HomeMy WebLinkAboutStaff Report 3.A 02/06/2006CITY Or PETALUMA, CALIFORNIA
3.A
AGENDA BILL February 6, 2006
Aeenda Title: Meeting Date:
Resolution approving the revised Core Natural Gas Aggregation February 6, 2006
Agreement with ABAG Power
Meetine Time: ❑X 3:00 PM
❑ 7:00 PM
CateeOry (check one): ❑X Consent Calendar ❑ Public Hearing ❑ New Business
❑ Unfinished Business ❑ Presentation
Department: Director: Contact Person: Phone Number:
Admin Sery Steven Carmichael Steve 1C a hael 707-778-4352
Cost of Proposal: Account Number:
N/A N/A
Amount Budgeted: Name of Fund:
Attachments to Agenda Packet Item:
Revised Natural Gas Sales and Aggregation Agreement
Summary Statement:
The City has been participating in the ABAG Natural Gas purchase program For approximately 8 years.
Over the years, savings have averaged about 10%. This item will approve a revised agreement that makes
minor changes to the agreement (page 4) that work to the City's advantage.
Recommended Citv Council Action/Suggested Motion:
Approve Resolution extending its participation in the ABAG Power Natural Core Natural Gas Aggregation
Agreement beyond June 30, 2005 by executing a revised Gas Aggregation Agreement.
Reviewed by/Admin. Svcs. Dir:
D te:
'Todav's Date:
January 19, 2006
Reviewed by City Attornev:
Date:
Revision # and Date Revised:
#
ADDroged.by City Manager:
f�7 Date:
File Code:
SAgenda/2-6-06 natural gas
RESOLUTION APPROVING THE REVISED
CORE NATURAL GAS AGGREGATION AGREEMENT
WITH ABAG POWER
WHEREAS, the City of Petaluma is a member of the ABAG POWER Natural Gas Aggregation
Program, and
WHEREAS, the current Core Natural Gas Sales and Aggregation Agreement between the City of
Petaluma and ABAG POWER was due for renewal in June 2005, and
WHEREAS, the ABAG POWER Executive Committee has approved certain revisions to the
Core Natural Gas Sales and Aggregation Agreement, and
WHEREAS, the ABAG POWER goals of cost savings and price stability, along with the longer-
tenu natural gas purchasing strategy correspond with the goals of the City of Petaluma, and
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Petaluma hereby
authorizes the execution and delivery of the revised Core Natural Gas Sales and Aggregation Agreement.
EMIMM
PYINHOINFIX It 1
By and Between
ABAG POWER
and
Petaluma, City of
(Name of Public Agency)
For service within the territory of
Pacific Gas & Electric Company
Revised Core Agreement - 2004
3
CORE NATURAL GAS SALES AND AGGREGATION AGREEMENT
This Core Natural Gas Sales and Aggregation Agreement, hereinafter "Agreement", is made
and entered into as of this day of 20_, by and between the ABAG Publicly OWned
Energy Resources, a California joint powers agency, hereinafter "ABAG POWER", and the City of
Petaluma (name of public agency), a (charter/general law city or county or
special district), hereinafter "Public Agency".
The parties hereby agree as follows:
1. Eligibility: Public Agency is a member of ABAG POWER. ABAG POWER shall provide
directly or, at its option, shall contract to provide coordination services for the purchase and
management of a natural gas program for members of ABAG POWER participating in said program
[Participant(s)] .
2. Authorities: Public Agency is a customer of PG&E for core natural gas distribution services.
ABAG POWER is a designated Core Transportation Agent (CTA) in accordance with PG&E's Rule
23 and Tariff G -CT ("Program"). Public Agency appoints ABAG POWER as its exclusive agent to
coordinate its purchase and management of natural gas, on behalf of Public Agency for the facilities
listed in Exhibit A, which is attached hereto and incorporated herein. All parties understand and
agree that the authority for the Program is granted by and subject to the CPUC, as initially authorized
by CPUC Decision No. 91-02-040 and as modified through various subsequent CPUC Decisions.
This Agreement is pursuant to the Utility Aggregation Tariff Rate Schedule(s), Tariff Rules and terms
and conditions set forth in such agreement. Public Agency represents and warrants that any prior
aggregator authorizations which Public Agency may have executed will be terminated effective no
later than the date of this authorization.
