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Home My WebLink AboutMINUTES - 11142006 - C.163 TO: BOARD OF SUPERVISORS '- Contra =' Costa FROM: CARLOS BALTODANO, DIRECTOR s �•` ?�,•} X40 BUILDING INSPECTION DEPARTMENTA,......� County DATE: November 14, 2006 C _ I �SUBJECT: Consent to Assignment of Mirant Agreement 3 SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS AUTHORIZE the Director of Building Inspection to consent to the assignment of an agreement between the County and Mirant Delta, LLC, to Pacific Gas and Electric, concerning fees, compliance verification, and enforcement at the Contra Costa Unit 8 Power Project. FISCAL IMPACT None. CONTINUED ON ATTACHMENT: YES SIGNATURE RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION F BOARD COMMITTEE /APPROVE �ZR . , T SIGNATURE(S)- ACTION IGNATURES :ACTION OF BOA N A& V / Y atoo 4o' APPROVED AS RECOMMENDED OT R VOTE OF SUPERVISORS -�� I HEREBY CERTIFY THAT THIS IS A TRUE _UNANIMOUS(ABSENT� L ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE ABSENT: ABSTAIN: BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact: Carlos Baltodano (5-1108) ATTESTED: G� cc: Building Inspection John Cullen,Clerk of the Boar of Supervisors County Administrator and Coun Administrator County Counsel B PUTY CB:nr I BACKGROUND/REASONS FOR RECOMMENDATIONS The Contra Costa Unit 8 Power Project, a 530-megawatt, natural gas-fired, combined cycle, combustion turbine power plant, is under construction at the Contra Costa Power Plant and its site complex, located on Wilbur Avenue, one mile northeast of the City of Antioch, on the southern shore of the San Joaquin River, in the unincorporated area of Contra Costa County. In 2001, the California Energy Resources Conservation and Development Commission ("CEC") certified and authorized construction of the power plant project. The power plant was to be constructed by Mirant Delta, LLC. Construction began but is not complete. The County is responsible for verifying that the power plant project complies with the conditions established when the CEC certified and authorized construction of the project. Contra Costa County and Mirant Delta previously entered into an agreement concerning fees, compliance verification and enforcement at the Project. Under the agreement between the County and Mirant, the County recovers its costs of compliance verification from Mirant Delta. Mirant Delta intends to sell the power plant and its site complex to Pacific Gas and Electric Company("PG&E"). When the sale closes,which is anticipated to occur on November 17, 2006, Mirant Delta and PG&E intend to execute an Assignment and Assumption Agreement, where Mirant Delta's existing contracts would be assigned to PG&E. The parties to the sale have requested that Contra Costa County consent to the assignment of its agreement with Mirant Delta to PG&E. PG&E intends to complete construction of the power plant project pursuant to the terms and conditions of the CEC's authorization. The attached consent authorizes the assignment of the County's agreement from Mirant Delta to Pacific Gas and Electric. The assignment would be effective on the closing date of the sale of the power plant project and site. Following assignment of the agreement from Mirant Delta to PG&E, the County would recover its costs of compliance verification from PG&E. \bo\mirant agreement Page 2 of 2 CONSENT OF CONTRA COSTA COUNTY TO ASSIGNMENT AND ASSUMPTION.OF AGREEMENT BETWEEN CONTRA COSTA COUNTY AND MIRANT DELTA, LLC, FOR FEES, COMPLIANCE VERIFICATION AND ENFORCEMENT AT THE CONTRA COSTA UNIT 8 POWER PROJECT This Consent to the Assignment and Assumption of the Agreement Between Contra Costa County and Mirant Delta, LLC, for Fees, Compliance Verification and Enforcement at the Contra Costa Unit 8 Power Project, and of the Amendment to the Agreement, is made by Contra Costa County. RECITALS A. The Contra Costa Unit 8 Power Project ("Project"), a 530-megawatt, natural gas-fired, combined cycle, combustion turbine power plant, is under construction at the Contra Costa Power Plant and its site complex, located on Wilbur Avenue, one mile northeast of the City of Antioch, on the southern shore of the San Joaquin River, in the unincorporated area of Contra Costa County. B. The California Energy Resources Conservation and Development Commission ("CEC") has the exclusive power to certify all power plants in the State of California and all