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HomeMy WebLinkAboutresolution.council.094-12 �r • RESOLUTION NO. Series of 2012 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A SECOND REVISED SUPPLEMENTAL AGREEMENT, BETWEEN THE CITY OF ASPEN AND THE MUNICIPAL ENERGY ASSOCIATION OF NEBRASKA, AND AUTHORIZING THE MAYOR OR CITY MANAGER TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council a Second Revised Supplemental Agreement, between the City of Aspen and the Municipal Energy Association of Nebraska (MEAN), a substantially complete copy of which is attached hereto as Exhibit"A"; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ASPEN, COLORADO: That the City Council of the City of Aspen hereby approves that Second Revised Supplemental Agreement, between the City of Aspen and MEAN, a substantially complete copy of which is annexed hereto and incorporated herein, and does hereby authorize the Mayor or City Manager to execute said agreement on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the It*of ,2012. 04WA44/ Michael C. Ireland,Mayor I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held on the day hyreinabove stated. Kathryn S. I ch,City Clerk RESOLUTION NO. Series of 2012 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A SECOND REVISED SUPPLEMENTAL AGREEMENT, BETWEEN THE CITY OF ASPEN AND THE MUNICIPAL ENERGY ASSOCIATION OF NEBRASKA, AND AUTHORIZING THE MAYOR OR CITY MANAGER TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council a Second Revised Supplemental Agreement, between the City of Aspen and the Municipal Energy Association of Nebraska (MEAN), a substantially complete copy of which is attached hereto as Exhibit"A"; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ASPEN, COLORADO: That the City Council of the City of Aspen hereby approves that Second Revised Supplemental Agreement, between the City of Aspen and MEAN, a substantially complete copy of which is annexed hereto and incorporated herein, and does hereby authorize the Mayor or City Manager to execute said agreement on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 19h of 12012. 4WA41 Michael C. Ireland, Mayor I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held on the day h remabove stated. Kathryn S. ch, City Clerk Second Revised Supplemental Agreement between Municipal Energy Agency of Nebraska and The City of Aspen, Colorado This Second Revised Supplemental Agreement, entered into this 15th day of November, 2012, between the City of Aspen, Colorado, a home rule city of the State of Colorado (Aspen), and the Municipal Energy Agency of Nebraska, an agency and political subdivision of the State of Nebraska (MEAN), supersedes and replaces the Revised Supplemental Agreement between Aspen and MEAN executed as of September 18, 1995. WHEREAS, due to unique circumstances affecting the sale of electric capacity and energy by MEAN to Aspen, the parties desire to agree on certain contractual terms in addition to those that would normally attend the sale of the electric capacity and energy by MEAN to a municipal customer; and WHEREAS, Aspen intends to acquire or has acquired an interest in a portion of the output of the Ridgway Hydropower Project (Ridgway) owned by the Tri-County Water Conservancy District (Tri-County); and WHEREAS, MEAN and Aspen desire to set forth the terms and conditions by which MEAN will manage the Ridgway output for Aspen and pass through the benefit of said output to Aspen in the manner hereinafter described. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties hereby agree as follows: 1. The parties have executed standardized contracts governing the sale of electric capacity and energy by MEAN to Aspen. These Agreements are the Electrical Resources Pooling Agreement (Pooling Agreement), dated June 25, 1984, the Service Schedule M Total Power Requirements Power Purchase Agreement (Schedule M Agreement), dated June 25, 1984, the Supplemental Agreement for Wind-Generated Energy Purchase, dated October 31, 2002, and the Second Supplemental Agreement for Wind-Generated Energy Purchase, dated August 4, 2005 (Preexisting Power Agreements), which are incorporated herein by this reference. In the event of any conflict or contradiction between the provisions of one or more of the Preexisting Power Agreements, and the provisions of this Agreement, this Agreement shall govern and control. 