04-043 ABAG Power-Core Natural Gas Sales & AggregationCORE NATURAL (sAS SALES AND
AGGREGATION AGREEMENT
By and Between
ABAG POWER
andl
City of Cupertino
(Name of Public Agency)
For service within the territory of
Pacific Gas & Electric Company
Revised Core Agreement - 2004
CORE NATURAL GAS SALES ANL- AGGREGATION AGREEMENT
This Core Natural Gas Sales and Aggregation Agreement, hereinafter "Agreement", is made and
entered into as of this (~ day of ~P~. 20~, b;~ and between the ABAG Publicly OWned Energy
Resources, a California joint powers agency, hereinafter "ABAG POWER", and the City of Cupertino
(name of public agency), a (-~Ct'1FX'q.Q LGu) Ci w~,.(charter/general law city or county or special
district), hereinafter "Public Agency". ,(J
The parties hereby agree as follows:
1. Eli ibility: Public Agency is a member of ABAG POWER. ABAG POWER shall provide
directly or, at its option, shall contract to provi~3e coordination services for the purchase and
management of a natural gas program for members of ABAG POWER participating in said program
[Participant(s)].
2. Authorities: Public Agency is a customer oj' PG&E for core natural gas distribution services.
ABAG POWER is a designated Core Transportation ~~gent (CTA) in accordance with PG&E's Rule 23
and Tariff G-CT ("Program"). Public Agency appoints ABAG POWER as its exclusive agent to
coordinate its purchase and management of natural l;as, on behalf of Public Agency for the facilities
listed in Exhibit A, which is attached hereto and incorporated herein. All parties understand and agree
that the authority for the Program is granted by and. subject to the CPUC, as initially authorized by
CPUC Decision No. 91-02-040 and as modified through various subsequent CPUC Decisions. This
Agreement is pursuant to the Utility Aggregation Tariff Rate Schedule(s), Tariff Rules and terms and
conditions set forth in such agreement. Public Agenc}~ represents and warrants that any prior aggregator
authorizations which Public Agency may have executed will be terminated effective no later than the
date of this authorization.
3. Services: ABAG POWER shall deliver, or cause to be delivered, the following services to
Public Agency:
3.1 Analyze and evaluate natural gas supple and transportation strategies;
3.2 Negotiate and implement natural gas purchase, transportation and other similar gas
services for Participants;
3.3 Perform nominations of gas purchased and transportation services on behalf of Public
Agency's facilities as listed in Exhibit A;
3.4 Monitor gas account imbalances;
3.5 Generate invoices for all natural gas purchases and services for ABAG POWER to
perform as required under the Agreement. Invoices will include the following information:
3.5.1 For each facility listed in Exhibit A, the monthly usage, and gas charges,
including, but not limited to, ABAG POWER operatio~ial and administrative fees.
-1-
Revised Core Agreement - 2004
3.5.2 The status of the account identifying the prior account balance, any payments
since the previous invoice, current charges plus any applicable late payment charges and credit balances
as calculated pursuant to Paragraph 9.3(?); and
3.6 Provide general consultation services.
4. Enrollment Notification of Changes: Public Agency shall through the attached Exhibit A submit
to ABAG POWER its list of accounts to be served Hereunder. Public Agency represents and warrants
that all facilities listed in Exhibit A distribute natural gas used by Public Agency and that none of the
facilities will be serviced by another core transport ~igent as of the Start Date as defined in Paragraph
9.5. Public Agency shall also notify ABAG POW1:R forty-five (45) days in advance of changes in
Public Agency's facilities or operations which are reasonably expected to increase or decrease the
consumption of natural gas more than ten percent (10'%) as compared to historical levels. Public Agency
may add facilities to Exhibit A upon prior written notice to ABAG POWER. Public Agency may delete
facilities from Exhibit A only upon written consent by ABAG POWER, which consent shall not be
unreasonably withheld, except that Public Agency may delete facilities without ABAG POWER'S
consent if Public Agency abandons the facility or transfers the facility to another entity.
