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HomeMy WebLinkAboutCC RESO 15,826RESOLUTION NO. 15,826 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE CITY MANAGER TO EXECUTE A THERMAL ENERGY STORAGE AGREEMENT WITH SAN DIEGO GAS & ELECTRIC COMPANY FOR THE NEW CITY ADMINISTRATION BUILDING BE IT RESOLVED by the City Council of the City of National City that the City Manager is hereby authorized to execute a Thermal Energy Storage Agreement for the new City Administration Building between the City of National City and the San Diego Gas & Electric Company. A copy of said agreement is attached hereto as Exhibit "A." PASSED and ADOPTED this 20th day of December, 1988. George H. Waters, Mayor ATTEST: Lori Anne Peoples, City Clerk APPROVED AS TO FORM: George H. Eiser, III, City Attorney SDGii San Diego Gas & Electric PO. BOX 1831 • SAN DIEGO, CA 92112 • 619/696.2000 FILE NO. THERMAL ENERGY STORAGE AGREEMENT THIS AGREEMENT is made and entered by and between SAN DIEGO GAS & ELECTRIC COMPANY ("SDG&E"), a California corporation, and City of National City„ hereinafter referred to as "Customer". WHEREAS: 1. Customer plans to construct a new 101,500 square foot civic center in National City. ("Facility"). 2. Customer desires to utilize thermal energy storage in said Facility, as opposed to a conventional air-conditioning system, provided that SDG&E shares in the additional construction and equipment costs associated with a thermal storage cooling system. 3. SDG&E is desirous of fostering the use by private enterprise of new technologies which will contribute to the reduction of peak period electrical demand and to the increase of electrical demand and consumption during off-peak periods. 4. It has been demonstrated that the use of thermal energy storage for space cooling results in the shift of substantial electrical demand and consumption from peak to off-peak periods. AP 1513 Approval #82-0793 (B) SDG&E Form 143-1459B Rev. 6/15/88 NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties agree as follows: 1. TERM This Agreement shall commence on the date it is executed by SDG&E, and shall continue in force for fifteen (15) years from the date final payment, as provided in Section 5 is made. 2. SCOPE 2.1 Customer will proceed to construct and complete said Facility, including the thermal storage cooling system, on or before September 1991. 2.2 Customer will cause to be included in the construction contract provisions for the acquisition and installation of a thermal storage system and all appurtenant and auxiliary compressors, condensers, pumps, air handlers, piping and related equipment required to provide for an operable thermal storage cooling system with a maximum rated capacity of approximately 1300 ton -hours. 3. SYSTEM SELECTION AND OWNERSHIP Selection of the thermal storage cooling system described in Section 2.2, is the sole responsibility of Customer. Customer shall have total ownership of all equipment associated with the thermal storage cooling system. SDG&E has evaluated the sizing of the system for the sole purpose of determining Customer's eligibility for this program; SDG&E makes no representations as to the sizing of the system for any other purposes of Customer. Furthermore, SDG&E makes no representations as to the reliability and/or efficiency of the thermal storage system selected, or any components thereof. Customer shall indemnify SDG&E from any liability relating to the system's reliability, efficiency and/or performance. -2- 4. CALCULATION OF INDUCEMENT PAYMENT 4.1 A one-time financial contribution toward the added costs of installing a cool storage system (ice, chilled water, eutectic salt or similar thermal energy storage system) in lieu of, or to replace, a conventional air-conditioning, refrigeration, or process cooling system, accordance with the following: a. For new building installations, the cooling load used below shall be the design cooling load in tons used to size a conventional cooling system for the Customer's application. SDG&E may require the Customer to provide a cooling load estimate certified by an engineer licensed in the State of California. Total Cooling Load 0-200 Tons in Tons 201-1200 Tons >1200 Tons Funding Levels not 250 $/ton to be Exceeded: 225 $/ton 200 $/ton b. For retrofit installations, the cooling load used below shall be the electric load displaced in kilowatts (kW) by thermal storage components as determined from instrumentation, equipment specifications, log books or bills. Total Cooling Load 0-200 kW in kW 201-1200 kW >1200 kW Funding Levels not to be 250 $/kW exceeded: AL-TOU Customers 225 $/kW 200 $/kW AD Customers 250 $/kW 250 $/kW 4.2 The amount of the calculated inducement payment made to a Customer for the single cool storage application shall be subject to the following limitations: a. For all installations, SDG&E shall be the sole judge of Tons or kW of cooling load used to calculate inducement amounts. -3- b. The inducement payment amounts used above apply to thermal storage systems with a minimum of 6.5 ton -hours of storage for each ton of conventional