CITY OF BATAVIA DATE: June 16, 2011 TO: Public Utilities Committee FROM: Steven Allen, Senior Project Engineer SUBJECT: NERC Consulting Engineering Services – RESOLUTION 11-57-R Summary: The Electric Utility has sought consulting engineering services to assist with NERC compliance. These compliance requirements are part of being connected to the 138kV system. Background: The City of Batavia Municipal Electric Utility began receiving power at 138kV from the Bulk Electric System in 2007. Connecting to the Bulk Electric System comes with an involved set of requirements put in place by NERC that must be kept current. Failure to meet these requirements can come with a penalty. In 2009 ReliabilityFirst, who is contracted by NERC to enforce these requirements in our area, conducted the first audit in a 6 year rotation on the Electric Utility's compliance of these requirements. The audit did reveal that there were some areas that required attention and also came with a monetary penalty. In addition to the 6 year audit cycle there are a number of requirements that must be shown to be in compliance at varying intervals throughout the year. Not only must the Electric Utility demonstrate compliance with these requirements, the requirements are constantly being updated requiring review of current policies and practices. This creates an intense workload for Electric Utility Staff that can come with heavy consequences should something be missed. The Senior Project Engineer is currently dedicating 35% to 40% of the time to the compliance program. The Electric Utility wishes to transition into more of an oversight role of the compliance program, such that Staff can focus on engineering tasks. In an effort to mitigate the possibility of future violations and monetary penalties, the Electric Utility solicited engineering services to assist with compliance of the NERC requirements. Avant Energy, based in Minneapolis, MN, has significant experience providing NERC compliance for municipal utilities. They are currently managing compliance for the Minnesota Municipal Power Agency which has 11 members. Avant has experience with the development of procedures related to the various NERC requirements, training, and audits. During the 2009 NERC audit of the Minnesota Municipal Power Agency compliance program they were found to have zero violations. This will be done in a two phase approach. In Phase 1, the Electric Utility intends to have the compliance program overhauled by Avant Energy. They will evaluate and improve upon the existing program to insure that the program is compliant with the current NERC standards. Phase 2 will consist of Avant Energy continuing to monitor and maintain the compliance program for the Electric Utility as NERC requirements change. This would be a multiyear agreement lasting 2 years. The Electric Utility would be involved in the review and implementation of any changes to the requirements.
Transcript
CITY OF BATAVIA DATE: June 16, 2011 TO: Public Utilities Committee FROM: Steven Allen, Senior Project Engineer SUBJECT: NERC Consulting Engineering Services – RESOLUTION 11-57-R Summary: The Electric Utility has sought consulting engineering services to assist with NERC compliance. These compliance requirements are part of being connected to the 138kV system. Background: The City of Batavia Municipal Electric Utility began receiving power at 138kV from the Bulk Electric System in 2007. Connecting to the Bulk Electric System comes with an involved set of requirements put in place by NERC that must be kept current. Failure to meet these requirements can come with a penalty. In 2009 ReliabilityFirst, who is contracted by NERC to enforce these requirements in our area, conducted the first audit in a 6 year rotation on the Electric Utility's compliance of these requirements. The audit did reveal that there were some areas that required attention and also came with a monetary penalty. In addition to the 6 year audit cycle there are a number of requirements that must be shown to be in compliance at varying intervals throughout the year. Not only must the Electric Utility demonstrate compliance with these requirements, the requirements are constantly being updated requiring review of current policies and practices. This creates an intense workload for Electric Utility Staff that can come with heavy consequences should something be missed. The Senior Project Engineer is currently dedicating 35% to 40% of the time to the compliance program. The Electric Utility wishes to transition into more of an oversight role of the compliance program, such that Staff can focus on engineering tasks. In an effort to mitigate the possibility of future violations and monetary penalties, the Electric Utility solicited engineering services to assist with compliance of the NERC requirements. Avant Energy, based in Minneapolis, MN, has significant experience providing NERC compliance for municipal utilities. They are currently managing compliance for the Minnesota Municipal Power Agency which has 11 members. Avant has experience with the development of procedures related to the various NERC requirements, training, and audits. During the 2009 NERC audit of the Minnesota Municipal Power Agency compliance program they were found to have zero violations. This will be done in a two phase approach. In Phase 1, the Electric Utility intends to have the compliance program overhauled by Avant Energy. They will evaluate and improve upon the existing program to insure that the program is compliant with the current NERC standards. Phase 2 will consist of Avant Energy continuing to monitor and maintain the compliance program for the Electric Utility as NERC requirements change. This would be a multiyear agreement lasting 2 years. The Electric Utility would be involved in the review and implementation of any changes to the requirements.
Staff recommendation: The Electric Utility is recommending that the Public Utilities Committee approve Resolution 11-57-R awarding an Engineering Services Contract to Avant Energy for NERC Compliance Services for Phase 1 in an amount not to exceed $30,000.00 with completion by December 31, 2011, and for Phase 2 in an amount not to exceed $25,000.00 annually with the agreement beginning on January 1, 2012 and expiring on December 31, 2013.
