Redding City Council
April 7, 2026

Agenda
Regular Meeting
Redding City Council
Council Chambers
777 Cypress Avenue, Redding, CA
April 7, 2026
6:00 PM

1. CALL TO ORDER - MAYOR MIKE LITTAU
A. Pledge of Allegiance
B. Invocation - Debbie Ivey, Redding Police and Fire Departments' Chaplain C. Roll Call

2. PRESENTATIONS
2A. Mayor’s Proclamation presented to First 5 Shasta declaring April 11-18, 2026, as Week of the Young Child in the City of Redding.
2B. Mayor's Proclamation presented to the Shasta County Arts Council declaring April 2026 as Arts, Culture, and Creativity Month in the City of Redding.

3. PUBLIC COMMENT - for non-agendized matters within the city’s jurisdiction.

PURSUANT TO THE BROWN ACT, CITY COUNCIL CANNOT TAKE ACTION ON PUBLIC

COMMENT ITEMS
The City Council will allocate up to a maximum of three minutes per speaker for 30 minutes total, at the beginning of the meeting for Public Comment for non-agendized matters within the City’s jurisdiction.

The Mayor will determine the order of the speakers. If 30 minutes is not adequate to accommodate all of the individuals who have submitted their name through the electronic kiosk, the Council will trail this item to the end of the open session agenda. The remaining speakers will address the City Council at that time.

If anyone wishes to address the City Council on any item considered at this meeting before or during Council’s consideration of that item, please enter your name in the electronic kiosk located in the lobby. The City Council will allocate up to a maximum of three minutes per speaker for each agenda item. Staff reports are available on-line at the City’s web site at www.cityofredding.gov and in the Public View binder located on the podium at the north side of the Chambers.

PLEASE SILENCE YOUR CELL PHONES. THANK YOU.

Redding City Council April 7, 2026

4. CONSENT CALENDAR
The Consent Calendar contains items considered routine and/or which have been individually scrutinized by City Council Members and are anticipated to require no further deliberation. If a member of the public wishes to address an item on the Consent Calendar, please enter your name in the electronic kiosk located in the lobby before the Consent Calendar is considered. It shall be the prerogative of any Council Member, before the Consent Calendar is acted upon, to: (1) comment on an item; (2) respond to any public comment on an item; (3) request the record reflect an abstention or nay vote on an item; or (4) remove an item and place it on the Regular portion of the agenda for delivery of a staff report and/or an extended discussion or deliberation. 4(a). Approve City Council Minutes: Special Meeting Budget and Closed Session of February 3, 2026; Regular Meeting of February 3, 2026; Special Meeting – Closed Session of February 17, 2026; Regular Meeting of February 17, 2026; Special Meeting – Closed Session of March 17, 2026; and Regular Meeting of March 17, 2026.

4.1(a). Authorize and approve the following:
(1) Approve the Real Estate Purchase and Sale Agreement (PSA) with Fall River Development Inc., for 10 acres of City of Redding-owned property located at 5750 Venture Parkway, Stillwater Business Park Parcel 9 (Assessor’s Parcel Number 054-220-017), for the appraised value; and (2) Authorize the Mayor to sign the PSA and other documents needed to complete the sale and transfer of the property.

4.5(a). Authorize and approve the following modifications relative to the award of Bid Schedule No. 5630 for traffic control services to Highway Specialty Company Inc.:
(1) Authorize the City of Redding (City) Purchasing Officer to amend Purchase Order PUR003039 to increase the not-to-exceed amount from $182,405 to $362,405 for the initial contract term ending September 30, 2026; and
(2) Authorize the City’s Purchasing Officer, or designee, to exercise two one-year extension options through September 30, 2028, if mutually agreeable, with all prices, terms, and conditions remaining the same, in an amount not-to-exceed $362,405 per contract year.

4.5(b). Authorize and approve the following related to City of Redding as a Member:
(1) Approve Amendment No. 1 to Project Agreement No. 3 between the Transmission Agency of Northern California and its Members; and (2) Authorize the City Manager, or designee, to execute the First Amendment and approve future modifications to Project Agreement No.

3. Redding City Council April 7, 2026

4.5(c). Authorize and approve the following actions relative to expenditures of Greenhouse Gas Cap-and-Invest (formerly Cap and Trade) Allowance Proceeds:
(1) Approve the establishment and implementation of the Energy Procurement Program;
(2) Adopt Resolution approving and adopting the 26th Amendment to City Budget Resolution No. 2025-049 appropriating $1,579,000 of unallocated proceeds from the sale of California carbon allowances and interest accrued to fund the Energy Procurement Program; and (3) Authorize the City Manager, or designee, to administer the program, including approving program specifics, making program modifications, adjusting funding between eligible programs, and allocating any additional allowance auction proceeds and interest earnings to eligible programs.

4.11(a). Adopt Resolution approving and adopting the 32nd Amendment to City Budget Resolution No. 2025-049 appropriating $1,067,510 in Californian State Water Resources Control Board Drinking Water Grant funds for the Cascade Racquet Club Mutual Water Company Water Main Project.

4.11(b). Authorize and approve the following actions relative to Bid Schedule No. 5675 (Job No. WAADM23016), North Willis Area Water Main Improvements Project - Phase 1:
(1) Award to Cox & Cox Construction, Inc., in the amount of $4,788,644; (2) Approve an additional $670,000 to cover the cost of administration and inspection fees;
(3) Approve $525,000 for project development costs;
(4) Approve $720,000 to provide construction contingency funding; (5) Authorize the City Manager, or designee, to approve additional increases in either the construction management or construction contingency amounts up to a total of $100,000; and
(6) Find that the Project is categorically exempt from review under the California Environmental Quality Act, pursuant to Section 15301 - Existing Facilities.

4.11(c). Accept Bid Schedule No. 5400 (Job No. 8687), Trinity Street Bikeway Project, awarded to S.T. Rhoades, Inc., as satisfactorily complete, with a final cost of $2,428,162.67.

4.11(d). Accept Bid Schedule No. 5302 (Job No. 5424-98), City Council Chambers Audio Visual Upgrade Project, awarded to Conti, LLC, as satisfactorily complete, with a final cost of $631,848.54.

4.11(e). Authorize and approve the following actions relative to Bid Negotiation No. 5523, Water Main 2024 Improvement Project:
(1) Increase of $25,000 to the construction management budget, bringing the construction management total to $443,000; and (2) Increase of $475,000 to the construction contingency budget bringing the construction contingency total to $1,175,000.

Redding City Council April 7, 2026

4.11(f). Adopt Resolution approving and adopting the 31st Amendment to Budget Resolution No. 2025-049 reappropriating Carbon Reduction Program funds in the amount of $500,000 from the California Street Bikeway to the upcoming Victor and Cypress Avenue Active Transportation project.

RECOMMENDATION: ACCEPT, ACKNOWLEDGE, ADOPT, APPROVE,
AND/OR AUTHORIZE ALL ITEMS ON THE CONSENT CALENDAR.

5. APPOINTMENTS
City Council

5.1. Consider Mayor's appointments to the City of Redding Planning Commission.

Recommendation:

Approve Mayor’s recommendation to appoint the following applicants to the City of Redding Planning Commission:
(1) Appoint Kent Manuel to serve an unexpired term effective April 7, 2026, through April 30, 2029, due to the resignation of Planning Commissioner Blake Nance on March 3, 2026; and
(2) Appoint Joshua Johnson to serve a four-year term effective May 1, 2026, through April 30, 2030, due to the completion of Planning Commissioner Michele Goedert’s second term.

9. REGULAR CALENDAR: REPORTS & COMMUNICATIONS OF DEPARTMENTS,

BOARDS, COMMISSIONS AND COMMITTEES
Public Works

9.11(g). Consider adopting Resolution declaring an emergency for the City of Redding Tarmac Road Storm Drain Emergency Replacement Project, and associated budget Resolution.

Recommendation:

Authorize and approve the following actions relative to the City of Redding Tarmac Road Storm Drain Emergency Replacement Project (Project):
(1) Adopt Resolution, by not less than four-fifths affirmative vote, to declare an emergency and authorize the City Manager, or designee, to negotiate an emergency public works contract for the project in an amount not-to-exceed $3,500,000;
(2) Authorize construction contingency amount up to a total of $300,000; (3) Approve $50,000 to cover costs for project development; (4) Approve $300,000 to cover costs for construction management and inspection fees;
(5) Adopt Resolution approving and adopting the 33rd Amendment to City Budget Resolution No. 2025-049 appropriating $4,150,000 for said purpose; and
(6) Find that the Project is exempt from review under the California Environmental Quality Act Guidelines, pursuant to Section 15269(b) – Emergency Projects.

Redding City Council April 7, 2026

11. COUNCIL TRAVEL REPORT(S)
City Council Member attendance at conference/meetings reimbursed at City expense. {Requirement of Assembly Bill 1234}
Information Only

12. SUGGESTIONS FROM COUNCIL MEMBERS RELATIVE TO POTENTIAL TOPICS

FOR FUTURE CITY COUNCIL MEETINGS

13. ADJOURNMENT
Pursuant to the Brown Act, non-confidential materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available for inspection during normal business hours at the Office of the City Clerk, 3rd Floor, City Hall, 777 Cypress Avenue, Redding, California.

City Council Meetings will be televised live on Shasta Community Access Channels via Charter/Spectrum Cable channel 181, and will be rerun on Thursday at 12:30 p.m. during the week in which the meeting is held. Additionally, the meeting can be viewed online at the following: https://www.shastaartscouncil.org/scactv; and the City’s YouTube Channel https://www.youtube.com/cityofredding. Video of the City Council meetings can also be viewed on the City’s web site at https://www.cityofredding.gov/. Open the Services tab, and select City Council Videos.

In compliance with Title II of the Americans with Disabilities Act, the City of Redding will make available to persons with disabilities modifications or accommodations including auxiliary aids or services necessary to participate in public meetings. A person needing assistance should contact the Redding City Clerk by telephone at (530) 225-4447 or in person, or by mail at 777 Cypress Avenue, 3rd Floor, Redding, California 96001 at least three (3) working days in advance.

The City of Redding will ensure that no person shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination under any of its projects, activities, services, or business opportunities on the basis of race, color, national origin, age, sex, or disability, as afforded by Title VI of the Civil Rights Act of 1964 and related statutes as amended. All persons, regardless of their citizenship status, are covered under this regulation.

Questions, complaints, or requests for accommodations or additional information may be forwarded to the ADA & Title VI Coordinator at 777 Cypress Avenue, Attn: Personnel Dept., Redding, California 96001, Phone (530) 225-4065.

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Mayor’s Proclamation presented to First 5 Shasta declaring April 11-18, 2026, as Week of the Young Child in the City of Redding.

Attachments
Proclamation
MEETING DATE: April 7, 2026
ITEM NO. 2A
FROM:
***APPROVED BY***
[email protected]
[email protected]
SUBJECT: 2A--Mayor's Proclamation declaring April 11-18, 2026, as Week of the Young Child in the City of Redding
Mike Littau, Mayor
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Packet Pg. 7
Attachment: Proclamation (2A--Mayor's Proclamation declaring April 11-18, 2026, as Week of the Young Child)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Mayor's Proclamation presented to the Shasta County Arts Council declaring April 2026 as Arts, Culture, and Creativity Month in the City of Redding.

Attachments
Proclamation - Arts, Culture, and Creativity Month
MEETING DATE: April 7, 2026
ITEM NO. 2B
FROM:
***APPROVED BY***
[email protected]
[email protected]
SUBJECT: 2B--Mayor's Proclamation declaring April 2026 as Arts, Culture, and Creativity Month in the City of Redding.

Mike Littau, Mayor
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Packet Pg. 9
Attachment: Proclamation - Arts, Culture, and Creativity Month (2B--Mayor's Proclamation - Arts, Culture, Creativity Month April 2026)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Approve City Council Minutes: Special Meeting Budget and Closed Session of February 3, 2026; Regular Meeting of February 3, 2026; Special Meeting – Closed Session of February 17, 2026; Regular Meeting of February 17, 2026; Special Meeting – Closed Session of March 17, 2026; and Regular Meeting of March 17, 2026.

Attachments
Unofficial Minutes - Special Meeting - Budget and Closed Session of February 3, 2026 Unofficial Minutes - Regular Meeting of February 3, 2026 Unofficial Minutes - Special Meeting - Closed Session of February 17, 2026 Unofficial Minutes - Regular Meeting of February 17, 2026 Unofficial Minutes - Special Meeting - Closed Session of March 17, 2026 Unofficial Minutes - Regular Meeting of March 17, 2026
MEETING DATE: April 7, 2026
ITEM NO. 4(a)
FROM:
***APPROVED BY***
[email protected]
[email protected]
SUBJECT: 4(a)--Approve City Council Minutes
Sharlene Tipton, City Clerk
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174
02/03/2026
Unofficial Minutes Redding City Council, Special Meeting Civic Center Council Chambers
777 Cypress Avenue
Redding, CA 96001
February 3, 2026, 3:00 PM
The meeting was called to order at 3:05 p.m. by Mayor Mike Littau with the following Council Members present: Tenessa Audette, Jack Munns and Erin Resner. Vice Mayor Dr. Paul Dhanuka arrived at 3:21 p.m.

Also present: City Attorney Christian M. Curtis, Interim City Manager Kari Kibler, Interim Assistant City Manager/Public Works Director Michael Webb, City Clerk Sharlene Tipton, and Executive Assistant II Erin Barnhart.

City of Redding Biennial Revenue Discussion No. 1

3.1. City of Redding Biennial Budget Revenue Discussion for FY 26 & FY 27.

Interim City Manager Kibler provided opening remarks, and Finance Director Greg Robinett summarized the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

A discussion amongst the Council ensued to discuss how to proceed for this meeting, and it was decided to take a vote on each section.

Council Member Resner left the Chambers at 3:15 p.m. and returned at 3:16 p.m.

Council provided the following direction regarding revenue assumption modifications for Fiscal Years (FY) 2025 through FY 2031:

Sales Tax Revenue
A MOTION WAS MADE by Council Member Audette, second by Council Member Resner, to adopt Scenario 2 (Middle), update FY 2025 to $30,253, and to use formally approved projections that FY 2026 will be down two percent year over year from this revised amount. The Vote: Unanimous Ayes.

Property Tax Updates
A MOTION WAS MADE by Council Member Audette, seconded by Council Member Munns, to adopt a custom scenario, keep as budgeted and recognize the actual number for FY 2025 at a 3% assumption, and keep as projected at 3% going forward.

The Vote: Unanimous Ayes.

Council Member Munns left the Chambers at 3:58 p.m. and returned at 4:00 p.m.

Transient Occupancy Tax
A MOTION WAS MADE by Council Member Resner, seconded by Council Member Audette, to adopt Scenario 3 (Downside), with some exceptions: in FY 2026 assume a long-term growth assumption of 2% and then moving forward from FY 2027, assume a long-term growth assumption of 3.5%. The Vote: Unanimous Ayes.

Cannabis and Other Tax Updates
A MOTION WAS MADE by Council Member Audette, seconded by Council Member Resner, to change FY 2026 year over year increase to 6.89%; change FY 2027 to reflect a flat growth; and keep 4% year over year increases for the remainder of FYs 2028 through 2031. The Vote: Unanimous Ayes.

A discussion amongst the Council ensued.

A consensus of Council directed staff to postpone any additional budget meetings pending the new City Manager’s arrival and once he has assumed his position.

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Attachment: Unofficial Minutes - Special Meeting - Budget and Closed Session of February 3, 2026 (4(a)--Approve City Council Minutes) 175
02/03/2026

PUBLIC COMMENT
Mayor Littau announced that no one present wished to speak regarding the following Closed Session items.

CLOSED SESSION
At the hour of 5:09 p.m., Mayor Littau announced that the Council would adjourn to Closed Session.

At the hour of 6:26 p.m., Mayor Littau reconvened to Open Session and reported that in reference to:
4A. Closed Session pursuant to California Government Code Section 54956.9(d)(1):

CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Cook v. City of Redding, et al.; Shasta County Superior Court Case No. 25CV-0207283 Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.
4B. Closed Session pursuant to California Government Code Section 54956.8:

CONFERENCE WITH REAL PROPERTY NEGOTIATOR
Locations: 1728 East Cypress Avenue, APN No. 067-080-048; 1200 Industrial Street, APN No. 067-120-019; and
2525 Victor Avenue, APN No. 067-490-023
City Negotiator: Public Works Director Michael Webb
Parties: City of Redding and:
(1) Piggy and the Farmer Inc., a California Corporation; (2) Lawrence A. Price & Kathleen L. Price, husband and wife, as Joint Tenants;
(3) Warren K. Partridge and Laurey L. Partridge, husband and wife, as Joint Tenants
Under Negotiation: Price and Terms
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.
4C. Closed Session pursuant to California Government Code Section 54957.6:

CONFERENCE WITH LABOR NEGOTIATOR
Designated Agency Representative: Interim Personnel Director Leslie Saelee Employee Organizations:
(1) Redding Police Managers’ Association;
(2) Redding Peace Officers’ Association;
(3) Redding Peace Officers’ Association - Miscellaneous Employees; (4) Redding Independent Employees’ Organization-Clerical, Technical and Professional Unit;
(5) Redding Independent Employees’ Organization-Supervisory & Confidential Unit; (6) International Brotherhood of Electrical Workers 1245 AFL-CIO-Maintenance Employees; and
(7) Unrepresented Employees
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.
4D. Closed Session pursuant to California Government Code Section 54957(b):

PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Title: City Attorney
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.

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Attachment: Unofficial Minutes - Special Meeting - Budget and Closed Session of February 3, 2026 (4(a)--Approve City Council Minutes) 176
02/03/2026
4E. Closed Session pursuant to California Government Code Section 54957(b):

PUBLIC EMPLOYEE RECRUITMENT – CITY ATTORNEY
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.

ADJOURNMENT
There being no further business at the hour of 6:26 p.m., Mayor Littau declared the meeting adjourned.

APPROVED:
______________________________
Mike Littau, Mayor
ATTEST:
____________________________
Sharlene Tipton, City Clerk
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Attachment: Unofficial Minutes - Special Meeting - Budget and Closed Session of February 3, 2026 (4(a)--Approve City Council Minutes) 177
02/03/2026
Unofficial Minutes Redding City Council, Regular Meeting Civic Center Council Chambers
777 Cypress Avenue
Redding, CA 96001
February 3, 2026, 6:00 PM
The meeting was called to order at 6:27 p.m. by Mayor Mike Littau with the following Council Members present: Tenessa Audette, Dr. Paul Dhanuka, Jack Munns, and Erin Resner.

Also present: City Attorney Christian M. Curtis, Interim City Manager Kibler, Interim Assistant City Manager Webb, City Clerk Sharlene Tipton, and Executive Assistant II Erin Barnhart.

The Pledge of Allegiance was led by Council Member Audette.

The Invocation was provided by Redding Police and Fire Chaplain Jen McCloskey.

PRESENTATIONS
2A. Presentation of City of Redding Appreciation Clocks to Joshua Divine and Denise Yergenson for their service on the Community Services Advisory Commission from January 1, 2018, to December 31, 2025.

Mayor Littau expressed his appreciation to Ms. Yergenson for her service to the City of Redding for the last eight years.

Mr. Divine was unable to attend this meeting and will receive his Appreciation Clock at a future Council Meeting.

The City Council took no formal action on this informational item.

PUBLIC COMMENT
Margaret Cantrell expressed her support for upcoming budget discussions and requested Council reduce staffing.

David Wasko opined his opposition to the Flock Safety surveillance system.

Kayla Anderson, owner of an apartment complex on Hartnell Avenue, requested any available assistance with repairs to 22 of 24 apartments that were damaged due to recent December 2025 winter storm. Council directed staff to follow up with Ms. Anderson.

David Baker, former owner of a coffee shop in City Hall for almost 20 years, shared the negative interactions he had with Redding Police Department Officers while volunteering at Planned Parenthood, and opined that he was retaliated against for such volunteer work.

Amber Bush asked Council for assistance due to the City of Redding’s camping ordinance preventing her and her family from living on her property with a half-built house due to losing their home in the 2018 Carr Fire.

CONSENT CALENDAR
The following matters were considered inclusively under the Consent Calendar and each Report to the City Council (staff report) is incorporated herein by reference:
4(a). Accept City of Redding Proof of Cash and Cash by Fund reports for the months of October, November, and December 2025.

Council Member Audette expressed concerns with the proof of cash general fund showing a negative $11.4 million and noted that she confirmed with the Finance Director that the second quarter report will not be provided at the next regularly scheduled Council meeting. 4(b). Accept the City of Redding Treasurer’s Report for October, November, and December 2025.

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Attachment: Unofficial Minutes - Regular Meeting of February 3, 2026 (4(a)--Approve City Council Minutes) 178
02/03/2026

4.1(a). Authorize and approve the following: (1) adopt Resolution No. 2026-009, a resolution of the City Council of the City of Redding, establishing the City of Redding Audit Committee to provide structured oversight of internal and external audit activities; and (2) adopt Resolution No. 2026-010, a resolution of the City Council of the City of Redding, establishing the City of Redding Financial Advisory Committee to provide communityinformed advisory input on budget development, financial priorities, and long-term sustainability.

4.5(a). Authorize and approve the following modification relative to Bid Schedule No. 5631 – Furnish and Deliver Pad-Mounted Distribution Switches for the Redding Electric Utility:
(1) increase the purchase order awarded to Anixter, Inc. by $128,560.58, resulting in a new total award amount of $349,817.33 (including applicable sales tax), for the purchase of five (5) additional pad-mounted switches; and (2) authorize the City Manager, or designee, to execute all documents necessary to implement this action.

4.5(b). Authorize and approve the following: (1) approve and authorize Redding Electric Utility Director to execute Western Area Power Administration Contract No. 25-SNR-03267, Contract for Interconnection and Transmission Service for the Whiskeytown Power Project; (2) acknowledge that, pursuant to Resolution No. 97-203 and Resolution No. 93- 018, the Redding Electric Utility Director is authorized to enter into enabling transmission service agreements and to approve transmission service transactions conducted under the terms of Contract No. 25-SNR-03267; (3) authorize the Electric Utility Director to approve substation maintenance and related costs associated with Contract No. 25-SNR-03267 for the ten-year contract term in a total amount not to exceed $1,215,000, which includes a contingency of fifty percent; and (4) authorize the Redding Electric Utility Director to approve non-substantive contract amendments and administrative changes related to Contract No. 25-SNR-03267 that are not otherwise authorized under Resolution No. 97- 203 or Resolution No. 93-018, provided such changes are consistent with the terms and conditions approved herein and do not increase the authorized not-to-exceed amount.

4.9(a). Authorize and approve the following: (1) approve Memorandum of Understanding (MOU) between the City of Redding, the City of Anderson, and the County of Shasta for replacement and maintenance of the agencies’ fingerprinting machines (Live Scan) through the Integrated Public Safety task force; (2) accept funding from the Community Corrections Partnership in the amount of $152,455.08 for the purchase of the new system, with the term of the MOU to be from the date of the final signature until October 5, 2027; and (3) authorize the Mayor to execute the MOU on behalf of the City of Redding.

4.11(a). Authorize and approve the following relative to the purchase of a CCTV inspection van for maintenance of the City of Redding Storm Drain system: (1) authorize the purchase of a Rapidview IBAK HD CCTV Inspection Van using Sourcewell contract pricing from Municipal Maintenance Equipment, with a net delivered cost of $350,864.18, including all applicable taxes and fees; and (2) authorize the City Manager, or designee, to approve future pricing adjustments, terms, and policy changes as needed up to an additional $10,000.00 for the purchase of the CCTV inspection van.

4.11(b).Authorize and approve the following actions relative to Bid Schedule No. 5660, Redding Electric Utility Substation Fencing Project Phase 4: (1) award to J.S. Builders Inc. in the amount of $189,083; (2) approve an additional $64,385 to cover the cost of administration and inspection fees; (3) approve $40,000 for project development costs; (4) approve $29,000 to provide construction contingency funding; (5) authorize the City Manager, or designee, to approve additional increases in either the construction management or construction contingency amounts up to a total of $35,000; and (6) find that the project is categorically exempt from review under the California Environmental Quality Act, pursuant to Section 15301 - Existing Facilities and Section 15302 - Replacement or Reconstruction.

4.11(c).Authorize and approve the following actions relative to Bid Schedule No. 5651, Burney Library Roof Replacement, Solar and Generator Addition Project (Project): (1) award to Addy Electric, Inc. in the amount of $225,271.14 for the Base Bid, an additional $15,240 for Additive Alternate 1, and an additional $3,175 for Additive Alternate 3; (2) approve $94,000 to cover the cost of administration and inspection fees; (3) approve $75,000 for project development costs; (4) approve $25,000 to provide construction contingency funding; and (5) find that the project is categorically exempt from review under the California Environmental Quality Act, pursuant to Section 15301 – Existing Facilities.

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Attachment: Unofficial Minutes - Regular Meeting of February 3, 2026 (4(a)--Approve City Council Minutes) 179
02/03/2026
A MOTION WAS MADE by Council Member Resner, seconded by Council Member Munns, that the foregoing items on the Consent Calendar be accepted, acknowledged, adopted, approved, and/or authorized as recommended.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Resolution Nos. 2026-009 and 2026-010 are on file in the Office of the City Clerk.

APPOINTMENTS

5.1. Mayor's Appointment to the Redding Housing Authority Board of Commissioners.

Mayor Littau highlighted the Report to the City Council (staff report), incorporated herein by reference, and shared that he spoke with Mr. Dutra regarding the appointment and feels confident with the choice.

A MOTION WAS MADE by Council Member Dr. Dhanuka, seconded by Council Member Munns, to approve the Mayor’s recommendation to appoint Joseph Dutra to the City of Redding Housing Authority Board of Commissioners to serve a four-year term beginning January 1, 2026, through December 31, 2029. The Vote: Unanimous Ayes.

5.2. Mayor's Appointment to the City of Redding Administrative Hearings Board.

Mayor Littau summarized the Report to the City Council (staff report), incorporated herein by reference, and shared that he spoke with Mr. Roadrunner and expressed confidence in the choice made.

A MOTION WAS MADE by Council Member Dr. Dhanuka, seconded by Council Member Resner, to approve the Mayor’s recommendation to appoint Teporaca Roadrunner to the City of Redding Administrative Hearings Board for a four-year term beginning February 1, 2026, through January 31, 2030. The Vote: Unanimous Ayes Council Member Munns left the Chambers at 7:34 p.m. and returned at 7:35 p.m.

REGULAR CALENDAR: REPORTS & COMMUNICATIONS OF DEPARTMENTS,

BOARDS, COMMISSIONS AND COMMITTEES
9A. Reports from Independent Auditors for the year ended June 30, 2025.

Finance Director/City Treasurer Greg Robinett highlighted the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Munns, seconded by Council Member Resner, to approve the Audit Committee’s recommendation to accept the Statement on Auditing Standards AU-C 260 Letter and the draft copy of the Single Audit Reports for the year ended June 30, 2025.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Mayor Littau moved item 9.10(a) to be discussed prior to item 9.6(a).

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Attachment: Unofficial Minutes - Regular Meeting of February 3, 2026 (4(a)--Approve City Council Minutes) 180
02/03/2026

9.10(a).Acceptance of the City of Redding Annual Comprehensive Financial Report for the year ended June 30, 2025.

Finance Director Greg Robinett summarized the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

Michael Quinn spoke in favor of the transparency and work being done by Finance Director/City Treasurer Robinett and his department staff.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Munns, seconded by Council Member Resner, to accept the City of Redding Annual Comprehensive Financial Report for the fiscal year ended June 30, 2025. The Vote: Unanimous Ayes.

9.5(c). Approval of Redding Electric Utility's 2030 Strategic Plan.

Electric Utility Director Nicholas Zettel summarized the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Resner, seconded by Council Member Dr.

Dhanuka, to approve Redding Electric Utility’s (REU) 2030 Strategic Plan, establishing updated mission and vision statements, identifying strategic focus areas, and setting longterm goals to guide the REU’s operations and decision-making through 2030.

The Vote:

AYES: Council Members – Audette, Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Council Member Munns left the Chambers at 9:00 p.m. and returned at 9:02 p.m.

9.6(a). Provide direction to staff regarding funding for Advance Redding's operations of the Civic Auditorium located at 700 Auditorium Drive.

Community Services Director Travis Menne provided a Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

The following spoke in favor of the Civic Auditorium remaining open: Susan Murray, Paul David, Yvonna Kuyper, Lindsey Meyers, Rachel Hatch, Steven Williams, Steve Kohn, Hope Seth, Eric Hiatt, Julie Winter, and John Truitt.

In response to Mayor Pro Tempore Resner, Finance Director Robinett and Interim Assistant City Manager Webb explained that the funding options identified in order to provide short-term funding to maintain operational status for the Redding Civic Auditorium are the following: (1) Stillwater Business Park funding through the sale of vacant lots; and (2) proceeds from the land sale to the Redding Rancheria.

In response to Vice Mayor Dr. Dhanuka, Advance Redding’s General Manager Julie Dyar, and Board President Eric Hiatt advised Council that even though they are generating a revenue on their profit and lost statements, they are still carrying a negative balance.

Additionally, Mr. Hiatt stated they are willing to work with Council for a path forward.

In response to Council’s suggestion, City Attorney Curtis confirmed that due to Advance Redding’s non-profit status, should Council appoint a Council Member as a voting board member, this would change Advance Redding’s 501(c)(3) status.

A discussion amongst the Council ensued.

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A MOTION WAS MADE by Council Member Resner, seconded by Council Member Munns, to authorize and approve the following actions relative to Advance Redding and the operations of the Civic Auditorium: (1) authorize the Mayor to execute a 2026 Short Term Grant Agreement (Agreement) for short-term operations of the Civic Auditorium for a four-month term from the date of the Agreement in an amount not-to-exceed $464,000, paid in equal monthly payments beginning March 1, 2026; (2) authorize the Mayor to execute the Second Lease Amendment with Advance Redding (C-5682), providing rent relief and adding a 60-day no-cause termination clause; (3) direct staff to return to Council within three months at the May 19, 2026, City Council Meeting with an update regarding the short-term plan and long-term feasibility options for further funding consideration; and (3) as a condition of considering further funding, Council directed Advance Redding to provide the following: (a) quarterly financial reports; (b) a good faith letter showing continued participation in the long-term solution for the Civic Auditorium and the Northern Riverfront plan; (c) when the Request for Proposals (RFP) is created for operations of the Civic Auditorium, Advance Redding will apply for the RFP; (d) appoint Mayor Littau to serve as a non-voting member on the Advance Redding Board of Directors.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None

9.11(d). Final update to COVID-19 Economic Stimulus Package Projects.

Interim Assistant City Manager Michael Webb provided the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Dr. Dhanuka, seconded by Council Member Resner, to authorize and approve the following relative to the City of Redding’s COVID-19 Economic Stimulus Package projects: (1) ratify approval of City Manager award for the Corporation Yard HVAC Upgrade (C19-M-05) to Ray Mac Mechanical, Inc. in the amount of $342,450; and (2) accept the final Project Status Report. The Vote:

Unanimous Ayes.

9.15(a).Accept a Presentation and consider providing direction to staff regarding alternate prescription sourcing.

Interim Personnel Director Leslie Saelee summarized the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

A discussion amongst the Council ensued.

The Council unanimously accepted the presentation and directed staff to revisit alternate prescription sourcing for City of Redding employees in six months, or once Alliant has completed its vetting process with Limitless, and return to Council for further discussion by the end of 2026.

TRAVEL REPORTS
City Council Member attendance at conference/meetings reimbursed at City expense. {Requirement of Assembly Bill 1234}
Mayor Pro Tempore Resner attended the Northern California Power Agency Commission meeting in Sacramento, California, on January 22, 2026.

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ADJOURNMENT
There being no further business at the hour of 10:25 p.m., Mayor Littau declared the meeting adjourned.

APPROVED:
______________________________
Mike Littau, Mayor
ATTEST:
____________________________
Sharlene Tipton, City Clerk
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Unofficial Minutes Redding City Council, Special Meeting Civic Center Council Chambers
777 Cypress Avenue
Redding, CA 96001
February 17, 2026, 4:45 PM
The meeting was called to order at 4:47 p.m. by Mayor Mike Littau with the following Council Members present: Dr. Paul Dhanuka, and Jack Munns. Mayor Pro Tempore Erin Resner participated telephonically. Council Member Tenessa Audette arrived at 4:48 p.m. All votes were taken by roll call.

Also present: City Attorney Christian M. Curtis, City Manager William Tarbox, Interim Assistant City Manager Michael Webb, City Clerk Sharlene Tipton, and Executive Assistant II Erin Barnhart.

PUBLIC COMMENT
The following spoke in favor of a lease agreement for the Redding Motorsports Park / Redding Drag Strip, located on Old Oregon Trail, relative to item no. 3D: Lionel Bell, Chris Bixler, Kenny Cox, Cole Burris, Alveen Gideon, Melynda Burbage, Tyler Marchione, Doug Reed, Tyler Ritcheson, Dusty Bullen, Tim Gibbons, Troy A. Baugh, and Tony Trimp.

CLOSED SESSION
At the hour of 5:16 p.m., Mayor Littau opened the Special Meeting and announced that the Council would adjourn to Closed Session.

At the hour of 6:14 p.m., Mayor Littau reconvened the Special Meeting to Open Session and reported that in reference to:
3A. Closed Session pursuant to California Government Code Section 54957(b):

PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Title: City Attorney
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.
3B. Closed Session pursuant to California Government Code Section 54957(b):

PUBLIC EMPLOYEE RECRUITMENT – CITY ATTORNEY
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.

CONTINUED CLOSED SESSION
At the hour of 8:16 p.m., Mayor Littau reconvened the Special Meeting and announced that the Council would adjourn to Closed Session.

At the hour of 9:41 p.m., Mayor Littau reconvened the Special Meeting to Open Session and reported that in reference to:
3C. Closed Session pursuant to California Government Code Section 54957.6:

CONFERENCE WITH LABOR NEGOTIATOR
Designated Agency Representative: Interim Personnel Director Leslie Saelee Employee Organizations:
(1) Redding Independent Employees’ Organization - Clerical, Technical and Professional Unit; and
(2) Redding Independent Employees’ Organization - Supervisory & Confidential Unit Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.

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3D. Closed Session pursuant to California Government Code Section 54956.8:

CONFERENCE WITH REAL PROPERTY NEGOTIATOR
Property Location: Redding Motorsports Park / Redding Drag Strip, located on Old Oregon Trail, a licensed portion of Assessor’s Parcel Nos. 054- 270-004 and 056-130-031
Agency Negotiator: Community Services Director Travis Menne Negotiating Parties: City of Redding and Redding Drag Strip, Inc.; Redding Motorsports Park; Stillwater MX; Shasta Kart Klub; and Shasta Supermoto Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.

ADJOURNMENT
There being no further business at the hour of 9:42 p.m., Mayor Littau declared the meeting adjourned.

APPROVED:
______________________________
Mike Littau, Mayor
ATTEST:
____________________________
Sharlene Tipton, City Clerk
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Unofficial Minutes Redding City Council, Regular Meeting Civic Center Council Chambers
777 Cypress Avenue
Redding, CA 96001
February 17, 2026, 6:00 PM
The meeting was called to order at 6:14 p.m. by Mayor Mike Littau with the following Council Members present: Tenessa Audette, Dr. Paul Dhanuka, and Jack Munns. Mayor Pro Tempore Erin Resner participated telephonically. All votes were taken by roll call.

Also present: City Attorney Christian M. Curtis, City Manager William Tarbox, Interim Assistant City Manager Michael Webb, City Clerk Sharlene Tipton, and Executive Assistant II Erin Barnhart.

The Pledge of Allegiance was led by Council Member Munns.

The Invocation was provided by Pastor Colin Duffy, Redding Church of Nazarene.

PRESENTATIONS
2A. Presentation of City of Redding Appreciation Clock to Joshua Divine for his service on the Community Services Advisory Commission (CSAC) from January 1, 2018, to December 31, 2025.

Mayor Littau thanked Mr. Divine for his service as a CSAC Commissioner for the last 8 years and expressed his sincere appreciation on behalf of the City Council.

The City Council took no formal action on this informational item. 2B. Presentation from Public Affairs Specialist Mary Bradfield, and Charles Kight, on behalf of the U.S. Small Business Administration, regarding services provided to, and available to, County of Shasta and City of Redding residents regarding the December 2025 flood event.

The City Council took no formal action on this informational item.

PUBLIC COMMENT
Michael Kiley, Athletic Director for Special Olympics Northern California, invited the Council and the public to attend the Special Olympics Basketball Tournament to be held on March 21- 22, 2026.

Rob Swendiman expressed his concerns while attending peaceful protests in the City of Redding and requested a larger law enforcement presence.

Delores Lucero, on behalf of Shasta County Watchdog, requested more transparency with public records requests.

Mark Monroe opined his support for the Redding Motorsports Park.

Robert Sid shared his support for the Redding Police Department during the recent protest held at Enterprise High School.

CONSENT CALENDAR
The following matters were considered inclusively under the Consent Calendar and each Report to City Council (staff report) is incorporated herein by reference:
4(a). Approve City Council Minutes: Special Meeting – Closed Session of January 6, 2026; and Regular Meeting of January 6, 2026.

Council Member Audette noted a correction made to the regular meeting minutes of January 6, 2026, and is incorporated herein by reference.

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4(b). Accept the following City of Redding Accounts Payable and Payroll Registers:
(1) Accounts Payable Register No. 7 for the period of January 1, 2026, through January 31, 2026, in the amount of $ 23,586,337.94; (2) Payroll Register No. 14 for the period of December 21, 2025, through, January 3, 2026, in the amount of $ 3,026,542.75; and (3) Payroll Register No. 15 for the period of January 4, 2026, through January 17, 2026, in the amount of $2,876,885.53; for a summary total of $29,489,766.22.

4.4(a). Adopt Resolution No. 2026-011, a resolution of the City Council of the City of Redding, approving adopting the 21st Amendment to City Budget Resolution No. 2025-049 appropriating $0 by utilizing personnel savings to fund the demolition of the subject property located at 825 Industrial Street, which has been the focus of prolonged City of Redding Code Enforcement efforts due to chronic nuisance conditions, multiple structure fires, advanced structural deterioration, repeated trespassing, and significant public safety concerns.

4.9(a). Approve ratification of submission of a grant application to the California Office of Traffic Safety Selective Traffic Enforcement Program in the amount of $689,226.09; and authorize the City Manager, or designee, to execute allocation of the grant agreement and all subsequent documentations and to administratively appropriate the award.

4.11(a).Authorize and approve the following actions relative to the Eastside Road over Olney Creek Bridge Project (Project): (1) increase project budget by $1,200,000; and (2) adopt Resolution No. 2026-012, a resolution of the City Council of the City of Redding, approving and adopting the 25th Amendment to City Budget Resolution No. 2025-049 appropriating $1,200,000 of Citywide Transportation Impact Fee funds for the project.

4.11(b).Authorize and approve the following actions relative to Bid Schedule No. 5470, Westside Road over Canyon Hollow Creek Bridge Replacement Project: (1) reject the apparent low bid by JS Builders, Inc. as nonresponsive and award the project to the second low bidder JF Shea Construction, Inc., in the amount of $4,748,526; (2) approve an additional $712,200 to cover the cost of administration and inspection fees and $985,000 for project development costs; (3) approve $474,500 to provide construction contingency funding; (4) authorize the City Manager, or designee, to approve additional increases in either the construction management or construction contingency amounts up to a total of $50,000; and (5) adopt Resolution No. 2026-013, a resolution of the City Council of the City of Redding, approving and adopting the 24th Amendment to City Budget Resolution No. 2025-049 appropriating $2,318,780 for the Westside Road over Canyon Hollow Creek Bridge Replacement project; increasing appropriation of federal grant funds by $267,360 and increasing appropriation of Transportation Impact Fee funds by $2,051,420.

4.11(c).Authorize the City Manager, or designee, to submit a grant application to the United States Department of Transportation for the Better Utilizing Investments to Leverage Development Grant Program in the amount of $25 million for the South Bonnyview Diverging Diamond Interchange and Corridor Capacity Improvement Project.

4.11(d).Authorize and approve the following actions relative to Bid Schedule No. 5667, Oregon Street Improvements: (1) award the project to the lowest bidder, JF Shea, in the amount of $1,312,100; (2) approve an additional $151,900 to cover the cost of administration and inspection fees; (3) approve $351,750 for project development costs; (4) approve $131,200 to provide construction contingency funding; and (5) authorize the City Manager, or designee, to approve additional increases in either the construction management or construction contingency amounts up to a total of $75,000.

A MOTION WAS MADE by Council Member Audette, seconded by Council Member Dr. Dhanuka, that the foregoing items on the Consent Calendar be accepted, acknowledged, adopted, approved, and/or authorized as recommended.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Resolution Nos. 2026-011 through 2026-013 are on file in the Office of the City Clerk.

Council Member Munns left Chambers at 6:45 p.m. and returned at 6:47 p.m.

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APPOINTMENTS

5.1. Mayor's reappointment to the Shasta County Commission on Aging.

Mayor Littau provided an overview of the Report to the City Council (staff report), incorporated herein by reference, and shared that he spoke with Mr. Brokloff regarding the reappointment.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Dr. Dhanuka, seconded by Council Member Audette, to approve the Mayor’s recommendation to reappoint Michael Brokloff as the City of Redding Representative to the Shasta County Commission on Aging (COA) to serve a two-year term effective January 5, 2026, through January 3, 2028, pursuant to the Shasta County COA bylaws. The Vote: Unanimous Ayes
REGULAR CALENDAR: REPORTS & COMMUNICATIONS OF DEPARTMENTS,

BOARDS, COMMISSIONS AND COMMITTEES

9.1(a). Memorandum of Understanding with Redding Tourism Marking Group, Inc.

Management Assistant to City Manager Jason Gibilisco summarized the Report to the City Council (staff report), incorporated herein by reference.