design cooling load. Systems with less storage may be accepted; but, the inducement payment amount will be prorated. c. SDG&E shall have the right to reject Customer participation in the program, if, in the judgement of SDG&E, a proposed installation is improperly designed, installed costs of the storage system are deemed excessive, an alternate type of system would be more suitable, or an equally suitable type of system would be less expensive. d. Inducement payments shall be limited to funding levels authorized from year to year by the CPUC. 5. PAYMENT 5.1 SDG&E shall pay to Customer $50,000, computed at the rate of $250 per kW for 200 kW of cooling load. Payments shall be made in accordance with the following schedule: a. Forty percent (40%) of the total payment due under Section 5.1 upon delivery to the job site of the thermal storage units and receipt by Customer of a billing for the cost of said units. b. Balance of the total payment due under Section 5.1 upon completion of the thermal storage cooling system and all associated components. Verification by SDG&E to its satisfaction that the thermal storage cooling system has been installed as designed and is operable is a condition precedent to this final payment. 5.2 Requests for each of said payments, together with supporting documentation, shall be submitted by Customer to SDG&E. Payment shall be made by SDG&E within 30 days of approval by SDG&E of the payment request. -4- 6. MAINTENANCE Customer agrees to maintain the system at a level which meets or exceeds manufacturer's specifications. Customer further agrees to document its maintenance of the system and to provide that documentation to SDG&E upon request. 7. SYSTEM OPERATION 7.1 SDG&E's financial contribution to Customer, pursuant to Section 4, is made largely in consideration that the installation and operation of the thermal storage cooling system will substantially reduce Customer's electrical demand and consumption during periods of peak demand on SDG&E's electrical generation, transmission, distribution system, and will transfer energy requirement from peak hours to off-peak hours. 7.2 Accordingly, Customer agrees to operate the refrigeration compressors of the thermal storage system during times other than SDG&E's "peak demand periods" as defined in paragraph 7.3 for a period of 15 years from the date final payment is made under paragraph 5.1b using only electrical power purchased from SDG&E. 7.3 SDG&E's current "peak demand periods" are as follows: May 1 through September 30 . . .11 a.m. - 6 p.m. . .Weekdays* October 1 through April 30 . . . 5 p.m. - 8 p.m. . .Weekdays* *Except holidays All time periods listed are applicable to local time. 7.4 SDG&E's "peak demand periods" are subject to change from time to time. SDG&E will give notice to Customer of such changes, and Customer agrees to observe such revised "peak demand periods" pursuant to provisions of Section 7.2. 7.5 The restrictions imposed by Sections 7.2 and liquidated damages set forth in Section 13 shall be waived for circumstances, occurrences or events not created, controlled or controllable by the Customer. No waiver of restrictions or penalties will be granted for times when SDG&E or the California Utility Power System's Coordinator has declared a Stage 1 alert, or such other times when a demand reduction is required for the operating convenience of SDG&E. 7.6 TES Metering and Rate Schedule a. Customer shall provide at no expense to SDG&E a metering point for refrigeration compressors, condenser pumps and condenser fans. 1. New installations - Adjacent to new house meter. 2. Retrofit installations - Adjacent to existing house meter. b. Customer shall accept service at the above metering point for thermal energy storage equipment at the CPUC approved schedule for thermal energy storage for the term of this Agreement. c. Schedule AL-TOU is the current schedule for TES. 8. INSPECTION SDG&E reserves the right to inspect the Facility at reasonable times for the purpose of monitoring Customer's compl_ance with its performance obligations under this Agreement. This provision shall not impose upon SDG&E any obligation to perform any inspection. 9. COMPLIANCE WITH LAWS Customer and any subcontractor it may retain shall be deemed to be familiar with, and at all times shall comply with and observe all applicable federal, state and local law, ordinances, rules, regulations, executive orders, all applicable safety orders and all orders or decrees of administrative agencies, courts or other legally constituted authorities having jurisdiction or authority over Customer, SDG&E, or the Facility which may now or hereafter exist. 10. BUILDING TRANSFER 10.1 If the Customer is considering transfer of title to the Facility during the term of this Agreement, Customer shall provide SDG&E with a minimum of 60 days written notice (including name and address of all prospective transferees), in advance of any such transfer. Customer shall then have 30 days to provide SDG&E with an agreement executed by the prospective transferee agreeing to assume all of the obligations of the Agreement as of the effective date of the transfer. 