HomeMy WebLinkAbout5.308 Original ContractFiled at the Request of:
City of Port Angeles
City Clerk's Office
P. O. Box 1150
Port Angeles, WA 98362
U
Dated:
2005 1164646
Interlocal Agreement
City Clerk File No.: 312
Agreement between the City of Port Angeles and Id A
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Clallam
County
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ELECTRICAL SERVICE AREA AGREEMENT
This AGREEMENT is made and entered into this 30th day of
December, 1992, by and between the City of Port Angeles,
Washington, hereinafter called the "City," and the Public Utility
District No. 1 of Clallam County, Washington, hereinafter called
the "District."
WITNESSETH that:
WHEREAS, the City and the District concur that the elimination
and avoidance of duplicate electrical plant would be in the best
interests of their rate paying customers; and
WHEREAS, the City and the District require definitive service
areas in order that they may properly plan for growth within their
respective systems; and
WHEREAS, the laws of the State of Washington, specifically
Chapter 54.48 RCW and RCW 35A.14.900, contain language governing
agreements between utilities regarding service territories and
acquisition of facilities; and
WHEREAS, City and District representatives have met and
reached an agreement on electrical service areas;
NOW, THEREFORE, IT IS AGREED between the parties hereto as
follows:
1. Service Area Boundary:
1.1 The electrical service area boundary between the City and
the District shall be the City Limits as shown on Exhibit "A"
attached hereto and made a part of this Agreement. All the
territory within the described boundary shall be the City Service
Area. All the territory without the described boundary shall be
the District Service Area. Each utility shall have the exclusive
right to provide electrical service to facilities lying within
their respective service territories except as provided for in
Section 7 of this Agreement.
1.2 All areas that are annexed into the City during the term
of this Agreement shall automatically adjust the Service Area
Boundary so that it falls within the City's Service Area, provided
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5,80
that upon any such annexation Exhibit "A" shall be revised
accordingly.
2. Term of Agreement:
This Agreement shall be effective from midnight December 31,
1992, until midnight December 31, 2017.
3. Termination of Agreement:
After the tenth year of this Agreement and at five -year
intervals thereafter, either party to this Agreement may terminate
the Agreement by giving the other party written notice at least
ninety (90) days before the end of the tenth year or the end of any
five -year period thereafter.
4. Changes to the Agreement:
Changes in the terms and conditions of this Agreement may be
made at any time upon the mutual written consent of both parties,
provided, however, that revisions to Exhibit "A" as necessitated by
annexations have already been agreed upon herein. Either party
desiring a change shall give the other party ninety (90) days
written notice. The notice shall contain the desired changes and
a full explanation of the reasons for the changes. If, at the end
of the ninety -day period, the parties hereto cannot mutually agree
to the proposed changes, the Agreement shall remain unchanged.
5. Immediate Sale of Certain Facilities:
Within one hundred twenty (120) days after the effective date
of this Agreement, the District will sell and convey to the City
and the City shall purchase certain electric system facilities
existing within the City's Service Area, as shown on Exhibit "A" as
"Immediate Sale Facilities," which Exhibit is attached hereto and
made a part of this Agreement. The purchase price will be in
accordance with Section 10 of this Agreement. On the effective
date of such sale or conveyance, the District's customers in these
areas will be transferred to the City, and the District will have
no further service obligation to such customers.
6. Delayed Sale of Certain Facilities:
6.1 The District shall sell and convey and the City shall
purchase certain facilities of the District that lie within the
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City's Service Area as shown on Exhibit "A" as "Delayed Sale
Facilities," which Exhibit is attached hereto and made a part of
this Agreement. The City shall have up to three (3) years to
purchase Delayed Sale Facilities or up to eighteen (18) months
after written notice that the District will be unable to continue
service to those customers without substantial system capital cost
as determined by the District. The City shall notify the District,
within sixty (60) days of the effective date of this Agreement, the
date(s) the City proposes to purchase the Delayed Sale Facilities.
The purchase price will be in accordance with Section 10 of this
Agreement.