1 2. The City of Aspen, Colorado owns and operates the Ruedi hydroelectric plant under a permit issued by the Federal Energy Regulatory Commission (FERC) with a rated capacity of five megawatts and a hydroelectric project known as Maroon Creek with a rated capacity of .5 megawatts; and Aspen intends to acquire or has acquired an interest in a portion of the output of Ridgway); which projects are used to supply capacity and energy to Aspen for resale to its customers. MEAN is fully aware that Aspen is planning and may construct itself, or jointly with third parties one or more of the additional proposed hydroelectric projects listed in Exhibit B to this Agreement that may also be used to supply capacity and energy to Aspen. Aspen has received a WAPA demand allocation under the Post 2004 Resource Pool of 988 kW in the summer season and 1,560 kW in the winter season. The parties agree that Aspen is only obligated to purchase from MEAN under the Schedule M Agreement the capacity and energy over and above that actually supplied by the following resources: (i) Aspen's allocation of 988 kW in the summer season and 1,560 kW in the winter season from WAPA under their Post 2004 Resource Pool, and (ii) the facilities listed in Exhibit B; notwithstanding the foregoing, the parties expressly agree that the hydropower output credited to Aspen under this Agreement for each unit shall be limited and is deemed not to exceed generation associated with the capacity amount listed for each respective unit on Exhibit B to this Agreement. 3. Calculation of MEAN Monthly Billing Demand and Energy A. Monthly Billing Demand is equal to the maximum hourly metered demand minus the WAPA demand allocation and minus the actual generation from hydroelectric generating facilities as set forth in Exhibit B, for the same clock hour, less applicable transmission losses as specified in the PSCo Contract and the Holy Cross Contract, less applicable transmission losses as specified in the Tri-State Generation and Transmission Association, Inc. (Tri-State) network transmission service agreement for MEAN's delivery of Ridgway, for the current month, subject to the Minimum Billing Demand provision in Exhibit B, Schedule of Rates and Charges, to the Service Schedule M contract. B. Monthly Billing Energy is determined as follows: On an hourly basis, MEAN will reconcile the load and generation for Aspen. For each hour, the amount of supplemental energy supplied by MEAN under the Schedule M Agreement shall be actual metered energy minus the sum of energy supplied from WAPA and the energy generated from the hydropower projects listed on Exhibit B. Monthly Billing Energy equals the net of the amounts determined on an hourly basis for the current month, less applicable transmission losses as specified in the PSCo Contract, the Holy Cross Contract and the Tri-State network transmission service agreement for MEAN's delivery of Ridgway, for the current month. In the event Aspen's resources from the hydropower generation from the facilities listed on Exhibit B and the Supplemental Agreement for Wind-Generated Energy Purchase exceed the City's total electric power and energy requirements MEAN will credit the City for the excess amounts at the MEAN Base 2 Energy rate set forth in the then-current Schedule of Rates and Charges to the Schedule M Agreement. Notwithstanding anything to the contrary in this Agreement, no provision of this Agreement shall reduce, modify or affect the amounts to be charged to Aspen for purchases under the following agreements between MEAN and Aspen: the Supplemental Agreement for Wind-Generated Energy Purchase, dated October 31, 2002, the Second Supplemental Agreement for Wind-Generated Energy Purchase, dated August 4, 2005, or the Supplemental Agreement for Wind Energy Generation Attributes Purchase, dated April 1, 2009; those amounts will be charged notwithstanding any excess generation from Aspen's hydropower projects on Exhibit B or WAPA. In addition, in the event that for any month the amount of WAPA firm energy purchases exceeds the amount of City's Total Metered Energy, as that term is defined in the then- current Schedule of Rates and Charges to the Schedule M Agreement, MEAN will credit the City for the excess amounts at the then-current WAPA energy rate. 4. Aspen shall be treated, for purposes of the Pooling Agreement and Schedule M Agreement, as if those hydroelectric generating facilities listed in Exhibit B which actually supply capacity and energy to Aspen, were WAPA Allocations (subject to Section 3 above regarding wind-generated energy purchases), and the following provisions of the Pooling Agreement and Schedule M Agreement shall not be applicable to Aspen with regard to the facilities listed on Exhibit B: Pooling Agreement Article VIII, Article IX; Section 13.02, Section 13.05, Section 13.06, Section 15.02, Section 15.04 Schedule M Agreement Article XII and Article XIV 5. Division of responsibility for transmission losses: A. MEAN shall bear all transmission losses associated with delivery of MEAN power and energy to Aspen at the Delivery Point. The Delivery Point is set forth in Exhibit A to this Agreement. B. Aspen shall bear all transmission losses associated with the delivery of WAPA power and energy as well as power and energy from the facilities listed on Exhibit B. 6. Division of responsibility for transmission charges: A. MEAN has entered into the PSCo Contract for delivery by PSCo of power and energy from MEAN resources, Ruedi and WAPA. Aspen has entered into the Holy Cross Contract for use of Holy Cross transmission and distribution facilities for delivery of power and energy from Ruedi to the transmission system of PSCo and from the 3 transmission system of PSCo to Aspen and for the delivery of all power and energy from the