HomeMy WebLinkAboutInformationa Report - Desert Community Energy CCA ProgramSTAFF REPORT
CITY OF PALM DESERT
COMMUNITY DEVELOPMENT DEPARTMENT
MEETING DATE: February 28, 2019
PREPARE BY: Ryan Stendell, Director of Community Development
REQUEST: Receive and file an informational report related to the Desert
Community Energy, and provide direction to staff related to a
potential program launch in 2020.
Recommendation
By Minute Motion:
Receive and file an informational report related to Desert Community
Energy (DCE).
2. Provide direction to staff related to a potential program launch in 2020.
Strateqic Plan Obiective
Energy and Sustainability Priority 2: Promote greater usage of more sustainable
materials.
One of the most advantageous goals of existing Community Choice Aggregations
(CCA) is the purchase of bulk power from more sustainable power providers, which
meets the intent of the above -mentioned strategic plan goal.
Desert Communitv Energv Board
At its meeting of February 4, 2019, board members were presented with options for how,
when, or if DCE should launch its energy program. DCE staff acknowledged that recent
changes in the California Public Utilities Commission (CPUC) have changed the business
model bought into by the three member cities. Most importantly, changes to how the
Power Charge Indifference Adjustment (PCIA or Exit Fee) is calculated has all but
eliminated DCE's ability to deliver power at a savings.
Board members agreed that these changes warranted going back to each agency in an
effort to reaffirm interest in the program and a goal of launching the program in 2020. A
detailed staff report prepared by DCE staff is attached to this report.
February 28, 2019 — City Council Staff Report
Information Item: Desert Community Energy
Page 2 of 4
Background Analvsis
The City Council previously indicated a primary DCE objective was to provide electric
power at a slight discount while providing a more sustainable blend of energy. The recent
PCIA decision effectively neutralizes this cost reduction objective; however, other CCA
considerations include the enhanced green power use, greater local energy control and
focus, environmental responsibility, and investment in the local economy.
DCE staff conducted a recent survey that indicated support for local energy control and
the willingness to pay a modest additional cost to attain a cleaner, environmentally
responsible power product. The results also indicate that customers favor having a
choice.
It is also acknowledged that the definition of "modest additional cost" is subjective. The
current rate structures being presented to City staff ranges from 0-10% higher rates based
on options of desired levels of green energy. Given the nature of how electricity is
consumed in the Coachella Valley, this could be seen as significant. It is true that a
customer can always opt -out and return to Southern California Edison (SCE); however,
staff remains concerned about the perception created with automatic enrollment into the
DCE program at potentially higher rates.
Councilmember Request for Action February 14, 2019:
At its regular meeting of February 14, 2019, Councilmember Kelly asked staff to address
two questions in this staff report. Below please find responses prepared by DCE and City
staff:
1. As a member of the JPA, can the other two member agencies force the City into
launching DCE?
If other cities chose to launch and Palm Desert chose not to, the City would not be
forced to launch. Each city would also have the option to select the default product
for their community. As noted above, while a decision to move forward is needed
by the end of March, there will be an additional discussion at the February through
June DCE Board meetings about product offerings, rates, and financial
considerations, which would allow each member to identify and work with the other
members to have their concerns resolved.
With respect to risk, DCE cannot commit member jurisdictions to any obligations,
including debt. The Joint Powers Agency (JPA) agreement identifies the
responsibility of member cities with respect to debt and other financial obligations,
in Section 2.2 of the JPA (page 3), "... Pursuant to Sections 6508.1 of the Act, the
debts, liabilities or obligations of (the CCA) shall not be debts, liabilities or
obligations of the individual Parties unless the governing board of a Party agrees
February 28, 2019 — City Council Staff Report
Information Item: Desert Community Energy
Page 3 of 4
in writing to assume any of the debts, liabilities or obligations of (the CCA). A Party
who has not agreed to assume an authority debt, liability or obligation shall not be
responsible in any way for such debt, liability or obligation even if a majority of the
Parties agrees to assume the debt, liability or obligation of (the CCA).
Notwithstanding Section 7.4 of this Agreement, this Section 2.2 may not be
amended unless such amendment is approved by the governing board of each
Party."
A benefit of the formation of a separate CCA JPA is that the assets and liabilities
of the CCA program remain separate from member agency assets, including city
general funds; financial liability is mitigated by specific JPA language that protects
municipal assets.
2. What are our termination rights under the JPA?
Article 6 of the JPA outlines the withdrawal and termination procedures, and
section 6.1.3 speaks specifically to how to withdrawal prior to program launch. The
entirety of section 6.1.3 is below:
6.1.3 "The Right to Withdraw Prior to Program Launch. After receiving bids from
power suppliers, DCE shall provide to the Parties the report from the electrical
utility consultant(s) retained by DCE that compares the total estimated electrical
rates that DCE 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 (SCE), providing such information as is available to assist
with forecasting of conditions over the next three years. A Party may immediately
withdraw its membership in DCE without any further financial obligation, as long
as the Party provides written notice of its intent to withdraw to DCE Board no more
than thirty (30) days after receiving the report. A Party may also withdraw its
membership in DCE prior to December 31, 2017, for any reason. Any withdrawing
Party shall not be entitled to any return of funds it may have provided to DCE,
provided; however, that if, after the program is launched there are unobligated and
unused funds, the withdrawing member shall be refunded its pro rata share of the
unobligated and unused funds."
After program launch the City can withdraw at the beginning of any fiscal year after
giving six months' notice of its intent to do so. In this case, the City remains
responsible for claims, demands, damages, and financial obligations through the
end of the effective withdrawal date. Additional sections of Article 6 of the JPA
apply; however, 6.1.1, 6.1.3, and 6.3 appear to be the most relevant. A full copy of
the executed JPA is attached to this report.
February 28, 2019 — City Council Staff Report
Information Item: Desert Community Energy
Page 4 of 4
Fiscal Analvsis
There is no fiscal impact related to this report.
LEGAL REVIEW
Hargreaves
City Attorney
DEPT. REVIEW
Ryan Stendell
Director of
Community
Development
FINANCIAL CITY
REVIEW MANAGER
Janet Moore Lauri Aylaian
Director of Finance City Manager
ATTACHMENTS: 1. DCE Staff Report Dated February 15, 2019
2. C36400 Executed JPA Agreement
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��..�■ DESERT COMMUNITY ENERGY
DESERT STATUS UPDATE
COMMUNITY FEBRUARY 8, 2019
ENERGY
The POWER of choice
TO: City Council Members for Palm Desert, Cathedral City, Palm Springs
RE: Desert Community Energy Upd,
FROM: Tom Kirk, Executive Director
DATE: February 15, 2019
At their February 4 meeting, Desert Community Energy (DCE) Board members requested that
presentations be made to each city council to provide an update on Desert Community Energy.
This report is to provide DCE member agencies with an update on status, progress to date and
forthcoming decision points regarding the Community Choice Aggregation program. The next
possible launch for DCE would be in 2020. At their February 25 meeting, the DCE Board will
discuss next steps with some decisions needed by March 2019 in order to launch in 2020.
