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Home My WebLink About5.375 Original Contract , -' , " ".. . ' , - , , ,- -', , ' " " \ \ ~ 5. ~7.s ~i- 'Or R'''T''P2' N:G--IEiL:- E"S" , f I j J ; 1 I ; I ,~l I ,: 1 ",,-,"' ,."'~ _:. ~~ i 1_' _...) _~.J ~)1 ..l__~l ~'j , t-' { __ .w "~ WAS H I N G TON, U. S. A. Public Works & Utilities Department Febmary 11, 2009 Mr. Gary Saleba President EES Consulting 570 Kirkland Way, Suite 200 Kirkland, W A 98033 Dear Gary, Please find enclosed the agreement for Western Public Agencies Group services for 2009. -' '4'> We look forward to this year's opportunities and challenges and our continued membership. '< \, Sina~ (2~ Larry Dunbar Deputy Director of Power Systems Cc ;Y.Jjj1ii~rt!i:{ty_C'i~i:B ,'- Phone' 360-417-4805/ Fax' 360-417-4542 Website' WWW cltyofpa us / Email' publlcworks@cltyofpa us 321 East Fifth Street - PO, Box 1150/ Port Angeles, WA 98362-0217 CONSULTING SERVICES AGREEMENT EES CONSULTING, INC. Blllmg Address 570 Kirkland Way, SUite 200, 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 Port Angeles, Attn Larry Dunbar, PO Box 1150, Port Angeles, WA 98362 (heremafter "CLIENT") I. SCOPE, COMPENSATION AND QUALITY OF CONSULTING SERVICES EES CONSULTING WIll provide the services and be compensated for these services as descnbed In Exhibit A, 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 II. TERMS & CONDITIONS OF CONSULTING SERVICES AGREEMENT Timing of Work EES CONSULTING shall commence work on or about January 1, 2009 2 Relationship of Parties, No Third-Party Beneficiaries EES CONSULTING IS an Independent contractor under this Agreement This Agreement gives no nghts or benefits to anyone not named as a party to this Agreement, and there are no third party beneficlanes to this Agreement 3 Insurance a Insurance of EES CONSULTING EES CONSULTING Will mamtaln throughout the performance of this Agreement the follOWIng types and amounts of Insurance. Worker's Compensabon and Employer's Liability Insurance as reqUired by applicable state or federal law ComprehenSive Vehicle Liability Insurance covenng personal mJury and property damage claims anslng from the use of motor vehicles WIth combined smgle limits of $1 ,000,000 III Commercial General Liability Insurance covenng claims for personal InJury and property damage WIth combined smgle 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 provlslon{s) m 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 Mutuallndemmficatlon EES CONSULTING agrees to mdemnlfy 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 attomeys' fees) ansmg out of Injury to persons or damage to property (Including, WIthout limitation, property of CLIENT, EES CONSULTING, and their respective employees, agents, licensees, and representalives) m 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 attomeys' fees) anslng 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 proporbonate negligence, If any 5 Resolution of Disputes, Attorneys' Fees The law of the State of Washington shall govern the Interpretalion 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 party shall be enlitled to Its costs and reasonable attorneys' fees 6 TerminatIon of Agreement Either EES CONSULTING or CLIENT may terminate this Agreement upon thirty (30) days wntten 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 termmatlon date EES CONSULTING, INC CITY OF PORT ANGELES By Gary Saleba By Kent Myers TIlle PreSident 1~ Ci tv Manaaer Date December 4, 2008 20, 2009 ~ . Consulting lDJ~~fH\Vl~rm UlJ. DEe 4 2008 illJ December 4, 2008 City of Port Angeles Public Works and Utilities Dept Eni;IIlt!~flng StHl/'Ci:;} t}'"I'>llJ/i Mr Charles Dawsey Benton Rural Electric AssoclatlOn Post Office Box 1150 Prosser, W A 99350 Mr Dave Muller leWIS County P U D Post Office Box 330 Chehahs, W A 98532 Mr Bob Wittenberg Skamama County PUD POBox 500 Carson, WA 98610 Mr Doug Nass Clallam County P U D Post Office Box 1090 Port Angeles, W A 98362 Ms Steve Taylor Mason County P U D No 1 North 21971 Highway 10 1 Shelton, WA 98584 Mr Steve Walter Tanner Electric Cooperative POBox 1426 North Bend, WA 98045 Mr Wayne Nelson Clark Pubhc UtIhtIes Post Office Box 8900 Vancouver, WA 98668 Ms Wyla Wood Mason County P U D No 3 Post Office Box 2148 Shelton, W A 98584 Mr David Trambhe WahkIakum County PUD No I POBox 248 Cathlamet, WA 98612 Mr Bob Titus CIty of Ellensburg 420 North Pearl Street Ellensburg, W A 98926 Mr Doug Miller Pacific County P U D Post Office Box 472 Raymond, WA 98577 Mr Terry Huber Pierce County Cooperative AssoclatIon c/o Town of SteIlacoom 1030 Roe Street Stellacoom, WA 98388 Mr RIck Lovely Grays Harbor County PUD POBox 480 Aberdeen, W A 98520 Mr Ray Grmberg Pemnsula Light Company Post Office Box 78 GIg Harbor, W A 98335 Mr Mark KJelland Kittitas County PUD 1400 East Vantage Highway Ellensburg, W A 98926 Mr Larry Dunbar City of Port Angeles POBox 1150 Port Angeles, W A 98362 SUBJECT: Proposed WP AG Scope of Services