REPORT TO COUNCIL
SUBJECT
Title
Action on Appendix G - Amendment No. 7 to the Grizzly Development and Mokelumne Settlement Agreement by and Between Pacific Gas and Electric Company and City of Santa Clara and Related Budget Amendment
Report
BACKGROUND
Since 2013, Pacific Gas and Electric Company (PG&E) and the City of Santa Clara (City), doing business as Silicon Valley Power (SVP), as co-licensees of the Bucks Creek Hydroelectric Project (Project) and pursuant to the Grizzly Development and Mokelumne Settlement Agreement (Agreement), have been working together toward obtaining a relicensing of the Project by the Federal Energy Regulatory Commission (FERC). The Project includes, amongst other facilities, PG&E's Bucks Creek hydroelectric powerhouse and the City's Grizzly hydroelectric powerhouse. Midway through the relicensing effort, the co-licensees discovered that they disagreed as to the interpretation of Agreement's provisions regarding allocation of relicensing costs. After protracted negotiations, the co-licensees have agreed on the interpretation of the Agreement's cost allocation provisions, and have reduced to writing specific clarifications to the Agreement to set forth such understandings.
DISCUSSION
Amendment No. 7 to the Agreement adds two new definitions and five new paragraphs to existing Section 12.2.2 of the Agreement to clarify the cost allocation provisions related to costs incurred in the relicensing process.
The proposed revisions to the Agreement clarify that relicensing costs incurred by City staff, City consultants, and City legal counsel shall either be shared by the co-licensees in accordance with the 2013 "Letter Agreement Regarding Bucks Creek Hydroelectric Project Relicensing Cost Sharing Pursuant to Grizzly Development and Mokelumne Settlement Agreement (1990)" (Letter Agreement), or paid for by the City and booked by the City as "Costs of Plant" for accounting purposes. The City's relicensing costs that are to be shared be...
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