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HomeMy WebLinkAboutItem No. 15 JPA Western Community EnergyText File City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 17-714 Agenda Date: 7/10/2018 Status: BusinessVersion: 1 File Type: AgreementIn Control: City Council / Successor Agency Agenda Number: 15) Page 1 City of Lake Elsinore Printed on 7/5/2018 Page 1 of 3 REPORT TO CITY COUNCIL To:Honorable Mayorand Members of the City Council From:Grant Yates, City Manager Prepared by: Jason Simpson, Assistant City Manager Date:June 12, 2018 Subject:Joint Powers Agreement with Western Community Energy Recommendation adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITYOF LAKE ELSINORE, CALIFORNIA, APPROVING MEMBERSHIP IN THE WESTERN COMMUNITY ENERGY JOINT POWERS AUTHORITY; and; introduce by title only and waive further reading of AN ORDINANCE OF THE CITY COUNCIL OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE IMPLEMENTATION OF A COMMUNITY CHOICE AGGREGATION PROGRAM Background In January 2016, Western Riverside Council of Governments (WRCOG) staff received direction from the Executive Committee to pursue a Feasibility Study (Study) for the potential formation of a Community Choice Aggregation (CCA) Program for interested member jurisdictions. Using conservative numbers and assumptions, the Study indicates forming a CCA would be favorable for the sub-region. The CCA, now named Western Community Energy (WCE), will be administered by WRCOG initially. As WCE establishes a joint power authority (JPA) and Governing Board, WCE anticipates to launch in late 2018 with several member jurisdictions. WRCOG willpresent information on WCE and respond to questions from the Council and members of the community. CCA allows cities and counties to aggregate their buying power to secure electrical energy supply contracts on a region-wide basis. In California, CCA (Assembly Bill 117) was chaptered in September 2002 and allows for local jurisdictions to form a CCA for this purpose. Several local jurisdictions throughout California are pursuing formation of CCAs as a way to lower energy costs and/or provide “greener” energy supply. Careful creation and administration of a CCA can have many local benefits. A CCA provides consumer choice where none currently exists, and if past performance is any indicator, can also result in lower costs for electrical generation rates. Currently there are nine (9) operational CCAs in California, with eight (8) more coming on line in 2018. Within Riverside County, the City of San Jacinto, County of Riverside unincorporated, and Desert Community Energy anticipate serving load in 2018. Western Community Energy Page 2 of 3 As of May 2015, three (3) CCAs were offering their customers twenty to fifty percent (20-50%) more renewable energy than the predecessor utility at prices that were competitive and even lower than the utility rates. Two of those CCAs were also procuring and co-developing in-State and local renewable resources andoffering specialized energy programs designed for their local service areas. Discussion In CCAs, communities can increase the amount of electricity procured from sources such as solar, wind, and geothermal. They can also develop innovative energy programs tailored specifically to local preferences andsupport the development of green and clean tech energy and projects. Finally, through the competition that they can promote, CCAs can help drivecosts down, stimulate new energy investments, and diversify power choices. Once a CCA is operational, it is completely ratepayer funded, and not subsidized by taxpayer dollars. One of the important features of the CCA is that while ratepayers can "opt out" of participation in the program, the default status of each ratepayer is participation. Ratepayer revenues for electrical generation that currently flow to the incumbent utility are re-directed to the CCA, which becomes the default provider of electrical generation services. A program's start-up funding can be provided by a municipal government, a local agency, a grant or a private service provider. All startup funding is recoverable through early program revenues. Lastly, a CCA provides significantly more local control over the energy procurement, rate setting, consumer programming, and other decision-making components as compared to the existing investor owned utility model. The most common approach to administration of a CCA is an inter-agency "joint powers agency," sometimes referenced as a "joint powers authority" (JPA or “Authority”) formed pursuant to the Joint Exercise of Powers Act codified at California Government Code Section 6500 et seq. In this instance, the JPA serves as a public, non-profit agency on behalf of the municipalities that choose to participate in the CCA program. A second option is for a single city or county to form and structure a CCA through an enterprise fund and manage the CCA "in- house." A third option involves commercial, third party firm. This model is new in California, so its risks and benefits are unknown at this time. Regardless of a CCA's administrative structure, the program's assets and liabilities remain separate from those of City general fund. Financial liability is mitigated by specific JPA organization or action, and vendor contract language that protects municipal assets. In the JPA model, surplus funds generated by the CCA may be reinvested back into the community in the form of new energy projects and programs that serve the entire service area. In the enterprise fund and privately managed models, a portion of revenues may be allocated to the general fund consistent with sound fiscal management practices and laws governing use of ratepayer funds. Highlights from the JPA include: Board of Directors. The governing body of the Authority shall be a Board of Directors consisting of one director for each Member Agency appointed in accordance with Section 2.2. Appointment of Directors. The governingbody of each Member Agency shall appoint and designate in writing one regular Director who shall be authorized to act for and on behalf of the Member Agency on matters within the powers of the Authority. The governing body of each Member Agency shall also appoint and designate in writing one alternate Director who may vote in matters when the regular Director is absent from a Board meeting. The persons appointed and designated as the regular Director and the alternate Director shall be a member of the governing body of the Member Agency. Western Community Energy Page 3 of 3 Voting by the Board of Directors. Each member of the Board or participating alternate shall be entitled to one vote. Action of the Board on all matters shall