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CITY OF BATAVIA, ILLINOIS RESOLUTION 11-57-R
AUTHORIZING ENGINEERING SERVICES CONTRACT FOR NERC COMPLIANCE WITH AVANT ENERGY
WHEREAS, the City of Batavia owns and operates an electric utility whereby it purchases wholesale power and resells same to its citizens; and
WHEREAS, the City of Batavia Municipal Electric Utility receives its power from the Bulk Electric System at 138kV; and
WHEREAS, the City of Batavia Municipal Electric Utility intends to fully comply with the NERC regulations in place for utilities connected to the Bulk Electric System; and
WHEREAS, proposals were sought and received from qualified contractors to provide consulting services to review and expand the City of Batavia Municipal Electric Utility existing NERC compliance program, and to provide ongoing oversight and maintenance of the City of Batavia Municipal Electric Utility NERC compliance program, and found that Avant Energy has the experience and qualifications necessary to provide these services in a satisfactory manner; and
WHEREAS, it is in the best interests of the City of Batavia that the proposal from Avant Energy be accepted, and a Contract with Avant Energy be entered into; and
NOW, THEREFORE, BE IT RESOLVED, by the Mayor and City Council of the City of Batavia, Kane and DuPage Counties, Illinois, as follows:
SECTION 1: That the Mayor and City Clerk are hereby authorized to enter into a Contract with Avant Energy for NERC Compliance services for Phase 1 in an amount not to exceed $30,000.00 with completion by December 31, 2011; and for Phase 2 in an amount not to exceed $25,000.00 annually beginning on January 1, 2012 and expiring on December 31, 2013 – said contract being attached hereto as Exhibit #1.
CITY OF BATAVIA, ILLINOIS RESOLUTION 11-57-R
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PRESENTED to and PASSED by the City Council of the City of Batavia, Illinois, this 5th day of July, 2011.
APPROVED by me as Mayor of said City of Batavia, Illinois, this 5th day of July, 2011.
Mayor Schielke VOTE: Ayes Nays Absent Abstentions Total holding office: Mayor and 14 aldermen
ATTEST: ______________________________
Heidi Wetzel, City Clerk
CITY OF BATAVIA
JEFFERY D. SCHIELKE Mayor
100 North Island Avenue ♦ Batavia, Illinois 60510 ♦ Phone: 630-454-2000 ♦ www.cityofbatavia.net
June 1, 2011 Avant Energy Ms. Molly J. Weyandt 200 South Sixth Street Suite 200 Minneapolis, MN 55402
Re:
NERC Consulting Services Request for Proposal
Dear Ms. Weyandt: As a result of an investigation into qualifications, the City of Batavia has selected your firm to explore the possibility of entering into a contract for NERC Consulting Services to assist the Batavia Municipal Electric Utility in reviewing and updating our NERC Compliance program. Please provide a proposal by 4 p.m, CT on Friday, June 15, 2011. If you have any questions, please contact me at 630-454-2358 or via email at [email protected]. Sincerely, Steven K. Allen, P.E.
Senior Project Engineer
Page 2 of 7 (Excluding Exhibits) June 1, 2011 Re: NERC Compliance Services Request for Proposal (RFP)
SERVICES TO BE PROVIDED The Consulting Engineer shall perform and carry out, in a professional and satisfactory manner, the necessary services required to complete the City of Batavia Municipal Electric Utility NEC Compliance Program Updating project. EQUAL EMPLOYMENT OPPORTUNITY CLAUSE EQUAL EMPLOYMENT OPPORTUNITY CLAUSE required by the Illinois Fair Employment Practices Commission as a material term of all public contracts. During the performance of this contract, the “contractor” (or “consultant” in the case of service agreements) agrees as follows:
1. That it will not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, or ancestry; and further, that it will examine all job classifications to determine if minority persons or women are underutilized and will take appropriate affirmative action to rectify any such under utilization.
2. That, if it hires additional employees in order to perform this contract, or any
portion hereof, it will determine the availability (in accordance with the Commission’s Rules and Regulations for Public Contracts) of minorities and women in the area(s) from which it may reasonably recruit and it will hire for each job classification for which employees are hired in such a way that minorities and women are not underutilized.
3. That, in all solicitations or advertisements for employees placed by it or on its
behalf, it will state that all applicants will be afforded equal opportunity without discrimination because of race, color, religion, sex, national origin, or ancestry.
Page 3 of 7 (Excluding Exhibits) June 1, 2011 Re: NERC Compliance Services Request for Proposal (RFP)
4. That it will send to each labor organization or representative of workers with which
it has or is bound by a collective bargaining or other agreement or understanding, a notice advising such labor organization or representative of the contractor’s obligations under the Illinois Fair Employment Practices Act and the Commission's Rules and Regulations for Public Contracts. If any such labor organization or representative fails or refuses to cooperate with the contractor in its efforts to comply with such Act and Rules and Regulations the contractor will promptly so notify the Illinois Fair Employment Practices Commission and the contracting agency and will recruit employees from other sources when necessary to fulfill its obligations there under.
5. That it will submit reports as required by the Illinois Fair Employment Practices
Commission’s Rules and Regulations for Public Contracts, furnish all relevant information as may from time to time be requested by the Commission or the contracting agency, and in all respects comply with the Illinois Fair Employment Practices Act and the Commission’s Rules and Regulations for Public Contracts.
6. That it will permit access to all relevant books, records, accounts, and work sites by
personnel of the contracting agency and the Illinois Fair Employment Practices Commission for purposes of investigation to ascertain compliance with the Illinois Fair Employment Practices Act and the Commission’s Rules and Regulations for Public Contracts.
