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HomeMy WebLinkAbout1997-015 Refinance Agrmt - BPA Department of Energy Bonneville Power Administration P.O. Box 3621 Portland, Oregon 97208-3621 BPA Appropriations Refinancing, Public Law 104-134 January 21, 1997 Brian L. Almquist, City Administrator City of Ashland City Hall 20 East Main Ashland, OR 97520 Dear Brian: Last year the U.S. Congress enacted in Public Law 104-134, the 1996 Energy and Water Development Appropriations Act (Act), a section (Section 3201) which resolves past interest rate subsidy criticisms regarding the existing Federal Columbia River Power System (FCRPS) investments in a manner that benefits Federal taxpayers while assuring BPA's customers that their repayment obligation will not be changed in the future. Section 3201(i) of the Act requires that the Bonneville Power Administration (BPA) offer certain contract terms in all future and certain existing contracts for the sale of electric power, transmission, or related services. BP A interprets "related services" to include any power or transmission service which is sold by BPA: energy services, operations and maintenance agreements, and ancillary reserve services. These contract terms are intended to fix the customers' obligations to repay interest and principal on old capital investments. BP A interprets section 3201 (i) to exclude purchase contracts such as power acquisition contracts and conservation contracts; as well as other agreements which are not a "sale" by BP A such as net billing agreements, Canadian Entitlement agreements, and facilities access agreements. The purpose ofthis letter agreement is to offer a single amendment to all of your eligible contracts in effect as of the effective date of this letter agreement to include the contract provisions specified in Section 3201(i). For any future eligible contracts, BPA will also offer comparable contract terms to fulfill the requirements of Section 320 I (i). By this letter agreement, BP A offers to implement Section 320 I (i) for eligible contracts as follows: 1. ELIGIBLE CONTRACTS. Customer contracts with BPA are eligible if in effect as of the effective date of this letter agreement, for the sale of electric power, transmission, or related services. The Customer shall list those contracts it wishes to amend in the Attachment to this letter agreement. 2 2. DEFINITIONS. Unless otherwise defined in this letter agreement, all capitalized terms shall have the same meaning as specified in Section 3201. 3. IMPLEMENTATION OF SECTION 3201(i). Each contract listed in the Attachment to this letter agreement is amended to include the following section: "BPA APPROPRIATIONS REFINANCING ACT- P.L.I04-134 Consistent with Section 3201(i) of Public Law No. 104-134: "(a) Bonneville shall establish rates and charges on the basis that: "( 1) the principal amount of an old capital investment shall be no greater than the new principal amount established under Section 3201(b) of Public Law 104-134; "(2) the interest rate applicable to the unpaid balance of the new principal amount of an old capital investment shall be no greater than the interest rate established under Section 3201(c) of Public Law 104-134; "(3) any payment of principal of an old capital investment shall reduce the outstanding principal balance ofthe old capital investment in the amount of the payment at the time the payment is tendered; and "( 4) any payment of interest on the unpaid balance of the new principal amount of an old capital investment shall be a credit against the appropriate interest account in the amount of the payment at the time the payment is tendered -- "(b) apart from charges necessary to repay the new principal amount of an old capital investment as established under Section 3 20 1 (b) of Public Law 1 04-134 and to pay the interest on the principal amount under Section 3201(c) of Public Law 104-134, no amount may be charged for return to the U.S. Treasury as repayment for or return on an old capital investment, whether by way of rate, rent, lease payment, assessment, user charge, or any other fee; "(c) amounts provided under Section 1304 of Title 31, U.S. Code, shall be available to pay, and shall be the sole source for payment of, a judgment against or settlement by Bonneville or the United States on a claim for a breach of this section; and "( d) the contract provisions specified in this section do not: "(1) preclude Bonneville from recovering, through rates or other means, any tax that is generally imposed on electric utilities in the United States, or 3 "(2) affect Bonneville's authority under applicable law, including section 7(g) ofthe Pacific Northwest Electric Power Planning and Conservation Act, to: "(A) allocate costs and benefits, including but not limited to fish and wildlife costs, to rates or resources, or "(B) design rates. "(e) Terms used in this section shall have the same meaning as they have under Section 3201(b) of Public Law 104-134. "(f) References in this section to Section 3201 of Public Law 104-134 are to that Section as approved by the 104th Congress and signed by the President in April of 1996." BP A makes no further representation as to the meaning or application of Section 320 l(i) other than the specific terms offered herein. If the terms and conditions ofthis letter agreement are acceptable, please sign the acceptance block on both originals, and return one original of this letter agreement to me no later than April 30, 1997. The remaining original is for your files. Thank you for your prompt attention to this matter. Sincerely, -p,~ J n Lebens Account Executive ACCEPTED: Brian L. Almquist, City Administrator & General Manager City of Ashland By ~?'~~ l/- Name Brian L. Almquis (Print/Type) Title Date 2/4/97 Attachment: List of Eligible Contract ATTACHMENT City of Ashland LIST OF ELIGIBLE CONTRACTS BPA Appropriations Refinancing, Public Law 104-134 The following contracts are amended to include the terms ofthe letter agreement executed on , 199 Contract Number Contract Title 96MS-94924 Power Sales DE-MS79-92BP93628 Reciprocal Operating & Emergency Repair Agreement D E- MS 79-92BP93 666 Reimbursable and O&M Agreement DE-MS79-81BP90432 Power Sales