at the Lodi
Water Treatment Facility
280 Megawatt high efficiency combined cycle natural
gas generating unit. Will use treated sewage effluent for
cooling
Northern California Power Agency (NCPA) will finance,
construct and maintain plant
3 AZUSA
LIGHT & W A T E R
• —.,, . . _ , ,. . , , , .. , —... ,
.,
LEC Map
. ,. ..„..„ ,.. .,..., ., , , . .... ,. .,,... . .,.., „.,.... .,. ,
California Department
of Water Resources
./ - (multiple locaticnsl
/
Ukiah r-NGridley:Biggs plain'�q
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Approval Schedule
CEC License April 21, 2010
NCPA Commission Approval of April 22, 2010
CEQA, PSA & PMOA
• Participant Approvals April 21-May 5, 2010
• Signed Copies of PSA to NCPA May 15, 2010
• "Power Island" Notice to Proceed June 15, 2010
• Financing Complete June 22, 2010
Start Construction July 1, 2010 ~.0
6 AZUSA
LG F W Ai L9
LEC Schedule
Project Timeline
Milestone Date
Detailed Engineering Contract Executed December 2008
Power Island Purchase Contract May 2009
CEC Staff Assessment Issued November 2009
CEC Final Decision April 2010
Financing Complete June 2010
Construction Commences July 2010
Combustion Turbine & HRSG On Site April 2011
Steam Turbine On Site November 2011
Plant Back Feed of 230 KV Power October 2011
Natural Gas Available January 2012
First Fire March 2012
Steam Blows April 2012
Commercial Operation Date June 1, 2012
7 AZUSA
L! GF4T & WATER
Efficiency Corn pa. rh ► n
Plant Owner COD Heat Rate
( Btu/kWh)
Walnut Energy Center Turlock 2005 7,822
Panoche Energy Center Energy Investors Fund 2009 7,815
Marsh Landing Gen Station Mirant 2012 7,720
Sutter Energy Center Calpine 2001 7, 100
Willow Pass Mirant 2012 7,053
Cosumnes SMUD 2006 7,047
Los Medanos Energy Center Calpine 2001 7,025
Metcalf Calpine 2005 7,000
Delta Energy Center Calpine 2002 7,000
Colusa Generating Station PG&E 2010 6,950
Gateway Generating Station PG&E 2009 6,(140
Lodi Energy Center NCPA 2012 6,824
8 AZUSA
L ! G H T & WATER
GHG Comparison
Plant Owner Carbon Footprint
lbs/MWH
Marsh Landing Mirant 900
Sutter Energy Center Calpine 829
Cosumnes SMUD FA 823
Willow Pass Mirant 823
Metcalf Calpine 816
Los Medanos Calpine 816
Gateway Generating PG&E 812
Colusa Generating PG&E 812
Juan Coal SCPPA
Proposed LEC NCPA 794
.0N.~
9 AZUSA
LIGHT & WAG ER
LEC Cost Summar
Com onent Costs $m
Power Island (Costs Fixed) $148.5
Major Purchases (10% Costs Fixed) $34.8
Bulk Materials- (part of General Contract) $29.6
S•are Parts $2.5
Labor and Services
Labor- General Contractor $59.4
Professional Services $10.9
NCPA Labor $6.0
Construction Management (Cost Fixed) $3.5
CBO & Environmental Com.liance Contract Executed $2.5
Interconnection and Fees
PG&E Gas (based upon PG&E estimate 8/2008) $6.8
CAISO (Costs Fixed) $0.4
Sales Tax $15.6
Legal Costs $1 .5
Siemens Long Term Service Agreement $1 .5
Misc Feels $0.1
Phase I and Phase II (Costs Fixed) $18.2
Detailed En.ineerin. Costs Fixed $7.0
Contingency
General (V)a
Total Construction Costs $375.3
Finance Costs
Finance Costs and Project Reserves (t R
Total Costs of Project $451. A Z U S A
LIGHT & WATER
Azusa Financial
Azusa's share is -y2. 79% which equates to 7.8 MW
NCPA will issue 30 year bonds for the project for
Funds to construct the plant (construction costs + interest during
construction)
Costs to issue bonds
` Required reserve funds (debt, operating, etc.)
Azusa's estimated share of debt will be $12.9 million
-'Annual debt service is estimated at $846 ,000 per year
Note: Azusa's development costs to be refunded - $1 million.