7. That it will include verbatim or by reference the provisions of paragraphs 1 through
7 of this clause in every performance subcontract as defined in Section 2.10 (b) of the Commission's Rules and Regulations for Public Contracts so that such provision will be binding upon every such subcontractor; and that it will also include the provisions of paragraphs 1,5, 6, and 7 in every supply subcontract as defined in Section 2.10(a) of the Commission’s Rules and Regulations for Public Contracts so that such provisions will be binding upon every such subcontractor. In the same manner as with other provisions of this contract, the contractor will be liable for compliance with applicable provisions of this clause by all its subcontractors; and further it will promptly notify the contracting agency and the Illinois Fair Employment Practices Commission in the event any subcontractor fails or refuses to comply therewith. In addition, no contractor will utilize any subcontractor declared by the Commission to be non-responsible and therefore ineligible for contracts or subcontracts with the State of Illinois or any of its political subdivisions or municipal corporations.
The City of Batavia does not discriminate on the basis of handicapped status in admission or access to, or treatment or employment in, its programs and activities.
Page 4 of 7 (Excluding Exhibits) June 1, 2011 Re: NERC Compliance Services Request for Proposal (RFP)
STANDARD CONDITIONS Contract Documents: This Request for Proposal, these Standard Conditions, the General Supplemental Additional Conditions (as described below), the Proposer’s Proposal Sheet the Agreement to be entered into between the City and the Proposer and any drawings, plans, standard conditions, special conditions, supplemental additional conditions, specifications, proposal notice, proposal sheet, and addendum, if any, as specified herein shall form the “Contract Documents.” For the purpose of this proposal, the word “City” shall refer to the City of Batavia and the word “Proposer” shall refer to any person, company, or entity submitting a proposal. Any work shown or described in one of the documents shall be construed as if described in all the documents. Submittal of Proposal: Proposals must be submitted to the attention of Gary Holm, 200 N. Raddant Rd, Batavia, IL 60510, [email protected] Compliance with Laws: The Proposer shall at all times observe and conform to all laws, ordinances, and regulations of the Federal, State, and local governments, which may in any manner affect the preparation of proposals or the performance of the contract. Form of Contract: See attached section entitled “Agreement”.
GENERAL SUPPLEMENTAL ADDITIONAL CONDITIONS Termination of Contract: The City reserves the right to terminate in whole or any part of this contract, upon written notice to the Proposer, in the event of default by the Proposer, provided, however, that upon receipt of written notice of default, the Proposer shall have ten (10) days to cure the default. Default is defined as failure of the Proposer to materially perform any of the provisions of this contract or failure to make sufficient progress so as to endanger performance of this contract in accordance with its terms. In the event of default and termination, the City may procure, upon such terms and in such manner, as the City may deem appropriate, supplies, or services similar to those so terminated; provided, however, the City shall pay the Proposer for all charges due up to the effective date of termination. The Proposer shall not be liable to the City under this Agreement except to the extent any losses, claims, damages or liabilities are caused to the City by the negligence or willful misconduct of Proposer. Neither party shall be liable to the other party for any, special, incidental, multiple, exemplary or punitive damages for performance or non-performance under this Agreement or for any actions undertaken in connection with or related to this Agreement, including, without limitation, damage claims based on causes of action for breach of contract, tort or any other theory of recovery. For the avoidance of doubt, nor shall either party be liable to the other party for any claim of lost profits, whether such claim of lost profits is categorized under this Agreement as indirect, direct or consequential damages or under any alternative theory of recovery. Documentation: When the written specification requires the Proposer submit a written findings or analysis report with their proposal submittal, the Proposer shall provide the document to the City electronically as either a .PDF or .DOC file on compact disc (CD).
Page 5 of 7 (Excluding Exhibits) June 1, 2011 Re: NERC Compliance Services Request for Proposal (RFP)
Hold Harmless Agreement (Contractual Liability): The Proposer agrees to indemnify and save harmless the City, including its elected or appointed officials, employees, and agents against any and all claims, loss, damage, injury, liability, and court costs and attorney’s fees incident thereto, including any claims made by employees of the Proposer or any of their subcontractors, as well as all other persons, resulting directly or indirectly from the work covered by this contract or the equipment used in connection therewith. It is understood that this agreement shall apply to any and all such claims whether resulting from the negligence or the intentional acts of the Proposer, or otherwise, provided, however, this indemnification shall not apply to any claim, damage, loss, or expense arising solely out of professional services performed by the City, its agents, or employees, including 1) the preparation of maps, plans, opinions, reports, surveys, designs, or specifications, and 2) supervisory, inspection, or engineering services).
Special Requirement: If the Proposer is an architectural firm or engineering firm, said Proposer shall, in addition to the insurance requirements set forth below, file a certificate of insurance for professional liability, errors and omissions coverage subject to final acceptance by the City of said coverage.
Insurance: The Proposer will provide certificates of insurance evidencing the following types and limits of insurance. The certificates of insurance will specifically address each of the requirements noted below. Each insurance company shall be acceptable to the City. The General Liability coverage shall name the City of Batavia as additional insured. All insurance noted below is primary and in no event will be considered contributory to any insurance purchased by the City. All insurance noted below will not be canceled, reduced, or materially changed without providing the City thirty (30) days advance notice, via certified mail.
