Title
Recommendation to Authorize the City Manager to Execute a Gas Service Operations and Maintenance Agreement with PG&E at Alameda Point. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Authorize the City Manager to Execute a Gas Service Operations and Maintenance Agreement with PG&E at Alameda Point
BACKGROUND
Pacific Gas & Electric (PG&E) currently operates and maintains the existing former Navy gas lines at Alameda Point that are currently owned by the City of Alameda (Existing Gas Lines). These gas lines were not designed or constructed to PG&E standards and specifications. PG&E and the City entered into an operations and maintenance agreement in 1997 upon the Navy’s decommissioning of the former Naval Air Station Alameda (NAS Alameda) that was extended until 2004 (Old Agreement) (Exhibit 1). Despite attempts made to enter into a new operations and maintenance agreement over the years, an agreement was not renewed and PG&E continued to provide the operations and maintenance services without it. Now PG&E and City staff have agreed to enter into a new operations and maintenance agreement (New Agreement) (Exhibit 2).
DISCUSSION
The following provides a summary of the key terms of the New Agreement:
• Operations and Maintenance. PG&E will operate and maintain the Existing Gas Lines comparable to PG&E’s other gas facilities, including routine maintenance and extraordinary expenditures, such as repairing any line, valve or other equipment that suffers a leak or other failure. Further, PG&E seeks to deactivate Existing Gas Lines without active service addresses and not necessary for leasing to minimize the number of unnecessary active gas lines. No new gas lines will be installed by PG&E as part of this agreement unless constructed consistent with PG&E standards and connected to an existing PG&E system. The City could allow potential users to install private gas lines at its discretion.
• Modernization. PG&E and City agree that they both desire the replacement of the Existing Gas Lines with new gas lines constructed to PG&E standards as part of the City’s new development and adaptive reuse plans consistent with the Alameda Point Master Infrastructure Plan (MIP) and agree to facilitate better mapping of the Existing Gas Lines. Additionally, PG&E allows for the opportunity at its discretion to fund and construct new gas lines at its expense in coordination with the City and the MIP.
• Indemnity and Release. Consistent with the Old Agreement, the City agrees to release PG&E for the interim period between the expiration of the Old Agreement in 2004 and the effective date of the New Agreement and indemnify PG&E for their work as part of the New Agreement.
• Compensation. The City compensates PG&E for all associated costs of operating and maintaining the existing gas lines, which is estimated to cost approximately $100,000 annually.
FINANCIAL IMPACT
The City will compensate PG&E for its actual costs to perform operations and maintenance activity, and related services. This work is funded through Base Reuse Fund (858, Program 818003). The annual estimated cost is approximately $100,000. There is no impact to the General Fund as a result of this action.
RECOMMENDATION
Authorize the City Manager to execute a Gas Service Operations and Maintenance Agreement with PG&E at Alameda Point.
Respectfully submitted,
Jennifer Ott, Base Reuse & Transportation Planning Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Old Gas Service Operations and Maintenance Agreement
2. New Gas Service Operations and Maintenance Agreement