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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 ill a Clallam County f a 'a n t h j, S X 4f�0 u�ia".4 r rN1 FILED FOR RECORD 47 ,,-E REWJE:;T Ac- LCURCtD .H f 3 r L Jt Cn 2005 SEP -9 AN 9: 33 (t2D s e I 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 -1- 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 -2- 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 -3- 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. -5- 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, -2-- 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.