3. Services: ABAG POWER shall deliver, or cause to be delivered, the following services to
Public Agency:
3.1 Analyze and evaluate natural gas supply and transportation strategies;
3.2 Negotiate and implement natural gas purchase, transportation and other similar gas
services for Participants;
3.3 Perform nominations of gas purchased and transportation services on behalf of Public
Agency's facilities as listed in Exhibit A;
3.4 Monitor gas account imbalances;
3.5 Generate invoices for all natural gas purchases and services for ABAG POWER to
perform as required under the Agreement. Invoices will include the following information:
3.5.1 For each facility listed in Exhibit A, the monthly usage, and gas charges,
including, but not limited to, ABAG POWER operational and administrative fees.
Revised Core Agreement — 2004 /'
3.5.2 The status of the account identifying the prior account balance, any payments
since the previous invoice, current charges plus any applicable late payment charges and credit
balances as calculated pursuant to Paragraph 9.2; and
3.6 Provide general consultation services.
4. Enrollment Notification of Chances: Public Agency shall through the attached Exhibit A
submit to ABAG POWER its list of accounts to be served hereunder. Public Agency represents and
warrants that all facilities listed in Exhibit A distribute natural gas used by Public Agency and that
none of the facilities will be serviced by another core transport agent as of the Start Date as defined in
Paragraph 9.5. Public Agency shall also notify ABAG POWER forty-five (45) days in advance of
changes in Public Agency's facilities or operations which are reasonably expected to increase or
decrease the consumption of natural gas more than ten percent (10%) as compared to historical levels.
Public Agency may add facilities to Exhibit A upon prior written notice to ABAG POWER. Public
Agency may delete facilities from Exhibit A only upon written consent by ABAG POWER, which
consent shall not be unreasonably withheld, except that Public Agency may delete facilities without
ABAG POWER's consent if Public Agency abandons the facility or transfers the facility to another
entity.
5. Acencv Relationship: Public Agency authorizes ABAG POWER to act as its exclusive agent
for the Program and does hereby constitute and appoint an authorized officer or agent of ABAG
POWER to act on its behalf as its lawful agent for the implementation of the Program. This
authorization shall include the right to do and perform all acts, with full power to execute all
documents requisite and necessary to be done in all matters relating to the purchase, sale, and
transportation of natural gas. Therefore, Public Agency authorizes ABAG POWER to take actions
appropriate to establish and implement the Program, including, but not limited to:
5.1 Aggregating the gas supplies and services of Public Agency with those of other
Participants in conjunction with providing such gas supplies and services to Public Agency and
pursuant to the terms and conditions of the Program;
5.2 Executing local distribution company riders and other documentation on behalf of
Public Agency;
5.3 Nominating gas supplies on behalf of Public Agency;
5.4 Handling gas imbalances, gas storage, and all other operational transactions with the
Utility in order to deliver gas to the Utility for subsequent redelivery to Public Agency; and
5.5 Arranging for payment of Program bills for natural gas, transportation and other Utility
charges. Public Agency understands and agrees that in the event of nonpayment by ABAG POWER,
Public Agency will be responsible for payment of Public Agency's bills for gas and services, even if
the Public Agency has already made payment to ABAG POWER for those gas quantities and services.
Revised Core Agreement — 2004 5
Public Agency understands that if ABAG POWER's contract with the Utility terminates for
any reason, on Public Agency's receipt of notice from Utility, Public Agency will receive gas service
for Exhibit A accounts under core procurement service from the Utility commencing on the first day
of Public Agency's next billing cycle pursuant to the terms and conditions of the applicable core
procurement Tariff Rate Schedule for each Public Agency's accounts.
6. Title: All purchase, transportation and other gas service contracts shall be in the name of
ABAG POWER.
7. Term: Subject to the provisions of Paragraphs 12 and 13 hereof, and receipt of timely
notifications of alternative arrangements, this Agreement shall be in full force for a three (3) year
term commencing July 1 of the year immediately following the execution date of this contract.
Subject to Paragraph 13, the term of this Agreement shall be automatically extended for additional
three-year periods on each July 1 provided that ABAG POWER is not in breach of this Agreement,
and provided that Public Agency has not submitted on or before June 1 written notice of its decision
to terminate the Agreement effective the July 1 three (3) years after said notice.
8. Fees: The operational fees for all services described in Paragraphs 3 and 5 shall be
established by the ABAG POWER Board of Directors, hereinafter "Board".
9. Payment:
9.1 On a monthly basis, unless otherwise approved by Public Agency, ABAG POWER will
provide, or cause to be provided, to Public Agency an invoice for the Public Agency's facilities
serviced under this Agreement. Invoices will be directed to and payment is to be made directly by
Public Agency to the escrow account designated pursuant to Paragraph 10 of this Agreement.