In response to Council Member Audette, City Attorney Curtis advised Council that to amend a contract with Visit Redding or Redding Tourism Marketing Group Inc., the item would need to be agendized for a future Council Meeting.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Audette, seconded by Council Member Resner, to: (1) authorize the Mayor to sign a Memorandum of Understanding with Redding Tourism Marketing Group, Inc., outlining the cooperating framework to support the Ironman 70.3 branded endurance triathlon to take place in the City of Redding on August 16, 2026, August 15, 2027, and August 13, 2028; and (2) directed staff to return at a future Council meeting with funding options including contract revisions with Visit Redding and Redding Tourism Marketing Group Inc. for funding to support the Ironman 70.3 event.

The Vote:

AYES: Council Members – Audette and Resner
NOES: Council Members – Dhanuka, Munns, and Littau
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Mayor Littau expressed his interest in seeing this to fruition and is open to seeing all potential options to fund the Ironman.

A discussion amongst the Council ensued.

A SECOND MOTION WAS MADE by Council Member Dr. Dhanuka, seconded by Council Member Munns, to: (1) authorize the Mayor to sign a Memorandum of Understanding with Redding Tourism Marketing Group, Inc., outlining the cooperating framework to support the Ironman 70.3 branded endurance triathlon to take place in the City of Redding on August 16, 2026, August 15, 2027, and August 13, 2028; and (2) directed staff to return at a future council meeting with funding options to support the Ironman 70.3 event.

The Vote:

AYES: Council Members – Dhanuka, Munns, and Littau
NOES: Council Members – Audette and Resner
ABSTAIN: Council Members – None
ABSENT: Council Members – None

9.5(a). Redding Electric Utility's Quarterly Financial Report and Industry Activities Update.

Electric Utility Director Nick Zettel summarized the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

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Delores Lucero, on behalf of Shasta County Watchdog, spoke in opposition to the quarterly financial report.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Munns, seconded by Council Member Dhanuka, to accept the City of Redding Electric Utility’s Fiscal Year 2025-26 Second Quarter Financial Report and Industry Activities Update.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None

9.5(b). Set a Public Hearing for March 3, 2026, regarding Redding Electric Utility rate increases.

Electric Utility Director Nick Zettel highlighted the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

In response to Council Member Audette, Director Zettel and Electric Utility Assistant Director Joseph Bowers confirmed that this item is to set the public hearing. Director Zettel noted that all the data and information will be shared during the public workshops being held February 25, 2026, and the Public Hearing on March 17, 2026, and included that all Redding Electric Utility staff would be on site and able to address the concerns pertaining to utility rate increases.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Munns, seconded by Council Member Dr. Dhanuka, to approve setting a Public Hearing on March 3, 2026, at 6:00 p.m., in the City Council Chambers, 777 Cypress Avenue, Redding, California, to consider increases in Redding Electric Utility rates (four and one-half percent increase per year) effective beginning with the April 1, 2026, billing cycle and continuing with the January 1, 2027, January 1, 2028, and January 1, 2029, billing cycles, along with an increase to the Residential Energy Discount benefit for income-qualified households.

The Vote:

AYES: Council Members – Dhanuka, Munns, Resner, and Littau NOES: Council Members – Audette
ABSTAIN: Council Members – None
ABSENT: Council Members – None

SUGGESTIONS FROM COUNCIL MEMBERS RELATIVE TO POTENTIAL TOPICS FOR

FUTURE CITY COUNCIL MEETINGS
At Council Member Audette’s suggestion, a consensus of Council directed staff to return to Council for consideration at a future Council meeting with a draft Ordinance for a one-time Entertainment District for Hilltop Drive during the Kool April Nights Cruise on April 24, 2026.

At Vice Mayor Dr. Dhanuka’s suggestion, a consensus of Council directed staff to return to Council for consideration at its March 17, 2026, Council meeting with applications for the newly established City of Redding Finance Oversight Committee.

ADJOURNMENT
There being no further business at the hour of 8:12 p.m., Mayor Littau declared the meeting adjourned.

APPROVED:
______________________________
Mike Littau, Mayor
ATTEST:
____________________________
Sharlene Tipton, City Clerk
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Unofficial Minutes Redding City Council, Special Meeting Civic Center Council Chambers
777 Cypress Avenue
Redding, CA 96001
March 17, 2026, 3:30 PM
The meeting was called to order by Mayor Mike Littau with the following Council Members present: Tenessa Audette, Jack Munns, and Erin Resner. Vice Mayor Dr. Paul Dhanuka arrived at 3:36 p.m.

Also present: City Attorney Christian M. Curtis, City Manager William Tarbox, City Clerk Sharlene Tipton, and Executive Assistant II Erin Barnhart.

PUBLIC COMMENT
Mayor Littau announced that no one present wished to speak regarding the following Closed Session items.

CLOSED SESSION
At the hour of 3:31 p.m., Mayor Littau announced that the Council would adjourn to Closed Session.

At the hour of 5:58 p.m., Mayor Littau reconvened the Closed Session to Open Session and reported that in reference to:
3A. Closed Session pursuant to California Government Code Section 54956.9(d)(1):

CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Wynhoff v. City of Redding; Shasta County Superior Court Case No. 24CV-0204924 Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.
3B. Closed Session pursuant to California Government Code Section 54956.9(d)(1):

CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Manivong v. City of Redding, et al.; Shasta County Superior Court Case No. 25CV-0209517
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on 3B(3).
3C. Closed Session pursuant to California Government Code Section 54956.9(d)(1):

CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
River Ranch Neighborhood Association v. City of Redding; Shasta County Superior Court Case No. 26CV-210023
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.
3D. Closed Session pursuant to California Government Code Section 54956.9(d)(1):

CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Baker v. City of Redding; Shasta County Superior Court Case No. 26CV-209640 Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.
3E. Closed Session pursuant to California Government Code Section 54956.9(d)(4):

CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
Initiation of Litigation - One potential case
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.

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3F. Closed Session pursuant to California Government Code Section 54957.6:

CONFERENCE WITH LABOR NEGOTIATOR
Designated Agency Representative: Personnel Director Kibler Employee Organizations:
(1) Local 1934 of International Association of Fire Fighters (2) United Public Employees of California - Redding Fire Management Unit Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.

At the hour of 6:04 p.m., Mayor Littau declared the meeting adjourned and continued items 3G through 3H to the end of the regular City Council meeting held on the same date, March 17, 2026, at 6:00 p.m. in the City of Redding Council Chambers located at 777 Cypress Avenue, Redding, CA 96001.

CONTINUED CLOSED SESSION
At the hour of 8:00 p.m., Mayor Littau reconvened the Special Meeting and announced that the Council would adjourn to Closed Session.

Vice Mayor Dr. Dhanuka left the meeting at 8:12 p.m. and did not return.

At the hour of 8:55 p.m., Mayor Littau reconvened the Special Meeting to Open Session and reported that in reference to:
3G. Closed Session pursuant to California Government Code Sections 54957(b) and 54957.6:

PUBLIC EMPLOYEE PERFORMANCE EVALUATION, PUBLIC EMPLOYMENT

RECRUITMENT AND CONFERENCE WITH LABOR NEGOTIATORS
Title: City Attorney
(1) Pursuant to California Government Code Section 54957(b) – PUBLIC EMPLOYEE PERFORMANCE EVALUATION – City Attorney;
(2) Pursuant to California Government Code Section 54957(b) - PUBLIC EMPLOYMENT: City Attorney – Recruitment; and
(3) Pursuant to California Government Code Section 54957.6 – CONFERENCE WITH LABOR NEGOTIATORS - Designated Agency
Representative: Personnel Director Kibler; Unrepresented Public Employee: City Attorney
By a vote of 4-1, (Vice Mayor Dr. Dhanuka was absent), the Council accepted City Attorney Curtis’ resignation effective April 4, 2026.
3H. Closed Session pursuant to California Government Code Section 54956.8:

CONFERENCE WITH REAL PROPERTY NEGOTIATOR
Property Location: Redding Motorsports Park / Redding Drag Strip, located on Old Oregon Trail, a licensed portion of Assessor’s Parcel Nos. 054-270- 004 and 056-130-031
Agency Negotiator: Community Services Director Menne
Negotiating Parties: City of Redding and Redding Drag Strip, Inc.; Redding Motorsports Park; Stillwater MX; Shasta Kart Klub; and Shasta Supermoto Under Negotiation: Price and Terms
Pursuant to Government Code Section 54957.1(a), the City Council took no reportable action on this item.

ADJOURNMENT
There being no further business at the hour of 8:58 p.m., Mayor Littau declared the meeting adjourned.

APPROVED:
______________________________
Mike Littau, Mayor
ATTEST:
___________________________
Sharlene Tipton, City Clerk
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Unofficial Minutes Redding City Council, Regular Meeting Civic Center Council Chambers
777 Cypress Avenue
Redding, CA 96001
March 17, 2026, 6:00 PM
The meeting was called to order at 6:00 p.m. by Mayor Mike Littau with the following Council Members present: Tenessa Audette, Jack Munns, and Erin Resner. Vice Mayor Dr. Paul Dhanuka participated telephonically All votes were taken by roll call.

Also present: City Attorney Christian M. Curtis, City Manager William Tarbox, City Clerk Sharlene Tipton, and Executive Assistant II Erin Barnhart.

The Pledge of Allegiance was led by Vice Mayor Dhanuka.

The Invocation was provided by Lynn Fritz, and Joey Carroll, Native American Tradition as a Karuk Tribal Descendent/Shasta County Interfaith Forum Chair.

PRESENTATION
2A. On behalf of District 1 Assembly Member Heather Hadwick, District Field Representative Mark Mezzano presented a Certificate of Recognition honoring Firefighter Steven Sawyer as the City of Redding Fire Department’s 2025 Firefighter of the Year.

Fire Chief Jerrod Vanlandingham summarized the Report to the City Council (staff report), incorporated herein by reference, and along with Mr. Mezzano, thanked Mr. Sawyer for his dedication to public safety.

The City Council took no formal action on this informational item.

PUBLIC COMMENT
Tony Trimp expressed his support for the Redding Motorsports Park, and invited the Council and community to attend the National Hot Rod Association (NHRA) Summit ET Series 2026 Season Opener for the Redding Drag Strip scheduled for March 21 and 22, 2026.

Mark Ewing, Beautify Shasta founder and spokesperson, highlighted the grassroots effort to continuously clean up high impact litter zones within Redding and surrounding areas, and provided Council with a resume memorializing the efforts thus far, incorporated herein by reference.

Tim Bauer, Choose Redding Sports and Event’s Director, highlighted the upcoming Ironman Triathlon taking place in the City of Redding on August 16, 2026. He noted that of the 2,500 registration spots available, 1,200 have been filled with registrant from 11 countries and 35 states, including California.

Sheree Topete opined her support for a future medical school with regards to item 9A, and encouraged the Council to vote yes on the item.

CONSENT CALENDAR
The following matters were considered inclusively under the Consent Calendar and each Report to City Council (staff report) is incorporated herein by reference:
4(a). Approve City Council Minutes: Special Meeting – Closed Session of January 20, 2026; Regular Meeting of January 20, 2026; Special Meeting – Closed Session of March 3, 2026; and Regular Meeting of March 3, 2026.

City Clerk Tipton removed the Special Meeting – Budget Prioritization & Modification Session and Closed Session of February 3, 2026, and the Regular Meeting of February 3, 2026, from this meeting and will return for consideration and adoption at a future Council Meeting
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4(b). Accept the following City of Redding Accounts Payable and Payroll Registers:
(1) Accounts Payable Register No. 8 for the period of February 1, 2026, through February 28, 2026, in the amount of $21,331,908.09; (2) Payroll Register No. 16 for the period of January 18, 2026, through January 31, 2026, in the amount of $2,890,419.02; and (3) Payroll Register No. 17 for the period of February 1, 2026, through February 14, 2026, in the amount of $2,743,410.45; for a summary total of $26,965,737.56 4(c). Accept City of Redding Proof of Cash and Cash by Fund reports for the month of January 2026.
4(d). Accept the City of Redding Treasurer’s Report for January 2026. 4(e). This is the second reading of the below-noted Ordinance introduced at the regularly scheduled City Council Meeting of March 3, 2026, authorize and approve the following:
(1) adopt Uncodified Ordinance No. 2689, an ordinance of the City Council of the City of Redding, amending Redding Municipal Code Title 6 (Business Taxes, Licenses and Regulations) Chapter 6.42 (Entertainment Zone) by amending Section 6.42 for establishing a temporary entertainment zone on portions of Hilltop Drive.

4.4(a). Authorize and approve the following: (1) accept the 2025 City of Redding General Plan/Housing Element Annual Progress Report; and (2) direct staff to forward the document to the Governor’s Office of Planning and Research, and the State of California Department of Housing and Community Development.

4.5(a). Authorize and approve the following actions relative to Bid Schedule No. 5672 – Insulators, Pins, Braces and Guy Assemblies for the Redding Electric Utility: (1) award Bid 5672 to OneSource Supply Solutions for an annual evaluated price of $300,795.80, plus 7.25 percent sales tax of $21,807.70 for a total amount of $322,603.50; (2) authorize the Purchasing Officer to extend the bid award annually with OneSource Supply Solutions through February 28, 2031, if mutually agreeable, with all pricing, terms and conditions remaining the same; and (3) authorize the City Manager, or designee, to approve an additional $60,000 per fiscal year as a contingency for unforeseen operational requirements.

4.6(a). Adopt Resolution No. 2026-016, a resolution of the City Council of the City of Redding, approving and adopting the 27th Amendment to City Budget Resolution No. 2025-049 appropriating $60,190 for the California State Library award funds for English as a Second Language Services for fiscal year 2025-2026.

4.6(b). Authorize and approve the following: (1) approve and ratify the Federal Aviation Administration (FAA) Airport Improvement Program (AIP) grant applications submitted by the Airports Division; and (2) authorize the City Manager, or designee, to accept and execute a grant agreement for any, or all, FAA AIP grant funds associated with these projects.

4.6(c). Authorize and approve the following: (1) approve the Ground Lease Agreement for 195,584 square feet of ground space with Shasta Hangar, LLC, for land located at the Redding Regional Airport – 3760 Flight Avenue, for a period of 36 years with two fiveyear extension options; (2) authorize the Mayor, or designee, to sign and execute the lease agreement; and (3) find the action categorically exempt from review under the California Environmental Quality Act Guidelines, pursuant to Section 15301 – Existing facilities.

4.9(a). This item was moved to the Regular Calendar item number 9.9(a) at the request of Council Member Audette.

4.11(a).Approve and authorize the following relative to the purchase of a Vac-Con vacuum excavator for the maintenance of the City of Redding Water Distribution system: (1) authorize the purchase of a vacuum excavator using Sourcewell contract pricing, with a net delivered cost of $650,713.30, including all applicable taxes and fees; and (2) authorize the City Manager, or designee, to approve future pricing adjustments, terms, and policy changes as needed up to an additional $30,000 due to inflation and unstable economic conditions for the purchase of the vacuum excavator
Packet Pg. 29
Attachment: Unofficial Minutes - Regular Meeting of March 17, 2026 (4(a)--Approve City Council Minutes) 197
03/17/2026

4.11(b).Authorize and approve the following actions relative to Bid Schedule No. 5642, Stillwater Outfall Building – Phase II for the City of Redding Stillwater Wastewater Treatment Plant:
(1) award the project to the lowest bidder, Converse Construction Inc., in the amount of $243,041; (2) approve an additional $79,000 to cover the cost of administration and inspection fees; (3) approve $91,000 for project development costs; (4) approve $35,000 to provide construction contingency funding; (5) authorize the City Manager, or designee, to approve additional increases in either the construction management or construction contingency amounts up to a total of $10,000; and (6) find that the project is categorically exempt from environmental review under the California Environmental Quality Act, pursuant to Section 15301-Existing Facilities and Section 15303-New Construction or Conversion of Existing Structures.

4.15(a).Adopt Resolution No. 2026-017, a resolution of the City Council of the City of Redding, modifying the Employment and Benefit Policies for City of Redding Unrepresented Employees, effective March 18, 2026.

A MOTION WAS MADE by Council Member Dhanuka seconded by Council Member Resner, that the foregoing items on the Consent Calendar be accepted, acknowledged, adopted, approved, and/or authorized as recommended.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Resolution Nos. 2026-016 and 2026-017 are on file in the Office of the City Clerk.

PUBLIC HEARING - CANCELLED

6.1. Cancellation of Public Hearing to consider City of Redding electric rate increases.

Mayor Littau highlighted the Report to the City Council (staff report), incorporated herein by reference. He noted that the Public Hearing continued from the regular City Council meeting held on March 3, 2026, regarding City of Redding Electric Utility (REU) rate increases and increasing the Residential Energy Discount, was cancelled and would not be discussed by the Council at this time.

The City Council took no formal action on this informational item.

REGULAR CALENDAR: REPORTS & COMMUNICATIONS OF DEPARTMENTS,

BOARDS, COMMISSIONS AND COMMITTEES
9A. Letter of Support for a Northern California Medical Sciences School in the City of Redding.

Mayor Littau summarized the Report to the City Council (staff report), incorporated herein by reference.

Dr. Thomas Perry, MD, and Simpson University President Dr. Norman D. Hall, each expressed their support and the need for a Northern California Medical Science School in the City of Redding.

Council Member Resner emphasized that this was a letter of support, not budgetary support.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Littau, seconded by Council Member Munns, authorizing the Mayor to send a letter of support to the Rural Northern California Medical School Consortium in support of a medical sciences school in the City of Redding.

The Vote: Unanimous Ayes.

Council Member Munns left the Chambers at 7:10 p.m. and returned at 7:12 p.m.

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Attachment: Unofficial Minutes - Regular Meeting of March 17, 2026 (4(a)--Approve City Council Minutes) 198
03/17/2026
Mayor Littau moved item no. 9.10(a) to be considered prior to item 9.1(a).

9.10(a).Accept the City of Redding Mid-Year Budget Review and Adoption of the Associated Resolution
Finance Director Greg Robinett provided an overview of the Report to the City Council (staff report), and a PowerPoint presentation, both incorporated herein by reference.

In response to Council Members Audette and Resner, Director Robinett explained what the budget variances were primarily attributed to.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Resner, seconded by Council Member Munns, to: (1) accept the City of Redding’s Fiscal Year 2025-26 Mid-Year Budget Report; and (2) adopt Resolution No. 2026-018, a resolution of the City Council of the City of Redding, approving and adopting the 28th Amendment to City Budget Resolution No. 2025-049 increasing appropriations by $1,185,570 for Fiscal Year 2025-26 and decreasing appropriations by $938,670 for Fiscal Year 2026-27.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Resolution No. 2026-018 is on file in the Office of the City Clerk.

9.1(a). Approve Consulting and Professional Services Agreement with Circle 6 Consulting for the City of Redding (City).

City Manager Tarbox and Interim Assistant City Manager Webb summarized the Report to the City Council (staff report), and provided a PowerPoint presentation, both incorporated herein by reference.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Resner, seconded by Council Member Audette, to: (1) approve sole-source Consulting and Professional Services Agreement pursuant to Redding Municipal Code Sections 4.20.080(A)(6) and 4.20.120(L)(8), with Circle 6 Consulting Inc., in an amount not-to-exceed $300,000 to perform a City-wide efficiency study; (2) authorize the City Manager, or designee, to execute the Consulting and Professional Services Agreement; and (3) adopt Resolution No. 2026-019, a resolution of the City Council of the City of Redding, approving and adopting the 29th Amendment to City Budget Resolution No. 2025-049 appropriating $235,230 for Professional Services Agreement with Circle 6 Consulting for Fiscal Year 2025-26.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Resolution No. 2026-019 is on file in the Office of the City Clerk.

9.9(a). Item 4.9(a) was moved from the Consent Calendar at the request of Council Member Audette.

Resolution ratifying and authorizing a grant from the California Highway Patrol's Cannabis Tax Fund Grant Program.

In response to Council Member Audette, City Attorney Curtis confirmed that should this item be approved by Council, City Manager Tarbox will have the authority to administratively appropriate the grant funds as written in the staff report recommendation.

A discussion amongst the Council ensued.

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03/17/2026
A MOTION WAS MADE by Council Member Audette, seconded by Council Member Dhanuka, to: (1) adopt Resolution No. 2026-020, a resolution of the City Council of the City of Redding, ratifying the application for, and authorizing, the acceptance of funding from the California Highway Patrol’s Cannabis Tax Fund Grant Program, if awarded, in the amount of $480,115; (2) authorize the City Manager, or designee, to execute said contract and any associated amendments; and (3) authorize the City Manager to administratively appropriate the grant funds.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Resolution No. 2026-020 is on file in the Office of the City Clerk.

9.11(c).City of Redding Public Works Downtown Parking Division Financial Update and adopt Resolution amending the City of Redding Traffic Control Map.

Interim Assistant City Manager Michael Webb highlighted the Report to the City Council (staff report), and a PowerPoint presentation, both incorporated herein by reference.

A discussion amongst the Council ensued.

A MOTION WAS MADE by Council Member Dr. Dhanuka, seconded by Council Member Munns, to accept the following actions relative to the City of Redding’s Parking Division and Traffic Control Map: (1) accept the Public Works Department’s Downtown Parking Financial Update; (2) adopt Resolution No. 2026-021, a resolution of the City Council of the City of Redding, amending the City of Redding Traffic Control Map, as shown on Exhibits A, B, and C and summarized below: (3) modify eight on-street parking spaces impacted by new State Regulation daylighting requirements by converting them to designated commercial loading/short-term commercial spaces and authorizing yellow curb markings, shown on Exhibit A, as determined appropriate by the City Traffic Engineer; (4) modify red curb “No Parking” designations along the frontage of 1155 Lake Boulevard (Kennett Court Apartments) to reflect the full frontage as shown on Exhibit B; (5) extend the existing red curb on Yana Avenue at the Shasta Meadows Elementary School crosswalk by approximately 20 feet on the north side of the crossing to improve sight distance and pedestrian safety, shown on Exhibit C; and (6) find that the proposed actions are exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines (14 CCR §15061(b)(3)) - Common Sense Exemption.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Resolution No. 2026-021 is on file in the Office of the City Clerk

9.14(a).Approve Contract with Burke, Williams & Sorensen, LLP to provide legal services as Interim City Attorney.

City Attorney Curtis summarized the Report to the City Council (staff report), incorporated herein by reference.

Mr. Curtis stated that the following two items did not make it into the recommendation in the staff report, but were in the body of the staff report: (1) adopt a budget resolution; and (2) approve Benjamin Stock as the interim City Attorney effective April 5, 2026.

A discussion amongst the Council ensued.

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03/17/2026
A MOTION WAS MADE by Council Member Resner, seconded by Council Member Munns, to: (1) approve the contract with Burke, Williams & Sorensen, LLP, in a not-toexceed amount of $300,000, for the provision of legal services as Interim City Attorney for the City of Redding, effective upon signing; (2) adopt Resolution No. 2026-022, a resolution of the City Council of the City of Redding, approving and adopting the 30th Amendment to City Budget Resolution No. 2025-049 appropriating $177,170 for the contract with Burke, Williams & Sorensen LLP for the provision of legal services as Interim City Attorney for Fiscal Year 2025-26; and (3) approve the appointment of Benjamin Stock as the Interim City Attorney for the City of Redding effective April 5, 2026.

The Vote:

AYES: Council Members – Audette, Dr. Dhanuka, Munns, Resner, and Littau NOES: Council Members – None
ABSTAIN: Council Members – None
ABSENT: Council Members – None
Resolution No. 2026-022 is on file in the Office of the City Clerk

COUNCIL TRAVEL REPORT
City Council Member attendance at conference/meetings reimbursed at City expense. {Requirement of Assembly Bill 1234}
Council Member Tenessa Audette attended the League of California Cities’ Sacramento Valley Division Meeting in Chico, California, on March 6, 2026.

ADJOURNMENT
There being no further business at the hour of 8:15 p.m., Mayor Littau declared the meeting adjourned.

APPROVED:
______________________________
Mike Littau, Mayor
ATTEST:
____________________________
Sharlene Tipton, City Clerk
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Attachment: Unofficial Minutes - Regular Meeting of March 17, 2026 (4(a)--Approve City Council Minutes)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize and approve the following:
(1) Approve the Real Estate Purchase and Sale Agreement (PSA) with Fall River Development Inc., for 10 acres of City of Redding-owned property located at 5750 Venture Parkway, Stillwater Business Park Parcel 9 (Assessor’s Parcel Number 054-220- 017), for the appraised value; and
(2) Authorize the Mayor to sign the PSA and other documents needed to complete the sale and transfer of the property.

Fiscal Impact
The sale of the property is for the appraised value, subject to adjustments for appraisal costs, closing costs, and escrow fees. The net proceeds will be deposited into the City of Redding’s (City) Capital Projects General Fund.

Alternative Action
The City Council (Council) could alter the terms of the Purchase and Sale Agreement or choose not to sell the property at this time.

Background/ Analysis
Fall River Development Inc., has submitted an offer to purchase a City-owned property located at 5750 Venture Parkway (Assessor’s Parcel Number 054-220-017), also known as Stillwater Business Park Parcel 9 (10 acres) as depicted in the attached location map. Fall River Development is planning to build a manufacturing warehouse.

The listed property is part of the Stillwater Business Park planned development. The basic terms and conditions of the agreement include:

MEETING DATE: April 7, 2026
ITEM NO. 4.1(a)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 4.1(a)--Purchase and Sale Agreement with Fall River Development Inc.

Jason Gibilisco, Management
Assistant to the City Manager
Packet Pg. 34
Report to Redding City Council March 31, 2026
Re: 4.1(a)--Purchase and Sale agreement with Fall River Development Inc. Page 2 • Refundable deposit of $10,000;
• Price to be determined and agreed upon based on current appraisal; • Due diligence period of 90 days;
• Closing shall occur on or before 30 days following the due diligence period; and • Split closing costs equally.

The Property was declared exempt surplus property on October 6, 2020, by Resolution No. 2020-119.

Environmental Review
The sale of City-owned property presents no significant impact on the environment and is therefore categorically exempt from review under the California Environmental Quality Act Guidelines Section 15312 (Surplus Government Property Sales).

Council Priority/ City Manager Goals
• Economic Development – “Facilitate and become a catalyst for economic development in Redding to create jobs, retain current businesses and attract new ones, and encourage investment in the community.”
Attachments
Location Map
Purchase and Sale Agreement
Packet Pg. 35
S
tillwaterParcel9
Sources:Esri,HERE,Garmin,Intermap,incrementPCorp.,GEBCO,USGS, FAO,NPS,NRCAN,GeoBase,IGN,KadasterNL,OrdnanceSurvey,Esri Parcel
GISNumber
0 2/23/2026,4:22:02PM

00.0750.150.3mi

00.10.20.4km
1:9,028
CityofReddingGIS
Packet Pg. 36 Internal Map Viewer
Attachment: Location Map (4.1(a)--Purchase and Sale agreement with Fall River Development Inc.) Packet Pg. 37
Attachment: Purchase and Sale Agreement (4.1(a)--Purchase and Sale agreement with Fall River Development Inc.) Packet Pg. 38
Attachment: Purchase and Sale Agreement (4.1(a)--Purchase and Sale agreement with Fall River Development Inc.) Packet Pg. 39
Attachment: Purchase and Sale Agreement (4.1(a)--Purchase and Sale agreement with Fall River Development Inc.) Packet Pg. 40
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Attachment: Purchase and Sale Agreement (4.1(a)--Purchase and Sale agreement with Fall River Development Inc.) Packet Pg. 44
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Attachment: Purchase and Sale Agreement (4.1(a)--Purchase and Sale agreement with Fall River Development Inc.) Packet Pg. 55
Attachment: Purchase and Sale Agreement (4.1(a)--Purchase and Sale agreement with Fall River Development Inc.) Packet Pg. 56
Attachment: Purchase and Sale Agreement (4.1(a)--Purchase and Sale agreement with Fall River Development Inc.)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize and approve the following modifications relative to the award of Bid Schedule No. 5630 for traffic control services to Highway Specialty Company Inc.:
(1) Authorize the City of Redding (City) Purchasing Officer to amend Purchase Order PUR003039 to increase the not-to-exceed amount from $182,405 to $362,405 for the initial contract term ending September 30, 2026; and
(2) Authorize the City’s Purchasing Officer, or designee, to exercise two one-year extension options through September 30, 2028, if mutually agreeable, with all prices, terms, and conditions remaining the same, in an amount not-to-exceed $362,405 per contract year.

Fiscal Impact
Redding Electric Utility (REU) included funding for traffic control services within the General System Improvements biennial budget for Fiscal Years 2025-27. Approval of the requested $180,000 increase to Purchase Order PUR003039 will raise the not-to-exceed amount for the initial term to $362,405.

If both one-year extension options are exercised, the annual not-to-exceed amount will remain $362,405 per year, for a potential total authorization of $1,087,215 over the three-year period.

Future extension years will remain subject to Council-approved budget appropriations.

Sufficient funding is available within REU’s General System Improvements budget to accommodate the additional cost. Traffic control services are a necessary component of electric utility construction and system improvement projects performed within public rights-of-way. As such, these costs are appropriately included as part of capital project expenditures and are anticipated to be reimbursed through bond proceeds associated with electric system improvements. No additional appropriations are required.

MEETING DATE: April 7, 2026
ITEM NO. 4.5(a)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 4.5(a)--Authorize and Approve Modifications to the award of Bid Schedule 5630 – Traffic Control Services (Highway Specialty Company, Inc.) Nick Zettel, Director of
Redding Electric Utility
Packet Pg. 57
Report to Redding City Council April 1, 2026
Re: 4.5(a)--Authorize and Approve Modifications to the award of Bid Schedule 5630 – Traffic Control Page 2
Alternative Action
The Council may choose not to approve the staff’s recommendation and provide alternative direction.

Background/Analysis
REU regularly performs electric system construction, maintenance, and emergency response activities within public rights-of-way. Traffic control services are required for these activities to maintain safe travel conditions for the public, protect utility crews working near roadways, and comply with applicable traffic control regulations and safety standards. As a result, traffic control personnel, equipment, and services are essential components of electric utility work performed in public streets.

On September 29, 2025, the City of Redding (City) issued Purchase Order PUR003039 to Highway Specialty Company, Inc. following the successful award of Bid 5630 for on-call traffic control services. The initial term began October 1, 2025, and runs through September 30, 2026, with two optional one-year extensions through September 30, 2028. The original purchase order amount of $182,405 was based on estimated service levels at the time of contract award.

Because traffic control is directly associated with the execution of these capital improvement activities, it is considered a necessary project cost and is appropriately included as part of General System Improvements and is eligible for reimbursement through electric system bond proceeds.

Due to the increased volume of in-house underground construction and continued system improvement activities, utilization of on-call traffic control services under Purchase Order PUR003039 has exceeded earlier projections. The purchase order is therefore approaching its authorized limit.

Staff recommends increasing the purchase order to ensure sufficient capacity for traffic control services for the remainder of the initial term and to authorize continuation of services under the two one-year extension options at the same annual not-to-exceed amount. Highway Specialty Company, Inc. has performed satisfactorily, and pricing remains consistent with the competitively bid contract schedule.

Environmental Review
This is not a project defined under the California Environmental Quality Act (CEQA), and no further action is required.

Council Priority/City Manager Goals
• This is a routine operational item.

Attachments
Existing Bid Proposal from Highway Specialty Company
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Attachment: Existing Bid Proposal from Highway Specialty Company (4.5(a)--Authorize and Approve Modifications to the award of Bid Packet Pg. 60
Attachment: Existing Bid Proposal from Highway Specialty Company (4.5(a)--Authorize and Approve Modifications to the award of Bid Packet Pg. 61
Attachment: Existing Bid Proposal from Highway Specialty Company (4.5(a)--Authorize and Approve Modifications to the award of Bid

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize and approve the following related to City of Redding as a Member:
(1) Approve Amendment No. 1 to Project Agreement No. 3 between the Transmission Agency of Northern California and its Members; and
(2) Authorize the City Manager, or designee, to execute the First Amendment and approve future modifications to Project Agreement No. 3.

Fiscal Impact
There is no fiscal impact to the general fund associated with the requested actions. Approval of the First Amendment to Project Agreement No. 3 (PA3) does not change the City of Redding’s financial obligations or participation percentages under the agreement, and no additional appropriations are required.

Alternative Action
Council may reject staff’s recommendation and provide alternative direction.

Background/Analysis
The Transmission Agency of Northern California (TANC) is a joint powers agency formed in 1984 by publicly owned electric utilities, including the City of Redding (City). Through its membership in TANC, the City participates in and receives transmission benefits from the California‑Oregon Transmission Project. PA3, originally executed in 1990, governs the rights, obligations, and participation percentages of TANC members with respect to that project.

Since execution of PA3, operational and regulatory conditions affecting transmission capacity and participation have evolved. In recent years, certain TANC members have sought to adjust their participation percentages by transferring non‑TANC‑owned transmission capability to MEETING DATE: April 7, 2026
ITEM NO. 4.5(b)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3 Nick Zettel, Director of
Redding Electric Utility
Packet Pg. 62
Report to Redding City Council April 1, 2026
Re: 4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3 Page 2 TANC, and TANC has received an increase in rated project transfer capacity due to system uprates. These changes highlighted procedural inefficiencies in PA3 that require formal amendments even when transfers do not affect non‑participating members.

The First Amendment to PA3 addresses these issues by allowing future adjustments to participation percentages and transfer capability to occur without further amendments, provided such actions receive an affirmative vote of the TANC Commission and the written consent of affected members. The amendment also includes technical and administrative updates, such as removing obsolete references, aligning the fiscal year definition with TANC’s current practice, and clarifying internal cross‑references.

Approval of the First Amendment preserves existing member rights while improving administrative efficiency and flexibility for future project management. Authorizing the City Manager, or his/her delegate, to approve future modifications to PA3 will streamline implementation of Commission‑approved changes and reduce the need for repeated City Council actions when amendments do not materially alter the City’s obligations.

Environmental Review
The proposed action is not a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3).

Council Priority/City Manager Goals
• This agenda item is a routine operational item.

Attachments
PA3 Redline with Amendment No. 1 (3.18.26)
Amendment No. 1 to Project Agreement No. 3 final (3-18-26) Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) Packet Pg. 63
123456789
10 11
12 13 TRANSMISSION AGENCY OF
14 NORTHERN CALIFORNIA
15 PROJECT AGREEMENT NO. 3
16 FOR THE
17 CALIFORNIA-OREGON TRANSMISSION PROJECT
18 19
20 21
22 23
24 25
26 27
28 Packet Pg. 64
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 1 2/23/90 2 TRANSMISSION AGENCY OF NORTHERN CALIFORNIA 3 PROJECT AGREEMENT NO. 3 4 FOR THE 5 CALIFORNIA-OREGON TRANSMISSION PROJECT 6789 AMONG 10 THE TRANSMISSION AGENCY OF NORTHERN CALIFORNIA
11 THE CITY OF ALAMEDA
12 THE CITY OF HEALDSBURG
13 THE CITY OF LODI
14 THE CITY OF LOMPOC
15 THE MODESTO IRRIGATION DISTRICT
16 THE CITY OF PALO ALTO
17 THE PLUMAS-SIERRA RURAL ELECTRIC COOPERATIVE
18 THE CITY OF REDDING
19 THE CITY OF ROSEVILLE
20 THE SACRAMENTO MUNICIPAL UTILITY DISTRICT
21 THE CITY OF SANTA CLARA
22 THE TURLOCK IRRIGATION DISTRICT
23 THE CITY OF UKIAH
24 25
26 27
28 Packet Pg. 65
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 1 Packet Pg. 66
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) i
1 TRANSMISSION AGENCY OF NORTHERN CALIFORNIA 2 PROJECT AGREEMENT NO. 3 3 FOR THE 4 CALIFORNIA-OREGON TRANSMISSION PROJECT 5 TABLE OF CONTENTS 67 SECTION PAGE 8 Preamble ……………………………………………………………………… 1 9 Recitals ……………………………………………………………………… 1 10 1 Definitions …………………………………………………………………4
11 2 Project Participation and Authorization …… 12
12 3 Duties and Responsibilities of TANC During
13 Phase II and Phase III …………………………………………17
14 4 Obligations of Members During Phase II and
15 Phase III ……………………………………………………………………… 20
16 5 Term, Termination, and Amendments ………………… 26
17 6 Default ……………………………………………………………………… 27
18 7 Use of Transfer Capability ………………………………… 30
19 8 Scheduling …………………………………………………………………… 33
20 9 Insurance and Indemnification ………………………… 34
21 10 Compliance with Other Instruments ………………… 34
22 11 Liability of TANC Officers ………………………………… 34
23 12 Notice of Computation …………………………………………… 35
24 13 Applicable Law …………………………………………………………… 36
25 14 Severability ………………………………………………………………… 36
26 15 Members’ Right to Withdraw ………………………………… 36
27 16 Assignment of Agreement ………………………………………42
28 17 Members’ Obligations Several ……………………………42
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Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) ii
1 18 Trustee as a Third Party Beneficiary ………… 42
2 19 Appendices …………………………………………………………………… 43
3 20 Waiver ……………………………………………………………………………… 43
4 21 Captions ………………………………………………………………………… 43
5 22 Billing and Payment ………………………………………………… 43
6 23 Distribution of Assets ………………………………………… 45
7 24 Counterparts ………………………………………………………………… 45
8 25 Signatures …………………………………………………………………… 45
9 10 Memorandum of Understanding …………………………… APPENDIX A 11 Memorandum of Understanding Annex ……………… APPENDIX B
12 ParticipatingParticipation Percentages …………………………………(N13 S)………………………… APPENDIX C 14 Participation Percentages (S-N).……………………APPENDIX C-1 15 Return of Layoff Percentages ………………………APPENDIX C-2
16 Prescheduling of Transmission Use
17 and Curtailment of Notification
18 Procedures ………………………………………………………… APPENDIX D
19 Billing Addresses of the Parties ………………… APPENDIX E
20 21
22 23
24 25
26 27
28 Formatted: French (France)
Formatted: French (France)
Formatted: French (France)
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Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) iii
123
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Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 1 1 PREAMBLE 23 This project Agreement No. 3 is made and entered into as of 4 March 1, 1990, by and among the Transmission Agency of Northern 5 California, hereinafter referred to as "TANC"; and the Cities of 6 Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, 7 Santa Clara, and Ukiah; the Sacramento Municipal Utility 8 District; the Modesto Irrigation District; the Turlock Irrigation 9 District; and the Plumas-Sierra Rural Electric Cooperative. 10 11
12 RECITALS
13 14 WHEREAS:
15 A. On December 10, 1984, TANC was duly established as a 16 joint powers agency, pursuant to Section 6500 et seq. of the 17 California Government Code, by an agreement among the Members 18 entitled "Joint Powers Agreement, Transmission Agency of Northern 19 California"; and
20 B. TANC, in its own name, or for the benefit of its
21 Members, has the power to acquire by purchase or eminent domain, 22 construct, finance, operate and maintain facilities for electric 23 power transmission including, without limitation, the power to 24 purchase, lease, operate, develop, contract for, or own, new or 25 upgraded transmission lines, and facilities for the benefit of 26 the Members; and
27 C. Each Member of TANC owns and operates a system for the 28 distribution of electric power and energy, and is authorized to Packet Pg. 70
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 2 1 obtain transmission facilities or rights to use transmission 2 facilities for its present or future requirements, through 3 contracts with TANC or otherwise; and 4 D. TANC, on behalf of its Members, executed December 19, 5 1984, "Memorandum of Understanding, California-Oregon 6 Transmission Project," among certain California entities and the 7 Western Area Power Administration, which sets forth principles 8 for the development of the California-Oregon Transmission Project 9 including the designation of TANC as Project Manager; and 10 E. The Members of TANC entered into the June 19,
11 1985,"Project Agreement" for the purposes of issuing and selling 12 a promissory note for financing studies and other preliminary 13 costs to be incurred prior to making a decision, after 14 environmental and other review, of whether to undertake 15 construction of the 16CaliforniaCalifornia-Oregon Transmission 16 Project; and
17 F. The Members of TANC entered into the September 30, 1985, 18 "TANC Project Agreement No. 2 for the California-Oregon 19 Transmission Project" for the purpose of refinancing the 20 promissory note and to fund certain feasibility and planning 21 studies, and to provide for TANC's share of the costs for Project 22 Development Work for the California-Oregon Transmission Project; 23 and
24 G. TANC, on behalf of its Members, executed the September 25 30, 1985, "California-Oregon Transmission Project Development 26 Agreement" for the purpose of completing required activities such 27 as obtaining approvals, certificates, licenses and permits as 28 required by law and regulation before undertaking construction of 29 the Project; and
Packet Pg. 71
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 3 1 H. TANC, on behalf of its Members, entered into the 2 Memorandum of Understanding Annex dated February 6, 1986, with 3 the initial Participants and additional non-federal public 4 entities which allocated a 3.125 percent Project entitlement 5 among the additional Participants and re-allocated the remaining 6 entitlement among the initial Participants; and 7 I. The Members of TANC desire to authorize TANC to 8 undertake additional responsibilities as a Participant in the 9 California-Oregon Transmission Project on behalf of the Members, 10 and recognize the desire of all Participants in the
11 California-Oregon Transmission Project for TANC to perform the 12 duties of Project Manager, including the duties and
13 responsibilities described in the "Memorandum of Understanding, 14 California-Oregon Transmission Project," and the "Project 15 Participation Agreement," as defined in this Agreement; and 16 J. On January 20, 1988, TANC certified the Final
17 Environmental Impact Report for the California-Oregon 18 Transmission Project, the Los Banos-Gates Transmission Project, 19 and the Pacific Northwest Reinforcement Project, made findings 20 pursuant to the California Environmental Quality Act, and 21 approved the California-Oregon Transmission Project; and 22 K. Each Member executing this Agreement has participated in 23 the preparation and review of the Draft Environmental Impact 24 Report and has reviewed and approved the Final Environmental 25Impact Report for the California-Oregon Transmission Project and 26 adopted the findings made by TANC as lead agency for the 27 California-Oregon Transmission Project.

