AR 050206 SCPPA agreement - Laserfiche WebLink

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decide not to participate in a project at any point during the due diligence process, the member would only pay for costs committed to that date. Colton Electric Utility has control over the projects it participates in and has the right not to participate in any project or discontinue participation in any project at any point during the development phase. Some of the renewable projects proposed are to be owned and financed by SCPPA, and others were proposed as long-term power purchase agreements. It is anticipated that more substantial due diligence will be required to evaluate the ownership agreements. Since the total costs for due diligence, review, and contract negotiation are not known at this time, the development agreement establishes a cap for all projects of $5.4 million. The Los Angeles Water and Power (LADWP) Department will be the project manager because they have expressed a majority interest in all projects. Colton Electric Utility is currently evaluating two projects, but may participate in others. Based on the percentage of interest that Colton Electric Utility has expressed, the cap for all projects would not exceed $100,000. If any amount above this level was required, an addendum to the development agreement would be required and brought before the City Council for approval. The individual contracts for professional services will be through SCPPA, and SCPPA will bill Colton Electric Utility based on the agreed allocation to each member. It is anticipated that the due diligence, review, and negotiations will take place over a one to two year timeframe, and not all projects are expected to result in contract execution. The Utilities Commission recommended approval of the development agreement at the Commission meeting on April 24, 2006. FINANCIAL IMPACT: Appropriate funds will be budgeted in each fiscal year beginning in FY 06-07 in the Electric Utility Power Resource Development account number 520-8000-8022-2350-0923-000, but will not exceed $100,000 in total. ENVIRONMENTAL IMPACT: None. CONFLICT OF INTEREST — Gift Disclosure Requirements None RECOMMENDATION: Staff recommends that the City Council approve the SCPPA Renewable Resource Development Agreement. Attachment: SCPPA Renewable Resource Development Agreement REVIEW TEAM ONLY �l City Attorney:Finance Director: City Manager: T OTHER: