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REliC ENSING PROCESS AGREEMENT BETWEEN CAliFORNIA DEPARTMENT OF WATER RESOURCES AND THE DEPARTMENT OF WATER AND POWER OF THE CiTY OF lOS ANGELES FOR THE SOUTH SWP HYDROPOWER PROJECT NO. 2426 This Relicensing Process Agreement ("Agreement") is made and entered into on this __ day of ,2013, by and between the California Department of Water Resources ("DWR") and the Department of Water and Power of the City of Los Angeles ("LADWP"), a department organized and existing under the charter of the City of Los Angeles, a municipal corporation of the State of California (jointly, the "licensees"). WHEREAS, in 1978 the Federal Energy Regulatory Commission ("FERC") issued a license ("license") for the California Aqueduct Project No. 2426 (the "Project") to DWR, and to LADWP as Joint Licensee "to the extent of its interest in the Castaic Pump Storage Facility" effective February 1, 1972, for a period of 50 years terminating January 31, 2022. FERC subsequently approved a change in name of the Project to "South SWP Hydropower" Project No. 2426; WHEREAS, the Project is located on the West and East Branches of the southern portion of the State Water Project, and is described in greater detail in the License, as it has been amended from time to time; WHEREAS, in order to obtain a new license or licenses for the Project from FERC, Licensees intend to complete relicensing activities prior to the expiration of the current license term; WHEREAS, under the Federal Power Act ("FPA"), Licensees must notify FERC whether they intend to file an application for a new license at least five years before expiration of the existing license, and must file an application for new license no later than two years before expiration of the existing license; WHEREAS, Licensees intend to share the costs and management of relicensing the Project, as specified below; WHEREAS, Licensees desire to coordinate as effectively and efficiently as possible and to present consistent communication to stakeholders and to FERC in supporting a mutually-beneficial outcome to the relicensing process, subject to each Licensee's role and legal obligations per existing agreements and operational requirements; WHEREAS, Licensees desire to minimize the financial impact of relicensing and future operation on behalf of the ratepayers and customers being served by these facilities while addressing project impacts in an accountable and responsive manner; and WHEREAS, Licensees desire to coordinate their substantial technical and environmental expertise to produce an efficient and cost-effective relicensing process. Page 1 of 13 NOW, THEREFORE, it is agreed between the Licensees as follows: COST SHARE PROVISIONS ( 1. Process Costs. "Process Costs" are the costs to obtain a new license or licenses from FERC and all related permits, regulatory approvals, and third party agreements and include both Internal Costs and Common Costs, as defined below. Process Costs do not include the costs associated with the Contract for Cooperative Development of September 1966, as amended, or costs associated with implementing a new license or agreements required by or related to a new license. 1.1 Internal Costs. "Internal Costs" are those Process Costs incurred for internal relicensing activities. "Internal relicensing activities" include, but are not limited to, staff time and associated costs, administrative support and legal activities. Except as provided in Section 4, Licensees are solely responsible for paying their own Internal Costs. 1.2 Common Costs. "Common Costs" are Process Costs that must be mutually agreed to in writing, in advance of either Licensee contracting for such cost, and in any event, prior to performance of such activities. These include, but are not limited to: (a) costs of outside consultants, experts, and services for strategic planning, technical analyses, preparation of the pre-application document, preparation of environmental documents, participation in technical working groups and other meetings, study plan development and . implementation, preparation of study reports and other FERC filings jointly ( submitted by the Licensees in support of the relicensing process, preparation of the license application, post-application document preparation and analyses; and (b) out-of-pocket costs, such as costs incurred for public meetings and vendor services. 2. Equal Sharing of Common Costs. Licensees will equally share the Common Costs of all relicensing activities for the West Branch facilities. The West Branch facilities are generally comprised of Quail Dam and Lake and Lower Quail Canal, Peace Valley Pipeline, the Warne Powerplant, Pyramid Dam and Lake, Angeles TUnnel and surge chamber, Castaic Powerplant, the Elderberry Dam and Forebay, and associated licensed transmission lines and other appurtenances. 