Loading...
HomeMy WebLinkAbout5.1102 Original ContractEES November 15, 2010 Mr Charles Dawsey Benton Rural Electric Association Post Office Box 1150 Prosser, WA 99350 Mr Doug Nass Clallam County P U D Post Office Box 1090 Port Angeles, WA 98362 Mr Wayne Nelson Clark Pubhc Utilities Post Office Box 8900 Vancouver, WA 98668 Mr Bob Titus City of Ellensburg 501 N Anderson Street Ellensburg, WA 98926 Mr Rick Lovely Grays Harbor County PUD P O Box 480 Aberdeen, WA 98520 Mr Chuck Ward Kittitas County PUD 1400 East Vantage Highway Ellensburg, WA 98926 Consulting Dear Ladies and Gentlemen: 570 Kirkland Way, Suite 200 Kirkland, Washington 98033 Mr Dave Muller Lewis County P U D Post Office Box 330 Chehalis, WA 98532 Mr Steven N Taylor Mason County P U D No 1 North 21971 Highway 101 Shelton, WA 98584 Ms Wyla Wood Mason County P U D No 3 Post Office Box 2148 Shelton, WA 98584 Mr Doug Miller Pacific County P U D Post Office Box 472 Raymond, WA 98577 Mr Jafar Taghavi Penmsula Light Company Post Office Box 78 Gig Harbor, WA 98335 Mr Larry Dunbar City of Port Angeles P O Box 1150 Port Angeles, WA 98362 SUBJECT: Proposed WPAG Scone of Services and Contracts for 2011 Attached please find consulting and legal contracts from Terry and me for the 2011 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. Telephone 425 889 -2700 Facsimile. 425 889 -2725 A registered professional engineering corporation with offices in Kirkland, WA; Portland, OR, and Bellingham, WA Mr Bob Wittenberg Skamama County PUD P O Box 500 Carson, WA 98610 Mr Steve Walter Tanner Electric Cooperative P O Box 1426 North Bend, WA 98045 Mr David Trambhe Wahkiakum County PUD No 1 P O Box 248 Cathlamet, WA 98612 Mr Terry Huber Pierce County Cooperative Association c/o Town of Steilacoom 1030 Roe Street Steilacoom, WA 98388 Western Public Agencies Group November 15, 2010 Page 2 Please feel free to call Terry or me if you have any questions. Very truly yours, Gary S. Saleba President cc Dan Sharpe, Alder Mutual Light Company Gary Armstrong, Town of Eatonville Darnel Brooks,Elmhurst Mutual Power Light Robin Rego, Lakeview Light Power Company Letticia Neal, City of Milton Isabella Deditch, Ohop Mutual Light Company Mark Johnson, Parkland Light Water Company Mark Burlinghame, Town of Steilacoom Terry Mundorf, MMPS &M Western Pub is Agencies Group 2011 Scope of Services and Budget EXHIBIT A 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.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, 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 WPAG member utilities serve more than one million customers and purchase more than 6 billion kilowatt -hours from the Bonneville Power Administration (`Bonneville each year under both Load Following and Slice 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. Scope of Services The 2011 scope of services for WPAG is proposed as follows: General WPAG Activities and Meetings Regional Activities EXHIBIT A During 2011, EES Consulting and MMPS &M will monitor and comment on regional and federal activities of specific interest to WPAG members not covered adequately by other public power organizations of mutual interest and relevance. Monthly meetings will be held to brief WPAG members on these activities. WP -12 Rate Proceedings BPA has completed planning workshops to prepare for a combined power and transmission rate proceeding that will set rates under the Tiered Rate Methodology for the very first time. In this case, virtually every issue that has been subject to settled treatment since 1980 will be up for grabs. In addition, certain large preference customers are seeking to upset the current balance between PTP and NT rates by shifting costs from PTP to NT. While there are WPAG members that use PTP as well as NT, WPAG will actively participate in the transmission rate case to ensure that costs are not shifted from PTP to the detriment of NT, and that the coincidence factor used to allocate costs treats fairly both NT and PTP users. WPAG will be fully engaged in these proceedings to protect the interests of its members. This will be staffed by EES Consulting and MMPS &M. TRM Loose Ends and Revisions There have already been some changes to the TRM to correct errors and address omissions. The WP -12 rate proceedings are likely to uncover more of the same. In addition, there are a number of significant issues that were not satisfactorily resolved at the end of the Tier Rate Methodology process that BPA has agreed to revisit, including most importantly the issue of system obligations that BPA treats as off -the -top dedications to the Tier 1 system capability. Additionally, there are significant issues that will arise as the TRM is actually