Background: Since summer 2017 when DCE was formed as a Joint Powers Authority, the
DCE Board and city staff have worked diligently to provide a Community Choice Aggregation
(CCA) program in your communities. The DCE Board undertook all necessary investigatory,
regulatory and preparatory steps associated with an expected date to start serving customers
on August 1, 2018. At program launch, DCE would provide retail power supply service to
electricity customers in Cathedral City, Palm Desert and Palm Springs. Since inception, a key
program objective was to offer customers savings on their bill, compared to SCE rates. In
summer 2018 the rate savings was expected to be 3% on the generation portion of the bill.
However, in late July 2018, just days before scheduled launch, the DCE Board suspended the
CCA program start due to unexpected natural gas and electricity price spikes. Other factors
that contributed to this decision were anticipated changes to the exit fee (Power Charge
Indifference Adjustment/PCIA) and SCE rate forecast uncertainty. Together these factors
diminished the likelihood of delivering demonstrable customer savings and reduced the
potential for DCE to launch on sound financial footing. At a special meeting on August 15, the
Board gave direction to staff to delay the launch of the DCE Community Choice Energy
program until 2020.
Current Status: The DCE Community Choice Energy program has been suspended since
August 2018. Due to requirements imposed by the California Public Utilities Commission
(CPUC), the DCE Board must take action by the end of March 2019 if it is to commence retail
electric power service to member communities in 2020. While some decisions do need to be
made in March, the actual launch would likely occur in spring 2020. Decisions about the product
offerings, renewable and carbon -free content, and other program features will be discussed for
the next several months, with decisions needed in April 2019. The Board will continue fine-
tuning of the product mix, rates, and other program features into June. If a decision to launch
in spring 2020 is made, power procurement will commence in summer 2019.
Since the decision to suspend DCE launch, the uncertainty about the exit fee (PCIA) and SCE
rates has been resolved. In October 2018, the CPUC made changes to the exit fee (PCIA)
charged to CCA customers. The CPUC decision on the PCIA substantially impacts the ability
of CCAs, including DCE, to offer rate savings to customers. The PCIA rates have been updated
as of January 2019 and have been incorporated in the current DCE pro forma. SCE rates for
2019 are also now available.
At their November 2018 Board meeting, staff requested direction from the Board on launch
schedule considerations. Recent assessments by The Energy Authority (TEA) suggest DCE
may only be able to offer customer rates at parity or slightly below SCE rates. To evaluate the
interest of the participating communities in a local energy agency, the Board sought further
information regarding local power perspectives to inform Board decision choices. The Board
directed staff to conduct a survey of electricity customers in the three member cities.
DCE Ratepayer Survey: During December DCE completed a competitive bid process for a
consultant to complete a statistically valid survey of DCE customers. Probolsky Research was
selected to poll residents about their views on local energy control, reduced GHG emissions,
and potential willingness to subscribe to a 100% "carbon -free" power product. Probolsky
Research is a highly respected firm that conducts opinion and market research for business
and government clients. A contract was executed, and the survey was conducted from January
18 to January 24, 2019 among electric ratepayers in Cathedral City, Palm Desert, and Palm
Springs. A total of 300 ratepayers (179 by telephone and 121 online) were surveyed, with an
oversample of 200 ratepayers in each city. Results are summarized in the attached
PowerPoint, presented in aggregate as well as parsed by individual cities.
Survey results indicate that although relatively few residents are currently familiar with
"Community Choice Aggregation", given more information on such a program nearly 80% of
those polled expressed support for a locally sponsored power program with emphasis on
meeting community climate objectives, local economic development, and carbon free energy
resources. The results also suggest similar community perspectives across DCE's three
participating cities. The DCE survey also asked about various cost scenarios. When asked
about willingness to pay a "little bit more" for energy than currently paying to SCE for a locally
controlled, "no shareholders" energy program, nearly 60% of respondents were supportive.
City -by -city data on similar questions showed similar levels of support. A survey of this size
yields a margin of error of +1-5.8%, with a confidence level of 95%.
In short, there appears to be substantial majority support for a locally controlled and focused
power program given near parity rates versus SCE with 49% willing to pay up to 10% more,
and 63% up 5% more, for a 100% carbon -free energy product. It should be noted that "up to
10% more" on the generation charge would result in an increase of approximately 4% on the
total bill. Again, these perspectives are consistent across DCE's three member communities.
These results were a positive surprise to DCE board members, staff and the pollsters.
DCE Considerations and Options: There are multiple reasons why a community might
establish and support a CCA. The DCE Board has previously indicated a primary DCE
objective was to provide electric power at discount to SCE. The recent PCIA decision
effectively neutralizes this cost reduction objective but other CCA considerations include
enhanced green power use, greater local energy control and focus, environmental
responsibility, and investment in the local economy.
DCE's survey results indicate residents support local energy control and are willing to pay
modest additional cost to attain a cleaner, environmentally responsible power product. The
results also indicate that customers favor having a choice. And while rate relief is desirable,
survey responses indicate that customers are interested in and supportive of local control,
cleaner, greener electricity, reducing their carbon footprint, and investment in local
communities.
CCA Program Options:
The DCE Board will discuss various options at their February 25 meeting regarding the launch
of the program. A summary of the outcomes at that meeting will be provided during updates to
each city council.
1. 35% "Green" Default Product - rates at parity to slightly below SCE
a. Essentially match what customers now get from SCE
b. Customers can "opt -up" to more green products
c. Customers can "opt -out" and remain with SCE
2. 100% "Green/Carbon-free" Default Product - rates 7-9% above SCE base product
a. Meet California's 100% green mandate 25 years early
b. Accelerate beneficial and local environmental goals
c. Low income and other special classes protected
d. Customers can "opt -down" to a basic green product at a cost less than or equal to
SCE
e. Customers can "opt -out" and remain with SCE
3. Refocus / Dissolve DCE
a. Redirect DCE to address other local energy matters
b. Continue to monitor CCA and consider restart during 2021 or beyond
c. Dissolve DCE JPA
DCE staff tentatively recommends commencing CCA operations during spring 2020 offering a
100% carbon -free default product, with additional "less green" choices for those customers
desiring to opt -down to slightly lower cost products (essentially combining options 2 and 1).
This recommendation is contingent on assessing final business model feasibility and
input/questions received from member cities and members of the public. The recommendation
is based on:
✓ Survey results indicating local support
✓ Demonstrable cost savings v. SCE's 100% product
✓ Opportunity to precede California's 2045 100% carbon free standard by 25 years
✓ Low income and other special rate classes protected
✓ Options for customers to opt -down or opt -out if so inclined
✓ Substantial contribution to local climate goals
✓ Member cities may individually select default product
Associated Next Steps:
• Inform member cities (this report)
• DCE Board discussion on February 25; decision by March 2019 (March 18 mtg)
• Affirm necessary vendor and services relationships
• Prepare and submit requisite regulatory filings (begins March 2019)
• Consider establishing Community Advisory Committee
• Contract for 2020 wholesale power capacity and energy products (summer 2019)
• Implement internal business and risk management procedures adopted by DCE
• Confirm product offerings and customer rates
• Program launch on or about April 1, 2020
3
Summary: DCE suspended its August 1, 2018 CCA program implementation due to potential
financial impacts, reducing likelihood of delivering demonstrable rate savings. DCE initiated
a local customer survey during January 2019 to provide additional insight to the Board
regarding local CCA services, climate concern, and price sensitivity for a 100% carbon -free
power supply. Survey results suggest member communities are willing to support a local
power program which provides a 100% "green" product at a modest cost increase over current
SCE rates, as long as all customers have the ability to opt -down or opt -out of such service. A
recent refresh of program economics supports the business feasibility of this approach.
