Explanation
BACKGROUND: On October 26, 2004, the City Attorney entered into a contract with McNees, Wallace & Nurick LLC, a law firm knowledgeable in electric purchase power issues to provide specialized legal services for the Division of Electricity (City) relating to the Power Purchase and Sale Agreement between the City and Constellation Commodities Group and American Municipal Power-Ohio (Constellation). Constellation, which is the Division of Electricity's energy requirements provider, is subject to a new service charge created by the Federal Energy Regulatory Commission (FERC) as part of the efforts to deregulate the electric power industry. This charge, which is called the Seams Elimination Cost Allocation (SECA), is to be paid, by FERC order, by those receiving the energy. The City and Constellation disagree over the interpretation of the City's contract as to who is liable for payment of the SECA charges.
To date the City Attorney, has contracted with McNees, Wallace & Nurick for a total of $70,000, beginning in 2004. It is estimated that an additional $35,000 is needed to cover the remaining specialized legal services regarding SECA purchase power issues, and certain additional legal services necessary to the evaluation of purchase power proposals and the negotiations of new purchase power agreements anticipated for 2006 and 2007.
Contract Compliance Number: 231256003
FISCAL IMPACT: There is sufficient budget authority in the Division of Electricity's Operating Fund to cover this expenditure
EMERGENCY JUSTIFICATION: Emergency action is requested as not to delay the monies necessary to continue the legal services of David Kleppinger, the City's special counsel, whose expertise is this matter is needed.
Title
To authorize the City Attorney to modify an existing contract with McNees Wallace & Nurick LLC to act as special counsel to represent the City regarding certain Seams Elimination Cost Allocation (SECA) purchase power issues, and other necessary specialized legal services, and to authorize the expenditure of $35,000.00 from the Division of Electricity Operating Fund and to declare an emergency. ($35,000.00)
Body
WHEREAS, On October 26, 2004, the City Attorney entered into a contract with McNees, Wallace & Nurick LLC, (ED017942), a law firm knowledgeable in electric purchase power issues, in the amount of $10,000, to provide specialized legal services for the Division of Electricity (City) relating to the Power Purchase and Sale Agreement between the City and Constellation; and
WHEREAS, Constellation and the City disagree on which party, under the City and Constellation Agreement, is responsible for a FERC imposed charge, called the Seams Elimination Cost Allocation (SECA) related to deregulation of transmission services; and
WHEREAS, due to the continuing SECA issue, the City Attorney, through an encumbrance in 2005 for $10,000.00, an additional $15,000.00 as authorized by Ordinance Number 1519-2005, and most recently in January Ordinance 0097-2006 authorized $35,000.00, to date has contracted with McNees, Wallace & Nurick for a total of $70,000; and
WHEREAS, it is estimated that an additional $35,000 is needed to cover the remaining specialized legal services regarding SECA purchase power issues, and certain additional legal services necessary to the evaluation of purchase power proposals and the negotiations of new purchase power agreements anticipated for 2006 and 2007; and
WHEREAS, an emergency exists in the usual daily operation of the City, in that it is immediately necessary to authorize the City Attorney to modify an existing contract with McNees Wallace & Nurick LLC to act as special counsel to represent the City regarding the Seams Elimination Cost Allocation (SECA) purchase power issues relating to the Power Purchase and Sale Agreement between the City of Columbus and Constellation Commodities Group, and for additional legal services necessary to the evaluation of purchase power proposals and the negotiations of new purchase power agreements for the preservation of the public health, peace, property and safety; now, therefore:
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the City Attorney is hereby authorized to modify an existing contract with McNees, Wallace & Nurick LLC, in an amount of $35,000.00, for special legal counsel services relating to the Power Purchase and Sale Agreement between the City of Columbus and Constellation Commodities Group and for additional legal services necessary to the evaluation of purchase power proposals and the negotiations of new purchase power agreements.
SECTION 2. That to pay the cost of the aforesaid contract modification, the expenditure of $35,000.00, or so much thereof as may be needed, is hereby authorized from the Division of Electricity, Division No. 60-07, Operating Fund 550, OCA 600830, Object Level Three 3336.
SECTION 3. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after passage and approval by the Mayor or ten days after its passage if the Mayor neither approves nor vetoes the same.