translated into rates that will need to be dealt with in the next year. One such issue is the lack of any agreed upon methodology for determining the capability of the Tier 1 system, which impacts how much Tier 1 power is available to WPAG utilities. This will be staffed primarily by MMPS &M. TRM Benchmarks During the next 18 months, a number of important values will be established for each WPAG member utility that will bear on the amount of low cost federal power each WPAG member will be able to purchase from BPA. These include the Contract High Water Mark (CHWM), the Rate Period High Water Mark (RHWM), and the Contract Demand Quantity (CDQ). While the primary responsibility for the determination of these values will rest with individual WPAG member utilities, WPAG as a group will be involved in the public processes that determine these values to ensure that WPAG A -2 EXHIBIT A member receive fair and equitable treatment. This will be staffed by EES Consulting and MMPS &M. Tier 2 Resource Acauisition BPA is already investigating various resources for acquisition 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, WPAG members have a direct financial interest in how BPA goes about evaluating resources, and what resources it decides to acquire regardless of whether they intend to rely on BPA for Tier 2 service or not. WPAG will participate in the BPA processes regarding the acquisition of additional resources. This will be staffed by EES Consulting and MMPS &M. Conservation BPA has been and will remain engaged in discussions regarding how conservation will be funded under the new TRM contracts and rates. There is a desire among many preference customers be have the option of providing their own funding for conservation, not run these dollars through the BPA rates, and obtain thereby more flexibility in how conservation and demand side programs are managed. This will make conservation and demand side more adaptable for meeting Tier 2 loads. WPAG will work to ensure that current BPA funded programs will continue to be available to utilities that want to participate in them. In addition, WPAG will ensure that conservation can be used as a Tier 2 resource for those who wish to do so. This will be staffed by EES Consulting and MMPS &M. Preference to FBS Capacity BPA has been using increasing amounts of FBS capacity to integrate wind generation on the Federal transmission system. This capacity is deducted from the FBS capability made available to preference customers under Tier 1. For the near term, the primary impact of this activity is to reduce the secondary revenues available to BPA to reduce the PF rate by shifting secondary power sales from heavy load hours to light load hours. However, in the future this reduction in FBS capacity may impinge on service to preference customer loads under both load following and Slice contracts. WPAG will bring to the fore in the WP -12 rate proceeding this misuse of FBS capacity, and assert our preference rights to this capacity. Vindication of these preference rights may require litigation. This will be staffed by MMPS &M. IOU REP Benefits Proposed Settlement Our success in the Golden Northwest and PGE cases resulted in the WP -07 Supplemental rate proceeding, and substantial refunds to preference customers. There continues to be litigation over funds that BPA allowed the IOUs to retain. This caused BPA to initiate negotiations under the auspices of a mediator between the publics, IOUs and BPA in an effort to resolve the pending litigation and agree on the appropriate level of benefits that should be paid to the IOUs over the long term. A proposed settlement of these issues is currently being drafted into final form, and is likely to be offered to all WPAG members EXHIBIT A as litigants. The question of whether the settlement agreement should be signed by each WPAG utility is ultimately a decision of each board and council, but WPAG intends to offer all necessary assistance to WPAG members in making this decision. This will be staffed primarily by MMPS &M. IOU REP Benefits Public Process and Congressional Ratification In the event that sufficient preference customers sign the final settlement offered by BPA to resolve pending litigation and set the REP benefits for the IOUs for the next 17 years, BPA will conduct a public process to determine whether the proposed settlement is reasonable, and whether BPA should execute the settlement. If BPA elects to sign the settlement, there will be an effort to secure Congressional legislation to preclude legal challenges to the settlement. Since these proceeding will, if successful, replace the cost protection provided to preference customers by the Rate Test