A. Comprehensive General Liability including Products Liability/Completed Operations insurance, in an amount not less than $1,000,000/occurrence, $2,000,000/policy limit, including Broad Form Contractual Liability insurance, in an amount not less than $1,000,000/occurrence, $2,000,000/policy limit, subject to the terms and conditions of the policy. A copy of the policy may be required.
B. Automobile Liability insurance, in an amount not less than $1,000,000 combined single
limit. Said insurance is to be extended to cover hired and non-owned vehicles.
C. Umbrella or Excess Liability coverage, the Contractor shall provide evidence of Umbrella or Excess Liability coverage of $2,000,000.
D. Workers’ Compensation is to be provided as required by statute, by an insurance
company licensed to write worker’s compensation in the State of Illinois. Employer’s Liability, in an amount not less than $500,000 each accident, $500,000 disease – policy limit, and $500,000 disease – each employee.
E. Insurance Rating – All insurance policies required by this contract shall be underwritten
by insurance companies with a minimum A. M. Best rating of A:VII.
F. A certificate of insurance is required as evidence of coverage, with the City of Batavia named as an additional insured. The same full insurance coverage provided to the named
Page 6 of 7 (Excluding Exhibits) June 1, 2011 Re: NERC Compliance Services Request for Proposal (RFP)
insured, whether it is the contractor or a sub-contractor, shall be provided to the City without any limitations or endorsements that might limit or exclude coverage. If insurance is canceled for any reason whatsoever the City will be given not less than thirty (30) days prior written notice.
The Proposer shall not commence work under this contract until they have obtained all insurance required under this section and such insurance has been approved by the City, nor shall Proposer allow any subcontractor to commence work on their subcontract until the same insurance has been obtained by the subcontractor. The Proposer and their subcontractor(s) shall maintain all insurance required under paragraphs A through D of this Section for not less than one (1) year after completion of this contract.
Page 7 of 7 (Excluding Exhibits) June 1, 2011 Re: NERC Compliance Services Request for Proposal (RFP)
I hereby certify that the item(s) proposed is/are in accordance with the specifications as noted and that the prices quoted are not subject to change; and that Avant Energy, Inc._ __________ (Company Name) is not barred by law from submitting a proposal to the City for the project contemplated herein because of a conviction for prior violations of either Illinois Compiled Statutes, 720 ILCS 5/33E-3 (Bid Rigging) or 720 ILCS 5/33-4 (Bid Rotating); and that Avant Energy, Inc._ __________ (Company Name) is not delinquent in payment of any taxes to the Illinois Department of Revenue in accordance with 65 ILCS 5/11-42.1; and that Avant Energy, Inc._ __________ (Company Name) provides a drug free workplace pursuant 30 ILCS 580/1, et seq.; and that Avant Energy, Inc._ __________ (Company Name) is in compliance with the Illinois Human Rights Act 775 ILCS 5/1.101, et seq. including establishment and maintenance of sexual harassment policies and program. Joseph V. Fulliero______________________ ___________________________________ Proposer’s Firm Name Signed Name and Title 200 South Sixth Street, Suite 300________ Joseph V. Fulliero, VP of Operations__ __ Street Address Print Name and Title Minneapolis, MN, 55402 _ 41-1571413 ___ City State Zip Code Federal Employee Identification Number 612-349-6868______________________ _ 612-349-6108 ____________ __________ Phone Number Fax Number [email protected]__________ _June 15, 2011_______________________ E-mail Address Date
Proposal For Proposal For Proposal For Proposal For
The City of Batavia Municipal Electric Utility (Batavia) is required to follow the North American Electric Reliability Corporation (NERC) standards. The Federal Energy Regulatory Commission (FERC) made the NERC standards mandatory in 2007. Batavia is a municipal utility with load located in northern Illinois. Batavia is currently registered as a Load Serving Entity (LSE) and Distribution Provider (DP).
Batavia Has Two
Current Compliance
Issues
Batavia is currently dealing with two lingering issues from its 2009 NERC compliance audit. The issues are related to the following standards:
• CIP-001 (Sabotage Recognition)
• PRC-005 (Protection System Maintenance and Testing)
Batavia is Going
Through the
Enforcement
Process
Batavia is going through the enforcement process to resolve noncompliance issues. Batavia has finished a mitigation plan for CIP-001 and is working on a mitigation plan for PRC-005. The utility could also face a financial penalty for noncompliance. NERC penalties can be up to $1 million/day for noncompliance. If Batavia receives a NERC penalty, it will be much smaller.
Batavia Wants to
Improve Processes
and Reduce Risk
Batavia plans to improve its processes to prevent future violations. The goal of the NERC standards is to improve the reliability of the Bulk Electric System (BES). Batavia wants to comply with the NERC standards to avoid risks such as financial penalties and BES disturbances.
Batavia Seeks Firm
to Provide Process
Development and
Management
Services
Batavia is seeking a firm to develop improved NERC compliance processes, and provide ongoing management services. The utility wants to immediately evaluate its current program and identify areas for improvement. Batavia understands that NERC standards are continually evolving and compliance requires ongoing program maintenance. The utility desires to move into an oversight role, and wants support in maintaining compliance.
