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HomeMy WebLinkAbout5.375K Original Contractr EES January 12, 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 Public 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 0 Box 480 Aberdeen, WA 98520 Ms Kim Mikkelsen Kittitas County PUD 1400 East Vantage Highway Ellensburg, WA 98926 Consulting SUBJECT: Proposed WPAG Scope of Services and Contracts for 2010 Dear Ladies and Gentlemen: Attached please find consulting and legal contracts from Terry and me for the 2010 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, Washington 98033 Mr Dave Muller Lewis County P U D Post Office Box 330 Chehalis, WA 98532 Ms Steve 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 Ray Gnnberg Peninsula Light Company Post Office Box 78 Gig Harbor, WA 98335 Mr Larry Dunbar City of Port Angeles P 0 Box 1150 Port Angeles, WA 98362 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 Skamania County PUD P 0 Box 500 Carson, WA 98610 Mr Steve Walter Tanner Electric Cooperative P 0 Box 1426 North Bend, WA 98045 Mr David Trambhe Wahkiakum County PUD No 1 P 0 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 January 12, 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 Daniel Brooks,Elmhurst Mutual Power Light Robm Rego, Lakeview Light Power Company Letticia Neal, City of Milton Isabella Deditch, Ohop Mutual Light Company Mark Johnson, Parkland Light Water Company Mark Burlmghame, Town of Steilacoom Terry Mundorf, MMPS &M 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, Attn: Larry Dunbar, P.O. 1150. Port Angeles, WA 98362 (hereinafter "CLIENT"). 1. SCOPE, COMPENSATION AND QUALITY OF CONSULTING SERVICES EES CONSULTING will provide the services and be compensated for these services as described in Exhibit A, attached hereto. EES CONSULTING shall render its seances 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 12, 2010 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 beneficiaries to this Agreement 3 insurance. a. Insurance of EES CONSULTING. EES CONSULTING vnll maintain throughout the performance of this Agreement the following types and amounts of insurance: L Worker's Compensation and Employer's Liability Insurance as required by applicable state or federal law. it. Comprehensive Vehicle Liabiiity Insurance covering personal injury and property damage claims arising from the use of motor vehicles with combined single limits of $1,000,000 it. Commercial General Liability Insurance covering claims for personal injury and property damage with combined single limits of $1,000,000. w. 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 CONSULTINGs 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 CLIENTs or CLIENT'S agents proportionate negligence, if any 5. Resolution of Disputes, Attorneys' Fees. The law of the State of Washington shag govern the Interpretation of and the resolution of disputes under this Agreement If any claim, at law or otherwise, Is made by either party to this Agreement, the prevailing 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 written notice to the other sent to the addresses listed herein In the event CLIENT terminates this agreement, CLIENT specifically agrees to pay EES CONSULTING for all services rendered through the termination date. EES CONSULTING, INC By Gary Saleba Title: President Date: January 12, 2010 Date CITY OF PORT ANGELES By Title Western Public Agencies Group 2010 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 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. 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 2010 scope of services for WPAG is proposed as follows: General WPAG Activities and Meetings EXHIBIT A During 2010, 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, including BPA- related legislation, progress on regional transmission and any other new topic of mutual interest and relevance. Monthly meetings will be held to brief WPAG members on these activities. Regional Activities WP -12 Rate Proceeding BPA has already started planning workshops to prepare for a combined power and transmission rate proceeding that implement for the first time the Tiered Rate Methodology. In this case, virtually