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W A T E R I E N E R 5 Y , L I F E RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: November 19, 2010 ITEM NO: 9 SUBJECT: UTILITY SERVICES AGREEMENT (USA) BETWEEN CITY OF RANCHO CUCAMONGA AND CITY OF RIVERSIDE ISSUE: That the Board of Public Utilities consider approval of the proposed Utility Services Agreement (USA) under which Riverside Public Utilities (RPU) will provide certain utility-related services to the City of Rancho Cucamonga. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the Utility Services Agreement between the City of Rancho Cucamonga and the City of Riverside; and 2. Authorize the City Manager, or his designee, to execute the Utility Services Agreement. BACKGROUND: The City of Rancho Cucamonga's municipal utility was established in August 2001 and serves a substantial commercial center. Currently, Pilot Power Group, Inc. (Pilot) provides Rancho Cucamonga with certain wholesale power supply services related to the procurement and utilization of resources to serve Rancho Cucamonga's electric customers. The proposed USA provides for the expansion of those services and the transfer of those responsibilities from Pilot to RPU beginning as early as January 1, 2011. RPU currently provides an assortment of wholesale power supply services to the cities of Banning, Azusa and Corona under separate agreements. The proposed USA utilizes the "Master Agreement/Services Schedule" format. Under this format, Service Schedules are created to govern RPU's ongoing provision of discrete services. Limited duration services may be provided through Task Assignments on an as-needed basis that would be subject to the approval of the parties' Authorized Representatives under the agreement. 1. Transaction Prescheduling Services: Based upon the resources procured by Rancho Cucamonga, the Resources Division Market Operations function will coordinate deliveries of power from those resources with third parties on a day-ahead basis. To the extent Rancho Cucamonga's resources do not match its hourly customer requirements, RPU will attempt to economically procure or sell, as appropriate, the imbalance. The monthly charges associated with this service are initially $2,492. 2. Transaction Settlement Services: After-the-fact settlement of Rancho Cucamonga's power supply transactions involves the validation of their accuracy and the appropriate approvals for invoicing and payment of amounts due to and owing from Rancho Cucamonga. The Settlements Group within the Resources Division Power Contracts/Projects function will perform this activity.