Payment is due immediately upon receipt of the invoice. Late payment charges at the rate of one and
a half percent (1.5%) per month calculated daily on the outstanding balance will be imposed
commencing on the thirty-first (31st) day after the mailing date of the invoice. Late payment charges
may, at ABAG POWER's sole discretion, be debited against Public Agency's Working Capital
Account as defined in Paragraph 9.3.
9.2 ABAG POWER will invoice Public Agency, and Public Agency will pay, in monthly
installments, sums representing payments for the natural gas and services provided under this
Agreement (Invoiced Amounts). Initially, Invoiced Amounts will be based on ABAG POWER's
estimate of Public Agency's consumption of natural gas for the month leveled to eliminate extreme
consumption fluctuations but adjusted to reflect moderated seasonal fluctuations. Each invoice will
also identify the costs, if any, of natural gas, including, but not limited to transportation charges and
operational fees, and utility charges charged to Public Agency for the period identified in the invoice.
Any disputes between the parties regarding the amount of any Actual Charges shall be resolved
pursuant to Section H of Exhibit B to this Agreement, as defined in Paragraph 9.3, will be adjusted as
soon as practicable to reflect the resolution of the dispute.
9.3 Upon approval of this Agreement by ABAG POWER, Public Agency shall pay a
working capital deposit to ABAG POWER prior to transferring any accounts to the ABAG POWER
program. This deposit is refundable when Public Agency leaves the program and all liabilities to
Revised Core Agreement — 2004
ABAG POWER have been satisfied. The currently approved working capital deposit is calculated as
follows:
[Two times the average load (therms) times the current applicable rate ($/therm).]
9.4 After the end of each fiscal year, ABAG POWER will perform a "true -up" by
calculating the difference between the Invoiced Amounts and the Actual Charges. Any difference in
these amounts will be debited or credited (as appropriate) to the Public Agency in equal installments
over the remaining program year's invoices.
9.5 In accordance with the terms of Paragraph 10, ABAG POWER will first apply the
Invoiced Amounts to the payment of Actual Charges. Public Agency acknowledges that during the
term of this Agreement ABAG POWER has the right to use working capital deposits to pay Actual
Charges incurred by other Participants in the Program as such Actual Charges become due. Such use
of the monies will not be a debit against the working capital deposit and will not obviate, eliminate or
modify ABAG POWER's obligation to pay Public Agency the working capital deposit amount
pursuant to Paragraph 13.3. ABAG POWER retains the right to modify Invoiced Amounts to
increase the sum of working capital deposits in the Program in order to timely pay Actual Charges as
they become due.
.6
■ ,. 1JW,.
Ag@ncy, ABAG 011VER may delay the Start Date to accommo 2 Program
9.7 In the event Public Agency fails to make timely payment consistent with the terms
employed by ABAG POWER, in addition to any other remedy it may have hereunder and
notwithstanding the existence of any late payment penalty, ABAG POWER may declare Public
Agency to be in default and terminate the agreement. ABAG POWER is further authorized to bill
Public Agency for reasonable charges associated with demands for payment on late accounts as well
as reasonable charges associated with suspension and resumption of service hereunder.
10. Disbursement of Funds: Subject to the terms and conditions of this Agreement, ABAG
POWER agrees to provide for sale and delivery, and Public Agency agrees to receive and to
pay ABAG POWER for natural gas. Further, Public Agency agrees to pay for the Actual
Charges.
10.1 An escrow account for the purposes of receiving payments by Participants and making
payments to the Utilities, the gas supplier and other payees as authorized by ABAG POWER will be
established.
10.2 The instructions for this escrow account have been approved by ABAG POWER, and
shall include a list of the authorized recipients of payments from the account.
10.3 Only ABAG POWER may authorize release of funds from the escrow account, and
such shall only be to those payees identified in the escrow instructions.
Revised Core Agreement — 2004 1
11. Gas Prouram Pricinu:
11.1 Allocation. The gas charges to Participants will include (a) cost of the gas commodity
(gas charges), (b) applicable utility transportation charges, and (c) administrative costs. Gas charges
are the product of a Participant's usage times the unit rate for gas for each month. The unit rate is the
total monthly cost of natural gas purchased for all Participants at the supplier contract price divided
by the total monthly usage of Participants. Transportation and administrative charges will be
allocated to each Participant based on gas usage.
11.2 Annual Reoort. Each year, ABAG POWER will provide each Participant with a report
showing that Participant's total costs for natural gas, including transportation charges and
administrative fees, and utility charges at a per therm cost for each category.
11.3 Gas Purchasinu. Under the policy direction of the Board, ABAG staff will regularly
canvas the natural gas market and enter into contracts to acquire natural gas for, among others, fixed
price, indexed price and variable price with a minimum and/or maximum. ABAG staff, under the
policy direction of the Board, has the power to execute all contracts reasonably necessary to deliver
natural gas to each Participant.
