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Home My WebLink AboutRESO 8022' ' RESOLUTION NO. 8022 RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING UTILITY RULE AND REGULATION 5 PERTAINING TO CONTRACTS AND ADOPTING NEW UTILITY RATE SCHEDULES G-11 AND G-12 OF THE CITY OF PALO ALTO UTILITIES RATES AND CHARGES PERTAINING TO LARGE COMMERCIAL FIXED-TERM AND CUSTOM COMMODITY GAS SERVICES The Council of the City of Palo Alto hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12. 20. 010 of the Palo Alto Munlclpal Code, Rule and Regulation 5 (Contracts) of the Palo Alto Utilities Rules and Regulations is hereby amended to read in accordance with the attached Sheet Nos. 1 through 4. Utility Rate Schedule G-11 (Large Commercial Fixed-term Commodity Gas Service) is hereby adopted, to read in accordance with Sheets G-11-1 and G-11-2, attached hereto and incorporated herein by reference. Utility Rate Schedule G-12 (Large Commercial Custom Commodity Gas Service) is hereby adopted, to read in accordance with Sheets G- 12-1 and G-12-2, attached hereto and incorporated herein by reference. The foregoing Utility Rate Schedules, as amended and as adopted, shall become effective January 1, 2001. SECTION 2. The Council finds that the revenue derived from the authorlzed adjustments of the general natural gas service rates shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 3. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, California Public Resources Code section 21080, subdivision (b) (8). INTRODUCED AND PASSED: December 12, 2000 AYES: NOES: ABSENT: BEECHAM, BURCH, EAKINS, FAZZINO, KLEINBERG, KNISS, LYTLE, MOSSAR, OJAKIAN ABSTENTIONS: APPROV~ AS TO FORM: ~\/II~ Senior Asst. City At~rney 001222 syn 0071951 CONTRACTS RULE AND REGULATION 5 A. TYPES OF SERVICE CONTRACTS For electric, gas, or fiber optic services in large quantities or under special conditions, CPAU may require a suitable written agreement for new or existing customers. Contracts may apply to standard service offerings or custom or special services. The following is an illustrative list of special services that may be the subject(s) of a contract. Additional services may apply at the discretion of the Director of Utilities. 1. Line Extensions. 2. Temporary Service. 3. Special Facilities. 4. CPAU service to special districts and institutions. 5. Special type service requirements. 6. Work performed for other agencies at their expense. 7. Customers purchasing energy from other entities, such as an ESP. 8. Customers purchasing natural gas or power from CP AU under special arrangements. 9. Transmission service 10. Purchase of commodity products and services 11. Special Metering and/or Billing Services. 12. Special Energy Services. 13. Long-term service agreements greater than 3 years. 14. Loans and leases to Customers to finance efficiency improvements or to improve power reliability at a Customers' site. 15. Standby Service. 16. Purchase, lease, installation, connection or maintenance of on-site generation (distributed generation) B. CONTRACT APPLICATION PROCEDURES Large commercial customers will have the ability to negotiate provisions of Energy Services from CPAU. In general, the following application procedures are applicable to service contracts. 1. Completion and signature of applicable form(s) or letter(s) as necessary; CITY OF PALO ALTO UTILITIES Issued by the City Council Supercedes Sheet No. 1 dated 12-14-99 CITY OF PALO ALTO UTILITIES Effective 1-1-2001 Sheet No.1 CONTRACTS RULE AND REGULATION 5 2. Depending on the type of service contract, Customers shall request consideration for a special contractual agreement in writing to the Director of Utilities specifying their objectives, including the desired term of the contract. 3. If applicable, fees or deposits shall be paid. 4. If applicable, compliance with the City's insurance requirements. C. CONTRACT PRICING GUIDELINES Contracts between CP AU and its customers shall be based on the following pricing guidelines: 1. The same pricing, terms, and conditions for one customer will be made available to other customers of similar size, service, and load characteristics. 2. Authority to establish the specific terms, excluding the rates of services, will be delegated to the City Manager. 3. Revenues realized from each contract will, at a minimum, recover all applicable Energy Services costs over the term of the contract. 4. Rates arrangements differing from those offered in the current and successor rate schedules will not shift costs to the other customers in the short-or long-term. 5. Only the commodity portion of the rate will be fu:ed under custom commodity rates and fu:ed-term commodity rates. Rate schedule cost components such as electric distribution, gas transportation, administrative fees, public benefits, tax, and other non-bypassable charges will be adopted by Council and will be equivalent to the corresponding charges contained on applicable full-service rate schedules. Council may change such charges during the term of the contract 6. The available rates for fu:ed-term rate options and custom rate options will be public information, and will be published by the Utilities Department. CITY OF PALO ALTO UTILITIES Issued by the City Council Supercedes Sheet No. 1 dated 12-14-99 CITY OF PALO ALTO UTILITIES Effective 1-1-2001 Sheet No.2 CONTRACTS RULE AND REGULATION 5 (Continued) 7. Rates for fixed-term commodity rates and custom commodity contracts will adhere to the principles set forth in the Council approved Commodity Pricing Policy. One exception to this policy relates to the component of the overall rate that is designed to fund or withdraw from the Supply Rate Stabilization Reserve (SRSR). This component may be less or more than is applied to full service rate schedules. 