HomeMy WebLinkAbout2001-11-13 City Council (7)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
6
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:
SUBJECT:
NOVEMBER 13, 2001 CMR: 420:01
RESOLUTION RATIFYING THE EXECUTION OF A CONTRACT
WITH SEMPRA ENERGY TRADING CORP.
RECOMMENDATION
Staff recommends that the Council approve the proposed resolution ratifying the
execution by the City Manager of the Base Contract for Short-Term Sale and Purchase of
Natural Gas (Contract) with Sempra Energy Trading Corp. (Sempra).
DISCUSSION
The City Manager has the authority to enter into contracts for commodity purchases and
sales for terms up to three years. The City has a~eements with two other gas suppliers,
and this Contract creates increased competition between suppliers resulting in the best
possible price to the City. Entering into transactions with multiple suppliers also
diversifies the credit risk associated with commodity purchases. The Contract enables
but does not obligate staff to enter into natural gas purchase and sales transactions with
Sempra.
Sempra has requested the City to legally ratify the Contract prior to transactions occuring.
The City Attorney has advised that this ratification will be demonstrated with the
proposed resolution.
RESOURCE IMPACT
Approval of the proposed resolution has no impact on financial or personnel resources.
CMR:420:01 Page 1 of 2
POLICY IMPLICATIONS
This recommendation is consistent with the Council approved Utilities Strategic Plan to
preserve a supply cost advantage compared to the market price by increasing the
competition among suppliers who buy natural gas from or sell natural gas to the City.
ENVIRONMENTAL R~VIEW
Approval of the proposed resolution does not constitute a project under the Califomia
Environmental Quality Act and, therefore, is exempt from the environmental assessment
requirement.
ATTACHMENTS
Resolution of the Council of the City of Palo Alto Ratifying the Execution of the Base
Contract for Short-Term Sale and Purchase of Natural Gas with Sempra Energy Trading
Corp. by the City Manager or his Designated Representative, the Director of Utilities.
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
KARLA DAILE~: ""
Resource Planner
/ ~i~r" "-’"ector of Utilities
Assistant City Manager
CMR:420:01 Page 2 of 2
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO RATIFYING THE EXECUTION OF THE BASE
CONTRACT FOR SHORT-TERM SALE AND PURCHASE OF
NATURAL GAS WITH SEMPRA ENERGY TRADING CORP. BY
THE CITY MANAGER OR HIS DESIGNATED
REPRESENTATIVE,THE DIRECTOR OF UTILITIES
WHEREAS, the City of Palo Alto ("City") is a municipal
corporation and a charter city, duly and validly created,
organized and existing under the constitution and laws of the
State of California;
WHEREAS, the City has the full legal right, power and
authority to execute contracts for the purchase of electricity
and natural gas under California law, the Charter of the City of
Palo Alto and the Palo Alto Municipal Code;
WHEREAS, the City wishes to procure natural gas from
Sempra Energy Trading Corp. for consumption by its utility
customers; and
WHEREAS, the City executed a "Base Contract for Short-
term Sale and Purchase of Natural Gas with Sempra Energy Trading
Corp. ("Contract"), effective as of July 31, 2001;
NOW, THEREFORE, the Council of the City of Palo Alto
does hereby RESOLVE as follows:
SECTION i. The Council hereby ratifies the execution of
the Contract and related exhibits with Sempra Energy Trading
Corp. by the City Manager or his designated representative, the
Director of Utilities, and hereby authorizes the City Manager or
his designated representative, the Director of Utilities, to
undertake all actions necessary to exercise the City’s rights
and perform the City’s obligations under the Contract.
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O11102 syn 0072116
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:APPROVED:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
Mayor
City Manager
Director of Utilities
Director of Administrative
Services
O11102 syn 0072116