and Contracts for 2009 D~ar Ladies and Gentlemen: Attached please find consulting and legal contracts from Terry and me for the 2009 scope of services for the Western Public Agencies Group (WPAG). If these contracts are acceptable, please sign and return one copy of each contract for our respective files. Thank you for allowing EES Consulting and Marsh, Mundorf, Pratt, Sullivan & McKenzie (MMPS&M) to serve you for another year. 570 Kirkland Way, SUite 200 Kirkland, Waslungton 98033 Telephone 425 889-2700 FaCSimile 425 889-2725 A registered profeSSIOnal engmeermg corporatIOn With offices m Kirkland, W A, Portland, OR, IndlO, CA, and Bellmgham, W A Western Public Agencies Group December 4, 2008 Page 2 Please feel free to call Terry or me if you have any questions. Very truly yours, j~ S~ ~~ Gary S. Saleba President cc Dan Sharpe, Alder Mutual Light Company Jamieson Van Eaton, Town of Eatonvllle Damel Brooks,Ehnhurst Mutual Power & Light Robm Rego, Lakeview Light & Power Company Katnna Asay, City of Milton Isabella Dedltch, Ohop Mutual Light Company Mark Johnson, Parkland Light & Water Company Mark Burhnghame, Town of Stellacoom Terry Mundorf, MMPS&M , EXHIBIT A Western Public Agencies Group 2009 Scope of Services and Budget The Western Public Agencies Group (WPAG) comprises 23 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, Lewis County P.D.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, Peninsula Light Company, the City of Port Angeles, Tanner Electric Cooperative, 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, Lakeview Light and Power Company, the City of Milton, Ohop Mutual Light Company, Parkland Light and Water Company, and the Town of Steilacoom. Together the WP AG member utilities serve more than one million customers and purchase more than 6 billion kilowatt-hours from the Bonneville Power Administration ("Bonneville") each year. WP AG 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. WP AG members are 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 forums in the Pacific Northwest and the United States since 1980. WP AG 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. WP AG 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. A-J EXHIBIT A Scope of Services The 2009 scope of services for WP AG is proposed as follows: . General WP AG Activities and Meetings During 2009, EES Consulting and MMPS&M will monitor and comment on regional and federal activities of specific interest to WP AG members not covered adequately by other public power organizations, including BP A-related legislation, progress on regional transmission and any other new topic of mutual interest and relevance. Monthly meetings will be held to brief WP AG members on these activities. . Regional Dialogue Activities WP-lO Rate Proceeding BP A has already started workshops to prepare for a combined power and transmission rate proceeding that will unfold this year. There is some likelihood that this case will be settled on rate design issues, but questions of risk, revenue levels, and pricing of generation inputs for resource integration will be subject to dispute. WP AG will be fully engaged in this proceeding to protect the interests of its members. This will be staffed by EES Consulting and MMPS&M. Tier 2 Resource Acquisition BP A is already investigating various resources for acqulSltlOn purposes, and will be gearing up these activities during the coming year. While the theory of tiered rates is to separate the costs of these resources from those of Tier 1 resources, there is a strong likelihood that some of the costs of Tier 2 resources will find their way into Tier 1 rates. As such, WP AG member have a direct financial interest in how BP A goes about evaluating resources, and what resources it decides to acquire regardless of whether they intend to rely on BP A for Tier 2 service or not. WP AG will participate in the BP A processes regarding the acquisition of additional resources. This will be staffed by EES Consulting and MMPS&M. 7(b)(2) Rate Remand BPA has concluded the 7(i) process to respond to the remand of the 9th Circuit Court in the Golden Northwest and PGE cases, and this resulted in significant refunds to WP AG members. However, BPA allowed the rODs to retain over $750,000 of preference customer money under contracts that are palpably illegal. We will be investigating ways to obtain the return of this money to WP AG utilities, including pursuit of litigation in the 9th Circuit. This will be staffed by EES Consulting and MMPS&M. A-2 .' EXHIBIT A Tiered Rate Methodology (TRM) BP A has completed the initial formulation of the TRM. Currently, BP A is planning to have a process to review and revise the TRM early in 2009. This will present an opportunity to improve the TRM over the current product, and may prompt a re- examination of tiered rates depending on the state of the economy over the next year. WP AG will participate in this process with