HomeMy WebLinkAboutADM_Central_Coast_Community_Energy_-__JOINT_POWER_AGREEMENTPage 1
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JOINT EXERCISE OF POWER AGREEMENT
RELATING TO AND CREATING CENTRAL COAST COMMUNITY ENERGY
This Joint Exercise of Powers Agreement, effective as of ____________, 2018 is made and
entered into pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1 (Section 6500
et seq.) of the California Government Code among the Parties.
RECITALS
A. The Parties share various powers under California law, including, but not limited to, the
power to purchase, supply, and aggregate electricity for themselves and customers within
their jurisdictions.
B. In 2006, the State Legislature adopted AB 32, the Global Warming Solutions Act, which
mandates a reduction in greenhouse gas emissions in 2020 to 1990 levels. In 2016, the
State Legislature adopted SB 32, which mandates statewide greenhouse gas emissions be
reduced to 40 percent below the 1990 level by 2030. The California Air Resources Board
is promulgating regulations to implement the greenhouse gas reduction targets, which
will require local governments to develop programs to reduce greenhouse gas emissions.
C. The purposes for entering into this Agreement include:
a. Reducing greenhouse gas emissions;
b. Providing electric power to customers at a competitive cost;
c. Carrying out programs to reduce energy consumption;
d. Stimulating and sustaining the local economy by developing local jobs in
renewable energy and energy efficiency; and
e. Promoting long-term electric rate stability and energy security and reliability for
residents through local control of electric generation resources.
D. It is the mission and purpose of this Agreement to build a strong Community Choice
Energy (CCE) program that is locally controlled and delivers greenhouse gas emission
reductions, cost-competitive clean electricity, product choice, price stability, and energy
efficiency.
E. It is the intent of this Agreement to promote the development and use of a wide range of
renewable energy sources and energy efficiency programs, including but not limited to
solar, wind, and biomass energy production. The purchase of renewable power and
greenhouse gas-free energy sources will decrease regional greenhouse gas emissions and
accelerate the State’s transition to clean power resources to the extent feasible.
Implementing a CCE program pursuant to this Agreement also will add increasing levels
of locally generated renewable resources.
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F. The Parties desire to establish a separate public agency, known as Central Coast
Community Energy, a California joint powers authority, or CCCE, under the provisions
of the Joint Exercise of Powers Act of the State of California (Government Code
Section 6500 et seq.) (“Act”) in order to collectively study, promote, develop, conduct,
operate, and manage energy programs.
G. The Parties have each adopted an ordinance electing to implement, through the CCCE, a
common CCE program (also known as a Community Choice Aggregation
(CCA) program) hereinafter called the CCE Program, pursuant to California Public
Utilities Code, sections 331.1(b) and 366.2. The first priority of the CCCE will be the
consideration of those actions necessary to implement the CCE Program.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions
hereinafter set forth, it is agreed by and among the Parties as follows:
ARTICLE 1.
DEFINITIONS AND EXHIBITS
1.1 Definitions. Capitalized terms used in this Agreement shall have the meanings
specified in Exhibit A, unless the context requires otherwise.
1.2 Documents Included. This Agreement consists of this document and the
following exhibits, all of which are hereby incorporated into this Agreement:
Exhibit A: Definitions
Exhibit B: List of the Parties
Exhibit C: Annual Energy Use
Exhibit D: Voting Shares
Exhibit E: Signatures
ARTICLE 2.
FORMATION OF CENTRAL COAST COMMUNITY ENERGY
2.1 Effective Date and Term. This Agreement shall become effective and CCCE
shall exist as a separate public agency on [insert date], or when both the cities of
San Luis Obispo and Morro Bay have executed this Agreement, whichever occurs
later. The CCCE shall provide notice to the Parties of the Effective Date. CCCE
shall continue to exist, and this Agreement shall be effective, until this Agreement
is terminated in accordance with Section 6.4, subject to the rights of the Parties to
withdraw from CCCE.
2.2 Formation. There is formed, as of the Effective Date, a public agency named
Central Coast Community Energy. Pursuant to Sections 6506 and 6507 of the
Act, CCCE is a public agency separate from the Parties. Pursuant to
Sections 6508.1 of the Act, the debts, liabilities or obligations of CCCE shall not
be debts, liabilities or obligations of the individual Parties unless the governing
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body of a Party agrees in writing to assume any of the debts, liabilities or
obligations of CCCE. A Party who has not agreed to assume an CCCE debt,
liability or obligation shall not be responsible in any way for such debt, liability or
obligation even if a majority of the Parties agree to assume the debt, liability or
obligation of CCCE. Notwithstanding Section 7.4 of this Agreement, this
Section 2.2 may not be amended, unless such amendment is approved by the
governing body of each Party.
2.3 Name. CCCE may change its name at any time through adoption of a resolution
of the Board of Directors.
2.4 Purpose. The purpose of this Agreement is to establish an independent public
agency in order to exercise powers common to each Party to establish and operate
a CCE Program that achieves long-term GHG emission reductions by offering
clean, cost effective and price stable electricity to residents, businesses, and
agricultural producers, while carrying out innovative programs to reduce customer
energy use, substantially increase local renewable energy production, and power
the local transportation system. To that end, CCCE will study, promote, develop,
conduct, operate, and manage energy, energy efficiency and conservation, and
other energy-related programs, and to exercise all other powers necessary and
incidental to accomplishing this purpose. Without limiting the generality of the
foregoing, the Parties intend for this Agreement to be used as a contractual
mechanism by which the Parties are authorized to participate in the CCE
Program, as further described in Section 4.1. The Parties intend other agreements
shall define the terms and conditions associated with the implementation of the
CCE Program and any other energy programs approved by CCCE.