This report is intended to inform member cities of DCE's current options and staff's
recommended approach, receive feedback and respond to any questions member cities may
have.
Attachment:
1. DCE Customer Survey Results summary
2
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RECEIVED
CITY CLERK'S OFFICE
PALM DESERT.:,A
DESERT COMMUNITY ENERGY 2019 JAN 17 PM 3: 55
JOINT POWERS AGREEMENT
This Joint Powers Agreement ("Agreement), effective as of October 30, 2017 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 relating to the joint exercise of powers among the
parties set forth In Exhibit B (individually "Party" or "Member", collectively'Part1W or
`Members"). The term "Parties" or "Members" shall also include an incorporated municipality or
county added to this Agreement in accordance with Section 2.4.
RECITALS
A. The Parties share various powers under California law, including but not limited to
the power to purchase, supply, and aggregate elec OcIty 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 Legislature passed SIB 32, which codifies a 2030 greenhouse gas
emissions reduction target of 40 percent below 1990 levels.
C. The purposes for entering into this Agreement include:
a. Reducing greenhouse gas emissions related to the use of power
throughout the jurisdictions of the Parties and neighboring regions;
b. Providing electric power and other forms of energy 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 and conventional energy; and
e. Promoting long-term electric rate stability, 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 Community Choice
Aggregation program that is locally controlled and delivers cost -competitive dean
electricity, product choice, price stability, energy efficiency and greenhouse gas
emission reductions.
E. It is the intent of this Agreement to promote the development and use of a wide
range of renewable and efficient 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 be the
desired approach to decrease regional greenhouse gas emissions and accelerate
the State's transition to dean power resources to the extent feasible. The DCE
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Community Choice Aggregation Joint Powers Agreement -1-
will also add hunaasing levels of locally generated renewable resources as these
projects are developed and customer energy needs expand.
F. The Parties desire to establish a separate public agency, known as the Desert
Community Energy, or DCE, under the provisions of the Joint Exercise of Powers
Act of the State of California (Govemment Code Section 6500 et seq.) (`Act") in
order to collectively study, promote, develop, conduct, operate, and manage
energy programs.
G. The Parties anticipate adopting an ordinance electing to implement through the
DCE a common Community Choice Aggregation (CCA) program, an electric
service enterprise available to cities and counties pursuant to California Public
Utilities Code Sections 331.1(b) and 366.2. The first priority of the DCE will be the
consideration of those actions necessary to implement the CCA 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 terns used in the Agreement shall have the meanings
specified in Exhibit A, unless the context requires otherwise.
1.2 Qgqpymnts Inck*d. 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 Q. Annual Energy Use
Exhibit D: Voting Shares
Exhibit E: Signatures
ARTICLE 2: FORMATION OF DESERT COMMUNITY ENERGY
2.1 Effective Date pnd Tenn. This Agreement shall become effective and DCE shall
exist as a separate public agency on October 30, 2017 or when the Parties
execute this Agreement, whichever occurs later. The DCE shall provide notice to
the Parties of the Effective Date. DCE 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 DCE.
2.2 Formanpn. There is formed as of the Effective Date a public agency named
Desert Community Energy. Pursuant to Sedans 6506 and 6507 of the Act, DCE
is a public agency separate from the Parties. Pursuant to Sections 6508.1 of the
Act, the debts, liabilities or obligations of DCE shall not be debts, liabilities or
obligations of the individual Parties unless the governing board of a Party agrees
in writing to assume any of the debts, liabilities or obligations of DCE. A Party
who has not agreed to assume an Authority debt, liability or obligation shall not
be responsible in any way for such debt, liabirdy or obligation even if a majority of
Desert Community Energy
Community Choice Aggregation Joint Powers Agreement -2-
the Parties agree to assume the debt, liability or obligation of DCE.
Notwithstanding Section 7.54 of this Agreement, this Section 2.2 may not be
amended unless such amendment is approved by the governing board of each
Party.
2.2.1 Name. DCE may change its name at any time through adoption of a
resolubon of the Board of Directors.
2.3 Purpose. The purpose of this Agreement is to establish an independent public
agency in order to exercise powers common to each Party to build a Community
Choice Aggregation program that achieves significant, "-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, and to promote local renewable and
efficient energy production technologies. To that end, DCE 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 CCA Program, as further described in Section 4.1. The Parties intend that
other agreements shall define the terms and conditions associated with the
Implementation of the CCA Program and any other energy programs approved
by DCE.
2.4 Membership in DCE.
2.4.1 The initial Members of DCE are the Cities of Blythe, Cathedral City,
Desert Hot Springs, Indian Wells, Palm Desert, and Palm Springs.
2.4.2 Any city or county may request to become a member of DCE by
submitting a resolution adopted by its City Council or Board of
Supervisors to the Board of DCE. The Board shall review the request
and shall vote to approve or disapprove the request. The Board may
establish conditions, Including but not limited to financial conditions,
under which the city or county may become a member of DCE. The
Board shall notify the then members of DCE of this request and the date
that 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 from the
date the notice is mailed to the members. If the request is approved by
the Board, the city or county shall become a member of DCE under
the terms and conditions set forth by the Board and upon approval and
execution of this Agreement by the requesting city or county.
2.5 Povvers. DCE shall have all powers common to the Parties and such additional
powers accorded to it by law. DCE 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 3.17;
2.5.1 to make and enter into contracts;
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Community Choice Aggregation Joint Powers Agreement -3-
2.5.2 to employ agents and employees, including but not limited to an
Executive Officer,
2.5.3 to acquire, contract, manage, maintain, and operate any buildkVs,
infrastructure, works, or improvements;
2.5.4 to acquire property by eminent domain. or otherwise, except as limited
under Section 6508 of the Ad, and to hold or dispose of any property;
however, DCE shall not exercise the power of eminent domain within the
jurisdiction of a Party over its oboction without first meeting and
conferring in good faith;
2.5.5 to lease any property;
2.5.6 to sue and be sued in its own name;
2.5.7 to 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 Sections 53850 et seq. and authority under
the Act;
2.5.8 to form subsidiary or independent corporations or entities if necessary, to
carry out energy supply and energy conservation programs at the lowest
possible cost or to take advantage of legislative or regulatory changes;
2.5.9 to issue revenue bonds and other forms of indebtedness;
2.5.10 to apply for, accept, and receive all licenses, permits, grants, loans or
other aids from any federal, state, or local public agency;
2.5.11 to submit documentation and notices, register, and comply with orders,
tariffs and agreements for the establishment and implementation of the
CCA Program and other energy programs;
2.5A2 to adopt Operating Rules and Regulations;
2.5.13 to make and enter into service agreements relating to the provision of
services necessary to plan, implement, operate and administer the CCA
Program and other energy programs, inducting the acquisition of electric
power supply and the provision of retail and regulatory support services;
and
2.5.14 to permit additional Parties to enter into this Agreement after the Effective
Date and to permit another entity authorized to be a community choice
aggregator to designate DCE to act as the community choice energy
aggregator on its behalf.