11 AZUSA
hml
LEC Energy Pric :
$/MWH
Debt 15 .48
O&M 6 . 35
Fuel ($7/mmbtu) 47 . 77
A&G/lns/CAISO 2 . 55
Total $72 . 15
12 AZUSA
LEC Rarticipants
MW
Indenture Group A
Azusa 7.80 2.79%
BART 17.50 6.25%
Biggs 0.75 0.27%
Gridley 5.50 1 .96%
Healdsburg 4.40 1 .57%
Lodi 26.20 9.36%
Lompoc 5.60 2.00%
Plumas-Sierra 2.20 0.79%
Port of Oakland 3.25 1 .16%
PWRPA 7.47 2.67%
Silicon Valley Power 71 .00 25.36%
Ukiah 5.00 1 .79%
Indenture Group B
CDWR 93.33 33.33%
Indenture Group C
Modesto 30.00 10.71 %
Total 280.00 100.00%
13
AZUSA
LIGHT & WATER
LEC Impact on Azusa
Power Supply
14 AZUSA
Benefits of LEG
Participation
Provides needed "capacity" to meet
CAISO requirements
Reduces Azusa's average GHG emissions
Provides both supply and price hedge for
a San Juan contingency scenarios
"All in" costs projected to be less than
forward market
Black & Veatch Report documents
15 AZUSA
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EnergyBalance
ba__rsjissserssiasssimfmirissiti..............
, ,
450.000.000----
IMIN Hydro Generation (MINN 1E111 Nuclear Generaton jMWh1
INIIMWind Energy(MWh) =San Juan 3 Generatior'MWr.,
4[10.000.000 —Native Energy Load(1411/Y1-1)
350.0:!0.000-
Generatton Generation
Saul)Km Welt
300,1/D0.000"-+.,.�_ ___ 4111111PP".—
250,300.300-0"".""
200.000.000-
Sian Juan 3 Generation(PAWN
150.3DQ.0Da-
100.DDO.DDO-
50,000.000
wind Energy(awn)
Nuclear Generation pawn
'Hydro Generation (*AWN
O.DDO
2010 2011 2012 2013 2014 2015 2018 2017 2018 2018 2020 2021 2022 2023 2024 2025 :_e02— 2c.:1.-EL :__:
No LEC ,,
sw
17 AZUSA
LIGHT & WAT Ecq
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20 AZUSA
LIGHT & WATER
Azusa Light & Water - Comparison of CO2 Emissions
(tons per MWh of Portfolio Generation)
1.50
• 1.40 —
--�V.i-nou�LEC Case LEC Case
1.30 —
1.20
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2010 201' 2C12 2013 2014 20'f 20'5 2017 2018 2011+ 2020 202' 2022 2023 2024 202E 2020 2027 2029 20_B
21 AZUSA
LIGHT & WATER
Azusa Energy Balance
Azusa Light &Water Energy Balance
LEC Included in Supp y Portfolio -Sar Juan Early Retirement
450.003.000- i
hyaro Generation(MWM Nuclear Generation(KWh) I
MUM Wind Clergy(MW'hl =Gan Juan 3 Generation (With)
400.003.000- LEC Generajon(lAWhi Native Energy Loci(NWh)
350,003.000
300.003.000 — imam
250.003.0001
Without San Juan Coal
200.003.000-
150.003.030-
San Juan 3 Generatbn(WWII)
100,003.000- LEC Generation(MWn
50.003.000
Wind Energy(MWfl)
Nuclear Generation tlitagni
Nydro Generation{NWh)
3.000
2010 2011 2012 2013 2014 2015 2010 2017 2018 209 2020 2321 2022 2023 2024 2325 2028 2027 2028 3020
IOW
22 AZUSA
LIGHT & WATER
\a •
• ene,
(w/oCarbori )
Lodi Energy Center
Cost(shaded areas) vs Benefits(lines)
$180
$160
$140
$120
�,,,,►�+ Fuel+VOM
s $100 •- - �_. _. - ,. CO2 Cost
$80 I �,�..*r♦� 'rsogo• mem Fd_
TEEEr
I$60
$40 E— Value_Pwr
$20 1 -
$- 111111111111111111111.111111111111111111
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
[NPvofs456Tiion 0,0%0
23
AZUSA
L I G H T & WATER
os ;
(WIC Carbon)
i _
Lodi Energy Center
Cost(shaded areas)vs Benefits(lines)
$200 r ---- -— ---- --- ----- .._ ---
$180 ; -- — - - ---- -- ---
r'..
