25C - AGMT - WATER PURCHASE ORDER

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11/18/2014 Board Meeting 8 -1 Attachment 1, Page 2 of 2 Additional Aspects of the Purchase Orders: • Purchase Orders are voluntary • The commitment is cumulative over the term; agencies that do not meet the full amount of the commitment during the term will pay for the unmet commitment at the average of the Tier 1 Supply Rate in effect during the term. The Purchase Order will allow for an appeals process at the end of the term for agencies with an unmet commitment. Each acre -foot of unmet commitment will be reduced by the amount of production from a local resource project, measured in acre -feet, that commences operation on or after January 1, 2014. Local resource production includes any project type as approved by the Board under the Local Resources Program. • The commitment will be adjusted to exclude Water Supply Allocation Plan years. • Purchase Orders do not confer a contractual right to system supply to a member agency. The proposal does not accommodate the exchange or sale of purchase order quantities between member agencies. • All member agency purchase orders will extend over the same 10 -year period. Member agencies purchase orders will be effective January 1, 2015. • The Tier 2 Supply Rate for Calendar Years 2015 and 2016, as already determined by the Board, will not change. Biennially, the Board reviews the proposed Tier 1 and Tier 2 Supply Rates as part of the biennial rate setting process. 25C -17