2.6 Limitation oh Ppworq, As required by Government Code Section 6509, the
power of DOE Is subject to the restrictions upon the manner of exercising power
possessed by the City of (!tart name of one natVdbadna dtN.
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Community Choice Aggregation Joint Powers Agreement -4-
ARTICLE 3: GOVERNANCE AND INTERNAL ORGANIZATION
3.1 Govemino Body. DCE shall be governed by a legislative body known as the
Board of Directors ("Board7. The initial Board shall consist of one (1) director
appointed by each of the initial members. Each Director shall serve at the
pleasure of the governing board of the Party appointing such Director, and may
be removed as Director by such governing board at any time. If at any time a
vacancy occurs on the Board, a replacement shall be appointed to fill the position
of the previous Director within 60 days of the date that such position becomes
vacant. Directors shall be elected officials or senior staff of the appointing Party
that Is the signatory to this Agreement. Each Party may appoint an alternate to
serve in the absence of its Director. Alternates may be either elected officials or
senior staff of the appointing Party that is the signatory to this Agreement. The
Board shall exercise all powers and conduct all business of DCE, either directly
or by delegation to other bodies or persons pursuant to this Agreement.
If additional cities or counties join DCE, as set forth in section 2.4, each city or
county that becomes a member of DCE shall be entitled to one (1) director and
one (1) alternate appointed as set forth above.
Ex Officio Directors. The Board may appoint ex officio members of the Board.
Ex officio directors shall receive all meeting notices, shall have the right to
participate in Board discussions and the right to place items on the agenda but
shall not be counted towards a quorum and shall have no vote.
3.2 Reaular Board MeetirwM. The Board shall hold at least one regular annual
meeting and shall provide for such other regular meetings as it deems
necessary. Meetings of the Board shall be held at such locations within one of
the member jurisdictions, and at such times as may be designated from time to
time by the Board. 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.).
3.3 Special Meetinos of the Board. Subject to all noticing requirements of the Ralph
M. Brown Act, special meetings of the Board may be called in accordance with
the provisions of California Government Code Sections 54956 and 64956.5. to
be held at such times and places within one of the member jurisdictions as may
be ordered by the Chair. A majority of the Board may also call a special meeting
for any purpose.
3.4 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
serve at the pleasure of the Board. There shall be no limit on the number of
terms held by either the Chair or Vice Chair.
3.5 Co� of Meebnoq. The Chair or, in the absence of the Chair, the Vice -Chair,
shall preside at all meetings of the Board.
3.6 Resionation of a Director. Any Director may resign effective on giving written
notice to the Board and the other Members, unless the notice specifies a later
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Community Choice Aggregation Joint Powers Agreement -5-
time for the effectiveness of such resignation. A successor shall be appointed by
the affected Member as provided for in this Agreement.
3.7 Quorum. Except as otherwise provided in this Agreement, every act or decision
by the Board shall be made by a majority vote of the Directors present at a
meeting duly held at which a quorum is present. No action may be taken by the
Directors if a quorum of the Board Is not present. In the absence of a quorum,
any meeting of the Board may be adjourned from time to time by a vote of the
majority present, but no other business may be transacted except as provided for
in this Section.
A quorum shall exist if a majority of the Directors then designated by and serving
on behalf of the Members are present at any duly called meeting of the Board.
Ex officio, non -voting directors shall not be included when calculating the number
of Directors necessary to constitute a quorum or the number of votes necessary
to approve an action. In the event that a Member has failed to designate a
Director, or a Member's designated Director has died, resigned, left office, been
terminated or is otherwise unwilling or unable to act as the designating Member's
representative, and a replacement Director has not yet been designated, and
there is no designated alternate, such that a Member has no duly acting
representative on the Board, then that Members. vacant Board position shall not
be included when calculating the number of Directors necessary to constitute a
quorum or the number of votes necessary to approve an action.
3.8 Other Officers. The Executive Officer of DCE shall be the secretary of DCE, or
as otherwise determined by the Board. Any officer, employee or agent of any
Member of DCE may also be an officer, employee, or agent of any of the
Members. DCE shall have the power to appoint such additional officers and to
employ such employees and assistants as may be appropriate. Each and all of
said officers, employees and assistants shall serve at the pleasure of DCE and
shall perform such duties and shall have such powers as DCE may, from time to
time, determine. Any officer may resign at any time by giving written notice to the
secretary. Any such resignation shall be effective upon receipt of such notice or
at any later time specified in the notice. Officers shah assume the duties of their
offices immediately after their appointment and shall hold office until their
successors are appointed, except in the case of their removal or resignation.
Vacancies of officers shall be filled by appointment of the Board and such
appointee shall hold office until the appointment of his or her successor.
3.9 Minutes. The secretary of DCE shall cause to be kept minutes of regular,
adjourned regular and special meetings of the Board. The secretary shall cause
a copy of all minutes, along with copies of all ordinances and resolutions, to be
forwarded to each of the Parties hereto.
3.10 Rules. A majority of Director: may adopt rules governing meetings If not
inconsistent or to conflict with this Agreement. In the absence of rules adopted
by the Directors, Roberts' Rules of Order, as they may be amended from time to
time, shall govem the meetings of the Board in so far as they are not inconsistent
or in conflict with this Agreement or any DCE bylaws.
3.11 Powers and Functbns of the Board. The Board shall exercise general
governance and oversight over the business and activities of DCE, consistent
with this Agreement and applicable law. The Board shah provide general policy
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Community Choice Aggregation Joint Powers Agreement -6-
guidance to the CCA Program. Board approval shall be required for any of the
following actions:
3,11.1 The issuance of bonds or any other financing even if program
revenues are expected to pay for such financing.
3.11.2 The appointment or termination of the Executive Officer and General
Counsel.
3.11.3 The appointment or removal of officers described in Section 3.17,
subject to Section 3.17.1.
3.11.4 Any decision to provide retirement or post -retirement benefits that
are defined benefit programs, subject to the requirements of section
5.3.4, below.
3.11.5 The adoption of the Annual Budget.
3.11.6 The adoption of an ordinance.
3.11.7 The approval of agreements, except as provided by Section 3.12.
3.11.8 The initiation or resolution of claims and litigation where DCE will be
the defendant, plaintiff, petitioner, respondent, cross complainant or
cross petitioner, or intervenor, provided, however, that the Executive
Officer or General Counsel, on behalf of DCE, may intervene in,
become a party to, or file comments with respect to any proceeding
pending at the California Public Utilities Commisslon, 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.
3.11.9 The setting of rates for power sold by DCE and the setting of charges
for any other category of service provided by DCE.
3.11.10 Termination of the CCA Program.
3.12 CVAG's Participation. CVAG shall provide, under contract with DCE,
administrative services required by DCE during the first fire (5) years of the
implementation of the DCE; and thereafter as the administrative services contract
may be renewed from time to time by DCE, and shall exercise such other powers
and duties as the Board deems necessary to achieve the purpose of this
Agreement. During any such term, CVAG's Executive Director may serve as the
secretary of DCE.
