HomeMy WebLinkAbout000837 Original Contract City of Port Angeles
Record # 000837
EXHIBIT A
Western Public Agencies Group
2015 Scope of Services and Budget
The Western Public Agencies Group ("WPAG") comprises 21 publicly owned utilities in the state
of Washington: Benton REA, Clallam County P.U.D. No. 1, Clark Public Utilities, the City of
Ellensburg, Grays Harbor P.U.D. No. 1, Kittitas County P.U.D. No. 1, Lakeview Light and Power
Company, Lewis County P.U.D. No. 1, Mason County P.U.D. No. 1, Mason County P.U.D. No. 3,
Pacific County P.U.D. No. 2, Skamania County P.U.D. No.1, Wahkiakum County P.U.D. No. 1, the
City of Port Angeles, and members of the Pierce County Cooperative Power Association, which
includes Alder Mutual Light Company, the Town of Eatonville, Elmhurst Mutual Power and Light
Company, the City of Milton, Ohop Mutual Light Company, Parkland Light and Water Company,
and the Town of Steilacoom.
Together the WPAG member utilities serve more than one million customers and purchase
more than 6 billion kilowatt-hours from the Bonneville Power Administration ("Bonneville" or
"BPA") each year under both Load Following and Slice/Block Contracts. WPAG member utilities
also own or receive output from more than 400 megawatts of non-Bonneville generation and
purchase more than 300 megawatts of power from sources other than Bonneville. WPAG
members are generally winter-peaking utilities with lower annual load factors.
WPAG members' similar characteristics have caused them to join together to represent their
interests before Bonneville, and in other regional and national forums since 1980. WPAG has
intervened as a group in every major Bonneville rate proceeding since enactment of the Pacific
Northwest Electric Power Planning and Conservation Act of 1980. WPAG's interests have also
been represented in Congress, before the Northwest Power Planning Council, and in other
regional forums.
The scope of services presented here includes areas that various other organizations, of which
WPAG members might also be members, cannot advocate for WPAG members due to conflicts
of interest within those organizations, lack of staff resources or subject area expertise. WPAG
thus fills a need that is unmet by membership in the Public Power Council, the Northwest Public
Power Association, the Pacific Northwest Utilities Conference Committee and other similar
groups.
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EXHIBIT A
impacts of adding another area of substantial wind resource development to the
Federal transmission system are troubling. This action will stimulate requests for BPA to
use Federal base system resources to integrate these resources, further straining the
Federal base system and its ability to serve preference customer loads. It will also likely
increase the costs of resolving over-supply events. WPAG has strongly opposed the
proposal to roll in the Montana Intertie in prior rate cases and will continue to do so in
the BP-16 Rate Case. This will be staffed primarily by MMPS&M.
Cost Allocation to NT and PTP Transmission Rates— In the last rate case, Snohomish PUD
asserted that BPA's allocation of costs between Network Transmission ("NT") and Point
to Point ("PTP") transmission rates did not recognize the full costs of services provided
to NT customers, to the detriment of PTP customers. BPA held a number of pre-BP-16
Rate Case workshops on this matter and in those workshops Snohomish and Tacoma
continued to pursue the same arguments they made in the BP-14 Rate Case on this
issue. In the initial rate proposal, BPA will propose no change to its cost allocation
methodology. The Snohomish and Tacoma proposal seek to shift costs from the PTP rate
to the NT rate in a manner that is not cost justified. Snohomish and Tacoma are PTP
customers. WPAG will oppose efforts to shift costs between transmission rates in a
manner that is not cost justified and will support efforts to fairly allocate costs between
NT and PTP rates. This will be staffed by EES Consulting and MMPS&M.
Funding Conservation — BPA currently capitalizes (borrows) 100% of the costs of the
energy efficiency incentive (EEI) budgets it provides to its power customers. However,
BPA and its customers are now considering expensing rather capitalizing some or all of
these costs. The reasons for this recent push toward expensing include the belief held
by some utilities that BPA should not borrow money to pay for conservation in their
service areas, and a desire to reduce BPA's borrowing costs and ease pressure on the
BPA's borrowing authority with the treasury. On the other hand, an immediate switch
to expensing EEI costs would result in an approximate 5% rate increase on top of the
general power rate increase. We will work with WPAG's members to identify WPAG's
position on this topic for BP-16 Rate Case, and then advance that position in the rate
proceedings. This will be staffed by EES Consulting and MMPS&M.