set out in the Regional Power Act, WPAG intends to be fully involved in both of these activities. The positions taken in these processes will be dictated by the WPAG members. This will be staffed primarily by MMPS &M. DSI Lona -Term Contracts During the coming calendar year, BPA will also be dealing with the issue of how it will deliver "benefits" to the DSIs. The cost of these benefits will be imposed on Tier 1 customers, including WPAG utilities. It will also require BPA to negotiate a contract 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. Resource Integration Impacts BPA is integrating increasing amounts of wind generation that is being exported to California, and the uncontrolled nature of this generation combined with the generation requirements imposed on the FBS due to fish mitigation has lead to adverse operating events, market dysfunction and additional costs imposed on BPA. This is a multifaceted problem that will require imaginative and forceful responses. These developments present another manner in which the rights of preference customers are being eroded. WPAG will be actively involved in the identification and implementation of actions to address all of the issues that are presented in this context to ensure that the FBS is preserved for use in serving preference customer loads, and that costs of integrating these resources are borne by their sponsors. This will be staffed primarily by MMPS &M. Transmission Issues have arisen regarding the ability of BPA 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 WPAG members receive federal power service from BPA, and many have developed and will develop non federal resources. As such, WPAG 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. WPAG 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. 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 WPAG 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 WPAG direct participation is needed. In June 2007, under the direction of FERC, the North American Electricity Council (NERC) began enforcing electric reliability standards. As of that time utilities with greater than 25,000 customers are required to register with NERC and their regional reliability organization or the Western Electricity Coordinating Council (WECC) on the west coast of North America. EES Consulting has been monitoring and advising WPAG members on compliance issues since April of 2007. EES Consulting will continue to monitor compliance issues on behalf of WPAG members in 2011. EES Consulting will alert WPAG members of issues as they arise. To the extent that detailed analysis and /or representation is required by an individual WPAG member with respect to compliance issues, tasks will be completed and billed on an individual utility basis. Olympia Legislative Session EES Consulting and MMPS &M will monitor the activities of the 2011 legislature on behalf of WPAG's specific interests. Other Matters Budget EES Consulting President $165 per hour Managing Director 160 per hour EXHIBIT A During the course of each year, matters arise that require WPAG attention to protect the interests of our customers. These matters are undertaken at the direction of the WPAG utilities. The budget for the scope of services described above is calculated at the following billing rates for EES Consulting and MMPS &M: A -5 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 $175 per hour Associate $165 per hour These billing rates will remain in effect through December 31, 2011. On the basis of the above billing rates, the 2011 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 $150,000 in supplemental funding has been provided to staff the WP -12 Power and Transmission rate cases, and any public process regarding the proposed IOU REP benefit settlement. 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 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 annual WPAG budget for 2011 is estimated at $240,000, and a supplemental budget of $150,000 for rate case activities. 