HomeMy WebLinkAbout12/17/2003 - STAFF REPORTS (26) lYV4/
DATE: December 17, 2003
TO: City Council
FROM: Director of Public Works/City Engineer
WASTEWATER TREATMENT PLANT POWER PURCHASE AGREEMENT
RECOMMENDATION:
It is recommended that City Council authorize the termination of the Interconnection and
Power Purchase Agreement for the Cogeneration Project of the City of Palm Springs
Wastewater Treatment Plant.
SUMMARY:
This action will terminate the Interconnection and Power Purchase Agreement entered into
in 1983,with the Southern California Edison Company for the Cogeneration Project at the
Palm Springs Wastewater Treatment Plant. Cogeneration equipment has not been
operated at the plant for many years. Air Quality Regulations have precluded operation
due to the high costs involved as compared to the relatively low payback.
BACKGROUND:
In 1983 the City executed a standard agreement for available power purchase with
Southern California Edison Company(SCE). Specifically,the agreement provided forSCE
to pay for power generated at the treatment plant by engines run on natural or digester
gas. Although power was generated and purchased by SCE over the last couple of
decades,new regulations from the Federal Energy Regulatory Commission made effective
in 2000, required additional pollution abatement devices on the engines. Cost for the
maintenance and upgrading of the engine was prohibitive and costs could not be
recovered by relatively low rates paid under the agreement to the City. Therefore, over the
last several years electricity had not been generated nor sold to SCE, as this would have
resulted in monetary loss to the City.
However, under the current agreement, SCE continues to bill the City a moderate facility
charge every month. Since there are no plans for upgrading the engine nor resuming sale
of electricity to SCE due to the cost of upgrading exceeding the monies received for the
power, staff recommends that the agreement be canceled, the engine surplussed and the
monthly
charges from SCE halted.
DAVID J. BARAKIAN
Director of Public Works/City Engineer
APPROVED;-�
ATTACHMENTS:
1. Minute Order
2. Termination Notification Agreement ��
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August 29,2003
Jack Martin
City of Palm Springs,
R0.Box 2743
Palm Springs,CA 42263
SUBJECT- Termination of the Power Purchase Agreement("Agreement")
between Southern California Edison Company("Edison")and
City of Palm Springs -QFID#1012
Dear Mr.Martin:
In a letter from David Barakian dated Match 5,2003,the City of Palm Springs expressed a desire
to terminate the Power Purchase Agreement that currently exists between Southern California
Edison and the City of Palm Springs.
Subsequently,in accordance with Section 5 of the Power Purchase Agreement("PPA")between
the City of Palm Springs ("Palm Springs'),and Southern California Edison("Edison"),I am
enclosing a Termination Notification Agreement("Agreement")for you to sign,date and return.
(Please retain a copy for your files) The PPA between Southern California Edison and Palm
Springs will be considered terminated effective as of the date you provide on the Agreement.
Please ensure that this Termination Agreement is signed by a person with the appropriate level of
authority to effect termination of the PPA between Edison and Palm Springs.
Should you desire to resume operating in parallel with Edison's electrical system in the future,
you may contact Tom Dossey at(626)302-8242,to request a Distributed Generarion
Interconnection Agreement.
In terminating this PPA,Edison reserves all rights,remedies and claims which have accrued or
will have accrued as of the termination date and which survive the termination.
Should you need to contact me please refer to the above information. Thank you for your time in
this[natter.
Sincerely,
is
Janet L. Gaxda
Contract Manager
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2V4 PYdnul ChUve Ave. p•!
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10-29-2003 14:40 From-SCE QF Resources 626 302 9622 T-361 P 003/009 F-313
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TE MINATION NOTIFICATION AGREEMENT
CITY OF PALM SPRINGS
(QFFW# 1012)
The City of Palm Springs,('"Seller"},hereby notifies Southern California Edison Company
("Edison")that the Power Purchase Agreement("Agreement")between Edison and Seller,
executed May 5, 1993,shall terminate on the date provided below,pursuant to Section 5 of the
Agreement.
City of Palm Springs Wastewater Treatment Plant
4375 Mesiluite Avenue
Palm Springs, CA 92264
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O o,
MINUTE ORDER NO.
AUTHORIZING THE TERMINATION OF THE
INTERCONNECTION AND POWER PURCHASE
AGREEMENT FOR THE COGENERATION PROJECT OF
THE CITY OF PALM SPRINGS WASTEWATER
TREATMENT PLANT.
I HEREBY CERTIFY that this Minute Order, authorizing the termination of the
Interconnection and Power Purchase Agreement for the Cogeneration Project of the City
of Palm Springs Wastewater Treatment Plant.,was adopted by the City Council of the City
of Palm Springs, California, in a meeting thereof held on the 17`h day of December, 2003.
PATRICIA A. SANDERS
City Clerk
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