Conservation Billing Credits — BPA has proposed to offer billing credits to customers who
undertake independent conservation activities in lieu of receiving an EEI from BPA
during the BP-16 period. These credits will be offered pursuant to section 6(h) of the
Northwest Power Act. WPAG will monitor this proposal in the rate case to ensure that
its implementation (i) is done in a manner consistent with BPA's statutory obligations
and (ii) does not harm utilities that decided not to participate in the billing credits
program. This will be staffed by EES Consulting and MMPS&M.
Delivery Charge — BPA is proposing another 25% increase to the Delivery Charge, which
charge is levied on WPAG members still taking service from BPA owned transmission
facilities at below 34.5 kV. This is a much larger than the general rate increase, and will
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EXHIBIT A
preference customer loads. The potential benefit is that wind integration needs will be
met from the market, freeing up Federal base system capability currently used for that
purpose for use to serve preference customer loads. WPAG will participate in both of
these processes to ensure that any energy imbalance market is structured in a way to
minimize the detrimental aspects and maximize the benefits to preference customers.
Any erosion to preference customer rights will be stoutly resisted. This will be staffed
by EES Consulting and MMPS&M.
Network Transmission Service Process — BPA has initiated an intensive process with NT
customers to address concerns and issues regarding access to and availability of
transmission capability for resource and load service for NT customers. It has included
issues such as how is transmission capability ear-marked for NT customers, how is such
capability made available to NT customers, and can NT customers get access to
transmission without getting in line behind all the wind generators. While BPA has
made some preliminary decisions that are favorable to NT customers, much work
remains to be done to assure NT customers that BPA will have transmission available
when it is needed by NT customers. This will be staffed by MMPS&M.
Northwest Power and Conservation Council
Seventh Northwest Power Plan —The Northwest Power and Conservation Council will be
developing the Seventh Northwest Power Plan during 2015. We will work with WPAG's
members to identify and develop positions on issues within the scope of the Plan that
impact them. For example, the conservation targets developed under the Plan are
incorporated by BPA in its resource acquisition strategy and ultimately impact BPA's Tier
1 power rates. Another potential topic is the Council's treatment of the Columbia
Generating Station under the Plan. We will participate in the Council's public process
for the Plan focusing on the issues identified with WPAG's members. This will be staffed
by EES Consulting and MMPS&M.
• 9T" Circuit Petition for Review
WPAG filed a petition for review in the 9t" Circuit to question whether BPA has the statutory
authority to pay wind generators for their lost RECs, PTCs, and contract damages under
BPA's Oversupply Management Protocol (OMP). This action has been placed on stay
through until early 2015 at which time a new briefing schedule will be set by court order.
This will be staffed by MMPS&M.
• Federal Energy Regulatory Commission
Given the apparent sympathy the FERC has for wind generation, it is clear that much of the
transmission issues relating to wind will find their way back to the FERC. This will require
more active participation by WPAG in FERC processes in order to vindicate our interests as
preference customers. This may require litigation, as it is clear from recent FERC actions
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EXHIBIT A
Project Manager ...................................................................... 160 per hour
Senior Analyst or Engineer....................................................... 155 per hour
Analyst....................................................................................... 150per hour
Clerical...................................................................................... 120 per hour
MMPS&M
Principal ................................................................................. $180 per hour
Associate................................................................................ $180 per hour
These billing rates will remain in effect through December 31, 2015.
On the basis of the above billing rates, the 2015 labor budgets of EES Consulting and MMPS&M
combined are estimated to remain at $200,000, which holds the line on budget increases. This
labor budget will be split equally between EES Consulting and MMPS&M. In addition, an
amount of $50,000 in supplemental funding has been provided to staff the upcoming BP-16
Rate Case. This total labor budget of$250,000 is same as the total labor budget in 2014, which
also included an amount of$50,000 in supplemental funding.
In addition to labor costs, out-of-pocket expenses will be billed to WPAG members at their cost
to EES Consulting and MMPS&M. It is estimated that $40,000 in total out-of-pocket expenses
will be incurred. Out-of-pocket costs will be billed by whichever organization actually incurs the
expense. The total estimated annual WPAG budget (including the supplemental funding) for
2015 is estimated at $290,000. This represents no increase over the total 2014 annual WPAG
budget.
As always, the allocation of the budget among WPAG members is open to negotiation by the
participants. We have attached an inter-utility allocation predicated on the most recent
available utility data. After a discussion of the foregoing issue, a final budget by utility will be
prepared. An example of the budget's allocation is attached at the end of this narrative.
