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Home My WebLink AboutSOUTHERN CALIFORNIA EDISON 2 -2002 , 14 02 0~:2S~ Public ~c~ks --F,b-14-Z00Z 01 :Sh. From-Se! ~F I...uren 714S473345 SZS 10Z ISZZ T-164 POOZ/OOI F-46Z c " / " EI EDiSON" "l!J)1!;i)~7J;~~""L'<~""'" February 14, 2002 ~\) - '\ - l (J t. {\ City of Santa Ana 220 S. Daisy Avenue, Building A Santa Ana, CA 92703 Ld5 E. Bitt.,..,.. lJlfl:\,:I.(ll' \'(p lll,,,,,'td,~,t- Attention: Tholll Coughran Re: Ppwer Purchase A(rl!Amp.nt Between Southern C~lifornia Edison Comnanv and City of Santa Ana. QFID 4054. Dear Mr. Coughran: In early 200 1, Southern California Edison Company ("Edison") suspended payments to all Qualifying Facilities ("QFs"), including the project referenced above ("Sellex"), due to, among other things, liquidity issues caused by the California energy crisis. The suspension eventually encompassed payments for energy and capacity delivered by Seller and other QFs to Edison during the period November 1,2000 through and including March 26, 2001 (the "Suspended Payments"). Seller executed an agreement with Edison wbich provided for payment of Seller's portion of the Suspended Payments upon the occurrence of certain conditions, including- the enactment of "Restorative Legislation" by the California Legislature and the occurrence of "Commission Approval" as each of those terms is defined in the agreement. Such agreement terminated by its own terms because Commission Approval was not obtained within 120 days of the effective date of the agreement, Furthermore, the California Legislature has not enacted Restorative Legislation and is unlikely to do so. AI; you may be aware, Edison has entered into agreements and amendments with numerous other QFs providing for payment of Suspend.ed Payments, pIllS interest, upon the satisfaction of certain specified conditions which, pursuant to certain amendments agreed to by the parties, are no longer dependent on the enactment of Restorative Legislation by the California Legislature. Currently, Edison anticipates that these conditions may be satisfied in time to permit payment in full under these settlement agreements during the first quarter of 2002. Although Restorative Legislation bas not been enacted, and the agreement referred to above has, in any event, terminated, Edison nevertheless proposes to p.2 N~2002-011 .~ Fep 14 02 OS:26~ Public Wcrks F.b-IA-/OOZ 01 :S9p, Fr~,-SCE iF Rmurm 7146473345 m 10/ 9m T.16~ P 003/007 H,/ p.3 NIr. Tholll Coughran February 14,2002 Page 2 pay to Seller its portion of the Suspended Payments ("Seller's Suspended Payment Amount"), including accrued interest thereon, at the same time Edison makes such payments to QFs that Me parties to amended settlement agreements, provided that Seller releases EdisOll from any claims concerning the payment suspension. Additi,maUy, consistent with the terms accepted by other QFs, , the release includes a waiver of the semi-Illonthly payments initiated by the California Public Utilities Commission in Decision No. 01-03.067,which payment scheme has proven to be unduly burdensome to implement. If Seller accepts the terms of this proposal, Seller's Suspend.ed Payment Amount would be calculated in the manner set forth below. This letter is intended only to identify what Edison will require if Seller desires to receiue Seller's Suspended Payment Amount at the same time that other QFs that are parties to amended 6ett/ement agreem.ents with Edison receive Suspended Paymenls. Thi6 letter is not a commitment or undertaking by Edison that Edison will ""ok.. such a payment to Seller. As such, this letter shall not be construed as an admission by Edison. that any a11Ulunt is owed by Edi60n to Seller or as a representation that all or a portion of Seller's Suspen.ded Payment Amount will be paid to Seller by a particular date or at all. Enclosure A is an agreement by Seller to release Edison from claims and potential claims concerning the payment suspension if Edison pays Seller's Suspended Payment Amount by no later than May 31, 2002. The release also contains a waiver by Seller of the right to receive semi-monthly payments for energy and capacity under D.Ol.03-067 or otherwise. If payment is not made by May 31, 2002. the release