12. Chanue of Reuulations: Any future change in law, rule or regulation, or utility practice which
prohibits or frustrates ABAG POWER or the Public Agency from carrying out the terms of this
Agreement shall excuse both parties from their obligations, other than the obligation of Public Agency
to make payments due for gas and services received.
13. Cancellation of Service:
13.1 Cancellation by Public Auencv: Public Agency may cancel the Agreement by giving
ABAG POWER written notice by June 1 of its intent to terminate on June 30 of the third year
following the date notice was given.
13.2 Cancellation by ABAG POWER: Actions by the utilities and/or CPUC to develop
rules which are in conflict with sound business practices, or impose unnecessary risk on either party
to this Agreement, or substantially prevent ABAG POWER from performing its functions under this
Agreement may result in the cancellation of this Agreement by ABAG POWER. ABAG POWER
shall give Public Agency written notice ninety (90) days prior to such cancellation and both parties
shall work diligently to minimize the negative effects on ABAG POWER and the Public Agency of
such cancellation.
13.3 Workinu Capital Deposit: Within ninety (90) days after cancellation, ABAG POWER
will pay to Public Agency the amount of its working capital as modified pursuant to Paragraph 9.2,
less any debits imposed pursuant to Paragraph 9.1 and less any outstanding Actual Charges owed by
Public Agency.
14. ABAG POWER Board of Directors: Michael Ban (Name of Public Agency
Representative) shall be the Public Agency's representative to the Board. The Board shall provide
policy direction for the Program. The Board's powers shall include admission of new Participants
Revised Core Agreement — 2004 9
and the extension of any contracts for the purchase of natural gas and/or related services under rules
and procedures adopted by the Board.
15. Approvals: The Public Agency Representative may grant any approval, or give any
direction required by this Agreement, in writing or orally. Written approvals or directions may be
transmitted physically, by facsimile or electronically. Oral approvals will be confirmed in writing by
either party.
16. Attornevs' Fees: In the event either party invokes its right to arbitration under Section H of
Exhibit B due to an alleged breach of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and costs as determined by the arbitrator.
17. Ownershin of Files, Reports, Photographs, and Related Documents: Upon termination of
the Agreement, any and all files, reports, photographs, plans, specifications, drawings, data, maps,
models and related documents respecting in any way the subject matter of this Agreement, whether
prepared by ABAG POWER, the Public Agency or third parties and in whatever media they are
stored shall remain or shall become the property of the Public Agency and the Public Agency shall
acquire title to, and copyright ownership of, all such documents. The Public Agency hereby grants to
ABAG POWER an irrevocable license to retain a copy of all records covered by this paragraph for
ABAG POWER's files.
18. Indemnity: Public Agency shall indemnify and hold harmless ABAG, ABAG POWER and
their respective directors, officers, member agencies, agents and employees from and against all
claims, damages, losses and expenses including attorney's fees arising out of or resulting from the
performance or non-performance of the services required by this Agreement, unless such is caused by
the negligence of ABAG, ABAG POWER or their respective directors, officers, member agencies,
agents or employees.
19. Assignment/Security Arrangements: Public Agency hereby acknowledges that ABAG
POWER may, in order to finance security deposit and cash flow deficits incurred in connection with
the operation with this Program, incur short-term debt which may be secured by an assignment,
encumbrance or hypothecation of this Agreement and/or payments due hereunder.
20. Notices: The following addresses for the giving of notices and billings shall be:
Public Agencv Notices
Address:
Facsimile No.:
Atm.
Telephone No.:
Email:
Revised Core Agreement - 2004 �q
Public Auencv Billinn Address
Name:
Address:
Facsimile No.:
Atm.
ABAG POWER Notices
ABAG
P. O. Box 2050
Oakland, CA 94604-2050
Gerald L. Lahr, Program Manager
Telephone No: 510-464-7908
Facsimile No: 510-464-5508
Email: JerryL@abag.ca.gov
Telephone No.:
Email:
21. Severabilitv: If any provision of this Agreement or the application of any such provision shall
be held by a court of competent jurisdiction to be invalid, void, or unenforceable to any extent, the
remaining provisions of this Agreement and the application thereof shall remain in full force and
effect and shall not be affected, impaired, or invalidated.
22. Captions: The captions appearing in this Agreement are inserted as a matter of convenience
and in no way define or limit the provisions of this Agreement.
23. Other Contract Provisions: This Agreement shall be subject to the other standard provisions
which are set forth in the attached Exhibit B, which is incorporated by this reference.