6.2 As areas are annexed into the City, the City will have
twenty four (24) months in which to provide service to customers in
the annexed area by constructing facilities or purchasing District
facilities. Within sixty (60) days of the effective date of
annexation, the City will advise the District how the City intends
to provide service to the customers in the annexed area (by
constructing facilities, purchasing facilities, or both), and the
date(s) the City proposes to purchase any District facilities in
the annexed area. The purchase price will be in accordance with
Section 10 of this Agreement.
7. Retention of Certain Facilities:
Both the City and the District shall have the right to
construct, maintain, and otherwise operate those facilities
required to provide electrical service to properties owned and
operated by them regardless of whose Service Area the property lies
within. Such facilities will be identified on Exhibit "A."
However, this does not preclude either party from providing service
to the other party upon request.
8. New Developments in City Service Area:
For the period of time that the District maintains existing
distribution lines in the City's Service Area in order to continue
electric service to existing customers in the area, the City may,
at its option, request the District to serve a new customer or
group of new customers until such time as the City purchases that
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portion of the District's distribution line used to provide service
to the new customer or installs its own facilities in the area.
The District may choose not to provide service to new customers if
the provision of such service would require
capital cost as determined by the
District will meet to determine the
facilities to provide service to the
will only install service lines
District.
preferred
substantial system
The City and the
manner to construct
new customer(s). The District
and transformers; all other
facilities must be installed by the City and will remain City
property. Connection of City facilities to District facilities
will be done by the District at City expense. Maintenance
responsibility will be established for each situation. The City
may choose to use the wheeling provisions of Section 11 of this
Agreement in order to provide City service at City rates.
For proposed new developments located on sites on which a
District electric line exists and the City has determined that the
City will serve the new customer(s) or the development, the
following shall apply:
8.1 The City shall purchase that portion of the District line
located in the development, or if the District line extends through
a proposed development and City acquisition of that portion of the
District line located within the proposed development renders the
remaining portion of the electric line unserviceable as determined
by the District, then:
a. If the entire remaining portion of the electric line
is located within the City's Service Area, the City, at its option,
shall either pay the District to relocate the line, either
underground or overhead, to eliminate any conflicts with the
proposed development, or purchase the entire portion of the line
extending to, through, and beyond the proposed development; or
b. If the remaining portion of the electric line extends
beyond the City's Service Area and the District determines that the
facility is necessary to maintain service to customers situated
outside the City Service Area, the City shall pay the District the
cost of the relocation work necessary to eliminate any conflicts
between the electric line and the proposed development.
8.2 The City Light Director shall make the determination as
to whether or not a District line is in conflict with proposed
developments. The determination shall be made at the time the
developments are being considered by the City.
9. Exclusion:
All existing and future District transmission lines, major
distribution feeder lines, and substations as described and shown
on Exhibit "A" attached hereto, and as further amended, and made a
part of this Agreement, are excluded from the terms and conditions
of this Agreement. These lines may be repaired, replaced,
expanded, and up- graded to a higher voltage at any future date
without regard to this Agreement.
10. Purchase Formulas:
The purchase price for transfers from the District to the City
shall be established pursuant to Sections 10.1 and 10.2 of this
Agreement. The meaning of the terms used in Sections 10.1 and 10.2
is set forth on Exhibit "B," attached hereto and made a part of
this Agreement.
10.1 Purchase Price for Transfer of Facilities with
Customers: The purchase price shall be the lesser of: a) the
cost for the City to serve plus severance costs, or b) compensation
based on five (5) years of net revenue plus plant value plus
severance costs.
10.2 Purchase Price for Transfer of Customers Only: In
situations where transfer of customers occurs with no transfer of
facilities, the purchase price shall be the lesser of: a) the cost
for the City to serve plus severance costs, or b) compensation
based on five (5) years of net revenue plus severance costs.
11. Wheelina Aareements:
The City and the District acknowledge that there may be
certain groups of their customers located where extension of their
lines would be uneconomic and duplicative of the other party's
facilities.