3.13 "utive Officer. Except as may be provided pursuant to any administrative
services agreement referenced in Section 3.12, the Board of Directors shall have
the authority to appoint an Executive Officer for DCE, who shall be responsible
for the day-to-day operation and management of DCE and the CCA Program.
The Executive Officer may be retained under contract with DCE, be an employee
of DCE, be an employee of CVAG, or be an employee of one of the Parties. The
Executive Officer shall report directly to the Board and serve as staff to DCE.
Except as otherwise set forth In this Agreement, the Executive Officer may
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Community Choice Aggregation Joint Powers Agreement -7-
exercise all powers of DCE, including the power to hire, discipline and 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 may be established by the Board from time to time, by
resolution of the Board, except the powers specifically set forth In Section 3.11 or
those powers which by law must be exercised by the Board of Directors. The
Executive Officer shall serve at the pleasure of the Board.
3.14 DCE Staff. Except as may be provided pursuant to any administrative services
agreement, � Z.. -, A- In Section 3.12, DCE may contract with CVAG for staff
services, retain its own staff, or contract with another entity for services. Unless
other employment is approved by the Commission, the DCE Executive Officer
may utilize CVAG staff as may be necessary to accomplish the purposes of DCE.
CVAG staff time, as well as office expenses, direct and Indirect overhead, shall
be charged to ICE utilizing direct billing and other accounting practices that
provide for a dear separation of funds.
3.15 Commissions. Boards, and Committees
3.15.1 The Board may establish commissions, boards or committees. including
but not limited to a standing executive committee of the Board, as the
Board deems appropriate, to assist the Board in carrying out its authority
and functions under this Agreement and may delegate authority to such
commissions, boards or committees as set forth in a Board resolution.
Such delegation may be modified, amended or revoked at any time the
Board may deem appropriate. Any decision delegated pursuant to this
subsection may be appealed to the Board, as the Board so determines.
3.15.2 The Board may also establish any advisory oomrnissions, boards, and
committees as the Board deems appropriate to assist the Board in
carrying out its functions and implementing the CCA Program, other
energy programs and the provisions of this Agreement.
3.15.3 Any board, commission or committee formed under this section shall
comply with the requirements of the Ralph M. Brown Act. The Board
may establish rules, regulations, policies, bylaws or procedures to govern
arty such commissions, boards, or committees, and shall determine
whether members shall be compensated or entitled to reimbursement for
expenses.
3.16 Director Compensation. Directors shall serve without compensation from DCE.
However, Directors may be compensated by their respective appointing
authorities. The Board, however, may adopt by resolution a policy relating to the
reimbursement by DCE of expenses or other costs incurred by Directors.
3.17 ygng. As described in Section 3.7 and in Seaton 3.17.3, action by DCE Board
will be taken solely by a majority vote of the total number of Directors present
except as provided in Section 3.17.5 below. In addition, as described in Section
3.17.4, upon request of two (2) Directors, a weighted vote by shares win also 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 Weighted Voting Shares
present. No action may be approved solely by a majority vote by shares. The
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Community Choice Aggregation Joint Powers Agreement -&
voting shares of Directors and approval requirements for actions of the Board
shall be as follows:
3.17.1 Weighted Votina Shares
Each member agency shall have a Voting Share as determined by the
following formulas:
(a) Pro Rata Votipo Share. Each Member shall have an equal voting
share determined by the following formula: ( [I / total number of
Members] multiplied by ), expressed as a percentage to two
decimal places; and
(b) Annual Enerav Votina Share. Each Member shall have an
additional voting share determined by the following formula:
([Total Annual Energy Use (expressed in MWh) in the Member's
Jurisdiction / combined Total Annual Energy Use In all Members'
Jurisdictions] multiplied by %), expressed as a percentage to two
decimal places. Annual Energy Use values are to be based on
total CCA related retail energy sales of all electric customer
accounts as of December 31 of the most recent year for which
such data is available. In the absence of actual data, the Board
may approve the use of reasonably estimated Annual Energy Use
values.
(c) Weighted Votina Share. Each Member's Weighted Voting Share
shall be the respective sum of the values computed in (a) and (b)
above, expressed as a percentage to two decimal places. The
combined total Weighted Voting Shares of all Members is 100.00
percent.
3 17 2 Shares are set forth inhibit DD based on data ad Votim Sha The vailablal e as o the Voting
Effective Date of this Agreement Exhibit D shall be revised no less than
annually as necessary to account for changes in the number of Members
and or changes In the Members' annual MWh retail energy usage.
Adjustments to Exhibit D shall be approved by the Board.
3.17.3 Action Anoroval Reauirements. Except as provided in Sections 3.17 and
3.17.4 and 3.17.5, the Board shall act solely upon the affirmative vote of a
majority of Directors present at the meeting.
3.17.4 Ootion for Approval by Votina Shares. Notwithstanding Section 3.17.3,
any two (2) Directors present at a meeting may demand that approval of
any matter related to the CCA Program be determined on the basis of
both Weighted Voting Shares and by the affirmative vote of a majority of
Directors present at the meeting. If two Directors make such a demand
with respect to approval of any such matter, then approval of such matter
shalt require the affirmative vote of a majority of Directors present at the
meeting and the affirmative vote of Directors having a majority of
Weighted Voting Shares present, as determined by Section 3.17.1 except
as provided In Section 3.17.5.
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Community Choice Aggregation Joint Powers Agreement -9-
3.17.5 Sflecial Votirp FeQuirements for Certain Matters.
(a) Two-TI. s and Weighted Voting Approval Requirements Relating
to Sections 6.2 and 7.54. Notwithstanding any other provision of
this Agreement, action of the Board on the matters set forth in
Section 6.2 (involuntary termination of a Member), or Section 7.54
(amendment of this Agreement) shall require the affirmative vote
of at least two-thirds of Directors present; provided, however, that:
(i) notwithstanding the forogoarg, any two (2) Directors present at
a meeting may demand that the vote be determined on the basis
of both Weighted Voting Shares and by the affirmative vote of
Directors present, and If any two (2) Directors make such a
demand, then approval shall require the affirmative vote of both at
least two-thirds of Directors present and the affirmative vote of
Directors having at least two-thirds of the Weighed Voting Shares
present, as determined by Section 3.17.1; and (li) for votes to
involuntarily terminate a Member under Section 6.2. the Director
for the Member subject to involuntary termination may not vote,
and the number of Directors constituting two-thirds of all Directors,
and the Weighted Voting Share of each Member shall be
recalculated as if the Member subject to possible termination were
not a Member.
(b) Seventy -Five Percent Special Voting Requirements for Eminent
Domain and Contributions or Pledge of Assets.
(i) A decision to exercise the power of eminent domain on
behalf of DCE to acquire any property interest other than
an easement, right-of-way, or temporary construction
easement shall require a vote of at least 75% of all
Directors.
Qi) The imposition on any Member of any obligation to make
contributions or pledge asset as a condition of continued
participation In the CCA Program shall require a vote of at
least 75% of all Directors and the approval of the
governing boards of the Members which are being asked
to make such contribution or pledge.