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Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 4 1
2 NOW, THEREFORE, in consideration of the mutual covenants 3 and conditions set forth in this Agreement, TANC and the Members 4 agree as follows:
5 6 1. DEFINITIONS
7 Whenever used in this Agreement, the following terms shall 8 have the following meanings. The singular of any term shall 9 include the plural and the plural shall include the singular. 10 1.1 "Acquisition and Construction Work" - Any work
11 necessary or useful for acquisition and construction of the 12 Project, including procurement of materials and any land or 13 rights in land in connection therewith; and, in addition, that 14 work to be done pursuant to or in the negotiation of the Intertie 15 Agreements for: management and administrative services; 16 economic, legal, engineering, and other activities; and services 17 which may be necessary or convenient in connection with the 18 Intertie Agreements.
19 1.2 “Addition" - A new facility, other than a Betterment 20 or Replacement, that is added to the Project, together with 21 associated land rights, if any.
22 1.3 “Agreement" - This Project Agreement No. 3 among the 23 Members and TANC, as amended and supplemented from time to time 24 in accordance with the terms hereof.
25 1.4 "Betterment" - A new facility, other than a
26 Replacement, together with associated land rights, if any, which 27 will increase the "Rated Project Transfer Capability" (as that 28 term is defined in the Intertie Agreements) above the thenFormatted: Not Expanded by / Condensed by Packet Pg. 73
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 5 1 current Rated Project Transfer Capability or sixteen hundred 2 (1600) megawatts, whichever is less. 3 1.5 "Closing Date" - The date of each issuance of TANC 4 Project Indebtedness, as determined and announced by written 5 notice from TANC to a TANC Members, as further described in 6 Section 4.1.1. 7 1.6 "Debt Service" - With respect to any period, the 8 aggregate of the amounts required by each Indenture to be paid 9 during said period into any fund or account created by the 10 Indenture for the sole purpose of paying or providing reserves 11 for paying the principal (including sinking fund installments) of 12 and premium, if any, and interest on all the Indebtedness from 13 time to time outstanding; provided, however, that Debt Service 14 shall not include any amounts on account of acceleration of the 15 maturity of any Indebtedness.
16 1.7 "Electric System"- A properties and assets, real and 17 personal, tangible and intangible, of any Member (whether leased 18 or owned) now or hereafter existing, used for or pertaining to 19 the generation, transmission, transformation, distribution and 20 sale of electric capacity and energy, including all additions, 21 extensions, expansions, improvements and betterments thereto and 22 equipping thereof; provided, however, that to the extent the 23 Member is a joint owner of an asset or property, only the 24 Member's ownership interest in such asset or property shall be 25 considered to be part of its Electric System.
26 1.8“Executive Committee"- A committee appointed by the 27 TANC Commission to which it may delegate certain responsibilities 28 as provided in resolutions duly adopted by the TANC Commission Packet Pg. 74
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 6 1 pursuant to the Joint Powers Agreement. 2 1.8 [Intentionally omitted] 3 1.9 "Fiscal Year" - The twelve-month period terminating 4 SeptemberJune 30 of each year, or any other annual accounting 5 period hereafter selected and designated by TANC as its Fiscal 6 Year for purposes of this Agreement and each Indenture. 7 1.10 "Indebtedness" - Bonds, notes or other evidences of 8 indebtedness (including, without limitation, contracts relating 9 to letters of credit or other credit enhancement devices and 10 long-term contracts which are characterized as debt by TANC at or 11 prior to execution thereof) issued or otherwise incurred or 12 entered into by or on behalf of TANC in connection with the 13 Project. For purposes of this Agreement, Indebtedness shall be 14 considered outstanding as of any date if such Indebtedness has 15 not been paid or if provision for the payment of the principal of 16 and interest on such Indebtedness has not been made in accordance 17 with the Indenture pursuant to which such Indebtedness has been 18 issued or incurred.
19 1.11“Indenture"- One or more indentures or other
20 instruments approved or adopted by TANC providing for the 21 issuance or incurring of Indebtedness.
22 1.12 "Interest Charge"- That charge against unpaid amounts 23 due and owing in accordance with this Agreement assessed at an 24 annual interest rate compounded monthly equal to the lesser of 25(i) two percent (2%) plus the applicable first of the month, 26 reference rate or successor, of the Bank of America N.T. & S.A., 27 San Francisco, California, in effect from time to time during the 28 period over which the payment is overdue or (ii) the maximum 29 interest rate permitted by law.

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Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 7 1 1.13 "Intertie Agreements"- Agreements related to the 2 Project which have been or which may be entered into by TANC and 3 some or all of the other Participants, which include, but are not 4 limited to, the MOU, the Project Development Agreement, the 5 Project Participation Agreement, any amendments to the foregoing 6 agreements, and other agreements related to the Project entered 7 into by TANC as Project Manager or by TANC on behalf of the 8 Members. 9 1.14 “Joint Powers Agreement" - The Joint Powers Agreement, 10 Transmission Agency of Northern California, dated December 10, 11 1984, which established TANC as a joint powers agency pursuant to 12 Section 6500 et seq. of the California Government Code, as 13 amended and supplemented from time to time.
14 1.15“Management Committee"- A committee as described in 15 the MOU and further described in the Intertie Agreements. 16 1.16 "Member"- Any of the Cities of Alameda, Healdsburg, 17 Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and 18 Ukiah; the Sacramento Municipal Utility District; the Modesto 19 Irrigation District; the Turlock Irrigation District; or the 20 Plumas-Sierra Rural Electric Cooperative, which, at any given 21 point in time, is a party to the Joint Powers Agreement and 22 retains its rights and interests under this Agreement. 23 1.17 "MOU"- The Memorandum of Understanding, California- 24 Oregon Transmission Project, dated December 19, 1984, among the 25 Participants, the Department of Water and Power of the city of 26 Los Angeles, and the California Department of Water Resources, as 27 modified by the Memorandum of Decision of the United States 28 Secretary of Energy, dated February 7, 1985, as interpreted by Packet Pg. 76
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 8 1 the letter of the United States Department of Energy Acting 2 General Counsel, dated May 4, 1985, a copy of which is attached 3 hereto as Appendix A, as amended by the Memorandum of 4 Understanding Annex, and as it may be further amended. 5 1.18 "Memorandum of Understanding Annex" - The agreement 6 among the Participants, the California Department of 'Water 7 Resources, and the Department of Water and Power of the City of 8 Los Angeles executed on February 6, 1986 which modified the MOU 9 and a located a 3.125 percent Project entitlement to certain non -
10 federal public entities set out at 50 Fed. Reg. 42769 (1985) and 11 simultaneously reduced the existing Participants' entitlements by 12 a corresponding percentage, a copy of which is attached hereto as 13 Appendix B.
14 1.19 “Operating Agent"- The Participant designated in the 15 Intertie Agreements to have the duties and responsibilities for 16 the overall operation and maintenance of the Project. 17 1.20“Opposing Member"- A Member which votes against a 18 Betterment or Addition in accordance with Section 3.1.2.2.1 or 19 3.1.2.2.2.
20 1.21 "Participants"- Those entities, including TANC, which 21 have interests in the Project through execution of the Intertie 22 Agreements.
23 1.22 "Participation Percentage"- That percentage of TANC's 24 entitlement to Transfer Capability which an individual Member of 25 TANC has the right to use as set forth in Appendix C and Appendix 26C-1 of this Agreement. Such percentages may be modified pursuant 27 to Sections 2.3, 3.1.2.2, 6, and 15.
28 1.23 "PDA"- Project Development Agreement.

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Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 9 1 1.24“Phase" or "Phases"- Those activities of the Project 2 described in Section 2.2. 3 1.25 "Project" - The California -Oregon Transmission
4 Project, which consists of electric transmission facilities 5 between California and the Pacific Northwest, as such Project is 6 generally described in, and as changed pursuant to, the Intertie 7 Agreements. 8 1.26 "Project Development Agreement" - That agreement among 9 the Participants dated September 30, 1985, which provides, inter 10 alia, for the Participants to share the costs of Project 11 Development Work.
12 1.27 "Project Development Work"- That work described in 13 Appendix A of the PDA, or consistent with and within the scope of 14 Appendix A of the PDA and approved by the Management Committee to 15 be performed in accordance with the PDA.
16 1.28 "Project Manager"- The entity designated by the 17 parties to the MOU and the Intertie Agreements which has the 18 overall management responsibility for the Acquisition and 19 Construction Work of the Project.
20 1.29 "Project Participation Agreement"- That agreement 21 which may be executed by those Participants electing to proceed 22 with Phase II and Phase III of the Project, as it may be modified 23 and supplemented in accordance with the terms thereof. 24 1.30 "Replacement"- A new facility that is intended to be 25 a direct replacement for an existing facility, which is designed 26 primarily to maintain the existing operational reliability or 27 capability of the Project, irrespective of whether the 28 replacement results in an incidental increase in the "Rated Packet Pg. 78
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 10 1 Project Transfer Capability" (as that term is defined in the 2 Intertie Agreements), and which results in a "retirement unit" 3 being substituted for another such retirement unit. As used 4 herein, "retirement unit" shall mean property as defined in 5 Section 15060Part 101, Definition 34 of the Federal Energy 6 Regulatory Commission Uniform System of Accounts Prescribed for 7 Public Utilities and Licensees Subject to the Provisions of the 8 Federal Power Act, or its successor document. 9 1.31 "Revenues" - All income, rents, rates, fees, charges, 10 and other moneys derived by a Member from the ownership or 11 operation of its Electric System, including, without limiting the 12 generality of the foregoing (i) all income, rents, rates, fees, 13 charges, or other moneys derived from the sale, provision, and 14 supply of electric capacity and energy and other services, 15 facilities, and commodities sold, furnished, or supplied through 16 the facilities of the Electric System, (ii) the earnings on and 17 income derived from the investment of such income, rents, rates, 18 fees, charges, or other moneys to the extent that the use of such 19 earnings and income is limited to the Electric System by or 20 pursuant to law and (iii) the proceeds derived by such Member 21 directly or indirectly from the sale, lease, or other disposition 22 of a part of the Electric System as permitted hereby; but the 23 term "Revenues" shall not include customers' deposits or 24 advances subject to refund or contributions in aid of 25 construction until such deposits, advances, or contributions have 26 become the property of the Member.
27 1.32“TANC Capital Improvement Costs"- Those costs
28 incurred in connection with Phase III of the Project allocable to Packet Pg. 79
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 11 1 TANC for the purpose of making Additions, Betterments, or 2 Replacements to the Project and such other costs relating to 3 capital improvements to the Project properly chargeable to TANC 4 pursuant to the Intertie Agreements. 5 1.33 "TANC Commission" - The governing body of TANC as 6 described in the Joint Powers Agreement. 7 1.34 "TANC Coordinator" - An entity appointed by TANC to, 8 inter alia, coordinate the Members' use of TANC's entitlement to 9 Transfer Capability. 10 1.35 "TANC Project Costs"- Those costs incurred in
11 connection with Phase II of the Project allocable to TANC and 12 such other costs relating to the acquisition and construction of 13 the Project properly chargeable to TANC pursuant to the Intertie 14 Agreements.
15 1.36 "TANC Project Indebtedness"- That Indebtedness to be 16 issued by TANC to finance TANC Project Costs, TANC Project O&M 17 Costs, TANC Capital Improvement Costs, and such other costs as 18 are described in Section 4.1.3.1.
19 1.37 "TANC Project O&M Costs"- Those costs incurred in 20 connection with Phase III of the Project allocable to TANC which 21 are necessary to operate and maintain the Project, such other 22 costs relating to the operation and maintenance of the Project 23 properly chargeable to TANC pursuant to the Intertie Agreements, 24 and costs of the TANC Coordinator. TANC Project O&M costs shall 25 not include TANC Project Costs or TANC Capital Improvement Costs. 26 1.38 "Transfer Capability"- The ability of the Project or 27 a segment thereof to transmit power, expressed in megawatts, as 28 determined in accordance with the Intertie Agreements. As used Packet Pg. 80
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 12 1 in this Agreement, the term "Transfer Capability" can refer to a 2 rated amount or an amount available at any given time, as 3 appropriate in the context in which such term is used. TANC and 4 its Members acknowledge that there may be times when available 5 Transfer Capability is less than the rated amount for the Project 6 or a segment thereof. 7 1.39 "Trustee" - Any trustee, including any successor 8 trustee, under an Indenture. 9 10 2. PROJECT PARTICIPATION AND AUTHORIZATION
11 2.1Scope- TANC is hereby authorized and directed to act 12 on behalf of the Members in activities related to Phase II and 13 Phase III of the Project, as more fully described below, as a 14 Participant pursuant to the Intertie Agreements, subject to 15 procedures for Member approval and authorization established by 16 the TANC Commission pursuant to this Agreement and the Joint 17 Powers Agreement. TANC is also hereby authorized to fulfill its 18 duties and responsibilities as Project Manager or under any other 19 management role pursuant to the Intertie Agreements. 20 2.2 Phases- The Project shall proceed in accordance with 21 the following activities:
22 2.2.1 Phase I activities consist of Project
23 Development Work;
24 2.2.2 Phase II activities consist of Acquisition and 25 Construction Work;
26 2.2.3 Phase III activities consist of operation,
27 maintenance, Additions, Betterments, Replacements, and the 28 retirement or disposal of the project
Packet Pg. 81
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 13 1 2.3 Participation 2 2.3.1 Pursuant to Paragraph 15 of the Joint Powers 3 Agreement, the Members executing this Agreement each 4 hereby(i) approve TANC's participation in the Project as a 5 Participant in accordance with, and to the extent provided 6 in, the Intertie Agreements and this Agreement and (ii) 7 elect to participate in Phases II and III of the Project in 8 the Participation Percentages set forth in Appendix C and 9 Appendix C-1, as those percentages may be revised in 10 accordance with this Agreement. In consideration of such 11 approval and election, and payment of its share of the 12 costs set forth in Section 4, each Member shall be
13 entitled to its respective Participation Percentage share 14 of TANC's entitlement to Transfer Capability on the terms 15 and conditions provided for by this Agreement. In the event 16 that the first issuance and sale of TANC Project
17 Indebtedness does not occur within six(6) months after the 18 date of this Agreement, any Member may terminate its 19 participation under this Agreement by giving written notice 20 to TANC, in which case the Participation Percentage of such 21 Member shall be divided pro rata among the remaining 22 Members based on Participation Percentages, unless
23 otherwise agreed to by such remaining Members. After the 24 first issuance and sale of such TANC Project Indebtedness, 25 no Member may terminate its participation in this
26 Agreement.
27 2.3.2 In the event that TANC'sTANC’s entitlement
28 to Transfer Capability changes from time to time, within 29 sixty (60) days after such change, the Members shall be 30 permitted
Packet Pg. 82
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 14 1 to revise the Members’ Participation Percentages set 2 forthwill be unchanged except as provided in Appendix C this 3 Agreement. Changes to Members’ Participation Percentages 4 shall be permitted without an amendment to this Agreement, 5 subject to the following conditions: as follows:
6 2.3.2.1
7 8 The All revisions of Participation Percentages set
9 forth in Appendix Cpursuant to this Section 2.3.2
10 shall govern inrequire an affirmative vote of the
11 event thatCommission using the voting procedures
12 provided in the Joint Powers Agreement.
13 2.3.2.2 Members shall be permitted to revise
14 their Participation Percentages if one or more Members 15 are unable to agree to such a revision to Appendix C; 16 2.3.2.2
17 18 No Member shall be required to accept a an offsetting 19 change in Participation Percentage which, when
20 multiplied by TANC's megawatt entitlement to . All
21 Members whose Participation Percentage change must
22 consent to the change in writing.
23 2.3.2.3 Members shall be permitted to acquire
24 Transfer Capability, would exceed from outside of TANC 25 and transfer that capability to TANC, without
26 amendment to this Agreement subject to an affirmative 27 vote of the megawatt amount set forth in Commission
28 using the Appendix C, Column D,voting procedures
29 provided in which event such excess Participation
Formatted: Indent: First line: 0.63", Tab stops: 1", Left + Not at 1.75"
Packet Pg. 83
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 15 1 Percentage shall be divided pro rata among the other 2 Members based on Participation Percentages, unless
3 otherwise agreed to by such Members;
4 2.3.2.3 No Joint Powers Agreement and written
5 consent of the Members acquiring the Member may agree 6 to a Participation Percentage which, when multiplied
7 by TANC's megawatt entitlement to Transfer
8 Capability, would be less than the megawatt amount
9 set forth in Appendix C, Column C;
10 2.3.2.4
11 12 No Member may agree to a. Participation Percentage 13 which, when multiplied by TANC's megawatt entitlement 14 toPercentages of all Members shall be changed so that 15 the Member acquiring the Transfer Capability, would
16 exceed the megawatt amount set forth in Appendix C,
17 Column D, if the effect of such agreement would be to 18 materially, adversely alter any retains its existing 19 Transfer Capability and obtains the additional
20 Transfer Capability it has acquired, and is subject
21 to, all the rights of or security for holders of and 22 obligations associated with the transfer. TANC Project 23 Indebtedness.

Formatted: Indent: First line: 0.63", Tab stops: 1", Left + 6", Left + Not at 2.44"
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Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 16 1 2.3.2.4 Participation Percentage revisions 2 shall (a) be recorded with an administrative amendment 3 to Appendix C and Appendix C-1; and (b) result in the 4 aggregate Participation Percentages of the Members of 5 one hundred (100) percent.

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Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 17 1 2.3.3 Members acknowledge and agree that, 2 notwithstanding the foregoing provisions, Member defaults may 3 result in a non-defaulting Member accepting a megawatt amount 4 in excess of the limits set forth in Appendix C, Column D. or 5 Appendix C-1. Members also acknowledge and agree that, 6 notwithstanding the foregoing provisions, no such agreement 7 shall result in aggregate Participation Percentages of the 8 Members of less than one hundred (100) percent. 9 103. DUTIES AND RESPONSIBILITIES OF TANC DURING PHASE II AND 11 PHASE III
12 3.1 Decisions- Decisions related to the Project shall be 13 made by the TANC Commission at meetings to be held at times and 14 places determined by the TANC Commission; provided, that the TANC 15 Commission may delegate decisions to its Executive Committee or 16 others, between meetings, as provided in resolutions duly adopted 17 by the TANC Commission pursuant to the Joint Powers Agreement. 18 3.1.1 The exercise of the rights and obligations of
19 TANC under this Agreement shall be subject to the control at 20 all times of the TANC Commission.
21 3.1.2 Voting- Approvals or authorizations required
22 under this Agreement shall be given or withheld by the TANC 23 Commission using the voting procedures described in the Joint 24 Powers Agreement, subject to the following provisions:
25 3.1.2.1 Phase II Activities - With regard to
26 Phase II activities as described in section 2.2.2, to 27 constitute a quorum, the combined Participation
28 Percentages of the Members not in default represented Packet Pg. 86
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 1 Packet Pg. 87
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 16 1 by the TANC Commissioners present must represent at 2 least sixty (60) percent of the aggregate 3 Participation Percentages of Members not in default at 4 the time of the vote and the action must be approved 5 by TANC Commissioners representing at least a majority 6 of the aggregate Participation Percentages of Members 7 not in default at the time of the vote. 8 3.1.2.2 Phase III Activities - With regard to 9 Phase III activities as described in Section 2.2.3, to 10 constitute a quorum, the combined Participation
11 Percentages of the Members not in default represented 12 by the TANC Commissioners present must represent at
13 least sixty (60) percent of the aggregate Participa14 tion Percentages of Members not in default at the time 15 of the vote and the action must be approved by TANC
16 Commissioners representing at least a majority of the 17 aggregate Participation Percentages of Members not in 18 default at the time of the vote, provided:
19 3.1.2.2.1 In the event that a Member
20 votes against a proposed Betterment, such
21 Opposing Member shall have no obligations
22 stemming from such Commission action nor shall
23 such Opposing Member have any right to
24 participate in the benefits of such Commission
25 action and, with regard to such benefits and
26 obligations, the Participation Percentage of
27 each Member except for the Opposing Member(s)
28 shall be increased to the ratio between each
Packet Pg. 88
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 17 1 such Member's Participation Percentage and the 2 aggregate of the Participation Percentages the 3 Members excluding such Opposing Member(s), 4 expressed as a percentage. 5 3.1.2.2.2 In the event that a 6 Member votes against a proposed Addition to 7 the Project in any Fiscal Year, and TANC's 8 share of the cost of all Additions 9 previously approved in such Fiscal Year when 10 added to TANC's share of the cost of the
11 proposed Addition exceeds twenty-five
12 million dollars ($25,000,000) adjusted in
13 accordance with changes in the Consumer
14 Price Index (CPI) or successor index using
15 the January 1, 1990 level as the base year,
16 with regard to such Opposing Member's
17 Participation Percentage of such excess
18 amount only, such Opposing Member shall
19 have no obligations stemming from such
20 Commission action nor shall such Opposing
21 Member have any right to participate in the
22 benefits of such Commission action. With
23 regard to the rights and obligations
24 associated with such excess amount, the
25 Members excluding such Opposing Member(s)
26 shall negotiate appropriate adjustments to
27 their Participation Percentages.
28 3.1.2.2.3 In the event that a Member
29 votes against a proposed Replacement,
Packet Pg. 89
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 18 1 such Member shall nevertheless be bound by 2 the outcome of such Commission action. 3 3.1.2.2.4 Nothing contained herein 4 is intended to relieve any Member from its 5 obligations resulting from Commission action 6 except as specifically provided in Sections 7 3.1.2.2.1 and 3.1.2.2.2. 8 3.1.2.2.5 Each agreement by the 9 Members with respect to Betterments or 10 Additions shall specifically recognize
11 TANC's rights under this Agreement which
12 secure TANC Project Indebtedness.
13 3.2 Specific Duties and Responsibilities- TANC, through 14 the approval of the TANC Commission, shall be empowered to 15 perform all duties appropriate for the implementation of Phase II 16 and Phase III of the Project, subject to the terms hereof, 17 including but not limited to:
18 3.2.1 Act as Project Manager or in any other
19 managerial role for the Project in accordance with the 20 Intertie Agreements;
21 3.2.2 Authorize (i) the issuance or incurrence of
22 Indebtedness and the appropriate documentation related 23 thereto, (ii) the contract of purchase or notice of sale or 24 other instrument under which Indebtedness is to be sold or 25 incurred, (iii) the selection of managing underwriters for 26 Indebtedness (if such Indebtedness is to be sold upon a 27 negotiated basis), and (iv) the manner and timing of 28 marketing (including the manner of sale), if applicable, Packet Pg. 90
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 19 1 interest rates, and other terms of Indebtedness; 2 3.2.3 Provide periodic reports of major construction 3 and major events to the Members with respect to the Project; 4 3.2.4 Review, discuss, and attempt to resolve any 5 disputes among TANC and/or the Members; 6 3.2.5 Negotiate, review, approve, execute, enforce 7 and modify Intertie Agreements as a Participant on behalf of 8 the Members for Phase II and Phase III and perform all 9 activities necessary to fulfill TANC's obligations as a 10 Participant under those agreements;
11 3.2.6Approve and engage consultants or advisors on
12 financial, economic, engineering, environmental, management, 13 and legal or other matters;
14 3.2.7 Review, modify, and approve TANC's insurance
15 program including, without limitation, the establishment of a 16 self-insurance program;
17 3.2.8 Incur costs, liabilities, and obligations;
18 3.2.9 Purchase, sell, rent, and lease equipment,
19 apparatus, materials, and supplies and establish and maintain 20 inventories of any of the foregoing;
21 3.2.10 Acquire by purchase or eminent domain any
22 interest in property, real or personal;
23 3.2.11 Enforce, waive, adjust or compromise any claim 24 by or against TANC, including claims covered by or relating 25 to insurance policies;
26 3.2.12 Initiate, defend, and otherwise participate in 27 legal and administrative proceedings;
28 3.2.13 Maintain for Member inspection and audit for
Packet Pg. 91
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 20 1 The term of this Agreement, and for three (3) years 2 thereafter, books and cost records of TANC in accordance with 3 generally accepted accounting principles; 4 3.2.14 Perform other tasks as may be necessary to 5 fulfill its obligations as a Participant, as Project Manager, 6 and in any other managerial role under this Agreement and the 7 Intertie Agreements during Phase II and Phase III of the 8 Project in a timely, cost effective manner. 9 10 4. OBLIGATIONS OF MEMBERS DURING PHASE II AND PHASE III 11 4.1 TANC Project Costs – Subject to Section 3.1.2.2, each 12 Member agrees to pay, based on its Participation Percentage, its 13 portion of TANC Project Costs, its portion of TANC Project O&M 14 Costs, its portion of TANC Capital Improvement Costs, and its 15 portion of Debt Service on TANC Project Indebtedness, in each 16 case as provided in this Section 4.1:
17 4.1.1 At least sixty (60) days prior to the initial
18 Closing Date and at least sixty (60) days prior to the 19 commencement of each Fiscal Year thereafter, the TANC 20 Commission shall develop, approve, and distribute to the 21 Members a budget for TANC Project Costs, Debt Service for 22 TANC Project Indebtedness, TANC Project O&M Costs, and TANC 23 Capital Improvement Costs which the TANC Commission estimates 24 will be incurred during the then-current Fiscal Year in the 25 case of the initial budget and during the next succeeding 26 Fiscal Year for a subsequent budgets. Such budgets shall be 27 generally based upon budgets approved by the Management 28 Committee and upon TANC's estimates of TANC
Packet Pg. 92
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 21 1 Project Costs, Debt Service for TANC Project Indebtedness, 2 TANC Project O&M Costs, and TANC Capital Improvement Cost 3 provided, that if a budget has not been approved by the 4 Management Committee the budget shall be based upon TANC's 5 estimates. Each budget other than the initial budget shall 6 also include a variance report which compares actual 7 expenditures with budgeted amounts for the previous Fiscal 8 Year. As soon as practicable after the approval of each such 9 budget, TANC shall mail the budget to the Members. Members 10 acknowledge and agree that Participant defaults or
11 withdrawals that result in changes in TANC's ownership 12 interest in the Project will require changes in TANC's 13 payment obligations under the Intertie Agreements
14 approximately proportionate to the change in TANC's
15 entitlement to Transfer Capability and a corresponding change 16 in the Members' payment obligations hereunder. TANC, if 17 requested by any Member, will make best efforts to remarket 18 any entitlement to Transfer capability that such Member or 19 its designated agent may determine to be in excess of that 20 Member's requirements. Remarketing efforts will be focused on 21 the other Members, the Western Area Power Administration, the 22 California Department of Water Resources, and other
23 Participants. Members also acknowledge and agree that some 24 anticipated Participants may elect not to enter into the 25 Intertie Agreements for Phase II and Phase III of the Project 26 and that this Agreement is intended to permit the Project to 27 be constructed without such anticipated Participants so that 28 TANC's ownership interest
Packet Pg. 93
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 22 1 in the Project, and thus the amount of Transfer Capability to 2 which each Member shall be entitled pursuant to this 3 Agreement, will vary depending on the final ownership 4 interests established for TANC and the other Participants 5 pursuant to the Intertie Agreements. TANC currently 6 anticipates that, at the time of execution of the Intertie 7 Agreements, the Intertie Agreements will establish TANC's 8 initial ownership interest in the Project at a minimum of 9 42.2916% and a maximum of 93.75%. 10 4.1.2 Each of the Members hereby approves the
11 issuance and sale of TANC Project Indebtedness as provided in 12 Section 4.1.3.1 below subject to approval of the TANC 13 Commission pursuant to Section 3.1.2. Such approvals are 14 intended to be and are limited to the approvals required by 15 Paragraphs 6 and 15 of the Joint Powers Agreement. Such 16 Indebtedness shall not constitute a debt, liability or 17 obligation of any of the Members and shall not constitute a 18 debt of TANC payable by the Members pursuant to Paragraph 21 19 of the Joint Powers Agreement.
20 4.1.3 Subject to Section 3.1.2.2, each of the
21 Members hereby severally requests and agrees as follows:
22 4.1.3.1 Each Member requests that TANC issue,
23 sell, or otherwise incur Indebtedness from time to
24 time pursuant to the provisions of Chapter 5, Division 25 7, Title 1 of the Government Code of the State of
26 California or any other applicable provisions of law 27 in amounts which will be sufficient to permit TANC to 28 pay, when due, all TANC Project Costs, TANC
Packet Pg. 94
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 23 1 Project O&M Costs through the first full Fiscal Year 2 after completion of the Project, TANC Capital 3 Improvement Costs, costs of issuance, credit 4 enhancements and other costs incurred in connection 5 with the issuance or incurring of TANC Project 6 Indebtedness, and to provide for capitalized interest 7 as determined by TANC and for required deposits to 8 funds and accounts established by each Indenture and, 9 in addition, to provide for the principal and interest 10 on all Indebtedness outstanding on the initial Closing 11 Date (all of said Indebtedness to constitute TANC
12 Project Indebtedness}. Whenever TANC deems it
13 beneficial to the Members, as a result of Debt Service 14 savings or otherwise, upon approval of the TANC
15 Commission, TANC may issue Indebtedness to refund
16 outstanding TANC Project Indebtedness (which the
17 Members hereby authorize) and the same shall be TANC 18 Project Indebtedness.
19 4.1.3.2 Each Member severally agrees to pay
20 to TANC an amount equal to its Participation
21 Percentage of a Debt Service on the TANC Project
22 Indebtedness to enable TANC to pay such Debt Service 23 at the times and in the manner set forth in the
24 applicable Indentures. Each Member also agrees to pay 25 to TANC, in accordance with Section 22, an amount
26 equal to its Participation Percentage of TANC Project 27 Costs, TANC Project O&M Costs, and TANC Capital
28 Improvement Costs, not financed by TANC Project
Packet Pg. 95
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 24 1 Indebtedness as indicated in the budgets prepared 2 pursuant to Section 4.1.1, including any budget 3 revisions made pursuant to Section 4.1.5. 4 4.1.3.3 Upon failure of a Member to make any 5 of the payments described in Section 4.1.3.2, TANC 6 shall make demand upon such Member, and if said 7 failure is not remedied within forty-five (45) days 8 from the date of such demand, it shall constitute a 9 default at the expiration of such forty-five (45) day 10 period. Such default shall be handled in accordance
11 with Section 6. Notice of such demand shall be
12 provided to the other Members.
13 4.1.3.4 Each Member agrees to establish rates
14 and charges for its Electric System so as to provide 15 Revenues sufficient, together with other available
16 funds derived from its Electric System, to pay, when 17 due, all amounts payable by such Member under this
18 Agreement and to pay all other amounts payable from, 19 and all lawful charges against or liens upon, the
20 Revenues of its Electric System.
21 4.1.3.5 Each Member shall be obligated to make
22 payments under this Section 4.1.3 and to budget for
23 such payments solely from the Revenues of, and as an 24 operating expense of, its Electric System. Each Member 25 shall make the payments required of it by this
26 Agreement in the amounts and at the times determined 27 pursuant to this Agreement and such payments and the 28 obligation to make same shall be absolute and
Packet Pg. 96
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 25 1 unconditional and such payments shall be made whether 2 or not the Project or any part thereof has been 3 completed, is operating or operable or its output or 4 capability is suspended, interrupted, interfered with, 5 reduced or curtailed, or terminated in whole or in 6 part, and such payments shall not be subject to 7 reduction whether by offset, counterclaim, recoupment 8 or otherwise and shall not be conditioned upon the 9 performance or nonperformance by any party to any 10 agreement or for any other cause or reason whatsoever. 11 4.1.3.6 Each Member covenants and agrees that
12 it shall, at all times so long as any TANC Project
13 Indebtedness remains outstanding, operate the
14 properties of its Electric System and business in
15 connection therewith in an efficient manner and at a 16 reasonable cost and shall maintain its Electric
17 System in good working order and condition, and shall 18 cooperate with TANC in the performance of the
19 respective obligations of TANC and such Member under 20 this Agreement.
21 4.1.3.7 Each Member agrees that all rights,
22 title, and interest of TANC in and to all payments
23 required to be made under this Section 4.1.3 by the
24 Members pursuant to the provisions hereof may be
25 pledged and assigned under the Indentures to secure
26 the TANC Project Indebtedness.
27 4.1.4 Funds received by TANC from the issuance and
28 sale of TANC Project Indebtedness shall be applied to one or Packet Pg. 97
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 26 1 more of the purposes specified in Section 4.1.3.1 in 2 accordance with the Indenture authorizing such TANC Project 3 Indebtedness. 4 4.1.5 TANC may, from time to time, revise the 5 budgets established pursuant to Section 4.1.1 as necessary. 6 Such budgets shall include adjustments for variances between 7 estimated and actual costs included in previous budgets. In 8 that event, subject to Section 3.1.2, the procedures of 9 Sections 4.1.2 through 4.1.4 shall be followed for payment of 10 any additional costs.
11 12 5. TERM, TERMINATION, AND AMENDMENTS
13 5.1 Term- This Agreement shall take effect as of the date 14 hereof and shall remain in full force and effect during the term 15 of the Joint Powers Agreement and the Intertie Agreements (as 16 their terms may be extended) or so long as any TANC Project 17 Indebtedness remains outstanding, whichever is longer. 18 5.2 Termination- This Agreement shall not be subject to 19 termination by TANC or any Member under any circumstances, 20 whether based upon the default of any party under this Agreement, 21 or any other instrument, or otherwise.
22 5.3 Amendments- So long as any TANC Project Indebtedness 23 is outstanding, this Agreement may be amended, modified, or 24 otherwise changed or rescinded, except as provided in the 25 applicable Indentures, so long as such amendment, modification, 26 change, or rescission would not materially, adversely alter any 27 rights of or security for holders of such Indebtedness. Except as 28 provided in Section 2.3.2 and Section 8.3, this Agreement may be Packet Pg. 98
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 27 1 amended only by the written agreement of all of the parties 2 thereto. 34 6. DEFAULT 5 6.1 Defaulting Member's Participation Percentage – Upon 6 the failure of any Member or, with respect to its obligations 7 under Section 15, a former Member who has withdrawn, to meet its 8 obligations hereunder, TANC shall give written notice of the 9 failure to such Member or former Member who has withdrawn and, if 10 such failure has not been cured within forty-five (45) days after 11 the date of such notice, it shall constitute a default at the 12 expiration of such forty-five (45) day period. Upon such default, 13 in addition to the rights and remedies available to TANC pursuant 14 to Section 6.2, TANC may protect and enforce its rights hereunder 15 by suit or suits in equity or at law, whether for the specific 16 performance of any covenant herein or for damages or in aid of 17 the execution of any power granted herein or any other remedy 18 available under any provision of applicable law. No remedy by the 19 terms of this Agreement conferred upon or reserved to TANC is 20 intended to be exclusive of any other remedy, but each and every 21 such remedy shall be cumulative and shall be in addition to every 22 other remedy given under this Agreement or existing at law or in 23 equity or by statute on or after the effective date of this 24 Agreement.
25 6.2 Nondefaulting Member's Participation Percentage– Upon 26 any default described in Section 4.1.3.3, the defaulting Member 27 shall no longer be entitled to any rights granted to the Members Packet Pg. 99
Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 28 1 with respect to the Project, and each Member severally agrees 2 that the Participation Percentage of each nondefaulting Member 3 shall be automatically increased as follows: 4 6.2.1 Each Member severally agrees that the 5 Participation Percentage of each nondefaulting Member shall 6 be automatically increased to the ratio between such 7 nondefaulting Member's Participation Percentage and the 8 aggregate of the Participation Percentages of the 9 nondefaulting Members, expressed as a percentage. For 10 purposes of this Section 6.2.1 and Section 6.2.2, the term 11 "Member" shall include, but not be limited to, each former 12 Member who has withdrawn from TANC and converted its 13 Participation Percentage of TANC's entitlement to Transfer 14 Capability to an ownership interest in the Project pursuant 15 to Section 15, and the term "Participation Percentage" shall 16 mean that percentage which would represent such withdrawn 17 Member's Participation Percentage of TANC's entitlement to 18 Transfer Capability if such conversion had not occurred. 19 6.2.2 Notwithstanding the provisions of Section
20 6.2.1, the cumulative increase for any nondefaulting Member 21 pursuant to this Section 6.2 shall not exceed twenty-five 22 percent (25%) of its Participation Percentage in effect 23 immediately prior to the first default without the consent of 24 the Member; provided, that for purposes of determining such 25 cumulative increase any increase (i) pursuant to Section 2.3 26 or 3.1.2.2, or (ii) which results because a Member has 27 withdrawn from TANC and converted its Participation
28 Percentage of TANC's entitlement to Transfer Capability to an Packet Pg. 100 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 29 1 ownership interest in the Project pursuant to Section 15, 2 shall not be considered. The nondefaulting
3 Members shall be entitled to the rights which the
4 default Member loses upon the default and shall assume 5 subject to section 6.3 all of the obligations of the
6 defaulting Member with respect to such rights hereunder. 7 Increases in the Participation Percentages of the
8 nondefaulting Members shall be applicable to any payments due 9 and not paid by the defaulting Member at the time of the 10 increase and all subsequent payments due and not paid by the 11 defaulting Member.
12 6.3 Defaulting Member's Obligations - Each Member agrees 13 that increases in the obligations of other Members pursuant to 14 Section 6.2 shall not relieve the defaulting Member or a former 15 Member who has withdrawn, of its liability for its obligations 16 described hereunder. The nondefaulting Members shall have a right 17 of recovery from the defaulting Member to the extent of increases 18 in their obligations resulting from such default (plus interest 19 at the Interest Charge) from the date of such default until paid. 20 6.4 Tax Covenant - Notwithstanding any other provision of 21 this Agreement, no Member shall transfer, assign, sell or 22 exchange any portion of its Participation Percentage of TANC's 23 entitlement to Transfer Capacity, or any other interest in the 24 Project or the capacity or capability thereof, directly or 25 indirectly, in any manner, or shall take, or to the extent it 26 can control the same permit to be taken, any other action or 27 actions, which would adversely affect the exclusion of the Formatted: Indent: First line: 0.63"
Packet Pg. 101 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 30 1 interest on any of the TANC Project Indebtedness from gross 2 income for federal, income tax purposes under Section 103 of the 3 Internal Revenue Code of 1986, as amended, and the applicable 4 regulations thereunder (or any successors to such statute and 5 regulations), including without limitation, by reason of 6 classification of such TANC Project Indebtedness as a "private 7 activity bond" within the meaning of said Code. 89 7. USE OF TRANSFER CAPABILITY 10 7.1 Member Use of Transfer Capability- Subject to the 11 provisions of this Section 7, Section 6.4, and Section 8 hereof, 12 each Member shall have the right to use its Participation 13 Percentage of TANC's entitlement to Transfer Capability for any 14 purpose, including holding such Transfer Capability in reserve or 15 making such Transfer Capability available to a Member, 16 Participant, or other entity, subject to the terms and conditions 17 relating to assignments and layoffs by Participants under the 18 intertie Agreements; provided, that before a Member may make 19 unneeded Transfer Capability available to a non-Member, it shall 20 make such Transfer Capability available to the other Members on 21 terms and conditions which are established by the TANC 22 Commission. Nothing in this Section 7.1, however, shall prohibit 23 a Member or its designated agent from requesting that the TANC 24 Coordinator make all or part of such Member's unused Transfer 25 Capability available to other Members on behalf of such Member. 26 7.2Non-Member Use of Transfer Capability- Each Member or 27 its designated agent shall notify the TANC Coordinator in the 28 event that it does not need all or a portion of its Participation Packet Pg. 102 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 31 1Percentage of TANC's entitlement to Transfer Capability and no 2 other Member needs such Transfer Capability. In such event, the 3 TANC coordinator shall then make such Transfer Capability 4 available to the other Participants pursuant to the provisions 5 the Intertie Agreements. Otherwise, each Member or its designated 6 agent shall determine the disposition of its unneeded Transfer 7 Capability, which may include directing the TANC Coordinator to 8 make such Transfer Capability available to any entity on such 9 terms and conditions as such Member or its designated agent may 10 direct.
11 7.2.1 Compensation- Compensation for the use of a
12 Member's Participation Percentage of TANC's entitlement to 13 Transfer Capability by other Participants will be as set 14 forth in the Intertie Agreements. In the event that the 15 provisions of the Intertie Agreements do not apply to the 16 transaction, compensation shall be as determined by each 17 Member making such Transfer Capability available.
18 7.2.2 Allocation of Revenue- Payments for the use
19 of TANC's unneeded entitlement to Transfer Capability by non- 20 Members shall be collected by TANC and promptly and fully 21 credited directly to the Member making such Transfer 22 Capability available. Each such Member agrees that all right, 23 title, and interest of such Member and TANC in and to such 24 payments may be pledged and assigned under the Indentures to 25 secure payments required to be made under Section 4.1.3 by or 26 on behalf of such Member.
27 7.3 MOU Layoffs- In accordance with Sections 10.1 and 28 10.2 of the MOU as implemented by the Intertie Agreements, TANC Packet Pg. 103 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 32 1 shall lay off a portion of its entitlement to Transfer 2 Capability. Compensation to TANC by those entities receiving the 3 layoff is to be based on TANC's Project Cost including financing 4 plus contingencies of twenty-five (25) percent. 5 7.3.1 Unless otherwise agreed by the Members, each 6 Member shall provide its portion of such layoffs in 7 accordance with the Member's Participation Percentage. 8 7.3.2 Payments for the layoff of TANC's entitlement 9 to Transfer Capability as described in Sections 10.1 and 10 10.2 of the MOU shall be collected by TANC and promptly and 11 fully credited to the Members based on each Member's 12 Participation Percentage unless otherwise agreed by the 13 Members. Each such Member agrees that any right, title, and 14 interest of such Member and TANC in and to such payments 15 may be pledged and assigned under the Indentures to secure 16 payments required to be made under Section 4 1.3 by or on 17 behalf of such Member.
18 7.4 In the event that a Member's Participation Percentage 19 of TANC's entitlement to Transfer Capability converted to 20 megawatts exceeds the megawatt amount in Appendix C, Column E and 21 Appendix C-1, layoffs made by TANC pursuant to Sections 7.2 and 22 7.3 shall first be made from such excess amount if so requested 23 by that Member. If more than one Member has such an excess amount 24 and the sum of all such excess amounts exceeds the amount of the 25 layoff, the layoff shall be made pro rata based on the ratio 26 between each such requesting Member's excess amount and the sum 27 of all such requesting Members' excess amounts.

Packet Pg. 104 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 33 1 7.5 Notwithstanding anything to the contrary contained in 2 this Section 7, no layoff of Transfer Capability made pursuant to 3 this Section 7 shall excuse a Member from making the full 4 payments required by Section 4 hereof nor reduce the amount or 5 extend the time of such payments. 67 8. SCHEDULING 8 8.1 Member Scheduling Rights - During any scheduling 9 period, each Member or its designated agent shall have the right 10 to schedule power transactions using Transfer Capability up to 11 the amount of its Participation Percentage of TANC's entitlement 12 to Transfer Capability, subject to the provisions of Section 7 of 13 this Agreement. Each Member or its designated agent may also 14 schedule power transactions over any additional percentage of 15 Transfer Capability that it has a right to use. Notwithstanding 16 the provisions of Section 8.2, each Member or its designated 17 agent shall have the right to schedule such transactions pursuant 18 to its separate agreements with other entities. All power 19 scheduled over the Project shall be in whole megawatt amounts or 20 as otherwise set forth in the Intertie Agreements.
21 8.2 Project Use Information Coordination- Each Member or 22 19 its designated agent shall provide the TANC Coordinator with 23 Project use information required to meet TANC's obligations under 24 the Intertie Agreements as a Participant in the Project. The TANC 25 Coordinator shall submit such information to the operating Agent 26 in accordance with such agreements.
27 8.3 Scheduling and Curtailment Procedures- Specific
28 procedures which implement the provisions of this Section 8 and Packet Pg. 105 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 34 1 Section 7 hereof are set forth in Appendix D. The Members and 2 their designated agents agree to comply with such procedures, a s
3 they may be modified from time to time by a vote of the TANC 4 Commission pursuant to Section 3.1.2. 56 9. INSURANCE AND INDEMNIFICATION 7 TANC shall maintain, or cause to be maintained in force, 8 insurance as may be determined prudent in the judgment of the 9 TANC Commission and as may be required by the provisions of the 10 Intertie Agreements and any Indenture. TANC shall indemnify, 11 defend, and hold harmless each Member, and its governing board 12 members, officers, employees and agents, from any liability for 13 personal injury, death, or property damage arising out of the 14 negligent activities of TANC pursuant to this Agreement or the 15 Intertie Agreements.
16 17 10. COMPLIANCE WITH OTHER INSTRUMENTS
18 It is recognized by the parties hereto that, for the 19 benefit of the Members, TANC, in undertaking, or causing to be 20 undertaken, the planning, licensing, financing, construction, and 21 operation of TANC's share of the Project, must comply with the 22 requirements of each Indenture, the Intertie Agreements, all 23 applicable licenses, permits, and regulatory approvals necessary 24 therefor, and the Joint Powers Agreement.
25 26 11. LIABILITY OF TANC OFFICERS
27 11.1 Release- Each Member agrees that TANC's
28 Commissioners, officers, and employees shall not be liable to the Packet Pg. 106 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 35 1 Members for direct, indirect or consequential loss or damage 2 suffered by the Members as a result of (i) the performance or 3 nonperformance by TANC under any Intertie Agreements or (ii) the 4 performance or nonperformance of TANC under this Agreement. Each 5 Member releases TANC's Commissioners, officers, and employees 6 from any claim or liability (whether negligent or otherwise) as a 7 result of any actions or inactions of TANC under this Agreement 8 or the performance or nonperformance by TANC under any Intertie 9 Agreement. 10 11.2 No Modification- The provisions of this Section shall 11 not be construed so as to relieve TANC of any obligations under 12 any of the Intertie Agreements and the provisions of this Section 13 shall not be construed to modify or amend Paragraph 2 of the 14 Joint Powers Agreement.
15 16 12. NOTICE AND COMPUTATION OF TIME
17 12.1 Manner of Notices- Any notice or demand by a Member 18 to TANC under this Agreement shall be deemed properly given if 19 deposited in the United States mail first class postage prepaid 20 or its equivalent, or sent via facsimile or other electronic 21 media and confirmed by telephone or, in writing, or by electronic 22media within twenty-four(24) hours},, addressed to TANC at its 23 operational office; any notice or demand by TANC to any Member 24 under this Agreement shall be deemed properly given if deposited 25 in the United States mail first class postage prepaid or its 26 equivalent, or sent via facsimile or other electronic media and 27 confirmed by telephone or, in writing, or by electronic media 28 within twenty-four (24) hours},, addressed to the addressee shown Packet Pg. 107 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 36 1 on the signature pages hereof at the address shown in Appendix E. 2 The designations of the name and address to which any such notice 3 or demand is directed may be changed at any; time and from time 4 to time by any party giving notice as above provided in this 5 Section. 6 12.2 Time Computed - In computing any period of time from 7 such notice, such period shall commence on the date mailed or, if 8 sent via facsimile or other electronic media, on the date sent. 9 10 13. APPLICABLE LAW
11 This Agreement is made under and shall be governed by the 12 laws of the State of California.
13 14 14. SEVERABILITY
15 If any section, paragraph, clause, or provision of this 16 Agreement, or any part thereof, shall be finally adjudicated by a 17 court of competent jurisdiction to be invalid, the remainder of 18 this Agreement shall remain in full force and effect as though 19 such section, paragraph, clause, or provisions or any part 20 thereof so adjudicated to be invalid had not been included 21 herein.
22 23 15. MEMBER'S RIGHT TO WITHDRAW
24 15.1 Conversion of Participation Percentage to Undivided 25 Ownership Interest- TANC's undivided ownership interest in the 26 Project shall constitute rights or property acquired and owned by 27 TANC and no Member shall have an ownership interest in the 28 Project except upon withdrawal from TANC and conversion of its 29 Participation Percentage to an undivided ownership interest as Packet Pg. 108 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 37 1 provided herein. After the commercial operation date of the 2 Project, each Member not then in default shall be entitled to 3 withdraw from TANC and convert its Participation Percentage int o
Packet Pg. 109 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 38 1 an undivided ownership interest in the Project. Such Member's 2 undivided ownership interest shall be equal in amount to its 3 Participation Percentage multiplied by TANC's then undivided 4 ownership interest in the Project. Upon such withdrawal and 5 conversion, at the express written request of the withdrawing 6 Member, TANC shall make best efforts to take such administrative 7 actions, including the execution of such documents and amendments 8 to the Intertie Agreements, as may be reasonably requested by the 9 withdrawing Member to establish and evidence such Member's 10 undivided ownership interest in the Project and such Member's 11 role as a Participant under the Intertie Agreements, and a 12 reasonable administrative and legal costs associated with such 13 unopposed withdrawal and conversion shall be the responsibility 14 of such withdrawing Member. Each Member electing to withdraw from 15 TANC and so convert its Participation Percentage shall hold its 16 ownership interest as a tenant in common with TANC and the other 17 Participants as set forth in the Intertie Agreements. 18 15.2 Procedure and Conditions- Notwithstanding Paragraphs 19 19 and 20 of the Joint Powers Agreement, a Member may withdraw 20 from TANC and convert its Participation Percentage into an 21 undivided ownership interest in the Project by requesting that 22 TANC assign to the Member an undivided ownership interest in the 23 Project as provided in Section 15.1 and all rights, interest, and 24 obligations related thereto, and by giving written notice to TANC 25 and all other former Members that have withdrawn at least one (1) 26 year in advance of the noticed effective date of withdrawal; 27 provided that:
28 15.2.1 TANC shall have one hundred eighty (180) days, Packet Pg. 110 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 39 1 from written notice given pursuant to Section 15.5, to 2 exercise a right of first refusal to any rights, interests, 3 and obligations in the Project (in whole or in part) which 4 a former Member that has withdrawn determines to sell, 5 transfer, assign, or otherwise dispose of pursuant to a 6 bona fide written offer. In the event that any former 7 Member that has withdrawn ceases to exist as a public 8 agency, as defined in Section 6500 of the California 9 Government Code, then all rights, interests, and 10 obligations of such former Member in the Project which were 11 derived through TANC shall, at TANC's option, revert to 12 TANC in exchange for TANC assuming such former Member's 13 remaining obligations in the Project; provided, that such 14 former Member that has withdrawn has not sold, assigned, or 15 otherwise disposed of its rights, interests, and
16 obligations prior to the date such Member ceases to exist 17 as a public agency; provided further, that any former 18 Member that has withdrawn has the right to sell, assign, or 19 otherwise dispose of its rights, interests, and obligations 20 to anyone as long as the sale does not violate the
21 provisions of Section 6.4.
22 15.2.2 Former Members who have withdrawn shall have a 23 right of first refusal in any right or interest in the 24 Project (in whole or in part) which TANC or a TANC Member 25 determines to sell, transfer or assign to a non-Member. The 26 rights and obligations of former Members who have withdrawn 27 with respect to layoffs of Transfer Capability shall be as 28 prescribed in Section 7 of this Agreement;
29 15.2.3 Except as provided in this Section 15, a
Packet Pg. 111 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 40 1 withdrawal shall have no adverse effect on the rights and 2 obligations under the MOU of TANC, its Members, and other 3 former Members who have withdrawn, as those rights and 4 obligations exist on the date of execution of this 5 Agreement; 6 15.2.4 A former Member who has withdrawn shall meet 7 its pro rata share of TANC's layoff obligations under 8 Section 7.3 of this Agreement; and 9 15.2.5 Neither the withdrawal of a Member from TANC 10 nor the conversion of its Participation Percentage of 11 TANC's entitlement to Transfer Capability to an undivided 12 ownership interest in the Project pursuant to Section 15.1 13 shall relieve such Member of any of its obligations to make 14 payments with respect to Debt Service on TANC Project 15 Indebtedness at the times and in the amounts specified in 16 Section 4.1.3.2, as though such conversion had not
17 occurred, including any amounts due thereunder as a result 18 of an increase in such Member's Participation Percentage 19 pursuant to Sections 2.3, 3.1.2.2, and 6.2. In addition, 20 neither shall such action relieve the withdrawing Member of 21 any of its obligations pursuant to Section 6.4, nor affect 22 the rights of TANC to pursue its remedies under Section 6 23 against such former Member who has withdrawn.
24 15.2.6 Prior to withdrawal and conversion pursuant to 25 this Section 15, a withdrawing Member shall execute such 26 instruments and take such actions as TANC may reasonably 27 request to protect the continuing rights of TANC in the 28 interest transferred as set forth in this Agreement.

Packet Pg. 112 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 41 1 15.3 Inclusion in Intertie Agreements- Implementation of 2 this Section 15 is subject to the provisions of all applicable 3 Intertie Agreements. TANC shall make best efforts to include in 4 all applicable Intertie Agreements, as necessary, provisions to 5 recognize and authorize the rights and obligations of TANC and 6 Members who may elect to withdraw under this Section 15. 7 15.4 No Right to Partition - Each Member waives any rights 8 it may have to partition TANC's ownership interest in the Project 9 and agrees not to seek or to file any action in law or in equity 10 to partition such interest. The Members agree that their sole 11 right and procedure to obtain an ownership interest in the 12 Project separate and apart from TANC is pursuant to this Section 13 15.
14 15.5 Notice- Pursuant to the provisions of Section 15.2, 15 any former Member who has withdrawn shall have the obligation to 16 notify TANC and all other former Members who have withdrawn of 17 its intent to sell, transfer, or assign its interest in the 18 Project (in whole or in part).
19 15.6 Inclusion in Subsequent Project Agreement- Unless 20 otherwise agreed by the Members, the provisions of this Section 21 15 shall be included in any subsequent TANC "project agreement" 22 (as that term is defined in the Joint Powers Agreement) 23 pertaining to the subject matter hereof.
24 15.7 Adjustment of Participation Percentages- Except as 25 otherwise provided in Section 15.2.5, upon the withdrawal of a 26 Member and conversion of its Participation Percentage to an 27 undivided ownership interest pursuant to this Section 15, the 28 Participation Percentage of each remaining Member which has not Packet Pg. 113 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 42 1 so withdrawn and converted shall be automatically increased to 2 the ratio between such remaining Member's Participation 3 Percentage and the aggregate of the Participation Percentages of 4 all such remaining Members, expressed as a percentage. 56 16. ASSIGNMENT OF AGREEMENT 7 16.1 No Assignment While TANC Project Indebtedness 8 Outstanding - This Agreement shall inure to the benefit of and 9 shall be binding upon the respective successors and assigns of 10 the parties to this Agreement; provided, however, that, except as 11 provided in Sections 2.3.2, 4.1.3.7, 7.2.2, 7.3.2, and 15, 12 neither this Agreement nor any right or interest herein shall be 13 transferred or assigned by any party hereto so long as any TANC 14 Project Indebtedness is outstanding.
15 16.2 Assignment Prior to Withdrawal- Unless a Member has 16 withdrawn from TANC pursuant to Section 15 of this Agreement, any 17 assignment, in whole or in part, of a Member's Participation 18 Percentage or individual ownership interest to a person or entity 19 which is not a member of TANC is subject to paragraph 19 of the 20 Joint Powers Agreement.
21 22 17. MEMBERS' OBLIGATIONS SEVERAL
23 The obligation of each Member to make payments under this 24 Agreement is a several obligation and not a joint obligation with 25 those of the other Members.
26 27 18. TRUSTEE AS A THIRD PARTY BENEFICIARY
28 The parties agree that, among other things, this Agreement Packet Pg. 114 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 43 1 is also made and entered into for the benefit of the Trustee 2 under each Indenture and the holders of outstanding TANC Project 3 Indebtedness, as third-party beneficiaries, and the Trustee and 4 such holders shall have the right, as third-party beneficiaries, 5 to initiate and maintain suit to enforce this Agreement to the 6 extent provided in any Indenture. Except as provided in this 7 Section 18, no rights or benefits shall be created in any person 8 or entity not a party to this Agreement. 9 10 19. APPENDICES
11 This Agreement includes Appendices A, B, C,C-1, C—2, D, 12 and E attached hereto and incorporated herein by this reference. 13 14 20. WAIVER
15 Any waiver at any time by any party of its rights with 16 respect to a default under this Agreement, or with respect to any 17 other matters arising in connection with this Agreement, shall 18 not be deemed a waiver with respect to any subsequent default or 19 other matter.
20 21 21. CAPTIONS
22 Except as used for definitions, all indexes, titles, 23 subject headings, section titles and similar items are provided 24 for the purpose of reference and convenience and are not intended 25 to be inclusive, definitive or to affect the meaning or scope of 26 this Agreement.
27 28 22. BILLING AND PAYMENT
Packet Pg. 115 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 44 1 22.1 Unless otherwise agreed by the Members and TANC, the 2 accounting and billing period shall be one (1) calendar month. 3 Monthly bills sent to a Member shall be sent by United States 4 mail first class, postage prepaid or its equivalent, to the 5 billing address specified in Appendix E. The designation of any 6 person specified in Appendix E may be changed at any time by 7 advance notice given to all Members not then in default and the 8 TANC coordinator. 9 22.2 Billings for amounts payable shall be due on the 10 twenty-fifth (25th) day after mailing of the bill. Payment shall 11 be made at offices designated by the party to which payment is 12 due. If the due date falls on a non-business day of either party, 13 then the payment shall be due on the next following business day 14 without interest.
15 22.3 Amounts of monthly billings not paid on or before the 16 due date shall be payable with an Interest Charge calculated from 17 the due date to the date of payment.
18 22.4 In case any portion of any monthly bill is in dispute, 19 the entire bill shall be paid when due. Any excess amount of 20 payments made pursuant to monthly billings, which through 21 inadvertent error or as a result of a dispute may have been 22 overpaid, as determined by whatever means the parties select to 23 resolve the dispute, shall be returned by the owing party upon 24 determination of the correct amount in accordance with the 25 Intertie Agreements. If the amount owing exceeds five hundred 26 dollars ($500.00) and is more than three (3) months past due, it 27 shall be returned with interest at the rate for an Interest 28 Charge less two (2) percent.

Packet Pg. 116 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 45 12 23. DISTRIBUTION OF ASSETS 3 Notwithstanding anything to the contrary contained in 4 Section 21 of the Joint Powers Agreement, but subject in all 5 events to the provisions of the Intertie Agreements, in the event 6 the Project terminates, subject to Section 16 TANC shall 7 distribute to all Members not then in default TANC's share of the 8 proceeds of the sale, transfer, or other disposition of any 9 assets acquired in connection with the Project, and all of its 10 right, title, and interest therein as a Participant. Such 11 distribution shall be in proportion to the Participation 12 Percentages of such Members then in effect. No such distribution 13 shall occur so long as any TANC Project Indebtedness remains 14 outstanding.
15 16 24. COUNTERPARTS
17 This Agreement may be executed in several counterparts, 18 each of which shall be deemed to be an original and all of which, 19 when taken together, shall constitute a single Agreement. 20 21 25. SIGNATURES
22 In witness whereof, the parties have caused this Project 23 Agreement No. 3 to be executed as of the date first above 24 written. The signatories to this Project Agreement No. 3 25 represent that they have been appropriately authorized to enter 26 into this Project Agreement No. 3 on behalf of the party for whom 27 they sign.

Packet Pg. 117 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 46 1 CITY OF ALAMEDA 2 By: _________________________ 3 Name: _________________________ 4 Title: _________________________ 5 Date: _________________________ 67 CITY OF HEALDSBURG 8 By: _________________________ 9 Name: _________________________ 10 Title: _________________________
11 Date: _________________________
12 13 CITY OF LODI
14 By: _________________________
15 Name: _________________________
16 Title: _________________________
17 Date: _________________________
18 19 CITY OF LOMPOC
20 By: _________________________
21 Name: _________________________
22 Title: _________________________
23 Date: _________________________
24 25 MODESTO IRRIGATION DISTRICT
26 By: _________________________
27 Name: _________________________
28 Title: _________________________
29 Date: _________________________
30 31 CITY OF PALO ALTO
32 By: _________________________
33 Name: _________________________
34 Title: _________________________
35 Date: _________________________
36 37 CITY OF REDDING
38 By: _________________________
39 Name: _________________________
40 Title: _________________________
41 Date: _________________________
42 43 CITY OF ROSEVILLE
44 By: _________________________
45 Name: _________________________
46 Title: _________________________
47 Date: _________________________
48 49
50 Packet Pg. 118 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 47 1 SACRAMENTO MUNICIPAL UTILITY DISTRICT 2 By: _________________________ 3 Name: _________________________ 4 Title: _________________________ 5 Date: _________________________ 67 CITY OF SANTA CLARA 8 By: _________________________ 9 Name: _________________________ 10 Title: _________________________
11 Date: _________________________
12 13 TURLOCK IRRIGATION DISTRICT
14 By: _________________________
15 Name: _________________________
16 Title: _________________________
17 Date: _________________________
18 19 CITY OF UKIAH
20 By: _________________________
21 Name: _________________________
22 Title: _________________________
23 Date: _________________________
24 25 PLUMAS-SIERRA RURAL ELECTRIC
26 COOPERATIVE
27 By: _________________________
28 Name: _________________________
29 Title: _________________________
30 Date: _________________________
31 32 TRANSMISSION AGENCY OF NORTHERN
33 CALIFORNIA
34 By: _________________________
35 Name: _________________________
36 Title: _________________________
37 Date: _________________________
38 39
40 41
42 43
44 45
46 47
48 49
50 Packet Pg. 119 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) Packet Pg. 120 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 1 APPENDIX A

MEMORANDUM OF UNDERSTANDING

CALIFORNIA-OREGON TRANSMISSION PROJECT
This memorandum of Understanding (MOU) is entered into
as of the 19th day of December, 1984 by (1) the CITY OF ANAHEIM (Anaheim), CITY OF AZUSA (Azusa), CITY OF BANNING (Banning), CITY OF COLTON (Colton), CITY OF RIVERSIDE
(Riverside), and CITY OF VERNON (Vernon) collectively
referred to as "Southern California Public Agencies": (2) CALIFORNIA DEPARTMENT OF WATER RESOURCES (CDWR): (3)

PACIFIC GAS AND ELECTRIC COMPANY (PG&E) SAN DIEGO GAS AND ELECTRIC COMPANY (SDG&E), and SOUTHERN CALIFORNIA EDISON COMPANY (SCE), collectively referred to as "Investor-Owned Utilities": (4) the WESTERN AREA POWER ADMINISTRATION
(Western): and (5) the TRANSMISSION AGENCY OF NORTHERN
CALIFORNIA (Agency) (composed of the Cities of Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto,
Redding, Roseville, Santa Clara, and Ukiah, the Plumas- Sierra Rural Electric Cooperative, the Sacramento Municipal Utility District, the Modesto Irrigation District, and the Turlock Irrigation District), hereinafter sometimes
referred to individua y as "Participant" and collectively as "Participants", and the LOS ANGELES DEPARTMENT OF WATER AND POWER ("LADWP"), representing itself and the Cities of Glendale, Burbank and Pasadena, a non-voting member of the Management Committee.

Recitals
WHEREAS, the Agency, the Investor-Owned Utilities, CDWR and Western, have carried out studies related to possible alternative methods of developing additional transmission facilities between California and the Pacific Northwest, and
WHEREAS, Public Law 98-360 and the Conference Report on H.R. 5653 authorize the Secretary of Energy (Secretary) to participate with non-federal entities in developing the California-Oregon Transmission Project (Project) by
Packet Pg. 121 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 2 upgrading certain facilities and authorize the Secretary to construct or participate in the construction of such
additional facilities as he deems necessary to allow
mutually beneficial power sales between the Pacific
Northwest and California, and to accept and use funds
contributed by non-federal entities, including investor- owned and publicly owned utilities, for that purpose, and WHEREAS, pursuant to the mandate set forth in the
Conference Report on H.R. 5653 and Public Law 98-360, the Secretary is directed to enter into negotiations with all interested non-federal entities for the financing, planning and construction of a new 500-kV AC line and associated facilities, and
WHEREAS, the Secretary has met with the Participants
and others and has conferred in and observed the
negotiation of this MOU by the Participants, and
WHEREAS, the Agency, the Southern California Public
Agencies, the Investor-Owned Utilities, Western and the CDWR have all participated in the negotiations and in the development of the Project, and
WHEREAS, the Project, when constructed, will parallel
in part the DC line between California and the Pacific
Northwest, and the operation of the Project may affect the operation of the DC line, and for that reason, the
Participants have invited LADWP, the operator of the DC line, to be a member of the Management Committee to the extent set forth in this MOU, and
WHEREAS, the Project has been evaluated from the
technical viewpoint and has been found to be technically feasible, and
WHEREAS, utilities in the Pacific Northwest and in
California have determined that development of the Project will provide mutual benefits to their respective regions, and
WHEREAS, the Participants will develop the Project
consistent with applicable environmental laws, in an
expeditious manner, and
Packet Pg. 122 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 3 WHEREAS, in order to develop the Project in accordance with this MOU, the Participants intend to take all
appropriate actions including the negotiation and execution of a definitive participation agreement, and other
agreements as necessary, within nine months or as soon as practicable after execution hereof, and
WHEREAS, CDWR and the Participants have agreed to
postpone the date upon which CDWR will first be entitled to exercise its rights to buy 6.25 percent of Project transfer capability, and
NOW THEREFORE, in order to expedite the signing of the
Participation Agreement and other necessary agreements, the following Principles are hereby agreed to and shall be
implemented in such agreements.

1.0 Scope of Project

1.1 The Project includes:

1.1.1 The construction of a new 500-kV AC
transmission line from the California-
Oregon border area to the Redding area.

1.1.2 Reconstruction of an existing double
circuit 230-kV AC line owned by Western to
a single circuit 500-kV AC line from the
Redding area to the Tracy Substation.

1.1.3 Construction of a new 500-kV AC line from
Tracy Substation to Tesla Substation.

1.1.4 Construction of a 500-kV AC cross-tie from
the Redding area to Round Mountain
Substation or its vicinity, unless the
Management Committee determines that such
cross-tie is not needed.

1.1.5 Construction of a 500-kV substation in the
Redding area. The size, location, and
configuration shall be as determined by
the Management Committee.

Packet Pg. 123 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 4 2.0 Associated Facilities

2.1 The Project does not include facilities south of
the Tesla Substation, however, PG&E shall upgrade
or improve portions of its transmission system
between Tesla Substation and Midway Substation as
necessary to provide firm power transfer
capability to meet its obligations hereunder as
set forth in Sections 2.2, 2.3 and 2.4.

2.2 PG&E shall provide firm bi-directional
transmission service over its facilities between
Tesla and Midway Substations for the Southern
California Public Agencies, SCE and SDG&E in
amounts equal to their respective transfer
capabilities in the Project (whether obtained
under Section 5 or Section 10) for the life of
the Project. PG&E shall also provide up to SO MW
of firm bi-directional transmission service
between Tesla and Midway Substations for
transmission entitlement that may be assignable
by SMUD pursuant to Section 9.0. PG&E shall not
be obligated to provide firm transmission service
in excess of 700 MW for power transmitted over
Project facilities and SMUD1s SO MW of assignable
entitlement, provided, that such transmission
service shall be provided under reasonable rates,
terms and conditions.

2.3 In addition to firm transmission service provided
pursuant to Section 2.2, PG&E shall make
available to the Agency for the life of the
Project up to 300 MW of firm bi-directional
transmission service between Tesla Substation and
Midway (150 MW for the M-S-R San Juan Project,
plus an additional 150 MW). The Agency shall, if
requested to do so by PG&E, provide, in the form
of a contribution in aid of construction, a
reasonable and proportionate share of the capital
required for increasing the transfer capability
between Los Banos and Gates. Such
Packet Pg. 124 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 5 transfer capability is to be developed by PG&E
and will be available for service no later than
January 1, 1990 and shall be provided under
reasonable rates, terms and conditions.

2.4 Project participants agree to cooperate in
developing suitable transmission facilities to
deliver power transmitted over the Project to the
Participants, or to provide acceptable firm
transmission service arrangements for such power
under reasonable rates, terms and conditions.

2.5 SCE agrees to provide firm bi-directional
transmission service between Midway Substation
and the Southern California Public Agencies of
power available over the Project's facilities,
consistent with the provisions of applicable
individual integrated operating agreements and
settlement agreements between such agencies and
SCE or any successor agreements. If SCE and any
such agency cannot agree upon the terms and
conditions of such a firm transmission service
agreement hereunder, SCE will make a unilateral
filing with the FERC of such a firm transmission
service agreement under Section 205 or 206 of the
Federal Power Act and pursuant to the FERC's
rules and regulations promulgated thereunder.

3.0 Project Rating Interconnection and Operation

3.1 The Project shall be designed to have a minimum
transfer capability of 1600 MW including loop
flow from the California-Oregon border to the
Tesla Substation and a minimum of 1900 MW of
transfer capability from the Redding Substation
to the Tracy Substation. The actual Project
transfer capability will be determined from time
to time by the Management Committee based on
studies. The Management Committee has the right
to review and approve all modifications to the
Project, provided that any modification which
materially affects the transmission system of a
Packet Pg. 125 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 6 Participant shall require the prior approval of
such Participant.

3.2 The Project shall be interconnected and operated
in parallel with the existing AC Intertie
facilities.

3.3 The Participants shall enter into appropriate
contractual arrangements:

3.3.1 With Northwest utilities to interconnect
the Project with the Pacific Northwest
transmission system such that access is
available to a wide spectrum of utilities
in the Pacific Northwest and Canada.

Agreement shall be among the Participants
and Northwest utilities.

3.3.2 With PG&E and Western for interconnections
between the Project and Western and PG&E
systems, including provisions governing
the ownership of new facilities in
existing substations.

3.3.3 Providing that each Participant shall
have a right to displace Northwest imports
scheduled by other Participants over the
Project for delivery and use within a
control area at times when any Participant
in such control area is in a spill
condition or at minimum generation,
provided that displacement energy is
delivered to the Participant whose energy
is being displaced at a cost including
penalties, if any, at or below the price
of the displaced Northwest imports.

3.3.4 For the interconnection and parallel
operation of the Project with existing AC
Intertie facilities. Such arrangements
shall also provide for integration of the
Project with the existing AC Intertie
System, including pro rata sharing of
available
Packet Pg. 126 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 7 transfer capability under outage and
curtailment conditions, including
curtailments due to loop flow.

3.4 PG&E shall be the operating agent for operation
and maintenance of the Project, with operation
and maintenance costs to be shared by Project
Participants in proportion to their respective
allocations under these Principles. PG&E shall
coordinate with Western on the operations and
maintenance on the Redding to Tracy portion of
the Project.

3.5All Participants who receive transfer capability
from the Project shall coordinate schedules with
PG&E.

4.0 Project Management 4.1 A Management Committee, chaired by a representative of the Agency, is hereby formed to
oversee and approve the planning, design,
construction, operation and maintenance of the
Project. Each Participant in the Project shall
have representation on the Management Committee,
with the members of the Agency being represented
by the Agency and the Southern California Public
Agencies being represented by one Participant of
their choice. All actions or decisions by the
Management Committee shall be by agreement of at
least 75 percent interest of the voting
Participants, based on Project Participation
shares between the California-Oregon border area
and Tesla Substation. Subcommittees shall be
formed as needed to address specific aspects of
the Project. CDWR, prior to exercise of rights
under Section 8.1, and LADWP shall also have non-
voting representation on the Management
Committee. Each Participant,including each of
the members of the Agency and each of the
Southern California Public Agencies, shall be
given advance notification of all meetings of the
Management Committee and may attend meetings.

Packet Pg. 127 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 8 4.2 Western shall be the lead agency for the NEPA
process and the Agency shall be the lead agency
for the CEQA process. All Participants agree to
cooperate and support the processes necessary to
obtain all necessary permits from regulatory
agencies having jurisdiction.

4.3 The Agency shall be the overall Project Manager.

Western, under contract to the Participants,
shall be responsible for design and construction
of the upgraded Western facilities, including the
proposed Redding Substation. The Agency and/or
PG&E, under contract to the Participants, shall
be responsible for design and construction of all
Project facilities other than Western upgraded
facilities.

4.4 In exercising its non-voting representation on
the Management Committee, LADWP may represent the
ownership interests of itself, Burbank, Glendale
and Pasadena in the DC line only as to
discussions relating to operation of the DC line,
and its representation shall be limited to
offering non-binding suggestions as to planning,
construction, and operation of the Project, and
advising the Committee as to problems which may
arise through operation of the Project in
parallel with the DC line.

5.0 Project Participation Shares

5.1 The Participants shall be entitled to Project
transfer capability between the California-Oregon
border area and Tesla Substation prior to January
1, 2005, in the following proportions:

5.1.1 The Agency shall be entitled to 43.75
percent.

5.1.2 The Investor-Owned Utilities shall be
entitled to 42.19 percent.

5.1.3 The Southern California Public Agencies
shall be entitled to 7.81 percent.

Packet Pg. 128 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 9 5.1.4 Western for DOE laboratories and federal
wildlife refuges shall be entitled to 6.25
percent.

5.2 If CDWR exercises its rights and purchases its share of the Project pursuant to Section 8.1, then the
Participants shall be entitled to Project transfer
capability between the California-Oregon border area
and Tesla Substation commencing on January 1, 2005,
in the following proportions:

5.2.1 The Agency shall be entitled to 40.83
percent.

5.2.2 The Investor-Owned Utilities shall be
entitled to 39.38 percent.

5.2.3 The Southern California Public Agencies shall
be entitled to 7.29 percent.

5.2.4 Western for DOE laboratories and federal
wildlife refuges shall be entitled to 6.25
percent.

5.2.5 The CDWR shall be entitled to 6.25 percent.

5.3 If CDWR elects not to exercise its rights to
purchase Project transfer capability pursuant to
Section 8.1, then the Participants shall continue
to be entitled to Project transfer capability in
the same percentages as specified in Section 5.1.

5.4 The Project transfer capability specified to
Western in Sections 5.1, 5.2, and 5.3, is to
serve DOE laboratories and federal wildlife
refuges unless they make other arrangements with
Western or other Participants. In addition,
Western shall be provided the following transfer
capability in Project facilities between the
Redding Substation and Tracy Substation:

5.4.1 300 MW under all operating conditions,
with back up service provided by PG&E
pursuant to Contract 14-06-200-2948A
(Contract 2948A).

Packet Pg. 129 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 10 5.4.2 Up to an additional 300 MW (above 1900
MW), to the extent that such transfer
capability is available from the Project.

5.5 During construction of the Project, to the extent
transmission capacity is available, PG&E will accept
CVP power at any point of interconnection between
PG&E and Western for delivery to PG&E or to Western
loads served from PG&E's system pursuant to Contract
2948A. Any incremental costs incurred by Western
because of the outage of its facilities during
construction, including wheeling charges paid to
PG&E, shall be deemed to be a Project cost.

6.0 Project Financing Responsibility

6.1 Prior to the effective date of any election by CDWR to exercise its rights pursuant to Section 8.1 and
unless otherwise agreed pursuant to Section 6.3, the
Participants shall be responsible for financing the
Project and betterments in the following proportions:

6.1.1 The Agency, 46.67 percent (approximately
700/1500);

6.1.2 The Investor-Owned Utilities, 45.00
percent (approximately 675/1500);

6.1.3 The Southern California Public Agencies,

8.33 percent (approximately 125/1500).

6.2 Subsequent to the effective date of election by
CDWR to exercise its rights pursuant to Section

8.1, and unless otherwise agreed pursuant to
Section 6.3, the Participants shall be
responsible for any capital betterments for the
Project in the following proportions:

6.2.l The Agency, 43.55 percent;

6.2.2 The Investor-Owned Utilities, 42.00 percent;

6.2.3 The Southern California Public Agencies,

7.78 percent;

6.2.4 CDWR, 6.67 percent.

Packet Pg. 130 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 11 6.3 A Participant may agree to assume (in part or whole} financing responsibility for another Participant's
share. Such assumption shall not alter the Project
Participation shares in Section 5.

7.0 Project Ownership

7.1 Except as otherwise agreed by the Participants
pursuant to Section 7.6, the Project, other than
the upgraded Western facilities, shall be owned
in the following proportions prior to January 1,
2005, and also thereafter, if CDWR does not
exercise its rights pursuant to Section 8.1.

7.1.1 The Agency, 46.67 percent.

7.1.2 The Investor-Owned Utilities, 45.00
percent.

7.1.3 The Southern California Public Agencies,

8.33 percent.

7.2 If CDWR exercises its rights to purchase Project
transfer capability pursuant to Section 8.1, then
except as otherwise agreed by the Participants
pursuant to Section 7.6, the Project (other than
the upgraded Western facilities) shall be owned in
the following proportions after January 1, 2005:

7.2.1 The Agency, 43.55 percent.

7.2.2 The Investor-Owned Utilities, 42.00 percent.

7.2.3 The Southern California Public Agencies,

7.78 percent.

7.2.4 The CDWR, 6.67 percent.

7.3 Unless prohibited by law or unless otherwise
agreed pursuant to Section 7.6, the upgraded
Western facilities shall be owned in the
following proportions prior to January 1, 2005:

7.3.1 The Agency, 36.84 percent (700/1900).

7.3.2 The Investor-Owned Utilities, 35.53
percent (675/1900).

7.3.3 The Southern California Public Agencies,

6.58 percent (125/1900).

Packet Pg. 131 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 12 7.3.4 Western, 21.05 percent (400/1900).

7.4 Unless prohibited by law or unless otherwise
agreed pursuant to Section 7.6, the upgraded
Western facilities shall be owned in the
following proportions on and after January l,
2005, if CDWR exercises its rights to purchase
pursuant to Section 8.1.

7.4.1 The Agency, 34.39 percent (approximately
653/1900).

7.4.2 The Investor-Owned Utilities, 33.16
percent (approximately 630/1900).

7.4.3 The Southern California Public Agencies,

6.14 percent (approximately 117/1900).

7.4.4 Western, 21.05 percent (400/1900).

7.4.5 CDWR, 5.26 percent (100/1900).

7.5 If CDWR elects not to exercise its rights
pursuant to Section 8.1, then the proportions
owned on and after January 1, 2005, shall be as
specified in Section 7.3.

7.6 A Participant may agree to assume ownership of all or part of another Participant's ownership share and provide firm transmission service to
such other Participant in an amount that the
Participant's ownership share plus transmission
service hereunder shall equal the Participant's
Project participation share in Section 5.

8.0 Rights for the California Department of Water Resources

8.1 Effective January 1, 2005, CDWR will have a right
to buy pro rata from all Participants, except
Western, 6.25 percent of the Project as the
Project exists as of the date CDWR exercises its
right. Unless another price is mutually agreed to
by the selling Participant and CDWR, CDWR shall
pay each selling Participant the original
construction cost (including the original
construction cost associated with
Packet Pg. 132 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 13 Western's entitlement), including the interest it
incurred during construction, plus the original
cost of capital improvements and betterments
(including the original cost of capital
improvements and betterments associated with
Western's entitlement), including interest it
incurred during construction, allocable to the
respective pro rata share of the Project that the participant is selling to CDWR. Within one year after the Project is energized, each Participant
shall provide CDWR with a statement of the original construction cost (including the original construction cost associated with
Western's entitlement), including the interest it
incurred during construction for its share of the
Project so that CDWR can determine the cost it
shall be obligated to pay such Participant if it
exercises its rights under this Section 8.1.

Within one year after any capital improvements or
betterments are completed prior to the date of
exercise by CDWR, each Participant shall provide
CDWR with a statement of construction costs
incurred for such capital improvements, or
betterments (including the original construction
cost of capital improvements and betterments
associated with Western's entitlement) including
interest it incurred during construction with
respect to its share, so that CDWR can determine
the cost it shall be obligated to pay such
Participant if it exercises its rights under this
Section 8.1.

8.2 Subject to (1) satisfaction of Section 11.4 of
this MOU as to participation of PG&E in the
Project, (2) execution by COWR of the
participation agreement, and(3) construction of
the Project, the term of the Extra High Voltage
Contract, dated August 1, 1967, among CDWR, PG&E,
SDG&E, and SCE, or the successor(s) in interest
to SDG&E and SCE, shall be
Packet Pg. 133 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 14 extended for the useful life of the existing AC
Intertie. Notwithstanding any terms to the
contrary in the Extra High Voltage Contract, if
the Parties cannot reach agreement on the rates
that CDWR is to pay during the extended term of
this contract, after 2004 PG&E, SCE, and SDG&E,
or the successor(s) in interest to SDG&E and SCE,
may unilaterally make application to FERC for a
change in rates, under Section 205 of the Federal
Power Act and pursuant to the FERC's Rules and
Regulations promulgated thereunder.

8.2.1 CDWR shall be considered a Participant for
the purposes of Sections 3.3.3 and 10.4.

8.3 Upon exercise of CDWR's rights under Section 8.1,
PG&E and SCE shall provide firm transmission
capacity to deliver CDWR's 100 MW to Midway and
Vincent Substations, under reasonable rates,
terms, and conditions.

8.4 Except as provided in Section 8.2, nothing in
this agreement shall modify or change CDWR's
rights under the Extra High Voltage Agreement
dated August 1, 1967.

9.0 The EHV Contract Between SMUD, PG&E, SCE, and SDG&E

9.1 PG&E, SCE, and SDG&E, pursuant to Article 33 of
the August l, 1967 contract entitled "Contract
Between California Companies and Sacramento
Municipal Utility District for Extra High Voltage
Transmission and Exchange Service" between SMUD,
PG&E, SCE, and SDG&E (EHV Contract), consent to
an assignment by SMUD of up to SO MW of SMUD's
200 MW entitlement pursuant to the EHV Contract
to California publicly owned utilities on such
terms as may be negotiated between SMUD and the
California publicly owned utilities: provided,
however that such terms shall be consistent
with, shall not amend, and shall not
Packet Pg. 134 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 15 interfere with the performance of any rights or
obligations under the EHV Contract. Such assignment
may commence on January 1, 1985 and shall terminate
on the earliest to occur of, (1) the date when the
California-Oregon Transmission Project becomes
operational, (2) the date when the participation of
PG&E, SCE, and SDG&E is terminated because the
approvals under Section 11.4 cannot be obtained or
because those approvals are unsatisfactory to PG&E,
SCE, and SDG&E, (3) the date when the Project is
terminated prior to its operation, such termination
to be deemed to have occurred on January 1, 1993, if
no work has been done on the Project for three years
prior to that date. Such an assignment shall not
impair SMUD's right to utilize any assigned
entitlement after termination of the assignment.

10.0 Layoff Arrangements

10.l The Agency shall lay off on a firm basis 50 MW of
Project transfer capability to the California
Public Agencies between 1990 and 1994. The Agency
shall lay off on a firm basis 25 MW of Project
transfer capability to the Southern California
Public Agencies between 1995 and 1999.

10.2 The Agency shall lay off on a firm basis Project
transfer capability to the Investor-Owned
Utilities, as indicated below:
1990: 200 MW
1991: 175 MW
1992: 150 MW
1993: 125 MW
1994: 100 MW
1995: 75 MW
1996: 50 MW
1997: 25 MW
1998 and thereafter: 0 MW
Packet Pg. 135 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 16 10.3 Layoff of Project transfer capability pursuant to Sections 10.l and 10.2 shall be sold at the cost
of said transfer capability based on public
financing plus contingencies of 25 percent. It is
recognized that the layoff amounts set forth in
Sections 10.1 and 10.2 will be converted to a
percentage of the minimum design transfer
capability of 1600 MW and applied to the actual
transfer capability determined by the Management
Committee.

10.4 An important goal of the Project is to benefit
the Participants and their respective ratepayers,
commensurate with the risks inherent in the
Project. To the extent that any Participant does
not need its Project transfer capability to meet
the loads of its system (directly or by exchange)
and its firm layoff requirement pursuant to
Sections 10.1 and 10.2 hereunder, such remaining
transfer capability shall be made available to
the other Participants.