require an affirmative vote of a majority of all Directors present and qualified to vote constituting a quorum. Initial Funding of Authority. WRCOG has funded certain activities necessary to implement the CCA Program. If the program becomes operational, these initial costs shall be included in the customer charges for electric services to the extent permitted by law, and WRCOG shall be reimbursed from the payment of such charges by customers of the Authority pursuant to a reimbursement agreement between Authority and WRCOG. Prior to such reimbursement, WRCOG shall provide such documentation of costs paid as the Board may request. The Authority may establish a reasonable time period over which such costs are recovered. In the event the program does not become operational, WRCOG shall not be entitled to any reimbursement of the initial costs. Right to Withdraw Prior to Program Launch. After receiving bids from power suppliers, the Authority must provide to the Member Agencies the report from the electrical utility consultant retained by the Authority that compares the total estimated electrical rates that the Authority 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. If the report provides that the Authority is unable to provide total electrical rates, as part of its baseline offering, to the customers that are equal to or lower than the incumbent utility or to provide power in a manner that has a lower greenhouse gas emissions rate or uses more renewable energy than the incumbent utility, a Member Agency may immediately withdraw its membership in the Authority without any financial obligation, as long as the Member Agency provides written notice of its intent to withdraw to the Authority Board no more than thirty (30) days after receiving the report. Fiscal Impact None. Exhibits A –Resolution B –Agreement C –Ordinance D –Bylaws for Western Community Energy RESOLUTION NO. 2018 -___ RESOLUTION OF THE CITY COUNCILOFTHE CITY OF LAKE ELSINORE, CALIFORNIA,APPROVING MEMBERSHIP IN THE WESTERN COMMUNITY ENERGY JOINT POWERS AUTHORITY Whereas,Assembly Bill 117 (Stat. 2002, ch. 838; see California Public UtilitiesCode section 366.2 et seq.) authorizes any California city or county, whose governing body so elects, to combine the electricity load of its residents and businesses in a community-wide electricity aggregation program known as Community Choice Aggregation;and; Whereas,pursuant to the Joint Exercise of Powers Act (see California Government Code section 6500 et seq.) incorporated municipalities or counties within Riverside County may enter into a Joint Powers Agreement creating a separate public agency tostudy, promote, develop, conduct, operate, and manage energy, energy efficiency and conservation, and other energy- related and climate change programs, to be known as the Western Community Energy Authority; and; Whereas,each incorporated municipality or county wishing to participate in the Western Community Energy Authority will appoint one regular Director and one alternate Director to serve on the governing body of the Western Community Energy Authority; and; Whereas, the City of Lake Elsinore desires to provide constituents within its service area with greater local involvement over electric services, and promote competitive retail choice by joining the Western Community Energy Authority and participating in the Community Choice Aggregation program; and; Whereas,in order for the City of Lake Elsinore to become a Member Agency in the Western Community Energy Authority, the City Council must adopt a resolution requesting participation and evidencing an intent to join the Western Community Energy Authority. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1.Each of the above recitals is true and correct and is adopted by the legislative body of the District. Section 2.The Council of the City of Lake Elsinore affirms its intent to join the Western Community Energy Authority as a Member Agency by authorizing its signatory for the execution of the Western Community Energy Joint Powers Agreement in substantially the form attached hereto as Exhibit A. Section 3.This Resolution shall be effective upon its adoption. Reso. No. 2018- Page 2 of 3 2 Passed and Adopted on this 10th dayof July, 2018. _____________________________ Natasha Johnson, Mayor Attest: _____________________________ Susan M. Domen, MMCCity Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE) I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2018-______ was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of July10, 2018and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ Susan M. Domen, MMC City Clerk Reso.No. 2018- Page 3 of 3 EXHIBIT A WESTERN COMMUNITY ENERGY JOINT POWERS AGREEMENT WESTERN COMMUNITY ENERGY JOINT POWERS AGREEMENT This Joint Powers Agreement (“Agreement”), effective as of _________, 2018 (“Effective Date”) 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 A(“Member Agencies”). The term “Member Agencies” shall also include an incorporated municipality or county added to this Agreement in accordance with Section 3.1. RECITALS A.In 2002, AB 117 was signed into law allowing public agencies to aggregate the electrical load of interested consumers within their jurisdictional boundaries and purchase electricity on behalf of those consumers. B.The Member Agencies desire to establish a separate public agency, known as Western Community Energy(“Authority”), under the provisions of the Joint Exercise of Powers Act of the State of California (Government Code § 6500 et seq.) (“Act”) in orderto collectively study, promote, develop, conduct, operate, and manage energy programs, and exercise any powers common to the Authority’s members to further these purposes. C. The Member Agencies have each adopted an ordinance electing to implement through the Authority a community choice aggregation program pursuant to California Public Utilities Code § 366.2. The priority of the Authority will be the consideration of those actions necessary to implement the program. AGREEMENT NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions hereinafter set forth, it is agreed by and among the Member Agenciesas follows: SECTION 1. FORMATION OFAUTHORITY 1.1 Creation of Agency. Pursuant to the Joint Exercise of Powers Act, California Government Code § 6500 et seq.and other pertinent provisions of law, there is hereby created a public entity to be known as the Western Community Energy. The Authority shall be a public entity separate and apart from the Member Agencies. 