sites on which power plants are located. The CEC adopted its decision on the Project, CEC Docket No. 00-AFC-01 ("Decision"), on May 30, 2001. In the Decision, the CEC approved the application of Mirant Delta, LLC for certification for the Project, subject to the timely performance of the conditions of certification and compliance verifications enumerated in the text of the Decision. C. The CEC has delegated its authority for compliance verification at the Project and its authority as Chief Building Official for the Project to Contra Costa County, through its Director of Building Inspection,pursuant to the following: Title 20, California Code of Regulations, section 1770; and the Memorandum of Understanding Between the California Energy Commission and Contra Costa County for Design Review, Plan Check, and Construction Inspection of the Contra Costa Power Plant Unit 8 Project 00-AFC-1 (effective August 6, 2001). D. Effective September 1, 2001, Contra Costa County and Mirant Delta, LLC entered into an agreement concerning fees, compliance verification and enforcement at the Project. Effective May 1, 2002, Contra Costa County and Mirant Delta, LLC entered into an amendment of the September 1, 2001 agreement. E. Mirant Delta, LLC and Mirant Special Procurement, Inc. intend to sell, transfer, convey, assign and deliver the Contra Costa Power Plant and its site complex to Pacific Gas and Electric Company(PG&E"), pursuant to an Amended and Restated Asset Transfer Agreement (the "ATA.") At closing, which is anticipated to occur on or about November 17, 2006, Mirant Delta, LLC, Mirant Special Procurement, Inc., and PG&E intend to execute an Assignment and Assumption Agreement. The parties to the ATA have requested that Contra Costa County consent to the assignment of the September 1, 2001 agreement to PG&E prior to execution of the Page 1 of 3 ATA. PG&E intends to complete construction of the Project pursuant to the terms and conditions of the Decision and subject to the terms and conditions of the September 1, 2001 agreement and its amendment. F. Section 7 of the September 1, 2001 agreement provides that it is not assignable by Mirant Delta, LLC in whole or in part without the prior written consent of Contra Costa County. CONSENT OF CONTRA COSTA COUNTY 1. Definitions. For purposes of this Consent, the following terms have the following meanings: a. "Assignee"means Pacific Gas and Electric Company. b. "Assignment Agreement"means an assignment and assumption agreement between Assignors and Assignee that is in substantially the same form as the attached assignment and assumption agreement, which is attached and incorporated into this Consent. C. "Assignors"means Mirant Delta, LLC and Mirant Special Procurement, Inc. d. "Fee Agreement"means the September 1, 2001 Agreement Between Contra Costa County and Mirant Delta, LLC, for Fees, Compliance Verification and Enforcement at the Contra Costa Unit 8 Power Project, as amended by the May 1, 2002 Amendment to the Agreement Between Contra Costa County and Mirant Delta, LLC, for Fees, Compliance Verification and. Enforcement at the Contra Costa Unit 8 Power Project. 2. Consent. Contra Costa County consents to the assignment of the Fee Agreement by Assignors to Assignee and the assumption of the Fee Agreement by Assignee under the following terms and conditions: a. The Assignee shall accept and shall assume all of the respective responsibilities of all agreements, covenants, and obligations of Assignors contained in the Fee Agreement, and shall become directly obligated and liable to Contra Costa County to perform thereunder. Assignors are released from any and all agreements, covenants, and obligations contained in the Fee Agreement, to the extent these are, in fact, assumed and performed by Assignee. b. The assignment and assumption of the Fee Agreement described above shall occur pursuant to the terms and conditions of the Assignment Agreement. C. No assignment, other than the assignment described above, shall be effective to assign the Fee Agreement, or any portion thereof, to any other entity or party. d. This Consent shall become effective upon full execution of the Assignment Agreement by Assignors and Assignee. No assignment of the Fee Agreement shall be deemed to have occurred between Assignors and Assignee until full execution of the Assignment Page 2 of 3 Agreement. 