2.5 Membership in CCCE
2.5.1 The initial members of CCCE are the City of San Luis Obispo and the
City of Morro Bay. Additional cities or counties may also become initial
members of CCCE by executing this Agreement and delivering an
executed copy of this Agreement and a copy of the adopted ordinance
required by Public Utilities Code Section 366.2(c)(12) prior to the
Effective Date.
2.5.2 Any city or county that is not an initial member may request to become a
member of CCCE by submitting a resolution adopted by its City Council
or Board of Supervisors to the Board of CCCE. The Board shall review
the request and shall vote to approve or disapprove the request by
resolution. The Board may establish conditions, including, but not
limited, to financial conditions, under which the city or county may
become a member of CCCE. The Board shall notify the existing members
of CCCE of that request and the date the request will be on the Board’s
meeting agenda for action. The date set for Board action shall be at least
forty-five (45) days after the date the notice is mailed to the members. If
the request is approved by a two-thirds vote of the entire Board, then the
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city or county shall become a member of CCCE under the terms and
conditions set forth by the Board and upon the adoption of an ordinance
required by Public Utilities Code, section 366.2(c)(12) and the approval
and execution of this Agreement by the city or county.
2.6 Powers. CCCE shall have all powers common to the Parties and such additional
powers accorded to it by law. CCCE is authorized, in its own name, to exercise
all powers and do all acts necessary and proper to carry out the provisions of this
Agreement and fulfill its purposes, including, but not limited to, each of the
following powers, subject to the voting requirements set forth in Section 3.8:
2.6.1 Make and enter into contracts;
2.6.2 Employ agents and employees, including but not limited to an Executive
Officer and General Counsel;
2.6.3 Acquire property by eminent domain, or otherwise, except as limited
under Section 6508 of the Act, and to hold or dispose of any property;
2.6.4 Lease any property;
2.6.5 Sue and be sued in its own name;
2.6.6 Incur debts, liabilities, and obligations, including but not limited to loans
from private lending sources pursuant to its temporary borrowing powers
such as Government Code, section 53850 et seq. or any legal authority
under the Act or other laws;
2.6.7 Form other entities if necessary, to carry out energy supply and energy
conservation programs or conduct other programs or activities within the
powers of CCCE;
2.6.8 Issue revenue bonds and other forms of indebtedness;
2.6.9 Apply for, accept, and receive all licenses, permits, grants, loans or other
assistance from any federal, state, or local public agency;
2.6.10 Submit documentation and notices, register, and comply with orders,
tariffs and agreements for the establishment and implementation of the
CCE Program and other energy programs;
2.6.11 Adopt policies, rules and regulations governing the operation of CCCE;
2.6.12 Make and enter into service agreements relating to the provision of
services necessary to plan, implement, operate and administer the CCE
Program and other energy programs;
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2.6.13 Designate another entity authorized to be a community choice aggregator
to act as the community choice energy aggregator on behalf of CCCE.
2.7 Limitation on Powers. As required by Government Code, section 6509, the
power of CCCE is subject to the restrictions upon the manner of exercising power
possessed by City of San Luis Obispo.
2.8 Compliance with Local Zoning and Building Laws. Notwithstanding any other
provisions of this Agreement or state law, any facilities, buildings or structures
located, constructed or caused to be constructed by CCCE within the territory of
CCCE shall comply with the General Plan, zoning and building laws of the local
jurisdiction within which the facilities are constructed .
ARTICLE 3.
GOVERNANCE AND INTERNAL ORGANIZATION
3.1 Board of Directors. CCCE shall be governed by a legislative body known as the a
Board of Directors. The initial Board shall consist of two Directors appointed by
the governing body of each of the initial Parties. For example, if the initial Parties
are the City of San Luis Obispo and the City of Morro Bay, the Board shall
consist of four Directors with two Directors appointed by the City Council of San
Luis Obispo and two Directors appointed by the City Council of Morro Bay.
Each Director shall serve at the pleasure of the governing body of the Party whom
appointed such Director, and may be removed as Director by such governing
body at any time. If at any time a vacancy occurs on the Board, then a
replacement shall be appointed to fill the position of the previous Director within
45 days after the date that position becomes vacant. Directors must be members
of the City Council or Board of Supervisors of a Party to this Agreement. Each
Party shall appoint an alternate(s) to serve in the absence of its Director(s).
Alternates may be members of the City Council or Board of Supervisors of the
Party or a staff member of the Party.
If additional cities or counties join CCCE, as provided in Section 2.5.2, each city
or county that becomes a member of CCCE shall be entitled to two Directors who
shall be appointed as set forth above. When the fifth member joins CCCE, the
number of Directors per Party shall be reduced to one Director per Party; and each
Party shall determine which Director shall continue as that Party’s representative
on the Board.
3.2 Quorum. A majority of the appointed Directors shall constitute a quorum, except
that less than a quorum may adjourn from time to time in accordance with law.