1.2 Effective Date and Term. This Agreement shall become effective and Authority shall exist as a separate public agency on the date this Agreement is executed by at least two Member Agencies after adoption of the ordinances required by California Public Utilities Code § 366.2(c)(10). The Authority shall continue to exist, and this Agreement shall be effective, until this Agreement is terminated in accordance with Section 5, subject to the rights of a Member Agency to withdraw from the Authority. 1.3 Member Agencies. The names, particular capacities, and addresses of the Member Agencies are shown on Exhibit A, attached hereto, as may be amended from time to time. 1.4 Purpose. The purpose of this Agreement is to establish an independent public agency in order to exercise powers common to each Member Agency to study, promote, develop, conduct, operate, and manage energy, energy efficiency and conservation, and other energy- related and climate change programs (the “CCAProgram”), and to exercise all other powers necessary and incidental to accomplishing this purpose. The Member Agencies intend for this Agreement to be used as a contractual mechanism by which the Member Agencies are authorized to participate in the CCA Program. The Member Agencies intend that other agreements shall define the terms and conditions associated with the implementation of the CCA Program and any energy programs approved by the Authority. 1.5 Powers. The Authority shall have all powers common to the Member Agencies and such additional powers accorded to it by law. The Authority 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 purpose, including, but not limited to, each of the following powers: 1.5.1 Serve as a forum for the consideration, study, and recommendation of energy services for the CCA Program; 1.5.2 To make and enter into any and all contracts to effectuate the purpose of this Agreement, including, but not limited to, those relating to the purchase or sale of electrical energy or attributes thereof, and related service agreements; 1.5.3 To employ agents and employees, including, but not limited to, engineers, attorneys, planners, financial consultants, and separate and apart therefrom to employ such other persons, as it deems necessary; 1.5.4 To acquire, contract, manage, maintain, and operate any buildings, works, or improvements, including, but not limited to, electric generating facilities; 1.5.5 To acquire property by eminent domain, or otherwise, except as limited by section 6508 of the Act, and to hold or dispose of property; 1.5.6 To lease any property; 1.5.7 To use and be sued in its own name; 1.5.8 To incur debts, liabilities, and obligations, including, but not limited to, loans from private lending sources pursuant to its temporary borrowing powers, such as California Government Code § 53850 et seq.and authority under the Act; 1.5.9 To form subsidiary or independent corporations or entities, if appropriate, to carry out energy supply and energy conservation programs, or to take advantage of legislative or regulatory changes; 1.5.10To issue revenue bonds and other forms of indebtedness; 1.5.11To apply for, accept, and receive all licenses, permits, grants, loans, or other assistance from any federal, state, or local agency; 1.5.12To submit documentation and notices, register, and comply with orders, tariffs, and agreements for the establishment and implementation of the CCA Program and other energy and climate change programs; 1.5.13To adopt rules, regulations, policies, bylaws, and procedures governing the operation of the Authority; and 1.5.14To receive gifts, contributions, and donations of property, funds, services, and other forms of financial assistance from persons, firms, corporations, and any governmental entity. 1.6 Manner of Exercising Powers. The powers of the Authority are subject to the restrictions upon the manner of exercising power possessed by a general law city. SECTION 2: GOVERNANCE 2.1 Board of Directors. The governing body of the Authority shall be a Board of Directors consisting of one director for each Member Agency appointed in accordance with Section 2.2. 2.2 Appointment of Directors. The governing body of each Member Agency shall appoint and designate in writing one regular Director who shall be authorized to act for and on behalf of the Member Agency on matters within the powers of the Authority. The governing body of each Member Agency shall also appoint and designate in writing one alternate Director who may vote in matters when the regular Director is absent from a Board meeting. The persons appointed and designated as the regular Director and the alternate Director shall be a member of the governing body of the Member Agency. 2.3 Terms of Office. Each regular and alternate Director shall serve at the pleasure of the governing body of the Member Agency that the Director represents and may be removed as Director by the governing body of the Member Agency at any time. If at any time a vacancy occurs on the Board, a replacement shall be appointed by the governing body to fill the position of the previous Director within ninety (90) days of the date that such position becomes vacant. 2.4 Quorum. A majority of the Directors of the entire Board shall constitute a quorum, except that less than a quorum may adjourn a meeting from time to time in accordance with law. 2.5 Powers of the Board of Directors. The Board may exercise all the powers enumerated in this Agreement and shall conduct all business and activities of the Authority consistent with this Agreement and any bylaws, operating procedures, and applicable law. 2.6 Executive Committee. The Board may establish an executive committee consisting of a smaller number of Directors. The Board may delegate to the executive committee such authority as the Board might otherwise exercise. 2.7 Committees. The Board may establish advisory committees as the Board deems appropriate to assist the Board in carrying out its functions and implementing the purposes of this Agreement. 2.8 Director Compensation. The Board may adopt policies establishing a stipend to compensate work performed by a Director on behalf of the Authority as well as policies for the reimbursement of expenses incurred by a Director. 2.9 Voting by the Board of Directors. 2.9.1 Vote Count. Each member of the Board or participating alternate shall be entitled to one vote. Action of the Board on all matters shall require an affirmative vote of a majority of all Directors present and qualified to vote constituting a quorum. 2.9.2 Weighted Vote. Notwithstanding Section 2.9.1, above, the Board of the Authority may establish in its Bylaws a procedure to require a weighted vote for all or certain matters before the Board. Any procedure for a weighted vote shall allocate votes based on energy usage of Member Agencies and shall be approved or amended by the affirmative vote of at least a majority of all Directors present and qualified to vote and constituting a quorum. 