HomeMy WebLinkAboutStaff Report 6 09/15/19971
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
32
33
34
35
36
37
38
39
40
41
42
43
44
45
I M���E
AGENDA ITEM#
KEYWORD: ABAG's Pooled Natural
Gas Program
DATE: September 15,1997
DEPARTMENT: Department of Public Works
Steve Simmons, Public Works Superintendent
REQUEST COUNCIL ACTION: Approve resolution authorizing participation in ABAG's
Natural Gas Program and authorizing the City Manager to sign 1) a Natural Gas Sales and
Aggregation Agreement appointing ABAG as the Core Transport Agent for the City of Petaluma
in procuring the purchase and transportation of natural gas; and 2) PG &E's Customer
Authorization for Core Gas Transportation Service. In addition, the Resolution designates the
City Manager (or his /her designee) to serve on ABAG's Power Purchasing Pool Program
Committee established by the ABAG Executive Board to provide oversight to the Pool.
RECOMMENDATION: Approve the Resolution.
BACKGROUND: In 1991, the California Public Utilities Commission (CPUC) deregulated the
commodity portion of the natural gas market and allowed utility customers to procure their gas
supply from suppliers other than the utility. In 1996 and 1997, the CPUC and the State
Legislature acted to deregulate the electric utility industry in the State of California.
In order to facilitate the participation of local governments in the new deregulated energy market,
the Association of Bay Area Governments (ABAG) created a Power Purchasing Pool for local
government agencies in 1995. To pilot its efforts in this area, ABAG created a Natural Gas
Purchase Program, which currently purchases natural gas for 32 public agencies. In the first year
of its operation, ABAG's Natural Gas Program achieved a seven percent savings (as percent of
the utility's cost) for participants. Estimated savings for the 1997 -98 fiscal year are five to eight
percent.
ABAG has an established track record of successful affiliate services that have yielded
significant savings for participants in Workers' Compensation, pooled risk management, and
pooled financial services. The intent of the ABAG Power Purchasing Pool is to build on this
experience and offer a new program extending this same history of service and cost savings to
gas and electric purchases by local governments.
In addition, ABAG has developed an Electric Purchase Program which local governments in the
PG &E service territory may join between now and September 30, 1997 for the start of the
deregulated electric market in 1998.
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
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Natural Gas Program Description: ABAG purchases natural gas on the agency's behalf and
arranges for it to be delivered to the PG &E system for distribution by PG &E to the burner tip.
Participation in ABAG's Program assures no change in participant's current priority of service
with Pacific Gas and Electric Company (PG &E), quality of natural gas, overall reliability of
service and performance of maintenance. PG &E will continue to provide meter reading, "on the
ground" repair and maintenance, and emergency response to all participants.
Participants will receive a single monthly bill for natural gas service from ABAG, even though
the gas and the transportation services will be provided by different companies. In addition, the
ABAG bill will consolidate all accounts into one summary bill.
CPUC and PG &E regulations require all customers wishing to aggregate their gas requirements
with others in order to purchase gas from a third party to sign an agreement with a Core
Transport Agent. The Core Natural Gas Sales and Aggregation Agreement authorizes ABAG to
serve as the Core Transport Agent for the City of Petaluma. This agreement also provides
information on ABAG's fees for this service. ABAG will collect one cent ($0.01) per therm
consumed by the City of Petaluma as an operating fee to pay for the services described above. In
addition, ABAG will collect one -third of one cent ($0.003) per therm consumed to offset its own
administrative costs.
By signing PG &E Customer Authorization for Core Gas Transportation Service, the City of
Petaluma authorizes PG &E to recognize ABAG as the City of Petaluma's Core Transport Agent
and agrees that it will continue to be responsible for payment to PG &E of its transportation bills,
even the City of Petaluma authorizes PG &E to send the bill to the Core Transport Agent for
payment. PG &E will continue to provide to the City of Petaluma all existing services except
procurement of natural gas. These include meter reading, routine service calls, and emergency as
it currently does. In addition to the bill sent by ABAG, PG &E will provide the City of Petaluma
with an "information- only" invoice, displaying the City of Petaluma's actual meter reads for the
purpose of confirming ABAG's bill.
ABAG Rates for Natural Gas: ABAG's rates are described in the attached 1997 -98 Natural Gas
Program Estimated Savings.
