HomeMy WebLinkAboutStaff Report 7028
CITY OF PALO ALTO OFFICE OF THE CITY CLERK
June 6, 2016
The Honorable City Council
Palo Alto, California
SECOND READING: Adopt an Ordinance Repealing Ordinance Number
4936, the Council's Prior Authorization for Natural Gas Purchases
(FIRST READING: May 16, 2016 PASSED: 9-0)
This was first heard by the City Council on May 16, 2016 and was passed unanimously, without
changes. It is now before the Council for second reading.
ATTACHMENTS:
Attachment A: Repealing Ordinance (PDF)
Department Head: Beth Minor, City Clerk
Page 2
NOT YET APPROVED
160414 jb 6053732 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Repealing Ordinance No.
4936, Which Authorized 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
2007-2022, Inclusive
The City Council finds and declares as follows:
A. On March 12, 2007, the City Council adopted an ordinance authorizing
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
2007-2022, inclusive, with a maximum expenditure limit of $65 million in for each Master
Agreement.
B. Since Council’s approval of Ordinance No. 4936, two counterparties, Shell
Energy North America (U.S.) L.P., and Mercuria Energy Gas Trading L.L.C., have been active
bidders for the City’s index-based gas purchases, and only $7.5 million of the approved $65
million expenditure limit remains for Mercuria Energy Gas Trading L.L.C. as of February 29,
2016. An increase in the maximum expenditure limit is needed to continue to purchase natural
gas for the City’s retail load.
C. The Council intends to adopt a resolution authorizing the City Manager to
purchase natural gas from one or more pre-qualified suppliers for delivery during calendar
years 2016 through 2022, inclusive, so long as the supplier with whom the City negotiates a
specific purchase transaction continues to be qualified and otherwise eligible to transact with
the City. Increasing the expenditure limit will provide for an estimated five years of gas
purchases.
D. Implementing this change via Council’s approval of a resolution rather
than an ordinance, as was done in prior years, will streamline the City’s administrative
processes. Therefore, staff recommends that Council repeal Ordinance 4936, and instead
adopt a resolution to be recommended for Council approval on May 16, 2016, outlining the
terms and conditions under which the City Manager can purchase a portion of the City’s natural
gas requirements.
NOW, THEREFORE, the Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Ordinance 4936, Authorizing 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 2007 Through 2022, Inclusive is repealed
in its entirety.
ATTACHMENT A
NOT YET APPROVED
160414 jb 6053732 2
SECTION 2. The Council hereby finds and determines that the repeal of this
Ordinance does not constitute a project under Public Resources Code Section 21065, thus no
California Environmental Quality Act assessment is required.
SECTION 3. This ordinance shall be effective on the 31st day after its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
City Attorney City Manager
____________________________
Director of Administrative Services