2.10 Officers. 2.10.1Chair and Vice Chair. On an annual basis, the Directors shall select from among themselves, a Chair and a Vice-Chair. The Chair shall be the presiding officer of all Board meetings. The Vice-Chair shall serve in the absence of the Chair. The term of office of the Chair and Vice-Chair shall continue for one year. There shall be no limit on the number of terms held by either the Chair or Vice-Chair. The office of either the Chair or Vice-Chair shall be declared vacant and a new selection shall be made if: (a) the person serving dies, resigns, or the Member Agency that the person represents removes the person as its representative on the Board, or (b) the Member Agency that he or she represents withdraws from the Authority pursuant to the provisions of this Agreement. 2.10.2Secretary. The Board shall appoint a Secretary who need not be a member of the Board. The Secretary shall be responsible for keeping the minutes of all meetings of the Board and all other official records of the Authority. 2.10.3Treasurer/Auditor. The Board shall appoint a qualified person to act as the Treasurer and a qualified person to act as the Auditor, neither of whom need be members of the Board. If the Board so designates, and in accordance with the provisions of applicable law, a qualified person may be appointed as the Treasurer and Auditor. Such person or persons shall possess the powers of and shall perform those functions required of them by California Government Code §§ 6505, 6505.5, and 6505.6, and by all other applicable laws and regulations andamendments thereto. 2.11 Meetings. The Board shall provide for its regular meetings, the date, hour, and place of which shall be fixed by resolution of the Board. Regular, adjourned, and special meetings shall be called and conducted in accordance with the provisions of the Ralph M. Brown Act, California Government Code § 54950 et seq. 2.12 Executive Director. The Executive Director shall be the chief administrative officer of the Western Riverside Council of Governments, or whomever is appointedby the Board thereafter. Compensation shall be fixed by the Board. The powers and duties of the Executive Director shall be subject to the authority of the Board. 2.13 Initial Administration of Authority. The Authority will be initially administered by the Western Riverside Council of Governments (“WRCOG”), which shall provide Executive Director, staff, and consultant services to the Authority. WRCOG shall provide administrative services for three years from the Effective Date of this Agreement pursuant to a services agreement. The term and conditions of the administrative services agreement may be extended by mutual agreement of WRCOG and the Authority without further amendment of this Agreement, as set forth in the administrative services agreement. 2.14 Additional Officers and Employees. The Board shall have the power to authorize such additional officers and assistants as may be appropriate, including retaining one or more administrative service providers for planning, implementing, and administering the CCA Program. Such officers and employees may also be, but are not required to be, officers and employees of the individual Member Agencies. 2.15 Bonding Requirement. The officers or persons who have charge of, handle, or have access to any property of the Authority shall be the members of the Board, the Treasurer, the Executive Director, and any such officers or persons to be designated or empowered by the Board. Each such officer of person shall be required to file an officialbond with the Authority in an amount which shall be established by the Board. Should the existing bond or bonds of any such officer be extended to cover the obligations provided herein, said bond shall be the official bond required herein. The premiums on any such bond attributable to the coverage required herein shall be the appropriate expenses of the Authority. 2.16 Audit. The records and accounts of the Authority shall be audited annually by an independent certified public accountant and copies of such audit report shall be filed with the State Controller, and each Member Agency to the Authority no later than fifteen (15) days after receipt of said audit by the Board. SECTION3: PARTICIPATION IN AUTHORITY AND IMPLEMENTATION OF CCA PROGRAM 3.1 Participation in Authority. An interested incorporated municipality or county may become a Member Agency of the Authority and a party to this Agreement upon satisfaction of the following: 3.1.1 Adoption of a resolution by the governing body of an incorporated municipality or county requesting participation and an intent to join the Authority; 3.1.2 Adoption of an ordinance required by California Public Utilities Code § 366.2(c)(12) and execution of all necessary CCA Program documents by an incorporated municipality or county; 3.1.3 Adoption by an affirmative vote of the Board of a resolution authorizing participation of the additional incorporated municipality or county; 3.1.4 Payment of a membership payment, if any; and 3.1.5 Satisfaction of any conditions established by the Board. 3.2 Continuing Participation. The Member Agencies acknowledge that participation in the CCA Program may change by the addition or withdrawal or termination of a Member Agency. The Member Agencies agree to participate with additional Member Agencies as may later be added. The Member Agencies also agree that the withdrawal or termination of a Member Agency shall not affect this Agreement or the remaining Member Agencies’ continuing obligations under this Agreement. 3.3 Implementation of CCA Program. 3.3.1 Enabling Ordinance. Each Member Agency shall adopt an ordinance in accordance with California Public Utilities Code § 366.2(c)(12) specifying that the Member Agency intends to implement a community choice aggregation program by and through its participation in this Authority. 3.3.2 Implementation Plan. The Authority shall cause to be prepared an implementation plan meeting the requirements of California Public Utilities Code § 366.2 and any applicable regulations of the California Public Utilities Commission (“CPUC”). The Board shall approve the implementation plan prior to it being filed with the CPUC. 3.4 Authority Documents. The Member Agencies acknowledge and agree that the operations of the Authority will be implemented through various program documents and regulatory filings duly adopted by the Board, including, but not limited to, operating rules, an annual budget, and plans and policies related to the provision of the CCA Program. The Member Agencies agree to abide by and comply with the terms and conditions of all such Authority documents that may be approved or adopted by the Board. 