(iii) Notwithstanding the foregoing, any two (2) Directors
present at the meeting may demand that a vote under
subsections (i) or (ii) be determined on the basis of
Weighted Voting Shares and by the affirmative vote of
Directors, and if any two (2) Directors make such a
demand, then approval shall require both the affirmative
vote of at least 75% of all Directors and the affirmative vote
of Directors having at least 75°A of all Weighted Voting
Shares, as detemnined by Section 3.17.1. For purposes of
this section, 'imposition on any Member of any obligation
to make contributions or pledge assets as a condition of
continued participation in the CCA Program" does not
include any obligations of a withdrawing or terminated
Member imposed under Section 6.3.
Desert Community Energy
Community Choice Aggregation Joint Powers Agreement -10-
3.18 Treasurer and Auditor. The Treasurer shall function as the combined offices of
'treasurer and Auditor pursuant to Government code sedan 6505.6 and shall
strictly comply with the statutes related to the duties and responsibilities specified
in Section 65.5 of the Act. The Treasurer for DCE shall be the depository and have
custody of all money of DCE from whatever source and shall draw all warrants and
pay demands against DCE as approved by the Board. The Treasurer shall cause
an independent audit(s) of the finances of DCE 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 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.
3.19 Administrative Services Provider. The Board may appoint one or more
administrative services providers to serve as DCE's agent for planning,
Implementing, operating and administering the CCA Program, and any other
program approved by the Board. The appointed administrative services provider
may be one of the Members, or CVAG as provided in Section 3.12. A separate
services agreement shall set forth the terms and conditions by which the
appointed administrative services provider(s) shall perform or cause to be
performed tasks necessary for planning, implementing, operating and
administering the CCA Program and other approved programs. Any such
services agreement shall set forth the terms and the circumstances under which
the services agreement may be terminated by DCE. This section shall not in any
way be construed to limit the discretion of DCE to hire its own employees to
administer all or any portion of the CCA Program or any other program.
ARTICLE 4: IMPLEMENTATION ACTION AND AUTHORITY DOCUMENTS
4.1 Preliminary Imolementation of the CCA Proaram.
4.1.1 Enabling Ordinance. To be eligible to participate in the CCA Program, each
Party must adopt an ordinance in accordance with Public Utilities Code
Section 3662(c)(12) for the purpose of specifying that the Party intends to
implement a CCA Program by and through its participation in DCE.
4.1.2 Imolemer"on Plan. DCE 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 in the manner provided by Section 3.17.
4.1.3 Termination pf CCA Proaram. Nothing contained in this Article or this
Agreement shall be construed to limit the discretion of DCE to terminate
the implementation or operation of the CCA Program at any time in
accordance with any applicable requirements of state law.
4.2 Authority Documents. The Parties acknowledge and agree that the affairs of
DCE will be implemented through various documents duly adopted by the Board
through Board resolution. The Parties agree to abide by and comply with the
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terms and conditions of all such documents that may be adopted by the Board,
subject to the Parties' right to withdraw from DCE as described In Article e.
ARTICLES: FINANCIAL PROVISIONS
5.1 E�' a1 Yjkar. DCE's fiscal year shall be 12 months commencing July 1 and
end'irg June 30. The fiscal year may be changed by Board resolution.
5.2 peoository.
5.2.1 All funds of DCE shall be held in separate accounts in the name of DCE
and not commingled with funds of any Party or any other person or entity.
5.2.2 All funds of DCE 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 DCE shall
be open to inspection by the Parties at all reasonable times. The Board
shall contract with a certified public accountant or public accountant to
make an annual audit of the accounts and records of DCE, which shall be
conducted in accordance with the requirements of Section 6505 of the
Act.
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 Operating 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 Sys gt et and RecovW of Costs.
5.3.1 Bud oet The initial budget shag be approved by the Board. The Board
may revise the budget from time to time as may be reasonably necessary
to address contingencies and unexpected expenses. All subsequert
budgets of DCE shall be approved by the Board In accordance with the
Operating Rules and Regulations.
5.3.2 Fundina of Initial Costs. The Parties acknowledge that implementing the
CCA Program will require some form of funding either provided by al or
some of the Parties or attained in some other mariner. If the CCA
Program becomes operational, these Initial Costs paid by such Parties or
attained from other sources shag be included in the customer charges for
electric services as provided by Section 5.3.3 to the extent permitted by
law, and respective Parties or other sources shall be reimbursed from the
payment of such charges by customers of DCE. CVAG shall also be
entitled to reimbursement for Initial Costs. DCE may establish a
reasonable time period over which such costs are recovered and repaid
to respective Parties or other sources. In the event that the CCA
Program does not beoome operational, respective Parties shag not be
entitled to any reimbursement of the funded Initial Costs from DCE or any
Party. If any of the initial member agencies or other sources assists in
funding initial costs, they shall also be entitled to reimbursement pursuant
to this section. The Board shall approve the manner of funding and
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repayment of initial CCA program costs which may include reasonable
interest charges.
5.3.3 r&A Proaram Costs. The Parties desire that all costs incurred by DCE
that are directly or indirectly attributable to the provision of electric,
conservation, efficiency, incentives, financing, or other services provided
under the CCA 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 CCA customers receiving such electric
services, or from revenues from grants or other third -party sources, to the
extent permitted by law.
5.3.4 Emolovee Retirement and Post-retirementPenefits. Should the Board
determine to provide a defined benefits retirement benefit to DCE
employees (such as PIERS) or other post -retirement berie is that would
be within an Other Post -Retirement Benefits (OPEB) obligation to DCE
employees, prior to providing such benefit(s) to any employee, the Board
shall (1) obtain a third party independent actuarial report on the kxV term
ousts of the benefit or benefits, (2) adopt a funding plan for the payment
of both current and long-term costs that provides for the payment of all
such costs on a current, pay-as-you-go, basis and eliminates any known
or reasonably anticipated unfunded liability associated with the benefits)
and (3) notice all Member agencies of the pending consideration of the
benefit(s) together with the actuarial report and funding plan, for at least
sixty (60) days and obtain the consent, by resolution of not less than 75
percent of the then current Member agency boards or councils
ARTICLE 6: WITHDRAWAL AND TERMINATION
6.1 Withdrawal.
6.1.1 Rioht to Withdraw. A Party may withdraw its participation in the CCA
Program, effective as of the beginning of DCE's next fiscal year, by giving
no less than 6 months advance written notice of its election to do so,
which notice shall be given to DCE and each Party. Withdrawal of a
Party shall require an affirmative vote of the Party's governing board.
6.1.2 ftht to Withdraw After Amendmer>t. Notwithstanding Section 6.1.1. a
Party may withdraw its membership in DCE following an amendment to
this Agreement adopted by the Board which the Party's Director voted
against, provided such notice is given In writing within thirty (30) days
following the date of the vote. Withdrawal of a Party shall require an
affirmative vote of the Party's governing board 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 Riaht to Withdraw Prior to Proaram Launch. After receiving Kids from
power suppliers, DCE shall provide to the Parties the report from the
electrical utility consuttant(s) retained by DCE that compares the total
estimated electrical rates that DCE will be charging to customers as well
as the estimated greenhouse gas emissions rate and the amount of
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estimated renewable energy used with that of the incumbent utility (SCE),
providing such information as is available to assist with forecasting of
conditions over the next three years. A Party may immediately withdraw
Its membership In DCE without any further financial obligation, as long as
the Party provides written notice of its intent to withdraw to DCE Board no
more than thirty (30) days after receiving the rreport. A Party may also
withdraw its membership in DCE prior to December 31, 2017 for any
reason. Any withdrawing Party shall not be entitled to any return of funds
it may have provided to DCE, provided, however, that if, after the program
is launched there are unobligated and unused funds, the withdrawing
member shall be refunded its pro rate share of the unobligated and
unused funds.
