HomeMy WebLinkAboutStaff Report 345-10D
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: . UTILITIES
DATE: SEPTEMBER 13, 2010 CMR: 345.10
REPORT TYPE: CONSENT
SUBJECT: Adoption of a Resolution Approving an Amendment to the Northern
California Power Agency Green Power Project Third Phase
Agreement to Allocate Shares from Existing Participants to an
Additional Member, the City of Gridley
EXECUTIVE SUMMARY
Palo Alto and seven other members of the Northern Power California Power Agency (NCPA)
participate in a project to jointly seek and acquire renewable energy resources. The City of
Gridley, also a member ofNCPA, is not a member of the project, but now wants to become one.
This' report recommends that Palo Alto approve an amendment to the agreement to allow Gridley
to participate inthis joint action effort. Palo Alto's share of the project will decline slightly to
allow Gridley'S participation .. Moreover, admitting Gridley will not have a significant impact on
Palo Alto's share of projects when pursuing renewable energy resources in the future.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution approving the Amendment to the
Northern California Power Agency (NCPA) Green Power Project (NGPP) Third Phase
Agreement (Amended NGPP Agreement) to allocate shares from existing participants to one
additional member, the City of Gridley.
BACKGROUND
In July 2006, the Council approved the original NGPP Third Phase Agreement (2006 NGPP
Agreement) to' pursue renewable resource projects jointly with other municipal agencies in
Northern California (CMR: 296:06). The 2006 NGPP Agreement was amended by Council in
2007 to remove a price cap that hindered finding renewable resources in an increasing price
market, and to facilitate development ofNCPA-owned renewable projects and allow members to
opt out of individual projects in the pre-construction, pre-contracting phase (CMR: 454.07). The
NGPP effort has not yet resulted in contracts executed through NCP A. However, NGPP now
has four California based projects with various degrees of member support including; solar PV
CMR: 345.10 Page 1 of 3
projects, a wind project, a landfill gas power purchase agreement and a landfill gas development
opportunity.
One of the current NGPP projects under consideration by NCP A members involves the
construction of several utility scale solar photovoltaic (PV) projects. One of the PV projects may
be developed in the territory of the City of Gridley, an NCP A member that is not an NGPP
participant. This opportunity has induced the City of Gridley to apply to join NGPP and
participate in the PV project by signing the Amended NGPP Agreement.
To follow Council direction to perform a thorough reassessment of the goals and strategies for
the acquisition of energy efficiency and renewable energy prior to making additional renewable
resource commitments, Palo Alto recently opted out of all four NGPP renewable electric projects
and is currently only participating in an effort to explore development of dairy methane gas to
meet a small fraction of the gas utility's load and perhaps through a voluntary customer-funded
program similar to PaloAltoGreen for the gas utility.
DISCUSSION
Under the current NGPP Agreement, NCPA members who participate in NGPP each have an
initial participation share of projects under consideration. As a specific project moves through
the process from evaluation towards some level of commitment, individual members can drop
out or reduce their participation percentages and other members can increase their participation
percentages.
The Amendment being considered would simply revise the participation shares matrix (Exhibit
A of Attachment B, the Amended NGPP Agreement) to admit Gridley as a new member at a
0.389 percent participation level (less than one percent) and reduce the percentage shares of all
eight other members proportionately. Palo Alto's participation share would drop only about 0.1
percent, from 23.4375% to 23.3463%. The small reduction in Palo Alto's share of future NGPP
projects is immaterial in terms of Palo Alto's ability to meet its needs for renewable energy as
determined by the Council.
Exhibit A of the Amended NGPP Agreement incorporating the percentage share changes has
been reviewed and approved by the City Attorney's Office.
RESOURCE IMPACT
This Amendment to the NGPP Third Phase Agreement is not expected to have any material
resource impact on Palo Alto.
POLICY IMPLICATIONS
Approval of this resolution allows the City of Gridley to participate in the Amended NGPP to
purchase renewable energy and thereby may help reduce greenhouse gas emissions. consistent
with the Council's policy on Climate Protection. Otherwise, approval of this resolution does not
change existing polity or constitute any new policy.
CMR: 345.10 Page 2 of3
ENVIRONMENTAL REVIEW
Execution of the Amended NGPP Agreement does not meet the definition of a project, pursuant
to section 21065 of the California Environmental Quality Act (CEQA). However, the City and
other participating members intend to receive output from projects that will constitute a project
for the purposes of CEQA. . Project developers will be responsible for acquiring necessary
environmental reviews and permits on projects to be developed.
