Resolution No. 4549 - Laserfiche WebLink

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AND: The Eugene Water & Electric Board, a municipal utility owned by the City of Eugene (EWEB) ( ~ 6') . r I"t: .L ~ C '" D u.." <k. \ IX CIb~03Lf3) MEMORANDUM OF UNDERSTANDING BETWEEN: The City of Eugene, a municipal corporation of the State of Oregon (City) RECITALS A. The Eugene Water & Electric Board (EWEB) has generated significant revenues through sales for resale which have benefitted the City of Eugene (City) through p~yments pursuant to Section 44(4) of!he E,!gene .Charter of 1976, and E\VEB's custorners through 10\ve1" rates. B. The City of Eugene (City) and the Eugene Water & Electric Board (EWEB) entered into a memorandum of understanding concerning paYments to the city on wholesale sales activities for a period ending December 31, 1997. C. EWEB and the City believe it is in their best interests to continue this new arrangement. Current market conditions continue to make it very difficult for EWEB to make sales to other entities which market or sell power ("Power Entities") for resale which generate sufficient margins to make J-tGpaYments to City and to return benefits to EWEB customers. The six percent formula, when applied to the gross revenues of such a potential sale, is often larger than the entire net revenues from the sale and would cause EWEB to forgo sales for resale opportunities. AGREEMENT 1. EWEB and the City agree that henceforth, paYments to the City for future sales to Power Entities shall be based on a revised formula. This formula shall be: 1.1 Seventeen percent (17%) of the net revenues from sales for resale. 1.2 The net revenues are defined as revenues frOll1 the sales less the cost of power and other services needed to deliver the power. 1.3 The cost of power for the calculation will be the Dow Jones Mid-Columbia index, adjusted for transmission, or some other similarly published index, unless there is a matched purchase and sale arrangement brokered by EWEB. 1.4 Services include wheeling, reserve capacity, storage, etc., which are used to deliver the desired product to the Power Entity. 2. Except as expressly provided in Section 1 of this Agreement, the current paYments based on six percent (6%) of gross revenues shall continue to apply. Other than sales to Power Entities,