Avant will provide a two phase approach to address Batavia’s NERC compliance needs. The first phase will immediately improve Batavia’s compliance program. The second phase will help Batavia achieve ongoing compliance. The two phase project plan will achieve both long and short term goals through a smooth transition process. Phase I:
• Avant Role: Evaluation and Improvement
• Batavia Role: Review and Approval Phase II:
• Avant Role: Monitoring and Maintenance
• Batavia Role: Implementation and Approval Utilize Experienced
People to Manage
NERC Compliance
Avant will utilize experienced people that are capable of managing all areas of NERC compliance. Our staff members have been involved in NERC compliance since the standards first became mandatory by FERC. Avant will dedicate experienced staff to both phases of the project plan. The Avant compliance staff has achieved the following with existing clients:
• Developed an original compliance program
• Completed an audit resulting in no violations
• Became compliant as a new Transmission Owner Coordinate Through
Video Conference,
Shared Files and
Meetings
Avant will coordinate with Batavia through multiple communication channels (video conference, shared online files, and in person meetings). We will also coordinate with Batavia by providing customized recommendations. This coordination will allow Batavia to stay informed of any program modifications, new rules, and upcoming issues. Our goal is to provide an ongoing resource to Batavia that is extremely accessible and helpful.
Provide Training to
Batavia Staff
Avant will provide training to Batavia staff members. We will work with the General Manager, Project Engineer, and other employees to help Batavia staff members improve their understanding of NERC compliance issues.
June 15, 2011 Work Plan for Phase I
3
Section 3. Work PlanSection 3. Work PlanSection 3. Work PlanSection 3. Work Plan for for for for Phase I Phase I Phase I Phase I
Phase I. Develop
Improved Program
Framework in 2011
Avant will develop an improved compliance program in 2011. Avant will finish Phase I work by the end of the calendar year.
Complete Initial
Program Evaluation
Avant will start Phase I by conducting an initial evaluation of Batavia’s current NERC compliance program. This evaluation will act as a mock-audit to establish areas for improved compliance. Batavia will send a CD with electronic records to Avant for review. Avant will then complete the evaluation, provide a summary of its findings, and make recommendations to Batavia.
Update Procedures
and Evidence
Records
Avant will update Batavia’s compliance procedures and evidence to reflect the current NERC standard requirements. Avant will provide redline copies of these document updates to Batavia. Batavia will have the ability to track, review, and approve all document revisions.
Expand Batavia
Culture of
Compliance
Avant will help Batavia expand its culture of compliance. FERC issued a compliance policy statement on October 16, 2008 that included references to company culture. FERC stated that a strong culture of compliance helps reduce or eliminate violation penalties. Avant will help Batavia document evidence of its culture to reduce future penalty risks.
Identify Alternatives
for Transmission
Owner and Cyber
Security Standards
Avant will identify alternative options for Batavia to utilize when addressing Transmission Ownership and Cyber Security standards. Batavia is not currently registered as a Transmission Owner (TO); however, the utility does own 10 miles of 100+ kV line. Avant will help Batavia voluntarily implement procedures that will promote reliability of their high voltage facilities. Batavia also does not currently own any critical cyber assets; however, Avant will evaluate and identify feasible improvements to Batavia’s cyber security.
Provide Guidance as
Batavia Implements
New Framework
Avant will provide guidance to Batavia throughout the implementation of its improved NERC compliance program. Avant will answer questions and help Batavia transition to new procedures.
June 15, 2011 Work Plan for Phase II
4
Section 4. Work PlanSection 4. Work PlanSection 4. Work PlanSection 4. Work Plan for for for for Phase II Phase II Phase II Phase II
Phase II. Advise
Batavia on Relevant
Compliance Issues
Starting 2012
Avant will start phase II in 2012 by advising Batavia on relevant compliance issues. NERC compliance requires continual observation, documentation, and program maintenance. Avant will provide Batavia with ongoing NERC compliance management services in Phase II.
Evaluate How Rule
Changes Affect
Batavia
Avant monitors NERC rule changes and will evaluate how the changes affect Batavia. We subscribe to industry publications and participate in compliance user groups. Avant will share this information with Batavia on a quarterly basis.
Create Customized
Industry Update
Summaries
Avant will create customized quarterly industry update summaries for Batavia. These written summaries will communicate relevant NERC compliance issues to the utility. Batavia will be able to share the summaries with staff and senior management. Avant will keep Batavia informed and save the utility time.
Develop
Responses to
Changing
Regulations
Avant will work with Batavia to develop responses to NERC rule changes and data requests Rule changes may require follow up actions and program modifications. Data requests will involve reporting to regulatory authorities. Avant will notify Batavia of data requests (audits, spot audits, self certifications, surveys, etc.) We will also review data gathered by Batavia to check for completeness prior to Batavia submitting data.
Maintain
Documentation and
Evidence
Avant will maintain Batavia’s compliance documentation. We will continually update Batavia’s records for new versions of NERC standards. Avant will also gather data from Batavia to keep evidence updated. Avant will work with Batavia to develop new procedures together. Batavia will be responsible for implementing procedures, responding to Avant’s data requests, and approving NERC compliance program documents.
Manage Online
Database for Shared
Documents
Avant will manage an online database of shared NERC compliance documents. Avant and Batavia will both require real time access to online files in Phase II. Avant will work with Batavia through a shared secure FTP site or an alternative software program. NERC compliance software will be optional and include an additional fee.