6.1.4 Continuing Financial Obligation: Further Assurances. Except as provided
by Section 6.1.3, a Party that withdraws its participation in the CCA
Program may be subject to certain continuing financial obligations, as
described in Section 6.3. Each withdrawing Party and DCE 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
CCA Program.
6.2 nnvoluntary Termination of a Party. Participation of a Party in the CCA program
may be terminated for material non-oomplance with provisions of this Agreement
or any other agreement relating to the Party's participation in the CCA Program
upon a vote of Board members as provided in Section 3.17.5. 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 fast 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 CCA Program terminated may be subject to
certain continuing liabilities, as described to Section 6.3.
6,3 gontinuina Financial Obligations: ReftM. Except as provided by Section 6A.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 such Party's membership or participation in the CCA Program
through the effective date of its withdrawal or involuntary termination, it being
agreed that the Party shall not be responsible for any new financial obligations
arising after the date of the Party's withdrawal or involuntary termination. Claims,
demands. damages, or other financial obligations for which a withdrawing or
terminated Party may remain liable irckrde, but are not limited to, losses from the
resale of power contracted for by DCE to serve the Party's load and any
unfunded liabilities such as unfunded retirement contributions or costs and any
unfunded post -retirement benefits. With respect to such financial obligations,
upon notice by a Party that i wishes to withdraw from the CCA Program, DCE
shall notify the Party of the minimum waiting period under which the Party would
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have no costs for withdrawal if the Party agrees to stay in the CCA Program for
such period. The wafting period will be set to the minimum duration such that
there are no costs transferred to remaining ratepayers. If the Party elects to
withdraw before the end of the minimum waiting period, the charge for exiting
shall be set at a dollar amount that would offset actual costs to the remaining
ratepayers, and may not include punitive charges that exceed actual costs. In
addition, such Party shall also be responsible for any costs or obligations
associated with the Party's participation in any program in accordance with the
provisions of any agreements relating to such program provided such costs or
obligations were incurred prior to the withdrawal of the Party. DCE may withhold
funds otherwise owing to the Party or may require the Party to deposit sufficient
funds with DCE, as reasonably determined by DCE and approved by a vote of
the Board, to cover the Party's financial obligations for the costs described
above. Any amount of the Party's funds held on deposit with DCE above that
which Is required to pay any existing or ongoing financial obligations shall be
returned to the Party. If there is a disagreement related to the charge(s) for
exiting, 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, the Parties may agree to proceed to arbitration, or any parry may seek
judicial review. The liability of any Party under this section 6.3 is subject and
subordinate to the provisions of Section 2.2, and nothing in this section 6.3 shall
reduce, impair, or eliminate any immunity from liability provided by Section 2.2.
6.4 Mutual TerminatiM. This Agreement may be terminated by mutual agreement of
a l the Parties; provided, however, the foregoing shall not be construed as limiting
the rights of a Party to withdraw its participation in the CCA Program, as
described in Section 6.1.
6.5 Djoosition of Prooertv Moon Termination of Authority. Upon termination of this
Agreement, any surplus money or assets in possession of DCE 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 PADute Resolution. The Parties and DCE shall make reasonable efforts to
informally settle all disputes arising out of or in connection with this Agreement.
Should such informal efforts to settle a dispute, after reasonable efforts, fail, the
dispute shall be mediated in accordance with policies and procedures
established by the Board.
7.2 Liabilrtv of Djedors. OffrceM. and E ngWXM. The Directors, officers, and
employees of DCE 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. DCE shall defend, Indemnify
and hold harmless the individual current and former Directors, officers, and
employees for any ads or omissions in the scope of their employment or duties in
the manner provided by Government Code Sections 995 at seq. Nothing in this
section shall be construed to limit the defenses available under the law, to the
Parties, DCE, or its Directors, officers, or employees
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7.3 In demnifiication of Parties. DCE shall acquire such insurance coverage as is
necessary to protect the Interests of DCE, the Parties, and the public. Subject to
the provisions of Section 7.4 and provided that a Party has acted In good faith
and in accordance with this Agreement, DCE shall defend with counsel
acceptable to said Party, indemnify and hold such Party free and harmless from
any loss, liability or damage Incurred or suffered by such Party by reason of
litigation arising from or as a result of any of the following: the Party's
participation In the JPA; action taken to approve and/or implement the CCA; or
any other ad performed or to be performed by the Party pursuant to this
Agreement; provided, however that such IrKlemnification or agreement to hold
harmless pursuant to this section shall be recoverable only out of DCE assets
and not from other Parties. To the extent OCE's assets are Insufficient to satisfy
its obligations under this Section, any member Agency forced to expend its own
funds to satisfy what would otherwise be DCE's obligations shall be entitled to
reimbursement from DCE.
7.4 Limitations on Liab tv. The Parties acknowledge that Section 895.2 of the
California Government Code provides that a Member Is jointly and severally
liable for the torts of the joint powers agency, but that Sections 895.4 and 895.6
of that Code allow the members of a joint powers agency to contractually agree
to indemnify and contribution provisions that slow such liability to be apportioned
among the members based on their respective degree of fault giving rise to the
liability. The Parties further acknowledge that they have agreed at Section 7.3
above to indemnify and defend those Member agencies against loss, liability or
damage suffered by a Member Agency individually as a result of that Agencys
good faith ads taken pursuant to this Agreement. Now. therefore, in
contemplation of such authority, the Parties agree that, as among themselves,
each shall assume that portion of the liability Imposed upon DCE or any of its
Members, officers, agents or employees by law for injury caused by any
negligent or wrongful ad or omission occurring during the performance of this
Agreement that is not covered by insurance, that is determined by the DCE to be
that Member's proportionate share accruing during the Membees period of
participation it DCE. Said determination shall be by three -fourths vote of the
Member Agencies, meaning an affiirmaWe vote of three4burths of the total
number of Member Agencies. The Members acknowledge that, given the
possible variables, determination of a proper apportionment may be difficult,
Therefore, sutejed only to arbitration rights set out at Section 6.3, the Members
agree that the Board's good faith deterrrdnation of a fair apportionment shall be
final, binding and enforceable as a tern of this Agreement Each Member shall to
the extent provided herein indemnify and hold harmless the other Members for
any loss, costs or expenses that may be Imposed on such other Members solely
by virtue of Sedan 895.2.
7.5 AmeMnVnt of this AqM2MM. This Agreement may not be amended except by
a written amendment approved by a vote of Bowl members as provided in
Section 3.17.5. DCE shall provide written notice to all Parties of amendments to
this Agreement, Including the effective data of such amendments, at least 30
days prior to the date upon which the Board votes on such amendments.