Delivery Point to Aspen. For the purpose of cost sharing arrangement between Aspen and MEAN, only the portion of Holy Cross facility charges associated with the Aspen Substation shall be shared between Aspen and MEAN. All remaining Holy Cross charges shall be passed through by MEAN and paid by Aspen. All Tri-State charges for MEAN's delivery of Ridgway shall be the responsibility of Aspen as provided in subsection B below. B. MEAN is responsible for the portion of the transmission cost for delivery of power and energy from MEAN resources, and the City of Aspen is responsible for the portion of the transmission cost for delivery of power and energy from Ruedi, Ridgway, WAPA and any other constructed hydropower projects currently listed as proposed on Exhibit B. All transmission costs, including losses, associated with the Ridgway Purchase Power Agreement shall be the sole responsibility of Aspen. Accordingly, Aspen shall be responsible for the lesser of the following costs: (i) costs of delivering power from the Ridgway project to Aspen, or (ii) costs for delivering power from the Ridgway project to MEAN's network load on Tri-State's system (which load shall be that determined by MEAN in its sole discretion). The allocation of PSCo and Holy Cross transmission costs between the City of Aspen and MEAN will be based 50% on the Energy Supply Ratio and 50% on Peak Demand Ratio defined as follows: 1. Energy Supply Ratio (ER) The ER for Aspen (ERA) is equal to the sum of the energy supplied by WAPA and the energy generated at Ruedi, less transmission losses as specified in the transmission agreements of PSCo and Holy Cross, divided by the total energy delivered to Aspen at the Point(s) of Measurement, for the previous calendar year. The ER for MEAN (ERM) is equal to one (1) minus the ERA. 2. Peak Demand Ratio (DR) The DR for Aspen (DRA) is equal to the sum of demand allocation from WAPA and the peak hourly generation from Ruedi coincident with the annual system peak demand for Aspen, less transmission losses as specified in the transmission agreements of PSCo and Holy Cross, divided by the annual system peak demand for Aspen as metered at the Point(s) of Measurement, for the previous calendar year. The DR for MEAN (DRM) is equal to one (1) minus the DRA. C. The monthly cost share will be calculated as follows: 1. The monthly cost share for Aspen shall be: (ERA x 50% + DRA x 50%) x Monthly Transmission cost from PSCo and Holy Cross 4 2. The monthly cost share for MEAN shall be: (ERM x 50% + DRM x 50%) x Monthly Transmission cost from PSCo and Holy Cross D. All arrangements for and charges for transmission, distribution, losses and other charges on and for all power and energy after it is delivered by MEAN to the Delivery Point shall be the sole responsibility of Aspen. Except as provided below for Ridgway, the Delivery Point shall be as set forth in Exhibit A to this Agreement. This Delivery Point is also the delivery point for Service Schedule M. The Delivery Point for Ridgway shall be deemed to be the Tri-State meter, or such point as agreed hereafter by Aspen and Tri-State Generation and Transmission Association, Inc. 7. Any decrease or increase in transmission losses or transmission charges shall accrue to or be paid by the party to whom the loss or charge subject to the increase or decrease would be allocated in accordance with paragraphs 5 and 6 hereof. Provided, however, that if as a result of an increase in transmission losses or transmission charges, a party determines in its sole discretion that continued performance under the Pooling Agreement or Schedule M Agreement would result, in the case of Aspen, in Aspen paying a higher rate for power and energy than it would pay to another supplier other than MEAN, or in the case of MEAN, would result in a MEAN Schedule M rate higher than it would be without Aspen on the system, then the party affected may give the other party notice of his intent to terminate the Pooling Agreement and Schedule M Agreement. Following such notification, the parties shall negotiate in good faith to reallocate transmission losses and transmission charges between them. If no agreement is reached between the parties, then the Pooling Agreement and Schedule M Agreement shall terminate on the third anniversary of the giving of the notice provided for herein. Notwithstanding any other provision of this paragraph, the Pooling Agreement and Schedule M Agreement shall not terminate following notice given by Aspen under this paragraph if MEAN agrees to bear whatever increased transmission loss or transmission charge resulted in Aspen's notice of intent to terminate. In the event that the Pooling Agreement and Schedule M Agreement are terminated in accordance with this paragraph 7 and such termination is initiated by Aspen, then any Minimum Billing Demand charges that would have applied had the contract not been terminated will still apply. In the event that the Pooling Agreement and Schedule M Agreement are terminated in accordance with this paragraph 7 and such termination is initiated by MEAN, then any Minimum Billing Demand charges that would have applied had the Agreements not been terminated will not apply. 