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HomeMy WebLinkAboutRes1993-020 . . . Sponsored by: lones CITY OF SEWARD, ALASKA RESOLUTION NO. 93-020 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING A RETAIL POWER SALES AGREEMENT BETWEEN THE CITY OF SEWARD AND SUNEEL ALASKA CORPORATION WHEREAS, the retail power sales agreement between the City of Seward and Suneel Alaska Corporation expired in February, 1991, and since has been in effect from month to month; and WHEREAS, Suneel has been purchasing power at a flat rate and has requested an interim rate relief at a KW charge comparable to that paid by the Large General Service customers; and WHEREAS, the city has hired R. W. Beck to conduct a rate study for the electric, water and sewer utilities; and WHEREAS, the city wishes to develop a Large Industrial rate for certain customers purchasing large amounts of electricity; and WHEREAS, it is in the public interest to enter into a short tenn agreement until the rate study is completed and a rate is established for the Large Industrial customer; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The city manager is authorized to enter into an agreement with Suneel Alaska Corporation for the purchase of electric power, a copy which is incorporated herein by reference. Section 2. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 8th day of February, 1993. THE CITY OF SEWARD, ALASKA Qo.-oe-. lA9. (I~ Dave W. Crane, Mayor . . . '" RETAIL POWER SALBS AGREEHENT BETWEBH CITY OF SEWARD AND SUNEEL ALASKA CORPORATION' 1. PARTIES The parties to this agreement are the City of Seward, a municipal corporation of the State of Alaska (hereinafter called "Seward") and Suneel Alaska Corporation, a corporation incorporated under the laws of the State of Alaska, having its headquarters in Seward, Alaska (hereinafter called "Suneel"). 2 . RECITALS 2.1 The City of Seward Electric Utility is a publicly owned electric utility owned and operated by the City of Seward. Title 14, Seward City Code, establishes general provisions for operation of the utility. (Title 14 is hereinafter called "Ordinances") The rates are established by City of Seward Resolution No. 92-064, or as subsequently amended by resolution (hereinafter called the "Tariff"). Page ,2 - 2 of the Tariff specifically addresses special contracts. 2.2 Seward purchases power from the Chugach Electric Association (CEA) or, under certain circumstances, generates power for distribution to retail customers within its service area. The wholesale power contract with CEA establishes certain conditions and restrictions that Seward must comply with when distributing the power. 2.3 The retail rates for power are set by the Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 1 . . . Seward City Council, based on the expenses of generation and distribution as well as the cost of wholesale power purchased from CEA. CEA's wholesale power rates are approved by the Alaska Public Utilities Commission. 3. AGREEMENT In consideration of the mutual covenants herein, Seward agrees to sell and Suneel agrees to buy electric power subject to the following terms and conditions. 4. DEFINITIONS The following terms, when used in this agreement, shall have the meanings specified: 4.1 Effective Initial Date: The date that Seward signs and authenticates this agreement. 4.2 Seward's Facilities: The facilities owned by Seward to transmit, generate, distribute and meter power serving Suneel's facilities. 4.3 Suneel's Facilities: All facilities owned by Suneel starting at the point of delivery specified hereunder. 4.4 Maximum Demand: The maximum number of kilowatts ("KWH) that Suneel is entitled to receive, and the maximum number of KW that Seward is obligated to furnish, as set forth in Section 5.5 hereof. 4.5 Starting Load: The instantaneous peak demand resulting from start-up of motors or other equipment. 4.6 Monthly Billing Demand: Demand based on the Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 2 . . . maximum demand recorded over a 15 minute period during the billing period measured in KW. (Seward is on 15 minute schedule with CEA) 4.7 Monthly Billing Energy: The kilowatt-hours ("KWH) upon which the monthly energy billings will be based. 4.8 Point of Delivery: The point where Seward delivers to Suneel the power and energy provided under this Agreement as set forth in Section 5.2 hereof. 5.0 SPECIAL PROVISIONS 5.1 Interruptible Service: Seward cannot guarantee uninterruptible power, and furthermore, at times it may be necessary to require Suneel to reduce or cease operations in order to provide power to other customers. Therefore, Suneel agrees to reduce or stop operations when requested by Seward. Seward recognizes that interruption of power will adversely effect Suneel and will make reasonable efforts to limit such interruption. Suneel acknowledges receiving a favorable rate by agreeing to this condition, and will not claim compensation from Seward for any cost or damages due to interruption of power. 5.2 Point of Delivery: The point of delivery and measurement for the electric power delivered hereunder, will be a single metering point located at the Suneel Facilities. 