Legal Agreement #l: Gas Sales and Aggregation Agreement: CPUC and PG &E regulations
require all customers wishing to aggregate their gas requirements with others in order to purchase
gas from a third party to sign an agreement with a Core Transport Agent. A Core Transport
Agent purchases natural gas on behalf of the group of customers and provides other services such
as nomination and delivery of gas supplies, treatment of gas imbalances, management of gas
storage inventories, and other procurement - related activities. The Core Transport Agent also is
responsible for billing and collecting payments from the customers for both gas and the utility's
transportation charges. After evaluating other options, ABAG decided that ABAG, rather than a
gas supplier, should play this critical function with the assistance of a joint venture firm of
Diablo Energy Consultants and IQ Solutions. The Gas Sales and Aggregation Agreement
authorizes ABAG to serve as the Core Transport Agent for the City of Petaluma, and asks the
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
32
33
34
35
36
37
38
39
40
41
42
43
44
City of Petaluma to acknowledge that ABAG may, in order to fund PG &E- required security
deposits and cash flow deficits, incur short-term debt secured by this agreement.
This agreement also provides information on ABAG's fees for this service. ABAG will collect
one cent ($0.01) per therm consumed by the City of Petaluma as an operating fee to pay for the
services described above. In addition, ABAG will collect one -third of one cent ($0.003) per
therm consumed to offset its own administrative costs and the costs associated with start-up
activities conducted by New Energy Ventures. Savings discussed above are net of these fees.
(For full calculation, see the attached ABAG Rate Schedule).
Legal Agreement #2: PG &E Customer Authorization for Core Gas Transportation Service: By
signing this agreement, the City of Petaluma authorizes PG &E to recognize ABAG as the City of
Petaluma's Core Transport Agent and agrees that it will continue to be responsible for payment
to PG &E of its transportation bills, even the City of Petaluma authorizes PG &E to send the bill
to the Core Transport Agent for payment. PG &E will continue to provide to the City of
Petaluma all existing services except procurement of natural gas. These include meter reading,
routine service calls, and emergency as it currently does. In addition to the bill sent by ABAG,
PG &E will provide the City of Petaluma with an "information- only" invoice, displaying the City
of Petaluma's actual meter reads for the purpose of confirming ABAG's bill.
ALTERNATIVES:
1. Pool gas purchases with another group.
2. Negotiate with gas suppliers as a separate entity.
3. Do nothing.
CONSEQUENCES OF NOT ACTING: Continue to purchase gas from PG &E at an estimated
5% to 8% higher rate than gas purchased by pooling with ABAG.
ACTION FOLLOWING AUTHORIZATION: The City Manager will be authorized to sign
1) a Natural Gas Sales and Aggregation Agreement appointing ABAG as the Core Transport
Agent for the City of Petaluma in procuring the purchase and transportation of natural gas; and 2)
PG &E's Customer Authorization for Core Gas Transportation Service. In addition, the
Resolution designates the City Manager (or his /her designee) to serve on ABAG's Power
Purchasing Pool Program Committee established by the ABAG Executive Board to provide
oversight to the Pool.
agenda97 /kc
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
RESOLUTION AUTHORIZING THE CITY MANAGER TO ENROLL THE CITY OF
PETALUMA IN THE ASSOCIATION OF BAY AREA GOVERNMENT'S POOLED
NATURAL GAS PURCHASING PROGRAM
WHEREAS, the City of Petaluma is currently purchasing natural gas and related
transportation and distribution services from PG &E under the jurisdiction of the California
Public Utilities Commission (CPUC); and
WHEREAS, deregulation of the natural gas industry in 1986 and CPUC Decisions No.'s
91 -02 -0405 94 -04 -027, and 95 -07 -048 end regulation promulgated thereunder, permit Utility
customers, including local governments, to purchase natural gas and specified related support
services from third parties through a "core transport agent "; and
WHEREAS, bulk purchasing of natural gas has proven itself to be a legal and cost-
effective means to achieve reductions in energy costs; and
WHEREAS, the City of Petaluma is a member /cooperating member of the Association of
Bay Area Governments (ABAG); and
WHEREAS, ABAG proposes to 1) form a Power Purchasing Pool Program to aggregate
natural gas needs of interested ABAG members and cooperating members; and 2) act as a core
transport agent on behalf of such members; and 3) deliver or cause to be delivered natural gas
and related services (including invoicing and gas management) to such members; and 4) form a
Power Purchasing Pool Committee comprised of representatives from each participating member
or cooperating member and grant it the power to oversee the Program; and
WHEREAS, ABAG may issue short-term debt in order to finance security deposit
requirements and /or cash flow deficits incurred by ABAG in operating the Power Purchasing
Pool Program which debt may be secured by the assignment, encumbrance or hypothecation of
the Natural Gas Sales and Aggregation Agreement between ABAG and the City of Petaluma.
I
2 NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Petaluma
3 hereby authorizes the participation of the City of Petaluma in the ABAG Power Purchasing Pool
4 to undertake a bulk purchasing program for natural gas on behalf of the City of Petaluma and
5 other ABAG members or cooperating members.