8. In the event Aspen shall become a Contract Purchaser, its obligation to purchase and MEAN's obligation to supply electric power and energy shall thereafter be at a Contract Demand equal to the maximum clock hour integrated system demand of 5 Aspen, less its WAPA allocation, occurring during each Billing Period for the 12 preceding monthly Billing Periods, adjusted to take into account any Aspen hydroelectric projects listed on Exhibit B operating during the 12 preceding monthly Billing Periods. The adjustment for hydroelectric projects shall be based upon the operating experience of each hydroelectric generation unit during the maximum clock hour of Aspen integrated system demand during the 12 preceding monthly Billing Periods. Contract Demand, as used herein, shall constitute the Firm Power Requirement for the City for purposes of 3.01 of the Schedule M Agreement. 9. Management of Ridgway output. Aspen hereby designates MEAN as the party exclusively responsible for scheduling and managing the Ridgway output for Aspen. MEAN shall manage Aspen's Ridgway output and accept delivery of the output from Tri- County pursuant to the terms and conditions of the agreement between Aspen and Tri- County for Ridgway output. After receipt of the output by MEAN from Tri-County, MEAN shall manage the Ridgway output in the manner determined by MEAN in its sole discretion (as further described in Section 6), and MEAN shall apply any applicable credit for such output to the extent it qualifies as excess generation as described in Section 3.B. 10. The parties mutually agree that the provisions of Section 4.02 of the Schedule M Agreement shall not apply in the case of events resulting from or caused by the negligent or intentional actions of MEAN. 11. It is mutually agreed and understood that the obligations imposed by the provisions of the Pooling Agreement, Schedule M Agreement and this Second Revised Supplemental Agreement are only such as are consistent with applicable state and federal law. The parties further agree that if any provision of the Pooling Agreement, Schedule M Agreement or this Second Revised Supplemental Agreement, becomes in its performance inconsistent with state or federal law or is declared invalid, they will in good faith negotiate to modify the agreement accordingly. 12. In no event shall the obligations imposed be diminished or agreements be modified so as to jeopardize the effectiveness of the Schedule M Agreement as security for the payment of notes, bonds, or other evidences of indebtedness issued by MEAN. 13. This Second Revised Supplemental Agreement shall be governed by the laws of the State of Nebraska. [SIGNATURE PAGE FOLLOWING.] 6 IN WITNESS WHEREOF, the undersigned parties have duly executed this Second Revised Supplemental Agreement as of the date below. MUNICIPAL ENERGY AGENCY OF CITY OF ASPEN, COLORADO NEBRASKA 0 By: By. Title: Title: �. Date: Date: G -f(-- ? - Atest: / Citylerk (SEAL) K:\Legal\K\MEAN\ERPA\Aspen MAspen_Second Revised Supplemental Agreement_final.docx 7 Exhibit A to the Second Revised Supplemental Agreement between Municipal Energy Agency of Nebraska and The City of Aspen, Colorado Delivery Point FRUEDI DAM 500 MCM LINE 25 kV i ----------------- (TO ASPEN) � I 1 BASALT i p I SUBSTATION (HOLY CROSS E.A.) 3 M E ----� HCEA LINE PUBLIC SERVICE CO i 1 OF COLORADO 115 kV 1 HCEA LINE 1 1 � 1 1 1 r 1 1 1 a 1 ASPEN SUBSTATION (HOLY CROSS E.A.) P= Point of Delivery M= Point of Measurement Point of Delivery Adjustment Equals None Exhibit B to the Second Revised Supplemental Agreement between Municipal Energy Agency of Nebraska and The City of Aspen, Colorado Existing and Proposed Hydropower Projects of the City of Aspen, Colorado [See attached.l EXHIBIT B EXISTING HYDROPOWER PROJECTS OF THE CITY OF ASPEN Estimated May- Estimated October- Year of Installed September Energy April Energy Project Location Start-up Capacity(KW) Production (GWH) Production (GWH) Ruedi Reservoir 1986 5,000 9.8 10.5 Maroon Creek Pipeline 1989 360 1.1 0.3 Ridgway Hydrol 2014 4,500 2.8 7.0 Total of Installed Hydro 9,860 13.7 17.8 PROPOSED HYDROPOWER PROJECTS TO BE BUILT OR PARTICIPATED IN BY THE CITY OF ASPEN Estimated May- Estimated October- Year of Installed September Energy April Energy Project Location Start-up Capacity(KW) Production (GWH) Production(GWH) Castle Creek Hydro 2014 1,170 4.7 1.1 Other Hydropower Projects 610 0.5 0.4 Total of Proposed Projects 1,780 5.2 1.5 i The City of Aspen will have the ability to purchase Ridgway power during the test period, starting in late 2013. If,for any reason,Aspen cannot participate in the Ridgway project,the 4,500 KW installed capacity associated with it will be automatically added to the 610 KW allowed installed capacity for proposed "Other Hydropower Projects." 2Other hydropower project locations may be substituted, subject to MEAN Board approval, not to exceed a total project capacity of 1,780 KW, or 6,280 KW if the City of Aspen cannot participate in the Ridgway project.