3.3 Powers and Functions of the Board. The Board shall exercise the general
governance and legislative powers of CCCE, consistent with this Agreement and
applicable law. The Board shall provide general policy guidance on the CCE
Program and other energy programs. This Agreement delegates contracting
powers and administrative powers and oversight over the operations and activities
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of SLO to the Operations Board as further described in Section 3.5. Board of
Director approval shall be required for any of the following actions in addition to
any other actions specified by this Agreement or required by law:
3.3.1 The issuance of bonds or any other financing even if program revenues are
expected to pay for such financing.
3.3.2 The appointment or termination of the Executive Officer and General
Counsel.
3.3.3 The appointment or removal of officers described in Section 3.10.
3.3.4 Any decision to provide retirement or post-retirement benefits.
3.3.5 The adoption of the annual budget.
3.3.6 The adoption of an ordinance.
3.3.7 The initiation or resolution of claims and litigation where CCCE will be
the plaintiff, petitioner, cross complainant or cross petitioner, or
intervenor; provided, however, that the Executive Officer or General
Counsel, on behalf of CCCE, may intervene in, become a party to, or file
comments with respect to any proceeding pending at the California Public
Utilities Commission, the Federal Energy Regulatory Commission, or any
other administrative agency, without approval of the Board as long as such
action is consistent with any adopted Board policies.
3.3.8 The adoption of the Implementation Plan.
3.3.9 The approval of major capital expenditures, excluding power purchases, as
defined by Board resolution.
3.3.10 The setting of rates for power sold by CCCE and the setting of charges for
any other category of service provided by CCCE.
3.3.11 The approval of new members pursuant to Section 2.5.2.
3.3.12 Termination of the CCE Program.
3.4 Executive Officer. The Board of Directors shall appoint an Executive Officer for
CCCE, who shall be responsible for the day-to-day operation and management of
CCCE and the CCE Program. The Executive Officer may be retained under
contract with CCCE, be an employee of CCCE, or be an employee of one of the
Parties. The Executive Officer shall report directly to the Board of Directors and
serve as staff to CCCE. The Executive Officer also shall report to and work with
the Operations Board on those matters within the jurisdiction of the Operations
Board. Except as otherwise set forth in this Agreement, the Executive Officer
may exercise all powers of CCCE, including the power to hire, discipline and
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terminate employees, as well as the power to approve any agreement if the total
amount payable under the agreement is less than $100,000 in any fiscal year, or
such higher amount as established by the Board from time to time, by resolution
of the Board, except the powers specifically set forth in Section 3.3 or those
powers, which by law, must be exercised by the Board of Directors. The
Executive Officer shall be responsible for coordinating the actions of the Board of
Directors and the Operations Board. The Executive Officer shall serve at the
pleasure of the Board of Directors.
3.5 Operations Board. The Operations Board shall consist of the City Manager of
each city Party and the Chief Administrative Office or Chief Executive Officer of
each county Party. Each Party also may appoint an alternate Director to the
Operations Board who shall be a management level employee of the Party. The
Operations Board shall provide direction to the Chief Executive Officer on the
day-to-day operations of CCCE and shall have the authority to approve and take
action on the following matters:
3.5.1 The approval of all contracts and contract amendments except as
provided by Section 3.3.9, including, but not limited to, power purchase
agreements.
3.5.2 The adoption of personnel rules and regulations.
3.5.3 The adoption of administrative rules and regulations except as
provided otherwise by this Agreement.
3.5.4 Any matters referred to the Operations Board by the Board of
Directors for study, review, recommendation or final action.
3.6 Commissions, Boards, and Committees. The Board of Directors may establish
commissions, boards or committees, including, but not limited to, a standing
executive committee and community advisory committee, as the Board deems
appropriate, to advise and assist the Board in carrying out its authority and
functions under this Agreement and may delegate authority to such commission,
board or committee as set forth in a Board resolution. Such delegation may be
modified, amended or revoked at any time as the Board may deem appropriate.
The Board may establish rules, regulations, policies, bylaws or procedures to
govern any such commissions, boards, or committees, and shall determine
whether members shall be compensated or entitled to reimbursement for
expenses. Any commission, board or committee established by the Board of
Directors shall comply with the applicable requirements of the Ralph M. Brown
Act.
3.7 Director Compensation. Directors shall serve without compensation from CCCE.
However, Directors may be compensated by their respective appointing
authorities. The Board, however, may adopt by resolution a policy relating to the
reimbursement by CCCE of expenses incurred by Directors.
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3.8 Board Voting. Except when a supermajority vote is required by Section 3.8.4,
action by the Board of Directors or the Operations Board shall require a majority
vote of the total number of Directors of the entire Board; provided, however, that
so long as CCCE consists of three or less members, all actions of the Board shall
require the affirmative vote of at least one Director appointed by each Party. In
addition, as described below in Section 3.8.3, upon request of two Directors, each
from a different Party, a weighted vote by shares also will be conducted. When
such a request is made, an action must be approved by both a majority vote of
Directors present and a majority of the voting shares of the entire Board. No
action may be approved solely by a vote by shares. The voting shares of
Directors and the requirements for voting by shares shall be as follows:
3.8.1 Voting Shares.
Each Party shall have a voting share as determined by the following formula:
(Annual Energy Use/Total Annual Energy) multiplied by 100, where
(a) “Annual Energy Use” means, (i) with respect to the first two years
following the Effective Date, the annual electricity usage,
expressed in kilowatt hours (“kWh”), within the Party’s respective
jurisdiction and (ii) with respect to the period after the second
anniversary of the Effective Date, the annual electricity usage
during the prior Fiscal Year, expressed in kWh, of accounts within
a Party’s respective jurisdiction that are served by CCCE; and
(b) “Total Annual Energy” means the sum of all Parties’ Annual
Energy Use. The initial values for Annual Energy Use will be
designated in Exhibit C, and shall be adjusted annually as soon as
reasonably practicable after January 1, but no later than March 1 of
each year. Those adjustments shall be approved by the Board of
Directors.