3.5 Termination of CCA Program. Nothing contained in this Agreement shall be construed to limit the discretion of the Authority to terminate the implementation or operation of the CCA Program at any time in accordance with any applicable requirements of state law. SECTION 4: FINANCIAL PROVISIONS 4.1 Fiscal Year. The Authority’s fiscal year shall be twelve (12) months commencing July 1 of each year and ending June 30 of the succeeding year. 4.2 Treasurer. The Treasury of the member agency whose Treasurer is the Treasurer for the Authority shall be the depository for the Authority. The Treasurer of the Authority shall have custody of all funds and shall provide for strict accountability thereof in accordance with California Government Code § 6505.5 and other applicable laws. The Treasurer shall perform all of the duties required in California Government Code § 6505 et seq.and all other such duties as may be prescribed by the Board. 4.3 Depository& Accounting. All funds of the Authority shall be held in separate accounts in the name of the Authority and not commingled with the funds of any Member Agency or any other person or entity. Disbursement of such funds during the term of this Agreement shall be accounted for in accordance with generally accepted accounting principles applicable to governmental entities and pursuant to California Government Code § 6505 et seq. and other applicable laws. There shall be a strict accountability of all funds. All revenues and expenditures shall be reported to the Board. The books andrecords of the Authority shall be open to inspection by the Member Agencies at all reasonable times. 4.4 Budget. The Board shall establish the budget for the Authority and may from time to time amend the budget to incorporate additional income and disbursements that might become available to the Authority for its purposes during a fiscal year. 4.5 Initial Funding of Authority. WRCOG has funded certain activities necessary to implement the CCA Program. If the program becomes operational, these initial costs shall be included in the customer charges for electric services to the extent permitted by law, and WRCOG shall be reimbursed from the payment of such charges by customers of the Authority pursuant to a reimbursement agreement between Authorityand WRCOG. Prior to such reimbursement, WRCOG shall provide such documentation of costs paid as the Board may request. The Authority may establish a reasonable time period over which such costs are recovered. In the event the program does not become operational, WRCOG shall not be entitled to any reimbursement of the initial costs. 4.6 No Liability to the Member Agencies. The debts, liabilities, or obligations of the Authority shall not be the debts, liabilities, or obligations of the individual Member Agencies unless the governing board of a Member Agency agrees in writing to assume any of the debts, liabilities, or obligations of the Authority. Notwithstanding Government Code section 895.2, if the Authority is found to be liable for injury caused by a negligent or wrongful act or omission occurring in the performance of an agreement, no Member Agency is jointly or severally liable for such injury. SECTION 5:WITHDRAWAL AND TERMINATION 5.1 Right to Withdraw. A Member Agency may withdraw its membership in the Authority, effective as of the beginning of the Authority’s fiscal year, by giving no less than 180 days advance written notice of its election to do so, which notice shall be given to the Authority andeach Member Agency. Withdrawal of a Member Agency shall require an affirmative vote of the Member Agency’s governing board. A Member Agency that withdraws its participation in the Authority pursuant to this subsection may be subject to certain continuing liabilities as described in Section 5.4. The withdrawing Member Agency and the Authority 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 Member Agency. 5.2 Right to Withdraw Prior to Program Launch. After receiving bids from power suppliers, the Authority must provide to the Member Agencies the report from the electrical utility consultant retained by the Authority that compares the total estimated electrical rates that the Authority 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. If the report provides that the Authority is unable to provide total electrical rates, as part of its baseline offering, to the customers that are equal to or lower than the incumbent utility or to provide power in a manner that has a lower greenhouse gas emissions rate or uses more renewable energy than the incumbent utility, a Member Agency may immediately withdraw its membership in the Authority without any financial obligation, as long as the Member Agency provides written notice of its intent to withdraw to the Authority Board no more than thirty (30) days after receiving the report. 5.3 Involuntary Termination. Membership in the Authority may be terminated for material non-compliance with the provisions of this Agreement or any other agreement or Board operating procedure relating to the Member Agency’s participation in the CCA Program upon a vote of the Board. 5.4 Continuing Liability. Except as provided by Section 5.2, upon the withdrawal or involuntary termination of a Member Agency, the Member Agency shall remain responsible for any claims, demands, damages, or liabilities arising from the Member Agency’s membership or participation in the Authority through the date of its withdrawal or termination. Claims, demands, damages, or liabilities for which a withdrawing or terminated Member Agency may remain liable, include, but are not limited to, losses from the resale of power contracted for by the Authority to serve the Member Agency’s load and the administrative costs associated thereto. The Authority may withhold funds otherwise owed to the Member Agency or require the Member Agency to deposit sufficient funds with the Authority, as reasonably determined by the Authority to cover the Member Agency’s costs described above. Upon notice by a Member Agency that desire to withdraw from the Authority, the Authority shall notify the Member Agency of the minimum waiting period under which the Member Agency would have no costs for withdrawal if the Member Agency agrees to stay in for such period. The waiting period will be set to the minimum duration such that there are no costs transferred to remaining ratepayers. If the Member Agency elects to withdraw from the Authority before the end of the minimum waiting period, the charge for exiting shall be set at a dollar amount that would offset the actual costs to the remaining ratepayers served by the Authority and may not include punitive damages that exceed actual costs. 