2000 AGN JUN 06 I12 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For the City Council Meeting of June 6, 2000 TO: HONORABLE MAYOR AN C APPROVAL: HENRY T. GARCIA, CITY MANAG FROM: THOMAS K. CLARKE, UTILITY DIRECTOR-_%� SUBJECT: APPROVAL OF TRANSITIONAL POST -SETTLEMENT CONTRACT WITH SEMPRA ENERGY TRADING DATE: MAY 22, 2000 BACKGROUND: At its March 21, 2000 meeting, the City Council approved the award of contract to Coral Power to carry out the electric utilities power resource scheduling, dispatching, and optimization services. Council approved a revised/finalized Version of the contract between the City and Coral Power on April 18, 2000. Currently, the Utility contracts with Sempra Energy Trading (Sempra), previously named ENOVA, to provide these scheduling and dispatching services. The existing contract expires on June 30, 2000. DISCUSSION There will be some transition period items related to settlement of various fees and invoices post June 30, 2000. Sempra has agreed to provide service for all the transactions that happen on or before June 30, 2000, and the charges for these items will be paid in July, August, and September at a total cost of $30,000. There is a pending issue between Sempra and the California Independent Systems Operator (CAISO) related to the 50% reimbursement of Colton's Grid Management Charge (GMC) for the period from April 98 through September 99, in the approximate amount of $94,000. The City was entitled to 50% of the charge if Sempra, as our scheduling coordinator, disputed the invoices within ten days. They failed to dispute these charges until it was brought to their attention to do so. Furthermore, all the invoices to Southern California Edison (Edison) are subject to audit, which may impact the profit sharing between Sempra and Colton in the approximate amount of $200,000. Sempra has assured us in the attached contract that they will assist us in getting appropriate GIVIC reimbursement and also help with the Edison audit. ANALYSIS After the negotiations between Sempra and City Staff, the attorney from Best, Best & Krieger reviewed the final contract that has been prepared for all post -settlement work. Thirty thousand dollars is the settlement amount agreed upon between Sempra and Colton. The City will pursue its claim to part of the GMC charges. It would be difficult for the City to recall Sempra's profit sharing portion that was paid to them about a year ago. ALTERNATIVES: There is no alternative for the transitional settlement agreement with Sempra for the three months at a cost of $30,000. However, the City may have an option to fight or settle the GMC issue with Edison. Page I of 2 (with attachment: Contract with Sernpra Energy Trading) Item # 12