(c) The combined voting share of all Directors representing a Party
shall be based upon the annual electricity usage within the Party’s
jurisdiction; the combined voting share of a county shall be based
upon the annual electricity usage within the unincorporated area of
the county.
For the purposes of weighted voting by shares, if a Party has more than one
Director on the Board of Directors present and voting, then the voting shares
allocated to the entity shall be equally divided amongst its Directors that are
present and voting.
3.8.2 Exhibit Showing Voting Shares. The initial voting shares will be set forth
in Exhibit D. Exhibit D shall be revised no less than annually, as
necessary to account for changes in the number of Parties and changes in
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the Parties’ Annual Energy Use. Adjustments to Exhibit D shall be
approved by the Board of Directors.
3.8.3 Option for Approval by Voting Shares. Any two Directors, each
appointed from a different Party, present at a meeting may demand
approval of any matter related to the CCE Program shall be determined on
the basis of both voting shares and by the affirmative vote of a majority of
Directors present at the meeting. If two Directors, each appointed from a
different Party, make such a demand with respect to approval of any such
matter, then approval of such matter shall require the affirmative vote of a
majority of Directors present at the meeting and the affirmative vote of
Directors having a majority of the voting shares of the entire Boardt. In
the event any one Party has a voting share that equals or exceeds that
which is necessary to disapprove the matter being voted on by the Board,
at least one other Party shall be required to vote in the negative in order to
disapprove such matter.
3.8.4 Special Voting Requirements for Certain Matters.
(a) Two-Thirds and Weighted Voting Approval Requirements
Relating to Specified Actions. Action of the Board on the matters
set forth in Section 2.5.2 (approval of new members), 6.2
(involuntary termination of a Party), or Section 7.4 (amendment of
this Agreement) or the approval of any bonds, loans or other
indebtedness shall require the affirmative vote of at least two-
thirds of the Directors of the entire Board. Notwithstanding the
foregoing, any two Directors present at the meeting, each
appointed from a different Party, may demand that the vote be
determined on the basis of both voting shares and by the
affirmative vote of Directors, and if any two Directors, each
appointed from a different Party, makes such a demand, then
approval shall require the affirmative vote of both at least two-
thirds of the Directors on the entire Board and the affirmative vote
of Directors having at least two-thirds of the voting shares of the
entire Board, as determined by Section 3.8; but, Directors from at
least two Parties must vote against a matter for the vote to fail. On
votes to involuntarily terminate a Party under Section 6.2, the
Director(s) for the Party subject to involuntary termination may not
vote, and the number of Directors constituting two-thirds of all
Directors, and the weighted vote of each Party shall be recalculated
as if the Party subject to possible termination were not a Party.
(b) Seventy-Five Percent Special Voting Requirement for Eminent
Domain .
(i) A decision to exercise the power of eminent domain on
behalf of CCCE to acquire any property interest other than
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an easement, right-of-way, or temporary construction
easement shall require a vote of at least 75% of all the
members of the Board of Directors.
(ii) Notwithstanding the foregoing, any two Directors present
at the meeting, each appointed by a different Party, may
demand a vote under subsection (i) be determined on the
basis of voting shares and by the affirmative vote of
Directors, and if any two Directors, each appointed from a
different Party, makes such a demand, then approval shall
require both the affirmative vote of at least 75% of the
entire Directors on the Board and the affirmative vote of
Directors having at least 75% of the voting shares of the
entire Board, but Directors from at least two Parties must
vote against a matter for the vote to fail.
3.9 Regular and Special Meetings of the Boards. The Board of Directors and
Operations Board shall hold the number of regular meetings provided by
resolution of each Board. The date, hour and place of each regular meeting shall
be fixed by resolution of each Board. Regular meetings may be adjourned to
another meeting time. Special and emergency meetings of the Boards may be
called in accordance with the provisions of California Government Code,
sections 54956 and 54956.5. Directors may participate in meetings
telephonically, with full voting rights, only to the extent permitted by law. All
meetings shall be conducted in accordance with the provisions of the Ralph M.
Brown Act (California Government Code, sections 54950 et seq.).
3.10 Selection of Board Officers.
3.10.1 Chair and Vice Chair. The Directors shall select, from among themselves,
a Chair, who shall be the presiding officer of all Board meetings, and a
Vice Chair, who shall serve in the absence of the Chair. The Chair and
Vice Chair shall each serve for a one-year term at the pleasure of the
Board. There shall be no limit on the number of terms held by either the
Chair or Vice Chair. The office of either the Chair or Vice Chair shall be
declared vacant and a new selection shall be made if:
(a) the person serving dies, resigns, or the Party the person represents
removes the person as its representative on the Board, or
(b) the Party that he or she represents withdraws from CCCE pursuant
to the provisions of this Agreement.