6
7 BE IT FURTHER RESOLVED that the City Manager or his /her designee, with the
8 concurrence of the City Attorney, is authorized to enter into and deliver 1) the Natural Gas Sales
9 and Aggregation Agreement with ABAG, in substantially the form set forth in the attached
10 Exhibit A appointing ABAG as the core transport agent for the City of Petaluma in procuring the
11 purchase and transportation of natural gas and related services and 2) the Utility's Customer
12 Authorization for Core Gas Transportation Services (attached as Exhibit B).
13
14 BE IT FURTHER RESOLVED that the City of Petaluma consents to the assignment,
15 encumbrance or hypothecation of the Natural Gas Sales and Aggregation Agreement with ABAG
16 for the sole purpose of securing short-term financing of the security deposit requirement and /or
17 cash flow deficits incurred by ABAG in implementing the Power Purchasing Pool Program.
18
19 BE IT FURTHER RESOLVED that the City Manager or his /her designee is appointed
20 the City of Petaluma's representative on ABAG's Power Purchasing Pool Committee to oversee
21 the operation of Power Purchasing Pool Program.
22
23 resold /kc
CORE NATURAL GAS SALES AND
AGGREGATION AGREEMENT
By and Between
and
(Name of Public Agency)
For service within the territory of
Pacific Gas & Electric Company
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 199_, by and between the Association of Bay
Area Governments, a California joint powers agency, hereinafter "ABAG ", and the
(name of public agency), a (charter /general law city or
county or special district), hereinafter "Public Agency".
The parties hereby agree as follows:
1. Eli ibg� iliV: Public Agency is a member or cooperating member of ABAG. ABAG 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 and cooperating members of ABAG participating
in said program [Participant(s)] .
2. Authorities: Public Agency is a customer of an entity providing natural gas services,
hereinafter "Utility ", under the jurisdiction of the California Public Utilities Commission, hereinafter
"CPUC." Public Agency appoints ABAG as its exclusive agent to coordinate its participation in. the
Utility's Natural Gas Aggregation Program for core transport customers, hereinafter "Program ", 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 modified through CPUC
Decision No. 94 -04 -027 and Decision No. 95 -07 -048. 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 shall deliver, or cause to 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 Forecast estimated monthly gas requirements of Public Agency;
3.4 Negotiate prices and quantities- for-natural gas purchases by Public Agency which may
include a bid or request for proposal process;
3.5 Perform nominations of gas purchased and transportation services for Public Agency;
3.6 Monitor gas account imbalances with transporters;
3.7 Provide for the delivery of natural gas to Participants' facilities as listed in Exhibit A
and for storage as permitted by the Utility.
1.8 Generate gas purchase, transportation and storage invoices showing:
3.8.1 For each facility listed in Exhibit A, the meter cycle, monthly usage, gas
charges, which include utility transportation charges, operational fees, ABAG administrative fees and
any utility charges.
3.8.2 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 9.3; and
3.9 Provide general consultation services.
4. Enrollment Notification of Changes: Public Agency shall through the attached Exhibit A,
which is incorporated herein, submit to ABAG 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 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 and the submission of a
"Customer Authorization for Core Gas Transportation Service" form (or Utility authorized equivalent)
to the Utility. Public Agency may delete facilities from Exhibit A only upon written consent by
ABAG, which consent shall not be unreasonably withheld, except that Public Agency may delete
facilities without ABAG's consent if Public Agency abandons the facility or transfers the facility to
another entity.
5. Agency Relationship: Public Agency authorizes ABAG to act as its exclusive agent for the
Program and does hereby constitute and appoint an authorized officer or agent of ABAG 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, safe, and transportation of natural gas. Therefore, Public
Agency authorizes ABAG 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;
-2-
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, 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 for those gas quantities and services.
Public Agency understands that if ABAG'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 for the remainder of the Contract Year.
6. Title: All purchase, transportation and other gas service contracts shall be in the name of
ABAG.
7. Term: Subject to the provisions of Paragraphs 12 or 13 hereof, and receipt of timely
notifications of alternative arrangements, this Agreement shall be in full force and effect from the date
first written above until June 30, 1998. Subject to Paragraph 13, the term of this Agreement shall be
automatically extended for additional one -year periods upon ABAG's submission to Public Agency of
written notice no later than June 1 of each year and stating all proposed fees for the extension period.
8. Fees: The operational fees for all the services described in Paragraphs 3 and 5 above will be
one cent ($.01) per therm used by Public Agency until June 30, 1998. An administrative fee of nine-
tenths of one cent ($.009) per therm used by Public Agency will also be charged until June 30, 1998.