5. Agency Relationship: Public Agency authorizes ABAG POWER to act as its exclusive agent for
the Program and does hereby constitute and appoint an authorized officer or agent of ABAG POWER to
act on its behalf as its lawful agent for the implemf;ntation of the Program. This authorization shall
include the right to do and perform all acts, with full power to execute all documents requisite and
necessary to be done in all matters relating to the purchase, sale, and transportation of natural gas.
Therefore, Public Agency authorizes ABAG POWER to take actions appropriate to establish and
implement the Program, including, but not limited to:
5.1 Aggregating the gas supplies and services of Public Agency with those of other
Participants in conjunction with providing such gas supplies and services to Public Agency and pursuant
to the terms and conditions of the Program;
5.2 Executing local distribution company riders and other documentation on behalf of Public
Agency;
5.3 Nominating gas supplies on behalf of Public Agency;
5.4 Handling gas imbalances, gas storagf;, and all other operational transactions with the
Utility in order to deliver gas to the Utility for subseq~rent redelivery to Public Agency; and
5.5 Arranging for payment of Program bills for natural gas, transportation and other Utility
charges. Public Agency understands and agrees that: in the event of nonpayment by ABAG POWER,
Public Agency will be responsible for payment of Public Agency's bills for gas and services, even if the
Public Agency has already made payment to ABAG POWER for those gas quantities and services.
Public Agency understands that if ABAG PO'WER'S contract with the Utility terminates for any
reason, on Public Agency's receipt of notice from i:~tility, Public Agency will receive gas service for
Exhibit A accounts under core procurement service from the Utility commencing on the first day of
-2~-
Revised Core Agreement - 2004
Public Agency's next billing cycle pursuant to the terms and conditions of the applicable core
procurement Tariff Rate Schedule for each Public Agency's accounts.
6. Title: All purchase, transportation and other g;as service contracts shall be in the name of ABAG
POWER.
7. Term: Subject to the provisions of Paragraphs 12 and 13 hereof, and receipt of timely
notifications of alternative arrangements, this Agreement shall be in full force for a three (3) year term
commencing July 1 of the year immediately following the execution date of this contract. Subject to
Paragraph 13, the term of this Agreement shall be automatically extended for additional three-year
periods on each July 1 provided that ABAG POWEF: is not in breach of this Agreement, and provided
that Public Agency has not submitted on or before June 1 written notice of its decision to terminate the
Agreement effective the July 1 three (3) years after said notice.
8. Fees: The operational fees for all services described in Paragraphs 3 and 5 shall be established
by the ABAG POWER Board of Directors, hereinafter "Board".
9. Payment:
9.1 On a monthly basis, unless otherwise approved by Public Agency, ABAG POWER will
provide, or cause to be provided, to Public Agency an invoice for the Public Agency's facilities serviced
under this Agreement. Invoices will be directed to and payment is to be made directly by Public
Agency to the escrow account designated pursuant to Paragraph 10 of this Agreement. Payment is due
immediately upon receipt of the invoice. Late payment charges at the rate of one and a half percent
(1.5%) per month calculated daily on the outstanding balance will be imposed commencing on the
thirty-first (31st) day after the mailing date of the invoice. Late payment charges may, at ABAG
POWER's sole discretion, be debited against Public Agency's Working Capital Account as defined in
Paragraph 9.3.
9.2 ABAG POWER will invoice Public Elgency, and Public Agency will pay, in monthly
installments, sums representing payments for the natural gas and services provided under this
Agreement (Invoiced Amounts). Initially, Invoice~i Amounts will be based on ABAG POWER's
estimate of Public Agency's consumption of natural gas for the month leveled to eliminate extreme
consumption fluctuations but adjusted to reflect moderated seasonal fluctuations. Each invoice will also
identify the costs, if any, of natural gas, includinl;, but not limited to transportation charges and
operational fees, and utility charges charged to Public Agency for the period identified in the invoice.
Any disputes between the parties regarding the amount of any Actual Charges shall be resolved pursuant
to Section H of Exhibit B to this Agreement, as defined in Paragraph 9.3, will be adjusted as soon as
practicable to reflect the resolution of the dispute.