10.2 If Customer fails to provide SDG&E with the executed agreement with terms and conditions acceptable to SDG&E, SDG&E may negotiate with the prospective transferee with regard to transferee's assuming the obligations under this Agreement. If transferee fails to assume the obligations of this Agreement on or prior to the effective date of the transfer, Customer agrees to pay liquidated damages as provided in Section 13 within 30 days from the date the transfer is effective. 11. INDEMNITY Customer will defend, indemnify, and save harmless, SDG&E, together with any and all of its agents and employees, from and against any and all claims, losses, liabilities, damages and expenses (including attorneys' fees) of any kind whatsoever for injuries to or death of any person (including, but not limited to, employees of SDG&E and Customer) and for all loss, damage or destruction of any property (including, but not limited to, any property of SDG&E or Customer) arising out of or in any way pertaining to the negligent performance or lack of performance of the terms of this Agreement, or otherwise, by Customer, its agents, employees or subcontractors. 12. INSURANCE Customer shall maintain in effect during the life of this Agreement Comprehensive General Liability Insurance, including contractual liability coverage for liability assumed by customer in this Agreement, with limits of not less than $1,000,000 each occurrence for bodily injury and property damage combined. Evidence of such insurance shall be made available to SDG&E upon request. Customer has the right to self -insure this exposure. -7- 13. LIQUIDATED DAMAGES The extent and amount of actual damages which would be suffered by SDG&E as a result of Customer's failure to perform in accordance with this Agreement are impractical or extremely difficult to determine or estimate. Customer will pay SDG&E the following amount as liquidated damages with interest (and not as a penalty) for each month (or any part thereof) during which Customer fails to perform in accordance with this Agreement: Amount each Month = $P/180 + Interest where: P = total payment in dollars made by SDG&E to Customer pursuant to Section 5. Interest is the sum accrued by the value of $P/180 as follows: where: I = ($P/180 X R/12 X Mo) Mo. = Months of operation elapsed from date of final payment to the month when Customer pays liquidated damages as provided herein. Mno. = Months non-performance, each month (or any part thereof) during which the Customer fails to perform. R = The average prime commercial lending rate over the period Mo calculated as the average of the prime commercial lending rate announced by the Bank of America for each month during the period Mo. The Total Amount (Ta) is calculated as follows: Ta = ($P/180 + $P/180 X R/12 X Mo) Mno This amount reflects a recapture of SDG&E's monthly investment under the Agreement for each month Customer fails to perform in accordance with this Agreement. 14. GOVERNING LAW Interpretation of this Agreement and performance thereof will be determined by California law. No action may be brought under this Agreement unless brought in a court located in San Diego County. 15. REMEDIES SDG&E expressly retains all of its rights and remedies provided by law or equity in the case of breach, and neither any action by SDG&E nor any reservation by SDG&E in this Agreement of any specific legal or equitable remedy shall constitute a waiver of any other legal or equitable rights or remedies. 16. SURVIVAL The obligations imposed on Customer and Customer's employees by and pursuant to Article 11 shall survive termination of this Agreement. 17. VALIDITY The invalidity, in whole or part, of any provisions hereof shall not affect the validity of any other provisions hereof. 18. COMPLETE AGREEMENT This Agreement contains the complete and entire Agreement between the parties and supersedes any previous communications, representations, or agreements, whether verbal or written, with respect to the subject matter. No change, addition or modification of any of the terms or conditions shall be valid or binding on SDG&E unless in writing, signed by an authorized representative of SDG&E. 19. MODIFICATION OF AGREEMENT BY CALIFORNIA PUBLIC UTILITIES COMMISSION While the form of this Agreement has been approved by the Public Utilities Commission of the State of California, this Agreement will at all times be subject to such changes or modifications as the Commission may, from time to time, direct in the exercise of its jurisdiction. 20. HEIRS, SUCCESSORS AND ASSIGNS This agreement shall be binding upon the heirs, suc- cessors in interest, and assigns of the parties hereto. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers or representatives as of the day and year first above written. CITY OF NATIONAL CITY SAN DIEGO GAS & ELECTRIC CO. Company / Company Signature Signature Tom G. McCabe Q (.2,,, -vAmcD Print Name City Manager Title Date iz/r Z`/? APPROVED AS FORM George H. Eiser, III ity Attorney Print Name Title Date -10-