Avant understands how to implement successful NERC compliance programs for municipal utilities. We have managed NERC compliance for the Minnesota Municipal Power Agency (MMPA) and its 11 members since 2007. Avant lead MMPA’s 2009 compliance audit, which resulted in no violations.
Active in All Areas
of NERC
Compliance
Avant is experienced in compliance of the following registrations:
• Load Serving Entity (LSE)
• Distribution Provider (DP)
• Purchasing-Selling Entity (PSE)
• Generation Owner (GO)
• Generation Operator (GOP)
• Transmission Owner (TO) Avant is experienced in evaluating requirements, developing procedures, organizing documentation, and proving compliance.
Experience in New
Registrations
Avant has experience with new NERC registrations. Avant helped MMPA become a registered TO in 2009 for an exiting facility. We understand how to communicate with the Regional Reliability Authority, Transmission Operator, and Reliability Coordinator in the registration process. Avant is experienced in evaluating and transitioning into new requirements. Avant is also experienced in avoiding unnecessary compliance registrations.
Relationships with
Technical Experts Avant has relationships with technical experts that specialize in unique NERC compliance situations. Avant may use these existing relationships to provide additional compliance services if needed.
Molly J. Weyandt Molly J. Weyandt is Manager of Power Services for Avant. Ms.
Weyandt has expertise in NERC compliance and other regulatory compliance issues. She is MMPA’s Alternative Compliance Contact, and has implemented MMPA’s NERC compliance program for over three years. Ms. Weyandt lead MMPA’s audit efforts in 2009. She also has experience in MISO matters, transmission issues, and back-office energy trading operations. Ms. Weyandt received a B.A. in Business Management cum laude
from the College of Saint Benedict. Joseph V. Fulliero Joseph V. Fulliero is Vice President of Operations for Avant and
oversees the day-to-day operations of MMPA. Mr. Fulliero is the Primary Compliance Contact for MMPA and has overseen MMPA’s NERC compliance since 2007. Mr. Fulliero has worked in MISO, NEISO, NYISO, and PJM. Mr. Fulliero has over 25 years of experience in energy and public works and is a Registered Professional Engineer. Mr. Fulliero has an M.S. in Management from Rensselaer Polytechnic Institute and undergraduate degrees in Engineering and Liberal Arts from the University of Connecticut and Fairfield University, respectively.
James D. Larson James D. Larson is the Vice President of Regulatory Affairs for
Avant and also the firm’s legal counsel. Mr. Larson joined the firm as a principal in 1995. He has been the Authorized Compliance Contact for MMPA and provided legal guidance on NERC compliance since 2007. Mr. Larson has also managed the firm’s electricity trading operation, has represented municipalities in Minnesota and Nebraska, and has worked with corporate clients nationwide. Mr. Larson earned his B.S. in Engineering Sciences degree from the United States Air Force Academy. He earned his J.D. degree, magna
cum laude, from the William Mitchell College of Law.
June 15, 2011 Schedule and Fees
7
Section 7Section 7Section 7Section 7. Schedule and Fees. Schedule and Fees. Schedule and Fees. Schedule and Fees
Phase I. Complete in
Q4 2011
Avant will complete Phase I by December 31, 2011. Avant will start work immediately after executing a contract for service.
Phase I. T & M Fee
with Limit
Avant will charge Batavia on a time and materials basis for Phase I of the contract, but will not exceed $30,000.
Phase II. Starts 2012 Avant will start Phase II in January 2012. Avant proposes a term of
two years for Phase II of the contract. Phase II. T & M Fee
with Limit Avant will charge Batavia on a time and materials basis for Phase II of the contract, but will not exceed $25,000 on an annual basis. Avant will notify Batavia when it has spent 75% of the annual budget. Avant will provide justification and obtain approval before doing any work beyond the $25,000 annual limit. The following NERC activities will be considered out of scope of Phase II. Avant is capable and willing to provide these services at an additional cost if desired by the client.
• Compliance Software
• Becoming Compliant with Additional Registrations
• Complying with the Enforcement Process o Violation Reporting o Mitigation Plans o Penalty Negotiation
2011 Avant Staff
Billing Rates
Avant will use the following billing rates for the contract. Avant will provide updated billing rates for each calendar year. The majority of the work will be completed by the Project Manager and Analyst staff. The Senior Advisors will act in an oversight role.
• Senior Advisor $285-350/Hr.
• Project Manager $125/Hr.
• Analyst $85/Hr.
AGREEMENT THIS AGREEMENT, made this 5th day of July, 2011 by and between the CITY OF BATAVIA, (hereinafter referred to as the “City”), and Avant Energy, (hereinafter referred to as the “Company), with regard to certain services in connection with the NERC Compliance Services Project (hereinafter referred to as the “Project”.) NOW THEREFORE, the City and the Company, in consideration of the mutual covenants hereinafter set forth, agree to as follows:
1. The Company agrees to perform services in connection with the Project as hereinafter
stated. The Company shall at all times observe and comply with all laws, ordinances, and regulations of the federal, state, and local governments, which may in any manner affect the preparation of proposals or the performance of the Agreement.
2. The Company has made a proposal to the City, dated June 15, 2011 attached hereto
Exhibit 1 and expressly made a part hereof, in response to the City’s Request for Proposal, dated June 1, 2011, also attached hereto Exhibit 2 and expressly made part hereof.
