HomeMy WebLinkAboutRESO7656RESOLUTION NO. 7656
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
CONCERNING THE OPTION OF THE CITY'S ELECTRICITY
CUSTOMERS TO ENGAGE IN DIRECT TRANSACTIONS WITH
ALTERNATE POWER SUPPLIERS, THE CITY'S RECOVERY OF
ITS UNECONOMIC INVESTMENTS IN ELECTRIC GENERATION
FACILITIES, AND THE CITY'S MARKETING OF PRODUCTS
AND SERVICES TO CUSTOMERS OUTSIDE OF THE CITY'S
JURISDICTIONAL BOUNDARIES IN THE CONTEXT OF THE
RESTRUCTURING OF THE ELECTRIC UTILITY INDUSTRY IN
CALIFORNIA
WHEREAS, the restructuring of the California electric
utility industry has been driven by changes in federal law intended
to create competition in the provision of electricity, and, under
Assembly Bill Number 1890 ("AB 1890"), the California legislature
adopted a legislative foundation for transforming the regulatory
framework of California's electric industry; and
WHEREAS, AB 1890 sanctions the right of municipalities,
including the City of Palo Alto ("City"), to collect a nonbypassable
generation -related severance fee or transition charge fromits
electricity customers, and requires the municipalities to permit
direct transactions between the municipalities' electricity
customers and alternate suppliers of electricity if such fees or
charges are collected; and
WHEREAS, the City wishes to authorize direct transactions
between alternate suppliers of electricity and its electricity
customers and the collection of a nonbypassable generation -related
severance fee or transition charge from these customers; and
WHEREAS, the City may wish to mitigate its potential losses
of electricity revenues .by offering products and services to
electricity customers outside of the City's jurisdictional
boundaries, to the extent this is legally and administratively
feasible;
NOW, THEREFORE, the Council of the City of Palo Alto does
hereby RESOLVE as follows:
SECTION 1. The City Council finds that the restructuring
of the electric industry in California will .engender substantial
competition among electric power suppliers, and, as a consequence,
lower prices for electricity may be offered. The Council further
finds that the City in good faith invested substantial amounts of
money in the acquisition or development of long-term power supply
resources, which now are proving to be uneconomical in view of the
substantial decrease in the current wholesale prices of
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electricity. The Council takes notice of Assembly Bill number
1890, which permits the City to authorize direct transactions
between the City's electricity customers and alternate suppliers of
electricity and to recover the costs of its uneconomic investments
in generation facilities from the City's electricity customers.
SECTION 2. The City Council declares that it is in the
best interests of the City in accordance with the terms and
conditions set forth in the Department of Utilities Rates and
Regulations to permit its electricity customers to engage in direct
transactions with alternate suppliers of electricity and collect
nonbypassable generation -related severance fees or transition
charges from its electricity customers, and it hereby authorizes
the City Manager or her designee to collect and secure from the
City's electricity customers nonbypassable generation -related
severance fees or transition charges and written confirmations of
their obligations to pay such fees or charges, and post sufficient
security as may be deemed reasonable by the City Manager.
SECTION 3. The City Council further declares the City may
authorize the offering of certain financial and non -financial
products and services to its electricity customers residing outside
of the City's jurisdictional boundaries, provided that it can be
established to this Council's satisfaction that the interests of the
City will be served by the offering of these products and services,
and it is legally and administratively feasible to engage in such
transactions.
SECTION 4. No consent, approval or authorization of the
City of Palo Alto to the entry of alternate suppliers of
electricity, including, without limitation, privately owned
utilities, power marketers, municipal utilities, aggregators, and
joint power agencies, within the jurisdictional boundaries of the
City to provide electricity or other ancillary commodities,
products or services or other non -electric utility commodities,
products or services shall be deemed granted, conferred or implied
by the action of the City Council in the adoption of this
resolution.
SECTION 5. The City Manager is hereby authorized to
conduct a thorough review of the relevant laws, rules, regulations,
rates, policies and procedures which may bear directly upon the
City's rights and obligations with respect to its electricity
customers as the electric industry is being restructured, and make
recommendations of such new and revised laws, rules, regulations,
rates, policies and procedures to this Council as will effectuate
the foregoing statements of policy.
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SECTION 6. The Council finds that the adoption of the
following policies does not constitute a project -for purposes of
the California Environmental Quality Act, and, therefore, no
environmental assessment is required.
INTRODUCED AND PASSED: MARCH 24, 1997
AYES:
NOES:
ABSENT
ANDERSEN, EAKINS, FAZZINO, HUBER, McCOWN, ROSENBAUM, SCHNEIDER, WHEELER
KNISS
ABSTENTIONS:
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ATTEST:
City Clerk / ) /f
APPROVED AS TO FORM: �-
Senior Asst. City Attorney
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Acting' Director
Administrative Services
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