10.4.1 Long-term transfer capability is transfer
capability for which a five-year advance
notice is required. Short-term transfer
capability is transfer capability for
which less than five years notice is
required.

10.4.2 Layoff transfer capability as specified in
Section 10.4 shall be made available on a
cost basis. Long-term transfer capability
shall be offered at no less than the cost
or transfer capability based on public
financing plus contingencies of 25
percent. Short-term transfer capability
shall be offered at no less than the cost
of transfer capability based on public
financing with no contingency adder.

10.4.3 If there are no Participants wishing to
purchase either long-term or short-term
Packet Pg. 136 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 17 layoff at the applicable price pursuant to
Section 10.4.2, then the selling
Participant can use its excess transfer
capability to deliver power to a
Participant or to other entities under any
terms and conditions or make its Project
transfer capability available to others.

10.5 Nothing in Section 10.4 shall prevent any
Participant from utilizing its Project transfer
capability to transmit power to other
Participants or entities in the Northwest.

11.0 Approval by the Secretary of Energy, Congress and
other Governmental Agencies
If, after a public notice procedure and due
deliberation by the Secretary, this MOU is adopted by the Secretary as the basis for development of the Project, the Participants agree as follows:

11.1 This MOU shall be submitted by the Secretary in
his report to Congress, pursuant to Public Law
98-360.

11.2 The Participants shall support the passage of
legislation in the form attached hereto as
"Exhibit A", authorizing the implementation of
the Project in accordance with this MOU. The
Participants shall also support report language
accompanying such legislation in the form
attached as "Exhibit B", which determines that
the plan for development and operation of the
Project in accordance with this MOU is in the
public interest.

11.3 Contracts among the Participants shall then be
negotiated to implement these principles. As a
condition of execution of any contracts
implementing this HOU each Participant shall
furnish the other Participants with a written
Opinion of Council in which it is represented
that said Participant has the authority to enter
into such contracts and to be
Packet Pg. 137 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) Packet Pg. 138 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 18 bound by the terms and conditions thereof. In the
case of Agency, each major member agency thereof
shall furnish such Opinion of Counsel.

11.4 The contracts negotiated to implement these
Principles shall be submitted to, and shall be
subject to satisfactory approvals and permits of,
local, state and federal governmental agencies
having jurisdiction over the Participants to the
contracts or the actions contemplated here.

11.5 If the conditions in Section 11.4 are not
satisfied as to any Participant, without changes
or new conditions unacceptable to such
Participant, such Participant shall no longer be
bound by any provision of this MOU.

12.0 Signature Clause
The signatories to this MOU represent that they have
been appropriately authorized to enter into this MOU on behalf of the Party for whom they sign. This MOU may be executed in counterparts. This MOU is executed as of the 19th day of December, 1984.
(Seal) CITY OF ANAHEIM
By: __________________________
Date: __________________________

CITY OF AZUSA
By: __________________________
Date: __________________________
Packet Pg. 139 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 18 bound by the terms and conditions thereof. In the
case of Agency, each major member agency thereof
shall furnish such Opinion of Counsel.

11.4 The contracts negotiated to implement these
Principles shall be submitted to, and shall be
subject to satisfactory approvals and permits of,
local, state and federal governmental agencies
having jurisdiction over the Participants to the
contracts or the actions contemplated here.

11.5 If the conditions in Section 11.4 are not
satisfied as to any Participant, without changes
or new conditions unacceptable to such
Participant, such Participant shall no longer be
bound by any provision of this MOU.

12.0 Signature Clause
The signatories to this MOU represent that they have
been appropriately authorized to enter into this MOU on behalf of the Party for whom they sign. This MOU may be executed in counterparts. This MOU is executed as of the 19th day of December, 1984.

CITY OF ANAHEIM
By: __________________________
Date: __________________________

CITY OF AZUSA
By: __________________________
Date: __________________________
Packet Pg. 140 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 19 CITY OF BANNING
By: __________________________
Date: __________________________

CITY OF COLTON
By: __________________________
Date: __________________________

CITY OF RIVERSIDE
By: __________________________
Date: __________________________

CITY OF VERNON
By: __________________________
Date: __________________________

CALIFORNIA DEPARTMENT OF

WATER RESOURCES
By: __________________________
Date: __________________________

PACIFIC GAS AND ELECTRIC COMPANY
By: __________________________
Date: __________________________
Packet Pg. 141 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 19 CITY OF BANNING
By: __________________________
Date: __________________________

CITY OF COLTON
By: __________________________
Date: __________________________

CITY OF RIVERSIDE
By: __________________________
Date: __________________________

CITY OF VERNON
By: __________________________
Date: __________________________

CALIFORNIA DEPARTMENT OF

WATER RESOURCES
By: __________________________
Date: __________________________

PACIFIC GAS AND ELECTRIC COMPANY
By: __________________________
Date: __________________________
Packet Pg. 142 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 19 CITY OF BANNING
By: __________________________
Date: __________________________

CITY OF COLTON
By: __________________________
Date: __________________________

CITY OF RIVERSIDE
By: __________________________
Date: __________________________

CITY OF VERNON
By: __________________________
Date: __________________________

CALIFORNIA DEPARTMENT OF

WATER RESOURCES
By: __________________________
Date: __________________________

PACIFIC GAS AND ELECTRIC COMPANY
By: __________________________
Date: __________________________
Packet Pg. 143 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 19 CITY OF BANNING
By: __________________________
Date: __________________________

CITY OF COLTON
By: __________________________
Date: __________________________

CITY OF RIVERSIDE
By: __________________________
Date: __________________________

CITY OF VERNON
By: __________________________
Date: __________________________

CALIFORNIA DEPARTMENT OF

WATER RESOURCES
By: __________________________
Date: __________________________

PACIFIC GAS AND ELECTRIC COMPANY
By: __________________________
Date: __________________________
Packet Pg. 144 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 19 CITY OF BANNING
By: __________________________
Date: __________________________

CITY OF COLTON
By: __________________________
Date: __________________________

CITY OF RIVERSIDE
By: __________________________
Date: __________________________

CITY OF VERNON
By: __________________________
Date: __________________________

CALIFORNIA DEPARTMENT OF

WATER RESOURCES
By: __________________________
Date: __________________________

PACIFIC GAS AND ELECTRIC COMPANY
By: __________________________
Date: __________________________
Packet Pg. 145 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 19 CITY OF BANNING
By: __________________________
Date: __________________________

CITY OF COLTON
By: __________________________
Date: __________________________

CITY OF RIVERSIDE
By: __________________________
Date: __________________________

CITY OF VERNON
By: __________________________
Date: __________________________

CALIFORNIA DEPARTMENT OF

WATER RESOURCES
By: __________________________
Date: __________________________

PACIFIC GAS AND ELECTRIC COMPANY
By: __________________________
Date: __________________________
Packet Pg. 146 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 20 SAN DIEGO GAS AND ELECTRIC COMPANY
By: ____________________________
Date: ____________________________

SOUTHERN CALIFORNIA EDISON COMPANY
By: ____________________________
Date: ____________________________

WESTERN AREA POWER ADMINISTRATION
By: ___________________________*
Date: ____________________________
*/ Subject toa public involvement proceeding
and, after consideration of publiccomments,
adoption of this MOU, as may be modified
based on such public comments, by the
Secretary of Energy.

TRANSMISSION AGENCY OF NORTHERN CALIFORNIA
By: ____________________________
Date: ____________________________

LOS ANGELES DEPARTMENT OF WATER AND POWER
By: ____________________________
Date: ____________________________
Packet Pg. 147 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 20 SAN DIEGO GAS AND ELECTRIC COMPANY
By: ____________________________
Date: ____________________________

SOUTHERN CALIFORNIA EDISON COMPANY
By: ____________________________
Date: ____________________________

WESTERN AREA POWER ADMINISTRATION
By: ____________________________
Date: ____________________________

TRANSMISSION AGENCY OF

NORTHERN CALIFORNIA
By: ____________________________
Date: ____________________________

LOS ANGELES DEPARTMENT OF WATER

AND POWER
By: ____________________________
Date: ____________________________
Packet Pg. 148 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 20 MEMORANDUM OF UNDERSTANDING

CALIFORNIA-OREGON TRANSMISSION PROJECT

SAN DIEGO GAS AND ELECTRIC COMPANY
By: ____________________________
Date: ____________________________

SOUTHERN CALIFORNIA EDISON COMPANY
By: ____________________________
Date: ____________________________

WESTERN AREA POWER ADMINISTRATION
By: ____________________________
Date: ____________________________

TRANSMISSION AGENCY OF

NORTHERN CALIFORNIA
By: ____________________________
Date: ____________________________

LOS ANGELES DEPARTMENT OF WATER

AND POWER
By: ____________________________
Date: ____________________________
Packet Pg. 149 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 20 SAN DIEGO GAS AND ELECTRIC COMPANY
By: ____________________________
Date: ____________________________

SOUTHERN CALIFORNIA EDISON COMPANY
By: ____________________________
Date: ____________________________

WESTERN AREA POWER ADMINISTRATION
By: ____________________________
Date: ____________________________

TRANSMISSION AGENCY OF

NORTHERN CALIFORNIA
By: ____________________________
Date: ____________________________

LOS ANGELES DEPARTMENT OF WATER

AND POWER
By: ____________________________
Date: ____________________________
Packet Pg. 150 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 20 SAN DIEGO GAS AND ELECTRIC COMPANY
By: ____________________________
Date: ____________________________

SOUTHERN CALIFORNIA EDISON COMPANY
By: ____________________________
Date: ____________________________

WESTERN AREA POWER ADMINISTRATION
By: ____________________________
Date: ____________________________

TRANSMISSION AGENCY OF

NORTHERN CALIFORNIA
By: ____________________________
Date: ____________________________

LOS ANGELES DEPARTMENT OF WATER

AND POWER
By: ____________________________
Date: ____________________________
Packet Pg. 151 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) "Exhibit A"
Suggested Legislation
The Secretary of Energy is authorized to cause the
construction of a third AC transmission line from the Pacific Northwest to California in accordance with a Memorandum of Understanding submitted by the Secretary pursuant to Public Law 98-360.

Packet Pg. 152 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) "Exhibit B"
Suggested Report Language in Appropriations
Legislation in Both Houses or Conference
The Secretary has, pursuant to Public Law 98-360, reported a conceptual plan for construction of the line, which is described in detail in a Memorandum of Understanding signed by most of the privately and publicly owned utilities in California. The plan for development and operation of the new 500-kV AC line and associated facilities described in the Memorandum is in the public interest and will benefit the electric consumers of the Pacific Northwest and Southwest. Accordingly, the Secretary is instructed to work with the California utilities and proceed with development and operation of the Project in accordance with the Memorandum.

Packet Pg. 153 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3)

APPENDIX B

CALIFORNIA-OREGON

TRANSMISSION PROJECT

MEMORANDUM OF UNDERSTANDING
ANNEX
Packet Pg. 154 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 1 CONFORMED COPY 23 CALIFORNIA-OREGON TRANSMISSION PROJECT 4 MEMORANDUM OF UNDERSTANDING ANNEX 56 Among 78 City of Anaheim 9 City of Azusa 10 City of Banning
11 City of Colton
12 City of Riverside
13 City of Vernon
14 California Department of Water Resources
15 Los Angeles Department of Water and Power
16 Pacific Gas and Electric Company
17 San Diego Gas & Electric Company
18 Southern California Edison Company
19 Transmission Agency of Northern California
20 Western Area Power Administration
21 Carmichael Water District
22 El Dorado Hills Community Services District
23 San Juan Suburban Water District
24 Shasta Dam Area Public Utility District
25 Southern San Joaquin Valley Power Authority
26 Trinity County Public Utility District
27 28 March 19, 1986
Packet Pg. 155 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) i
1 TABLE OF CONTENTS 23 SECTION PAGE 45 RECITALS ……………………………………………………………………………… 2 6 1. DEFINITIONS AND CATEGORIES OF PARTICIPANTS…… 3 7 2. ASSUMPTION OF OBLIGATIONS AND RIGHTS ……………… 4 8 3. PROJECT MANAGEMENT ………………………………………………………… 5 9 4. MEMORANDUM OF UNDERSTANDING—PROJECT PARTICIPATION 10 SHARES …………………………………………………………………………………6
11 5. MEMORANDUM OF UNDERSTANDING—PROJECT FINANCING
12 RESPONSIBILITY …………………………………………………………………9
13 6. MEMORANDUM OF UNDERSTANDING—PROJECT OWNERSHIP
14 …………………………………………………………………………………………………… 10
15 7. RIGHTS OF THE CALIFORNIA DEPARTMENT OF WATER
16 RESOURCES …………………………………………………………………………… 15
17 8. PROJECT DEVELOPMENT AGREEMENT –PROJECT OWNERSHIP, 18 ENTITLEMENT TO TRANSFER CAPABILITY OF THE PROJECT
19 AND PROJECT FINANCING REPONSIBILITY ………………… 18
20 9. CHANGES IN OWNERSHIP, PARTICIPATION SHARE, AND
21 FINANCING RESPONSIBILITY ………………………………………… 20
22 10. REIMBURSEMENT OF CURRENT PARTICIPANTS …………… 20
23 11. CONSTRUCTIVE WITHDRAWAL …………………………………………… 22
24 12. ASSIGNMENT ………………………………………………………………………… 25
25 13. OPINIONS OF COUNSEL …………………………………………………… 27
26 14. SIGNATURE CLAUSE …………………………………………………………… 28
27 28
Packet Pg. 156 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 1 1 MEMORANDUM OF UNDERSTANDING ANNEX 2 CALIFORNIA-OREGON TRANSMISSION PROJECT 34 This Memorandum of Understanding Annex (“MOU Annex ”) shall
5 be effective as of February 22, 1986, and is entered into by the 6 City of Anaheim (Anaheim), City of Azusa (Azusa), City of Banning 7 (Banning), City of Colton (Colton), City of Riverside 8 (Riverside), City of Vernon (Vernon), collectively referred to as 9 "Southern California Public Agencies": California Department of 10 Water Resources (CDWR): Pacific Gas and Electric Company 11 (PG&E), San Diego Gas and Electric Company (SDG&E), and 12 Southern California Edison Company (SCE), collectively referred 13 to as "Investor-Owned Utilities": the Western Area Power 14 Administration (Western): the Transmission Agency of Northern 15 California (Agency), a joint powers agency composed of the Cities 16 of Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, 17 Redding, Roseville, Santa Clara, and Ukiah, the Plumas-Sierra 18 Rural Electric Cooperative, the Sacramento Municipal Utility 19 District, the Modesto Irrigation District, and the Turlock 20 Irrigation District: hereinafter sometimes referred to 21 individually as "Current Participant" and collectively as 22“Current Participants": the Los Angeles Department of Water and 23 Power (LADWP), representing itself and the Cities of Glendale, 24 Burbank, and Pasadena, a non-voting member of the Management 25 Committee: and Southern San Joaquin Valley Power Authority (South 26 San Joaquin), a joint powers agency: Trinity County Public 27 Utility District (Trinity): Shasta Dam Area Public Utility 28 District (Shasta): San Juan Suburban Water District (San Juan):
29 Packet Pg. 157 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 2 1 El Dorado Hills Community Services District (El Dorado); and 2 Carmichael Water District (Carmichael), hereinafter sometimes 3 referred to individually as “Additional Participant” and 4 collectively as “Additional Participants.” 56 RECITALS 7 WHEREAS, the Current Participants, along with LADWP, have 8 executed the Memorandum of Understanding, California-Oregon 9 Transmission Project dated December 19, 1984 ("MOU"), and the 10 Current Participants, except for CDWR, have executed a 11 Supplemental Letter Agreement to the MOU, the Interim Cost 12 Sharing Agreement effective April 1, 1985, and the Project 13 Development Agreement ("PDA") effective September 30, 198S, for 14 the purpose of developing the California-Oregon Transmission 15 Project ("Project"), and
16 WHEREAS, the Secretary of Energy, by his Memorandum of 17 Decision ("MOD") of February 7, 1985 approved the MOU subject to 18 the modifications and conditions set forth in the MOD, which MOD 19 has been clarified by the May 4, 1985 letter from the Acting 20 General Counsel of the Department of Energy: and
21 WHEREAS, certain non-federal public entities were, under 22 terms and conditions specified by Western in 50 Fed. Reg. 23 31912 (1985), allocated entitlements within the 3.125 per cent of 24 Project transfer capability reserved to them by the Secretary of 25 Energy, which non-federal public entities and their allocated 26 entitlements are set out at SO Fed. Reg. 42769 (1985), and 27 WHEREAS, such non-federal public entities, designated as 28 the Additional Participants, as one condition of receiving and 29 Packet Pg. 158 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 3 1 using such entitlement must sign an agreement with the Current 2 Participants by which they assume all appropriate obligations and 3 become entitled to all applicable rights and benefits of the 4 Project defined to date, 5 NOW, THEREFORE, the Additional Participants, the Current 6 Participants, and LADWP agree as follows: 78 1. DEFINITIONS AND CATEGORIES OF PARTICIPANTS 9 1.1 For purposes of this MOU Annex, a "Participant" is 10 an entity having the obligations, rights and
11 benefits of a Participant as that term is used in
12 the MOU, the Supplemental Letter Agreement, the
13 Interim Cost Sharing Agreement, the PDA and any
14 other agreement related to the Project which has
15 been signed by all or substantially all the
16Current Participants and Additional Participants.
17 1.2 A Nonutility Participant is any Additional
18 Participant which (l) is not a public electric
19 utility regulated under applicable state law or
20 the Federal Power Act or exempted from such
21 regulation by reason of being a public entity, or
22 (2) does not have public utility responsibilities
23 with regard to serving electric power to
24 customers. Nonutility Participants have the same
25 rights, obligations and benefits as Participants
26 except as provided in Section 2.2 below. As of
27 the effective date of this Agreement, the
28 Nonutility Participants are South San Joaquin, San
29 Packet Pg. 159 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 4 1 Juan and Carmichael. Nothing contained herein 2 shall preclude a Nonutility Participant from 3 changing its status at a later date, to no longer 4 be a Nonutility Participant. 56 2. ASSUMPTION OF OBLIGATIONS AND RIGHTS 7 2.l Each Additional Participant agrees to and is bound 8 hereby by all provisions, terms and conditions of 9 the MOU s modified by the MOD of the United 10 States Secretary of Energy, dated February 7,
11 1985, as interpreted by the letter of the United
12 States Department of Energy Acting General
13 Counsel, dated May 4, 1985, and as such MOU may be
14 further amended, the Supplemental Letter
15 Agreement, the Interim Cost Sharing Agreement and
16 the PDA, all as modified by this MOU Annex, as if
17 each Additional Participant had duly executed such
18 agreement.
19 2.2 In accordance with the May 4, 1985 letter from the 20 Acting General Counsel of the Department of
21 Energy, which provides in part that the Secretary
22 of Energy's MOD was not intended to impose a
23 precedent for wheeling to end-users, Section 2.4
24 of the MOU and Sections 34.3 and 34.4 of the PDA,
25 which implement Section 2.4 of the MOU, shall not
26 be applicable to Nonutility Participants.
27 Section 10.S of the MOU shall not be applicable to
28 any Nonutility Participant.
29 Packet Pg. 160 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 5 1 3. PROJECT MANAGEMENT 2 The following is substituted for and replaces Section 4.1 3 Of the MOU: 4 4.1 A Management Committee, chaired by a 5 representative of the Agency, is hereby formed to 6 oversee and approve the planning, design, 7 construction, operation and maintenance of the 8 Project. Each Participant in the Project shall 9 have representation on the Management Committee, 10 with the members of the Agency being represented
11 by the Agency, and the Southern California Public
12 Agencies being represented by one Participant of
13 their choice, and each Additional Participant
14 being jointly represented by one Additional
15 Participant, provided that any Additional
16 Participant may designate instead a Current
17 Participant's Management Committee Representative
18 to represent it on the Management Committee. All
19 actions or decisions by the Management Committee
20 shall be by agreement of at least 75 percent
21 interest of the Participants entitled to vote
22 based on Project Participation shares between the
23 California-Oregon border area and Tesla
24 Substation, as expressed in Section 5. A
25 Management Committee Representative who represents
26 more than one Participant shall separately vote
27 the interests of each Participant represented.
28 Subcommittees shall be formed as needed to address
Packet Pg. 161 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 1 Packet Pg. 162 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 6 1 specific aspects of the Project. CDWR, prior to 2 exercise of rights under Section 8.1, and LADWP shall 3 also have non-voting representation on the Management 4 Committee. Each Participant, including each of the 5 Southern California Public Agencies and each of the 6 Additional Participants, and each of the members of 7 the Agency, shall be given advance notification of all 8 meetings of the Management Committee and may attend 9 meetings." 10 11 4. MEMORANDUM OF UNDERSTANDING--PROJECT PARTICIPATION SHARES 12 4.1 The following is substituted for and replaces
13 Section 5.1 of the MOU:
14“5.1 The Participants shall be entitled to
15 Project transfer capability between the
16 California-Oregon border area and Tesla
17 Substation prior to January 1, 2005, in the
18 following proportions:
195.1.1 The Agency shall be entitled
20 to 42.2916 percent;
21 5.1.2 The Investor-Owned Utilities
22 shall be entitled to 40.7837
23 percent;
24 5.1.3 The Southern California Public
25 Agencies shall be entitled to
26 7.5497 percent;
27 5.1.4 Western for DOE laboratories
28 and federal wildlife refuges
29 30
Packet Pg. 163 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 7 1 shall be entitled to 6.2500 2 percent; 3 5.1.5 South San Joaquin shall be 4 entitled to 2.0625 percent; 5 5.1.6 Trinity shall be entitled to 6 .3125 percent; 7 5.1.7 Shasta shall be entitled to 8 .4375 percent; 9 5.1.8 San Juan shall be entitled to 10 .0625 percent;
11 5.1.19 El Dorado shall be entitled to
12 .1875 percent;
13 5.1.10 Carmichael .0625 percent.”
14 4.2 The following is substituted for and replaces
15 Section 5.2 of the MOU:
16 "5.2 If CDWR exercises its rights and
17 purchases its share of the Project in
18 accordance with Section 8.1 of the MOU,
19 then the Participants shall be entitled
20 to Project transfer capability between
21 the California-Oregon border area and
22 Tesla Substation commencing on
23 January 1, 2005, in the following
24 proportions:
25 5.2.l The Agency shall be entitled
26 to 39.4690 percent;
27 28
29 Packet Pg. 164 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 8 1 5.2.2 The Investor-Owned Utilities
2 shall be entitled to 38.0673 3 percent; 4 5.2.3 The Southern California Public 5 Agencies shall be entitled to 6 7.0470 percent; 7 5.2.4 Western for DOE laboratories 8 and federal wildlife refuges 9 shall be entitled to 6.2500 10 percent;
11 5.2.5 South San Joaquin shall be
12 entitled to 2.0625 percent;
13 5.2.6 Trinity shall be entitled to
14 .3125 percent;
15 5.2.7 Shasta shall be entitled to
16 .4375 percent;
17 5.2.8 San Juan shall be entitled to
18 .0625 percent;
19 5.2.9 El Dorado shall be entitled to
20 .1875 percent;
21 5.2.10 Carmichael shall be entitled
22 to .0625 percent;
23 5.2.11 The CDWR shall be entitled to
24 6.0417 percent."
25 26
27 28
29 Packet Pg. 165 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 9 1 5. MEMORANDUM OF UNDERSTANDING--PROJECT FINANCING
2 RESPONSIBILITY
3 5.1 The following is substituted for and replaces
4 Section 6.1 of the MOU:
5 "6.1 Prior to the effective date of any
6 election by CDWR to exercise its rights
7 in accordance with Section 8.1 of the
8 MOU and unless otherwise agreed in
9 accordance with Section 6.3 of the MOU,
10 the Participants, shall be responsible
11 for financing t e Project and
12 betterments in the following
13 proportions:
14 6.1.1 The Agency, 45. 10 percent:
15 The Investor-Owned Utilities,
16 43.5026 percent:
17 6.1.2 The Southern California Public
18 Agencies, 8.0530 percent;
19 6.1.3 South San Joaquin, 2.2000
20 percent;
21 6.1.4 Trinity, .3333 percent;
22 6.1.5 Shasta, .4667 percent;
23 6.1.6 San Juan, .0667 percent;
24 6.1.7 El Dorado, .2000 percent;
25 6.1.8 Carmichael, .0667 percent."
26 5.2 The following is substituted for and replaces
27 Section 6.2 of the MOU:
28 29
Formatted: Spanish (Spain)
Packet Pg. 166 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 10 1“6.2 Subsequent to the effective date of
2 election by CDWR to exercise its rights 3 in accordance with Section 8.1 of the 4 MOU, and unless otherwise agreed in 5 accordance with Section 6.3 of the MOU, 6 the Participants, shall be responsible 7 for any capital betterments for the 8 Project in the following proportions: 9 6.2.1 The Agency, 42.1002 percent; 10 6.2.2 The Investor-Owned Utilities,
11 40.6052 percent;
12 6.2.3 The Southern California Public
13 Agencies, 7.5168 percent;
14 6.2.4 The CDWR, 6.4444 percent;
15 6.2.5 South San Joaquin, 2.2000
16Percent;
17 6.2.6 Trinity, .3333 percent;
18 6.2.7 Shasta, .4667 percent;
19 6.2.8 San Juan, .0667 percent;
20 6.2.9 El Dorado, .2000 percent;
21 6.2.10 Carmichael, .0667 percent.”
22 23 6. MEMORANDUM OF UNDERSTANDING--PROJECT OWNERSHIP 24 6.1 The following is substituted for and replaces
25 Section 7.1 of the MOU:
26“7.1 Except as otherwise agreed by the
27 Participants in accordance with
28 Section 7.6 of the MOU, the Project,
29 Packet Pg. 167 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 11 1 other than the upgraded Western 2 facilities, shall be owned in the 3 following proportions prior to 4 January 1, 2005, and also thereafter, 5 if CDWR does not exercise its right in 6 accordance with Section 8.1 of the MOU: 7 7.1.1 The Agency, 45. 10 percent; 8 7.1.2 The Investor-Owned Utilities, 9 43.5026 percent:
10 7.1.3 The Southern California Public
11 Agencies, 8.0530 percent;
12 7.1.4 South San Joaquin, 2.2000
13Percent;
14 7.1.5 Trinity, .3333 percent;
15 7.1.6 Shasta, .4667 percent;
16 7.1.7 San Juan, .0667 percent;
17 7.1.8 El Dorado, .2000 percent;
18 7.1.9 Carmichael, .0667 percent."
19 6.2 The following is substituted for and replaces
20 Section 7.2 of the MOU:
21 "7.2 If CDWR exercises its rights to
22 purchase Project transfer capability in
23 accordance with Section 8.1 of the MOU,
24 then except as otherwise agreed by the
25 Participants in accordance with
26 Section 7.6 of the MOU, the Project,
27 other than the upgraded Western
28 facilities, shall be owned in the
29 Formatted: Spanish (Spain)
Packet Pg. 168 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 12 1 following proportions after January 1, 2 2005: 3 7.2.1 The Agency, 42.1002 percent: 4 7.2.2 The Investor-Owned Utilities, 5 40.6052 percent: 6 7.2.3 The Southern California Public 7 Agencies, 7.5168 percent: 8 7.2.4 The CDWR, 6.4444 percent: 9 7.2.5 South San Joaquin, 2.2000 10Percent;
11 7.2.6 Trinity, .3333 percent:
12 7.2.7 Shasta, .4667 percent:
13 7.2.8 San Juan, .0667 percent:
14 7.2.9 El Dorado, .2000 percent:
15 7.2.10 Carmichael, .0667 percent."
16 6.3 The following is substituted for and replaces
17Section7.3 of the MOU:
18 "7.3 Unless prohibited by law or unless
19 otherwise agreed in accordance with
20 Section 7.6 of the MOU, the portion of
21 the upgraded Western facilities not
22 owned by Western shall be owned in the
23 following proportions prior to
24 January 1, 2005:
25 7.3.1 The Agency, 45.1110 percent,
26(approximately 677/1500);
27 28
29 Packet Pg. 169 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 13 1 7.3.2 The Investor-Owned Utilities,
2 43.5026 percent,-
3 (approximately 652/1500); 4 7.3.3 The Southern California Public 5 Agencies, 8.0530 percent 6 (approximately 121/1500); 7 7.3.4 South San Joaquin, 2.200 8 percent (approximately 9 33/1500); 10 7.3.5 Trinity, .3333 percent
11 (approximately 5/1500);
12 7.3.6 Shasta, .4667 percent
13 (approximately 7/1500);
14 7.3.7 San Juan, .0667 percent
15 (approximately 1/1500);
16 7.3.8 El Dorado, .2000 percent
17 (approximately 3/1500);
18 7.3.9 Carmichael, .0667 percent
19 (approximately 1/1500).
20 The Participants recognize that the
21 facilities to be owned by Western shall
22 be determined in accordance with the
23 provisions of the MOU, approved by the
24 Secretary of Energy by the MOD, which
25 MOD was clarified by the May 4, 1985
26 letter from the Acting General Counsel
27 of the Department of Energy. Further
28 negotiations of the particulars of the
29 Formatted: Spanish (Spain)
Packet Pg. 170 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 14 1 ownership of facilities by Western will 2 be required as engineering of the 3 Project progresses.” 4 6.4 The following is substituted for and replaces 5 Section 7.4 of the MOU: 6 "7.4 Unless prohibited by law or unless 7 otherwise agreed in accordance with 8 Section 7.6 of the MOU, the portion of 9 the upgraded Western facilities not 10 owned by Western shall be owned in the
11 following proportions on and after
12 January 1, 2005, if CDWR exercises its
13 rights to purchase in accordance with
14 Section 8.1 of the MOU:
15 7.4.1 The Agency, 42.1002 percent
16 (approximately 631/1500);
17 7.4.2 The Investor-owned Utilities,
18 40.6052 percent (approximately
19 609/1500);
20 7.4.3 The Southern California Public
21 Agencies,
22 7.5168 percent
23 (approximately 3/1500);
24 7.4.4 The CDWR, 6.4444 percent
25 (approximately 97/1500);
26 7.4.5 South San Joaquin, 2.200
27 percent (approximately
28 33/1500);
29 Packet Pg. 171 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 15 1 7.4.6 Trinity, .3333 percent
2 (approximately 5/1500);
3 7.4.7 Shasta, .4667 percent
4 (approximately 7/1500)
5 7.4.8 San Juan, .0667 percent
6 (approximately 1/1500);
7 7.4.9 El Dorado, .2000 percent
8 (approximately 3/1500)
9 7.4.10 Carmichael, .0667 percent
10 (approximately 1/1500).
11 The Participants recognize that the
12 Facilities to be owned by Western shall
13 Be determined in accordance with the
14 Provisions of the MOU, approved by the
15 Secretary of Energy by the MOD, which
16 MOD was clarified by the May 4, 1985
17 letter from the Acting General Counsel
18 of the Department of Energy. Further
19 negotiation of the particulars of the
20 ownership of facilities by Western will
21 be required as engineering of the
22 Project progresses.”
23 24 7. RIGHTS OF THE CALIFORNIA DEPARTMENT OF WATER RESOURCES 25 7.1 The following is substituted for and replaces
26 Section 8.1 of the MOU:
27 "8.1 Effective January 1, 2005, CDWR will
28 have a right to buy pro rata from all
29 Formatted: Spanish (Spain)
Packet Pg. 172 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 16 1 current Participants, except Western, 2 6.25 percent, as such percentage is 3 adjusted downward to accommodate the 4 allocation to Additional Participants, 5 of the Project as the Project exists as 6 of the date CDWR exercises its right. 7 Unless another price is mutually agreed 8 to by the selling Current Participant 9 and CDWR, COWR shall pay each selling 10 Current Participant the original
11 construction cost (including the
12 original construction cost associated
13 with Western’s entitlement), including
14 the interest it incurred during
15 construction, plus the original cost of
16 capital improvements and betterments
17 (including the original cost of capital
18 improvements and betterments associated
19 with Western’s entitlement), including
20 interest it incurred during
21 construction, allocable to the
22 respective pro rata share of the
23 Project that the Current Participant
24 is selling to CDWR. Within one year
25 after the Project is energized, each
26Current Participant shall provide CDWR
27 with a statement of the original
28 construction cost (including the
29 Packet Pg. 173 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 17 1 original construction cost associated 2 with Western's entitlement), including 3 the interest it incurred during 4 construction for its share of the 5 Project so that CDWR can determine the 6 cost it shall be obligated to pay such 7 current Participant if it exercises its 8 rights under this Section 8.1. Within 9 one year after any capital improvements 10 or betterments are completed prior to
11 the date of exercise by CDWR, each
12 Current Participant shall provide COWR
13 with a statement of construction costs
14 incurred for such capital improvements,
15 or betterments (including the original
16 construction cost of capital
17 improvements and betterments associated
18 with Western’s entitlement) including
19 interest incurred during construction
20 with respect to its share, so that CDWR
21 can determine the cost it shall be
22 obligated to pay such current
23 Participant if it exercises its rights
24 under this Section 8.1"
25 Packet Pg. 174 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 18 1 8. PROJECT DEVELOPMENT AGREEMENT--PROJECT OWNERSHIP, 2 ENTITLEMENT TO TRANSFER CAPABILITY OF THE PROJECT AND 3 PROJECT FINANCING RESPONSIBILITY
4 8.1 The following is substituted for and replaces
5 Appendix F of the PDA:
6 "Appendix F
7 Project Ownership and Entitlements
8 (Expressed in Percentages)
9 Entitlement to
10 Transfer Capability Ownership
of the Project1/ Interest2 11 /
12 TANC 42.2916 45.1110
13 14 PG&E 20.3918 21.7513
15 SDG&E 2.8549 3.0452
16 SCE 17.5370 13.7061
17 18 Anaheim 3.0198 3.2212
19 Azusa 0.3020 0.3221
20 Banning 0.1510 0.1611
21 Colton 0.3020 0.3221
22 Riverside 2.0762 2.2146
23 Vernon 1.6987 1.8119
24 25 Western 6.2500 0.0000
26 South San Joaquin 2.0625 2.2000
27 Trinity 0.3125 0.3333
28 Shasta 0.4375 0.4667
Formatted: Portuguese (Brazil)
Formatted: Spanish (Spain)
Packet Pg. 175 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 19 1 San Juan 0.0625 0.0667
2 El Dorado 0.1875 0.2000
3 Carmichael 0.0625 0.0667
4 100.0000 100.0000
5 6 1/ Between California-Oregon border area and Tesla Substation 7 2/ Excluding facilities owned by Western”
8 9 8.2 The following is substituted for and replaces
10 Section 5.1 of the PDA:
11 “5.1 Unless the following percentages are
12 otherwise modified in accordance with
13 Section 5.4 each Participant shall be
14 responsible for paying its share of the
15 costs of Project Development Work in
16 the following Cost Sharing Percentages:
17 TANC 45.1110
18 Anaheim 3.2212
19 Azusa 0.3221
20 Banning 0.16
21 Colton 0.3221
22 Riverside 2.2146
23 Vernon 1.8119
24 PG&E 21.7513
25 SCE 18.7061
26 SDG&E 3.0452
27 Western 0.0000
28 South San Joaquin 2.2000
29 Formatted: Portuguese (Brazil)
Packet Pg. 176 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 20 1 Trinity 0.3333
2 Shasta 0.4667
3 San Juan 0.0667
4 El Dorado 0.2000
5 Carmichael 0.0667
6 100.0000”
7 8 9. CHANGES IN OWNERSHIP, PARTICIPATION SHARE, AND FINANCING 9 RESPONSIBILITY
10 9.1 Sections 4, S, 6, 7, and 8 of this MOU Annex shall 11 whenever necessary be modified by restating
12 percentages to conform to changes in Project
13 Participation Share, Project ownership and Project
14 Financing Responsibility, as these terms are used
15 in the MOU, in accordance with the provisions of
16 the PDA or other agreements among the Participants
17 which provide for such changes.
18 9.2 Each Participant may assign its rights and
19 obligations in the Project in accordance with
20 Section 17 of the PDA and any applicable provision
21 of the Participation Agreement contemplated in
22 Sections 2.4 and 11.4 of the PDA, including the
23 layoff of Project transfer capability rights in
24 accordance with Section 10.4 of the MOU.
25 26 10. REIMBURSEMENT OF CURRENT PARTICIPANTS
27 10.1 Not later than ten (10) days after the effective 28 date of this MOU Annex, each Additional
29 Formatted: Spanish (Spain)
Packet Pg. 177 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 21 1 Participant shall reimburse each Current 2 Participant, except CDWR, for its share of a 3 payments made and due and payable to the Project 4 Manager by each Current Participant as of the 5 effective date of this MOU Annex for Project 6 Development Work in accordance with the Interim 7 Cost Sharing Agreement and the Project Development 8 Agreement plus interest in accordance with 9 Section 10.3 below. 10 10.2 Each Additional Participant's share of such costs 11 shall be that amount that each Additional
12 Participant would have paid to the Project Manager
13 for Project development work had that Additional
14 Participant been an original signator to the MOU
15 and paid all amounts due and payable under the
16 Interim Cost Sharing Agreement and the Project
17 Development Agreement, based upon its financing
18 responsibility percentage.
19 10.3 The amount to be reimbursed by each Additional
20 Participant to each Current Participant in
21 accordance with this Section 10, shall include an
22 interest charge assessed at an annual rate of
23 interest, compounded monthly, equal to the lesser
24 of (a) the applicable first of the month reference
25 rate, or successor, of the Bank of America N.T. &
26 S.A., San Francisco, California, corresponding to
27 the period for which reimbursement is made; or (b)
28 the maximum interest rate permitted by law. Such
29 Packet Pg. 178 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 22 1 interest shall .be charged against the amount to be 2 reimbursed from the time the Current Participant 3 made its original payment to the time such 4 reimbursement is paid by the Additional 5 Participant. 6 10.4 No later than the effective date of this 7 Agreement, the Project Manager shall compute the 8 amount of funds to be reimbursed by each 9 Additional Participant in accordance with the 10 provisions of this Section 10 and shall provide
11 the results of this computation to each Current
12 Participant and each Additional Participant. The
13 Project Manager shall issue a cash call to the
14 Additional Participants on behalf of the Current
15 Participants to whom reimbursements are to be made
16 and shall collect and disburse those funds
17 collected in accordance with this Section 10. In
18 no case shall the Project Manager, acting in its
19 capacity as such, be responsible on behalf of an
20 Additional Participant for any reimbursement owed
21 to any Current Participant in accordance with this
22 Section 10.
23 24 11. CONSTRUCTIVE WITHDRAWAL
25 11.1 Should any Additional Participant fail to duly
26 sign this MOU Annex within ten (10) days after its
27 effective date, fail to reimburse Current
28 Participants in accordance with Section 10, or
29 Packet Pg. 179 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 23 1 fail to meet any condition imposed by Western in 2 its stated allocation criteria (SO Fed. Reg. 3 31912) within the period established by Western, 4 that Additional Participant shall be deemed to 5 have withdrawn from the Project and that 6 Additional Participant's Share, as defined in the 7 PDA, shall be revoked and placed in an allocation 8 pool for reallocation to the other Additional 9 Participants or the Current Participants (except 10 Western) in a manner consistent with Western'&
11 stated criteria (SO Fed. Reg. 31912). Should any
12 portion of that additional Participant's
13 allocation not be reallocated to the other
14 Additional Participants, such unallocated portion
15 shall revert to the Current Participants and shall
16 be made available to each of them in a manner
17 consistent with Section 13 of the PDA or
18 appropriate provisional of the Participation
19 Agreement, whichever is applicable. Any right to
20 reimbursement for funds paid toward the
21 development and operation of the Project shall be
22 as defined in the PDA or Participation Agreement,
23 as applicable.
24 11.2 The following is substituted for and replaces
25 Section 13.4 of the PDA:
26 "13.4 If the amount of the withdrawing
27 Participant's Share voluntarily assumed
28 by the non-withdrawing Participants is
29 Packet Pg. 180 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 24 1 less than 100 percent of the 2 withdrawing Participant's Share, each 3 non-withdrawing Participant shall 4 assume its respective portion of the 5 balance of the withdrawing 6 Participant's Share, in an amount 7 proportionate to that which its Cost 8 Sharing Percentage bears to the total 9 Cost Sharing Percentages of 10 non-withdrawing Participants identified
11 in Section 5.1, provided that no
12 Participant shall be obligated in total
13 for more that 1.15 times its Cost
14 Sharing Percentage as of the effective
15 date of this Agreement. A Nonutility
16 Participant shall not be obligated to
17 assume any portion of the withdrawing
18 Participant’s Share.”
19 11.3 The following is added as a new Section 13.12 to 20 the PDA:
21“13.12 If an Additional Participant withdraws
22 from the Project in accordance with
23 Section 13, or is found in default in
24 accordance with Section 20, then such
25 Additional Participant's allocation
26 shall be revoked and be made
27 available to the non-withdrawing
28 29
Packet Pg. 181 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 25 1 Participants (except Western) on a pro 2 rata basis. 34 12. ASSIGNMENT 5 12. The following is substituted for and replaces 6 Section 17.1 of the PDA: 7 "17.1 A Participant may assign or transfer 8 any right or interest in this 9 Agreement, in whole or in part, only 10 after obtaining the written consent of
11 the other Participants, which consent
12 shall not be unreasonably withheld;
13 provided that a Participant may
14 withhold consent to any proposed
15 assignment or transfer either (1) to an
16 entity or association which is not
17 CDWR, Western, or a public electric
18 utility regulated under applicable
19 state law or the Federal Power Act or
20 exempted from such regulation by reason
21 of being a public entity, or (2) to an
22 entity or association which does not
23 have public utility responsibilities
24 with regard to serving electric power
25 to customers. A Participant shall not
26 withhold consent to any assignment or
27 transfer between Participants allocated
28 Project transfer capability by Western
29 Packet Pg. 182 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 26 1 as set forth in 50 Fed. Reg. 42769 2 (1985) solely because that entity is a 3 Nonutility Participant, provided that 4 such assignment or transfer concerns 5 part or all of the 3.125 percent of 6 Project transfer capability allocated 7 by Western and interests attendant 8 thereto, and no other interest in the 9 Project. Consent to a proposed 10 assignment to a joint powers agency
11 which is a Participant shall not be
12 withheld solely because that entity is
13 a joint powers agency. No Participant
14 shall bring, initiate or amend,
15 directly or indirectly including by
16 means of cross-complaint or other
17 affirmative allegation, an action or
18 proceeding before a court or an
19 administrative agency against another
20 Participant to contest the withholding
21 of consent by such Participant in
22 accordance with clauses (1) or (2) of
23 this Section 17.l or the reasons
24 therefor or the validity of this
25 Section 17.1, other than a dispute
26 regarding the factual application of
27 such clauses. The withholding of
28 consent by a Participant in accordance
29 Packet Pg. 183 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 27 1 with clauses (1) or (2) of this 2 Section 17.1 shall not indicate 3 approval or disapproval by any other 4 Participant of such withholding." 56 13. OPINIONS OF COUNSEL 7 The following is substituted for and replaces Section 11.3 8 of the MOU: 9 “11.3 Contracts among the Participants shall 10 then be negotiated to implement these
11 principles. As a condition of
12 execution of any contracts implementing
13 this MOU each Participant shall furnish
14 the other Participants with a written
15 Opinion of Counsel in which it is
16 represented that said Participant has
17 the authority to enter into such
18 contracts and to be bound by the terms
19 and conditions thereof. In the case of
20 the Agency, each major member agency
21 thereof shall furnish such Opinion of
22 Counsel. In the case of an Additional
23 Participant that is a joint powers
24 agency, the individual member agencies
25 of that joint powers agency shall not
26 be obligated to provide such Opinions
27 of Counsel but the joint powers agency
28 29
Packet Pg. 184 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 28 1 itself shall provide such Opinion of 2 Counsel of behalf of the agency." 34 14. SIGNATURE CLAUSE 5 The signatories of this MOU Annex represent they have 6 been appropriately authorized to enter into this HOU Annex on 7 behalf of the entity for whom they sign. This MOU Annex may be 8 executed in counterparts. 9 10 CITY OF ANAHEIM
11 By: _________________________
12 Name: _________________________
13 Title: _________________________
14 Date: _________________________
15 16 CITY OF AZUSA
17 By: _________________________
18 Name: _________________________
19 Title: _________________________
20 Date: _________________________
21 22 CITY OF BANNING
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 185 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 29 1 itself shall provide such Opinion of 2 Counsel of behalf of the agency." 34 14. SIGNATURE CLAUSE 5 The signatories of this MOU Annex represent they have 6 been appropriately authorized to enter into this HOU Annex on 7 behalf of the entity for whom they sign. This MOU Annex may be 8 executed in counterparts. 9 10 CITY OF ANAHEIM
11 By: _________________________
12 Name: _________________________
13 Title: _________________________
14 Date: _________________________
15 16 CITY OF AZUSA
17 By: _________________________
18 Name: _________________________
19 Title: _________________________
20 Date: _________________________
21 22 CITY OF BANNING
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 186 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 30 1 itself shall provide such Opinion of 2 Counsel of behalf of the agency." 34 14. SIGNATURE CLAUSE 5 The signatories of this MOU Annex represent they have 6 been appropriately authorized to enter into this HOU Annex on 7 behalf of the entity for whom they sign. This MOU Annex may be 8 executed in counterparts. 9 10 CITY OF ANAHEIM
11 By: _________________________
12 Name: _________________________
13 Title: _________________________
14 Date: _________________________
15 16 CITY OF AZUSA
17 By: _________________________
18 Name: _________________________
19 Title: _________________________
20 Date: _________________________
21 22 CITY OF BANNING
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 187 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 31 * Since CDWR is not a party to the Project Development Agreement {PDA), CDWR's approval of this OU Annex is not intended to express either approval or disapproval of
Sections 8, 11.2, 11.3 and 12, which do nothing other than amend certain sections of the PDA.
1CALIFORNIA DEPARTMENT OF
2 WATER RESOURCES 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 CARMICHAEL WATER DISTRICT 9 By: _________________________ 10 Name: _________________________
11 Title: _________________________
12 Date: _________________________
13 14 CITY OF COLTON
15 By: _________________________
16 Name: _________________________
17 Title: _________________________
18 Date: _________________________
19 20 EL DORADO HILLS COMMUNITY
21 SERVICES DISTRICT
22 By: _________________________
23 Name: _________________________
24 Title: _________________________
25 Date: _________________________
26 27
28 Packet Pg. 188 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 32 1CALIFORNIA DEPARTMENT OF
2 WATER RESOURCES 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 CARMICHAEL WATER DISTRICT 9 By: _________________________ 10 Name: _________________________
11 Title: _________________________
12 Date: _________________________
13 14 CITY OF COLTON
15 By: _________________________
16 Name: _________________________
17 Title: _________________________
18 Date: _________________________
19 20 EL DORADO HILLS COMMUNITY
21 SERVICES DISTRICT
22 By: _________________________
23 Name: _________________________
24 Title: _________________________
25 Date: _________________________
26 27
28 Packet Pg. 189 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 33 1CALIFORNIA DEPARTMENT OF
2 WATER RESOURCES 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 CARMICHAEL WATER DISTRICT 9 By: _________________________ 10 Name: _________________________
11 Title: _________________________
12 Date: _________________________
13 14 CITY OF COLTON
15 By: _________________________
16 Name: _________________________
17 Title: _________________________
18 Date: _________________________
19 20 EL DORADO HILLS COMMUNITY
21 SERVICES DISTRICT
22 By: _________________________
23 Name: _________________________
24 Title: _________________________
25 Date: _________________________
26 27
28 Packet Pg. 190 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 34 1CALIFORNIA DEPARTMENT OF
2 WATER RESOURCES 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 CARMICHAEL WATER DISTRICT 9 By: _________________________ 10 Name: _________________________
11 Title: _________________________
12 Date: _________________________
13 14 CITY OF COLTON
15 By: _________________________
16 Name: _________________________
17 Title: _________________________
18 Date: _________________________
19 20 EL DORADO HILLS COMMUNITY
21 SERVICES DISTRICT
22 By: _________________________
23 Name: _________________________
24 Title: _________________________
25 Date: _________________________
26 27
28 Packet Pg. 191 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 35 DEPARTMENT OF WATER AND POWER

