HomeMy WebLinkAbout2003-11-10 Ordinance 4810ORDINANCE NO. 4810
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AUTHORI.ZING THE CITY MANAGER TO PURCHASE A PORTION
OF THE CITY'S NATURAL GAS REQUIREMENTS FROM
CERTAIN PREQUALIFIED NATURAL GAS SUPPLIERS UNDER
SPECIFIED TERMS AND CONDITIONS DURING CALENDAR
YEARS 2004 THROUGH 2009, INCLUSIVE
The Council of the City of Palo Alto does ORDAIN as
follows:
SECTION 1. The City Council finds, as follows:
A. In accordance wi th the Ci ty' s Natural Gas
Procurement Plan, the City annually purchases natural gas to meet
the needs of its gas customers by entering into one or more
contracts with terms varying from one month to three years.
B. The City's annual budget for natural gas purchases
will vary depending on the price of gas charged by a supplier and
the projected annual gas customer requirements; the gas budget is
anticipated to fall within the range of approximately $16 million
to $22 million per fiscal year under current pricing.
C. In October 2002, the City initiated a Request for
Proposals process in order to prequalify a number of natural gas
suppliers, based on their financial and legal qualifications and
business experience, who are eligible to sell [and purchase
incidental to a sale] natural gas to the City.
D. BP Energy Company, ConocoPhillips, Inc., Coral
Energy Resources, L.P., Duke Energy Marketing America L.L.C., and
Sempra Energy Trading Corporation each possess the minimum
financial and legal qualifications and business experience in order
to be eligible to do business with the City.
E.
more of these
through 2009,
negotiates a
qualified and
The City intends to purchase natural gas from one or
prequalified suppliers during calendar years 2004
inclusive, so long as the supplier with whom the City
specific purchase transaction continues to be
otherwise eligible to sell to the City.
SECTION 2. The Council hereby authorizes the Mayor to sign
the standard form contract of the North American Energy Standards
Board, Inc., or equivalent, and hereby authorizes the City Manager
or his designated representative, the Director of Utilities, to
negotiate one or more individual transactions thereunder, with BP
Energy Company, ConocoPhillips, Inc., Coral Energy Resources, L.P.,
Duke Energy Marketing America L.L.C., and Sempra Energy Trading
Corporation. The authorization shall extend to individual
transactions executed under the referenced standard form contract,
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provided that (a) the maximum expenditure under any standard form
contract and any and all separate transactions thereunder with any
of the named suppliers shall not exceed $50 million in the
aggregate, (b) the maximum term of any transaction shall not exceed
a term of three (3) years, commencing on the date the transaction
is mutually agreed to by the parties, and (3) the quantity of gas
purchased by the City is limited to its load requirements
established as of the date the transaction is executed by the
parties.
SECTION 3. No standard form contract and any transaction
entered into thereunder with any qualified gas 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, 2009.
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: November 10, 2003
PASSED: December 8, 2003
AYES: BEECHAM, BURCH, FREEMAN, KISHIMOTO, KLEINBERG, LYTLE,
MOSSAR, OJAKIAN
NOES:
ABSTENTIONS:
ABSENT:
NOT PARTICIPATING: MORTON
ATTEST: ~
ac2ffX/lG1<-. I
City Clerk 9 ~ Mayor
APPROVED AS TO FORM:
~
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