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 EXHIBIT A The staffing for these projects will be similar to that for past WPAG activities. Gary Saleba and Terry Mundorf will be the principal representatives for EES Consulting and MMPS &M, respectively, with Ryan Neale providing support for the activities of Terry Mundorf. Additional MMPS &M and EES Consulting staff will assist as needed. CONSULTING SERVICES AGREEMENT EES CONSULTING, INC Billing 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, Mr Larry Dunbar, PO Box 1150, Port Angeles, WA 98362 (hereinafter "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 1 Timing of Work EES CONSULTING shall commence work on or about January 1, 2011 2 Relationship of Parties, No Third -Party Benefrcaanes 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 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 i Worker's Compensation and Employer's Liability Insurance as required by applicable state or federal law 11 Comprehensive Vehicle Liability Insurance covering personal injury and property damage claims ansing from the use of motor vehicles with combined single limits of $1,000,000 w 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 attomeys' 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 attomeys' fees) ansing 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 govem 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 party shall be entitled to its costs and reasonable attomeys' 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 termination date EES CONSULTING, INC By Gary Saleba Title President Date November 15, 2010 CITY OF PORT ANGELES By Title Date t al c a�I Q 4 Western Public Agencies Group Preliminary Indicative Budget for 2011 EES Consulting and Marsh Mundorf Pratt Sullivan McKenzie Source 2010 -2011 Northwest Electric Utility Directory (NWPPA), 2003 EIA Form 412 2004 EIA Form 861, Utility Supplied November 15, 2010 Total Budget Labor r$ 200,000 Expenses 40,000 1 Total Allocation 240,000 BPA Rate Case Supplemental Allocation 1 150,000 1 150,000 Average of Customers, Energy Sales and Invests lent Standard Supplemental Customers 1 Energy Sales 1 Net Investment 2 18.0% Budget Allocation Budget Allocation Without Cap Cap with Cap with Cap percent of percent of percent of percent of percent of number total kilowatt-hours total dollars total total total dollars dollars Individual Utilities Benton Electric REA 14,592 3 2% 565,802,985 4 7% 93,440,576 7 0% 4 96% 6 30% 15,128 9,455 Clallam County PUD 30,031 6 5% 762,660,906 6 4% 106,596,449 8 0% 6 95% 8 87% 21,282 13,301 Clark Public Utilties 183,015 39 7% 4,946,000,000 41 4% 347,900,000 26 0% 35 69% 18 00% 43,200 27,000 City of Ellensburg 9,200 2 0% 222,215,504 1 9% 26,419,391 2 0% 1 94% 2 48% 5,958 3,724 Grays Harbor PUD 41,690 9 0% 978,550,115 8 2% 224,895,016 16 8% 11 35% 14 39% 34,547 21,592 Kittitas County PUD 4,252 0 9% 84,029,083 0 7% 18,356,529 1 4% 1 00% 1 27% 3,047 1,904 Lewis County PUD No 1 30,892 6 7% 933,660,601 7 8% 109,236,614 8 2% 7 56% 9 65% 23,160 14,475 Mason County PUD No 1 5,143 1 1% 70,296,782 0 6% 13,709,373 1 0% 0 91% 1 16% 2,782 1,739 Mason County PUD No 3 32,634 7 1% 660,405,008 5 5% 112,548,253 8 4% 7 01% 8 92% 21,417 13,385 Pacific County PUD No 2 17,091 3 7% 299,128,325 2 5% 38,651,128 2 9% 3 03% 3 88% 9,305 5,816 Peninsula Light Company 27,374 5 9% 600,281,800 5 0% 84,883,260 6 3% 5 77% 7 36% 17,662 11,039 City of Port Angeles 10,919 2 4% 689,775,650 5 8% 22,618,463 1 7% 3 28% 4 22% 10,134 6,334 Skamania County PUD No 1 5,791 1 3% 130,110,119 11% 16,602,110 1 2% 1 20% 1 53% 3,663 2,289 Tanner Electric Cooperative 4,461 1 0% 88,973,918 0 7% 21,705,036 1 6% 1 11% 1 41% 3,385 2,115 Wahkiakum County PUD No 1 2,404 0 5% 41,592,833 0 3% 7,363,612 0 6% 0 47% 0 60% 1,447 905 Pierce County Cooperative Power Association Alder Mutual Light Company 283 0 1% 4,787,000 0 0% 409,409 0 0% 0 04% 0 06% 136 85 Town ofEatonville 1,178 03% 27,271,397 02% 1,150,000 0 1% 0 19% 024% 587 367 Elmhurst Mutual Power and Light Company 13,884 3 0% 269,750,037 2 3% 30,050,620 2 2% 2 50% 3 21% 7,692 4,808 Lakeview Light and Power Company 11,434 2 5% 278,291,000 2 3% 29,018,475 2 2% 2 33% 2 98% 7,140 4,463 City of Milton 3,389 0 7% 62,183,202 0 5% 2,378,975 0 2% 0 48% 0 62% 1,478 924 Ohop Mutual Light Company 4,189 0 9% 82,889,733 0 7% 8,969,611 0 7% 0 76% 0 97% 2,327 1,454 Parkland Light and Water Company 4,425 1 0% 118,504,536 1 0% 18,854,000 1 4% 1 12% 1 43% 3,422 2,139 Town of Sterlacoom 2,816 0 6% 40,428,000 0 3% 1,571,502 0 1% 0 36% 0 46% 1,100 688 Subtotal Pierce County Cooperative Power Association 41,598 9 0% 884,104,905 7 4% 92,402,592 6 9% 7 8% 9 95% 23,883 14,927 Total 461,087 100 0% 11,957,588,534 100 0% 1,337,328,402 100 0% 100 0% 100 00% 240,000 150,000 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; PENINSULA LIGHT COMPANY, WASHINGTON; TANNER ELECTRIC COOPERATIVE, 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 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: Page 1 of 2 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. 2. Public Utilities shall compensate the Attorney for these services at an average hourly rate not to exceed $175.00. 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. Date: November 15, 2010 MARSH MUNDORF PRATT SULLIVAN McKENZIE By: ✓��i /141 Terence L. Mundorf CITY OF PORT ANGELES Date: I a- a a l B Manager Page 2 of 2