OF THE CITY OF LOS ANGELES
by

BOARD OF WATER AND POWER COMMISSIONERS

OF THE CITY OF LOS ANGELES
By ____________________________________
and ___________________________________
Secretary
1 DWP No. 10259A 2345 As a party to the MOU but which is not a party 6 to any other Project Agreement, the Los Angeles Department of 7 Water and Power (LADWP) regards Sections 8, 9.2, 10, 11 and 12 8 of the MOU Annex, as having no involvement with LADWP. LADWP 9 further considers Section 3 of the MOU Annex as being the only 10 section of this Agreement which involves LADWP's interests in 11 the amended MOU, which interests are limited to those 12 expressed in Section 4.1 and 4.4 of the MOU.
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
Packet Pg. 192 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 36 1 LOS ANGELES DEPARTMENT OF 2 WATER AND POWER 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 PACIFIC GAS AND ELECTRIC 9 COMPANY 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 CITY OF RIVERSIDE
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 SAN DIEGO GAS & ELECTRIC
22 COMPANY
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 193 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 37 1 LOS ANGELES DEPARTMENT OF 2 WATER AND POWER 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 PACIFIC GAS AND ELECTRIC 9 COMPANY 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 CITY OF RIVERSIDE
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 SAN DIEGO GAS & ELECTRIC
22 COMPANY
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 194 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 38 1 LOS ANGELES DEPARTMENT OF 2 WATER AND POWER 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 PACIFIC GAS AND ELECTRIC 9 COMPANY 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 CITY OF RIVERSIDE
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 SAN DIEGO GAS & ELECTRIC
22 COMPANY
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 195 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 39 1 SAN JUAN SUBURBAN WATER 2 DISTRICT 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 SHASTA DAM AREA PUBLIC 9 UTILITY DISTRICT 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 SOUTHERN CALIFORNIA EDISON
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 SOUTHERN SAN JOAQUIN VALLEY
22 POWER AUTHORITY
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 196 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 40 1 SAN JUAN SUBURBAN WATER 2 DISTRICT 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 SHASTA DAM AREA PUBLIC 9 UTILITY DISTRICT 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 SOUTHERN CALIFORNIA EDISON
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 SOUTHERN SAN JOAQUIN VALLEY
22 POWER AUTHORITY
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 197 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 41 1 SAN JUAN SUBURBAN WATER 2 DISTRICT 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 SHASTA DAM AREA PUBLIC 9 UTILITY DISTRICT 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 SOUTHERN CALIFORNIA EDISON
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 SOUTHERN SAN JOAQUIN VALLEY
22 POWER AUTHORITY
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 198 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 42 1 SAN JUAN SUBURBAN WATER 2 DISTRICT 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 SHASTA DAM AREA PUBLIC 9 UTILITY DISTRICT 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 SOUTHERN CALIFORNIA EDISON
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 SOUTHERN SAN JOAQUIN VALLEY
22 POWER AUTHORITY
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 199 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 43 1 TRANSMISSION AGENCY OF 2 NORTHERN CALIFORNIA 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 TRINITY COUNTY PUBLIC 9 UTILITY DISTRICT 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 CITY OF VERNON
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 WESTERN AREA POWER
22 ADMINISTRATION
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 200 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 44 1 TRANSMISSION AGENCY OF 2 NORTHERN CALIFORNIA 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 TRINITY COUNTY PUBLIC 9 UTILITY DISTRICT 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 CITY OF VERNON
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 WESTERN AREA POWER
22 ADMINISTRATION
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 201 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 45 1 TRANSMISSION AGENCY OF 2 NORTHERN CALIFORNIA 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 TRINITY COUNTY PUBLIC 9 UTILITY DISTRICT 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 CITY OF VERNON
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 WESTERN AREA POWER
22 ADMINISTRATION
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 202 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 46 1 TRANSMISSION AGENCY OF 2 NORTHERN CALIFORNIA 3 By: _________________________ 4 Name: _________________________ 5 Title: _________________________ 6 Date: _________________________ 78 TRINITY COUNTY PUBLIC 9 UTILITY DISTRICT 10 By: _________________________
11 Name: _________________________
12 Title: _________________________
13 Date: _________________________
14 15 CITY OF VERNON
16 By: _________________________
17 Name: _________________________
18 Title: _________________________
19 Date: _________________________
20 21 WESTERN AREA POWER
22 ADMINISTRATION
23 By: _________________________
24 Name: _________________________
25 Title: _________________________
26 Date: _________________________
27 28
Packet Pg. 203 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 47 1 APPENDIX
Packet Pg. 204 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) C-1
Appendix C
Participation Percentages
Current N to S
New (Entitlement and Scheduling)
TANC
Member
Participati
onMember
Percentage
Minimum
MW
ShareMember
MW Entitlement
(North to South)
Maximum
MW
ShareScheduling
Rights
(North to South)
Desired
MW AmountScheduling Rights %
(North to South)
SMUD 37.8074% 569.2140 558 37.7793%
MID 23.0546% 347.1014 341 23.0873%
TID 17.1458% 258.1407 253 17.1293%
Santa Clara 9.8108% 147.7077 145 9.8172%
Redding 10.0398% 151.1555 148 10.0203%
Roseville 1/ 2/.1416% 3/32.2431 4/32 5/2.1666%
City of Alameda 1.7130.0000% 1.333- 11.59- 20.000.0000% 12.00 City of
Healdsburg

0.3570000% - - 0.2670000% 2.42 4.00 4.00
City of Lodi 1.6860.0000% 1.890- 11.41- 28.350.0000% 22.82 City of Lompoc 0.4080000% - - 0.1840000% 2.76 2.76 2.76 City of Palo Alto 4.2540.0000% 4.000- 28.79- 60.000.0000% 28.79 Plumas-Sierra
Rural Electric
Cooperative

0.3580000% - - 0.1610000% 2.42 2.42 2.42
City of Ukiah 0.4690000% - - 0.2110000% 3.17 3.17 3.17
Total 100.0000000% 1,505.5625 1,477 100.0000000% 676.67 1500.00 1265.60 (A) (B) (C) (D) (E)
Modesto Irrigation
District 19.200 21.120 129.92 316.77 255.00
City of Redding 6.400 8.281 43.31 124.22 100.00
City of Roseville 1.455 2.295 9.85 34.43 27.64
Sacramento
Municipal Utility
District

30.600 27.133 207.05 407.00 407.00
City of Santa
Clara

20.200 20.703 136.69 310.55 250.00
Turlock Irrigation
District 12.900 12.422 87.29 186.33 150.00
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Packet Pg. 205 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) C
-1
Scheduling Rights include the 29MW layoff to WAPA
COTP
Participants
Participant
Percentage
Participant MW
Entitlement (North
to South)
MW Scheduling
Rights
(North to South)
MW Scheduling
Rights%
(North to South)
TANC 88.5625% 1,505.5625 1,477 86.8824%
Western 9.3750% 159.3750 188 11.0588%
PG&E 2.0625% 35.0625 35 2.0588%
Total 100.0000% 1,700.0000 1,700 100.0000%.
1/ If TANC's megawatt entitlement to Transfer Capability in the Project is less than sixty- five percent (65%) of the Packet Pg. 206 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) C
-1
Transfer Capability allocated to the non-Federal
Participants, then these percentages shall govern. 2/ If TANC's megawatt entitlement to Transfer Capability in the Project is sixty-five percent (65%) or greater of the Transfer Capability allocated to the non-Federal
Participants, then these percentages shall govern.
3/ The numbers in this column represent the minimum amount of Transfer Capability for which a Member is obligated
pursuant to this Agreement based on a 1600 MW Project and will be adjusted on a pro rata basis to reflect the actual Rated Project Transfer Capability as that term is defined in the Intertie Agreements.
4/ The number1:1 in this column represent the maximum
amount of Transfer Capability to which a Member is obligated pursuant to his Agreement based on a 1600 MW. Project and will be adjusted on a pro rata basis to reflect the actual Rated Project Transfer Capability as that term is defined in the Intertie Agreements.
5/ The numbers in this column represent the amounts of
Transfer Capability which Members desire at this level of TANC's entitlement to Transfer Capability as a Participant under the Intertie Agreements in the event that the investor- owned utilities are no longer Participants in the Project.

Packet Pg. 207 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) C
-2
Appendix C-1
Current S to N
TANC
Member
Member
Percentage
Member MW
Entitlement (South
to North)
MW Scheduling
Rights
(South to North)
SMUD 37.8074% 410.17 402.00
MID 23.0546% 250.12 245.00
TID 17.1458% 186.01 182.00
Santa Clara 9.8108% 106.44 105.00
Redding 10.0398% 108.92 107.00
Roseville 2.1416% 23.23 23.00
Alameda 0.0000%--
Healdsburg 0.0000%--
Lodi 0.0000%--
Lompoc 0.0000%--
Palo Alto 0.0000%--
Plumas 0.0000%--
Ukiah 0.0000%--
Total 100.0000% 1,084.8906 1,064
COTP
Participants
Participant
Percentage
Participant MW
Entitlement (South
to North)
MW Scheduling
Rights
(South to North)
TANC 88.5625% 1,084.8906 1,064
Western 9.3750% 114.8438 136
PG&E 2.0625% 25.2656 25
100.0000% 1,225.0000 1,225
Packet Pg. 208 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) C-1
C-3
Formatted: Font: 10 pt
Formatted: Body Text, Line spacing: Multiple 0.06 li
Appendix C-2

A B C C D E
Return of Layoff
Percentages E
TANC
Member
PA-3 Member
Percentage Pre
Layoff
PA-3 Member
Percentage Current NCPA Layoff
Percentages
SVP Layoff
Percentages
Palo Alto Layoff
Percentages
PA-3 Member
Percentage
Conclusion of
Layoff
Member MW
Entitlement
(North to South)
MW Scheduling
Rights
(North to South)
Member MW
Entitlement (South
to North)
MW Scheduling
Rights
(South to North)
SMUD 27.5631% 37.8074% 2.5492% 6.8058% 1.6339% 26.8185% 403.7692 393 290.9513 282 MID 21.2960% 23.0546% 0.4902% 1.3088% 0.4137% 20.8419% 313.7872 307 226.1114 221 TID 12.5393% 17.1458% 0.8824% 2.3559% 1.6339% 12.2736% 184.7872 179 133.1554 129 Santa Clara 20.4745% 9.8108% 0.0000% -10.4705% 0.0000% 20.2813% 305.3479 303 220.0301 219 Redding 8.4119% 10.0398% 0.0000% 0.0000% 0.0000% 10.0398% 151.1555 148 108.9208 107 Roseville 2.1119% 2.1416% 0.0000% 0.0000% 0.0000% 2.1416% 32.2431 32 23.2340 23 Alameda 1.2272% 0.0000% -1.2272% 0.0000% 0.0000% 1.2272% 18.4763 19 13.3138 13 Healdsburg 0.2456% 0.0000% -0.2456% 0.0000% 0.0000% 0.2456% 3.6977 4 2.6645 3 Lodi 1.9201% 0.0000% -1.9201% 0.0000% 0.0000% 1.9201% 28.9083 29 20.8310 21 Lompoc 0.1865% 0.0000% -0.1865% 0.0000% 0.0000% 0.1865% 2.8079 3 2.0233 2 Palo Alto 3.6815% 0.0000% 0.0000% 0.0000% -3.6815% 3.6815% 55.4273 55 39.9402 40 Plumas 0.1479% 0.0000% -0.1479% 0.0000% 0.0000% 0.1479% 2.2267 2 1.6046 2 Ukiah 0.1945% 0.0000% -0.1945% 0.0000% 0.0000% 0.1945% 2.9283 3 2.1101 2 Total 100.0000% 100.0000% 0.0000% 0.0000% 0.0000% 100.0000% 1,505.5625 1477 1,084.8906 1064 A) Member Percentages before lay-off, purchase of water districts shares, and City of Redding moving shares of COTP outside of TANC into TANC.

B) Member Percentages after lay-off, purchase of water districts shares, and City of Redding moving shares of COTP outside of TANC into TANC.

C) 2014 lay-off agreement TANC resolution 14-03
D) 2009 lay-off agreement TANC Resolution 09-01
E) Includes the TANC/WAPA layoff agreement
E) Includes the TANC/WAPA layoff agreement
Packet Pg. 209 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC D
-1
1 APPENDIX D 2 PRESCHEDULING OF TRANSMISSION USE 3 AND CURTAILMENT NOTIFICATION PROCEDURES 45 1. OPERATING AGENT INTERFACES: 6 1.1 Through the TANC Coordinator, TANC shall notify 7 the Operating Agent relative to the amounts of 8 Transfer Capability that TANC will be using, as 9 required by the Intertie Agreements. 10 1.2 It is anticipated that the Operating Agent will
11 notify TANC through the 'TANC Coordinator when a
12 curtailment affecting Transfer capability is
13 scheduled or has occurred, as provided in the
14 Intertie Agreements.
15 1.3 It is anticipated that the Operating Agent will
16 notify Members or their designated agents
17 directly of a real-time curtailment of Transfer
18 Capability. Each Member or its designated agent
19 will be responsible for communicating and
20 coordinating real-time power schedule
21 curtailments and all changes in schedules due to
22 curtailments occurring in real-time pursuant to
23 its separate agreements with other entities.
24 25 2. TANC TRANSFR CAPABILITY PRESCHEDULING PROCEDURES 26 Transfer Capability will be prescheduled over four
27 differenttime frames - long term (6 years), next operating 28 year, next operating month, and current operating month. 29 2.1 Long Term and Next Operating Year
30 2.1.1 Each year, each Member shall prepare the
Packet Pg. 210 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) D
-2
1 following estimated data pertaining to 2 its use of Transfer Capability for each 3 month of the following six-year period: 4 2.1.1.1 Member’s Participation 5 Percentage; 6 2.1.1.2 Contracted Transfer 7 Capability Layoffs to Members 8 and Participants; 9 2.1.1.3 Contracted Transfer Capability 10 Layoffs from TANC and
11 Participants;
12 2.1.1.4 Amount of Transfer Capability
13 Available for sale; and
14 2.1.1.5 Amounts of additional
15 Transfer Capability desired.
16 2.1.2 This data will be submitted to the TANC
17 Coordinator by July 31 of each year.
18 2.1.3 The TANC Coordinator shall determine the
19 amounts of Transfer Capability owned by
20 other Participants that is unneeded by
21 each of those Participants (if available}
22 and that could be used by TANC.
23 2.1.4 The data will be compiled by the TANC
24 Coordinator into a document that defines the
25 projected use of the Project by each Member,
26 and on an aggregate TANC basis, for each
27 month of the six year period. The document
28 will also quantify instances where a Member
Packet Pg. 211 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) D
-3
1 may want additional Transfer Capability, 2 where a Member may have Transfer 3 Capability that it is not planning to 4 use, and where other Participants have 5 unneeded Transfer Capability. 6 2.1.5 The TANC Coordinator shall send this 7 document to the Members by August 31 so 8 that they will have data on projected 9 aggregate usage and can identify 10 potential periods when Transfer
11 Capability can be bought and sold among
12 the Members.
13 2.1.6 Those Members who have made buy/sell
14 arrangements for Transfer Capability
15 will notify the TANC Coordinator of
16 these arrangements and of their
17 effective time frames by September 30.
18 2.1.7 This new data will be utilized by the
19 TANC Coordinator to prepare a revised
20 document that defines the projected use
21 of the Project by Member, and on an
22 aggregate TANC basis, for each month of
23 the six year period. The document will
24 also quantify any amounts of unneeded
25 Transfer Capability and instances where
26 additional Transfer Capability could be
27 utilized by TANC or by aMember.
28 2.1.8 If the revised document demonstrates
29 unneeded capacity or needs for additional
Packet Pg. 212 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) D
-4
1 Transfer Capability, it will be 2 resubmitted to the Members by October 3 31 so that they are aware of potential 4 additional buy/sell opportunities. 5 2.1.9 Those Members making additional 6 buy/sell arrangements will notify the 7 TANC Coordinator of those additional 8 arrangements and their effective time 9 frames by November 30. 10 2.1.10 This updated data will be utilized by
11 the TANC Coordinator to prepare a
12 revised document that defines the
13 projected use of the Project by each
14 Member and on an aggregate TANC basis
15 for each month of the six year period.
16 The document will also quantify any
17 amounts of unneeded Transfer Capability
18 that was not required by TANC and
19 instances where additional Transfer
20 Capability could be utilized by TANC.
21 2.2 Next Operating Month
22 2.2.1 Each month, each Member or its
23 designated agent shall prepare the
24 following estimated hourly data for
25 each of three day-types(weekday,
26 Saturday, and Sunday/ Holiday)
27 pertaining to its use of the Project
28 for the next operating month:
29 2.2.1.1 Member's Participation
30 Percentage;
Packet Pg. 213 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) D
-5
1 2.2.1.2 Contracted Transfer Capability 2 layoffs to Members and 3 Participants; 4 2.2.1.3 Contracted Transfer Capability 5 layoffs from Members and other 6 Participants; 7 2.2.1.4 Amount of Transfer Capability 8 available for sale; and 9 2.2.1.5 Amounts of additional 10 TransferCapability desired.
11 2.2.2 This data will be submitted to the TANC
12 Coordinator by the 20th of the month
13 preceding the operating month in
14 question.
15 2.2.3 The TANC Coordinator shall determine
16 the amounts of Transfer Capability
17 owned by other Participants that is
18 unneeded by those Participants (if
19 available) and which could be used by
20 TANC.
21 2.2.4 The data will be compiled by the TANC
22 Coordinator into a document that
23 defines the projected use of the
24 Project by Member, and on an aggregate
25 TANC basis, for each hour of the three
26 day-types specified above. To the
27 extent possible the document will also
28 identify potential layoff opportunities
29 among the Members or between TANC and
30 other Participants.
31 2.2.5 This document will be sent to the TANC
Packet Pg. 214 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) D
-6
1 Members by the 21st of the month preceding 2 the operating month so that they will have 3 data on projected aggregate usage and can 4 identify potential periods when Transfer 5 Capability can be bought and sold among 6 the Members and between TANC and other 7 Participants. 8 2.2.6 Those Members who have made buy/sell 9 arrangements for Transfer Capability will 10 notify the TANC Coordinator of these
11 arrangements and of their effective time
12 frames by the 2.4th of the month preceding
13 the operating month.
14 2.2.7 This new data will be utilized by the TANC
15 Coordinator to prepare a revised document
16 that defines the projected use of the
17 Project by Member, and on an aggregate
18 TANC basis, for each hour of the three
19 day-types specified above and such data
20 will be made available to the Members. The
21 document will also quantify any amounts of
22 unneeded Transfer Capability and periods
23 of time when additional Transfer
24 Capability could be utilized by TANC or a
25 Member.
26 2.2.8 If any of the foregoing dates falls on a
27 weekend or holiday, the submittal shall
28 be made by the work day immediately
29 preceding the weekend or holiday.

Packet Pg. 215 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) D
-7
1 2.3 Current Operating Month 2 2.3.1 Data for the current operating month will 3 be contained on a dedicated computerized 4 "bulletin board" that will specify Member 5 use, and to the extent available 6 Participant use, of Transfer capability 7 on an hourly basis for the month. This 8 data will be the same as that prepared 9 for the "Next Operating Month" as 10 described in Section 2.2 above.
11 2.3.2 Using the data on the bulletin board the
12 Members or their designated agents may
13 make Transfer Capability buy/sell
14 arrangements among themselves and will
15 notify the TANC Coordinator of any changes
16 required to the bulletin board as soon as
17 practicable after making such change.
18 19 3. TANC CURTAILMENT NOTIFICATION PROCEDURES
20 3.1Curtailment Notification Procedure (Prescheduled) - 21 The TANC Coordinator shall promptly notify the
22 Members upon receipt of notice from the Operating
23 Agent of any scheduled curtailment of Transfer
24 Capability. The TANC Coordinator may advise the
25 Members of adjustments to Transfer Capability that
26 could be made to minimize the effects of the
27 curtailment on the Members. The steps in this
28 procedure are as follows:
29 3.1.1 The Operating Agent notifies the TANC
Packet Pg. 216 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) D
-8
1 Coordinator that a curtailment will occur 2 and the magnitude of the curtailment. 3 3.1.2 The TANC Coordinator will update the 4 bulletin board to reflect each Member's 5 remaining share of Transfer Capability. 6 3.1.3 The TANC Coordinator will notify each 7 Member or its designated agent of its 8 share of the curtailment and may 9 suggest certain actions (e.g., trading 10 Transfer Capability) that could be used
11 to minimize curtailment impacts.
12 3.1.4 In each event of a prescheduled
13 curtailment where TANC still has
14 sufficient Transfer Capability for the
15 aggregate power _schedules of the
16 Members, by mutual agreement a Member
17 may utilize another Member's unused
18 share of Transfer Capability in order
19 to avoid a curtailment.
20 3.2 Curtailment Notification Procedure (Real-Time)-
21 The Members anticipate that (i) the Operating Agent
22 will notify the TANC Coordinator of real-time
23 curtailments to Transfer Capability, (ii) the TANC
24 Coordinator will communicate and coordinate real-
25 time curtailments to Transfer capability with the
26 Members; and (iii) the Operating Agent will also
27 notify Members or their designated agents directly
28 of a real-time curtailment of Transfer Capability.
29 Each Member or its designated agent will be
30 responsible for communicating and
Packet Pg. 217 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) D
-9
1 coordinating real-time power schedule curtailments
2 and all changes in schedules due to curtailments 3 occurring in real-time pursuant to its separate 4 agreements with other entities. The TANC 5 Coordinator shall maintain the bulletin board, 6 based on information received from the Operating 7 Agent on a real-time basis. It is the intent of 8 the Members to share the use of Transfer 9 Capability in order to avoid curtailments to the 10 extent possible without jeopardizing service to
11 their own customers.
12 3.2.1 Using the data on the bulletin board, the
13 Members may make Transfer Capability
14 buy/sell arrangements among themselves
15 and will make appropriate arrangements
16 relative to changes in the amount of
17 reserved transmission capacity and the
18 corresponding power schedule changes
19 pursuant to their separate agreements
20 with other entities.
21 3.2.2 The Members will notify the TANC
22 Coordinator of any changes in the
23 amount of Transfer Capability they have
24 reserved. The TANC Coordinator will
25 update the data on the bulletin board.
26 27
28 29
30 Packet Pg. 218 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) E
-2
1 APPENDIX E 2 BILLING ADDRESSES OF THE PARTIES 345 City of Alameda 6 City of Healdsburg 7 City of Lodi 8 City of Lompoc 9 City of Palo Alto 10 City of Redding
11 City of Roseville
12 City of Santa Clara
13 City of Ukiah
14 The Sacramento Municipal Utility District
15 The Modesto Irrigation District
16 The Turlock Irrigation District
17 18 Plumas-Sierra Rural Electric Cooperative
19 P.O. Box 2000
20 Highway 70, 3 Miles West of Portola
21 Portola, CA 96122-2000
22 23 Transmission Agency Northern California
24 P.O. Box 661030
25 Sacramento, CA 95866
26 27
28 29
30 31
Commented [A1]: The scanned PDF of PA3 was
missing a page with all the billing
addresses. So this Appendix E needs to
be updated.

Formatted: Portuguese (Brazil)
Packet Pg. 219 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) E
-2
123456789
10 11
12 13
14 15
Packet Pg. 220 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) Formatted: Portuguese (Brazil)
Packet Pg. 221 Attachment: PA3 Redline with Amendment No. 1 (3.18.26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) AMENDMENT NO. 1
PROJECT AGREEMENT NO. 3

BETWEEN AND AMONG

THE TRANSMISSION AGENCY OF NORTHERN CALIFORNIA

AND ITS MEMBERS
This Amendment No. 1 to Project Agreement No. 3 (“Agreement”) by and among the Transmission Agency of Northern California, hereinafter referred to as "TANC," and its Members the Cities of Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah; the Sacramento Municipal Utility District; the Modesto Irrigation District; the Turlock Irrigation District; and the PlumasSierra Rural Electric Cooperative, hereinafter referred to as “Members,” is hereby made and entered into as of , 2026 (“Amendment Effective Date”), based upon the following:

RECITALS
WHEREAS, TANC and its Members desire to modify certain
provisions of the Agreement as provided herein;
WHEREAS, TANC and its Members seek to clarify that changes to Transfer Capability may be made without formally amending the Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, TANC and its Members agree as follows:

AMENDMENTS

1. The Table of Contents is revised to delete “Participation Percentages” and replace it with “Participation Percentages (N-S)” as Appendix C.

Packet Pg. 222 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 2 2. The Table of Contents is revised to add as Appendix C-1 “Participation Percentages (S-N)”, following Appendix C:

Participation Percentages (N-S).

3. The Table of Contents is revised to add as Appendix C-2 “Return of Layoff Percentages”, following Appendix C-1:

Participation Percentages (S-N).

4. The definition of “Betterment” in Section 1.4 of the Agreement is revised by deleting the phrase “or sixteen hundred (1600) megawatts, whichever is less”.

5. The definition of “Executive Committee” in Section 1.8 of the Agreement is deleted in its entirety and replaced with
“[Intentionally omitted]”.

6. The definition of “Fiscal Year” in Section 1.9 of the Agreement is revised by deleting “September” and replacing it with “June”.

7. Section 1.22 of the Agreement is revised to add “and Appendix C-1” after “Appendix C”.

8. Section 1.30 of the Agreement is revised by deleting “Section 15060” and replacing it with “Part 101, Definition 34”.

9. Section 2.3.1 of the Agreement is revised to add “and Appendix C-1” after “Appendix C”.

10.Section 2.3.2 of the Agreement is deleted in its entirety and replaced with the following: “In the event that TANC’s
entitlement to Transfer Capability changes, the Members’ Participation Percentages will be unchanged except as
provided in this Agreement. Changes to Members’ Participation Percentages shall be permitted without an amendment to this Agreement as follows:

2.3.2.1 All revisions of Participation Percentages
pursuant to this Section 2.3.2 shall require an
affirmative vote of the Commission using the voting
procedures provided in the Joint Powers Agreement.

2.3.2.2 Members shall be permitted to revise their
Participation Percentages if one or more Members agree
to accept an offsetting change in Participation
Packet Pg. 223 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 3 Percentage. All Members whose Participation Percentage change must consent to the change in writing.

2.3.2.3 Members shall be permitted to acquire Transfer
Capability from outside of TANC and transfer that
capability to TANC, without amendment to this Agreement subject to an affirmative vote of the Commission using
the voting procedures provided in the Joint Powers
Agreement and written consent of the Members acquiring
the Transfer Capability. Participation Percentages of
all Members shall be changed so that the Member acquiring the Transfer Capability retains its existing Transfer
Capability and obtains the additional Transfer
Capability it has acquired, and is subject to, all the
rights and obligations associated with the transfer.

2.3.2.4 Participation Percentage revisions shall (a)
be recorded with an administrative amendment to
Appendix C and Appendix C-1; and (b) result in the
aggregate Participation Percentages of the Members of
one hundred (100) percent.”

11. Section 2.3.3 of the Agreement is revised by deleting “Column D” and replacing it with “or Appendix C-1”.

12. Section 3.1 of the Agreement is revised by deleting “its Executive Committee or”.

13. Section 4.1.1 of the Agreement is revised by deleting “the California Department of Water Resources,”.

14. Section 5.3 of the Agreement is revised by adding an internal cross-reference to “Section 2.3.2 and” before “Section 8.3”.

15. Section 7.4 of the Agreement is revised by deleting “, Column E” and replacing it with “and Appendix C-1”.

16. Section 12.1 of the Agreement is revised by deleting “telephone or in writing within twenty-four (24 hour}” and replacing it with “telephone, in writing, or by electronic media within twenty-four (24) hours” both times this language is used.

17. Section 16.1 of the Agreement is revised by adding an internal cross-reference to Section “2.3.2,” after “Sections”.

Packet Pg. 224 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 4 18. Section 19 of the Agreement is revised to add “C-1, C-2,” between “Appendices A, B, C,” and “D, and E attached................. ” Packet Pg. 225 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 5 19. Appendix C of the Agreement is deleted and replaced with the following table of the Current North to South Participation Percentages:

New (Entitlement and Scheduling)
TANC
Member
Member
Percentage
Member MW
Entitlement
(North to South)
MW Scheduling
Rights
(North to South)
MW Scheduling
Rights %
(North to South)
SMUD 37.8074% 569.2140 558 37.7793%
MID 23.0546% 347.1014 341 23.0873%
TID 17.1458% 258.1407 253 17.1293%
Santa Clara 9.8108% 147.7077 145 9.8172%
Redding 10.0398% 151.1555 148 10.0203%
Roseville 2.1416% 32.2431 32 2.1666%
Alameda 0.0000% - - 0.0000%
Healdsburg 0.0000% - - 0.0000%
Lodi 0.0000% - - 0.0000%
Lompoc 0.0000% - - 0.0000%
Palo Alto 0.0000% - - 0.0000%
Plumas 0.0000% - - 0.0000%
Ukiah 0.0000% - - 0.0000%
Total 100.0000% 1,505.5625 1,477 100.0000%
Scheduling Rights include the 29MW layoff to WAPA
COTP
Participants
Participant
Percentage
Participant MW
Entitlement
(North to South)
MW Scheduling
Rights
(North to South)
MW Scheduling
Rights %
(North to South)
TANC 88.5625% 1,505.5625 1,477 86.8824%
Western 9.3750% 159.3750 188 11.0588%
PG&E 2.0625% 35.0625 35 2.0588%
Total 100.0000% 1,700.0000 1,700 100.0000%
.

20. Appendix C-1 is added to the Agreement to include the following table of the Current South to North Participation Percentages:

22. TANC
Member
Member
Percentage
Member MW
Entitlement
(South to North)
MW Scheduling
Rights
(South to North)
Packet Pg. 226 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 6 SMUD 37.8074% 410.17 402.00
MID 23.0546% 250.12 245.00
TID 17.1458% 186.01 182.00
Santa Clara 9.8108% 106.44 105.00
Redding 10.0398% 108.92 107.00
Roseville 2.1416% 23.23 23.00
Alameda 0.0000% - -
Healdsburg 0.0000% - -
Lodi 0.0000% - -
Lompoc 0.0000% - -
Palo Alto 0.0000% - -
Plumas 0.0000% - -
Ukiah 0.0000% - -
Total 100.0000% 1,084.8906 1,064
COTP
Participants
Participant
Percentage
Participant MW
Entitlement
(South to North)
MW Scheduling
Rights
(South to North)
TANC 88.5625% 1,084.8906 1,064
Western 9.3750% 114.8438 136
PG&E 2.0625% 25.2656 25
100.0000% 1,225.0000 1,225

21. Appendix C-2 is added to the Agreement to include the following table to document the Return of Layoff
Percentages:

22. Appendix E (Billing Addresses of the Parties) of the Agreement Packet Pg. 227 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 7 is updated to include the billing address of the Cities of Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding,
Packet Pg. 228 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 8 Roseville, Santa Clara, and Ukiah; the Sacramento Municipal Utility District; the Modesto Irrigation District; and the Turlock Irrigation District.

Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect. In case of a conflict in the terms of the Agreement and this Amendment No. 1, the provisions of this Amendment No. 1 shall control.

This Amendment will become effective when TANC and its Members have each signed below and shall be effective as of the Amendment Effective Date specified above. TANC and its Members intend that this Amendment shall not bind any Party unless it is executed by all Parties.

CITY OF ALAMEDA
By:

Name:

Title:

Date:

CITY OF HEALDSBURG
By:

Name:

Title:

Date:

CITY OF LODI
By:

Name:

Title:

Date:

CITY OF LOMPOC
By:

Name:

Title:

Date:

MODESTO IRRIGATION DISTRICT
By:

Name:

Title:

Date:

Packet Pg. 229 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 9 CITY OF PALO ALTO
By:

Name:

Title:

Date:

CITY OF REDDING
By:

Name:

Title:

Date:

CITY OF ROSEVILLE
By:

Name:

Title:

Date:

SACRAMENTO MUNICIPAL UTILITY

DISTRICT
By:

Name:

Title:

Date:

CITY OF SANTA CLARA
By:

Name:

Title:

Date:

TURLOCK IRRIGATION DISTRICT
By:

Name:

Title:

Date:

CITY OF UKIAH
By:

Name:

Title:

Date:

PLUMAS-SIERRA RURAL ELECTRIC

COOPERATIVE
By:

Name:

Packet Pg. 230 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) 10 Title:

Date:

TRANSMISSION AGENCY OF NORTHERN

CALIFORNIA
By:

Name:

Title:

Date:

Packet Pg. 231 Attachment: Amendment No. 1 to Project Agreement No. 3 final (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement No. 3) AMENDMENT NO. 1
PROJECT AGREEMENT NO. 3

BETWEEN AND AMONG

THE TRANSMISSION AGENCY OF NORTHERN CALIFORNIA

AND ITS MEMBERS
This Amendment No. 1 to Project Agreement No. 3 (“Agreement”) by and among the Transmission Agency of Northern California, hereinafter referred to as "TANC," and its Members the Cities of Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah; the Sacramento Municipal Utility District; the Modesto Irrigation District; the Turlock Irrigation District; and the PlumasSierra Rural Electric Cooperative, hereinafter referred to as “Members,” is hereby made and entered into as of , 2026 (“Amendment Effective Date”), based upon the following:

RECITALS
WHEREAS, TANC and its Members desire to modify certain
provisions of the Agreement as provided herein;
WHEREAS, TANC and its Members seek to clarify that changes to Transfer Capability may be made without formally amending the Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, TANC and its Members agree as follows:

AMENDMENTS

1. The Table of Contents is revised to delete “Participation Percentages” and replace it with “Participation Percentages (N-S)” as Appendix C.

Packet Pg. 232 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 2 2. The Table of Contents is revised to add as Appendix C-1 “Participation Percentages (S-N)”, following Appendix C:

Participation Percentages (N-S).

3. The Table of Contents is revised to add as Appendix C-2 “Return of Layoff Percentages”, following Appendix C-1:

Participation Percentages (S-N).

4. The definition of “Betterment” in Section 1.4 of the Agreement is revised by deleting the phrase “or sixteen hundred (1600) megawatts, whichever is less”.

5. The definition of “Executive Committee” in Section 1.8 of the Agreement is deleted in its entirety and replaced with
“[Intentionally omitted]”.

6. The definition of “Fiscal Year” in Section 1.9 of the Agreement is revised by deleting “September” and replacing it with “June”.

7. Section 1.22 of the Agreement is revised to add “and Appendix C-1” after “Appendix C”.

8. Section 1.30 of the Agreement is revised by deleting “Section 15060” and replacing it with “Part 101, Definition 34”.

9. Section 2.3.1 of the Agreement is revised to add “and Appendix C-1” after “Appendix C”.

10.Section 2.3.2 of the Agreement is deleted in its entirety and replaced with the following: “In the event that TANC’s
entitlement to Transfer Capability changes, the Members’ Participation Percentages will be unchanged except as
provided in this Agreement. Changes to Members’ Participation Percentages shall be permitted without an amendment to this Agreement as follows:

2.3.2.1 All revisions of Participation Percentages
pursuant to this Section 2.3.2 shall require an
affirmative vote of the Commission using the voting
procedures provided in the Joint Powers Agreement.

2.3.2.2 Members shall be permitted to revise their
Participation Percentages if one or more Members agree
to accept an offsetting change in Participation
Packet Pg. 233 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 3 Percentage. All Members whose Participation Percentage change must consent to the change in writing.

2.3.2.3 Members shall be permitted to acquire Transfer
Capability from outside of TANC and transfer that
capability to TANC, without amendment to this Agreement subject to an affirmative vote of the Commission using
the voting procedures provided in the Joint Powers
Agreement and written consent of the Members acquiring
the Transfer Capability. Participation Percentages of
all Members shall be changed so that the Member acquiring the Transfer Capability retains its existing Transfer
Capability and obtains the additional Transfer
Capability it has acquired, and is subject to, all the
rights and obligations associated with the transfer.