9. Payment:
9.1 On a monthly basis, unless otherwise approved by Public Agency, ABAG will provide,
or cause to be provided, to Public Agency a consolidated 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 - a€ter the-mailing-date of the invoice. Late payment charges
may, at ABAG's sole discretion, be debited against Public Agency's Credit Account as defined in
Paragraph 9.3.
-3-
9.2 ABAG will invoice Public Agency, and Public Agency will pay, in monthly
installments, sums representing payments in advance for the natural gas and services provided under
this Agreement (Invoiced Amounts). Initially, Invoiced Amounts will be based on ABAG'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, transportation, utility charges, operational fees and
administration fees charged to Public Agency for the period identified in the invoice (Actual Charges).
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 and the Credit Account, as defined in Paragraph
9.3 will be adjusted as soon as practicable to reflect the resolution of the'dispute.
9.3 For each invoice, ABAG will calculate (a) the difference between the Invoiced Amount
and the Actual Charges, and (b) the difference between the cumulative total of the Invoiced Amounts
and the cumulative total of Actual Charges, adjusted pursuant to Paragraphs 9.1 and 9.2 (Credit
Account). Public Agency recognizes that the Credit Account is a calculation of payments, credits,
debits and charges made pursuant to this Agreement and that ABAG will not be required to establish
actual fund accounts on behalf of, or in the name of Public Agency, with monies.
9.4 In accordance with the terms of Paragraph 10, ABAG will first apply *the Invoiced
Amounts to the payment of Actual Charges. Public Agency acknowledges that during the term of this
Agreement ABAG has the right to use monies in the amount reflected in the Credit Account 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 Credit Account and will not obviate, eliminate
or modify ABAG's obligation to pay Public Agency the Credit Account amount pursuant to Paragraph
13.3. ABAG retains the right to modify Invoiced Amounts to increase the sum of Credit Accounts in
the Program in order to timely pay Actual Charges as they become due.
9.5 The initial invoice will be dated and must be paid by
(Start Date), or this Agreement terminates on Upon prior written notice to Public
Agency, ABAG may delay the Start Date to accommodate Program requirements.
9.6 In the event Public Agency fails to make timely payment, consistent with the terms
employed by ABAG, in addition to any other remedy it may have hereunder and notwithstanding the
existence of any late payment penalty, ABAG may declare Public Agency to be in default and
terminate the agreement. ABAG 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 to4he terms -and conditions of this Agreement, ABAG agrees
to provide for sale and delivery, and Public Agency agrees to receive and to pay ABAG for natural
gas . Further, Public Agency agrees to pay for the Actual Charges.
-4-
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 will be
established.
10.2 The instructions for this escrow account have been approved by ABAG, and shall
include a list of the authorized recipients of payments from the account.
10:3 Only ABAG may authorize release of funds from the escrow account, and such shall
only be to those, payees identified in the escrow instructions.
11. Gas Program Pricing: The gas charges to the participants will include (a) the cost of the gas
commodity (gas charges) and (b) the applicable utility transportation charges. Gas charges are
the product of a participants 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. The supplier contract price is $1.90 per
MMBtu for the first 575 MMBtu per day, except in the event an industry index price stipulated
in the contract falls below $1.68 per MMBtu. In this event, the supplier price shall be $1.68
per MMBtu minus 50% of the difference between the industry index price and $1.68. All
remaining purchases will be priced at the utility's core subscription price (Schedule G -CSP)
minus $0.22 per MMBtu. The gas commodity price stated in this paragraph shall remain in
effect until June 30, 1998.
12. Change of Regulations: Any future change in law, rule or regulation, or utility practice which
prohibits or frustrates ABAG 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 Agency: Commencing in 1997, Public Agency may only
withdraw or cancel this Agreement consistent with the rules and regulations promulgated by the
CPUC and in a manner which releases ABAG from all responsibility and liability related to the
subject matter of the Agreement. Public Agency may cancel the contract by giving ABAG written
notice by June 15 of its intent to terminate on June 30 of that current year. ABAG may limit a Public
Agency's ability to cancel at dates other than June 30.
13.2 Cancellation by ABAG: 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 -from performing- its - functions under this Agreement may
result in the cancellation of this Agreement by ABAG. ABAG 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 and the Public Agency of such cancellation.
-5-
13.3 Credit Account Pau: Within ninety (90) days after cancellation, ABAG will pay to
Public Agency the amount of its Credit Account 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. Power Purchasing Pool Committee: (Name of Public Agency
Representative), shall be the Public Agency's representative to the Power Purchasing Pool Committee
to the ABAG Executive Board. The Power Purchasing Pool Committee shall provide policy direction
for the Program. The Committee's powers shall include admission of new Participants and the
extension of any contracts for the purchase of natural gas and /or related services under rules and
procedures adopted by the Committee.