will become null and void and its provi5ions will not become effective. If payment is made by that date, the release will go into effect and monthly payment calculation and processing under the power purchase agreement will resume (unless Seller's particular agreement provides otherwise). In order for Edison to pay Seller's Suspended Payment Amount to Seller at the same time that Edison pays the Suspended Payments to other QFs, Edison must receive Enclosure A, executed by Seller, no later than 5:00 p.m. Pacific Time February 19, 2002. Exhibit I to Enclosure A shows the amount of Seller's Sllspended Payment Amount that would be paid as of March 1, 2002 if Seller accepts the terms of this proposal. If the payment were made before or after March 1, 2002, the interest component of Seller's Suspended Payment Amount, as provided for in EKhibit 1, would be decreased or increased. as appropriate. Seller's Suspended Payment Amount is equal to 100% of the principal amount of Seller's portion of the Suspended Payments, as calculated by Edison pursuant to Seller's power purchase agreement (including, if applicable, payments calculated at Edison's full Feb 14 02 03:26p. Public Works , . F.b.14-10Q1 01:00'0 Fro.-\" QF i.""", 7146473345 115 301 9511 T-15. P OO./OOT ,-..1 p.4 :Nh. Thom Coughran February 14. 2002 Page 3 "posted avoided cost of energy"), adjusted hy any partial payments previously made by Edison. and less any past due amounts identified on Exhibit 1 that are owed by Seller to Edison, plus simple interest on both sums at a rate of 7% per annum (unless a different rate is specified in Seller's power purchase agyeement). (Any past due amounts owed by Seller to Edison that are not reflected in Exhibit 1 'will remain payable through the Donnal method(s) of coll~tion,) Iuterest is calculated from the date that each suspended monthly power purchase payment (or each ideutified past due amount owed by SeUer) first became due and payable through ~l1d including the date, if any. of a.ctual payment of Seller's Suspended Payment Amount (after taking into account any previous reductions in principal and all previous payments of interest). This is the same method provided for in the parties' existing Settlement Agreements with respect to the calculation of principal and interest amounes. In order to become eligible to receive the benefits of ehis proposal, Seller is requested to have its duly authorized representative (someone who can bind Seller contractually) date and si~ Enclosure A Seller should mail two original copies of Enclosure A to Edison at the address set forth below, with copies forwarded concurrently by facsimile to Edison at the number below for receipt no later than 5:00 p,m. Pacific Time on February 19, 2002: Southern California Edison Company 2244 Walnut Grove Avenue Suite 495 Rosemead, CA 91770 Facsimile number: (626) 302.9622 or (626) 302-1103 Attention: Bruce L, McCarthy Upon receipt of a properly executed Enclosure A, Edison will cotlntersien and return a fully executed original copy to Seller. Should you have any questions regarding the foregoing. please contact Janet 1. Gazda at (626) 302-9140. Very truly yours, ~~~ Feb 14 02 03i27p. Public Works , . F,b-14-1001 01:00po Fe,."..;C. OF Ram,,,, 7146473345 m m mz T-164 P 005/001 H62 p.5 Enclosw:e A CONDITIONAL RF.l,EASE AND WAIVER Effective upon payment by Southern California Edison Company ("Edison") to City of Santa Ana ("Seller") of Seller's Suspended Payment Amount, as defined below, Seller hereby releases and forever discharges Edison and each ohts parent, affiliates, subsidiaries, directors, officers, em.ployees, agents, insurers, attorneys, assigns and successors, by operation oflaw or otherwise, nom any and all known and unknown claims, including, but not limited to, claims for general, consequential, and exemplary daDlages. arising from or related to Edison's suspension of payments to Seller for electricity delivered to Edison by Seller during the period November 1,2000 through and including March 26, 2001. Seller represents and warrants that it has not assigned or otherwise transferred, whether involuntarily or voluntarily, by operation oflaw 01" otherwise, any of the claims that are the subject of the foregoing