5.5 Mutual Termination. This Agreement may be terminated by mutual agreement of all the Member Agencies; provided, however, that this subsection shall not be construed as limiting the rights of a Member Agency to withdraw in accordance with Section 5.1. 5.6 Disposition of Authority Assets Upon Termination of Agreement. Upon termination of this Agreement, any surplus money or assets in possession of the Authority for use under this Agreement, after payment of all liabilities, costs, expenses, and charges incurred by the Authority, shall be returned to the then-existing Member Agencies in proportion to the contributions made by each. SECTION 6:MISCELLANEOUS PROVISIONS 6.1 Dispute Resolution. The Member Agencies and Authority shall make efforts to settle all disputes arising out of or in connection with this Agreement. Before exercising any remedy provided by law, a Member Agency or Member Agencies and the Authority shall engage in nonbinding mediation in the manner agreed to by the Member Agency or Member Agencies and the Authority. In the event that nonbinding mediation does not resolve a dispute within 120 days after the demand for mediation is made, any Member Agency or the Authority may pursue any all remedies provided by law. 6.2 Liability of Directors, Officers, and Employees. The Directors, officers, and employees of the Authority 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 anyact or omission by another Director, officer, or employee. The Authority shall defend, indemnify, and hold harmless the individual current and former Directors, officers, and employees for any acts or omissions in the scope of their employment or duties in the manner provided by California Government Code § 995 et seq. Nothing in this section shall be construed to limit the defenses available under the law to the Member Agencies, the Authority, or its Directors, officers, or employees. 6.3 Indemnification. The Authority shall acquire such insurance coverage as the Board deems necessary to protect the interests of the Authority, the Member Agencies, and the Authority’s ratepayers. The Authority shall indemnify, defend, and hold harmless the Member Agencies and each of their respective members board or council members, officers, agents, and employees, from any and all claims, losses, damages, costs, injuries, and liabilities of every kind arising directly or indirectly from the conduct, activities, operations, acts, and omissions of the Authority under this Agreement. 6.4 Amendment of Agreement. This Agreement may be amended in writing with the approval of not less than two-thirds (2/3) of a vote of the Member Agencies. 6.5 Assignment. Except asotherwise expressly provided in this Agreement, the rights and duties of the Member Agencies may not be assigned or delegated without the advance written consent of all other Member Agencies. Any attempt to assign or delegate such rights or duties without express written consent shall be null and void. This Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Member Agencies. This section does not prohibit a Member Agency from entering into an independentagreement with another entity regarding the financing of that Member Agency’s contributions to the Authority, or the disposition of proceeds which that Member Agency receives under this Agreement, so long as such independent agreement does not affect, or purport to affect, the rights and duties of the Authority or the Member Agencies under this Agreement. 6.6 Severability. If any part of this Agreement is held, determined, or adjudicated to be illegal, void, or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible. 6.7 Further Assurances. Each Member Agency agrees to execute and deliver all further instruments and documents and take any further action thatmay be reasonably necessary to effectuate the purposes of this Agreement. 6.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. 6.9 Notices. Any notice authorized or required to be given pursuant to this Agreement shall 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) if the sender receives the return receipt. All notices shall be addressed to the office of the clerk or secretary of the Authority or Member Agency, as the case may be, or such other person designated in writing by the Authority or Member Agency. Notices given to one Member Agency shall be copied to all other Member Agencies. Notices given to the Authority shall be copied to all Member Agencies. [Signatures on next page] IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first written above. “CITY”“MEMBER AGENCIES” CITY OF LAKE ELSINORE, a municipal [Western Community Energy] corporation _______________________________________________________________ Grant Yates, City Manager By: __________________________ Its: __________________________ ATTEST: _________________________________ City Clerk APPROVED AS TO FORM: _________________________________ City Attorney EXHIBIT A List of Member Agencies ORDINANCE NO. 2018 -___ ORDINANCE OF THE CITY COUNCILOFTHE CITY OF LAKE ELSINORE, CALIFORNIA,AUTHORIZING THE IMPLEMENTATION OF A COMMUNITY CHOICE AGGREGATION PROGRAM Whereas, the City of Lake Elsinore has been actively investigating options to provide electric services to constituents within its service area with the intent of achieving greater local involvement over the provisions of electric services and promoting competitive retail choice; and; Whereas, Assembly Bill 117 (Stat. 2002, ch. 838; see California Public Utilities Code section 366.2 et seq.; hereinafter referred to as the “Act”) authorizes any California city or county, whose governing body so elects, to combine the electricity load of its residents and businesses in a community-wide electricity aggregation program known as Community Choice Aggregation (“CCA”); and; Whereas, the Act expressly authorizes participation in a CCA program through a joint powers agency, and to this end, the Western Riverside Council of Governments has been evaluating a CCA program for certain portions of the County and the cities and towns within it; and; Whereas, through Docket No. R.03-10-003, the California Public Utilities Commission (“Commission”) has issued various decisions and rulings addressing the implementation of CCA programs, including establishing a procedure by which the Commission will review implementation plans, which are required to be submitted under the Act as the means of describing the CCA program and ensuring compliance with the Act; and; Whereas, the City along with representatives of the Western Riverside Council