every issue that has been subject to settled treatment since 1980 will be up for grabs. This makes early and focused participation mandatory. will unfold this year. WPAG will be fully engaged in this proceeding to protect the interests of its members. This will be staffed by EES Consulting and MMPS &M. TRM Loose Ends 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 detennining the capability of the Tier 1 system, which impacts how much Tier 1 power is available to WPAG utilities. Tier 2 Resource Acquisition BPA is already investigating various resources for acquisition purposes, and will be gearing up these activities during the corning 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 member 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 A -2 EXHIBIT A preference customers be have the option of providing their own funding for conservation, not run these dollars through the BPA rates, and not pay for the portion of the BPA conservation program in which they do not participate. The outcome of these discussion on conservation self- funding are uncertain, but in any event 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 initiate discussions with BPA to ensure that conservation can be used as a Tier 2 resource for those who wish to do so. 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 has been working (and will continue to work) with other preference customers to construction the best legal arguments to assert preference to FBS capacity, and to determine the best forum in which to present this claim. This effort is likely to come to fruition in 2010. 7(b)(2) Rate Remand BPA has concluded the 7(i) process to respond to the remand of the 9 Circuit Court in the Golden Northwest and PGE cases, and this resulted in significant refunds to WPAG members. However, BPA allowed the IOUs to retain over $750,000 of preference customer money under contracts that are palpably illegal. This issue will likely get tangled up with the discussion of IOU benefits and the BPA effort to settle the pending litigation over BPA's remand decisions in WP -07 Supplemental case. Our efforts will be focused on retrieving for WPAG members our money that BPA allowed the IOUs to retain, including completing pending litigation in the 9th Circuit. This will be staffed by EES Consulting and MMPS &M. This will be staffed primarily by MMPS &M. IOU Benefits Discussions Our 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 has 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. These discussions are scheduled to commence in March of this year. Given the central role WPAG played in the litigation, WPAG will continue to participate actively in order to protect the interests of the WPAG utilities and the litigation results. This will be staffed primarily by MMPS &M. DSI Lookback and Refund As a result of the two 9 Circuit decisions invalidating the proposed BPA/ALCOA power sales contracts, BPA has a responsibility to conduct a public process to determine A -3 whether ALCOA has a repayment obligation to BPA, and if so what the amount of that repayment obligation is. It can be expected that BPA will not be favorably inclined to retrieve the monies unlawfully paid to this multi- national company, and that a strong effort by public power will be needed for persuade BPA to do so. WPAG will actively participate in this effort. DSI Long -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. 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 EXHIBIT A 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 2010. EES Consulting will alert WPAG members of issues as they arise. To the extent that detailed analysis and/or representation is required by A -4 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 2010 legislature on behalf of WPAG's specific interests. a Other Matters 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. 