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Recognizing potential benefits to rate paying customers, the
District and City hereby agree to consider wheeling power over
their facilities for the other party upon request and subject to an
appropriate wheeling agreement(s). Each wheeling agreement will
specify the conditions and charges for this service utilizing the
Wheeling Principles set forth in Exhibit "C." The parties will
strive for a simple formula for wheeling charges that recognizes
cost factors and utility standards. Either party may deny a
request for wheeling services.
12. Hold Harmless:
The City agrees, upon completion of the transfer of service
area and electrical facilities in accordance with this Agreement,
to indemnify, defend, and hold harmless the District and its
officials, employees, and agents, from and against any and all
claims for damages or any other relief due to property damage,
personal injury, or any other form of loss arising from accidents
or injuries occurring after the date of the transfer. The City
agrees to accept facilities as is with no warranty as to condition
or suitability for use by the City except as otherwise provided in
this Section.
The District agrees, upon completion of the transfer of
service area and electrical facilities referenced above, to
indemnify, defend, and hold harmless the City, its officials,
employees, and agents, from and against any and all claims for
damages or any other relief due to property damage, personal
injury, or any other form of loss arising from accidents or
injuries occurring prior to the date of the transfer or occurring
as a result of defects.
13. Authority:
Each party warrants that the undersigned representative has
full and complete legal authority to sign for it and to commit it
to the performance of the agreements set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly signed and executed in two counterparts as of
the day and year first above written.
ATTEST:
ATTEST:
w w
Becky J
sl ffity
City Clerk
1
Michael M i nnes, Manager
PUBLIC UTILITY DISTRICT
NO. 1 OF CLALLAM COUNTY
R•bert J. itus, Director
PORT ANGELES CITY LIGHT
EXHIBIT "B"
DEFINITIONS OF PURCHASE TERMS:
COST FOR PURCHASING PARTY TO SERVE The estimated cost to install
the necessary facilities to serve the customers to be transferred
at purchasing party's current construction standards and
conditions.
PLANT VALUE Current replacement cost using existing unit costs
for all primary, secondary, and service facilities multiplied by
the salvage factor. Trenching and labor costs for underground
services are not included. Transformer values will be calculated
using the actual age for each transformer when available. All
other system components will use average age.
Salvaae Factor:
Aae (Years) Salvage Factor
1 3
4 6
7 11
12 16
17 21
22 26
27 31
32
1.00
0.85
0.65
0.56
0.51
0.47
0.43
0.35
SEVERANCE COSTS All costs associated with transfer of customers
including but not limited to removing interconnecting wiring,
facilities, and meters; oil testing; and administrative costs.
NET REVENUE To determine net revenue, system net revenue is
determined as follows, using the most recent audited financial
statements:
Operating Revenue (Income Statement)
Less Purchased Power (FERC 555)
Less Distribution Maintenance Expenses (FERC 591 -598)
Less General Taxes (Income Statement)
Annual System Net Revenue
Five (5) years of net revenue is determined as follows:
Annual System Net Revenue x Transferred Customer Revenue x 5 years
Annual System Operating Revenue
The Transferred Customer Revenue issued in the above calculation
shall be based on such customers' usage during the most recent
twelve (12) months, multiplied by the retail rate in effect for
such customers at the time of transfer.
WHEELING PRINCIPLES:
EXHIBIT "C"
It is the intention of the parties that wheeling services will
be granted to the requesting party when sufficient capacity exists
for such service and that the party granting such service shall be
fully compensated for the wheeling services provided.
1. Definitions:
"Party 1" The utility requesting wheeling services.
"Party 2" The utility providing wheeling services.
"Rated capacity" The load in amps that a line section can
carry as determined by Scott and Scott DPAG software or agreed upon
equivalent; or any other facilities based on manufacturers' highest
rated capacity.
"Peak load" The highest fifteen (15) minute demand period in
the most recent thirty six (36) months as measured at the
substation /feeder.
"Necessary facilities" The facilities such as conductors,
switches, sectionalizing equipment, and substation equipment that
are necessary to provide service to Party l's customers.
"Average system cost" The result of dividing the total BPA
monthly wholesale power bill by the total monthly kWhs purchased.