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. Attorneys' 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. Ownership 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, 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 an
irrevocable license to retain a copy of all records covered by this section for ABAG's files.
18. Indemnity: Public Agency shall indemnify and hold harmless ABAG, its directors, its member
agencies, its agents and its 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, its directors,
its member agencies, its agents or its employees.
19. Assignment /Securi Arrangements: Public Agency hereby acknowledges that ABAG 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:
M
Public Agency Notices
Name:
Address:
Facsimile No.:
Attn.:
Public Agency Billing Address
Name:
Address:
Facsimile No.:
Attn.:
ABAG Notices
ABAG
P. O. Box 2050
Oakland, CA 94604 -2050
Patricia Spangler, Power Pool Manager
Telephone No: 510- 464 -7933
Facsimile No: 510- 464 -7985
Email:PatriciaS@abag.ca.gov
Telephone No.:
Email:
Telephone No.:
Email:
21. Severability: 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.
-7-
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.
ASSOCIATION OF BAY AREA GOVERNMENTS
Utz
r,ugene r . L-eong, hxecutive Director
Approved as to legal form and content:
Kenneth K. Moy, Legal Counsel
PUBLIC AGENCY
Date:
Date:
By: Date:
Name:
Title: (City Manager, County Administrator or other as designated
by resolution)
Approved as to legal form and content:
By: Date:
Name:
Title:
EXHIBIT B
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 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 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 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 relating to
its performance of services under this Agreement. ABAG 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. ABAG's officers, employees or agents shall neither 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
Thum ($2,000,00% nr 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.
ME
(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(1)(a) -(c), inclusive.
H. Arbitration. Any dispute between ABAG and the Public Agency regarding the
interpretation, effects, alleged breach or 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.
-10-
Distribution:
OPG &E Program Administrator (original)
❑CTA
OCustomer
ATTACHMENT A
r
For PG &E use only
CTA Group No.:
Contract No.:
Date Received:
Effective Service Date:
Termination Date:
CUSTOMER AUTHORIZATION FOR CORE GAS TRANSPORTATION SERVICE
By this Authorization for Core Gas Transportation Service (Authorization),
(Customer, I, my), a(n), whose business address is
requests Core Gas Transportation service from Pacific Gas and Electric Company (PG &E), a California
Corporation and authorizes Association of Bay Area Governments (CTA),
a(n) California joint powers agency , whose business address is
101 Eighth Street Oakland CA 946074756 to act as CTA
for the purpose of establishing and administering core gas transportation service on my behalf in accordance with
the rules and regulations of the California Public Utilities Commission (CPUC).
CTA is authorized to do any and all things both proper and necessary in establishing and administering such
service for and on my behalf, including (by way of illustration and not limitation) the purchase, nomination and
delivery of gas supplies, treatment of gas imbalances, management of gas storage inventories, and all
procurement - related transactions for my PG &E accounts contained in this Authorization.
Core Gas Transportation Service will begin no later than 90 days from the date PG &E receives this Authorization.
The effective service date for the Authorization will be the first day of the month following its execution by PG &E
(or the first meter reading date of the month following its execution by PG &E, if earlier). Each PG &E account will
begin Core Gas Transportation Service on the normal meter reading date in the effective service month.
The initial term of this Authorization will be (12) consecutive months from the effective service date and thereafter
will continue month -to -month unless Customer closes its business, until Authorization is canceled by PG &E as
specified in Rule 23, or either Customer or CTA executes and submits to PG &E Attachment E, Termination of
Customer Authorization for Core Gas Transportation Service. Unless otherwise specified, Termination received
by the first of the month will become effective for each account on the normal meter reading date in the following
month.
Customer authorizes. PG &E to release to CTA by written or electronic transfer the current and historical gas -usage
information for PG &E accounts contained in this Authorization. Customer releases, holds harmless, and
indemnifies PG &E from any liability, claims, demands, causes of action, damages, or expenses resulting from
unauthorized use of this information.
PG &E will provide its services to Customer as established in the terms and conditions of Schedule G -CT, Rule 23,
and other rules and regulations and any modifications thereto as authorized from time to time by the CPUC.
Customer will continue to be responsible for payment of PG &E transportation bills, even if Customer authorizes
PG &E to send its bill to CTA for payment. Customer is responsible for franchise fees under Schedule G -SUR and
any Utility User's Tax that may be required as a result of receiving gas commodity through CTA. The CPUC does
not regulate CTA, and any disputes with CTA will be Customer's sole responsibility. Billing disputes between
Customer and PG &E will be resolved as specified in Rule 10 and Rule 23.