of Governments have elected to form a joint powers agency known as Western Community Energy (“Authority”) that would specify the terms and conditions by which participants may participate as a group in energy programs, including, but not limited to, the implementation of a CCA program with the following benefits: a.Providing customers, a choice of power providers; b.Increasing local control over energy rates and other energy-related matters; c.Providing electric rates that are competitive with those provided by the incumbent utility; d.Improving the local economy by increasing local and regional renewable generation capacity and energy conservation and efficiency projects and programs; e.Increasing regional energy self-sufficiency; and; f.Reducing greenhouse gas emissions arising from electricity use in the City. 1. The Joint Powers Agreement creating the Authority will govern and operate the CCA program on behalf ofits member jurisdictions. The City may participate in the Authority by adoption of a resolution approving the execution of the Joint Powers Agreement and adoption of a CCA ordinance required by Public Utilities Code section 366.2(c)(12). The City’s participation in the Authority will include membership on the Board of Directors of the Authority as provided in the Joint Powers Agreement. Ord. No. 2018- Page 2 of 3 2 2.The Authority will enter into agreements with electric power suppliers and other services providers and, based onthese agreements, the Authority plans to provide power to residents and businesses at rates that are competitive with those of the incumbent utility. Once the Commission approves the implementation plan prepared by the Authority, the Authority may provide service to customers within the City and those cities that choose to participate in the Authority. 3.Under Public Utilities Code section 366.2, customers have the right to opt-out of a CCA program and continue to receive service from the incumbent utility. Customers who desire to continue to receive service from the incumbent utility will be able to do so at any time. 4. On July 10, 2018,the Council held a public meetingat which time interested persons had an opportunity to testify either in support or in opposition to implementation of the CCA program within the City. 5.This Ordinance is exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines, as it is not a “project” and has no potential to result in a direct or reasonably foreseeable indirect physical change to the environment because it is merely the formation of an organization. 14 Cal. Code Regs. § 15378(a). The ordinance is also exempt from CEQA because it is an organizational or administrative activity of governments that will not result in direct or indirect physical change in the environment. 14 Cal. Code Regs. § 15378(b)(5). The ordinance is also exempt from CEQA because it is merely a change in organization of local agencies. 14 Cal. Code Regs. § 15320. Further, the ordinance is exempt from CEQA because there is no possibility that the ordinance or its implementation, which would only result in the formation of a governmental organization, would have a significant negative effect on the environment. 14 Cal. Code Regs. § 15061(b)(3). The [INSERT TITLE OF CITY OFFICIAL] shall cause a Notice of Exemption to be filed as authorized by CEQA and the State CEQA Guidelines. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY DETERMINE AND ORDER AS FOLLOWS: Section 1. The above recitals are all true and correct. Section 2. AUTHORIZATION TO IMPLEMENT A COMMUNITY CHOICE AGGREGATION PROGRAM. Based upon the foregoing, and in order to provide businesses and residents within the City with a choice of power providers, the City hereby elects to implement a community choice aggregation program within the jurisdiction of the City by participating in the CCA program of the Authority, as described in the Joint Powers Agreement. Section 3. SEVERABILITY. If any section, subsection, sentence, clause, phrase or portion of this ordinance is held for any reason to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have adopted this ordinance and each section, subsection, clause, phrase or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. Ord. No. 2018- Page 3 of 3 3 Section 11. This Ordinance shall take effect thirty days after its final passage. Passed and Adopted on this 12th day of June,2018. _____________________________ Natasha Johnson, Mayor Attest: _____________________________ Susan M. Domen, MMC City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE) I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that OrdinanceNo. 2018-______ was introduced at the Regular meeting of the City Council of June 12, 2018, and adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of June 12, 2018and thatthe same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ Susan M. Domen, MMC City Clerk BYLAWS FOR WESTERN COMMUNITY ENERGY ARTICLE I FORMATION These Bylaws are provided for the organization and administration of Western Community Energy (“Authority”) which has been established pursuant to that certain document entitled the Western Community Energy Joint Powers Agreement (“Agreement”). These Bylaws supplement the Agreement. ARTICLE II PURPOSES The Authority is formed to study, promote, develop, conduct, operate, and manage energy and energy-related climate change programs, and to exercise all other powers necessary and incidental to accomplishing this purpose. These programs include,but are not limited to,the establishment of a Community Choice Aggregation Program known as the CCA Energy Program in accordance with the terms of the Agreement. ARTICLE III BOARD OF DIRECTORS Section 1. Board of Directors. The Authority shall be governed by a Board of Directors composed of one representative of each of the Member Agencies. The Board shall have all the powers and functions as set forth in Section 1.5 of the Agreement. The governing body of each Member Agency shall appoint and designate in writing to the Authority one regular Director who shall be authorized to act for and on behalf of the Member on all matters within the power of the Authority. The governing body of each Member Agency shall also appoint and designate in writing to the Authority one alternate Director who may vote on all matters when the regular Director is absent for a Board meeting. Both the Director and the Alternate Director shall be members of the governing body of the Member Agency. Section 2. Appointment Each Director and Alternate Director shall serve at the pleasure of the governing body of the Member Agency that the Director represents and may be removed as Director or Alternate Director by such