HomeMy WebLinkAbout2007-06-04 Ordinance 4953follows:
ORDINANCE NO. 4953
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AUTHORIZING THE CITY MANAGER TO PURCHASE A PORTION
OF THE CITY'S ELECTRICITY REQUIREMENTS FROM
CERTAIN PREQUALIFIED ELECTRICITY SUPPLIERS UNDER
SPECIFIED TERMS AND CONDITIONS DURING CALENDAR
YEARS 2007 THROUGH 2022, INCLUSIVE
The Council of the City of Palo Al to does ORDAIN as
SECTION 1. The City Council finds, as follows:
A. Between November 2001 and August 2003, the Council
by minute orders approved the following: (1) four primary energy
portfolio objectives ("Objectives"), noted in staff report
CMR:425:01, including the objective to ensure low and stable
electric supply rates for customersi (2) long-term electric
acquisition plan development and management guidelines ("LEAP
Guidelines"), noted in staff report CMR:389:02, which requires the
diversification of energy purchases based on factors such as dates
and terms of commitment, suppliers, prices and fuel sourceSj and
(3) the LEAP Implementation Plan, noted in sta~f report
CMR: 354: 03, which requires approval of master agreements with
suppliers for terms of up to three years.
B. In accordance with the LEAP Guidelines and the
implementation of the City's short-term electric purchase
laddering strategy, noted in staff report CMR:331:04, the City
must annually purchase and, incidental to purchases, sell
electrici ty to meet the needs of its electric customers by
contracting for terms varying from less than one month to three
years. The City's Energy Risk Management Policies, noted in staff
report CMR:128:06, provide that the City will purchase only that
quantity of electricity meeting its load requirements at the time
a transaction is executed.
C. By Ordinance No. 4812, adopted January 5, 2004, the
City has entered into one or more purchase transactions, costing in
the aggregate $19 million, which are scheduled for delivery in the
2007 -2009 period. These transactions will be governed by the
new, amended, or restated Edison Electric Institute contracts (each
an "EEl Contract").
D. In June 2006, the City conducted an RFP process for
electricity purchases and BP Energy Company, Coral Power, L.L.C.,
Sempra Energy Trading Corporation, ConocoPhillips Company, J.P.
Morgan Ventures Energy Corporation, Pacific Summit Energy L.L.C.
and Powerex Corporation have been determined to possess the minimum
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financial and legal qualifications and business experience required
of suppliers eligible to do business with the City.
E. The City intends to purchase electricity from one or
more of these pre-qualified suppliers for delivery during calendar
years 2007 through 2022, inclusive, provided the supplier with whom
the City negotiates specific transactions continues to be qualified
and otherwise eligible to do business with the City.
SECTION 2. The Council hereby authorizes the City Manager
to negotiate and sign new, amended, or restated EEl Contracts with
the suppliers referred to in Section 1.D above, and further
authorizes the City Manager or his designee, the Director of
Utilities, to negotiate one or more individual transactions,
including, but not limited to I negotiating contracts, addenda,
confirmations and transactions for resource adequacy. The
authorization shall extend to individual transactions executed
under any number of EEl Contracts with the referenced suppliers;
provided, however, (a) the maximum expenditure under any EEl
Contract shall not exceed $75 million in the aggregate and, with
respect to outstanding transactions for $19 million referred to in
Section 1.C, the respective amounts will not be applied against the
maximum expenditure established herein; and (b) the maximum term of
any transaction shall not exceed three years, commencing on the
date of execution of the transaction. The sentence preceding
notwithstanding, the City may enter into a transaction greater than
three years with any supplier referred to in Recital D, excepting
BP Energy Company and Sempra Energy Trading Corporation, with whom
any transaction shall not exceed four years, if the Council grants
prior approval to such transaction.
SECTION 3. No EEl Contract and any related transaction
entered into with any qualified supplier, executed by the City
Manager or his designated representative and approved as to form by
the City Attorney, under the authority of this ordinance shall
extend beyond December 31, 2022.
SECTION 4. The Council hereby finds that this ordinance is
exempt from the provisions of the California Environmental Quality
Act pursuant to Section 15061(b) (3) of the California Environmental
Quality Act Guidelines, because it can be seen with certainty that
there is no possibility of significant environmental effects
occurring as a result of the adoption of this ordinance.
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SECTION 5. This ordinance shall be effective on the
thirty-first day after the date of its adoption.
INTRODUCED: May 07, 2007
PASSED: June 04, 2007
AYES: BARTON, BEECHAM, CORDELL, DREKMEIER, KISHIMOTO,
KLEIN, KLEINBERG
NOES:
ABSTENTIONS: MORTON, MOSSAR
ABSENT:
APPROVED AS TO FORM:
C£~ ..
Senior Asst. City Attorney
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