Form No. 79- 845 - Attachment A
Pricing_& Regulatory Support
August 18, 1995
Page 1
Check one:
❑ 1 request that PG &E bill me directly for its services at my current billing address(es). PG &E may provide
CTA with an information -only statement of my PG &E charges.
❑ (.request that PG &E send my PG &E bill to CTA for payment, subject to approval by PG &E. If PG &E
approves the CTA for this billing option, I will receive an information -only statement of my PG &E charges,
sent by PG &E to my current billing address(es).
PG &E must receive one completed and signed original of Authorization. Facsimiles or photocopies must be
accompanied by an original.
COMMUNICATIONS
PG &E will use the following addresses to send formal notices, tariffs, PG &E service information and executed
agreements to Parties. This will not change the current billing address on PG &E accounts.
To Customer:
(Customer Company Name)
Mailing Address:
Service Address:
Attention:
Telephone Number:
To CTA:
Association of Bay Area Gov'ts
(CTA Company Name)
Mailing Address:
3201 Danville Blvd Suite 275
Alamo CA 94507
Service Address:
3201 Danville Blvd Suite 275
Alamo CA 94507
Attention:
ABAG Coordinator
Telephone Number:
( 510 ) 743 -7877
To PG &E:
Pacific Gas & Electric Company
Mailing Address:
P.O. Box 770000
Mail Code H28H
San Francisco CA 94177
Service Address:
123 Mission Street
Mail Code H28H
San Francisco CA 94105
Attention:
Core Transport Program Admin.
Telephone Number:
(415) 973 -3059
Telecopy Number: Telecopy Number: Telecopy Number:
510 ) 743 -1014 (415) 973 -2384
(Please Type or Print Clearly)
Signed by: Accepted by:
(Signature of duly authorized representative) (Signature of duly authorized representative)
For:
(Customer Company Name)
(Print Name)
(Title)
(Date)
For: Association of Bay Area Governments
(CTA Company Name)
Eugene Y Leong
(Print Name)
Executive Director
(Title)
(Date)
Form No. 79- 845 - Attachment A
Pricing & Regulatory Support
August 18, 1995
Page 2
For PG &E use only
CTA Group No.:
Contract No.:
Date Received:
Effective Service Date:
Termination Date:
ATTACHMENT A 4
CUSTOMER AUTHORIZATION FOR CORE GAS TRANSPORTATION SERVICE
Customer requests that the following PG &E gas account(s) begin Core Gas Transportation
Service.
No. SERVICE ADDRESS clry
❑ Check box if additional listings of accounts are attached.
Note: Under PG &E's CPUC- approved tariffs governing Core Gas Transportation ,service, a CTA is
"an individual or company that contracts with PG &E and participating core gas transportation
service Customers as the responsible agent to manage natural gas deliveries to PG &E on behalf
of a Core Transport Group." CTAs operate independent of PG &E. They are not agents of PG &E,
and PG &E is not liable for any of the LTA's acts, omissions or presentations.
Form No. 79 -845- Attachment A
Pricing & Regulatory Support
August 18, 1996
Page 3 of_
ASSOCIATION OF BAY AREA GOVERNMENTS RECEIVED I Mr In
-Representing City and County Governments of the San Francisco Bay Area ? ABAG
CITY MANAGE!
Date: June 25, 1997
To: Interested Public Agencies
-From: Eugene Y. Leong, ABAG Executive Director
Patricia Spangler, ABAG Power Purchasing Pool Manager
Subject: How to Join ABAG's Power Purchasing Pool for Electricity and Natural Gas
Introduction
Thank you for your interest in ABAG's Power Purchasing Pool. After some delay due to the
complexities of negotiating with power suppliers, we have completed our RFP process for power
supply and services and are very pleased to present you with a program description as well as
instructions on how to join the Pool.
As you may know, ABAG currently purchases natural gas for 32 public agencies. Savings for the
first year of this program were seven percent of the utility's cost — over two times the savings
ABAG had projected. In the last month, we have competitively bid and negotiated a new natural
gas contract for natural gas supply and are estimating savings will be five to eight percent in the
coming year.
For your convenience, we have provided the information and documentation you will need to
join both the Electricity and Natural Gas Programs. Service under the Natural Gas Program can
begin for your agency approximately six weeks after completion of the necessary agreements.