"Overhead factor" The cost of line losses on the system plus
costs of administering the agreement; said cost agreed to be ten
(10) percent.
"Excess capacity" The difference in amps between eighty (80)
percent of the rated capacity of the line section or facility and
the peak load through the line section or facility.
2. Term of Aareements:
Individual "Wheeling Agreements" shall have a term of twenty
five (25) years.
3. Termination of Aareements:
Party 1 may terminate a Wheeling Agreement at any time by
giving Party 2 written notice at least sixty (60) days prior to
termination. Party 2 may terminate a Wheeling Agreement either
upon receiving the consent of Party 1 or if Party 1 does not timely
elect to participate in capacity expansion or make payment pursuant
to Section 9 of this Exhibit.
4. Changes to Agreements:
Changes in the terms and conditions of a Wheeling Agreement
may be made at any time upon the mutual written consent of both
parties. Either party desiring a change shall give the other party
one hundred eighty (180) days written notice. The notice shall
contain the desired changes and a full explanation of the reasons
for the changes. If, at the end of the one hundred eighty -day
period, the parties hereto cannot mutually agree to the proposed
changes, the Agreement shall remain unchanged.
5. Wheeling Areas:
Each Wheeling Agreement shall include an exhibit showing all
areas to be provided with wheeling services. Information included
on the exhibit shall include the physical area to which electrical
power would be wheeled and a list of customers located within the
area.
6. Reauests for Wheeling Service:
Written requests to have wheeling services provided may be
made at any time by either party. Such requests shall include a
map or drawing of the area involved along with a list of all
existing customers lying within the area and their peak load within
the last thirty six (36) months.
7. Acceptance or Rejection of Reauests for Wheeling Service:
Within thirty (30) days of receipt of a request to provide
wheeling services, Party 2 shall determine if sufficient excess
capacity exists in its facilities to carry the required additional
load. If sufficient excess capacity exists, Party 2 shall prepare
a plan as to how to interconnect the facilities of the two parties.
After both parties have reviewed, and if necessary, revised the
plan, both parties shall decide whether to enter into an agreement.
If insufficient excess capacity exists, the request will be denied
unless the additional provisions of Section 8 of this Exhibit are
enacted.
8. Facility Costs in Order to Provide Wheeling Service:
All costs of modifying or upgrading facilities in order to
provide wheeling services shall be paid for by Party 1. These
costs shall include but not be limited to the cost of providing a
disconnect between the facilities of the two parties. In addition,
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should Party 1 wish Party 2 to provide wheeling services when
insufficient excess capacity exists as defined in Section 1 of this
Exhibit, then all costs associated with upgrading any necessary
facilities shall be borne by Party 1. Payment of costs by Party 1
shall be within thirty (30) days of invoice by Party 2 upon
completion of an upgrade project.
9. Insufficient Capacity Due to Load or Customer Growth:
In June of each year excess capacity calculations shall be
made by both parties for all facilities involved in providing
wheeling services. If any facilities have become overloaded, Party
2 shall prepare a cost estimate to upgrade the necessary facilities
using the same criteria as established in Section 8 of this
Exhibit, except that costs shall be split proportionately between
the parties based on each party's load served through the section
or facility. Again, the Scott and Scott DPAG software or
equivalent shall be used to determine each party's contribution to
the overall loading. Party 1 shall then have ninety (90) days to
decide whether to terminate the wheeling agreement or pay their
share of the costs to upgrade the facilities. Payment of costs by
Party 1 shall be within thirty (30) days of invoice by Party 2 upon
completion of an upgrade project.
10. Wheeling Charges:
Party 1 shall provide monthly statements to Party 2 of the
metered consumption and total estimated unmetered consumption of
all customers in areas where wheeling services are provided.
Wheeling charges shall be computed by multiplying the total metered
and unmetered consumption of such customers of Party 1 by Party 2's
average system cost and then multiplying that total by the overhead
factor. Compensation as calculated above shall be billed monthly
and due and payable within twenty (20) days of receipt of invoice.
11. Hold Harmless:
Each Wheeling Agreement shall have a hold harmless clause.