9.3 Upon approval of this Agreement b;~ ABAG POWER, Public Agency shall pay a
working capital deposit to ABAG POWER prior to transferring any accounts to the ABAG POWER
program. This deposit is refundable when Public .Agency leaves the program and all liabilities to
ABAG POWER have been satisfied. The currently ;approved working capital deposit is calculated as
follows:
[Two times the average load (therms) times the current applicable rate ($/therm).]
-3-
Revised Core Agreement - 2004
9.4 After the end of each fiscal year, ABAG POWER will perform a "true-up" by calculating
the difference between the Invoiced Amounts and the Actual Charges. Any difference in these amounts
will be debited or credited (as appropriate) to thf; Public Agency in equal installments over the
remaining program year's invoices.
9.5 In accordance with the terms of Paragraph 10, ABAG POWER will first apply the
Invoiced Amounts to the payment of Actual Charges. Public Agency acknowledges that during the term
of this Agreement ABAG POWER has the right to u;~e working capital deposits to pay Actual Charges
incurred by other Participants in the Program as suc:h Actual Charges become due. Such use of the
monies will not be a debit against the working capital deposit and will not obviate, eliminate or modify
ABAG POWER's obligation to pay Public Agency the working capital deposit amount pursuant to
Paragraph 13.3. ABAG POWER retains the right to modify Invoiced Amounts to increase the sum of
working capital deposits in the Program in order to timely pay Actual Charges as they become due.
9.6 The initial invoice will be dated and must be paid by
(Start Date), or this Agreement terminates on Upon prior written notice to Public
Agency, ABAG POWER may delay the Start Date to :rccommodate Program requirements.
9.7 In the event Public Agency fails to make timely payment consistent with the terms
employed by ABAG POWER, in addition to airy other remedy it may have hereunder and
notwithstanding the existence of any late payment penalty, ABAG POWER may declare Public Agency
to be in default and terminate the agreement. AB.~G POWER is further authorized to bill Public
Agency for reasonable charges associated with demands for payment on late accounts as well as
reasonable charges associated with suspension and resumption of service hereunder.
10. Disbursement of Funds: Subject to the terms a.nd conditions of this Agreement, ABAG POWER
agrees to provide for sale and delivery, and Public Agency agrees to receive and to pay ABAG
POWER for natural gas. Further, Public Agen~;y agrees to pay for the Actual Charges.
10.1 An escrow account for the purposes of receiving payments by Participants and making
payments to the Utilities, the gas supplier and other payees as authorized by ABAG POWER will be
established.
10.2 The instructions for this escrow account have been approved by ABAG POWER, and
shall include a list of the authorized recipients of payments from the account.
10.3 Only ABAG POWER may authorize release of funds from the escrow account, and such
shall only be to those payees identified in the escrow instructions.
11. Gas Program Pricing:
11.1 Allocation. The gas charges to Participants will include (a) cost of the gas commodity
(gas charges), (b) applicable utility transportation charges, and (c) administrative costs. Gas charges are
the product of a Participant's usage times the unit rate for gas for each month. The unit rate is the total
monthly cost of natural gas purchased for all Participants at the supplier contract price divided by the
-4-
Revised Core Agreement - 2004
total monthly usage of Participants. Transportation a:nd administrative charges will be allocated to each
Participant based on gas usage.
11.2 Annual Report. Each year, ABAG POWER will provide each Participant with a report
showing that Participant's total costs for natural gas, including transportation charges and administrative
fees, and utility charges at a per therm cost for each c~~tegory.
11.3 Gas Purchasing. Under the policy direction of the Board, ABAG staff will regularly
canvas the natural gas market and enter into contracts to acquire natural gas for, among others, fixed
price, indexed price and variable price with a minimiun and/or maximum. ABAG staff, under the policy
direction of the Board, has the power to execute all contracts reasonably necessary to deliver natural gas
to each Participant.
12. Change of Regulations: Any future change i:a law, rule or regulation, or utility practice which
prohibits or frustrates ABAG POWER or the Public Agency from carrying out the terms of this
Agreement shall excuse both parties from their oblig;~tions, other than the obligation of Public Agency
to make payments due for gas and services received.