Exhibits A through E of this Agreement may be revised from time to time by
Board vote and copies of such revised exhibits shall be distributed to all Parties.
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7.6 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 7.66 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.§6 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 DCE, 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 DCE or the Parties under this Agreement.
7.7 Severability. If one or more clauses, sentences, paragraphs or provisions of this
Agreement shall be held to be unlawful, invalid or unenforceable, it is hereby
agreed by the Parties, that the remainder of the 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.
7.8 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.
7.9 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.
7.10 Parties to be Served Notice. Any notice authorized or required to be given
pursuant to this Agreement shag 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) it
the sender receives the return receipt. All notices shall be addressed to the
office of the clerk or secretary of DCE or Party, as the case may be, or such
other person designated in writing by DCE or Party. Notices given to one Party
shag be copied to all other Parties. Notices given to DCE shall be copied to all
Parties.
7.11 No Trii(d Pafir Beneficiaries. This Agreement shall reflect the Parties' rights and
obligations as by and among themselves. Nothing herein shag create any right in
any third party to enforce any right or obligation set out in this Agreement as
against any Party hereto.
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Exhibit A
Definitions
1. "Act" means the Joint Exercise of Powers Act of the State of California (Government
Code Section 6500 et sea.)
2. "Administrative Services Agreement means an agreement or agreements entered into
after the Effective Date by DCE with one or more entity that will perform tasks necessary
for planning, implementing, operating and/or administering the CCA Program, or any
portion of the CCA Program or any other energy programs adopted by DCE.
3. "Agreemenr means this Joint Powers Agreement.
4. `Annual Energy Use' has the meaning given in Section 3.17.1(b).
5. "Authority' means the DCE.
6. "Authority Document(s)' means document(s) duty adopted by the Board by resolution or
motion implementing the powers, functions, and activities of DCE, Including but not
limited to the Operating Rules and Regulations, the annual budget, and plans and
policies.
7. 'Board" means the Board of Directors of DCE.
8. 'CCA" or "Community Choice Aggregation' means an electric service option available to
cities and counties pursuant to Public Utilities Code Section 366.2.
9. "CCA Program' means DCE's program relating to CCA that is principally described In
Article 2 of this Agreement.
10. "CVAG' shall mean the Coachella Valley Association of Governments.
11. "Director'' means a member of the Board of Directors appointed by and representing a
Party.
12. "Effective Date' means October 30, 2017 or when initial members of DCE execute this
Agreement, whichever occurs later, as further described in Section 2.1.
13. "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 tiled with the
California Public Utilities Commission for the purpose of describing a proposed CCA
Program.
14. "Initial Costs" means all costs incurred by the DCE and or any Parties relating to the
establishment and initial operation of DCE, such as the hiring of an Executive Officer
and any administrative staff, and any required accounting, administrative, technical, or
legal services in support of DCE's Initial activities or in support of the negotiation,
preparation, and approval of one or more Administrative Services Agreements.
15. "Operating Rules and Regulations' means one or more sets of rules, regulations,
policies, bylaws and procedures governing the operation of DCE.
16. "Parties' or "Members' means, collectively, the signatories to this Agreement.
Desert Community Energy —
Community Choice Aggregation Joint Powers Agreement -18-
17. 'Party", 'Member or "Member Agency' means a signatory to this Agreement.
18. "Total Annual Energy Use' has the meaning given in Section 3.17.1(b).
Desert Community Energy
Community Choice Aggregation Joint Powers Agreement
-19-
Exhibit B
List of Parties
Parties: City of Blythe — not in first phase
City of Cathedral City
City of Desert Hot Springs — not in first phase
City of Indian Wells — not in first phase
City of Palm Desert
City of Palm Springs
Desert Community Energy
Community Choice Aggregation Joint Powers Agreement -20-
City
Cathedral City
Palm Desert
Palm Springs
Exhibit C
PROFORMA
Annual Energy Use
Electric Average Load
Customers (GWh)
24,137 329
39,459 699
37,826
Total 101.4221
' Total does not include opt out rate, estimated at 101/6
640
1.668, $
Revenues
(Million $/Yr)
30
58
56
144
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Exhibit D
PROFORMA
VOTING SHARES
CVCEA CCA Program Participation and Weighted Voting Shares
Annual
Percent
MWh
Pro Rats
Active Participants
Use
Annual MWh
Voting
Vote
(MWh)
Share
Share
Cathedral City
329.000
19.72°%
9.86°%
16.67°%
Palm Desert
699,000
41.91°%
20.95°%
16.67%
Palm Springs
640,000
38.37°%
19.18%
18.67%
TOTALS
1,668.000
100.000/0
50.00°%
50.00%
Wtd Voting
Share
26.53°%
37.62%
35.85%
100.00%
Formulas used
1. AND& ENERGY US9 VOTING SE: TOTAL ANNUAL ENERGY USE (EXPRESSED IN
MWH) IN MEMBERS JUR{SD I N / COMBINED TOTAL ANNUAL ENERGY USE ALL
MEMBERS' JURISDICTIONS] MULTIPLIED BY %), EXPRESSED AS A PERCENTAGE TO TWO
DECIMAL PLACES. SEE SECTION 3.17.1 (6)
2. PRO VOT{f}G S ARE: [1 ! TOTAL NUMBER OF MEMBERS] MULTIPLIED BY'r4),
EXP D AS A PERCENTAGE TO TWO DECIMAL PLACES. SEE SECTION 3.17.1 (A)
3. WEIlJHTEyQT/NG SHARE: [THE RESPECTIVE SUM OF THE VALUES COMPUTED IN (1) AND
(2) AB0�1JJ P ESAED AS A PERCENTAGE TO TWO DECIMAL PLACES. SEE SECTION 3.17.1
(C)
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-22-
Exhibit E
Signatures
IN WITNESS EREOF, the Parties hereto have executed this Joint Powers Agreement
establishing the Community Energy, Community Choice Aggregation program.
By:
1
Name: Sal Jonathan
Title: Mayor
Date: December 14.2017 (Contract No. C36400)
Party: City of Palm Desert
(One signature page for each Member)
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Community Choice Aggregation Joint Powers Agreement -23-
EXHIBIT E
SIGNATURES
IN WITNESS WHEREOF: the Parties hereto have executed this Joint Powers Agreement
establishing the Desert Cities Energy Choice. Community Choice Aggregation program,
By:
Name: Charles P. McClendon
Title: City Manaaer
Date: Auaust 16. 2017
Party: Cathedral Citv
(One signature page for each Member)
Desert Cities Energy Choice 24
1PA Agreement, June 28, 2017
EXHIBIT E
SIGNATURES
IN WITNESS WHEREOF, the Parties hereto have executed this Joint Powers Agreement
establishing the Dowd Community Energy, Community Choice Aggregation program.
By:---�0:��Nw— CITY MORNEY
Name: I)A4 1'D 44. WJ"
ATTES
.f 404
Title: �/�` ' �- City Clerk
Date: `T I ►'A ! � 7 APPAOVEDOYCITYCOUNCIL
k�►i•('�. �il� I� Z'
Party, G l TAW `T Q.t h�G
(One signature page for each Member)
I.ewit Community Encrgy 1
Final JPA Agreement, June 28, 2017