1994 AGN AUG 16 I14 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For Council Meeting of August 16, 1994 TO: Honorable Mayor, City Council, and City Manager FROM: Thomas K. Clarke, Acting Electric Utility Director Date: 8/4/94 SUBJECT: APPROVAL OF A LETTER AGREEMENT AMONG THE ELSINORE VALLEY MUNICIPAL WATER DISTRICT AND THE CITIES OF ANAHEIM, AZUSA, BANNING, COLTON, AND RIVERSIDE, CALIFORNIA REGARDING A PUMPED STORAGE PROJECT BACKGROUND The cities of Anaheim, Azusa, Banning, Colton, and Riverside (Cities) and the Elsinore Valley Municipal Water District (Elsinore) have had a dispute regarding the development of a pumped storage generation project to be located at Lake Elsinore. The Cities currently hold a preliminary permit for the project issued by the Federal Energy Regulatory Commission. Elsinore filled a competing preliminary permit application which was subsequently denied. Both sides now desire to enter into a Letter Agreement which will resolve the dispute and settle which party will take the initiative as to the development of the project and establish the obligations and rights of those involved with regard to the development of the project by Elsinore. STATEMENT OF THE PROBLEM The Cities are no longer interested in being the lead agency in the development of the pumped storage project. On the other hand, Elsinore is still interested in it and wishes to go forward with the construction and operation of the facility. In doing so the Cities would relinquish their permit and transfer those rights to Elsinore. As part of the settlement, a portion of the project would be allocated to the Cities in a collective or individual basis. To utilize this allocation, the Cities would negotiate a Power Sales Agreement with Elsinore at the time power becomes available. Until that time, the Cities are under no obligation to participate in the evaluation, construction, or operation of the generation facility. The Letter Agreement provides that the Cities will retain a first right of refusal to execute a Power Sales Agreement on the allocated portion of the generation output until such time as they exercise that right. Page 1 of 2 Item No. �_