Service under the Electric Program will begin on January 1, 1998. Enclosed you will find the
following information:
1. ABAG's 1998 Power Supply Savings Estimate
2. ABAG's 1997 -98 Natural Gas Savings Estimate
3. Natural Gas Enrollment Package including:
a. Council/Board Resolution Authorizing Participation in Natural Gas Program
b. Checklist for Execution of Natural Gas Agreements
c. Core Natural Gas Sales. and Aggregation Agreement
d. PG &E Customer Authorization for Core Gas Transportation Service
e. Sample Report to Council
4. Electric Program Enrollment Package
a. Cover memo from ABAG to Natural Gas Pool Participants
b. Council Board Resolution Authorization Participation in Electric Program
c. Direct Access Electric Aggregation Agreement
d. Joint Powers Agreement Creating ABAG POWER
e. Sample Report to Council/Board
Mailing Address: P.O. Box 2050 Oakland, California 94604 -2050 (510) 464 -7900 Fax: (510) 464 -7970 info @abag.ca.gov
Location: Joseph P. Bort MetroCenter 101 Eighth Street Oakland, California 94607 -4756
Electric Program Background
See the attached memorandum and attachments from ABAG to ABAG's Natural Gas Program
Participants
Natural Gas Program Background
ABAG has both a core and noncore gas program. Information presented below is exclusively for
-the core gas program, which is limited to accounts which use under 20,800 therms per month
(which is the vast majority of all local government accounts). For those few governments with
noncore accounts, ABAG offers a purchasing service. For more information about noncore gas,
call Patricia Spangler at 510/464 -7933.
1. Core Natural Gas Price and Estimated Savings
ABAG estimates the core natural gas program will save participants between five and eight
percent of PG &E's natural gas service cost in 1997 -98. Natural gas is provided on a contract
basis with Enserch Energy Services. The contract price is fully described in the attached 1997-
98 Natural Gas Savings Estimate.
2. Natural Gas Program Description
ABAG purchases natural gas on the agency's behalf and arranges for it to be delivered to the
PG &E system for distribution by PG &E to the burner tip. Participation in ABAG's Program
assures no change in participant's current priority of service with Pacific Gas and Electric
Company (PG &E), quality of natural gas, overall reliability of service and performance of
maintenance. PG &E will continue to provide meter reading, "on the ground" repair and
maintenance, and emergency response to all participants.
Single Bill System: Participants will receive a single monthly bill for natural gas service from
ABAG, even though the gas and the transportation services will be provided by different
companies. In addition, the ABAG bill will consolidate all accounts into one summary bill.
Core Natural Gas Sales and Aggregation Agreement: CPUC and PG &E regulations require
all customers wishing to aggregate their gas requirements with others in order to purchase gas
from a third party to sign an agreement with a Core Transport Agent. The Core Natural Gas
Sales and Aggregation Agreement authorizes ABAG to serve as the Core Transport Agent for
the Public Agency. This agreement also provides information on ABAG's fees for this service.
ABAG will collect one cent ($0.01) per therm consumed by the Public Agency as an operating
fee to pair forthe scrvk= desca' bed above. In addition, ABAG will collect one -third of one cent
($0.009) per therm cons nwd to offset its own administrative costs. The term of the agreement
is one year with an evergreen clause that allow the contract to rollover for an additional year
unless the participant notifies ABAG of its intent to withdraw. The service begins approximately
six weeks after agreements are received by ABAG.
PG &E Customer Authorization for Core Gas Transportation Service: By signing this
agreement, the public agency authorizes PG &E to recognize ABAG as the Public Agency's Core
Transport Agent and agrees that it will continue to be responsible for payment to PG &E of its
transportation bills and the Public Agency authorizes PG &E to send the bill to the Core
Transport Agent for payment. PG &E will continue to provide to the Public Agency all existing
services except procurement of natural gas. These include meter reading, routine service calls,
and emergency response as it currently does. In addition, to the bill sent by ABAG, PG &E will
provide the Public Agency with an "information- only" invoice, indicating the Public Agency's
actual meter reads for the purpose of confirming ABAG's bill.
uestions
Whether you join one or both of ABAG's program, your agency can be assured of quality
service and public sector approach to pooled purchasing conducted by ABAG. Each public
agency is guaranteed a voice in program operations and decisions through its representative to
the Power Purchasing Pool Committee (current) and the ABAG POWER, the new joint powers
agency being formed to house both programs.
You undoubtedly will have lots of questions about the ABAG proposal. For this reason, ABAG
is planning to conduct four Electric Program Information Sessions around the Bay Area. These
session will be during the last three weeks in July in the cities of Vallejo, San Rafael, San Carlos
and Oakland. A schedule with the date, time, and place of these sessions will be posted online
(htti): / /www.abaa.ca.gov /services /power) and mailed to you directly. We encourage you to attend and
bring your questions to these meetings.
In the interim, you may call Patricia Spangler at (510) 464 -7933 or ABAG Legal Counsel Ken
Moy at (510) 464 -7914. Of course, ABAG staff will be available to attend Council and Board
meetings when you present this information.