2.3.2.4 Revisions to Participation Percentages
revisions shall (a) be recorded with an administrative
amendment to Appendix C and Appendix C-1; and (b) result in the aggregate Participation Percentages of the Members of one hundred (100) percent.”

11. Section 2.3.3 of the Agreement is revised by deleting “Column D” and replacing it with “or Appendix C-1”.

12. Section 3.1 of the Agreement is revised by deleting “its Executive Committee or”.

13. Section 4.1.1 of the Agreement is revised by deleting “the California Department of Water Resources,”.

14. Section 5.3 of the Agreement is revised by adding an internal cross-reference to “Section 2.3.2 and” before “Section 8.3”.

15. Section 7.4 of the Agreement is revised by deleting “, Column E” and replacing it with “and Appendix C-1”.

16. Section 12.1 of the Agreement is revised by deleting “telephone or in writing within twenty-four (24 hour}” and replacing it with “telephone, in writing, or by electronic media within twenty-four (24) hours” both times this language is used.

17. Section 16.1 of the Agreement is revised by adding an internal cross-reference to Section “2.3.2,” after “Sections”.

Packet Pg. 234 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 4 18. Section 19 of the Agreement is revised to add “C-1, C-2,” between “Appendices A, B, C,” and “D, and E attached................. ” Packet Pg. 235 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 5 19. Appendix C of the Agreement is deleted and replaced with the following table of the Current North to South Participation Percentages:

New (Entitlement and Scheduling)
TANC
Member
Member
Percentage
Member MW
Entitlement
(North to South)
MW Scheduling
Rights
(North to South)
MW Scheduling
Rights %
(North to South)
SMUD 37.8074% 569.2140 558 37.7793%
MID 23.0546% 347.1014 341 23.0873%
TID 17.1458% 258.1407 253 17.1293%
Santa Clara 9.8108% 147.7077 145 9.8172%
Redding 10.0398% 151.1555 148 10.0203%
Roseville 2.1416% 32.2431 32 2.1666%
Alameda 0.0000% - - 0.0000%
Healdsburg 0.0000% - - 0.0000%
Lodi 0.0000% - - 0.0000%
Lompoc 0.0000% - - 0.0000%
Palo Alto 0.0000% - - 0.0000%
Plumas 0.0000% - - 0.0000%
Ukiah 0.0000% - - 0.0000%
Total 100.0000% 1,505.5625 1,477 100.0000%
Scheduling Rights include the 29MW layoff to WAPA
COTP
Participants
Participant
Percentage
Participant MW
Entitlement
(North to South)
MW Scheduling
Rights
(North to South)
MW Scheduling
Rights %
(North to South)
TANC 88.5625% 1,505.5625 1,477 86.8824%
Western 9.3750% 159.3750 188 11.0588%
PG&E 2.0625% 35.0625 35 2.0588%
Total 100.0000% 1,700.0000 1,700 100.0000%
.

20. Appendix C-1 is added to the Agreement to include the following table of the Current South to North Participation Percentages:

22. TANC
Member
Member
Percentage
Member MW
Entitlement
(South to North)
MW Scheduling
Rights
(South to North)
Packet Pg. 236 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 6 SMUD 37.8074% 410.17 402.00
MID 23.0546% 250.12 245.00
TID 17.1458% 186.01 182.00
Santa Clara 9.8108% 106.44 105.00
Redding 10.0398% 108.92 107.00
Roseville 2.1416% 23.23 23.00
Alameda 0.0000% - -
Healdsburg 0.0000% - -
Lodi 0.0000% - -
Lompoc 0.0000% - -
Palo Alto 0.0000% - -
Plumas 0.0000% - -
Ukiah 0.0000% - -
Total 100.0000% 1,084.8906 1,064
COTP
Participants
Participant
Percentage
Participant MW
Entitlement
(South to North)
MW Scheduling
Rights
(South to North)
TANC 88.5625% 1,084.8906 1,064
Western 9.3750% 114.8438 136
PG&E 2.0625% 25.2656 25
100.0000% 1,225.0000 1,225

21. Appendix C-2 is added to the Agreement to include the following table to document the Return of Layoff Percentages:

22. Appendix E (Billing Addresses of the Parties) of the Agreement Packet Pg. 237 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 7 is updated to include the billing address of the Cities of Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding,
Packet Pg. 238 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 8 Roseville, Santa Clara, and Ukiah; the Sacramento Municipal Utility District; the Modesto Irrigation District; and the Turlock Irrigation District.

Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect. In case of a conflict in the terms of the Agreement and this Amendment No. 1, the provisions of this Amendment No. 1 shall control.

This Amendment will become effective when TANC and its Members have each signed below and shall be effective as of the Amendment Effective Date specified above. TANC and its Members intend that this Amendment shall not bind any Party unless it is executed by all Parties.

CITY OF ALAMEDA
By:

Name:

Title:

Date:

CITY OF HEALDSBURG
By:

Name:

Title:

Date:

CITY OF LODI
By:

Name:

Title:

Date:

CITY OF LOMPOC
By:

Name:

Title:

Date:

MODESTO IRRIGATION DISTRICT
By:

Name:

Title:

Date:

Packet Pg. 239 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 9 CITY OF PALO ALTO
By:

Name:

Title:

Date:

CITY OF REDDING
By:

Name:

Title:

Date:

CITY OF ROSEVILLE
By:

Name:

Title:

Date:

SACRAMENTO MUNICIPAL UTILITY

DISTRICT
By:

Name:

Title:

Date:

CITY OF SANTA CLARA
By:

Name:

Title:

Date:

TURLOCK IRRIGATION DISTRICT
By:

Name:

Title:

Date:

CITY OF UKIAH
By:

Name:

Title:

Date:

PLUMAS-SIERRA RURAL ELECTRIC

COOPERATIVE
By:

Name:

Packet Pg. 240 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement 10 Title:

Date:

TRANSMISSION AGENCY OF NORTHERN

CALIFORNIA
By:

Name:

Title:

Date:

Packet Pg. 241 Attachment: Amendment No. 1 to Project Agreement No. 3 final redline (3-18-26) (4.5(b)--Approve Amendment No.1 to TANC Project Agreement

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize and approve the following actions relative to expenditures of Greenhouse Gas Capand-Invest (formerly Cap and Trade) Allowance Proceeds:
(1) Approve the establishment and implementation of the Energy Procurement Program; (2) Adopt Resolution approving and adopting the 26th Amendment to City Budget Resolution No. 2025-049 appropriating $1,579,000 of unallocated proceeds from the sale of California carbon allowances and interest accrued to fund the Energy Procurement Program; and
(3) Authorize the City Manager, or designee, to administer the program, including approving program specifics, making program modifications, adjusting funding between eligible programs, and allocating any additional allowance auction proceeds and interest earnings to eligible programs.

Fiscal Impact
The following table summarizes the Greenhouse Gas (GHG) Cap-and-Invest Proceeds:

DESCRIPTION AMOUNT
Auction Proceeds from Sale of Allowances Through 2020 $33,149,000 Estimated Interest Earned Through 2025 $1,843,000
Total GHG Funding Balance $34,992,000
Appropriated Programs $33,413,000
Unallocated GHG Funds $1,579,000
Cap-and-Invest (formerly Cap and Trade) proceeds are held as restricted reserves within Redding Electric Utility (REU). Adoption of the attached budget Resolution is needed to appropriate and expend these funds. Use of these restricted reserves will not affect REU’s financial metrics, including days of cash on hand. As noted in the Background/Analysis below, REU is required by California law to expend these funds for eligible purposes. Approximately $1,579,000 in restricted reserves is currently unallocated and available for appropriation.

MEETING DATE: April 7, 2026
ITEM NO. 4.5(c)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 4.5(c)--Resolution to Approve Expenditures of Greenhouse Gas Cap-and-Invest Allowance Proceeds
Nick Zettel, Director of
Redding Electric Utility
Packet Pg. 242
Report to Redding City Council April 1, 2026
Re: 4.5(c)--Resolution to Approve Expenditures of Greenhouse Gas Cap-and-Invest Allowance Proceeds Page 2
Alternative Action
Council may choose not to authorize the City Manager, or designee, to expend Cap-and-Invest allowance proceeds on the identified greenhouse gas (GHG) emission reduction programs. REU staff would study additional options and return to the City Council (Council) with an alternative proposal.

Background/Analysis
Assembly Bill 32 established California’s Greenhouse Gas Cap-and-Invest Program, requiring certain sectors, including publicly owned electric utilities, to reduce greenhouse gas emissions to 1990 levels. REU participates in this program and receives a limited allocation of free allowances from the California Air Resources Board (CARB) to offset compliance costs associated with emissions from the Redding Power Plant and imported electricity. Each allowance represents one metric ton of greenhouse gas emissions, and surplus allowances may be sold through State auctions. Under standard practice, REU first retires allowances required for compliance, then sells any remaining allowances through the auction. Proceeds from these sales, along with interest earnings, are restricted by statute and must be used for programs that benefit electric ratepayers and reduce GHG emissions.

Since 2013, the City Council has taken multiple actions to establish policies and approve programs that ensure allowance proceeds are used appropriately and provide the best community benefit. As a result, approximately $33 million in auction proceeds has been allocated to GHG Programs, including transportation electrification, energy efficiency upgrades to City facilities, non-motorized transportation, and income qualifying programs. These programs have helped reduce over 22,000 metric tons of carbon, or the equivalent of removing 5,132 gasoline-powered vehicles from the road for one year.

Due to reduced allowance allocations and increased compliance obligations, REU has not had surplus allowances available for sale in recent years (current funding is limited to proceeds accrued through 2020 and interest earnings). To date, only two programs remain active:

Transportation Electrification with a balance of $1,060,000 and City Energy Efficiency Measures with a balance of $551,000 (expected to end in Fiscal Year 2026). The Non-Motorized Transportation program closed in 2022, but has $186,000 in unused funding available for other GHG programs. All remaining program funds will be swept to the new Energy Procurement Program.

Staff regularly evaluates options to deploy available allowance proceeds in a manner that maximizes greenhouse gas reductions, complies with California Code of Regulations (CCR) §95892, and provides cost-effective benefits to electric ratepayers. This evaluation considers regulatory requirements, cost efficiency, and alignment with Renewable Portfolio Standard (RPS) obligations. Per CCR §95892(d)(3)(A)(1), funding can be used to purchase renewable energy resources that meet Portfolio Content Category 1 requirements.

Packet Pg. 243
Report to Redding City Council April 1, 2026
Re: 4.5(c)--Resolution to Approve Expenditures of Greenhouse Gas Cap-and-Invest Allowance Proceeds Page 3
To maximize the use of remaining unencumbered GHG funds, REU recommends that the City Council establish an Energy Procurement Program within its Cap-and-Invest Program. There are renewable energy purchases already under contract that meet the eligibility requirements for GHG funds and are impacting the utility’s balance sheet. It is recommended that Council approve and allocate unused restricted funding to the Energy Procurement Program for renewable energy purchases until remaining funding is exhausted. Applying available GHG funds to eligible renewable purchases reduces the amount that must otherwise be recovered through electric rates. By offsetting these costs with restricted funds, the program helps stabilize rates, limit future increases, and protect long-term affordability for REU customers.

Additionally, this approach reduces greenhouse gas emissions more economically than other available options and supports long-term sustainability objectives, including the RPS. Staff may request adjustments to certain attributes of the program with the overall goal of maximizing benefits to REU ratepayers.

Table 1 provides a summary of the total estimated funding available to fund the Energy Procurement Program.

Table 1: Estimated Funding Available for Energy Procurement Program Description Amount
Unallocated GHG Funds $1,579,000
Reallocation of Unused Budgeted Program Funds * $1,797,000 Total Available Funding for Energy Procurement Program $3,376,000 * Amounts are based on current estimates of unexpended program funds and are subject to final reconciliation
Environmental Review
This is not a project defined under the California Environmental Quality Act, and no further action is required.

Council Priority/City Manager Goals
• Government of the 21st Century – "Be relevant and proactive to the opportunities and challenges of today's residents and workforce. Anticipate the future to make better decisions today."
Attachments
Budget Resolution
Cap-and-Invest Programs Funding Update
Energy Procurement Program Outline
Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds
Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds
Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects
Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects
Packet Pg. 244
RESOLUTION NO. 2026 - _____

A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE 26 TH AMENDMENT TO CITY BUDGET RESOLUTION NO. 2025-049
APPROPRIATING $1,579,000 FOR THE UNUSED PROCEEDS FROM THE SALE OF

CALIFORNIA CARBON ALLOWANCES AND INTEREST ACCRUED TO FUND THE ENERGY PROCUREMENT PROGRAM FOR FISCAL YEAR 2025-26

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDDING THAT Budget Resolution No. 2025-049 be and is hereby amended as follows:

FUND DIVISION DESCRIPTION INCREASE DECREASE
211 8075 REU – Customer Programs $ 1,579,000
THAT account titles and numbers requiring adjustments by this Resolution are as follows:

USE SOURCE

OF FUNDS OF FUNDS
Increase (Decrease) Revenue
211-8075-2910000-00000 Fund Balance $ 1,579,000
Increase (Decrease) Expenditures
211-8075-8909101-00000 Energy Procurement Program $ 3,016,000 211-8075-8908931-00000 Transportation Electrification $ (700,000) 211-8075-8908941-00000 Non-Motorized Transportation $ (186,000) 211-8075-8908961-00000 Energy Efficieny Measures $ (551,000) Total $ 1,579,000 $ 1,579,000
THAT the purpose is to appropriate $1,579,000 for the unused proceeds from the sale of California Carbon Allowances and interest accrued to fund the Energy Procurement Program for fiscal year 2025-26.

I HEREBY CERTIFY that the foregoing Resolution was introduced at a regular meeting of the City Council of the City of Redding on the 7th day of April 2026, and was duly adopted at said meeting by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

MIKE LITTAU, Mayor
ATTEST: FORM APPROVAL:

SHARLENE TIPTON, City Clerk BENJAMIN L. STOCK, Interim City Attorney
Packet Pg. 245 Attachment: Budget Resolution (4.5(c)--Resolution to Approve Expenditures of Greenhouse Gas Cap-and-Invest Allowance Proceeds) Packet Pg. 246 Attachment: Budget Resolution (4.5(c)--Resolution to Approve Expenditures of Greenhouse Gas Cap-and-Invest Allowance Proceeds) Cap-and-Invest Programs Funding Update1
Auction Proceeds Balance
Description Amount
Auction Proceeds from Sale of Allowances through 2020 $33,149,000 Estimated Interest through 1/1/2025 $1,843,000
Total GHG Funding Starting Balance $34,992,000
Budgeted Proceeds $33,413,000
Unallocated GHG Funding $1,579,000
Program Balances
Program Program
Status
Approved
Budget
Adjusted
Balances to
Date
Expenditures
to Date
Funding
Remaining
Total Lifetime
GHG Savings,
MTCO2e
Energy Efficiency Measures2 Active3 $9,500,000 $9,000,000 $8,449,000 $551,000 3,844 Transportation Electrification Active $3,700,000 $4,725,000 $3,665,000 $1,060,000 8,216 Non-Motorized Transportation Closed $1,100,000 $1,100,000 $914,000 $186,000 118 LED Streetlights Closed $2,000,000 $1,884,000 $1,884,000 $0 5,886 Low Income Weatherization Closed $2,000,000 $1,972,000 $1,972,000 $0 3,982 Low Income Electrification Closed $500,000 $154,000 $154,000 $0 656 Affordable Housing Closed $3,000,000 $3,000,000 $3,000,000 $0 1,821 Shade Trees Closed $500,000 $429,000 $429,000 $0 705
Covid Credit (Return to Ratepayer) Closed $11,113,000 $11,113,000 $11,113,000 $0 0 Total $33,413,000 $33,377,000 $31,580,000 $1,797,000 25,228

1 All funding totals are rounded.
2 Includes estimated FY26 expenditures from final program projects in progress. 3 The Energy Efficiency Measures will close by the end of FY 2026.

Packet Pg. 247 Attachment: Cap-and-Invest Programs Funding Update (4.5(c)--Resolution to Approve Expenditures of Proposed Adjusted Balances
Program Funding
Remaining
Balance
Adjustments
Proposed
Budgets
Energy Efficiency Measures $551,000 ($551,000) $0
Transportation Electrification $1,060,000 ($1,060,000) $0 Energy Procurement Program $0 $1,797,000 $1,797,000
Non-Motorized Transportation $186,000 ($186,000) $0
Total $1,797,000 $0 $1,797,000
Packet Pg. 248 Attachment: Cap-and-Invest Programs Funding Update (4.5(c)--Resolution to Approve Expenditures of Program Outline: Energy Procurement Program
Overview
Using GHG auction proceeds to support renewable energy procurements is a practical and affordable way to meet regulatory compliance obligations while advancing greenhouse gas reduction goals. Renewable energy procurements provide a reliable mechanism for complying with clean energy and emissions requirements, ensuring that obligated entities can meet statutory targets without relying on more expensive or volatile compliance alternatives. As renewable resources continue to decline in cost, these procurements offer a predictable and cost-effective compliance pathway.

Allocating auction proceeds to renewable energy procurements also helps maintain affordability by offsetting costs that would otherwise be borne by ratepayers. This approach reduces upward pressure on electricity rates, supports long-term price stability, and minimizes impacts on lowand moderate-income customers. Overall, using GHG auction proceeds for renewable procurements aligns compliance needs with affordability objectives, delivering emissions reductions in a fiscally responsible and equitable manner.

Redding Electric Utility (REU) is currently evaluating several renewable energy projects to support load growth and capacity constraints that also comply with state energy mandates. Because pricing for renewable energy projects is dependent upon the technology types (for example, solar, wind, battery storage, geothermal, etc.), REU is focusing on existing power purchase agreements (PPA) that will help reduce overall costs for approved clean-energy procurements used for compliance.

Potential pathways include:
• Reduce costs for the purchase of Renewables Portfolio Standard (RPS) eligible renewable energy credits (RECs)
o Allows REU to use funding to fully pay or reduce the Portfolio Content Category 1 (PCC1) REC purchase cost
o Applies to long- or short-term REC purchases
• Reduce costs from renewable energy or energy storage projects o Reduces overall long-term contract costs for eligible projects, including but not limited to solar, wind, battery storage, geothermal, etc.

Budget Detail
The initial funding available for this program is approximately $3,376,000. If approved, the Program will end once all allocated funding is exhausted.

Packet Pg. 249 Attachment: Energy Procurement Program Outline (4.5(c)--Resolution to Approve Expenditures of Greenhouse Gas Cap-and-Invest Allowance

CITY OF REDDING

REPORT TO REDDING CITY COUNCIL
Recommendation
Approve the Outlines for the following programs: ( 1) Low-income Energy Efficiency Improvements, ( 2) Shade Trees, ( 3) Transportation Electrification, ( 4) LED Streetlight Upgrades, and (5) Non-motorized Transportation; adopt Resolution approving the 70th Amendment to City Budget Resolution No. 2015- 057 appropriating funds in the amount of $6.5 million in proceeds received from the sale of California carbon allowances; authorize the City Manager, or his designee, to approve Program specifics, make minor Program modifications and funding adjustments between Programs.

Background
Assembly Bill 32 (AB 32) requires certain economic sectors of California to reduce greenhouse gas ( GHG) emissions to 1990 levels by 2020 through a Cap and Trade Emissions Reduction Program. As part of this Program, Redding Electric Utility (REU) must turn in “allowances” for its emissions from the Redding Power Plant, as well as a portion of the electricity REU brings into California over its transmission assets. An allowance represents one metric ton of GHG emissions. The allowances are administered by the California Air Resources Board ( CARB).

CARB has provided REU with a set number of "free allowances" each year in order to offset the expected cost burden of the Cap and Trade Program. Through diligent efforts, REU has reduced its GHG emissions profile by procuring carbon- free energy and ensuring energy purchases are as low in GHG emissions as possible. As a result of these emissions reduction efforts, REU has been able to sell a portion of its free allowances in the Cap and Trade auction process with total revenues to date of over $ 15 million as of March 2017. These funds are currently held as restricted reserves by REU. Any revenue received from the sale of these free allowances must be used exclusively for the benefit of the electric utility’s ratepayers, consistent with the GHG reduction goals of AB 32, and shall be subject to any limitations imposed by the governing board of a publicly owned electric utility.

On August 6, 2013, the City Council approved Resolution No. 2013-070 ( attached), which outlines REU’ s policy for eligible expenditures from proceeds generated from the sale of free allowances. On February 21, 2017, the Council received an informational update on REU’ s MEETING DATE: April 18, 2017
ITEM NO. 9.5(b)
E-020-010]
FROM:

SUBJECT: 9.5(b) - Expenditure of Greenhouse Gas Cap and Trade Allowance Proceeds APPROVED BY***
Barry Tippin, Asst. City
Manager/ REU Director
Packet Packet Pg. 250 Pg. 205 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Report to Redding City Council April 10, 2017
Re: 9.5(b) - Approve Expenditures of Greenhouse Gas Cap and Trade Allowance ProceedsPage 2 Allocated Allowance Policy (attached). As mentioned in the informational update, staff has studied an assortment of GHG reduction options that would be well-suited for allocation of the GHG allowance auction proceeds. Analysis of GHG reduction options included consideration of existing California laws and regulations regarding GHG emissions, value analysis, community improvement, and efficient use of resources. REU staff narrowed the focus toward the following five areas ( overview of programs is attached): ( 1) Low-income Energy Efficiency Improvements, 2) Shade Trees, (3) Transportation Electrification, (4) LED Streetlight Upgrades, and (5) Non - motorized Transportation.

The initial funding request for all five programs is $6.5 million. These funds are expected to be disbursed over the following four fiscal years as the programs develop and mature. As program participation rates are established and various information is ascertained, staff may request adjustments to certain attributes of each program with the overall goal of maximizing benefits to the customers of REU. Additional funding requests and other major program enhancements will be brought to the Council in the future as needed.

Issue
Should the City Council approve the attached Program Outlines to expend Cap and Trade allowance proceeds of $6.5 million on the identified GHG emission reduction programs and approve the accompanying budget resolution?
Alternatives and Implications of the Alternatives
The Council has the following alternatives:

1. Approve the attached Program Outlines, approve the attached budget resolution appropriating funds, authorize the City Manager, or his designee, to approve program specifics, make minor program modifications and funding adjustments between programs, and expend $ 6.5 million in proceeds received from the sale of California carbon allowances; this action will allow REU staff to move forward with program implementation as soon as possible.

2. Do not authorize the City Manager, or his designee, to expend Cap and Trade allowance proceeds on the identified GHG emission reduction programs. REU staff will study further options and return to the Council with an alternative proposal.

Fiscal Impact
Cap and Trade proceeds are currently held as REU restricted reserves. The attached budget resolution 2017- 70 is needed to expend these restricted reserves. Expending these funds does not affect REU’s financial metrics or days of cash on hand. As previously mentioned, REU is required by law to expend these funds.

Conclusion
Consistent with the goals identified in AB 32, REU staff has designed the identified GHG emissions reduction programs to benefit all REU customers while reducing customer costs and lowering GHG emissions in the City of Redding. It is recommended that the Council approve Packet Packet Pg. 251 Pg. 206 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Report to Redding City Council April 10, 2017
Re: 9.5(b) - Approve Expenditures of Greenhouse Gas Cap and Trade Allowance ProceedsPage 3 the attached Program Outlines, approve the attached budget resolution appropriating funds, authorize the City Manager, or his designee, to approve program specifics, make minor program modifications and funding adjustments between programs, and expend $6.5 million of Cap and Trade allowance proceeds on these programs as it is in the best interest of the City.

Attachments:

Resolution
GHG Allowance Proceed Expenditure 3-30-17 Attachment
04-16-13 Staff Report
02-21-17 Staff Report
Packet Packet Pg. 252 Pg. 207 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Resolution No. 2017 - ____________
A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE 70th AMENDMENT TO CITY BUDGET RESOLUTION NO. 2015-057 APPROPRIATING 6,500,000 IN PROCEEDS FROM THE SALE OF CALIFORNIA CARBON ALLOWANCES FOR THE FOLLOWING PROGRAM AREAS: ( 1) LOW INCOME ENERGY EFFICIENCY IMPROVEMENTS, ( 2) SHADE TREES, ( 3) TRANSPORTATION ELECTRIFICATION, ( 4) LED STREELIGHT UPGRADES AND ( 5) NON-MOTORIZED TRANSPORTATION FOR FISCAL YEAR 2016-17.

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDDING THAT Budget Resolution No. 2015-057 be and is hereby amended as follows:

FUND DIVISION DESCRIPTION INCREASE DECREASE
142
142
142
142
142
854
854
854
859
854
Low Income Energy Efficiency Imprv
Shade Trees
Transportation Electrification
LED Streetlight Upgrades
Non-Motorized Transportation
2,000,000
500,000
1,700,000
2,000,000
300,000
THAT account titles and numbers requiring adjustments by this Resolution are as follows:

USE SOURCE

OF FUNDS OF FUNDS
Increase Revenue
142-851-1-4400-01 Environmental Attributes $ 4,233,740
142-851-1-0001-01 Beginning Balance $ 2,266,260
Increase Expenditures
142-854-8908-91 Low Income Energy Efficiency Imprv $ 2,000,000 142-854-8908-92 Shade Trees $ 500,000
142-854-8908-93 Transportation Electrification $ 1,700,000 142-854-8908-94 Non-Motorized Transportation $ 300,000
142-859-3810-01 LED Streetlight Upgrades $ 2,000,000
Total 6,500,000$ 6,500,000$
THAT the purpose is to appropriate $6,500,000 in proceeds from the sale of California Carbon Allowances for the following program areas: ( 1) Low Income Energy Efficiency Improvements, 2) Shade Trees, ( 3) Transportation Electrification, (4) LED Streetlight Upgrades and ( 5) Non - Motorized Transportation for fiscal year 2016- 2017.

I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the _________ day of ___________, 2017 and was duly adopted at said meeting by the following vote:

Packet Packet Pg. 253 Pg. 208 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

BRENT WEAVER, Mayor
ATTEST: FORM APPROVAL:

PAMELA MIZE, City Clerk BARRY E. DeWALT, City Attorney
Packet Packet Pg. 254 Pg. 209 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Report to City Council – Attachment #1 March 28, 2017
Cap and Trade Allowance Proceed Expenditure Program Outline Page 1 Program Outlines
Program #1: Low-Income Energy Efficiency Improvements
Overview
In many cases low-income customers are not able to increase the efficiency of their dwellings due to the lack of financial means to pay for these improvements. REU proposes to serve low-income customers through an Energy Efficiency Program that will reduce their bills, improve comfort, and reduce greenhouse gas (GHG) emissions through reduced energy consumption, all at no cost to the customer. Specific attributes of the proposed Program are as follows:

Eligible customers will include all income-qualified REU customers including owners and renters residing in single-family and multifamily dwellings.

REU will work with the Self-Help Home Improvement Program and other partners to enroll customers, install electric saving measures, and provide monthly reports to REU.

It is expected that up to 1,300 low-income customers may be served. These energy efficiency improvements could save up to 1.2 million kWh/year, which results in over $180,000 in reduced bills to customers who need it most. These measures also are estimated to save almost 400 metric tons of carbon from being released into the environment.

Budget Detail
The cost to implement this Program is approximately $1,540 per customer served for a total budget of $2,000,000.

Program #2: Shade Trees
Overview
When properly placed on a customer’ s property, deciduous trees reduce GHG emissions by reducing utility consumption related to summer cooling. The proposed Shade Tree Program will provide specific species of high quality trees to REU residential customers at no cost, as long as they plant them in accordance with the guidelines in locations that provide shade for their dwelling. Specific attributes of the Program are as follows:

Program will be open to home owners and renters residing in existing residential dwellings who receive electric service from REU.

Program will be limited to certain species of deciduous trees that are well suited for Redding climate and soil conditions.

Customer must plant tree in a location that shades their home.

Up to four trees will be allowed per home.

Trees may be delivered to customers’ homes by City of Redding employees, other partners, or Program participants.

Packet Packet Pg. 255 Pg. 210 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Report to City Council March 28, 2017
Re: Cap and Trade Allowance Proceed Expenditure Page 2
It is expected that up to 4,000 trees may be planted, which will save up to 125 metric tons of carbon from being released into the environment.

Budget Detail
The cost to implement this Program is estimated to be $125 per tree for a total budget of $500,000.

Program #3: Transportation Electrification
Overview
The transportation sector is the largest contributor to GHG emissions in California. REU’ s clean resource mix gives the opportunity for electric vehicles (EVs) to play a vitalrole in meeting the GHG emission reduction goals set forth in both AB 32 and SB 32. EVs can reduce expenses for both the City and REU customers as a whole. Specific attributes of the proposed program are as follows:

Educate customers via a new web page, promotional EV, media outreach, and ride and drive events.

Offer an incentive to residential customers who receive electric services from REU for the purchase or lease of an EV, along with an incentive forthe installation of a Level 2 charger at their residence.

Offer an incentive to commercial customers who receive electric services from REU for the installation of a Level 2 charger at their business.

Offer incentives to encourage the installation of publicly available Level 3 chargers at optimal locations in the Redding service territory to promote EV adoption by supporting a fast charging infrastructure.

Encourage conversion of the City’s eligible fleet vehicles to EVs as appropriate through an incentive for the purchase of EVs, along with an incentive for the installation of Level 2 chargers.

It is expected that this Program will encourage the purchase of up to 300 additional EVs that will save up to 600 metric tons of carbon from being released into the environment.

Annual fuel cost savings for City fleet vehicles are estimated at approximately $1,400 per vehicle at current gasoline and electric rates.

Budget Detail
The cost to implement this Program is budgeted at $ 1,700,000. This includes $ 200,000 for residential incentives, $300,000 for commercial incentives, $300,000 for Level 3 public fast charging stations, and $900,000 for City fleet vehicle conversions. It is requested that the Electric Utility Director have authorization to adjust the funding between these four options to adapt to different levels of community demand.

Packet Packet Pg. 256 Pg. 211 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Report to City Council March 28, 2017
Re: Cap and Trade Allowance Proceed Expenditure Page 3
Program #4: LED Streetlight Upgrades
Overview
The conversion of the City’s streetlights from High Pressure Sodium (HPS) and Mercury Vapor MV) to Light Emitting Diode (LED) commenced in October 2015. This Project is expected to have numerous benefits:

The kilowatt hour (kWh) savings in electricity from installing these energy efficient lights is expected to increase each year as more lights are installed reaching a savings of over 3,500,000 kWh per year by 2022.

The LED lights provide a more directional light resulting in a reduction of light spillage onto areas where the light is not desired; they also have a more natural white light that significantly increases visibility and the ability to see colors at night.

LED lights are also expected to greatly reduce maintenance costs. An existing HPS or MV light has to be visited about every five years for bulb and/or photocell replacement. The new LEDs, along with more robust long-life photocells, are expected to extend the maintenance interval on city-owned street lights in excess of 15 years.

The Project is expected to reduce carbon emissions by over 1,000 metric tons each year.

Budget Detail
REU is proposing to allocate $2 million for streetlight replacements. It is expected that this will fully fund the program through its expected completion.

Program #5: Non-motorized Transportation
Overview
As part of achieving California’s overarching goal to reduce GHG emissions, REU has identified an additional opportunity to assist in reducing overall vehicle miles travelled by funding bicycle and pedestrian lane enhancements in support of the Region’ s Sustainable Community Strategy adopted by the Shasta Regional Transportation Agency with their Regional Transportation Plan. The City’s recently approved Downtown Transportation Plan identifies multiple areas to improve bicycle and pedestrian access throughout City streets, which ultimately reduces GHG emissions over traditional transportation methods. In addition, the City is currently preparing its first city-wide Active Transportation Plan (ATP) that will identify and prioritize non-motorized transportation and transit improvements across all of Redding that are inherently necessary to actively engage the community - directly resulting in improved health and reduced vehicle miles traveled, all while reducing GHG emissions. Specific attributes of the Program are as follows:

REU will work with the City of Redding Public Works Department to identify funding opportunities that can increase the bicycle and pedestrian paths within REU’s service territory.

Packet Packet Pg. 257 Pg. 212 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Report to City Council March 28, 2017
Re: Cap and Trade Allowance Proceed Expenditure Page 4
Specific areas have been recognized in the Downtown Transportation Plan and will be identified city-wide in the ATP Plan, including road striping, signage, pavement and other improvements.

While several funding sources were cited in the plans, a significant amount of funding remains to be secured.

Funding will be allocated as projects are initiated and completed depending upon the timing of project awards.

It is expected that this Program will provide at least five miles of incremental bicycle and pedestrian access for City streets.

Budget Detail:

REU is proposing to allocate $ 300, 000 for funding bicycle and pedestrian paths within REU’ s service territory. This Program will end upon expenditure of allocated funding.

Packet Packet Pg. 258 Pg. 213 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Packet Packet Pg. 259 Pg. 214 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Packet Packet Pg. 260 Pg. 215 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Packet Packet Pg. 261 Pg. 216 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)-- Packet Packet Pg. 262 Pg. 217 Attachment: Previous Staff Report - 4-16-17 - 9.5(b) Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds (4.5(c)--

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize the following action relative to expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds:
1) Approve the Outlines for the following programs:
a. Transportation Electrification;
b. Affordable Housing Energy Efficiency and Renewable Energy; c. Energy Efficiency Measures;
d. Low-Income Electrification (Fuel Switching) Program; and e. Non- motorized Transportation
2) Adopt Resolution approving the 29th Amendment to City Budget Resolution No. 2017- 057 appropriating funds in the amount of $10.8 million, which are proceeds received from the sale of California carbon allowances; and
3) Authorize the City Manager, or designee, to approve program specifics and make minor program modifications and funding adjustments between programs.

Fiscal Impact
Cap and Trade proceeds are currently held as REU restricted reserves. The attached budget Resolution is needed to disburse these restricted reserves. Expending these funds does not affect REU’s financial metrics or days of cash on hand. As mentioned in the Background/Analysis, REU is required by California law to expend these funds.

Alternative Action
The City Council could choose not to authorize the City Manager, or designee, to expend Cap and Trade allowance proceeds on the identified GHG emission reduction programs. REU staff would study additional options and return to the City Council with an alternative proposal.

MEETING DATE: April 17, 2018
ITEM NO. 9.5(b)
E-020-010/B-130-070]
FROM:

APPROVED BY***
dbeans@cityofredding. org btippin@cityofredding. org
SUBJECT: 9.5(b)--Resolution to Approve Expenditures of Greenhouse Gas Cap and Trade Allowance Proceeds
Daniel Beans, Director of
Electric Utility
Packet Pg. 263 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Report to Redding City Council April 11, 2018
Re: 9.5(b)--Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds Page 2 Background/Analysis
The Assembly Bill 32 ( AB 32) scoping plan regulations require certain economic sectors of California to reduce greenhouse gas ( GHG) emissions to 1990 levels by 2020 through a Cap and Trade Emissions Reduction Program. As part of this Program, Redding Electric Utility (REU) must turn in “ allowances” for its emissions from the Redding Power Plant, as well as a portion of the electricity REU brings into California over its transmission assets. An allowance represents one metric ton of GHG emissions. The allowances are administered by the California Air Resources Board (CARB).

CARB has provided REU with a set number of "free allowances" each year in order to offset the expected cost burden of the Cap and Trade Program. Through diligent efforts, REU has reduced its GHG emissions profile by procuring carbon-free energy and ensuring energy purchases are as low in GHG emissions as possible. As a result of these emissions reduction efforts, REU has been able to sell a portion of its free allowances in the Cap and Trade auction process with total revenues of over $18 million as of March 2018. These funds are currently held as restricted reserves by REU. Any revenue received from the sale of these free allowances must be used exclusively for the benefit of the electric utility’s ratepayers, consistent with the GHG reduction goals of AB 32, and shall be subject to any limitations imposed by the governing board of a publicly owned electric utility.

On August 6, 2013, the City Council (Council) approved Resolution No. 2013-070 ( attached), which outlines REU’ s policy for eligible expenditures from proceeds generated from the sale of free allowances. On April 18, 2017, the Council approved the 70th Amendment to City Budget Resolution No. 2015- 057 authorizing expenditures of $6.5 million of Cap and Trade auction proceeds in the following five program areas: ( 1) Low-income Energy Efficiency Improvements, 2) Shade Trees, ( 3) Transportation Electrification, ( 4) LED Streetlight Upgrades, and ( 5) Non - motorized Transportation. REU has been implementing these programs over the prior year with project results displayed in the Cap & Trade Fund Program Update ( attached).

In order to comply with the requirements of California Code of Regulations 17CCR § 95892, staff has studied an assortment of additional GHG reduction options that would be well-suited for allocation of the GHG allowance auction proceeds. Analysis of GHG reduction options included consideration of existing California laws and regulations regarding GHG emissions, value analysis, community improvement, and efficient use of resources. REU staff narrowed the focus toward the following five areas (overview of programs is attached): ( 1) Expanded funding for the existing Transportation Electrification program, ( 2) Affordable Housing Energy Efficiency and Renewable Energy, ( 3) Energy Efficiency Measures, ( 4) Low-Income Electrification ( Fuel Switching) Program, and ( 5) Non- motorized Transportation.

The funding request for all five programs is $ 10.8 million. These funds are expected to be disbursed over the next four (4) fiscal years as the programs develop and mature. As program participation rates are established and various information is ascertained, staff may request adjustments to certain attributes of each program with the overall goal of maximizing benefits to the customers of REU. Additional funding requests and other major program enhancements will be brought to the Council in the future as needed.

Packet Pg. 264 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Report to Redding City Council April 11, 2018
Re: 9.5(b)--Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds Page 3 Council Priority/City Manger Goals
Government of the 21st Century – “Be relevant and proactive to the opportunities and challenges of today’s residents and workforce. Anticipate the future to make better decisions today.”
Attachments
Resolution
Resolution No. 2013- 070
2018 Program Outline
Cap and Trade Fund Program Updates 2018
Packet Pg. 265 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to RESOLUTION NO. 2018-____

A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE 29th AMENDMENT TO CITY BUDGET RESOLUTION NO. 2017-057 APPROPRIATING 10,800,000 IN PROCEEDS FROM THE SALE OF CALIFORNIA CARBON ALLOWANCES FOR THE FOLLOWING PROGRAM AREAS: (1) TRANSPORTATION ELECTRIFICATION, ( 2) AFFORDABLE HOUSING ENERGY EFFICIENCY, ( 3) ENERGY EFFICIENCY MEASURES, ( 4) LOW-INCOME ELECTRIFICATION, AND 5) NON-MOTORIZED TRANSPORTATION FOR FISCAL YEAR 2017-18

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDDING THAT Budget Resolution No. 2017- 057 be and is hereby amended as follows:

FUND DIVISION DESCRIPTION INCREASE DECREASE
142
142
142
142
142
854
854
854
854
854
Transportation Electrification
Affordable Housing Energy
Efficiency
Energy Efficiency Measures
Low-Income Electrification
Non-Motorized Transportation
2,000,000
3,000,000
4,500,000
500,000
800,000
THAT account titles and numbers requiring adjustments by this Resolution are as follows:

USE SOURCE

OF FUNDS OF FUNDS
Increase Revenue
142-851-1-4400-01 Environmental Attributes 2,579,760$
142-851-1-0001-01 Beginning Balance 8,220,240$
Increase Expenditures
142-854-8908-93 Transportation Electrification 2,000,000$ 142-854-8908-95 Affordable Housing Energy Efficiency 3,000,000$ 142-854-8908-96 Energy Efficiency Measures 4,500,000$
142-854-8908-97 Low-Income Electrification 500,000$
142-854-8908-94 Non-Motorized Transportation 800,000$
Total 10,800,000$ 10,800,000$
THAT the purpose is to appropriate $10,800,000 in proceeds from the sale of California carbon allowances for the following program areas: ( 1) Transportation Electrification, ( 2) Affordable Housing Energy Efficiency, (3) Energy Efficiency Measures, ( 4) Low-Income Electrification, and ( 5) Non- Motorized Transportation for fiscal year 2017- 2018.

Packet Pg. 266 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to I HEREBY CERTIFY that the foregoing resolution was introduced at a regular meeting of the City Council of the City of Redding on the ____ day of _____, 2018, and was duly adopted at said meeting by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

KRISTEN SCHREDER, Mayor
ATTEST: FORM APPROVAL:

PAMELA MIZE, City Clerk BARRY E. DeWALT, City Attorney
Packet Pg. 267 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Packet Pg. 268 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Packet Pg. 269 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Report to City Council – Attachment #1 April 3, 2018
Cap and Trade Allowance Proceed Expenditure Program Outline Page 1 Program Outlines
Program # 1: Transportation Electrification
Overview
Redding Electric Utility’ s ( REU) Transportation Electrification Program has provided valuable insight as to opportunities, costs, and benefits of electric vehicle procurement and charging infrastructure development. In support of the state’ s goals to substantially reduce greenhouse gas GHG) emissions from the transportation sector, the following program enhancements and additions are proposed:

Supplement the existing funding plan for a City-wide Level 3 fast charging system, including site preparation, chargers/ charging equipment and electrical system upgrades .

In order to equally distribute the Level 3 fast charging systems throughout the City, REU is planning to incentivize three ( 3) site locations.

Supplement the City of Redding charging infrastructure project to deploy charging stations at all City-owned facilities. This includes site preparation, chargers/charging equipment, and electrical system upgrades. A preliminary engineering study has indicated the opportunity to install over 277 charging stations to support City-wide fleet electrification. For expense and feasibility purposes, this charging infrastructure project may be phased in various sequences to match charging needs with electric vehicle (EV) growth. GHG emission reductions are not typically associated with EV charging infrastructure; however, without the GHG charging infrastructure in place, the GHG emission reductions resulting from electric vehicles cannot materialize.