3. East Branch Costs. Process Costs for the East Branch facilities are not Common Costs and will be the sole responsibility of DWR. The East Branch facilities are generally comprised of the Alamo Powerplant, Mojave Siphon Powerplant, Cedar Springs Dam and Silverwood Lake, Devil Canyon Powerplant and Afterbays, and associated licensed transmission lines and other appurtenances. 4. Licensee Performance of Common Cost Activities. Licensees may agree that one of them has subject-matter expertise and available resources to carry out a ( Page 2 of 13 Common Costs relicensing activity. In situations where one of the Licensees is performing that activity, the Internal Costs associated with such activity may, by mutual written agreement, be classified as Common Costs, in which case the billing and invoices for the work will be subject to audit as specified in this Agreement. The billing Licensee shall bill per work order and said work orders will be included in Statements of Costs and invoices and paid pursuant to Section 16 under this Agreement. 5. Reservation of Right to Hire Own Experts. Nothing in this Agreement shall prevent either Licensee from hiring its own outside consultants or experts, at its own expense. 6. Allocation of Common Costs. Common Costs incurred by Licensees shall be reported monthly. On a quarterly basis, Licensees will calculate the equal share owed by each Licensee and determine the amount, if any, incurred by a Licensee in excess of the equal apportionment. Payments will be made pursuant to Section 16. 7. Exchange of Information, Data and Work Product. Licensees will share all information, data, and work product with each other as necessary for the completion of all pre-application, application, and post-filing activities during the term of this Agreement. Both Licensees shall treat such information as proprietary information and make the same efforts to keep and protect the information as it would its own proprietary information. The obligation to share information does not apply to any information, data, or work product obtained under Section 5 unless such information is subject to mandatory release under the California Public Records Act. Notwithstanding this section, Licensees remain bound by the Joint Prosecution, Joint Defense, and Common Interest Agreement between California Department of Water Resources and the City of Los Angeles acting by and through the Department of Water and Power Agreement of 2011 (JPJD 2011), attached hereto and made a part of this Agreement as Exhibit A, that may be amended from time to time, MANAGEMENT PROVISIONS 8. Executive Committee. 8.1 Formation of Executive Committee. Under this Agreement, an Executive Committee is established and shall be comprised of one Authorized Representative from each Licensee to provide oversight of activities that require consensus decision making during the relicensing process. The Authorized Representative from DWR shall be the Hydropower License Planning and Compliance Office Chief or his/her designee. The Authorized Representative from LADWP shall consist of a manager at the Executive Management level or his/her designee. Page 3 of 13 8.2 Designation of Authorized Representative. Each Licensee, within thirty (30) calendar days after the Effective Date of this Agreement, shall appoint and designate its Authorized Representative. Notice of such appointments and ( designations shall be made pursuant to Section 30. 8.3 Scope and Authority. 8.3.1 Each Authorized Representative shall be authorized and empowered by his/her governing authority (or authorities) to carry out the provisions of this Agreement on behalf of and for the benefit of said Licensee, and to provide liaison between the Licensees, subject to the limitation of the maximum expenditures as approved by his/her governing authority (or authorities). 8.3.2 The Authorized Representatives shall have no authority to alter, amend, modify or delete any of the provisions of this Agreement. 8.4 Duties and Responsibilities. The Executive Committee shall have the following duties and responsibilities, among others: 8.4.1 Each Authorized Representative shall oversee the relicensing activities for which the Licensee is responsible, oversee development of and approve the annual Common Cost budget, and choose a Project Manager. 8.4.2 Each Authorized Representative shall have the authority to enter into ( contracts within the scope of this Agreement. 8.4.3 Unless both Authorized Representatives mutually agree otherwise the Executive Committee shall have at least one standing meeting a month, with the Project Managers to discuss the progress of the relicensing. The Executive Committee shall establish a protocol for regularly scheduled meetings and conference
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