5.3 Seward's Facility: The parties recognize that Seward's facilities are adequate to transmit 2000 KW to Suneel's facilities. Should Suneel have demand in excess of this amount such that Seward cannot supply Suneel's increased demand without Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 3 . . . interfering with other customers, it may be necessary to upgrade Seward's facilities. This agreement will not be construed to require Seward to pay for the cost of upgrading Seward's facilities to transmit more than 2000 KW to Suneel. 5.4 Suneel's Facilities: The maintenance, repair, and upgrade of facilities owned by Suneel is solely the responsibility of Suneel. Seward may require Suneel to perform maintenance, repair, or upgrade of Suneel's facilities if it is determined they are in violation of the NESC, present a hazard to the utility's employees or the general public, or could cause interference or interruptions of service to other customers. Suneel will bear the entire cost of such maintenance, repair, or upgrade, even when directed by Seward. 5.5 Maximum Demand: Seward will supply a maximum demand of 1300 KW, except interrupted according to section 5.1. Electrical service supplied hereunder is to be in the form of three phase, 60 hertz electricity at a nominal voltage of 12,470 /7200 volts at the point of delivery. 5.6 Starting Loads: In accordance with Section 14.15.230, Seward City Code, any load that causes a large fluctuation in voltage on any given circuit and disturbs the service provided to other customers will be subject to disconnect by the City. The City may require, as a condition of service, that Suneel install, at its own expense, equipment that will eliminate the undesirable load characteristics, including but not limited to Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 4 . . . unbalanced load between phases, unacceptable variations from unity power factor, and unusual demand fluctuations produced by the customer's equipment. Suneel shall install starting compensation on all motors which exceed 50 rated horsepower. In no event shall Suneel's starting load exceed 500 KVA. 5.7 Changes in Maximum Demand: Should Suneel desire to increase its maximum demand, it will give notice to Seward at least 180 days prior to the date the increased demand will be required. Seward shall give notice to Suneel within 90 days of receipt of notice if it can meet the increased demand, and/or if system improvements may be required. 5.8 Notifications: All formal notice, demands or requests given or made under this Agreement shall be in writing and shall be deemed properly given or made if delivered personally or sent by registered mail, certified mail or telegram to the person designated below: Notices to Seward: Engineering/Utilities Manager City of Seward P.O. Box 167 Seward, Alaska 99664 Notices to Suneel: Suneel Alaska Corporation Seward Coal Terminal P.O. Box 1789 Seward, Alaska 99664 5.9 Term: The term of this agreement shall be until October 1st, 1993, or until the City Council adopts any new rate applicable to Suneel Alaska Corporation and thereafter month Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 5 . . . to month; provided, however that either party may give the other party written notice of its desire to amend the Agreement. Such written notice will be served upon the other party not less than sixty (60) days prior to the end of the initial period of this Agreement or any annual extension thereof. The parties agree that, while negotiating a new agreement, all provisions of the Agreement will remain in full force and effect until a new agreement is ratified or impasse is reached. 5.10 Termination by Seward: Seward has the right to terminate this Agreement in accordance with the Seward City Code applicable at the time of termination, the Seward Electrical Utility tariff applicable at the time of termination, and as elsewhere provided in this agreement. 5.11 Termination by Suneel: Suneel may terminate this Agreement by giving Seward six months written notice of its intent to terminate and by paying a termination fee of $60,000 at the end of the six month notice period. During the six month notice period, (and following the six month notice period if the $60,000 termination fee is not paid) Suneel shall be liable for all charges, including, if applicable, a minimum monthly charge, shown on attachment A to this Agreement. 5.12 Billing period: The billing period will be based on a monthly period as established by Seward in accordance with the Seward Code and tariff. 5.13 Changes in Rates: The rates may be changed Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 6 . . . from time to time by the Seward City Council in accordance with applicable ordinances, regulations, and procedures. Any increase in the wholesale cost to Seward of the power it purchases from CEA shall be passed through to and paid by Suneel. There will be no Seward overhead charges added to this wholesale cost pass through. 6. Rates for Power Supplv The applicable rates are shown in attachment A to this agreement. 