3.10.2 Secretary. The Board of Directors shall appoint a Secretary who shall be
responsible for keeping the minutes of all meetings of the Board and all
other official records of CCCE.
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3.10.3 Treasurer and Auditor. The Board of Directors shall appoint a Treasurer
who shall function as the combined offices of Treasurer and Auditor
pursuant to Government Code section 6505.6 and shall strictly comply
with the statutes related to the duties and responsibilities specified in
Section 6505.5 of the Act. The Treasurer for CCCE shall be the
depository and have custody of all money of CCCE from whatever source
and shall draw all warrants and pay demands against CCCE as approved
by the Board. The Treasurer shall cause an independent audit(s) of the
finances of CCCE to be made by a certified public accountant, or public
accountant, in compliance with Section 6505 of the Act. The Treasurer
shall report directly to the Board of Directors and shall comply with the
requirements of treasurers of incorporated municipalities. The Board may
transfer the responsibilities of Treasurer to any person or entity as the law
may provide at the time. The duties and obligations of the Treasurer are
further specified in Article 5. The Treasurer shall serve at the pleasure of
the Board of Directors.
3.11 Administrative Services Provider. The Operations Board may appoint one or
more administrative services providers to serve as CCCE’s agent for planning,
implementing, operating and administering the CCE Program, and any other
program approved by the Board, in accordance with the provisions of an
Administrative Services Agreement. The appointed administrative services
provider may be one of the Parties. One or more of the Parties may agree to
provide all or a portion of the services in the manner set forth in an
Administrative Services Agreement. Employees of the Parties utilized to perform
such services shall remain employees of the Parties and subject to the employing
Party’s control and supervision. An Administrative Services Agreement shall set
forth the terms and conditions by which the appointed administrative services
provider shall perform or cause to be performed all or enumerated tasks necessary
for planning, implementing, operating and administering the CCE Program and
other approved programs. The Administrative Services Agreement shall set forth
the term of this Agreement, the services to be provided, and the circumstances
under which the Administrative Services Agreement may be terminated by
CCCE. This section shall not in any way be construed to limit the discretion of
CCCE to hire its own employees to administer the CCE Program or any other
program.
ARTICLE 4.
IMPLEMENTATION ACTION AND CCCE DOCUMENTS
4.1 Preliminary Implementation of the CCE Program.
4.1.1 Enabling ordinance. To be eligible to participate in the CCE Program,
each Party must adopt an ordinance in accordance with Public Utilities
Code section 366.2(c)(12) for the purpose of specifying the Party intends
to implement a CCE program by and through its participation in CCCE.
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4.1.2 Implementation Plan. CCCE shall cause to be prepared an
Implementation Plan meeting the requirements of Public Utilities Code,
section 366.2 and any applicable Public Utilities Commission regulations,
as soon after the Effective Date as reasonably practicable. The
Implementation Plan shall not be filed with the Public Utilities
Commission until it is approved by the Board of Directors.
4.1.3 Integrated Resource Plan. CCCE shall cause to be prepared an Integrated
Resource Plan in accordance with CPUC regulations that will ensure the
long-term development and administration of a variety of power resources
in compliance with the State Renewable Portfolio Standard and other
statutory and regulatory requirements of the State of California.
4.1.4 Termination of CCE Program. Nothing contained in this Article or this
Agreement shall be construed to limit the discretion of CCCE to terminate
the implementation or operation of the CCE Program at any time in
accordance with any applicable requirements of state law.
4.2 CCCE Documents. The Parties acknowledge and agree the affairs of CCCE will
be implemented through various documents duly adopted by the Board of
Directors or Operations Board through Board resolution or minute action;
provided, that any Operations Board actions must be consistent with the polices
established by the Board of Directors. The Parties agree to abide by and comply
with the terms and conditions of all such documents that may be adopted by the
Board, subject to the Parties’ right to withdraw from CCCE as described in
Article 6.
ARTICLE 5.
FINANCIAL PROVISIONS
5.1 Fiscal Year. CCCE’s fiscal year shall be 12 months commencing July 1 and
ending June 30. The fiscal year may be changed by resolution of the Board of
Directors.
5.2 Depository.
5.2.1 All funds of CCCE shall be held in separate accounts in the name of
CCCE and not commingled with funds of any Party or any other person or
entity.
5.2.2 All funds of CCCE shall be strictly and separately accounted for, and
regular reports shall be rendered of all receipts and disbursements, at least
quarterly during the fiscal year. The books and records of CCCE shall be
open to inspection by the Parties at all reasonable times. The Board of
Directors shall contract with a certified public accountant or public
accountant to make an annual audit of the accounts and records of CCCE,
which shall be conducted in accordance with the requirements of Section
6505 of the Act.
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5.2.3 All expenditures shall be made in accordance with the approved budget
and upon the approval of any officer so authorized by the Board in
accordance with its policies, rules and regulations. The Treasurer shall
draw checks or warrants or make payments by other means for claims or
disbursements not within an applicable budget only upon the prior
approval of the Board.
5.3 Budget and Recovery of Costs.
5.3.1 Budget. The initial budget shall be approved by the Board of Directors.
The Board may revise the budget from time to time as may be reasonably
necessary to address contingencies and unexpected expenses. All
subsequent budgets of CCCE shall be approved by the Board of Directors.
