Agmt 2004 ABAG Power - Laserfiche WebLink

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Legal Analysis From a legal perspective, the matter is a simple collection issue. Since ABAG POWER did not enter into a contract during the Gap Period, there is no "seller" to invoice ABAG POWER for any energy that was consumed. There are only two sources of electricity flowing into the California grid that could have serviced the Electric Program during the Gap Period; the ISO and PG&E. The energy consumed by the Members could have been supplied through the ISO "imbalance energy." This is a reserve maintained by the ISO when contracted for energy supplies from PG&E and other electric service providers fall below the amount necessary to keep the grid operational. Electricity Program electricity consumption during the Gap Period could have come from this source. Alternatively, PG&E supplies such a large amount of electricity over any period of time that it could have been supplying part of the power for the Electric Program during the Gap Period. The risk of incurring the liability is wholly dependent on the ability either of the ISO or of PG&E to "prove" that electricity consumed by Members during this period was supplied by the party making the claim. ABAG POWER is without sufficient information to evaluate the likelihood of this risk occurring. . ABAG POWER has reviewed the price of imbalance energy for the period in question. Imbalance energy prices tend to be the highest of all prices paid for electricity. Based on the price for imbalance energy an estimate of the amount of electricity that the Electric Program would have consumed during the Gap Period, the maximum exposure is estimated as One Million Four Hundred Twenty Thousand Dollars ($1,420,000). Finally, ABAG POWER notes that as time goes on the ability of either the I50 or PG&E to collect the data necessary to generate an invoice and prove a claim diminishes. B. UDC CHARGES Description of Risk From information provided by the Program's billing agent (APS) we believe there may be UDC charges for which neither ABAG POWER nor its Members have been invoiced by PG&E. During the period July 2000 to June 2001 the amount of UDC charges billed to members (and collected by ABAG POWER) is greater than the amount invoiced from PG&E. ABAG POWER is also aware of one instance in which UDC charges for the affected period were generated by PG&E in connection with an electric account for a Member's streetlight system. These accounts are unique in the PG&E billing system. Electricity consumed by a streetlight system is not metered and is charged on an estimated consumption basis. In the case of which ABAG POWER is aware, the Member had already paid PG&E for the asserted UDC charges. Wind Up Agreement-Attmt D- 4-2$-04 All