COUNCIL AGENDA: 01-24-23
FILE NUMBER: 23-079
ITEM: 2.8
SAN JOSE Memorandum
CAPITAL OF SILICON VALLEY
TO: HONORABLE MAYOR FROM: Nora Frimann
AND CITY COUNCIL City Attorney
SUBJECT: SEE BELOW DATE: January 12, 2023
SUBJECT: AMENDMENT TO AGREEMENT WITH HALL ENERGY LAW PC FOR
LEGAL SERVICES RELATED TO POWER PROCUREMENT FOR SAN
JOSE CLEAN ENERGY
RECOMMENDATION
Adopt a resolution authorizing the City Attorney to negotiate and execute a fifth amendment to the agreement with Hall Energy Law PC for legal services related to power procurement for San José Clean Energy extending the term from June 30, 2022 to June 30, 2024, increasing the rates of compensation effective January 9, 2023, and increasing the amount of compensation by $80,000, for a total amount not to exceed $800,000, subject to the appropriation of funds.
OUTCOME
Execution of the fifth amendment to the agreement with Hall Energy Law PC will allow this law firm to continue to provide legal services related to power procurement for the San José Clean Energy program.
BACKGROUND
On February 12, 2019, the City entered into an agreement with the law firm of Hall Energy Law PC (“Hall Energy”) for an initial term retroactive from January 10, 2019 through January 8, 2021, with one 24-month option to extend the term through January 8, 2023, in a total amount not to exceed $44,000, to provide legal services related to power procurement for the San José Clean Energy program (“Agreement”). The Agreement has since been amended to increase the total amount of compensation to $720,000 and extend the term through June 30, 2022.
Under this Agreement, Hall Energy provides legal review and advice including:
evaluating and preparing requests for bids and accompanying Master Agreement and Confirmation templates for electrical power, advising on necessary changes to the San 1982299
HONORABLE MAYOR AND CITY COUNCIL
January 12, 2023
Subject: Amendment to Agreement for Legal Services with Hall Energy Law PC
José Municipal Code to enable the City to respond nimbly and execute Power Purchase Agreements, and advising the City on the financial obligations and commitments required by power suppliers including the drafting of collateralization agreements.
ANALYSIS
In August 2016, the City issued a Request for Qualifications seeking to establish a pool of qualified law firms to provide legal advice and assistance related to establishing, operating and terminating California Community Choice Aggregation (“CCA”) programs, including: general advice relating to establishing, operating and terminating a CCA; advising the City on regulatory requirements for CCAs; representing the City as necessary in front of various regulatory bodies; power procurement, including drafting short and long term power purchase agreements; bond and financing counsel to advise the City and possibly prepare legal opinions on various funding options or security for power purchases; rate setting advice and the statutory constraints affecting utility rates.
On January 9, 2018, the City entered into an agreement with Troutman Sanders LLP, one of the firms selected for the pool of qualified law firms, to provide legal services related to power procurement, with Mr. Stephen Hall as Lead Special Counsel under the agreement. In January 2019, Mr. Stephen Hall left the firm of Troutman Sanders LLP and formed Hall Energy. The City Attorney, in consultation with staff from the Community Energy Department, determined that continuing receiving services from Mr.
Hall through Hall Energy was in the best interest of the City’s newly formed CCA, San José Clean Energy (“SJCE”). SJCE’s power procurement activities rely on specialized legal services that combine the knowledge of the law governing energy procurement, public utilities, and local government agencies, as well as a deep understanding of commercial and operational requirements applicable to wholesale and retail electricity service. Hall Energy offers this unique set of skills, which are not available in-house at the City Attorney’s Office, and has many years of experience providing legal services related to power procurement to CCAs. Hall Energy is also counsel to several CCAs, and SJCE benefits from Mr. Hall’s work with those entities because he maintains current knowledge of new developments in the industry and improvements to standard procurement contracts.
Hall Energy has provided legal services to the City for four years, with no increase in hourly rates during that time. The City Attorney’s Office and SJCE desire to extend the term of the Agreement through June 30, 2024, retroactively revise the hourly rates of compensation effective January 9, 2023, and increase the amount of total compensation by $80,000, in order for Hall Energy to continue to assist the City with SJCE’s power procurement activities. Additional funds for the agreement will be provided by the Community Energy Department’s Non-Personal/Equipment appropriation in the San José Clean Energy Operating Fund. 1982299
HONORABLE MAYOR AND CITY COUNCIL
January 12, 2023
Subject: Amendment to Agreement for Legal Services with Hall Energy Law PC
CONCLUSION
To ensure the continued delivery of legal services in support of the San José Clean Energy program, staff recommends increasing the maximum amount of compensation for ongoing services by $80,000.
CLIMATE SMART SAN JOSE
The recommendation in this memo aligns with one or more Climate Smart San Jose energy, water, or mobility goals.
PUBLIC OUTREACH
This memorandum will be posted on the City’s website as part of the January 24, 2023 City Council Agenda.
COORDINATION
This memorandum has been coordinated with the Community Energy Department.
COST SUMMARY/IMPLICATIONS
1. Amount of Recommendation:
Original Agreement — February 12, 2019 $44,000
First Amendment — July 17, 2019 $100,000
Second Amendment — October 31, 2019 $176,000
Third Amendment — October 7, 2020 $400,000
Option No. 1 — effective January 9, 2021 $0
Fourth Amendment — November 28, 2022 $0
Proposed Fifth Amendment $80,000
TOTAL $800,000
2. Source of Funding: The amendment to the contract will be funded by the Community Energy Department’s Non-Personal/Equipment appropriation in the San José Clean Energy Operating Fund.
1982299
HONORABLE MAYOR AND CITY COUNCIL
January 12, 2023
Subject: Amendment to Agreement for Legal Services with Hall Energy Law PC
BUDGET REFERENCE
The table below identifies the fund and appropriations proposed to fund the contracts recommended as part of this memorandum.
Fund | Appn. | Appn. Name Current Amount for 2022-2023 Adopted Last Budget Action # # Appn. Contract Operating Budget Page (Date, Ord. No.) 501 0782 | COMMUNITY | $9,146,801 $80,000 1036 10/18/2022 ENERGY Ord. No. 30833
NP/EQUIP
CEQA
Not a Project; File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
NORA FRIMANN
City Attorney
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Rosa Tsongtaatari
Chief Deputy City Attorney
For questions, please contact Rosa Tsongtaatarii, Chief Deputy City Attorney, at (408) 535-1985
cc: Jennifer Maguire
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