ATTACHMENTS
A: Resolution approving Amended NGPP Agreement, Exhibit A.
B: Amended NGPP Agreement, Exhibit A
C: NCP A resolution approving Amended NGPP Agreement
PREPARED BY: .
DEPARTMENT APPROVAL:
CITY MANAGER APPROVAL:
CMR: 345.10
TOM KABAT @ \)L
Senior Resource Onginator
VALERI O. NG
7i:l:P~ /JAME NE r
City Manager
Page 3 of3
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ATTACHMENT· A
Not Yet Approved
Resolution No.
i ---
Resolution of the Council of the City of Palo Alto
Approving an Amendment to the Northern California
Power Agency Green Power Project Third Phase
Agreement to Allocate Shares/, from Existing Participants
to an Additional Member, City of Gridley
WHEREAS, the City of Palo Alto (the "City"), a municipal utility and a chartered
city, is a member of the Northern California Power Agency ("NCPA"); and
WHEREAS, the City, along with other members of NCPA, entered into THE
NORTHERN CALIFORNIA POWER AGENCY GREEN POWER PROJECT (NGPP) THIRD
PHASE AGREEMENT for the purpose of procuring electrical power and environmental
attributes ("Green Power") from NCPA's NGPP; and
WHEREAS, the NGPP Third Phase Agreement provides for NGPP project
participants to purchase Green Power from renewable resources and/or to develop or acquire
physical renewable generation assets; and
.WHEREAS, the NCP A Green Power Pool took steps to begin developing a Solar
PV Project (the "Project") for the benefit of its members; and
WHEREAS, the City of Gridley ("Gridley") is not a member of the NGPP or a
signatory to the NGPP Third Phase Agreement; and
WHEREAS, Gridley now wishes to become a member of the NGPP and a
signatory to the NGPP Third Phase Agreement; and
WHEREAS, in accordance with Section 7.2 of the NGPP Third Phase Agreement,
no NCP A member may become an additional party to the NGPP Third Phase Agreement unless
one or more of the Participants elect to allocate a portion of its Participant Percentage to such
Member; and
WHEREAS, the NGPP Participants, including the City, now wish to allocate a
portion of their participation percentages to Gridley, so that Gridley may become a member of
the NGPP and a signatory to the NGPP Third Phase Agreement.
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby approves the Amended Northern California Power
Agency Green Power Project (NGPP) Third Phase Agreement, including the amended Exhibit A,
which allocates 0.0912 percentage points of Palo Alto's 23.4375% participation interest in the
1
100729 jb 0073408
d
Not Yet Approved
NGPP to the City of Gridley. As a result, the City of Palo Alto will hold a revised participation
interest of23.3463% in the NGPP.
SECTION 2. The Council finds that the adoption of this resolution does not
constitute a project under the California Environmental Quality Act and the CEQA Guidelines
and, therefore, no environment assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
100729 jb 0073408
2
APPROVED:
Mayor.
City Manager
Director of Utilities
Director of Administrative
Services
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NGPP Participant Election (aMW")
NGPP Participant Election (%)
r aMW = Ca~acity in Averag_e M~
NGPP Participant Election (aMW")
NGPP Participant Election (%)
r aMW = Capacity in Averaqe M\IVl
NGPP 3rd Phase Allreement Participantion -Without Gridlev
Total
Ann aMW BART Healdsburg Lodi Lompoc Palo Alto Plumas
64.0 7.0 2.0 5.0 5.0 15.0 2.0
100.00% 10.9375% 3.1250% 7.8125% 7.8125% 23.4375% 3.1250%
NGPP 3rd Phase Aqreement Particioantion -Adiusted to Reflect Gridley Participation
Total
Ann aMW BART Healdsburg Lodi .Lompoc Palo Alto Plumas
64.25 7.0 2.0 5.0 5.0 15.0 2.0
100.00% 10.8949% 3.1128% 7.7821% 7.7821% 23.3463% 3.1128%
SVP Ukiah
25.0 3.0
39.0625% 4.6875%1
I
SVP Ukiah Gridley
25.0 3.0 0.25
38.9105% 4.6693% 0.3891%
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ATTACHMENT C
RESOLUTION 10·49
RESOLUTION OF THE NORTHERN CALIFORNIA POWER AGENCY APPROVING
AN AMENDMENT TO THE NORTHERN CALIFORNIA POWER AGENCY
GREEN POWER PROJECT (NGPP) 3RD PHASE AGREEMENT TO ALLOCATE SHARES FROM
EXISTING PARTICIPANTS TO ADDITIONAL MEMBER, CITY OF GRIDLEY
(reference Staff Report #162:1 O)
WHEREAS, the Members of the Northern California Power Agency ("NCPA") desire to ,
increase the utilization of renewable energy resources as part of their power mix strategy and have