3. This contract shall constitute the entire agreement and understanding by and between the
parties hereto, and it shall not be considered modified, altered, changed, or amended in any respect unless done so in writing with signatures by both the City and the Company.
4. The terms and conditions of this agreement shall be the sole terms and conditions
followed for this Agreement, unless otherwise approved in writing by the City Attorney and attached as an exhibit to this agreement. Any and all terms and conditions contained in Company’s Proposal shall be superseded by the terms and conditions of this agreement.
5. The Company shall obtain, at its own expense, all permits and licenses which may be
required to complete the Agreement, and/or required by federal, state, and local regulations and laws.
6. The City does not discriminate on the basis of handicapped status in the admission of,
access to, or treatment of employment in its programs and activities. 7. This contract shall continue for an initial term ending on December 31, 2012, and shall
automatically renew for an additional term ending on December 31, 2013, unless either party notifies the other party in writing of its decision not to extend the contract, which notice must be delivered no later than sixty (60) days prior to the end of the initial term.
8. Any payment made to the Company shall be strictly on the basis of quantum meruit. The Company shall submit to the City a detailed breakdown of hourly rates billed to date with each pay request. The detailed breakdown shall be based on the hourly rate breakdown contained in the approved proposal. The City will pay the Company for the performance of the Agreement as follows:
a. Monthly payments based on actual work satisfactorily completed.
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b. The total Phase 1 cost of the Agreement payment shall not exceed $30,000 ending December 31, 2011.
c. The total Phase 2 cost of the Agreement shall not exceed $25,000 annually beginning
January 1, 2012 ending December 31, 2013. d. Additions or deductions to the approved total amount for services shall be authorized
in writing by the City. Any out of scope work must be authorized in writing by the City. Any work performed without written approval from the City shall be solely at the expense of the Company.
e. Final payment to the Company will be made once the project has been completed, all
paperwork completed and turned into the City of Batavia, and approved by the City of Batavia.
9. The Company will perform those phases of the Project to which this Agreement applies,
and will give consultation and advice to the City during the performance of the services. 10. The Company will provide certificates of insurance evidencing the types and limits of
insurance. Each insurance company shall be acceptable to the City. The General Liability coverage shall name the City as an additional named insured. All insurance is primary, and in no event will be considered contributory to any insurance purchased by the City. All insurance will not be canceled, reduced, or materially changed without providing the City thirty (30) days advance notice, via certified mail.
The Company shall not commence work under this contract until they have obtained all
insurance required and such insurance has been approved by the City, nor shall the Company allow any subcontractors (hereafter Subs) to commence work on their subcontract until the same insurance has been obtained by the Sub. The Company and their Subs shall maintain all insurance for not less than one (1) year after completion of this contract
Special Requirement: If the Company is an architectural or engineering firm and is
providing architectural or engineering services, said Company shall also file a certificate of insurance for professional liability, errors and omissions coverage subject to final acceptance by the City of said coverage.
11. The Company will provide the services as required herein in accordance with the
Project Schedule. 12. The Company will attend conferences and visit the site of the work as may be outlined in
the Request for Proposal at any reasonable time when requested to do so by the City. 13. The Company warrants that they are technically qualified and entirely conversant with
the requirements of this Project; and that they have sufficient properly trained, organized, and experienced personnel and/or subcontractors to perform the services enumerated herein.
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14. The City and the Company each binds themselves and their partners, successors, executors, administrators, and assigns to the other party of this Agreement and to the partners, successors, executors, administrators, and assigns of such other party, in respect to all covenants of this Agreement; except as above, and as noted in the attachments, neither the City not the Company shall assign, subcontract, or transfer their interest in this Agreement without the written consent of the other. Nothing herein shall be construed as creating any personal liability on the part of any officer or agent of any public body, which may be a party hereto, nor shall it be construed as giving any rights or benefits hereunder to anyone other than the City and Company.
The Company may subcontract portions of the work upon written approval from the City.
These Subs shall conform, in all respects, to the applicable provisions specified and shall further be subject to approval by the City. The Company shall identify all proposed Subs who will furnish services under the terms of this proposal. The work to be done by the Subs shall be outlined in detail in the proposal submitted by the Company. None of the services to be furnished by the Company shall be subcontracted, assigned, or transferred to any other party or parties without the written consent if the City. The consent to subcontract, assign, or otherwise transfer any portion of the services to be furnished by the Company shall not be construed to relieve the Company of any responsibility for the fulfillment of this Agreement. Any request for payment to the company, for work that was subcontracted, shall be supported with a waiver of lien and contractor’s affidavit indicating the subcontractor has been paid and waives any lien on the project or funds for the project.
15. Company shall indemnify, protect, defend and hold the City and its employees harmless
from and against any and all claims, liabilities, judgments, costs, damages and expenses, including reasonable attorney’s fees, arising out of or in any way related to the work preformed pursuant to this contract, including all work preformed by its employees, agents, sub-contractors and assigns, except to the extent that such claim, liability, judgment, cost, damage or expense arises from the negligence or willful misconduct of the City, its employees or agents. Notwithstanding the forgoing to the contrary, the Company does not guarantee compliance with the NERC requirements and shall not be liable for any claims, liabilities, judgments, costs, damages and expenses arising out of findings of noncompliance except those which are causally related to the negligent or intentional actions or omissions of the Company.