13. Cancellation of Service:
13.1 Cancellation by Public Agency: Public Agency may cancel the Agreement by giving
ABAG POWER written notice by June 1 of its intent to terminate on June 30 of the third year following
the date notice was given.
13.2 Cancellation by ABAG POWER: Actions by the utilities and/or CPUC to develop rules
which are in conflict with sound business practices, ~~r impose unnecessary risk on either party to this
Agreement, or substantially prevent ABAG POV~'ER from performing its functions under this
Agreement may result in the cancellation of this Agreement by ABAG POWER. ABAG POWER shall
give Public Agency written notice ninety (90) days prior to such cancellation and both parties shall work
diligently to minimize the negative effects on A13AG POWER and the Public Agency of such
cancellation.
13.3 Working Capital Deposit: Within ninety (90) days after cancellation, ABAG POWER
will pay to Public Agency the amount of its working ~~apital as modified pursuant to Paragraph 9.2, less
any debits imposed pursuant to Paragraph 9.1 and less any outstanding Actual Charges owed by Public
Agency.
14. ABAG POWER Board of Directors: (Name of Public Agency
Representative) shall be the Public Agency's representative to the Board. The Board shall provide
policy direction for the Program. The Board's powers shall include admission of new Participants and
the extension of any contracts for the purchase of n~itural gas and/or related services under rules and
procedures adopted by the Board.
15. Approvals: The Public Agency Representative may grant any approval, or give any direction
required by this Agreement, in writing or orally. Written approvals or directions may be transmitted
physically, by facsimile or electronically. Oral approvals will be confirmed in writing by either party.
-5-
Revised Core Agreement - 2004
16. Attorneys' Fees: In the event either party invokes its right to arbitration under Section H of
Exhibit B due to an alleged breach of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and costs as determined by the arbitrator.
17. Ownership of Files, Reports, Photographs, and Related Documents: Upon termination of
the Agreement, any and all files, reports, photographs, plans, specifications, drawings, data, maps,
models and related documents respecting in any way the subject matter of this Agreement, whether
prepared by ABAG POWER, the Public Agency or third parties and in whatever media they are stored
shall remain or shall become the property of the Public; Agency and the Public Agency shall acquire title
to, and copyright ownership of, all such document;. The Public Agency hereby grants to ABAG
POWER an irrevocable license to retain a copy of <ill records covered by this paragraph for ABAG
POWER's files.
18. Indemnity: Public Agency shall indemnify anti hold harmless ABAG, ABAG POWER and their
respective directors, officers, member agencies, agents and employees from and against all claims,
damages, losses and expenses including attorney's fees arising out of or resulting from the performance
or non-performance of the services required by this Agreement, unless such is caused by the negligence
of ABAG, ABAG POWER or their respective directors, officers, member agencies, agents or
employees.
19. Assignment/Security Arran eg ments: Public Agency hereby acknowledges that ABAG POWER
may, in order to finance security deposit and cash floe deficits incurred in connection with the operation
with this Program, incur short-term debt which ma~~ be secured by an assignment, encumbrance or
hypothecation of this Agreement and/or payments due hereunder.
20. Notices: The following addresses for the giving of notices and billings shall be:
Public Agency Notices
Name: City of Cupertino
Address: 10300 Torre Avenue
Cupertino, CA 95014
Telephone No.
(408) 777-3226
Facsimile No.: (408) 777-3366
Email: carola@cupertino.org
Attn.: Carol Atwood
Public Agenc~g Address
Name: City of Cupertino
Address: 10300 Torre Avenue
Cupertino, CA 95014 Telephone No.
-6-
(408) 777-3219
Revised Core Agreement - 2004
Facsimile No.: (408) 777-3109
Email:
Attn.: Finance Department
ABAG POWER Notices
ABAG
P. O. Box 2050
Oakland, CA 94604-2050
Gerald L. Lahr, Program Manager
Telephone No: 510-464-7908
Facsimile No: 510-464-5508
Email: JerryL@abag.ca.gov
21. Severability: If any provision of this Agreement or the application of any such provision shall be
held by a court of competent jurisdiction to be invalid, void, or unenforceable to any extent, the
remaining provisions of this Agreement and the application thereof shall remain in full force and effect
and shall not be affected, impaired, or invalidated.