accordingly each adopted a Renewable Portfolio Standard ("RPS"); and
WHEREAS, to assist its Members in' meeting their respective RPS, the NCPA Commission '
on June 22,2006 approved execution of a form of NCPA Green Power Pool ("NGPP") Third Phase
Agreement to be entered into with those Members of NCPA desiring to do so; and
WHEREAS, the NCPA Green Power Pool amended its Third Phase Agreement on or about
November29,2007;and
WHEREAS, the NGPP Third Phase agreement, as amended, provides for NGPP project
participants to purchase electricity from renewable resources and/or to develop or acquire physical
renewable generation assets; and
WHE:REAS, the NCPA Green Power Pool took steps to begin developing a SOLAR PV
Project ("Project") for the benefit of its members; and
WHEREAS, The City of Gridley ("Gridley") is not a member of the NGPP or a signatory to
the NGPP Third Phase Agreement; and
WHEREAS, NCPA has been providing project management services related to the
acquisition of solar PV projects to be located within Gridley's distribution area or to serve Gridley
retail electric load pursuant to a Professional Services Agreement dated July 7, 2009 ("PSA"); and
WHEREAS, Gridley now wishes to become a member of the NGPP and a signatory to the
NGPP Third Phase Agreement; and
WHEREAS, in accordance with Section 7.2 of the NGPP Third Phase Agreement, no NCPA
member I'liay become an additional party to the NGPP Third Phase Agreement unless one or more
of the Participants elect to allocate a portion of its Participant Percentage to such Member; and
WHEREAS, the NGPP Participants now wish to allocate a portion of each of their
participation percentages to Gridley so that Gridley may become a member of the NGPP and a
Signatory to the NGPP Third Phase Agreement; and
WHEREAS, the Participants entered into a Amendment to the NGPP Third Phase
Agreement to Allocate Shares to Additional Member, City of Gridley, pursuant to Section 7.2 of the
NGPP Third Phase Agreement, which proposed Amendment is attached hereto as Exhibit A; and
WHEREAS, each Participant and Gridley have submitted evidence in the form of
Resolutions or similar documents demonstrating that the Amendment to the NGPP Third Phase
Agreement to Allocate Shares to the City of Gridley has been approved in accordance with the
Participants' and Gridley's applicable Constitutive Documents; and
WHEREAS, Gridley, upon approval of this Agreement by NCPA, is prepared to submit a
payment of Gridley's share of the security account, established pursuant to Section 5.5 of the
NGPP Third Phase Agreement; and
WHEREAS, the adoption of this resolution and approval by NCPA of the Amendment to th'e
NGPP Third Phase Agreement to Allocate Shares to Additional Member, City of Gridley, does not
constitute a project under the California Environmental Quality Act and no environmental
assessment is required.,
NOW, THEREFORE BE IT RESOLVED, that the Commission finds that adoption of this
resolution and approval by NCPA of the Amendment to the NGPP Third Phase Agreement to
Allocate Shares to Additional Member, City of Gridley, does not constitute a project under the
California Environmental Quality Act and no environmental assessment is required; and;
BE IT.FURTHER RESOLVED that the Commission hereby approves the Amendmentto the
NGPP Third Phase Agreement to Allocate Shares to Additional Member, City of Gridley and .
authorizes the General Manager to execute the Amendment on behalf of NCPA with such non
substantive changes as may be approved by the NCPA General Counsel; and
BE IT FURTHER RESOLVED that the General Manager or his designee, is hereby
authorized and directed, on behalf of NCPA, to make all approvals and take all actions necessary or
appropriate to carry out the intent of this Resolution and to implement the Amendment to the NGPP
Third Phase Agreement to Allocate Shares to Additional Member, City of Gridley and to administer
NCPA's obligations, responsibilities and duties to be performed consistent with said Agreements.
PASSED, ADOPTED and APPROVED this 27th day of May 2010 by. the following vote on
roll call:
Alameda
BART
Biggs
Gridley
Healdsburg
Lodi
Lompoc
Palo Alto
Port of Oakland
Redding
Roseville
Santa Clara
Truckee Donner
Turlock
Ukiah
Plumas-Sierra
~~Mt/ LARRY H S N
CHAIRMAN
:1
ATTEST:
Absent
x
x x
,
x.
DENISE DO
ASSISTANT SECRETARY