Project Staffing
The staffing for these projects will be similar to that for past WPAG activities. Gary Saleba will
be the principal representative for EES Consulting. Ryan Neale and Terry Mundorf will be the
principal representatives for MMPS&M. Additional MMPS&M and EES Consulting staff will
assist as needed.
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CONSULTING SERVICES AGREEMENT
EES CONSULTING,INC.
Billing Address
570 Kirkland Way,Suite 100,Kirkland,Washington 98033
(425)889-2700
This Consulting Services Agreement(herein Agreement)is made between EES Consulting,Inc.,(hereinafter"EES CONSULTING")and the City of PortAngeles,P.O.Box
1150,PortAngeles,WA 98362,Attn:Phillip Lusk(hereinafter"CLIENT').
I. SCOPE,COMPENSATION AND QUALITY OF CONSULTING SERVICES
EES CONSULTING will provide the services and be compensated for these services as described in ExhibitA,attached hereto.
EES CONSULTING shall render its services in accordance with generally accepted professional practices. EES CONSULTING shall,to the best of its knowledge and
belief,comply with applicable laws,ordinances,codes,rules,regulations,permits and other published requirements in effect on the date this Agreement is signed.
11. TERMS&CONDITIONS OF CONSULTING SERVICES AGREEMENT
1. Timing of Work. EES CONSULTING shall commence work on or about January 1,2015.
2. Relationship of Parties,No Third-Party Beneficiaries. EES CONSULTING is an independent contractor under this Agreement. This Agreement gives no rights or
benefits to anyone not named as a party to this Agreement,and there are no third party beneficiaries to this Agreement.
3. Insurance.
a. Insurance of EES CONSULTING. EES CONSULTING will maintain throughout the performance of this Agreement the following types and amounts of
insurance:
1. Worker's Compensation and Employer's Liability Insurance as required by applicable state or federal law.
ii. Comprehensive Vehicle Liability Insurance covering personal injury and property damage claims arising from the use of motor vehicles with combined
single limits of$1,000,000.
iii. Commercial General Liability Insurance covering claims for personal injury and property damage with combined single limits of$1,000,000.
iv. Professional Liability(Errors and Omissions,on a claims-made basis)Insurance with limits of$1,000,000.
b. Interpretation. Notwithstanding any other provision(s)in this Agreement,nothing shall be construed or enforced so as to void,negate or adversely affect any
otherwise applicable insurance held by any party to this Agreement.
4, Mutual Indemnification. EES CONSULTING agrees to indemnify and hold harmless CLIENT and its employees from and against any and all loss,cost,damage,
or expense of any kind and nature (including, without limitation, court costs, expenses,and reasonable attorneys'fees) arising out of injury to persons or damage to
property(including,without limitation, property of CLIENT, EES CONSULTING,and their respective employees,agents, licensees,and representatives)in any manner
caused by the negligent acts or omissions of EES CONSULTING in the performance of its work pursuant to or in connection with this Agreement to the extent of EES
CONSULTING's proportionate negligence,if any.
CLIENT agrees to indemnify and hold harmless EES CONSULTING and its employees from and against any and all loss,cost,damage,or expense of any kind and
nature (including without limitation, court costs, expenses and reasonable attorneys'fees) arising out of injury to person(s)or damage to property(including,without
limitation,property of CLIENT,EES CONSULTING,and their respective employees,agents,licensees and representatives)in any manner caused by the negligent acts or
omissions of CLIENT or other(s)with whom CLIENT contracts("CLIENT's agents")to perform work pursuant to or in connection with this Agreement,to the extent of
CLIENT's or CLIENT's agents proportionate negligence,if any
5. Resolution of Disputes, Attorneys' Fees. The law of the State of Washington shall govern the interpretation of and the resolution of disputes under this
Agreement. If any claim,at law or otherwise,is made by either party to this Agreement,the prevailing parry shall be entitled to its costs and reasonable attorneys'fees.
6. Termination of Agreement. Either EES CONSULTING or CLIENT may terminate this Agreement upon thirty(30) days written notice to the other sent to the
addresses listed herein.
In the event CLIENT terminates this agreement,CLIENT specifically agrees to pay EES CONSULTING for all services rendered through the termination date.