governing body at any time. Section 3. Vacancy If at any time a vacancy occurs on the Board, for whatever reason, a replacement shall be appointed by the governing body of the subject member to fill the position of the previous Director within ninety days of the date that such position becomes vacant. ARTICLE IV OFFICERS AND TERMS OF OFFICE Section 1. Officers There shall be a Chairperson, a Vice-Chairperson, a Secretary and a Treasurer. A.Chairperson. The Chairperson of the Authority shall be a Director. Duties of the Chairperson are to supervise the preparation of the business agenda, preside over Authority meetings, and sign all ordinances, resolutions, contracts and correspondence adopted or authorized by the Board. The term of office of the Chairperson shall be for one year. B.Vice-Chairperson. The Vice-Chairperson shall be a Director. The Vice-Chairperson shall perform the duties of Chairperson in the absence of such officer. The term of office of the Vice-Chairperson shall be for one year. C.Secretary. The Secretary will supervise the preparation of the meeting minutes and the maintenance of the records of the Authority. The term of the Secretary shall be for one year. The Secretary does not need to be a Director. D.Treasurer and Auditor. The Treasurer shall have custody of all the money of the Authority and shall have all of the duties and responsibilities specified in Government Code §6505.5. The Treasurer shall report directly to the Board and shall comply with the requirements of treasurers of incorporated municipalities. The positions of Treasurer and Auditor may be combined into one position known as the Treasurer/Auditor of the Authority. Neither the Treasurer nor the Auditor needs to be a Director. The term of the Treasurer and Auditor shall be for one year. The Board may transfer the responsibilities of the Treasurer and Auditor to any person or entity permitted by law. E.Election of Officers. An annual meeting of the Board shall be held in [INSERT MONTH] of each year or as soon thereafter as possible to elect the officers of the Authority. F.Terms of Office. The elected Chairperson and Vice-Chairperson shall assume office at the close of the meeting of their election and each officer shall hold office for one year, or until his or her successor shall be elected. G.No Term Limits. There are no limits on the numbers of terms that an officer of the Authority may serve. H.Committees. The Board or the Chairperson may delegate specified functions or actions to a committee that may be established by the Board. Each duly established committee may establish any standing or ad hoc committees determined to be appropriate or necessary. The duties and authority of all committees shall be subject to the approval and direction of the Board. ARTICLE V MEETINGS Section 1. Regular Meetings The Board by resolution shall establish the date, time and meeting location of all regular meetings of the Board. Special meetings may be called upon the request of a majority of the members of the Board or by the Chairperson. Section 2. Open Meetings The meetings of the Board, the Executive Committee and all other committees established by the Board shall be governed by the provisions of the Ralph M. Brown Act (California Government Code § 54950 et seq.). ARTICLE VII VOTING Each member of the Board shall have one vote on all matters unless otherwise provided by the Agreement or these Bylaws. Unless the Agreement or these Bylaws require a two-thirds vote, action on all items shall be determined by a majority vote of the quorum present and voting on the item. ARTICLE VIII POLICY REGARDING CONFIDENTIAL INFORMATION DISCLOSED DURING CLOSED SESSIONS It is vital that members of the Board divulge certain privileged information obtained in closed sessions at the Authority to their own governing bodies meeting in closed sessions. Thus, these Bylaws adopt the policy set forth in California Government Code §54956.96,which authorizes the disclosure of closed session information that has direct financial or liability implications for that Member Agency to the following individuals. A.All information received by the governing body of the Member Agency in a closed session related to the information presented to the Authority in closed session shall be confidential. However, a member of the governing body of a Member Agency, or his/her duly appointed alternate to the Authority, may disclose information obtained in a closed session that has direct financial or liability implications for that Member Agency to the following individuals: 1.Legal counsel of that Member Agency for purposes of obtaining advice on whether the matter has direct financial or liability implications for that Member Agency. 2.Other members of the governing body of the Member Agency present in a closed session of that Member Agency, as well as other persons that may be invited to attend the closed session by the Member Agency’s governing body. B.The governing body of the Member Agency, upon the advice of its legal counsel, may conduct a closed session in order to receive, discuss, and take action concerning information obtained in a closed session of the Authority pursuant to this policy. ARTICLE IX EXECUTIVE DIRECTOR Section 1. Duties. In addition to those duties set forth in the Agreement, the duties of the Executive Director are: A.To administer all contracts. B.To have fill charge of the administration of the business affairs of the Authority. C.To exercise general supervision over all property of the Authority. D.To accept, on behalf of the Authority, easements and other property rights and interests. E.To be responsible for the purchase of all supplies and equipment of the Authority. Section 2. Contracts. The Executive Director is authorized to contract and execute on behalf of the Authority, contracts for supplies, equipment and materials, and consultants not to exceed $100,000.00, provided the contract relates to purposes previously approved and budgeted by the Board. ARTICLE VIII DEBTS, LIABILITIES AND OBLIGATIONS As provided by Section 6.2 of the Agreement, the debts, liabilities and obligations of the Authority shall not be debts, liabilities or obligations of the individual Member Agencies unless the governing board of a Member Agency agrees in writing to assume any of the debts, liabilities, or obligations of the Authority. Notwithstanding Government Code section 895.2, if the Authority is found to be liable for injury caused by a negligent or wrongful act or omission occurring in the performance of an agreement, no Member Agency is jointly or severally liable for such injury. ARTICLE IX AMENDMENTS These Bylaws and any amendments may be amended by the Board.