ABAG'S POWER PURCHASING POOL
1998 Power Supply Savings Estimate
Savings on the Power Supply Rates
Projected Power Exchange Rate 2.5 cents per kWh
Projected ABAG Rate 2.1 cents per kWh
Estimated Savings per kWh 0.4 cents per kWh
Savings as Percentage of PG &E's Bundled Rate 4%
Additional Savings on Commodity Management and Billing
Additional savings will be achieved through commodity management, i.e. the selling of
contracted low cost surplus power when not required by the participants or through other buy -
sell opportunities with other schedule coordinators, suppliers, and the Power Exchange. These
savings cannot be estimated at this time. In addition, additional savings may be achieved on the
cost of billing. These savings cannot be estimated until the CPUC determines the utility's billing
cost.
AB 1890 10 Percent Rate Reduction
In addition to the savings estimated above, all accounts under PG &E's tariffs Al and A6 as well
as some accounts on PG &E's A10 tariff will be eligible for a 10 percent reduction in the utility
rate in addition to the discount obtained by ABAG's program.
ABAG's Administrative Fee
The savings estimate above does not include ABAG's Administrative Fee which will be
determined this Fall after ABAG has completed the final supply purchases and confirm
participants in the program.
For Further Information
Contact Patricia Spangler, ABAG, at (510) 464 -7933.
ABAG'S POWER PURCHASING POOL
1997 -98 Natural Gas . Savings Estimate
CORE NATURAL GAS PROGRAM,
Core Natural Gas Price
Baseload (approximately 60% of usage):. Fixed at $0.19 per therm. If the market price falls below
$0.168 per therm as determined by the NGI -- Northern California Border Index, the price will be
$0.168 per therm minus 50% of the difference between $.168 and the index price.
Residual (approximately 40% of usage): G -CSP Index (Utility Price) minus $0.022 per therm.
Please Note: in the event the G -CSP is discontinued due to the proposed adoption of the Gas Accord,
it will be replaced with the CPUC- approved real time pricing mechanism that will be the basis for
PG &E's natural gas prices.
Additional Savings due to Commodity Management and Regulatory Changes
Commodity Management: Estimated at $0.019 per therm.
Unbundling of Intrastate Transportation: Estimated at $0.016 per therm.
ABAG's Administrative Fee
Total Administrative Fee: $0.019 per therm
Projected Savings
Projected savings rate for 1997 -98 is 5 to 8 percent.
NONCORE NATURAL GAS PROGRAM
Accounts over 20,800 therms per month
(Call ABAG for Noncore Agreement)
Noncore Natural Gas Price: The monthly price for natural gas will be the lesser o£ 1) 90 percent
of the total G -CSP (PG &E monthly index price) or 2) the Gas Daily Index (North_ ern California)
minus $0.02 per MMBtu.
ABAG's Adminstrative Fee: Total Administrative Fee: $0.005 per therm
For further information, contact Patricia Spangler, ABA G, at 510/464 -7933.
June 13, 1997
RE: Customer Choice
Dear Customer:
Pacific Gas and Electric Company (PG &E) is committed to supporting customer choice
for natural gas procurement and electric generation services. PG &E, therefore,
encourages you to explore your options of purchasing gas and electricity, as a
commodity, from an unregulated energy supplier.
PG &E currently offers a gas transportation service option where you can purchase gas
directly from various competitive energy suppliers, rather than from PG &E as you have
in the past. Under this program, PG &E will still deliver gas to you via its gas
distribution system. (A similar customer choice option, for electric commodity
purchases, is expected to begin January 1, 1998.) Customers who participate in these
customer choice programs will continue to receive PG &E's assurance of safe, reliable
distribution service.
Should you choose another energy supplier, PG &E will no longer sell electricity and
gas to you, but PG &E will remain your distribution company, retaining responsibility
for maintaining the distribution system and providing safe, reliable delivery to you of
natural gas and electricity purchased by your energy supplier. (As a distribution
company and under current regulation, PG &E does not realize a profit from sales of the
commodity itself, but rather, passes commodity costs directly through to customers who
purchase their gas commodity from PG &E.)
Other energy suppliers can sell gas and electricity to you as a separate service, not
regulated by the California Public Utilities Commission (CPUC). They can be
expected to provide additional and customized services, beyond those offered by
PG &E. For instance, PG &E recently filed a proposal with the CPUC to price natural
gas to its customers so the price will vary monthly based on current market conditions.
(Other California natural gas utilities already use monthly pricing.) If monthly pricing
is approved by the CPUC and you or your organization decide that you don't want
monthly price fluctuations in your gas price, alternative pricing options may be
available from other energy suppliers.
PG &E cannot recommend or endorse other energy suppliers, however, we encourage
you to discuss and compare the options they make available to you.
For more information, call PG &E at 1- 800 - 743 -0040.
Sincerely,
Pacific Gas & Electric Company