8. Rates for fixed-term commodity rates and custom commodity contracts will adhere to the principles set forth in the Council approved Commodity Pricing Policy. One exception to this policy relates to the component of the overall rate that is designed to fund or withdraw from the Supply Rate Stabilization Reserve (SRSR). This component may be less or more than is applied to full service rate schedules. D. OVERSIGHT, REVIEW, AND APPROVAL OF COMMODITY SALES CONTRACTS 1. The City Auditor shall perform the oversight function, independent of the Utilities Department, to ensure sales contracts are implemented in accordance with Council- approved policies and guidelines. Reports will be provided to by the Auditor to the Council. 2. The UAC shall review the methodology underlying the calculation of the commodity rate, including the risk premium, and provide recommendations to the Council. 3. The UAC shall review a proposed range of commodity rates applicable to flxed term rate schedules and custom rate schedules and provide recommendations to Council. 4. Council shall adopt a range of commodity rates applicable to fiXed-term and custom commodity service rate schedules. 5. The City Manager shall be delegated the authority to designate a price for a customer that is within the Council-approved rate range for a fixed-term contract rate or custom contract rate. The City Manager may delegate such authority to the Director of Utilities. 6. The City Manager shall be delegated the authority to develop, approve and modify any CITY OF PALO ALTO UTILITIES Issued by the City Council Supercedes Sheet No.2 dated 12-14-99 CITY OF PALO ALTO UTILITIES Effective 1-1-2001 Sheet No.3 CONTRACTS RULE AND REGULATION 5 (Continued) contract boilerplates, confirmation schedules, and/or forms needed to implement energy sales contracts. The City Manager may delegate such authority to the Director of Utilities. All forms and boilerplates shall be reviewed and approved by the City Attorney. E. REPORTING OF COMMODITY SALES CONTRACTS 1. The Utilities Department shall prepare performance reports containing an analysis of cost recovery and revenue impact. The UAC and Council will receive a minimum of two reports per year for 2001 and 2002 and annual reports thereafter. 2. Council shall be notified of fiXed-term and custom contracts on a semiannual basis. The confidentiality of specific contract provisions such as price and customer usage profile shall be maintained unless the customer consents to its disclosure to the public. However, such information shall be made available for any Council member to review in the City Clerks Office. (END) CITY OF PALO ALTO UTILITIES Issued by the City Council Supercedes Sheet No.2 dated 12-14-99 CITY OF PALO ALTO UTILITIES Effective 1-1-2001 Sheet No.4 LARGE COMMERCIAL FIXED-TERM COMMODITY GAS SERVICE UTILITY RATE SCHEDULE G-11 A. APPLICABILITY: This schedule applies to large commercial customers who use at least 250,000 therms per year at one site. B. TERRITORY: Within the service area of the City of Palo Alto and on land owned or leased by the City. C. RATES: . PerTherm Supply Charges: 1. Commodity Charge ................................................................................ $0.20-$1.50 2. Administrative Fee ......................................................................................... $0.004 3. PG&E Local Transportation ........................................................................... $0.016 Distribution Charge: 1. Palo Alto Local Distribution ........................................................................... $0.237 D. TERM: 12 Months or 24 Months E. SPECIAL CONDITIONS: 1. Service under this schedule is subject to discontinuance in whole or in part, for operational reasons, or if the City experiences supply or capacity shortages. The City will exercise reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service, if the interruption of service is caused by an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City's control. 2. Customers who choose to be charged under this rate schedule are required to sign a letter with CP AU committing to a price and term and to adhere to rules and regulations set forth in CP AU Rule and Regulation No.5 (Contracts). The letter shall indicate the estimated gas consumption over the term of the contract rate. This consumption shall be served solely by CPAU. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 1-1-2001 Original Sheet No. G-11-1 LARGE COMMERCIAL FIXED-TERM COMMODITY GAS SERVICE UTILITY RATE SCHEDULE G-11 (Continued) 3. The Commodity Charge shall be fixed for a 12 or 24-month term. The other components of the rate: Administrative Fees, Transportation Charges, and Distribution Charges may be modified periodically with the Council's approval. 4. The Commodity Charge component of this rate and the term will be set at the time when the customer signs a letter acknowledging the term and price agreed upon with CPAU. The Commodity Charge shall be based upon the customer load shape and size, a risk premium, and market prices. The Commodity Charge will fall within the range set in Section C, Part 1 of this Schedule and will be for gas delivered to PG&E City Gate. 5. The Administrative Fee is equal to the allocable administrative and overhead costs incurred by the City in providing the gas service. 