IN WITNESS WHEREOF, the parties have hereunto set their hands effective the date and year first
above written.
ABAG PUBLICLY OWNED ENERGY RESOURCES
Date:
Henry Gardner, President
Approved as to legal form and content:
Revised Core Agreement — 2004 1 V
ME
Kenneth K. Moy, Legal Counsel
PUBLIC AGENCY
By:
Name:
Title:
by resolution)
Approved as to legal form and content:
in
W.Fro L:
Title:
Date:
Date:
(City Manager, County Administrator or other as designated
Date:
Revised Core Agreement — 2004
EXHIBIT A
List of Facility Accounts
Name of Public Agency: City of Petaluma
PG&E Account Number Street Address City
1. All current accounts with ABAG POWER
2.
3.
4.
5.
Revised Core Agreement — 2004 1
l
STANDARD CONTRACT PROVISIONS
A. Time of Essence. Time is of the essence in this Agreement.
B. Waiver. The waiver by either party of a breach by the other of any provision of this
Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach either of the
same or a different provision of this Agreement.
C. Controlling Law. This Agreement and all matters relating to it shall be governed by the laws
of the State of California.
D. Binding on Successors, Etc. This Agreement shall be binding upon the successors, assigns,
or transferees of ABAG POWER or Public Agency as the case may be. This provision shall not be
construed as an authorization to assign, transfer, hypothecate, or pledge this Agreement other than as
provided above.
E. Records/Audit. ABAG POWER shall keep complete and accurate books and records of all
financial aspects of its relationship with Public Agency in accordance with generally -accepted
accounting principles. ABAG POWER shall permit authorized representatives of Public Agency
and/or any of Public Agency's governmental grantors to inspect, copy, and audit all data and records
of ABAG POWER relating to its performance of services under this Agreement. ABAG POWER
shall maintain all such data and records intact for a period of three (3) years after the date that
services are completed hereunder or this Agreement is otherwise terminated.
F. Prohibited Interest. Neither ABAG, ABAG POWER or their respective directors, officers,
employees or agents shall solicit nor accept gratuities, favors or anything of monetary value from
contractors, potential contractors, or parties to subcontracts.
G. Insurance Requirements.
(1) ABAG shall, at its own expense, obtain and maintain in effect at all times during the
life of this Agreement the following insurance:
(a) Workers' compensation insurance as required by law.
(b) Comprehensive general liability insurance coverage of One Million Dollars
($1,000,000) in the aggregate for products and/or completed operations and One Million Dollars
($1,000,000) per occurrence for automobiles.
(c) Professional liability insurance with minimum liability limits of Two Million
Dollars ($2,000,000) in the aggregate.
(2) All ABAG's insurance policies shall contain an endorsement providing that written
notice shall be given to Public Agency at least thirty (30) days prior to termination, cancellation, or
reduction of coverage in the policy or policies, and all policies shall be carried by an insurance
company or companies acceptable to Public Agency.
Revised Core Agreement — 2004 13
(3) In addition, each policy or policies of insurance described in subparagraph (2) above
shall contain an endorsement providing for inclusion of Public Agency and its directors, officers,
agents, and employees as additional insureds with respect to the work or operations in connection
with this Agreement and providing that such insurance is primary insurance and that no insurance of
Public Agency will be called upon to contribute to a loss.
(4) Promptly upon execution of this Agreement, ABAG shall deliver to Public Agency
certificates of insurance evidencing the above insurance coverages. Such certificates shall make
reference to all provisions or endorsements required herein and shall be signed on behalf of the
insurer by an authorized representative thereof. ABAG agrees that at any time upon written request
by Public Agency to make available copies of such policies certified by an authorized representative
of the insured.
(5) The foregoing requirements as to types and limits of insurance coverage to be
maintained by ABAG and approval of policies by Public Agency are not intended to, and shall not, in
any manner limit or qualify the liabilities and obligations otherwise assumed by ABAG pursuant to
this Agreement, including, but not limited to, liability assumed pursuant to ABAG's insurance
policies under Subsections (1)(b) of this section.
(6) ABAG shall require all subcontractors to comply with the insurance requirements
described in Section G(l)(a)-(c), inclusive.
H. Arbitration. Any dispute between ABAG POWER and the Public Agency regarding the
interpretation, effects, alleged breach of powers and duties arising out of this Agreement shall be
submitted to binding arbitration. The arbitrator shall be selected by agreement between the parties by
lot from a list of up to six (6) arbitrators with each party submitting up to three (3) arbitrators.
Revised Core Agreement - 2004 I I