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 $175 per hour Associate $165 per hour These billing rates will remain in effect through December 31, 2010. EXHIBIT A On the basis of the above billing rates, the 2010 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 WPAG 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 WPAG budget for 2010 is estimated at $230,000. In addition, a contingency of $50,000 has been included to fund the A -5 EXHIBIT A training of Ryan Neale, with $25,000 of that amount being included in the allocation, with the remainder to be used as needed. As always, the allocation of the budget among WPAG members is open to negotiation by the participants. We have attached an inter utility allocation predicated on the most recent available utility data. After a discussion of the foregoing issue, a final budget by utility will be prepared. An example of the budget's allocation is attached at the end of this narrative. Project Staffing The staffing for this project 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. Additional MMPS &M and EES Consulting staff will assist as needed. Western Public Agencies Group Additional Budget for2010 EES Consulting and Marsh Mundorf Pratt Sullivan McKenzie Source: 2069 -2010 Northwest Electric Utility Directory (NWPPA), 2008 WPUDA Sourcebook, 2003 EIA Form 412 2004 EIA Form 861, Utility Supplied Total Budget Labor 200,000 Expenses 30,000 Total 230,000 Training Fund' 25,000 rota/Allocation 255,000 Training Fund Contingency` 25,000 Total Budget 280,000 To be used as needed, with $25,000 included January 1a 2010 Customers 1 Energy Sales Average of Customers, Energy Sales and Investment Budget Allocation with Cap Without Cap 18.0% Cap percent of percent of percent of percent of percent of 4 N N M N 0 4 4 0 r t p O co. i f: <7 b N 4 M N v N W` m O N In N a b 49 69 41 49 49 49 49 49 49 69 49 49 69 W K 69 49 4)4 49 49 49 49 109 number total k4owatt -hours total dollars total total total Individual Utilities Benton Electric REA 14,328 3.1% 529,284,266 4.3% 55,076,221 5.9% 445% 5.78% Cla[lam County PUD 29,829 6 5% 796,816,427 6.5% 50,440,018 5 4% 8.14% 6.04% Clark Public Unities 182,121 39 9% 5,132,000,000 42.1% 275,772,523 29.4% 37 10% 18.00% City of Ellensburg 9,181 2.0% 200,453,259 1.6% 9,744,025 1.0% 1.56% 2.05% Grays Harbor PUD 41,725 9 1% 1,028,145,396 8.4% 140,250,672 14.9% 10 83% 14.07% Kittitas County PUD 4,020 09% 72,269,206 0.6% 10,581,463 1.1% 087% 1.13% Lewis County PUD No 1 30,772 6.7% 964,294,125 7.9% 85,282,442 9.1% 7 91% 10.31% Mason County PUD No. 1 5,086 11% 68,736,860 0.6% 10,176,188 1.1% 092% 1.20% Mason County PUD No 3 32,536 7 1% 672,158,509 5.5% 99,434,348 10 6% 7.74% 10.05% Pacific County PUDNo, 17,020 37% 307,854,926 2.5% 39,129,640 4 2% 3.47% 4.52% Peninsula Light Company 27,236 6.0% 588,836,408 4.8% 59,691,447 6 4% 5 72% 7.45% City of Port Angeles 10,410 23% 715,874,794 5.9% 18,896,806 2.0% 329% 445% Skamanla County PUD No.1 5,759 1 3% 123,504,708 1.0% 14,208,000 1.5% 1 26% 1 64% Tanner Electnc Cooperative 4,422 1 0% 76,324,155 0.6% 12,356,404 1.3% 0.97% 126°/ Wahkiakum County PUD No. 1 2,403 0 5% 42,872,042 0.4% 7,391,412 0 8% 0.55% 0 72% Pierce County Cooperative Power Association Alder Mutual Light Company 279 0.1% 4,444,998 0 0% 304,837 0.0% 0.04% 0 06% Town of Eatonville 1,250 0 3% 24,292,160 0 2% 1,150,000 0.1% 020% 0.26% Elmhurst Mutual Power and Light Company 13,756 10% 258,970.192 22% 18,920,525 2.0% 2.41% 3 15% Lakeview Light and Power Company 9,600 2.1% 281,291,000 2 3% 8,369,626 0.9% 1.77% 2 32% City of Milton 3,428 08% 64,779,520 0.5% 2,378,975 0.3% 051% 067% Ohop Mutual Light Company 4,178 0.9% 81,373,870 0.7% 10,293,840 1.1% 0 89% 1.16% Parkland Light and Water Company 4,431 1 0a/ 118,680,088 1.0% 8,585,910 0 9% 0.95% 124% Town of Sterlacoom 2,757 0 6% 40,042,829 0.3% 918,000 0 1% 0 34% 045% Subtotal Pierce County Cooperative Power Association 39,679 8 7°/ 883,874,757 7 2% 50,921,513 5 4% 7 1% 9 32% 23,775 Total 456,527 100.0% 12,203,299,838 100 0% 939,353,122 100 0% 100.016 100.00% 255,000 Western Public Agencies Group Additional Budget for2010 EES Consulting and Marsh Mundorf Pratt Sullivan McKenzie Source: 2069 -2010 Northwest Electric Utility Directory (NWPPA), 2008 WPUDA Sourcebook, 2003 EIA Form 412 2004 EIA Form 861, Utility Supplied Total Budget Labor 200,000 Expenses 30,000 Total 230,000 Training Fund' 25,000 rota/Allocation 255,000 Training Fund Contingency` 25,000 Total Budget 280,000 To be used as needed, with $25,000 included January 1a 2010