$160 -._-.- — - _ - ---- -- - --____ --- •-."- --�✓--
$140 r r
r r /
W.
r.rrr� Fuel+VOM
$120 -- -- - -- --- -r--
3 r r r r...� • CO2_Cost
E $100 --- - --- _me_r / Fixed_Cost
$80 .....,,...&.W IOW. -_ Value-CO2
41.00.1 ....1•••
——— ValueOther
$60 -. -
Value_Pwr
$40 ._ --
i
$20 -
$- l-
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
NPV of $488 million
24 AZUSA
LIGHT & WATER
CEQA Compliance
Requirements
"0%.
25 AZUSA
L I G H T & W A T E R
CEQA
LEC is subject to CEQA (California Environmental Quality Act)
CEC (California Energy Commission) has the licensing jurisdiction
and acts as the Lead Agency under CEQA
CEC is a Certified Regulatory Agency. It is a process is equivalent to
the preparation of the Environmental Impact Report
The CEC has concluded that, as conditioned, the Project will not
have any significant adverse effects on the environment
CEC will issue its final decision on April 21 , 2010
NCPA and LEC Participants act as Responsible Agencies under
CEQA, and each must act independently to adopt the findings and
post Notice of Determination with County Clerks ,
26 AZUSA
LIGHT & W A T E R
Not . f Dete ■
t .
•
Notice of Determination Appendix D
To:
❑ Office of Planning and Research From:
Public Agency. Azusa Light&Water
For U.S. MailStreet Address: Address: 729 N. Azusa Avenue, PO Box 9500
P.O. Box 3044 1400 Tenth St.
Azusa, CA 91702
Sacramento, CA 95812-3044 Sacramento, CA 95814
Contact: George Morrow
® County Clerk Phone: (626) 812-5219
County of: Los Angeles
Address: 124 East Imperial Highway, Rm. 1002 Lead Agency(if different from above):
Norwalk, CA 90650 California Energy Commission
Phone: (562) 462-2137 Address: 1516 Ninth Street, MS- 15
Sacramento, CA 95814
Contact: Rod Jones
Phone: 916-654-5191
SUBJECT:Filing of Notice of Determination in compliance with Section 21108 or 21152 of the Public Resources Code.
State Clearinghouse Number (if submitted to State Clearinghouse):
Project Title: Lodi Energy Center("MEC") Project.
Project Location (include county): The site for the LEC project is 4.4 acres of land in the city of Lodi,6 miles
west of the Lodi city center, located near Interstate-5 (I-5) approximately 1.7 miles south of State Route 12. (San
Joaquin County).
Project Description:
The LEC is a natural gas-fired, combined-cycle nominal 296-megawatt(MW) power generation facility located in the
City of Lodi, CA.
This is to advise that Azusa Light &Water has approved the above described project on
❑ Lead Agency or ® Responsible Agency
and has made the following determinations regarding the above described project
(Date)
1. The project WILL NOT have a significant effect on the environment.
2. The California Energy Commission ("CEC") is a certified regulatory agency under Public Resources Code
section 21080.5 and CEOA Guidelines section 15251. The CEC prepared a substitute document for an
Environmental Impact Report pursuant to Guidelines section 15252
3. Measures to mitigate the impacts of the LEC were made conditions of approval of the project.
4. The CEC, through a Compliance Project Manager, will monitor, oversee, and verify compliance with the
conditions of CEC approval of the project.
5. A Statement of Overriding Consideration WAS NOT adopted for the project
6. Findings WERE made pursuant to the provisions of CEOA.
This is to certify that the CEC's substitute document in place of an EIR and the record of project approval is
available to the General Public at:
729 N. Azusa Avenue. Azusa. CA
Signature (Public Agency)
Title
Date Date Received for filing at OPR
NOW
IOW
Authority cited: Section 21083, Public Resources Code.