16. The City agrees to review each and every phase of the Project as in the aforementioned
proposal in a timely manner. Upon approval of each phase, the Company shall then proceed to the next phase.
17. All drawings, specifications, reports, and any other project documents prepared by the
Company in connection with any or all of the services to be furnished thereunder shall be delivered to the City for the expressed use of the City. The Company does have the right to retain original documents, but shall cause to be delivered to the City such quality of documents so as to assure total reproducibility of the documents delivered. All information, worksheets, reports, design calculations, plans, and specifications shall be the sole property of the City unless otherwise specified in the negotiated agreement. The Company agrees that the basic survey notes and sketches, charts, computations, and other data prepared or obtained by the Company pursuant to the Agreement will be made
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available, upon request, to the City without cost and without restriction or limitations as to their use. All field notes, test records, and reports shall be available to the City upon request.
18. The City reserves the right by written amendment to make changes in requirements,
amount of work, or engineering time schedule adjustments. The Company and the City shall negotiate appropriate adjustments acceptable to both parties to accommodate any changes.
19. The City may, at any time by written order, require the Company to stop all or part of the
services required by this Agreement. Upon receipt of such an order the Company shall immediately comply with its terms and take all steps to minimize the occurrence of costs allocable to the services covered by the order. The City will pay for costs associated with suspension provided, they are deemed reasonable by the City.
20. The City reserves the right to terminate the whole or any part of this Agreement, upon ten
(10) calendar day’s written notice to the Company if the City is dissatisfied with the services of the Company, provided that the City has previously notified the Company of its dissatisfaction in writing stating the reasons therefor and allowing the Company a minimum of thirty (30) days to adjust and meet the City’s expectations. The City further reserves the right to cancel the whole or part of the Agreement immediately for cause, if the Company fails to perform any of the previsions in the Agreement or fails to make delivery within the time stated, provided that notice is given in writing to the Company of the default, and the Company is given ten (10) days to cure the default or to begin curing the default and diligently continues to cure the default, if the default is of the nature that cannot be cured in such time. The Company will not be liable to perform if situations arise by reason of acts of God or public enemy, acts of City, fires, or floods.
a. Should any of the key personnel identified in the Proposal become unavailable to
work on the project, and no permanent substitute personnel reasonably satisfactory to the City is provided by the Company within thirty (30) days, and/or no temporary replacement personnel is provided by the Company immediately following the commencement of the subject Key Personnel’s unavailability, the City may, at its election, declare such contract terminated and at an end, reserve the right to maintain and action to recover damages arising due to breach of contract
b. The City reserves the right to terminate in whole or any part of this contract, upon
written notice to the Company, in the event of default by the Company. Default is defined as failure of the Company to perform any of the provisions of this contract of failure to make sufficient progress so as to endanger performance of this contract in accordance with its terms. In the event of default and termination, the City ay procure, upon such terms and in such manner as the City may deem appropriate, supplies or services similar to those so terminated.
The Company shall be liable to the City for all excess costs for such similar supplies
or service unless evidence is submitted to the City that in the sole opinion of the City clearly proves that failure to perform the contract was due to causes beyond the control and without the fault or negligence of the Company.
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c. Upon termination, the Company shall cause to be delivered to the City all surveys, reports, permits, agreements, calculations, drawings, specifications, partially and completed estimates, and data, as well as products of computer aided drafting, design, and writing that have been paid for by the City. Cost of termination incurred by the Company before the termination date will be reimbursed by the City only, if prior to the effective termination date, the City receives from the Company a list of actions necessary to accomplish termination and the City agrees in writing that those actions be taken. Upon receipt of the termination notice, the Company shall stop all work until said Agreement is reached.
21. The City agrees to notify the Company at least twenty-four (24) hours in advance of the
need for personnel or services. 22. Nothing contained in this Agreement, nor the performance of the parties hereunder, is
intended to benefit, nor shall inure to the benefit of, any third party, including the City’s Contractors, if any.
23. An notice relating to claims for damages or relating to allegations of default shall be in
writing and shall be made by certified or registered mail, postage prepaid, return receipt requested, or reliable overnight courier, to the parties as follows:
If to Company: Avant Energy, Inc. 200 South Sixth Street, Suite 300 Minneapolis, MN 55402 Attention: James D. Larson If to the City: City of Batavia Attention: City Clerk 100 North Island Avenue Batavia, IL 60510 with copies to: City of Batavia Attention: Public Works Director 200 N. Raddant Road Batavia, IL 60510 and: Kevin G. Drendel 111 Flinn Street Batavia, IL 60510
24. This Agreement contains the entire agreement between the parties. No other writing, discussion or any other communication about possible terms is to be construed as forming part of the agreement between the parties. Any terms and conditions submitted by the Company as part of its proposal are specifically disavowed and such terms and conditions shall not supersede this Agreement.
25. This Agreement shall be binding upon the partners, heirs, successors, executors,
administrators, and assigns of all the parties hereto.
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26. This Agreement shall be construed in accordance with the laws of the State of Illinois. Venue for any litigation arising from this Agreement shall be limited to the Courts of the Sixteenth Judicial Circuit, Kane County, Illinois.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first above written.
CITY OF BATAVIA, an Illinois Company, AVANT ENERGY, INC Municipality,
By: __________________________ By: ________________________________ Mayor President Attest: Attest: By: __________________________ By: ________________________________ City Clerk Secretary