5.3.2 Funding of Initial Costs. In the event the CCE Program becomes
operational, any Initial Costs paid by the Parties shall be included in the
customer charges for electric services as provided by Section 5.3.3 to the
extent recovery of such costs is permitted by law, and the Parties shall be
reimbursed from the payment of such charges by customers of CCCE.
Prior to such reimbursement, the Parties shall provide such documentation
of costs paid as the Board may request. CCCE may establish a reasonable
time period over which such costs are recovered. In the event the CCE
Program does not become operational, the Parties who had contributed
Initial Costs shall not be entitled to any reimbursement from CCCE or any
other Party. If any Party assists in funding initial costs, then that Party
shall also be entitled to reimbursement pursuant to this section.
5.3.3 CCE Program Costs. The Parties desire all costs incurred by CCCE that
are directly or indirectly attributable to the provision of electric,
conservation, efficiency, incentives, financing, or other services provided
under the CCE Program, including, but not limited to, the establishment
and maintenance of various reserves and performance funds and
administrative, accounting, legal, consulting, and other similar costs, shall
be recovered through charges to CCE customers receiving such electric
services, or from revenues from grants or other third-party sources.
5.3.4 Additional Contributions and Advances. Pursuant to Government Code
section 6504, the Parties may, in their sole discretion, make financial
contributions, loans or advances to CCCE for the purposes of CCCE set
forth in this Agreement. The repayment of such contributions, loans or
advances will be on the written terms agreed to by the Party making the
contribution, loan or advance to the CCCE.
ARTICLE 6.
WITHDRAWAL AND TERMINATION
6.1 Withdrawal Provisions.
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6.1.1 General Right to Withdraw. A Party may withdraw its membership in
CCCE, effective as of the beginning of CCCE’s fiscal year, by giving no
less than 6-months’ advance written notice of its election to do so, which
notice shall be given to CCCE and each Party. Withdrawal of a Party
shall require an affirmative vote of the Party’s governing body.
6.1.2 Right to Withdraw After Amendment. Notwithstanding Section 6.1.1, a
Party may withdraw its membership in CCCE following an amendment to
this Agreement adopted by the Board of Directors which the Party’s
Director(s) voted against; provided, that such notice is given in writing
within thirty (30) days following the date of the vote. Withdrawal of a
Party under this section shall require an affirmative vote of the Party’s
governing body and shall not be subject to the six-month advance notice
provided in Section 6.1.1. In the event of such withdrawal, the Party shall
be subject to the provisions of Section 6.3.
6.1.3 The Right to Withdraw Prior to Program Launch. After receiving bids
from power suppliers before the CCE Program launch, CCCE shall
provide to the Parties a report from the consultant retained by CCCE that
compares the total estimated electrical rates that CCCE will be charging to
customers as well as the estimated greenhouse gas emissions rate and the
amount of estimated renewable energy used with that of the incumbent
utility. If the report finds that any one of the following conditions exists,
then a Party may immediately withdraw its membership in CCCE without
any financial obligation, as long as the Party provides written notice of its
intent to withdraw to CCCE Board of Directors no more than fifteen
(15) days after receiving the report. Those conditions include: 1) the
CCCE is unable to provide total electrical rates that are equal to or less
than the incumbent utility at time of program launch, 2) the CCCE is
unable to provide electricity that has equal or lower greenhouse gas
emissions than the incumbent utility, and 3) the CCCE is not able to
match or exceed the incumbent utility’s renewable energy performance
pursuant to the State Renewable Portfolio Standard. Any Party that
withdraws from CCCE pursuant to this section shall not be entitled to any
refund of the Initial Costs it has paid to CCCE prior to the date of
withdrawal unless CCCE is later terminated pursuant to Section 6.4. In
such event, any Initial Costs not expended by CCCE shall be returned to
all Parties, including any Party that has withdrawn pursuant to this section,
in proportion to the contribution that each made. Notwithstanding
anything to the contrary in this Agreement, any Party that withdraws
pursuant to this section shall not be responsible for any liabilities or
obligations of CCCE after the date of withdrawal, including without
limitation any liability arising from power purchase agreements entered
into by CCCE.
6.1.4 Withdrawal Documents. Except as provided by Section 6.1.3, a Party that
withdraws its participation in the CCE Program may be subject to certain
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continuing financial obligations, as described in Section 6.3. Each
withdrawing Party and CCCE shall execute and deliver all further
instruments and documents, and take any further action that may be
reasonably necessary, as determined by the Board, to effectuate the
orderly withdrawal of such Party from participation in the CCE Program.
6.2 Involuntary Termination of a Party. Participation of a Party in the CCE Program
may be terminated for material non-compliance with provisions of this Agreement
or any other agreement relating to the Party’s participation in the CCE Program
upon a vote of Board members as provided in Section 3.8.4(a). Prior to any vote
to terminate participation with respect to a Party, written notice of the proposed
termination and the reason(s) for such termination shall be delivered to the Party
whose termination is proposed at least thirty (30) days prior to the regular Board
meeting at which such matter shall first be discussed as an agenda item. The
written notice of proposed termination shall specify the particular provisions of
this Agreement or other agreement that the Party has allegedly violated. The
Party subject to possible termination shall have the opportunity at the next regular
Board meeting to respond to any reasons and allegations that may be cited as a
basis for termination prior to a vote regarding termination. A Party that has had
its participation in the CCE Program terminated shall be subject to in the
provisions of Section 6.3.