22. Captions: The captions appearing in this Agreement are inserted as a matter of convenience and
in no way define or limit the provisions of this Agreement.
23. Other Contract Provisions: This Agreement shall be subject to the other standard provisions which
are set forth in the attached Exhibit B, which is incorp~~rated by this reference.
IN WITNESS WHEREOF, the parties have hereunto set their hands effective the date and year first
above written.
ABAG PUBLICLY OWNED ENERGY RESOURCES
By:
E ne Y. eong, Preside
Approved as t legal form and ntent:
By:
Kenne y, Legal Counsel
PU LI AGE CY
r
By:
Date: ~/~/`~ ~J
Date: ~/~-r~°56
Date: ~, 2. ~`~
Name: David W. Kna
-7-
Revised Core Agreement - 2004
Title: City Manager
by resolution)
(City Manager, County Administrator or other as designated
Approved as to-legal form d ntent: --
By: , ~ ~? ~ ~~~ Date:
Name: C f~/_.%l~j ~jl ~~/~~-'
Title: ~;'~ ~ ~ ~~~
-8-
Revised Core Agreement - 2004
EXHIBIT A
List of Facility Accounts
1.
2.
3.
4.
5.
Name of Public Agency:
PG&E Account Number S~:reet Address City
-9-
Revised Core Agreement - 2004
EXHIB:[T B
STANDARD CONTRE~CT PROVISIONS
A. Time of Essence. Time is of the essence in this Agreement.
B. Waiver. The waiver by either party of a breac;h by the other of any provision of this Agreement
shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or a
different provision of this Agreement.
C. Controlling Law. This Agreement and all matters relating to it shall be governed by the laws of
the State of California.
D. Binding on Successors, Etc. This Agreemen~: shall be binding upon the successors, assigns, or
transferees of ABAG POWER or Public Agency a:~ the case may be. This provision shall not be
construed as an authorization to assign, transfer, hypothecate, or pledge this Agreement other than as
provided above.
E. Records/Audit. ABAG POWER shall keep complete and accurate books and records of all
financial aspects of its relationship with Public agency in accordance with generally-accepted
accounting principles: ABAG POWER shall permit a~.rthorized representatives of Public Agency and/or
any of Public Agency's governmental grantors to inspc;ct, copy, and audit all data and records of ABAG
POWER relating to its performance of services under this Agreement. ABAG POWER shall maintain
all such data and records intact for a period of three (3) years after the date that services are completed
hereunder or this Agreement is otherwise terminated.
F. Prohibited Interest. Neither ABAG, ABAG POWER or their respective directors, officers,
employees or agents shall solicit nor accept gratuities, favors or anything of monetary value from
contractors, potential contractors, or parties to subcont~~acts.
G. Insurance Reauirements.
(1) ABAG shall, at its own expense, obtain and maintain in effect at all times during the life
of this Agreement the following insurance:
(a) Workers' compensation insurance as required by law.
(b) Comprehensive general liability insurance coverage of One Million Dollars
($1,000,000) in the aggregate for products and/or completed operations and One Million Dollars
($1,000,000) per occurrence for automobiles.
(c) Professional liability insurance with minimum liability limits of Two Million
Dollars ($2,000,000) in the aggregate.
(2) All ABAG's insurance policies shall contain an endorsement providing that written
notice shall be given to Public Agency at least thirt}~ (30) days prior to termination, cancellation, or
reduction of coverage in the policy or policies, and all policies shall be carried by an insurance company
or companies acceptable to Public Agency.
-10-
Revised Core Agreement- 2004
(3) In addition, each policy or policies of insurance described in subparagraph (2) above
shall contain an endorsement providing for inclusion of Public Agency and its directors, officers, agents,
and employees as additional insureds with respect t~~ the work or operations in connection with this
Agreement and providing that such insurance is primary insurance and that no insurance of Public
Agency will be called upon to contribute to a loss.