6. PG&E Local transportation charge is equal to the cost oftransporting gas from PG&E City Gate to the Palo Alto City Gate. 7. Total monthly charge = therms used during the month X (Commodity Charge + Administrative Fee + PG&E Local Transportation Charge +Palo Alto Local Distribution Charge). 8. A customer may request service under this schedule for more than one account or meter if the accounts are located on one site. A site shall be defined as one or more utility accounts serving contiguous parcels ofland with no intervening public right-of-ways (e.g. streets) and have a common billing address. 9. A customer may renew service under this rate schedule with a 30-day advance notice. The Commodity Charge for the renewed term of service will be based on the published fixed- term commodity charge at the time service is renewed. Customers electing not to renew service under this rate schedule will be returned to an applicable full-serVice gas rate schedule of their choice. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES {End} Effective 1-1-2001 Original Sheet No. G-11-2 • LARGE COMMERCIAL CUSTOM COMMODITY GAS SERVICE UTILITY RATE SCHEDULE G-12 A. APPLICABILITY: This schedule applies to large commercial customers who use at least 250,000 therms per year at one site. B. TERRITORY: Within the service area of the City of Palo Alto and on land owned or leased by the City. C. RATES: PerTherm Supply Charges: 1. Commodity Charge ................................................................................ $0.20-$1.50 2. Administrative Fee ............................................................... ; ......................... $0.004 3. PG&E Local Transportation ........................................................................... $0.016 Distribution Charge: 1. Palo Alto Local Distribution ........................................................................... $0.237 D. TERM: Up to 5 years E. SPECIAL CONDITIONS: 1. Service under this schedule is subject to discontinuance in whole or in part, for operational reasons, or if the City experiences supply or capacity shortages. The City will exercise reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service, if the interruption of service is caused by an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City's control. 2. Customers who choose to be charged under this rate schedule are required to sign a contract and confirmation schedule with CP AU and adhere to rules and regulations set forth in CPAU Rule and Regulation No.5 (Contracts). 3. The Commodity Charge shall be based upon the customer load shape and size, term, and market prices. The other components of the rate: Administrative Fees, Transportation Charges, and Distribution Charges may be modified periodically with the Council's approval. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 1-1-2001 Original Sheet No. G-12-1 LARGE COMMERCIAL CUSTOM COMMODITY GAS SERVICE UTILITY RATE SCHEDULE G-12 (Continued) 4. The Commodity Charge component of this rate and the term will be set at the time when the customer signs the Contract. Rate options available under Contract may include, but are not limited to, commodity rate caps, collars, forward strips, and trigger rates. Pricing for such products, including any necessary fees, will fall within the Commodity Charge range set forth in Section C, Part 1 of this Schedule. A rate cap is defined as a floating rate with a guaranteed maximum price. A rate collar is defined as a floating rate with maximum and minimum rate levels. Forward strips are defined as a set rate for a set term calculated by taking the average rate over a specified period of time. A rate trigger-is a mechanism wherein the customer could set a specific rate level and if the market rate reaches that level, the customer rate is automatically set at that level. 5. The Administrative Fee is equal to the allocable administrative and overhead costs incurred by the City in providing the gas service. 6. PG&E Local transportation charge is equal to the cost of transporting gas from PG&E City Gate to the Palo Alto City Gate. 7. Total monthly charge= therms used during the month X (Commodity Charge+ Administrative Fee + PG&E Local Transportation Charge+ Palo Alto Local Distribution Charge). 8. . The customer must remain on this term rate for the term indicated on the Confirmation Schedule, providing the customer continues to receive distribution services from the City. The confirmation Schedule shall indicate the Customer's approximate gas usage (load) over the term of the contract. This load shall be served solely by CPAU. 9. A customer may request service under this schedule for more than one account or meter if the accounts are located on one site. A site shall be defined as one or more utility accounts serving contiguous parcels ofland with no intervening public right-of-ways (e.g. streets) and have a common billing address. 10. A customer may request a renewal of this rate with a 30-day advance written notice. The commodity charge for the renewed period will be based on the market prices and other pricing factors that exist at the time the rate is renewed. Customers electing not to renew the Contract will be returned to an applicable full-service gas rate schedule of their choice. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES {End} Effective 1-1-2001 Original Sheet No. G-12-2