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Martinsville <br /> <br />Agenda Item Number, I ~/ <br />Department: ~ na~c~ <br />Date: ~-'&q-O 4 <br /> <br />City Council <br />Agenda Summary <br /> <br />Agenda Item: Consider adoption of an Ordinance, on emergency basis, and authorizing the City <br />Manager to sign a Guaranty Agreement with American National Bank and Trust Company. <br /> <br />Summary: The Federal Energy Regulatory Commission (FERC) requires all electric companies to <br />join Regional Transmission Organizations (RTOs) that will oversee and manage multi-state electric <br />transmission grids. Virginia law requires membership in an FOX) by January 1, 2005. RI'Os allow <br />customers to pay a single cost for transmission, rather than accumulated fees as power moves across <br />borders. In theory, RTOs should provide more reliable electric power at lower net costs. PJM <br />Interconnection ts the RTO controlling power transmission in all or parts of Virginia, West Virginia, <br />Maryland, the District of Columbia, Delaware, Illinois, New Jersey, Ohio, and Pennsylvania. <br /> <br />The City of Martinsville is one of ten governments that form the Blue Ridge Power Agency (BRPA). Through <br />BRPA the City and other members secure wholesale electricity and pay associated power and transmission <br />costs. All members of BRPA must either become members of PJM or have an agent to act on their behalf. <br />It is in the City's best interest to have BRPA act as its PJM agent. PJM requires BRPA to obtain an <br />irrevocable stand-by letter of credit to secure future payments. <br /> <br />The Bank is requi~ing an Ordinance from each community in order to issue the Guaranty. BRPA with help <br />from the firm of Hutton & Williams in conjunction with the Bank's attorney developed the ordinance. The <br />attached Ordinance authorizes the City to provide a loan guaranty of up to $190,000 in the account of <br />BRPA and American National Bank to make payments to PJM on Martinsville's behalf. The Ordinance <br />also authorizes up to two additional members of BRPA at their expense to be added in the future. <br /> <br />Due to the liming of final approval and length of time to fmalize negotiations between the Bank and BRPA <br />this is presented for approval on an emergency basis. <br /> <br />Recommended Council Action: Motion to adoption Ordinance on emergency basis and <br />authorize City Manager to execute the Guaranty, <br /> <br />ATTACHMENTS: <br /> <br />Role Call Aye Nay <br /> <br />Memo Council Minutes Mayor & Vice Mayor <br />Staff Report Existing Ordinance M S__ Cobbe <br />Correspondence X__ Proposed Ordinance M__ S Reynolds <br />Bid Tabulation Attorney's Report <br />P/C Recommendation Petition Council Members <br />P/C Minutes Contract M S Roop <br />Application Budget Amendmeht M S Ferrill <br />Citizen Legal Notice M S__ Clark <br />Consultant Report X__Other Guaranty <br /> <br /> <br />