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W A T E R I E N E R 5 Y , L I F E RIVERSIDE PUBLIC UTILITIES - -- .'%_ W& Board Memorandum P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: May 21, 2010 ITEM NO: 5 SUBJECT: MASTER SERVICES CONTRACT, SCHEDULE A, ("AGREEMENT") BETWEEN SOUTHERN CALIFORNIA GAS COMPANY ("SOCALGAS") AND THE CITY OF RIVERSIDE ("CITY") ISSUE: Consideration of a proposed agreement for intra-state gas transportation services in connection with Riverside's purchase of the Clearwater Power Plant ("Clearwater"). RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the Agreement between the City and SoCalGas for intra-state gas transportation services; 2. Authorize the City Manager, or his designee, to execute the Agreement after Clearwater Closing Date is determined and to adjust the starting date of the Agreement to coincide with Riverside's ownership of Clearwater; and 3. Authorize the City Manager, or his designee, to execute the Agreement and any other documents related to the management of gas transportation services. BACKGROUND: The Board of Public Utilities and City Council approved the Clearwater Power Plant Asset Purchases and Sale Agreement ("Purchase Agreement") between Riverside and the City of Corona (Corona) on February 5, 2010, and February 23, 2010, respectively. The purchase of Clearwater and its related assets brings to the City approximately 30 megawatts of power (sufficient for approximately 22,500 residential customers) and the 69,000 volt facilities necessary to move the power from Clearwater to the Southern California Edison Company's (SCE) electrical distribution system. As a part of this acquisition, multiple contracts and agreements are required to be executed, conveyed, and/or transferred to effect a proposed closing date of July 1, 2010, when all actions necessary for Riverside's ownership of Clearwater have been completed and Riverside gains ownership and possession of the Clearwater assets. The SoCal Gas Agreement will provide the natural gas transportation services needed from SoCalGas to supply Clearwater. Initially, gas transportation will be procured from SoCalGas on a month-to-month basis. It is expected that Riverside will convert from short-term month-to-month service to a longer term service within six months of Riverside taking possession of Clearwater. This conversion is permitted upon 20 days advance notice to SoCalGas.