(4) Promptly upon execution of this Agreement, ABAG shall deliver to Public Agency
certificates of insurance evidencing the above insurance coverages. Such certificates shall make
reference to all provisions or endorsements required }ierein and shall be signed on behalf of the insurer
by an authorized representative thereof. ABAG agre~:s that at any time upon written request by Public
Agency to make available copies of such policies certified by an authorized representative of the
insured.
(5) The foregoing requirements as to types and limits of insurance coverage to be maintained
by ABAG and approval of policies by Public Agenc}~ are not intended to, and shall not, in any manner
limit or qualify the liabilities and obligations otherwi:;e assumed by ABAG pursuant to this Agreement,
including, but not limited to, liability assumed pursua~it to ABAG's insurance policies under Subsections
(1)(b) of this section.
(6) ABAG shall require all subcontractors to comply with the insurance requirements
described in Section G(1)(a)-(c), inclusive.
H. Arbitration. Any dispute between ABAG POWER and the Public Agency regarding the
interpretation, effects, alleged breach of powers and duties arising out of this Agreement shall be
submitted to binding arbitration. The arbitrator shall be selected by agreement between the parties by
lot from a list of up to six (6) arbitrators with each party submitting up to three (3) arbitrators.
-11-
Revised Core Agreement - 2004
ASSOCIATION OF BAY AREA GOVERI\~MENTS
Representing City and County Governments of the San Francisco Bay Area
September 22, 2004
City Clerk
City of Cupertino
Re: Core Natural Gas Sales and Aggregation Agreement
Please note that I am returning two fully executed originals to you for your files. Please
keep the copy of this attached letter (addressed to Mr. Knapp) with your original
agreements. We have kept one fully executed original agreement for our files here at
ABAG.
Under separate cover, I am mailing an original letter and a copy of the agreement to Mr.
David Knapp, City Manager of the City of Cupertino who is the City of Cupertino's
representative to ABAG POWER Board.
If you have any questions, please call me at 510-464-7956. Thanks.
Vina Maharaj
Administrative Assistant
ABAG POWER
Mailing Address: P.O. Box 2050 Oakland, California 946042050 (510]4647900 Fax: (510J 464-8468 info@babag.ca.gov
Joseph P. Bort MetroCenter 101 Eighth Street Oakland, California 94607756
ASSOCIATION OF BAY AREA GOVERNMENTS
Representing City and County Governments of the San Francisco Bay Area
September 22, 2004
David Knapp
City Manager
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
Re: Core Natural Gas Sales and Aggre€;ation Agreement
Dear Mr. Knapp:
C~Op}~
Please find enclosed an executed copy of the revised Core Natural Gas Sales and
Aggregation Agreement. This Agreement is effective as of the date your agency
executed the document.
We are continuing to receive signed agreements from member agencies, and we hope to
complete this process in the near future. Hovvever, because this Agreement has yet to be
signed by the necessary aggregate of member agencies, the Agreement remains subject to
cancellation. If the members executing this agreement do not represent an aggregate load
of at least 400,000 Dth/year, this agreement maybe cancelled effective July 1, 2005 by
resolution of the ABAG POWER Executive Committee, and notice to members no later
than June 1, 2005. In such a case, your agenc;y's accounts would be returned to PG&E,
and ABAG POWER would work with you to minimize any adverse impacts.
We are pleased to report that during the past :fiscal year, the program saved members
approximately 9% on their natural gas costs CIS compared to PG&E, and we look forward
to another successful year.
Sincerely,
r d L. Lahr
Program Manager
/vm
Attachment
cc: Kenneth Moy, ABAG Legal Counsel
P 0 V: k H
n
a
m
Q
Mailing Address: P.O. Box 2050 Oakland. California 946042050 (510)4647900 Fax: (510) 464-8468 info@Cbabag.ca.gov
Joseph P. Bort MetroCenter 101 Eighth Street Oakland, California 94607756