EES CONSULTING,INC. CITY OF RTANGELES
By: Gary Saleba s — � w�— By:
Title: President Title: t✓f} r/}� Cg
Date: December 8,2014 Date: �` Ll
LEGAL SERVICES AGREEMENT
THIS AGREEMENT is made between BENTON RURAL ELECTRIC ASSOCIATION,
WASHINGTON; CITY OF PORT ANGELES, WASHINGTON; CITY OF ELLENSBURG,
WASHINGTON; CITY OF MILTON, WASHINGTON; TOWN OF EATONVILLE,
WASHINGTON; TOWN OF STEILACOOM, WASHINGTON; ALDER MUTUAL LIGHT
COMPANY, ELMHURST MUTUAL POWER AND LIGHT COMPANY, WASHINGTON;
LAKEVIEW LIGHT AND POWER COMPANY, WASHINGTON; OHOP MUTUAL LIGHT
COMPANY, WASHINGTON; PARKLAND LIGHT AND WATER COMPANY,
WASHINGTON; PUBLIC UTILITY DISTRICT NO. 1 OF CLALLAM COUNTY,
WASHINGTON; PUBLIC UTILITY DISTRICT NO. 1 OF CLARK COUNTY,
WASHINGTON; PUBLIC UTILITY DISTRICT NO. 1 OF GRAYS HARBOR COUNTY,
WASHINGTON; PUBLIC UTILITY DISTRICT OF KITTITAS COUNTY, WASHINGTON;
PUBLIC UTILITY DISTRICT NO. 1 OF LEWIS COUNTY, WASHINGTON; PUBLIC
UTILITY DISTRICT NO. 1 OF MASON COUNTY, WASHINGTON; PUBLIC UTILITY
DISTRICT NO. 3 OF MASON COUNTY, WASHINGTON; PUBLIC UTILITY DISTRICT
NO. 2 OF PACIFIC COUNTY, WASHINGTON, PUBLIC UTILITY DISTRICT NO. 1 OF
SKAMANIA COUNTY, WASHINGTON; AND PUBLIC UTILITY DISTRICT NO. 1 OF
WAHKIAKUM COUNTY, WASHINGTON (Public Utilities); and MARSH MUNDORF
PRATT SULLIVAN & McKENZIE (Attorney) for the provision of legal services and the
payment of compensation as specified herein.
WHEREAS, the Public Utilities presently purchase electric power and transmission from
the Bonneville Power Administration (BPA) pursuant to wholesale rate schedules determined by
BPA after public hearing pursuant to Section 7 of the Pacific Northwest Electric Power Planning
and Conservation Act (Act);
WHEREAS, BPA is considering adoption of various policies, rate forms and long-term
contracts which would have a major impact on the wholesale rates of the Public Utilities, and
WHEREAS, BPA is preparing to conduct hearings and public processes to decide issues
which will affect Bonneville's wholesale rate schedules and Power Sales Contracts for the Public
Utilities; and
WHEREAS, the Public Utilities wish to actively participate in these hearings and
processes to protect the interests of their ratepayers, and
WHEREAS, the Public Utilities may wish to diversify their power supply sources,
It is Therefore Agreed That:
1. The Attorney shall advise, assist and appear on behalf of the Public Utilities in
hearings and public processes relating to issues set forth Exhibit A referenced
herein attached and as directed by the Public Utilities.
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2. Public Utilities shall compensate the Attorney for these services at an average
hourly rate not to exceed $180.00. Out-of-pocket expenses, such as telephone,
telecopy, copying and postage, and reasonable and necessary travel expenses shall
be in addition to the hourly rate. The Attorney shall send each of the Public
Utilities an itemized statement for legal services rendered and out-of-pocket
expenses on a monthly basis.
3. The Attorney fees and out-of-pocket expenses incurred hereunder shall be divided
among the Public Utilities according to the formulas attached in Exhibit A.
4. The activities encompassed by this Agreement are set forth in Exhibit A attached
hereto. No other activities shall be undertaken without prior authorization of the
Public Utilities. It is understood that the length and amount of work necessary in
these proceedings is unique and the cost may exceed these estimates.
5. Files of the Attorney relating directly to the foregoing legal services shall be
available for examination by the authorized representative of the Public Utilities
or their attorneys and shall, upon reasonable request, be turned over the Public
Utilities if the Attorney ceases to act as attorney for the Public Utilities.
6. Because the attorney-client relationship is dependent upon mutual trust and full
confidence, an individual Public Utility, the Public Utilities collectively, or the
Attorney may terminate this Agreement at any time upon written notice.
MARSH MUNDORF PRATT SULLIVAN & McKENZIE
Date: December 8 2014 :B Y
Terence L. Mundorf
CITY OF PORT ANGELES
Date: `l By:
Manager
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