3. Notice. All notices and correspondence to Contra Costa County regarding the Fee Agreement, including invoices and payments, shall be directed to the following: Carlos Baltodano, Director Building Inspection Department Contra Costa County 651 Pine Street, 3rd Floor,North Wing Martinez, CA 94553 All notices and correspondence to Assignee regarding the Fee Agreement shall be directed to the following: Pacific Gas and Electric Company Mail Code N12G 77 Beale Street San Francisco, CA 94105 Attn: Vice President—Energy Procurement All notices and correspondence to Assignors regarding the Fee Agreement shall be directed to the following: Mirant Delta, LLC 696 West Tenth Street Pittsburg, CA 94565 Attn: President Mirant Special Procurement, Inc. 1155 Perimeter Center West Atlanta, GA 30338 Attn: President CONTRA COSTA COUNTY: By: Carlos Baltodano Director,Building Inspection Department Page 3 of 3 ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT(this "Assignment") is made and entered into as of[Month] L], 200[_], by and between Mirant Delta, LLC, a Delaware limited liability company, with its principal place of business at 696 West Tenth Street, Pittsburg, California 94565, Mirant Special Procurement, Inc., a Delaware corporation, with its principal place of business at 1155 Perimeter Center West, Atlanta, Georgia, 30338- 5416 (each an "Assignor" and together the "Assignors"), and Pacific Gas and Electric Company, a California corporation; with its principal place of business at 77 Beale Street, San Francisco, California 94105 ("Assignee"). Capitalized terms used but not defined in this Assignment have the meanings ascribed to such terms in that certain Asset Transfer Agreement dated as of June 10,2005,by and between the Assignors and Assignee(the"ATA"). WITNESSETH WHEREAS, Assignors and Assignee have made and entered into the ATA, pursuant to which the Assignors have agreed to transfer to Assignee, and Assignee has agreed to accept and assume from the Assignors, the contracts set forth on Schedule 1 attached hereto(the"Assigned Contracts")and the Assumed Liabilities;and WHEREAS, the ATA requires the Assignors and Assignee to duly execute and deliver this Assignment in connection with the consummation of the transactions contemplated therein; AGREEMENT NOW, THEREFORE, in consideration of the premises, mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,the Parties agree as follows: I. Assignment. Subject to the terms and conditions of the ATA, the Assignors hereby sell, transfer, convey, assign and deliver unto Assignee all of Assignors' right, title and interest in and to the Assigned Contracts. 2. Assumption. Subject to the terms and conditions of the ATA, Assignee hereby accepts the foregoing assignment and agrees to assume, satisfy, perform, pay and discharge (a) all of the Assignor's Liabilities and obligations under the Assigned Contracts arising on or after the Closing Date, and(b) the Assumed Liabilities,all in accordance with the terms thereof and of the ATA applicable thereto. 3. No Conflict. For the avoidance of doubt, any conflict between the terms of this Assignment and the terms and conditions of the ATA shall be resolved in favor of the ATA. 4. No Third Party Benefit. The terms and provisions of this Assignment are intended solely for the benefit of the Assignors and Assignee and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any other Person. 5. Further Assurances. Each of the Parties hereby agrees to execute and deliver, or cause to be executed and delivered, such other instruments and to take such other actions as another Party may reasonably request to consummate the transactions contemplated by this Assignment. 6. Successors and Assigns. The terms of this Assignment and the respective rights and obligations of the Parties shall be binding upon, and inure to the benefit of, their respective successors and assigns permitted under the ATA. 7. Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. 8. Counterparts. This Assignment may be executed in any number of counterparts and by facsimile, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 2 DOCSSF I:813520.3 IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the day and year first above written. MIRANT DELTA,LLC By: Name: Title: MIRANT SPECIAL PROCUREMENT,INC. By: Name: Title: PACIFIC GAS AND ELECTRIC COMPANY By: Name: Title: 2 DOCSSF 1:813520.3 Schedule 1 ASSIGNED CONTRACTS [TO BE ADDED PRIOR TO CLOSING] 4 DOCSSF 1:813520.3