7. General Terms and Conditions 7.1 Electrical Load Characteristics: SUneel shall design, construct, operate and maintain its facilities in accordance with accepted utility practices and shall meet the following constraints: 7.1.1 Suneel's load shall not cause sine-wave distortion or large short-interval demand that will impair service to other Seward customers, or cause interference with telephone, television or other facilities. 7.1.2 Suneel's load shall not result in a deviation from phase balance of more than ten (10) percent at any time. 7.1.3 Suneel will attempt to maintain a power factor of 1. If the power factor falls below 90t, lagging or leading, Suneel will take corrective steps to return the power factor to 90t or higher. Also, for any month in which the power factor falls below 90t, leading or lagging, the demand charge (or the minimum monthly charge, if applicable) from attachment A will Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 7 . . . be increased by multiplying it by the ratio of 90t divided by the actual power factor expressed as a percent. All power factor adjustment equipment installed by the customer must be approved by the city. Power factor can be determined by permanently installed equipment provided by the customer or by periodic testing at reasonable intervals at the discretion of the city at its own expense. 7.1.4 Suneel shall not make changes in its facilities or operate it facilities in a manner that will cause Seward to make expenditures which would otherwise be unnecessary. Seward's expenditures caused by Suneel in this regard and occasioned by a violation of this provision by Suneel shall be paid by Suneel. 7.2 Uncontrollable Forces: 7.2.1 An "Uncontrollable Force" shall mean an act of God, act or omission of government, failure of or threat of failure of facility, unscheduled maintenance and repair, labor or material strike, industrial lockout or other shortage, disturbances, act of the public enemy, war, blockade, insurrection, riot, epidemic, landslide, avalanche, earthquake, fire, storm, lightning, flood, washout, civil disturbance, restraint by court order or public authority, action or non-action by or inability to obtain necessary authorization or approval from any governmental agency or authority, and any act or omission similar to the kind herein enumerated. Strikes, lockouts, and other labor disturbances Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 8 . . . shall be considered Uncontrollable Forces and nothing in this Agreement shall require either party to settle a Labor dispute against its best judgement. 7.2.2 In the event either party, by reason of an Uncontrollable Force, is rendered unable, wholly or in part, to perform its obligations under this Agreement (other than its obligations to pay money), then upon said party giving notice and particulars of such Uncontrollable Force, its obligation to perform shall be suspended during the continuance of any inability so caused, but for no longer period, and the effect of such cause shall, so far as possible, be remedied with all reasonable dispatch; provided, however, that the settlement of labor disputes shall be considered wholly within the discretion of the party involved. The affected party shall not be responsible for its delay in performance under this Agreement caused by an Uncontrollable Force, nor shall such Uncontrollable Force give rise to a claim for damages of any type or constitute default. 7.3 Responsibility: 7.3.1 Except as provided in Section 7.1, each party shall assume all responsibility on its respective side of the Point of Delivery for the electric service supplied and taken, as well as for maintenance of any apparatus used in connection therewith. 7.3.2 Each party shall save the other harmless from and against all claims for injury or damage to persons or Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 9 . . . property occasioned by or in any way resulting from the electric service or the use thereof on its respective side of the Point of Delivery. 7.4 Metering: Seward shall provide for and maintain the metering equipment for measuring the power and energy delivered. Suneel may at its option and at its own expense install check meters. 7.4.1 Seward, (a) shall at its own expense make or provide for periodic tests and inspections of all Seward meters in order to maintain a commercial standard of accuracy, (b) shall restore to a condition of accuracy, any meters found to be inadequate, and (c) shall advise Suneel promptly of the results of any such test which shows any inaccuracy more than 2\ slow or fast. Suneel shall be permitted to have representatives at such test and inspections. At Suneel's request, Seward will provide the same service for Suneel's check meters, at its incremental cost to do so, which will be paid by Suneel. Seward shall make or provide for additional tests of Seward meters at the request of Suneel and in the presence of Suneel's representatives. The cost of any additional test requested by Suneel shall be borne by Seward if such test shows a meter inaccurate by more than 2\ slow or fast. If at any time a meter should fail to register, or its registration should be so erratic as to be meaningless, the estimated correct registration for billing purposes shall be based upon records from check meters, if available and tested for accuracy, or otherwise Retail Power Sales Agreement City of Seward - Suneel ~aska Corp. Page 10 . . . upon the best available data. 7.5 Waiver: The failure of either party to insist upon strict performance of any of the provisions hereof, or the acceptance by either party of the payment for all or part of the obligations hereunder shall not be deemed a waiver of any right or remedy by either party. 