1997 AGN NOV 04 I06 - Laserfiche WebLink

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__ _ _ CITY OF COLTON AGENDA REPORT FOR`THE CITY COUNCIL MEETING OF NOVEMBER 4, 1997 TO: Honorable Mayor and City Council APPROVAL: Len 1Nood, In#erim City Manager �� FROM: Thomas K. Ciarke, Utility Director' �-" _ SUBJECT: DATE; Approve Electric Utility Integrated Operations Agreement (IOA) Settlement with Sou#hern California Edison Company Monday, October 27, 1997 BACKGROUND To provide electric utility service to its customers, the City of Colton has relied upon the high-voltage transmission #acilities of Southern California Edison Company (SCE). SCE has provided this service to the Citythrough an Integrated � Operations Agreement or IOA. Under electric utility restructuring, SCE is required to transfer control of its high-voltage transmission facilities to the State's Independent System Operator (ISO). This requirement makes it very difficult and duplicative for SCE to administer the IOA, therefore, SCE proposed it be terminated. The City of Colton joined with the cities of Azusa and Banning (and, to a lesser extent, the cities of Riverside and Anaheim) in negotia#ions with SCE that began this past february. On Octaber 14, 1997, staff from the cities of Azusa, Banning, and Colton, and representatives of SCE reached a tentative agreement on principles for termination of the IOA. These principles provide #he City of Cotton with the necessary transmission and financial resources to effectively replace the tOA in the new 150 environment. � The principles have been incorporated into a final settlement document. A copy of this document, which is lengthy and technical in nature, is on file in the City Clerk's office for review. ANALYSIS The City's primary concern in negotiating the end of #he lOA is the preservation of transmission service for the long-term investments that have bee� made by the City in Honver Dam, Palo Verde Nuclear Generating Station, and San Juan Generating Station. The agreement secures firm transmission for all these resources for the life of the City's ownership in them. In addition, the City obtained other firm transmission services that will allow the City to ob#ain favorable market prices for the summer months. A nurnber of other issues are of concern including the provision of reserve energy, energy price under the power sales agreemen# the City has with SCE, and contingency arrangements for the start up ar discontinuation of th$ State's Independent System Operator. FINANCIAL IMPACT SCE will also pay the City the sum of $500,000 to assist in transferring operation of the City's resources from SCE to the I nd the G" y's S dulin oordinator, Enova Energy Management T omas K. Clarke, Utility Director RECOMMENDATION That the City Council adopt the attached resolufion approving the 1997 Edison-Colton Restructuring Agreement. Page 1 of 1 t' � � _ , , _ - � : � _ :,- _ __ __ _ _ _