Reference: Sections 21000-21174, Public Resources Code. Revised 2005 [>`
�, A
LIGHT & WATER
CEQA - Major Findings
Air Quality
— GHG will be reduced as a result of the plant
— Other emissions mitigated by purchasing Emission
Reduction Credits
Public Health and Safety - No major findings
Biological Resources
— Potential impact to Giant Gardner Snake and other
animals. Mitigated by conservation easement of 21 .2
acres
Soil and Water - No major findings
Cultural Resources - No major findings
28 AZUSA
CNT & WAT
CEQA - Major Findings
(continued)
Geological and Paleontology - No major
findings
Local Impacts - No major findings
Land Use - No major findings
Traffic and Transportation - No major findings
Social Economics - Local benefit from project
Noise and Vibration - No major findings
Visual Resources - No major findings
Construction Impacts - No major findings
Plant Operations Impact - No major findings
.-w
29 AZUSA
Power Sale Agreement
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30 AZUSA
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PSA Summary
Development/
Operation and Governance Enforceability/ Cashflows
Maintenance Legal Provisions
Authorizes NCPA Creates 3 Take-or-pay Establishes flow
to finance, Indenture Groups contract of funds for
construct, Project and each
operate and Indenture Groups
Establishes Participant Rate
maintain project Project Covenant
Participant 0& M Step-up
Authorizes NCPA Committee across all groups.
as project (PPC)to govern. Group A step-up
manager of 35%
Voting rights
Provides all commensurate Operations and
output to with generation Maintenance
Participants entitlement Reserve of 60
shares days cash M
32 AZUSA
LAGHI 6 WATER
_ Ownership structure
A
Indenture Group A
GroupA NCPA
Bonds Proceeds
Indenture Group B Proceeds
Al' , ,s�YcY Group $ NCPA LEC Project
N CPA p Bonds
NORTHERN CALIFORNIA POWER AGENCY
Group C Capital
MID Bonds
Contribution
--- --- -
ik-
c 1/2
E
z
d 2 83 m ca42
oa
o 1 o 1 o • Cashflows are segregated by Indenture Group
o o 2 a — Only exception is common operating
a1.11111.
reserve for entire project
- - -- - —'
• O&M step-up across Indenture Groups
Group A Group B Group C ■ Debt service step-up only within Indenture
A Participants' O&M Cal DWR O&M MID Group A
Step Step
D/S Step Up Up Up
Group A Participants include: Santa Clara, Lodi, Bay Area Rapid Transit District, Ukiah, Azusa, Gridley, Lompoc, seivi‘e
Power and Water Resources Pooling Authority, Healdsburg, Port of Oakland, Plumas Sierra, and Biggs
33
AZUSA
LIGHT & WATER
Additional PSA Details
Daily fuel obtained by NCPA
— Hedging by participants
— Physical gas allowed to be brought to project
Billing in advance like other NCPA projects
One chance default provisions
— Voluntary Step-up within Indenture Groups first, then
project participants, then NCPA members, then
mandatory step-up for Group A
Effective upon 100% subscription — plan to have
"group" agreement on subscription percentages
prior to signing
34 AZUSA
LIGHT & W A T E R
Project Management and
Operations Agreement
35 AZUSA
PMOA
Body of Agreement approved by Participant Governing
Boards
Tied very closely to LEC PSA and many cross
references to that agreement
"Agreement Schedules" contain detailed guidance and
are generally approved by the PPC and in some cases
the NCPA Commission
36 AZUSA
LIGHT & WATER
PMOA
PMOA Dictates Key Operational Compliance with
Operating Approach Responsibilities Regulatory Oversight
NCPA responsible for NCPA to operate the plant, Compliance with CEC
management, operation including: (Article 5) licensing conditions
and maintenance of the Power dispatch
Project (Article 3) Fuel procurement Compliance with Air
Maintenance permits and other
Directed by PPC (Article regulatory requirements
4) with some delegation
Budgeting and cost reporting
Billing and Accounting Responsible for reporting
Must Follow Prudent Utility on non-compliance and
Practice corrective measures
Provide "Economic Dispatch"
for the project
inine
37 AZUSA
LIGHT & WATER
AdditionalPMOAit
+eta
- Each participant entitled to their share of plant output and attributes
Daily fuel obtained by NCPA, hedging by participants; physical gas
allowed to be brought to project (Article 5)
• Forward Commitments limited to daily and spot markets (30 days or
less) (Article 5)
• Non-NCPA members will pay JPA assessment charge (up to 0. 15 Mwh
of plant output) (Article 6)
Differential Transmission Cost Adjustment for MID (Article 7)
• Billing in advance like other NCPA projects, special billing for CAISO
- Project reserves if necessary (Article 9)
-. Shared Facilities with CT1 and CT2 included in PMOA ^^�
38 AZUSA
L f G H T & W A T E R
Recommendations
Approve CEQA findings as a Responsible
Agency
Approve execution of LEC Power Sales
Agreement
Approve Project Management and
Operations Agreement
Authorize Director of Utilities to appoint
representatives to Participant Committee
.-v
39 AZUSA
•
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F 1110 42,
AZUSA
Chl' A'RFEA
AGENDA ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
VIA: F.M. DELACH, CITY MANAGER
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 26, 2010
SUBJECT: LEGISLATIVE POSITIONS ON AB 155, HR 1521 , AND HR 4812
RECOMMENDATION
It is recommended that the Utility Board:
1) Adopt the following positions:
a) OPPOSE position on AB 155 (Mendoza) Municipal Bankruptcy;
b) OPPOSE position on HR 1521 (Lofgren) The Cell Tax Fairness Act of 2009;
c) SUPPORT position on HR 4812 (Miller) Local Jobs for America Act.
2) Authorize the Mayor to sign position letters to be sent to bill authors and others as
appropriate.
BACKGROUND
AB 155 (Mendoza), Municipal Bankruptcy: Introduced by Assembly Member Tony Mendoza
(D-Norwalk), this bill would require that a local public agency seeking to file Chapter 9
bankruptcy protection obtain approval of the state-appointed California Debt and Investment
Advisory Commission (CDIAC). The CDIAC has the authority to deny, approve or set
conditions on a city's petition. Under the existing law, a city may file a petition permitted under
federal bankruptcy code. The League of California Cities has been opposed to AB 155 since its
introduction in January. The League's concerns focus on the involvement of politics into the
bankruptcy process which is currently conducted by neutral and expert bankruptcy judges who
Legislative Positions
APRIL 26,2010
Page 2
are not subject to political pressure. Further, municipal bankruptcy is rarely used. Since the
adoption of Chapter 9 in 1949, only two cities have petitioned for its use: the City of Desert Hot
Springs in 1994, and last year the City of Vallejo. If bankruptcy had to be filed, AB 155 imposes
unnecessary procedural burden on the local agency, thwarting a city's authority to manage its
fiscal affairs.
The bill was heard in the Senate Local Government Committee on April 19 and passed out of
Committee on a party line vote. It appears that the bill will move easily through the Senate and
Assembly Floor. The California League of Cities is urging members to send out opposition
letters to Governor Arnold Schwarzenegger immediately.
H.R. 1521 (Lofgren), The Cell Tax Fairness Act of 2009: Introduced by Representative Zoe
Lofgren (D-CA16), this bill prohibits states or local governments from imposing any new
discriminatory tax on mobile services, mobile service providers, or mobile service property for
five years after the enactment of this Act. A new discriminatory tax is one imposed on mobile
services, providers, or property that is not generally imposed on other types of services or
property, or that is generally imposed at a lower rate. In effect, however, the measure, and a
similar bill SB 1192 (D-Oropeza), provides a special carve-out exemption by imposing a five-
year moratorium on any new taxes on this industry.
Currently, 150 California cities impose local voter approved utility users taxes, which typically
apply to local utility services, including water, sewer, electricity and telecommunication services.
Collectively, these taxes provide $1.7 billion in revenue funding for public safety and other
critical programs, of which about half come from the telecommunication services. Approval of
this bill limiting the options of a city considering adopting a local utility user's tax will
compound the financial difficulties faced by California cities. Should the mobile
telecommunication industry be successful in obtaining a carve-out from taxation, this could open
the floodgates for Congress to grant additional exemptions to other industries.
HR 4812 (Miller), Local Jobs for America Act: Introduced by Representative George Miller (D-
CA7), this bill provides funding for parks, community recreational infrastructure and other
community programs. The bill would direct $75 billion to local communities hardest hit by the
recession to save jobs and hire vital staff, and $500 million for approximately 50,000 on-the-job
private sector training positions. In addition, the bill includes nearly $25 billion to support
education, firefighting and law enforcement jobs.
Considering the economic conditions of the local governments across the country, this legislation
is an important short-term step towards goals shared by California cities: keeping police officers,
firefighters and teachers on the job, restoring critical services that have been cut, and creating
new jobs that meet local needs.
097
Legislative Positions
April 26,2010
Page 3
FISCAL IMPACT
AB 155 would have no direct fiscal impact to the City.
While the City does not currently impose utility user's tax on the wireless industry, the passage
of HR1521 may limit our future options in imposing utility user's tax on other industries that
may also seek exemption.
Additional funding from the passage of HR4812 would be beneficial to providing and
maintaining local services to the residents.
Prepared by: Liza Cawte, Sr. Administrative Technician
098