7.6 Billing and Payment: 7.6.1 Seward shall render bills to Suneel on or before the 5th day of each calendar month for services furnished during the preceding billing month. In such bills Seward may designate certain items as being estimated due to unavailability of final underlying data, in which event adjustments to the correct amounts, when amounts are determined, shall be included in a bill for the subsequent month. 7.6.2 Payment by Suneel shall be due on the 20th day of each calendar month for service furnished during the preceding billing month. Payment shall be mailed, or may be paid in person, to the Seward Utility Department. Amounts not paid on or before the due date shall be payable with interest accrued at the rate of 1% per month (or the maximum legal rate if it is less) compounded monthly from the due date to the date of payment. 7.6.3 In the event any portion of any bill is disputed, the disputed amount may be paid or may be withheld. In any event, Suneel shall provide Seward with a detailed written explanation of why the amount is in dispute. If the disputed Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 11 . . . portion is paid and later found to be incorrect, Seward shall refund Suneel any overpayment, including interest at the rate of 1% per month compounded monthly to the date the refund check is mailed by Seward. If the disputed portion is withheld and later found to be owed, Suneel shall pay Seward the amount owed, including interest at the rate of 1% per month compounded monthly from the due date of payment to the date the check is received by Seward. 7.7 Special Contract: This Agreement shall be treated as a special contract, pursuant to City of Seward Resolution No. ~q),-O~Lf 7.8 Assignment: This Agreement shall be binding on and shall be for the benefit of the successors and assigns of the parties. Should the successor in interest to Seward be the Government of the United States by reason of the Rural Electrification Act or any mortgage thereunder, the responsibility of such successor will be subject to such statue and/or mortgage indenture. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their authorized representatives. CITY OF SEWARD SUNEEL ALASKA CORPORATION Ty~n~ Interim City Manager Date: 2/110 r Gj~ Date: February 15, 1993 Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. 12 Page 12 . . . ATTEST: \ WOH\...~. ~~S.lo.11otL,JO~"e.o.J ~ t>~ APPROVED AS TO FORM: F~1!']tiRlil C9ili, Attorneys for The City of Seward .,~ J:~:::." K.."~"- City Attorney 0~ ~~~ ~ Linda S. Murphy City Clerk STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this [')-111 day of fi~ul#R.Y , 1993, before me, the undersigned, a Notary Public in and for the State of Alaska, personally appeared Yi'}UN'a-IIH LEE , known to me and to me known to be the individual named in and who executed the foregoing document, and he acknowledged to me that he signed and sealed the same as his free and voluntary act for the uses and purposes therein set forth. WITNESS my hand and notarial seal the day and year first hereinabove written. .~ --If'JuIL! ~ (J. ~ry PublJ.c In d for Alaska My Commission Expires: 1()!J31t.~ . Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. 13 Page 13 . . . ATTACHMENT A TO RETAIL POWER SALES AGREEMENT BETWEEN CITY OF SEWARD AND SUNEEL ALASKA CORP. As of 'i-~,~Iet, \C{9.3 . and continuing until October 1st, 1993, or until he C1ty Council adopts a new rate applicable to Suneel Alaska Corporation, the rates in effect between Suneel Alaska Corporation and the City of Seward are: CUstomer Charge: Demand Charge: Energy Charge: . Fuel Adjustment Charg€: $36.24/meter $12.60/KW $ 0.0239/KWH As per tariff The minimum monthly charge shall be $7,500 regardless of the amount of power used by Suneel. These retail rates will be charged pursuant to Sections 6 and 7.6 of the Retail Power Sales Agreement. This Attachment is provided for the convenience of the parties who understand that the rates set out above may be changed from time to time by the Seward City Council as provided in Section 5.13 of the Retail Power Sales Agreement. Suneel acknowledges that the rates set forth in this attachment are negotiated based on Suneel's commitment to a 5 year contract, its agreement to pay a termination fee, and its agreement to interruption as provided in paragraph 5.1 of the agreement. Retail Power Sales Agreement City of Seward - Suneel Alaska Corp. Page 14 CITY OF SEWARD, ALASKA RESOLUTION NO. 93-020 . AYES: NOES: ABSENT: ABSTAIN: Bencardino, Crane, Darling, Krasnansky, Sieminski, & Swartz None None White A TIEST: APPROVED AS TO FORM: Perkins Coie, Attorneys for the city of Seward, Alaska ~d.J~'-,-:~ -~ <~ <.:c'v.......5...J -t':L-Linda S. Murphy, CMC/AAE City Clerk . (City Seal) 1~ I/I~ Fred B. Arvidson City Attorney .