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1977-697RESOLUTION NO. 77R- 697 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING THE TERMS AND CONDITIONS OF FOUR AGREEI IN CONNECTION WITH THE CITY OF ANAHEIM'S PARTICIPATION IN SAN O NUCLEAR GENERATING STATION (SONGS) UNITS 2 AND 3, AND AUTHORIZING THE UTILITIES DIRECTOR TO EXECUTE SAID AGREEMENTS ON BEHALF OF THE CITY OF ANAHEIM. WHEREAS, Southern California Edison Company "Edison") and San Diego Gas and Electric Company "San Diego present- ly own, as tenants -in- common, a nuclear generating station located on a site of approximately 90 acres in the northwest corner of the Marine Corps Base, Camp Pendleton, California., and known as the San Onofre Nuclear Generation Station "San Onofre"); and WHEREAS, Edison, the City of Riverside, "Riverside the City of Anaheim "Anaheim and the City of Banning entered into the Settlement Agreement, dated August 4, 1972, under which Edison offered to Riverside, Anaheim, and. the City of Banning participation in the ownership and output of Units 2 and 3 at San Onofre; and WHEREAS, Anaheim desires to participate in the ownership, construction and operation of San Onofre Units 2 and 3; and WHEREAS, in order to accomplish such participation, a San Onofre Units 2 and 3 Participation Agreement, a Supplemental Agreement for the Integration of Anaheim's Entitle- ment in San Onofre Units 2 and 3, and an Edison Anaheim San Onofre Transmission Service Agreement have been prepared, the terms and conditions of which are acceptable to the City Council of the City of Anaheim; and WHEREAS, it is in the best interests of the City of Anaheim to enter into said agreements; and WHEREAS, while Anaheim, Edison, Riverside and San Diego "Parties were negotiating the Participation Agreement, a position taken by a "responsible technician" in the Washington office of the Internal Revenue Service raised a question as to whether acquisition by publicly owned utilities and investor owned utilities of undivided co- tenancy interests in utility facilities would disqualify the interest owned by the investor owned utilities in such facilities as Section 38 -1- property for the purposes of the investment tax credit, pursuant to the Internal Revenue Code and thus cause the investor owned utilities to lose substantial tax benefits; and WHEREAS, in order to resolve the question, Edison is undertaking to obtain a Ruling of the Internal Revenue Service that the acquisition by the Cities of an undivided co- tenancy interest in San Onofre Nuclear Generating Station Units 2 and 3 will not disqualify the ownership interest in San Onofre Nuclear Generating Station Units 2 and 3 retained by Edison and San Diego as Section 38 property for the purposes of the investment tax credit; and WHEREAS, the Parties recognize that such a ruling cannot be obtained by November 1, 1977, the effective date of the Participation Agreement; and WHEREAS, Anaheim represents that it cannot prudently issue revenue bonds to finance its acquisition of an interest in San Onofre Nuclear Generating Station Units 2 and 3 until the Participation Agreement has been executed; and WHEREAS, Edison and San Diego represent that they cannot prudently execute the Participation Agreement until the question concerning the investment tax credit has been resolved; and WHIEREAS, a Letter Agreement (which includes said Participation Agreement, Supplemental Agreement for the Integration of Anaheims' Entitlement in San Onofre Units 2 and 3, and Edison- Anaheim San Onofre Transmission Service Agreement as Exhibits thereto) has been prepared, the terms of which provide, among other things, that said agreements attached as Exhibits shall be executed and become effective in accordance with the terms thereof when each Party is, in its sole discretion, satisfied that the execution of said agreements will not adversely affect the investment tax credit for those portions of San Onofre Nuclear Generating Station Units 2 and 3 owned by Edison and San Diego; and WHEREAS, the terms of said conditions of said Letter Agreement are acceptable to the City Council of the City of Anaheim and it is in the best interests of the City of Anaheim to enter into said agreement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Anaheim that the terms and conditions of the following Agreements are hereby approved and accepted: -2- 1. November 1, 1977 Letter Agreement 2. San Onofre Units 2 and 3 Participation Agreement 3. Supplemental Agreement for the Integration of Anaheim's Entitlement in San Onofre Units 2 and 3. 4. Edison- Anaheim San Onofre Transmission Service Agreement BE IT FURTHER RESOLVED that the Utilities Director of the City of Anaheim is authorized to execute said November 1, 1977 Letter Agreement on behalf of the City of Anaheim. BE IT FURTHER RESOLVED that, upon determination by the City Council of the City of Anaheim that it is satisfied that the execution of said San Onofre Units 2 and 3 Participa- tion Agreement, Supplemental Agreement for the Integration of Anaheims' Entitlement in San Onofre Units 2 and 3, and Edison Anaheim San Onofre Transmission Service Agreement will not adversely affect the investment tax credit for those portions of San Onofre Nuclear Generating Station Units 2 and 3 owned by Edison and San Diego, then, upon such determination, the Utilities Director is hereby authorized to execute said three agreements on behalf of the City of Anaheim. THE FOREGOING RESOLUTION is approved and adopted by the City Council of the City of Anaheim this 25th day of October 1977. ATTEST: rF CITY LERK OF T CITY OF ANAHEIM ROF:jh f y MAYO O_ HE C TY 0) JAHEIM SEAL STATE OF CALIFORNIA COUNTY OF ORANGE ss. CITY OF ANAHEIM CITY CLERK I, LINDA D. ROBERTS, City Clerk of the City of Anaheim, do hereby certify that the foregoing Resolution No. 77R -697 was introduced and adopted at a regular meeting provided by law, of the City Council of the City of Anaheim held on the 25th day of October, 1977, by the following vote of the members thereof: AYES: COUNCIL MEMBERS: Kaywood, Seymour and Roth NOES: COUNCIL MEMBERS: Kott and Thom ABSENT: COUNCIL MEMBERS: None CITY LERK OF' THE CI OF ANAHEIM AND I FURTHER CERTIFY that the Mayor of the City of Anaheim signed said Resolution No. 77R -697 on the 28th day of October, 1977. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the City of Anaheim this 28th day of October, 1977. I, LINDA D. ROBERTS, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the original of Resolution No. 77R -697 duly passed and adopted by the Anaheim City Council on October 25, 1977.