REU proposes a portion of the funding be directed toward electric bus development for public and/or school transportation. With the significant daily mileage placed on public transportation, GHG emission reductions are very effective in this sector. The typical RABA bus travels approximately 40,000 miles per year at an average of 5 -6 MPG.

Electrification causes a significant reduction in GHG emissions, estimated at nearly 1,400 MT of CO2e over the useful life while also providing reductions in local criteria pollutants such as PM10. Funding requests will be reviewed with priority placed on matching grant funds or similar leveraged opportunities.

Significant opportunity exists in the electrification of off-road power equipment.

Examples include: small vehicles used by Parks maintenance staff, people movers, forklifts, etc. Using an estimate of 13 typical side-by-side utility vehicles, GHG emissions reduction of approximately 737 MT of CO2e during the useful life of the equipment could be obtained. Funding will be used to replace outdated equipment that is identified to be cost effective and maximizing GHG reductions.

Budget Detail
The cost to implement this Program is approximately $ 2,000, 000. Funds are proposed to be distributed as follows:

Packet Pg. 270 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Report to City Council – Attachment #1 April 3, 2018
Cap and Trade Allowance Proceed Expenditure Program Outline Page 2 Level 3 Fast Charging Infrastructure and Demand Charge Credit - $540,000 City of Redding Electric Vehicle Charging Infrastructure - $1,000,000 Electric Bus and related charging equipment - $200,000
Off-road electric vehicles and equipment - $260,000
Program #2: Affordable Housing Energy Efficiency and Renewable Energy Overview
Affordable housing projects in Redding present opportunities for REU to incentivize various GHG reduction measures for improvements above current building code. Coupled with the traditional benefits of affordable housing, the proposed measures will provide incremental energy savings, transportation fuel reduction, and renewable energy generation. REU proposes to offer rebates for specific program measures ( listed below) that meet the requirement of quantifiable GHG reduction. REU will work with the City of Redding Housing Division to identify opportunities. All project specifics will be reviewed prior to providing project rebate funding to ensure compliance with the Cap and Trade Allowance Proceeds Expenditure Program. Specific areas of GHG reduction include:

Installation of on-site distributed renewable generation, including energy storage for grid optimization. Energy efficiency measures that provide incremental savings above current building code.

Electric Vehicle charging infrastructure installations.

Non- motorized transportation improvements related to the affordable housing project.

Budget Detail
The cost to implement this Program is estimated to be $3,000,000. Funds will be reserved on a first- come, first- served basis for project requests meeting the criteria listed above. After installation, verification of program measures will result in the distribution of rebate funds.

Program # 3: Energy Efficiency Measures
Overview
REU has been working with both public and private customers to identify opportunities for costeffective and technically feasible energy efficiency opportunities. Over the past several months, REU staff members have been working to establish an energy savings performance contract to analyze and install energy efficiency measures throughout the City’s departments. Separately, REU has been reviewing several City of Redding facilities with potential for stadium lighting upgrades. Significant savings can be achieved from modern LED stadium lighting. In order to capture the GHG emission reduction benefits from the City of Redding projects, REU would like to partially fund (or fully fund, depending on GHG reduction value) these projects from Cap & Packet Pg. 271 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Report to City Council – Attachment #1 April 3, 2018
Cap and Trade Allowance Proceed Expenditure Program Outline Page 3 Trade revenues. Furthermore, REU has been working with multiple non-residential customers to identify specific energy efficiency opportunities to help reduce energy consumption and GHG emissions while providing REU with tangible, reportable benefits toward meeting the state energy efficiency and GHG reduction goals. REU proposes the issuance of custom rebates for targeted non-residential customers that install energy saving measures meeting the Cap and Trade Allowance Proceed Expenditure Program goals. Specific attributes of the proposed program are as follows:

Provide funding toward an Energy Savings Performance Contract for the City of Redding. This includes direct installation of energy efficiency measures, modifications in energy use, and other related tasks providing a reduction in energy use at City facilities.

Provide funding for LED stadium lighting retrofits at City of Redding facilities. Projects will be prioritized based on usage, cost, project payback, and ultimate value for the City of Redding.

Issue custom rebates to targeted, non-residential customers for installation of approved energy efficiency measures. REU has contacted and engaged approximately 35 non - residential customers and has identified energy savings opportunities at all sites.

REU staff estimates the overall GHG emission reduction savings to be 17,408 MT of CO2e depending on the different mix of energy efficiency measures. This GHG emission reduction estimate can vary as REU further refines the project priorities for maximum benefit.

Budget Detail
The cost to implement this Program is budgeted at $4,500, 000. This includes $ 2,500,000 for the City of Redding energy savings performance contract, $ 500,000 for non-residential custom rebate incentives, and $1,500, 000 for LED stadium lighting retrofits at City of Redding facilities.

Program #4: Low-Income Electrification (Fuel Switching) Program Overview
The California Air Resource Board ( CARB) has recently updated the 2017 Climate Change Scoping Plan to include strategies for achieving California’ s 2030 GHG emission reduction targets. The Scoping Plan specifically addresses utilizing electrification ( fuel switching) at residential and non- residential locations as a viable option for GHG emission reductions. Fuel switching is substituting one energy source for another, in this case, natural gas to electric.

Specific attributes of the proposed program are as follows:

Project criteria ( i.e. heat pump efficiency factors, Energy Star ratings, etc.) have been developed to ensure electrification only takes place when the overall electric cost to the customer is the same or lower than the previous natural gas cost. Based on the estimated number of water and space heating installations within the service territory, GHG Packet Pg. 272 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Report to City Council – Attachment #1 April 3, 2018
Cap and Trade Allowance Proceed Expenditure Program Outline Page 4 emissions reductions are estimated at 3,689 MT of CO2e for the life of the Project.

REU has identified a unique opportunity to amend the current low-income weatherization contract between the City of Redding and the Self- Help Home Improvement Project SHHIP) to specifically include the replacement of natural gas fired water and space heating units to electric heat- pump technology.

The City of Redding Housing Division offers several rehabilitation programs for eligible customers. REU proposes funding water and space heating electrification projects submitted by the Housing Division that meet the same criteria established between the City of Redding and SHHIP.

Budget Detail
REU is proposing allocation of $500,000 for the Low-Income Electrification Program. REU is targeting 200 low-income households throughout the service area. It is expected that this will fully fund the Program through its expected completion.

Program # 5: Non- Motorized Transportation
Overview
As part of achieving California’ s overarching goal to reduce GHG emissions, REU has identified an additional opportunity to assist in reducing overall vehicle miles travelled by funding bicycle and pedestrian lane enhancements. This opportunity will support the City of Redding Active Transportation Plan which identifies and prioritizes non-motorized transportation and transit improvements across all of Redding that are inherently necessary to actively engage the community - directly resulting in improved health and reduced vehicle miles traveled, all while reducing GHG emissions. REU is also reviewing an opportunity with Community Services for development of additional trails system enhancements throughout Redding to reduce vehicle miles travelled. Specific attributes of the Program are as follows:

The City of Redding Public Works Department has identified an opportunity to provide partial funding for the Quartz Hill Road project. This project will widen the roadway from Benton Dr. to the top of the grade, adding sidewalk and bike lanes in a previously nearly inaccessible area for pedestrian traffic.

The City of Redding Community Services Department has identified an opportunities to seek grant funding for a new trail systems throughout Redding. The Community Services Department is seeking local funding to provide support for the grant application process.

REU proposes the use of Cap & Trade program revenues to provide the necessary funding to complete the projects.

Project estimates include 400 Metric Tonnes of CO2e emission reductions per year with a total reduction of nearly 900,000 vehicle miles travelled over the project lifetime.

Packet Pg. 273 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Report to City Council – Attachment #1 April 3, 2018
Cap and Trade Allowance Proceed Expenditure Program Outline Page 5 Budget Detail:

REU is proposing to allocate $800,000 for funding bicycle and pedestrian paths within REU’ s service territory for the Quartz Hill Road project and other non- motorized transportation project support with Community Services. This project will end upon expenditure of allocated funding and construction of the improvements.

Packet Pg. 274 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and Trade Proceeds (4.5(c)--Resolution to Program Budgeted Amount Start Date Time Period Funds Used Available Funds Low Income Weatherization ( LIEEP)$ 2,000,000 17-Sep 4 Fiscal Years $ 178,335 $ 1,821,665 Shade Trees $ 500,000 17-Apr 4 Fiscal Years $ 110,105 $ 389,895 Transportation Electrification $ 1,700,000 17-Apr 4 Fiscal Years $ 149,467 $ 1,550,533 Non-Motorized Transportation $ 300,000 17-Apr Ongoing $ 42,995 $ 257,005 LED Streetlight Upgrades $ 2,000,000 15-Oct Ongoing $ 393,671 $ 1,606,329 Cap & Trade Fund Program Updates
Packet Pg. 275 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse Gas Cap and

POWERING

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Cap & Trade Fund
Expenditure
Proposals
April 2018
Packet Pg. 276 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

POWERING A STRONG COMMUNITY
2017 C& T Program Results
2 Program Budgeted
Amount Start Date Time Period Funds Used Available Funds Low Income Weatherization
LIEEP)$ 2,000,000 Sep-17 4 Fiscal Years $ 178,335 $ 1,821,665 Shade Trees $ 500,000 Apr-17 4 Fiscal Years $ 110,105 $ 389,895 Transportation Electrification $ 1,700,000 Apr-17 4 Fiscal Years $ 149,467 $ 1,550,533 Non-Motorized Transportation $ 300,000 Apr-17 Ongoing $ 42,995 $ 257,005 LED Streetlight Upgrades $ 2,000,000 Oct-15 Ongoing $ 393,671 $ 1,606,329 TOTALS $ 6,500,000 $ 874,573 $ 5,625,427
Lifetime Carbon Offset of 6,502 MTCO2e or the equivalent of 16,000,000 miles not driven Packet Pg. 277 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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3 Transportation Electrification
Affordable Housing Upgrades
Energy Efficiency Measures
Space and Water Heating Electrification
Non-Motorized Transportation
C&T Funding Approval Request
Packet Pg. 278 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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Transportation
Electrification
Packet Pg. 279 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

POWERING A STRONG COMMUNITY
Transportation Electrification Program
5 Program
Launched
2017
Budget
deemed
too low
Demand
is very
high
Need is
growing
quickly
Propose
increase
in funds
Program began
July 2017
4-year goals
Initial budget estimates for
Level 3 & COR charging
infrastructure have
proven to be too low
Based on Target/ ChargePoint experience
Demand for non-licensed
EV’s and equipment
is very high
eBus interest is
accelerating faster
than planned
Packet Pg. 280 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

POWERING A STRONG COMMUNITY
6 Transportation Electrification Program
Supplement L3 charging
infrastructure by $450k to $750
total.

Supplement L3
charging within
City of Redding,
including demand
charge credit
540k
Supplement EV
Charging in City
of Redding
facilities
1M
Electric Bus &
Charging
Equipment:
200k
Off-Road
Electric vehicles
and Equipment
260k
Total: $2,000,000
Packet Pg. 281 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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Affordable Housing
Upgrades
Packet Pg. 282 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

POWERING A STRONG COMMUNITY
Affordable Housing Upgrades
8 Funding via rebates or
grants (depending on
project request)
Ability to leverage
external grants via local
match funding
Collaboration with the
City of Redding Housing
Division
Existing & New Construction Energy
Efficiency Improvements
Renewable Distributed Generation ( ex: Solar)
EV Charging station
Non-motorized transportation improvements
Requesting

3.0M for
GHG
reduction
upgrades:

Total: $3,000,000
Packet Pg. 283 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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Energy Efficiency
Packet Pg. 284 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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Split Funding
City of Redding
Energy Savings
Performance
Contract $2.5M
Targeted REU
Commercial
Customers $2.0M
City EE project
Intended for
areas with
greatest
energy
efficiency
upgrade
potential.

Targeted
Commercial
customers –
Prelim audit
results are
completed.

Project
criteria are
driven by
kWh savings
vs. cost.

Results in
maximum
GHG
reduction.

Above and
beyond
Public
Benefits
Program
funding
Energy Efficiency Programs
10 Total: $4,500,000
Packet Pg. 285 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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Water & Space Heating
Electrification
Fuel Switching)
Packet Pg. 286 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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CARB 2018
Scoping Plan
priority item
Amend
contract with
SHHIP: add
water and
space heating
electrification
into the
project
scope.

Heat pump
tech saves $
and reduces
GHG
emissions
compared to
burning
natural gas.

Proposing
500k
supplement
to the Low
Income
Energy
Efficiency
Program
LIEEP).

Electrification (Fuel Switching) Programs
12 Total: $ 500,000
Packet Pg. 287 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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Non-Motorized
Transportation
Packet Pg. 288 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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14 Non-Motorized Transportation
Supplement L3 charging
infrastructure by $450k to $750
total.

Identified in
City of Redding
Active
Transportation
Project list
CARB
spreadsheet
model used for
GHG Reduction
estimates
Quartz Hill
Road
Community
Services
Department –
Boulder Creek
Trails
Total: $800,000
Packet Pg. 289 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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15 Transportation Electrification -$ 2,000,000
Affordable Housing Upgrades -$ 3,000,000
Energy Efficiency Measures -$ 4,500,000
Space and Water Heating Electrification -$ 500,000
Non-Motorized Transportation -$ 800,000
2018 C& T Funding Total -$ 10,800,000
Lifetime Carbon Offset of 23,000 MTCO2e or the equivalent of 56,000,000 miles not driven Packet Pg. 290 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

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Thank you!
Packet Pg. 291 Attachment: Previous Staff Report - 4-17-18 - 9.5(b)- Approve Expenditures of Greenhouse

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize the following relative to the City of Redding’ s ( City) COVID- 19 Economic Stimulus Program of Projects:
1) Receive an update on progress; and
2) Ratify approval of the following contracts awarded by the City Manager:
a) C19-P-01: American Leak Detection
b) C19-P-02: American Leak Detection
c) C19-M-01: ACCO Services
d) C-19-L-01: B&C Electric
e) C19-M-02: ACCO Services
f) C19-PO-01: Musco Lighting (Equipment Purchase Only)
g) C19-DC-01: Jacobs Engineering
Fiscal Impact
The City Council (Council) has previously approved an allocation of $9 million in Greenhouse Gas ( GHG) Cap and Trade auction proceeds ( Cap and Trade auction proceeds) to be used for projects that reap an energy savings benefit to the City. To date, the City Manager has authorized purchases and projects totaling over $ 1.5 million and a consulting services agreement for engineering support of just over $1.2 million.

Alternative Action
The Council could choose to not ratify the City Manager awards and direct staff to terminate the agreements, if they are not complete. This would delay execution of the projects and potentially result in delays or claims by contractors performing the work.

MEETING DATE: July 21, 2020
ITEM NO. 4.11(k)
FROM:

APPROVED BY***
[email protected] btippin@cityofredding. org
SUBJECT: 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects Chuck Aukland, Public
Works Director
Packet Pg. 292 Attachment: Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects (4.5(c)--Resolution to Report to Redding City Council July 14, 2020
Re: 4.11( k)--City of Redding COVID Economic Stimulus Program of Projects Page 2 Background/ Analysis
On Tuesday, April 21, 2020, the Council unanimously approved the Economic Response Plan.

Included in the plan is the allocation of $9 million in Cap and Trade auction proceeds to be used for several projects ( Program) associated with the Local Economic Stimulus Package that equates to a savings in energy costs for the City. On May 5, 2020, the Council authorized the City Manager to execute agreements, purchase orders and contracts associated with the Program to ensure an expedited delivery schedule. The Council also directed staff to provide regular status updates on the project and ratify all City Manager awards.

To date, staff has awarded five purchase orders totaling $272,263 for lighting, plumbing and mechanical work at several facilities including fire stations and Old City Hall. Stadium lighting equipment totaling $1,227,941 was purchased for several ballfields that will be installed through a public works contract. Also awarded was a consultant services agreement with Jacobs Engineering to provide design, project management, and construction management services.

Although this time and materials agreement has a not to exceed value of $ 1,240,816, staff anticipates the final cost to be significantly less depending on staff availability for construction and level of detail needed for each bid package.

Staff and the consultant team completed site visits to all facilities to generate the final scope of work and develop a project plan to organize construction activities into manageable bid packages of similar work type and value in an effort to encourage the use of multiple local contractors.

This plan will likely result in the development of 18 separate bid packages and organized in priority order to ensure maximum benefit of energy reduction and the corresponding cost savings to the City’s General Fund. The attached Project Status Report provides more detailed information on project status and costs. Staff will return to the Council monthly to provide progress updates.

Council Priority/City Manager Goals
Budget and Financial Management – “ Achieve balanced and stable 10-year Financial Plans for all funds.”
Communication and Transparency – “ Improve the quality of communication with the public and City employees to enhance knowledge and increase transparency to improve public trust.”
Government of the 21st Century – “ Be relevant and proactive to the opportunities and challenges of today’ s residents and workforce. Anticipate the future to make better decisions today.”
Economic Development – “ Facilitate and become a catalyst for economic development in Redding to create jobs, retain current businesses and attract new ones, and encourage investment in the community.”
Attachments
Energy Efficiency Economic Response Plan ( EEERP) Project Status Report

9.1(b) Consider Economic Response Plan (4/21/20) (available online)

9.1(b) Consider authorizing the CM to award energy savings contracts ( 5/5/20) ( available online) Packet Pg. 293 Attachment: Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects (4.5(c)--Resolution to Packet Pg. 294 Attachment: Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects (4.5(c)--Resolution to

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Accept the City of Redding Economic Response Plan and provide direction to staff as follows:
1) Approve deferral of Transient Occupancy Tax ( TOT) hotels and motels. 2) Approve modification of existing Community Assistance for Redding Electric Services CARES) guidelines.
3) Approve modification of amortization policy for City of Redding utility bills. 4) Approve the refund of all City of Redding utility deposits. 5) Rescind approval of allocation of Cap and Trade funds for the Wildfire Mitigation and Building Electrification programs; approve Cap and Trade auction proceeds to be distributed to electric customers; and adopt Resolution approving and adopting the 32nd Amendment to City of Redding Budget Resolution No. 2019- 050 to appropriate a total of 9 million in Greenhouse Gas allotment for utility rebates. 6) Approve adoption of a utility grant program for small businesses utilizing $ 600,000 of Community Development Block Grant (CDBG) funding.
7) Economic Stimulus Package
a. Approve additional use of $5 million of Greenhouse Gas allotment and adopt Resolution approving and adopting the 33rd Amendment to City of Redding Budget Resolution No. 2019-050 allocating money for projects designated as providing energy savings for the general fund.
b. Provide direction on projects involving utilities funding and borrowing.

Fiscal Impact
The amount of impact of this proposal depends on the City Council’ s ( Council) direction for staff. The programs implemented thus far are expected to impact the General Fund due to approximately $ 500, 000 in missed revenue projections. Programs such as modifying the Amortization Program guidelines and deferring Transient Occupancy Tax will reduce reserves in the short term by providing cash flow relief to businesses. Using restricted revenue funds to modify existing CARES program guidelines, and also refunding City of Redding utility deposits MEETING DATE: April 21, 2020
ITEM NO. 9.1(b)
FROM:

APPROVED BY***
btippin@cityofredding. org
[email protected]
SUBJECT: 9.1(b)-- Consider Economic Response Plan related to the Covid- 19 pandemic' s impact on the City and provide direction regarding mitigation measures.

Barry Tippin, City Manager
Packet Pg. 295 Attachment: Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects (4.5(c)--Resolution to Report to Redding City Council April 16, 2020
Re: 9.1(b)--Economic Response Plan Page 2
and creating a utility grant program for small business will not impact unrestricted reserves. If the additional utility credit is approved, $ 9 million in Cap and Trade auction proceeds would need to be allocated, some of which would be reallocated from previously funded projects, to bring the total allocation to $11 million for utility rebates. To complete projects listed in the Local Economic Stimulus Package, $ 5 million in Cap and Trade auction proceeds would need to be allocated in addition to the $ 4 million already allocated. The Council could also, through approval of this report, provide direction and identify an amount of money to reserve to pay for any potential borrowing for projects that would be approved through the Local Economic Stimulus Package.

Alternative Action
The Council has multiple options with this report. If it chooses to not accept the report in its entirety, all currently implemented programs would cease and no additional community assistance programming would take place at this time. The Council could choose to accept the report, and therefore all of the currently implemented projects as well, and provide direction to staff regarding which new projects to move forward.

Background/Analysis
The Covid- 19 global pandemic has been a health catastrophe causing significant disruption in individual, community and societal norms while devastating the economy. The City of Redding, as the local governmental entity, needs to take bold action in line with the State and Federal Government to not only protect the health and welfare of the individual but also of the economy.

The City of Redding City Council will be presented with a number of proposed initiatives and projects to help individuals and businesses through this difficult time. The attached City of Redding Economic Response Plan is a report detailing programming currently implemented, as well as programming that could be implemented to assist the community. These items are varied in cost and source of funding.

Currently implementing
Maintain City services
Suspend Return to Owner fees for impounded animals
Suspend late fees and interest on payments due to the City of Redding Suspend City of Redding utility shut-offs due to non-payment Suspend City of Redding utility payment late fees
Cap and Trade distribution of $ 50 to every Redding Electric Utility ( REU) account holder
Pending approval
Deferral of Transient Occupancy Tax payment from hotel and motel businesses Modify existing – Community Assistance for Redding Electric Services ( CARES) program guidelines to provide opportunity for additional financial assistance to qualifying utility customers
Modify Utilities Amortization program guidelines to extend the amortization period, and extend the program to commercial customers
Refund City of Redding utility deposits to residential and commercial customers Additional Cap and Trade distribution of $200 to every REU account holder Utility grant program for small businesses
Local Economic Stimulus Package containing multiple projects that will result in local contract work opportunities and energy savings to the City of Redding Packet Pg. 296 Attachment: Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects (4.5(c)--Resolution to Report to Redding City Council April 16, 2020
Re: 9.1(b)--Economic Response Plan Page 3
Council Priority/ City Manager Goals
Budget and Financial Management – “ Achieve balanced and stable 10- year Financial Plans for all funds.”
Public Safety – “ Work to improve all aspects of public safety to help people feel secure and safe where they live, work, and play in the City of Redding.” Communication and Transparency – “ Improve the quality of communication with the public and City employees to enhance knowledge and increase transparency to improve public trust.”
Government of the 21st Century – “Be relevant and proactive to the opportunities and challenges of today’s residents and workforce. Anticipate the future to make better decisions today.”
Economic Development – “ Facilitate and become a catalyst for economic development in Redding to create jobs, retain current businesses and attract new ones, and encourage investment in the community.”
Attachments
Resolution - GHG Customer Distribution
Resolution - Green House Gas Allotment
COR Economic Response Plan 2020
Packet Pg. 297 Attachment: Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects (4.5(c)--Resolution to

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize the City Manager to award any public works contract, purchase order, or agreements, of any value, associated with the $ 9.5 million GHG funding approved as part of the Local Economic Stimulus Package.

Fiscal Impact
The City Council has previously approved the allocation of $9.5 million in Cap and Trade auction proceeds to be used for projects that reap an energy savings benefit to the City of Redding. There is no further fiscal impact to granting authority to the City Manager to execute the agreements, purchase orders, and contracts associated with these projects. There may, however, be an added benefit of seeing the money infused more rapidly into the local economy.

Alternative Action
The City Council could choose to not authorize the City Manager to execute the agreements, purchase orders, or contracts associated with the Cap and Trade distribution funds to expedite delivery of the work. This would lengthen the process to use the authorized funding.

Background/Analysis
On Tuesday, April 21, 2020, the City Council unanimously approved the Economic Response Plan. Included in the plan is the allocation of $9.5 million in Cap and Trade auction proceeds to be used for projects associated with the Local Economic Stimulus Package that equate to a savings in energy costs for the City of Redding. By authorizing the City Manager to negotiate, execute, and direct the agreements, purchase orders and contracts, staff can proceed with rapidly assigning the work and awarding bids. The benefit to this is being able to see the Cap and Trade action proceeds go to work as soon as possible in the community, and thereby providing the local MEETING DATE: May 5, 2020
ITEM NO. 9.1(b)
FROM:

APPROVED BY***
btippin@cityofredding. org
[email protected]
SUBJECT: 9.1(b)-- Consider authorizing the City Manager to award energy savings contracts, purchase orders, and agreements related to the Green House Gas ( GHG) funding approved by the City Council as part of the Local Economic Stimulus.

Barry Tippin, City Manager
Packet Pg. 298 Attachment: Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects (4.5(c)--Resolution to Report to Redding City Council April 28, 2020
Re: 9.1(b)--Authorize City Manager to award energy savings contracts Page 2 economy a direct opportunity to see a quick positive impact to jobs and business activity. The projects within the package may include, , LED light replacement in City facilities, reroofing and some solar installation at Fire Stations, replacing largely older and heavy energy using equipment with newer more efficient equipment, and additional energy saving projects to be determined
Council Priority/ City Manager Goals
Budget and Financial Management – “ Achieve balanced and stable 10- year Financial Plans for all funds.”
Public Safety – “ Work to improve all aspects of public safety to help people feel secure and safe where they live, work, and play in the City of Redding.” Communication and Transparency – “ Improve the quality of communication with the public and City employees to enhance knowledge and increase transparency to improve public trust.”
Government of the 21st Century – “ Be relevant and proactive to the opportunities and challenges of today’s residents and workforce. Anticipate the future to make better decisions today.”
Economic Development – “ Facilitate and become a catalyst for economic development in Redding to create jobs, retain current businesses and attract new ones, and encourage investment in the community.”
Packet Pg. 299 Attachment: Previous Staff Report - 7-21-20 - 4.11(k)--City of Redding COVID Economic Stimulus Program of Projects (4.5(c)--Resolution to Packet Pg. 300 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 301 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 302 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 303 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 304 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 305 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 306 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 307 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 308 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 309 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 310 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 311 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 312 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 313 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 314 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 315 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 316 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 317 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 318 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 319 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 320 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 321 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 322 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 323 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 324 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 325 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Stimulus Package Projects (4.5(c)--Resolution Packet Pg. 326 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Packet Pg. 327 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Packet Pg. 328 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Packet Pg. 329 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Packet Pg. 330 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Packet Pg. 331 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic Packet Pg. 332 Attachment: Previous Staff Report - 2-4-26 - 9.11(d)--Accept Final Update to COVID-19 Economic

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Adopt Resolution approving and adopting the 32nd Amendment to City Budget Resolution No. 2025-049 appropriating $1,067,510 in Californian State Water Resources Control Board Drinking Water Grant funds for the Cascade Racquet Club Mutual Water Company Water Main Project.

Fiscal Impact
The Cascade Racquet Club Mutual Water Company Water Main Project (Project) is being funded by a State Grant in the amount of $1,067,509. The attached budget resolution will appropriate the Grant funds to the Project. Additionally, the budget resolution includes an increase to the Project in the amount of $320,332 in order to provide adequate funding to remedy unforeseen conditions and successfully complete the project. There is no impact to the General Fund.

Cost Components Current Authorized Requested Increase New Authorized Development Costs $35,000 $0 $35,000
Contract $419,177 $0 $419,177
Contingency $50,000 $120,000 $170,000
Construction Management $193,000 $60,000 $253,000
City Manager Funds $50,000 $0 $0
Project Closeout $0 $140,332 $140,332
Total $747,177 $320,332 $1,067,509
MEETING DATE: April 7, 2026
ITEM NO. 4.11(a)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 4.11(a)--Adopt Budget Resolution appropriating grant funds for Cascade Racquet Club Water Main Project
Michael Webb, Public Works
Director/Interim Asst. City
Manager
Packet Pg. 333
Report to Redding City Council April 1, 2026
Re: 4.11(a)--Adopt Budget Reso for Cascade Racquet Club Water Main Project Page 2 Project cost components are estimates and some shifting of funds maybe be necessary to balance the project within the approved budget.

Alternative Action
The City Council (Council) may choose not to approve the request and provide alternative direction to staff.

Background/Analysis
On October 1, 2025, the Council awarded the Project to Zeis Construction, accepted Grant funds of $1,067,509, and authorized project funds of $747,177.

This Project involves the construction of the water infrastructure necessary to integrate all Cascade Racquet Club Mutual Water Company (CRCMWC) customers into the City’s system.

The Project will close the existing water main gap along Forest Hills Drive by installing more than 1,200 feet of new eight-inch water main. The project will also include installation of new City service connections to the 27 parcels and the installation of City-standard fire hydrants in the area. The existing well will be demolished, and the old water piping will be abandoned in place.

During the course of construction, unforeseen conditions warranted changes including but not limited to; water service relocations, tree removal, and a storm drain replacement which were all warranted changes to meet the projects intent. Additionally, after the placement of the new water main, water services and fire hydrants, trench backfill material became saturated as a result of unanticipated high groundwater, ultimately creating an unsuitable condition for properly placing pavement a top the trenches and completing the project. An increase to contingency funds is required to cover the cost to remedy the backfill material and to cover any additional unforeseen conditions that may arise during the remainder of the Project. Staff confirmed with the State that these costs are eligible for reimbursement. Staff is also requesting an increase in Project funds to cover construction management services and project close out.

The budget resolution will provide funds for the full amount of the Grant received for the Project. Staff anticipates total project costs to be within the Grant budget and any anticipated costs savings and unexpended funds will not be invoiced to the State.

Environmental Review
On October 7, 2025, the Council determined that the project is categorically exempt from environmental review under California Environmental Quality Act Guidelines, pursuant to Sections 15301 – Existing Facilities and Section 15303- New Construction or conversion of Small Structures. No further action is required.

Council Priority/City Manager Goals
• This is a routine operational item.

Attachments
Location Map
Budget Resolution
Previous Staff Report - October 7, 2025, item no. 4.11(f) - Award Cascade Racquet Club MWC Water Main
Packet Pg. 334

CITY OF REDDING

LOCATION MAP

CASCADE RACQUET CLUB

PUBLIC WORKS MWC WATER MAIN PROJECT

DEPARTMENT
NEW
WATER
MAIN
CRCMWC

SERVICE AREA
Packet Pg. 335 Attachment: Location Map (4.11(a)--Adopt Budget Reso for Cascade Racquet Club Water Main Project) Resolution No. 2026 - ____________

A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE 32 ndAMENDMENT TO CITY BUDGET RESOLUTION NO. 2025-049 APPROPRIATING $1,067,510 IN STATE GRANT FUNDING FOR THE CASCADE RACQUET CLUB MUTUAL WATER COMPANY WATER MAIN PROJECT.

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDDING THAT Budget Resolution No. 2025-049 be and is hereby amended as follows:

FUND DIVISION DESCRIPTION INCREASE DECREASE
221 6191 Transmission & Distribution $1,067,510
THAT account titles and numbers requiring adjustments by this Resolution are as follows:

USE SOURCE

OF FUNDS OF FUNDS
Increase (Decrease) Revenue
221-6191-3624101-00000 State Grant Operating-Water 1,067,510 Increase Expenditures
221-6191-6490901-00000 State Operating Grant Activities 1,067,510 Total $ 1,067,510 $ 1,067,510
THAT the purpose is to appropriate $1,067,510 in State grant funding for the Cascade Racquet Club Mutual Water Company Water Main Project.

I HEREBY CERTIFY that the foregoing Resolution was introduced at a regular meeting of the City Council of the City of Redding on the 7th day of April, 2026 and was duly adopted at said meeting by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

MIKE LITTAU, Mayor
ATTEST: FORM APPROVAL:

SHARLENE TIPTON, City Clerk BENJAMIN L. STOCK, City Attorney Packet Pg. 336 Attachment: Budget Resolution (4.11(a)--Adopt Budget Reso for Cascade Racquet Club Water Main Project)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize and approve the following actions relative to Bid Negotiation No. 5551 Cascade Racquet Club Mutual Water Company Water Main Project:
(1) Award to Zeis Construction in the amount of $419,177; (2) Approve an additional $193,000 to cover the cost of administration and inspection fees; (3) Approve $35,000 for project development costs;
(4) Approve $50,000 for construction contingency funding; (5) Authorize the Interim City Manager to approve additional increases in either the construction management or construction contingency amounts up to a total of $50,000; (6) Accept California State Water Resources Control Board grant funds of $1,067,509 for the project; and
(7) Find that the Project is categorically exempt from review under the California Environmental Quality Act, pursuant to Section 15301 – Existing Facilities and Section 15303 New Construction or Conversion of Small Structures.

Fiscal Impact
The Cascade Racquet Club Mutual Water Company (CRCMWC) Water Main Project (Project) will have no fiscal impact to the General Fund. All project costs will be funded by a California State Water Resources Control Board Drinking Water Grant (Grant), which will provide up to $1,067,509 in funding. There is no local match requirement associated with the grant. A summary of the project costs is provided in the table below:

MEETING DATE: October 7, 2025
ITEM NO. 4.11(f)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 4.11(f)--Award Bid Negotiation No. 5551 Cascade Racquet Club Mutual Water Company Water Main
Michael Webb, Public Works
Director

APPROVED
Packet Pg. 337 Attachment: Previous Staff Report - October 7, 2025, item no. 4.11(f) - Award Cascade Racquet Club MWC Water Main (4.11(a)--Adopt Budget Report to Redding City Council October 1, 2025
Re: 4.11(f)--Award BN No. 5551 Cascade Racquet Club MWC Water Main Page 2 Cost Summary
Item Estimated
Project Development Costs $ 35,000
Construction Contract + Contingency $469,177
Contract Administration, Inspection, Testing $193,000
Additional City Manager Authority $ 50,000
Total Project Costs $747,177
Project cost components are estimates and some shifting of the project development, construction management, and construction contingency funds may be necessary to balance the project within the approved budget.

Alternative Action
City Council (Council) may choose not to award the bid or accept the grant for the project and provide staff with alternate direction. Without the project, many properties within the CRCMWC would be unable to connect to the City of Redding’s (City) water system, and the CRCMWC would be required to continue operating its aging well and water system to serve its customers.

Background/Analysis
The CRCMWC, Public Water System Identification No. CA4500012, was formed in the 1960’s to provide water service to 28 residential parcels within the Cascade Racquet Club Estates Subdivision, located along Forest Hills Drive and Wimbledon Drive near the Sun Oaks Tennis and Fitness Club. The CRCMWC is located within the City limits and is surrounded by the City’s water service area. Many existing CRCMWC customers already have a City water main in the street in front of their homes and one parcel is already connected to the City’s system, but currently there is an approximate 1,200-foot gap in the City water main along Forest Hills Drive in front of several CRCMWC residences.

CRCMWC currently serves its 27 remaining customers via a 350-foot-deep well located at 3375 Forest Hills Drive (west of Sun Oaks Tennis and Fitness Club) and through 2,600 feet of fourinch-diameter asbestos cement water mains. The well and piping were installed in 1964, and have reached the end of their useful service lives. Additionally, the existing system lacks a redundant or auxiliary water source in the event of well failure or a power outage.

Due to the aging infrastructure, lack of redundancy, and limited resources to operate a small utility company, CRCMWC contacted the City to request consolidation into the City’s water system. On November 7, 2023, the Council authorized the City to apply for a State Water Resources Control Board grant to fund the incorporation of all CRCMWC customers into the City’s system. The grant was awarded in August 2024.

This project will construct the water infrastructure necessary to integrate all CRCMWC customers into the City’s system. It will close the existing water main gap along Forest Hills Drive by installing more than 1,200 feet of new eight-inch water main. The project will also include installation of new City service connections to the 27 parcels and the installation of Citystandard fire hydrants in the area. The existing well will be demolished, and the old water piping will be abandoned in place.

Packet Pg. 338 Attachment: Previous Staff Report - October 7, 2025, item no. 4.11(f) - Award Cascade Racquet Club MWC Water Main (4.11(a)--Adopt Budget Report to Redding City Council October 1, 2025
Re: 4.11(f)--Award BN No. 5551 Cascade Racquet Club MWC Water Main Page 3 A bid tabulation is attached for bids received and opened on June 12, 2025, for the project construction. The low bid, in the amount of $419,177, was submitted by Zeis Construction of Redding, California. The engineer’s estimate was $522,820. On September 8, 2025, the State Water Resources Control Board provided Final Budget Approval based on the bid from Zeis Construction and authorized the City to award a contract for construction.

Environmental Review
Staff has determined that the project is categorically exempt from environmental review under California Environmental Quality Act Guidelines, pursuant to Sections 15301 - Existing Facilities and Section 15303- New Construction or conversion of Small Structures. Class 1 exemptions include the minor alteration of existing public structures and facilities. Class 3 exemptions consist of construction and location of new small facilities and equipment, or conversion of existing structures. The existing water system would be extended, and would result in negligible expansion of use. The expansion would consist of newly located small facilities and equipment. The action area has been reviewed and does not have significant values for wildlife habitat or other environmental resources, and the project has no potential to have a significant effect on the environment.

Council Priority/City Manager Goals
• This is a routine operational item.

Attachments
^Bid Tabulation
^Location Map
^Notice of Exemption
Grant Agreement
Previous Staff Report 11-7-23
Packet Pg. 339 Attachment: Previous Staff Report - October 7, 2025, item no. 4.11(f) - Award Cascade Racquet Club MWC Water Main (4.11(a)--Adopt Budget BID TABULATION FOR:

CASCADE RACQUET CLUB MUTUAL WATER COMPANY WATER MAIN
Bid Schedule No.: 5551

ENGINEER'S EST
6/12/2025 UNIT UNIT UNIT UNIT

ITEM DESCRIPTION UNIT QTY PRICE TOTAL PRICE TOTAL PRICE TOTAL PRICE TOTAL 1 Water Pollution Control Plan LS 1 $10,000.00 $10,000.00 $2,200.00 $2,200.00 $6,500.00 $6,500.00 $2,500.00 $2,500.00 2 Construction Area Sign EA 6 $600.00 $3,600.00 $650.00 $3,900.00 $600.00 $3,600.00 $600.00 $3,600.00 3 Project Funding Sign EA 1 $2,500.00 $2,500.00 $2,000.00 $2,000.00 $1,500.00 $1,500.00 $1,300.00 $1,300.00 4 Traffic Control LS 1 $20,000.00 $20,000.00 $3,500.00 $3,500.00 $27,000.00 $27,000.00 $35,000.00 $35,000.00 5 Trench Sheeting & Shoring LS 1 $7,500.00 $7,500.00 $2,500.00 $2,500.00 $9,400.00 $9,400.00 $1,500.00 $1,500.00 6 Water (8" PVC) LF 1208 $190.00 $229,520.00 $133.50 $161,268.00 $140.00 $169,120.00 $170.00 $205,360.00 7 Valve (8" Gate) EA 5 $4,000.00 $20,000.00 $3,800.00 $19,000.00 $5,200.00 $26,000.00 $6,450.00 $32,250.00 8 Water Service EA 27 $6,000.00 $162,000.00 $4,885.50 $131,908.50 $5,655.00 $152,685.00 $3,500.00 $94,500.00 9 Abandon Valve EA 1 $1,000.00 $1,000.00 $900.00 $900.00 $1,200.00 $1,200.00 $2,000.00 $2,000.00 10 Remove Valve EA 4 $1,300.00 $5,200.00 $1,375.00 $5,500.00 $750.00 $3,000.00 $400.00 $1,600.00 11 Replace Fire Hydrant Assembly EA 3 $15,500.00 $46,500.00 $16,333.50 $49,000.50 $10,700.00 $32,100.00 $15,400.00 $46,200.00 12 Well Demolition LS 1 $15,000.00 $15,000.00 $37,500.00 $37,500.00 $25,000.00 $25,000.00 $35,000.00 $35,000.00 TOTAL - CONTRACT ITEMS $522,820.00 $419,177.00 $457,105.00 $460,810.00

UNIT UNIT UNIT UNIT

ITEM DESCRIPTION UNIT QTY PRICE TOTAL PRICE TOTAL PRICE TOTAL PRICE TOTAL 1 Water Pollution Control Plan LS 1 $1,500.00 $1,500.00 $1,750.00 $1,750.00 $1,954.35 $1,954.35 $5,207.00 $5,207.00 2 Construction Area Sign EA 6 $1,500.00 $9,000.00 $400.00 $2,400.00 $425.98 $2,555.88 $400.00 $2,400.00 3 Project Funding Sign EA 1 $2,000.00 $2,000.00 $1,250.00 $1,250.00 $1,271.58 $1,271.58 $600.00 $600.00 4 Traffic Control LS 1 $31,000.00 $31,000.00 $23,000.00 $23,000.00 $1,767.67 $1,767.67 $29,088.00 $29,088.00 5 Trench Sheeting & Shoring LS 1 $16,895.00 $16,895.00 $2,000.00 $2,000.00 $2,064.74 $2,064.74 $5,220.00 $5,220.00 6 Water (8" PVC) LF 1208 $172.00 $207,776.00 $170.00 $205,360.00 $201.76 $243,726.08 $183.22 $221,329.76 7 Valve (8" Gate) EA 5 $5,360.00 $26,800.00 $5,000.00 $25,000.00 $4,523.21 $22,616.05 $2,977.00 $14,885.00 8 Water Service EA 27 $4,465.00 $120,555.00 $5,850.00 $157,950.00 $5,568.81 $150,357.87 $6,288.00 $169,776.00 9 Abandon Valve EA 1 $300.00 $300.00 $1,250.00 $1,250.00 $697.42 $697.42 $816.00 $816.00 10 Remove Valve EA 4 $250.00 $1,000.00 $1,800.00 $7,200.00 $1,222.81 $4,891.24 $621.00 $2,484.00 11 Replace Fire Hydrant Assembly EA 3 $15,765.00 $47,295.00 $14,250.00 $42,750.00 $14,919.55 $44,758.65 $17,665.00 $52,995.00 12 Well Demolition LS 1 $33,488.00 $33,488.00 $30,000.00 $30,000.00 $39,164.75 $39,164.75 $35,687.24 $35,687.24 TOTAL - CONTRACT ITEMS $497,609.00 $499,910.00 $515,826.28 $540,488.00 Zeis Construction N & T Digmore, Inc
Giles Excavating &
Paving Inc
Sunrise Excavating SnL Group, Inc Site Work Solutions Axner Excavating Inc