6.3 Continuing Financial Obligations; Refund. Except as provided by Section 6.1.3,
upon a withdrawal or involuntary termination of a Party, the Party shall remain
responsible for any claims, demands, damages, or other financial obligations
arising from the Party membership or participation in the CCE Program through
the date of its withdrawal or involuntary termination, subject to the provisions of
Section 2.2. Thereafter, notwithstanding Section 2.2, the withdrawing or
terminated Party shall be responsible and liable for any damages, losses or costs
incurred by CCCE resulting from the Party’s withdrawal including, but are not
limited to, losses from the resale of power contracted for by CCCE to serve the
Party’s load. With respect to such financial obligations, upon notice by a Party
that it wishes to withdraw from the CCE Program, CCCE shall notify the Party of
the minimum waiting period under which the Party would have no costs for
withdrawal if the Party agrees to stay in the CCE Program for such period. The
waiting period will be set to the minimum duration required so no costs are
transferred to remaining ratepayers. If the Party elects to withdraw before the end
of the minimum waiting period, then the charge for withdrawal shall be set at a
dollar amount that would offset the estimated losses to CCCE and costs to the
remaining ratepayers, and may not include punitive charges that exceed actual
costs. For the purposes of this section, actual costs shall include not only any
financial losses or increased operating costs incurred by CCCE, but also all staff
time and consultant costs related to the withdrawal. CCCE may withhold funds
otherwise owing to the Party or may require the Party to deposit sufficient funds
with CCCE, as reasonably determined by and approved by the Board of Directors,
to cover the Party’s financial obligations for the costs described above. Any
amount of the Party’s funds held on deposit with CCCE above that which is
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required to pay any financial obligations shall be returned to the Party. If there is
a disagreement related to the charge(s) for withdrawal or exiting, then the Parties
shall attempt to settle the amount through mediation or other dispute resolution
process as authorized by Section 7.1. If the dispute is not resolved, then the
Parties may agree in writing to proceed to arbitration, or any party may seek
judicial review.
6.4 Mutual Termination. This Agreement may be terminated by mutual agreement of
all the Parties; provided, however, the foregoing shall not be construed as limiting
the rights of a Party to withdraw its participation in the CCE Program, as
described in Section 6.1.
6.5 Disposition of Property upon Termination of CCCE. Upon termination of this
Agreement, any surplus money or assets in possession of CCCE for use under this
Agreement, after payment of all liabilities, costs, expenses, and charges incurred
under this Agreement and under any program documents, shall be returned to the
then-existing Parties in proportion to the contributions made by each.
ARTICLE 7.
MISCELLANEOUS PROVISIONS
7.1 Dispute Resolution. The Parties and CCCE shall make reasonable efforts to
informally settle all disputes arising out of or in connection with this Agreement.
Before exercising any remedy provided by law, a Party or Parties and CCCE shall
engage in nonbinding mediation or arbitration in the manner agreed upon by the
Party or Parties and CCCE. In the event nonbinding mediation or arbitration is
not commenced or does not result in the settlement of a dispute within 120 days
after the demand for nonbinding mediation or arbitration is made, the Party or
Parties and CCCE may pursue any remedy provided by law.
7.2 Liability of Directors, Officers, and Employees. The Directors, officers, and
employees of CCCE shall use ordinary care and reasonable diligence in the
exercise of their powers and in the performance of their duties pursuant to this
Agreement. No current or former Director, officer, or employee will be
responsible for any act or omission by another Director, officer, or employee.
CCCE shall defend, indemnify and hold harmless the individual current and
former Directors, officers, and employees for any acts or omissions in the scope
of their employment or duties in the manner provided by Government Code
section 995 et seq. Nothing in this section shall be construed to limit the defenses
and immunities available under the law, to the Parties, CCCE, or its Directors,
officers, or employees.
7.3 Indemnification of Parties. CCCE shall acquire such insurance coverage as is
necessary to protect the interests of CCCE, the Parties, and the public. CCCE
shall defend, indemnify, and hold harmless the Parties and each of their respective
Council and Board of Supervisors Members, officers, officials, agents and
employees, from any and all claims, losses, damages, costs, injuries, and
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liabilities of every kind arising directly or indirectly from the conduct, activities,
operations, acts, and omissions of CCCE under this Agreement.
7.4 Amendment of this Agreement. This Agreement may not be amended except by a
written amendment approved by the Board of Directors as provided in
Section 3.8.4(a). CCCE shall provide written notice to all Parties of amendments
to this Agreement, including the effective date of such amendments, at least 30
days prior to the date upon which the Board votes on such amendments.
7.5 Assignment. Except as otherwise expressly provided in this Agreement, the
rights and duties of the Parties may not be assigned or delegated without the
advance written consent of all of the other Parties, and any attempt to assign or
delegate such rights or duties in contravention of this Section 7.5 shall be null and
void. This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of the Parties. This Section 7.5 does not prohibit a Party
from entering into an independent agreement with another agency, person, or
entity regarding the financing of that Party’s contributions to CCCE, or the
disposition of proceeds which that Party receives under this Agreement, so long
as such independent agreement does not affect, or purport to affect, the rights and
duties of CCCE or the Parties under this Agreement.