the objective of improving the operation and implementation of the TRM for winter peaking utilities, as well as continuing to investigate alternatives to this approach that may makes more sense under future circumstances. This will be staffed by EES Consulting and MMPS&M. IOU Benefits Discussions The success in the Golden Northwest and PGE cases resulted in the WP-07 Supplemental rate proceeding, and substantial refunds to preference customers. As discussed above, there continues to be litigation over funds that BPA allowed the IOUs to retain. This will undoubtedly cause BP A to imitate negotiations between the publics, IOUs and BPA on the appropriate level of benefits that should be paid to the IOUs over the long term. Given the central role WP AG played in the litigation and subsequent discussions, it is expected that WP AG will continue to participate actively in order to protect the interests of the WP AG utilities and the litigation results. This will be staffed primarily by MMPS&M. Power Sales Contract Negotiations BPA has completed the process of drafting and offering the post-20ll power sales contracts. Although these contracts have been executed, service does not commence under these agreements for about three years. Given current economic uncertainties and the change in administration, there is a strong likelihood that there will be opportunities to improve the Regional Dialogue, and depending on what happens to the TRM, potential for major revisions as well. This will be staffed primarily by MMPS&M. Power Sales Contract Implementation There will be a number of deadlines and decisions that will take place in the next year, including Tier 2 service elections, Shared Rate Plan, and getting ready for the determination on the Contract High Water Mark. Timely information and advice will be provided regarding these requirements, options available, and factors to be considered. This will be staffed by EES Consulting and MMPS&M. DSI Long-Term Contracts During the coming calendar year, BP A will also be dealing with the issue of how it will deliver "benefits" to the DSls. The cost of these benefits will be imposed on Tier 1 customers, including WP AG utilities. It will also require BP A to negotiate a contract A-3 EXHIBIT A with the DSIs for the delivery of any such benefits. This effort to continue to support the DSIs will be aggressively opposed by WPAG. This will be staffed primarily by MMPS&M. Transmission Issues have arisen regarding the ability of BP A transmission network to accommodate the amounts of wind generation being developed without imposing costs or access limitations on preference customers receiving service under their post-2011 power contracts via NT service over the Federal transmission system. All WP AG members receive federal power service from BP A, and many have developed and will develop non- federal resources. As such, WP AG is uniquely positioned to strike the proper balance between the integration of non-federal resources, particularly wind, and BPA's obligations to husband the resources of the Federal base system for service to its preference customers. WP AG will be fully involved with all processes in which these issues come to the fore, and in particular the development of the position that preference attaches to both the energy and capacity that is available from the Federal base system. This will be staffed primarily by MMPS&M. Non-Federal Tier Two Power Supply As BP A goes forward with tiering of the Federal power system, it will likely require customers to make choices regarding the use of Federal and non-Federal resources to serve Tier 2 load sometime in 2009. It will be necessary to investigate and evaluate resource and supply alternatives to serve Tier 2 load. This would include non-federal options, and exploration of pooling opportunities should be undertaken. This will be staffed primarily by EES Consulting. . Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) has begun investigations into transmission service provided under the NT and PTP contract under the auspices of updating of its landmark Order No. 888. This may result in changes to the way transmission dependent utilities have access and pay for access on transmission facilities and will have significant implications for WP AG members. To date, PPC has done a good job of working this issue. EES Consulting and MMPS&M will continue to assist PPC in its efforts, and will monitor this process to see if WP AG direct participation is needed. . Olympia Legislative Session EES Consulting and MMPS&M will monitor the activities of the 2009 legislature on behalf of WP AG' s specific interests. A-4 EXHIBIT A . Other Matters During the course of each year, matters arise that require WP AG attention to protect the interests of our customers. These matters are undertaken at the direction of the WP AG utilities. Budget The budget for the scope of services described above is calculated at the following billing rates for EES Consulting and MMPS&M: EES Consulting President.................................................................................. $165 per hour Managing Director.................................................................... 