release. Furthermore, with respect to the matters released herein, Seller waives the application of Civil Code Section 1542, which reads as follows: "A ;-eneral release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected the settlement with the debtor." "Seller's Suspended Payment Amount" is the amount set forth in the attached Exhibit 1, calculated as of March 1, 2002, but the interest component included in Seller's Suspended Payment Amount shall be subject to adjustment based on the actual date, if any, of payment by Edison of Seller's Suspended Payment Amount. In the event that Edison pays Seller's Suspended Payment Amount to Seller on or before May 31,2002 at 5:00 p.m. Pacific TIme, Edison shall not thereafter seek any adjustment to Seller's Suspended Payment Amount on the ground that either the energy or capacity price used to calculate such amount was, or is later detennined to have been, unlawful. Further, effective upon payment tQ Seller of Seller's Suspended Payment Amount, Seller waives any right, pursuant to D.OI-0a-067 or otherwise, to receive semi-monthly payments for energy and capacity delivered to Edison. Payment of Seller's Suspended Payment Amount shall be deemed made on the date, if any. that it has been deposited by Edison for delivery to Seller by nrst class or overnight mail. Fe~ ,14 02 03:,2-7p' Publ io Works Flb'14'100Z OZ,OOP' Fr..-SCE QF R"ourc" 7146473345 m 301 1m Ho4 P 000/007 HiZ Neither this Conditional Release and Waiver nor Edison's payment of the Seller's Suspended PayJllent p..mount shall be deemed or constxued to revive any agreement between Edison and Seller that has terminated. This Conditional Release and Waiver shall become null and void and shall have no further foxce or effect if Edison has not made payment of Seller's Suspended Payment Amount by 5:00 p,m. on May 31.2002. This Conditional Release and Waiver shall be intetpreted, governed and construed under the laws of the State of California as if executed and to be performed wholly within the State of California. The person who signs below on behalf of Seller represents that he or she has authority to do so and to bind Seller to this Conditional Release and Waiver without the further concurrence of any entity, person or court ~OF"'TA~ Gd.~<;. J NWD~ . PATRICIA E. HEALY Title: City Hanager Clerk of the Council Date: d-/ 9-() ()... SOUTHER:" CALIFORl'''IA EDISON COMPANY, a California corporation p.6 APBROVED S TO FORM By: Alan J. Fohrer Chairman aad Chief Executive Officer Mic e Vlgliolta Deputy City Attorney Date: Public Works Agency Feb 14 02 03:~7~ Public Works . . F,b-IHOOl 01:0Ip, F,~..SCE OF !",urm 7146473345 6ZS 302 em 1-164 P 0071007 F-461 p.7 City of Santa Ana QFID #4054 EXHIBIT 1 Reconciliation of Seller's Suspended Payml<nr Amounr Date DfThis Calculation Last Day Used In The Interest Calculation Applicable Interest Rate February 11,2002 March 1,2002 7.0% Outstanding Suspended Payments: Plus: Accrued Interest Seller's Suspended Payment Amount: $2,620.57 $14.58 $2,635.15 NOli: This Exhibit 1 Lr nDt a commitm4lCl"r und.naking by Edison tllat Edison will mtJlt.f ill payne,"' It> SditT. A.s such, tllb Exhibit J Jhall "01 b~t(Jnll'lled Q$ an IIdmis$l'on by Edison rhllt 4Ifp omOUlI1 U DWed lIy Edison to Sd/~r or as Q' npr~S6Uqtlon Ilrat all Df a portion oJ Stll~,.', SUSp.e"d4d PtlYfMnlAlnOllnJ w;U bt ptlJd to S4/1tl' by a particular dale qr fI' alt. ~~. ( \\ /) /D ./ DC "} ~/ Bruce L. McCarthy Manager, QF Contract Management QF Resources 626) 302-8667 FAX: (626) 302-9622 .J f6Y S'6'N \n /lJI\()\ I\II./\\\JIO\-IJ. .1 (cnnl'"I",\ March 18, 2002 Mr. Tom Coughran City of Santa Ana 220 S. Daisy Avenue, Building A Santa Ana, CA 92703 Dear Mr. Coughran: Subject: Conditional Release and Waiver City of Santa Ana, QFID 4054 As follow-up to receipt of your executed copy of the Conditional Release and Waiver which was attached to Southern California Edison Company's ("Edison") letter dated February 13, 2002, I am enclosing a fully executed copy of this document, together with Exhibit 1, duly executed by Edison as of the date so indicated. If I can be of further assistance, please do not hesitate to contact me. Very truly yours, ~~ P. O. Hu\. t(OO 22-+4 Walnut C;rm\' Av\.'. Rll:-;<..'l1l\.'(Id, C'" g 1770