7.6 Severability. If one or more clauses, sentences, paragraphs or provisions of this
Agreement shall be held to be unlawful, invalid or unenforceable, then it is hereby
agreed by the Parties, the remainder of this Agreement shall not be affected
thereby. Such clauses, sentences, paragraphs or provision shall be deemed
reformed so as to be lawful, valid and enforced to the maximum extent possible.
7.7 Further Assurances. Each Party agrees to execute and deliver all further
instruments and documents, and take any further action that may be reasonably
necessary, to effectuate the purposes and intent of this Agreement.
7.8 Execution by Counterparts. This Agreement may be executed in any number of
counterparts, and upon execution by all Parties, each executed counterpart shall
have the same force and effect as an original instrument and as if all Parties had
signed the same instrument. Any signature page of this Agreement may be
detached from any counterpart of this Agreement without impairing the legal
effect of any signatures thereon, and may be attached to another counterpart of
this Agreement identical in form hereto but having attached to it one or more
signature pages.
7.9 Parties to be Served Notice. Any notice authorized or required to be given
pursuant to this Agreement shall be validly given if served in writing either
personally, by deposit in the United States mail, first class postage prepaid with
return receipt requested, or by a recognized courier service. Notices given
(a) personally or by courier service shall be conclusively deemed received at the
time of delivery and receipt and (b) by mail shall be conclusively deemed given
48 hours after the deposit thereof (excluding Saturdays, Sundays and holidays) if
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the sender receives the return receipt. All notices shall be addressed to the office
of the clerk or secretary of CCCE or Party, as the case may be, or such other
person designated in writing by CCCE or Party. Notices given to one Party shall
be copied to all other Parties. Notices given to CCCE shall be copied to all
Parties.
[Signatures on next page]
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01181.0001/491349.1
CITY OF SAN LUIS OBISPO, a
California municipal corporation
By: ______________________________
Heidi Harmon, Mayor
ATTEST
By: ____________________________
Teresa Purrington, City Clerk
APPROVED AS TO FORM:
By: ____________________________
Christine Dietrick, City Attorney
CITY OF MORRO BAY, a California
municipal corporation
By: ____________________________
Jamie L. Irons, Mayor
ATTEST
By: _____________________________
Dana Swanson, City Clerk
APPROVED AS TO FORM
By: _____________________________
Joseph W. Pannone, City Attorney
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01181.0001/491349.1
EXHIBIT A
DEFINITIONS
“Act” means the Joint Exercise of Powers Act of the State of California (Government Code
section 6500 et seq.)
“Administrative Services Agreement” means an agreement or agreements entered into after the
Effective Date by CCCE with an entity that will perform tasks necessary for planning,
implementing, operating and/or administering the CCE Program, or any portion of the CCE
Program or any other energy programs adopted by CCCE.
“Agreement” means this Joint Powers Agreement.
“Annual Energy Use” has the meaning given in Section 3.7.1.
“Board” means the Board of Directors of CCCE unless the context indicates that the use of the
word “Board” also is intended to include the Operations Board.
“CCE” or “Community Choice Energy” or “CCA” or “Community Choice Aggregation” means
an electric service option available to cities and counties pursuant to Public Utilities Code
Section 366.2.
“CCE Program” or “CCA Program” means CCCE’s program relating to CCE that is principally
described in Sections 2.3, 2.4, and 4.1.
“Director” means a member of the Board of Directors or the Operations Board representing a
Party.
“Effective Date” means the date on which this Agreement shall become effective and CCCE
shall exist as a separate public agency, as described in Section 2.1.
“Implementation Plan” means the plan generally described in Section 4.1.2 of this Agreement
that is required under Public Utilities Code section 366.2 to be filed with the California Public
Utilities Commission for the purpose of describing a proposed CCE Program.
“Initial Costs” means all costs incurred by Parties and/or CCCE relating to the establishment and
initial operation of CCCE, such as the hiring of an Executive Officer and any administrative
staff, and any required accounting, administrative, technical, or legal services in support of
CCCE’s initial activities or in support of the negotiation, preparation, and approval of one or
more Administrative Services Agreements, Power Purchase Agreements, or financing
transactions.
Operations Board means the Board established by Section 3.5.
“Parties” or “Members” means, collectively, the City of San Luis Obispo and the City of Morro
Bay and any other city or county which timely executes this Agreement pursuant to Section 2.5.1
or is added to this Agreement pursuant to Section 2.5.2 and is listed in Exhibit B.
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“Party,” “Member” or “Member Agency” means a signatory to this Agreement.
“Total Annual Energy” has the meaning given in Section 3.7.1.
“CCCE Document(s)” means document(s) duly adopted by the Board by resolution or motion
implementing the powers, functions, and activities of CCCE, including but not limited to the
annual budget, rules, regulations, plans and policies.
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EXHIBIT B
LIST OF PARTIES
Page 1
Exhibit C
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01181.0001/491349.1
EXHIBIT C
ANNUAL ENERGY USE/VOTING SHARES
City of San Luis Obispo 237,472 MWh
City of Morro Bay 45,882 MWh
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Exhibit D
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01181.0001/491349.1
EXHIBIT D
VOTING SHARES
City of San Luis Obispo 84
City of Morro Bay 16
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Exhibit E
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01181.0001/491349.1
EXHIBIT E
SIGNATURE PAGES