160 per hour Manager.................................................................................... 155 per hour Senior Project Manager........................................ ........... .......... 150 per hour Project Manager........ ......................... ....................................... 145 per hour Senior Analyst or Engineer .......................................................140 per hour Analyst...................................................................................... 135 per hour Clerical...................................................................................... 120 per hour MMPS&M Principal.................................................................................. $165 per hour Associate................................................................................. $130 per hour These billing rates will remain in effect through December 31, 2009. On the basis of the above billing rates, the 2009 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 to labor costs, out -of-pocket expenses will be billed to WP AG members at their cost to EES Consulting and MMPS&M. It is estimated that $30,000 in total out-of-pocket expenses will be incurred for all work non-rate case elements in total. Out-of-pocket costs will be billed by whichever organization actually incurs the expense. The total estimated WP AG budget for 2009 is estimated at $230,000. As always, the allocation of the budget among WP AG 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. A-5 EXHIBIT A Project Staffing The staffing for this project will be similar to that for past WP AG activities. Gary Saleba and Terry Mundorf will be the principal representatives for EES Consulting and MMPS&M, respectively. Additional MMPS&M and EES Consulting staff will assist as needed. A-6 Western Public AgencIes Group DRAFT Proposed Budget for 2009 Scope of Services EES Consulting and Marsh Mundorf Pratt Sullivan & McKenzie Source' 2008-2009 Northwest Electric Utility Directory (NWPPA), 2008 WPUDA Sourcebook, 2003 EIA Form 412 & 2004 EIA Form 861, Utility Supplied December 3, 2008 Total Budget Labor Expenses Total $ $ $ 200,000 30,000 230,000 Average of Customers, Energy Sales and Investment Customers 1 Energy Sales 1 Investment 2, 3 18.0% Budget Allocation Wrthout Cap Cap with Cap percent of percent of percent of percent of percent of number total kilowatt-hours total dollars total total total dollars IndIvidual Utilities Benton Electric REA 14.047 31% 519,034,917 43% $ 55,076,221 59% 443% 577% $ 13,278 Clallam County PUD 29,594 65% 791,930,714 66% $ 50,440,018 54% 617% 808% $ 18,594 1--- $ 294% 1800% $ Clark Public Utlltles 180.043 397% 5,081,087,000 424% 275,772,523 37 17% 41,400 CIty of Ellensburg .' -. 9,020 20% 200,255,889 17% $ 9,744,025 10% 157% 206% $ 4,732 Grays Harbor PUD 41 ,708 92% 982,601,658 82% $ 140,250,672 149% 1078% 1402% $ 32,242 KIttitas County PUD 4,164 09% 72,767,000 06% $ 10,581,463 11% 088% 115% $ 2,648 LeWIS County PUD No 1 30,384 67% 929,239,755 78% $ 85,282,442 91% 785% 1024% $ 23.558 Mason County PUD No 1__ 5,095 11% 69,431,086 06% $ 10,176,188 11% 093% 121% $ 2,785 Mason County PUD No 3 32,190 71% 668,687,462 56% $ 99,434,348 106% 776% 1009% $ 23,204 Pacific County PUD No 2 16,889 37% 296.313.064 25% $ 39,129,640 42% 346% 450% $ 10,356 Pemnsula Light Company- 25,151 55% 551.615,218 46% $ 59,691,447 64% 550% 718% $ 16,511 ~jlPort,~ 10,522 23% 709,659.006 59% $ 18,896,806 20% 342% 451% $ ti\9~ ~ Skamama County PUD No 1 5,725 13% 128,576,272 11% $ 14,208,000 15% 128% 167% $ 3,849 Tanner ElectriC Cooperatlv~, 4,300 09% 67,594,220 06% $ 12,356,404 13% 094% 123% $ 2,818 Wahklakum County PUD No 1 2,360 05% 40,025,699 03% $ 7.391,412 08% 055% 071% $ 1,635 Pierce County Cooperative Power Association Alder Mutual Light Compa~y, 276 01% 3,887,591 00% $ 304,837 00% 004% 005% $ 126 Town of Eatonvllle 1,250 03% 24,292,160 02% $ 1,150,000 0.1% 020% 026% $ 605 Elmhurst Mutual Power and Light Company 13,726 30% 259,445,280 22% $ 18,920,525 20% 240% 315% $ 7,239 Lakev.ew Light and Power Company .,,- 25% 275,456,539 23% $ 8,369,626 09% 191% 252% $ 5,787 \ 11,511 City of Milton ~ 3,408 08% 63,932,270 05% $ 2,378,975 03% 051% 068% $ 1,553 Ohop Mutual Light Company 4,132 0.9% 77,677,410 06% $ 10,293,640 11% 089% 115% $ 2.653 Parkland Light and Water Company 5,012 11% 118,755,303 10% $ 8,585,910 09% 1.00% 131% $ 3,022 Town of Stellacoom - 2,718 06% 39,721,294 03% $ 918,000 01% 034% 045% $ 1,040 Subtotal Pierce County Cooperative Power ASSOCiatIon 42,033 93% 863,167,847 72% 50,921,513 54% 73% 958% $ 22,025 Total 453,225 100 0% 11,971,986,807 1000% 939,353,122 1000% 1000% 100 00% $ 230,000