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Home My WebLink AboutRESO 10074 6055624 Resolution No. 10074 Resolution of the Council of the City of Palo Alto 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 for Delivery during Calendar Years 2023 through 2028, Inclusive RECITALS A. Since April 19, 2012, the Council implemented gas supply rates that change monthly according to market prices, as described in Staff Report #2552. B.In accordance with the City’s Gas Utility Long-Term Plan (GULP), last updated June 5, 2017 (Staff Report #7967) the City must purchase and, incidental to purchases, sell gas to meet the needs of its gas customers by contracting for terms varying from less than one month to one month. The City's Energy Risk Management Policies, last updated December 17, 2018 (Staff Report #9813), provide that the City will purchase only that quantity of gas meeting its load requirements at the time a transaction is executed. C.By Ordinance No. 4936, adopted March 12, 2007, Council authorized the City Manager to negotiate and sign new, amended, or restated North American Energy Standards Board, Inc. contracts (each a “NAESB Contract” or “Master Agreement”) with BP Energy Company, Coral Energy Resources, L.P., Sempra Energy Trading Corporation, ConocoPhillips Company, J.P. Morgan Ventures Energy Corporation, and Powerex Corporation, and further authorized the City Manager or his designee, the Director of Utilities, to negotiate one or more individual transactions, including, but not limited to, negotiating contracts, addenda, confirmations and transactions. The authorization extended to individual transactions executed under any number of NAESB Contracts with the referenced suppliers; provided, however, (a) the maximum expenditure under any NAESB Contract shall not exceed $65 million in the aggregate; and (b) the maximum term of any transaction shall not exceed three years, commencing on the delivery date of the transaction. D.On May 16, 2016, Council adopted Resolution No. 9586, authorizing the City Manager to enter into natural gas purchase transactions with one or more of the pre- qualified suppliers through December 31, 2022 and increasing the maximum expenditure under any NAESB contract to $100 million. E.The current list of Council-approved counterparties which accounts for changes in corporate structure or ownership since Council’s adoption of Ordinance No. 4936 and Resolution No. 9586 includes: BP Energy Company, ConocoPhillips Company, EDF Trading North America, L.L.C., Powerex Corporation, and Shell Energy North America (U.S.), L.P. DocuSign Envelope ID: 0C518808-9329-4E09-ADE8-14AEB21CA430 6055624 F.The City intends to purchase natural gas from one or more of these pre- qualified suppliers for delivery during calendar years 2023 through 2028, 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. G.Since Council’s approval of Resolution No. 9586, BP Energy Company and EDF Trading North America, L.L.C. have been active bidders for the City’s index-based gas purchases, and $36.1 million of the approved $100 million expenditure limit remains for EDF Trading North America, L.L.C. as of June 28, 2022. H.An increase in the maximum expenditure limit is needed to continue to purchase natural gas for the City’s retail load for delivery during calendar years 2023 through 2028. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council hereby authorizes the City Manager or his designee, the Director of Utilities, to purchase a portion of the City’s natural gas requirements from the prequalified suppliers by negotiating one or more individual transactions, including, but not limited to, contracts, addenda, confirmations and transactions. The authorization shall extend to individual transactions executed under any number of NAESB Contracts or Master Agreements with the suppliers referenced in Recital E. SECTION 2. The purchases negotiated under Section 1 shall conform to the following requirements: a.The maximum expenditure under any Master Agreement will be $150 million; b.The maximum term of any transaction shall not exceed three years, commencing on the delivery date of the transaction. The sentence preceding notwithstanding, the City may enter into a transaction greater than three years, if the Council grants prior approval to such transaction. c.No transaction entered into with any of the referenced suppliers shall extend beyond December 31, 2028. // // // // // // // DocuSign Envelope ID: 0C518808-9329-4E09-ADE8-14AEB21CA430 6055624 // // SECTION 3. The Council hereby finds and determines that the adoption of this Resolution does not meet the definition of a project for the purposes of the California Environmental Quality Act (CEQA), under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. APPROVED: ________________________________ Mayor ________________________________ INTRODUCED AND PASSED: October 3, 2022 AYES: BURT, CORMACK, DUBOIS, FILSETH, KOU, STONE NOES: TANAKA ABSENT: ABSTENTIONS: ATTEST: ________________________________ City Clerk ________________________________ Assistant City Attorney City Manager ________________________________ Director of Administrative Services ________________________________ Director of Utilities DocuSign Envelope ID: 0C518808-9329-4E09-ADE8-14AEB21CA430 Certificate Of Completion Envelope Id: 0C51880893294E09ADE814AEB21CA430 Status: Completed Subject: Complete with DocuSign: Resolution 10074 Source Envelope: Document Pages: 3 Signatures: 6 Envelope Originator: Certificate Pages: 2 Initials: 0 Vinhloc Nguyen AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Vinhloc.Nguyen@CityofPaloAlto.org IP Address: 199.33.32.254 Record Tracking Status: Original 10/4/2022 12:55:35 PM Holder: Vinhloc Nguyen Vinhloc.Nguyen@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Aylin Bilir Aylin.Bilir@CityofPaloAlto.org Deputy City Attorney Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 10/4/2022 12:58:32 PM Resent: 10/11/2022 11:12:29 AM Viewed: 10/11/2022 11:56:57 AM Signed: 10/11/2022 12:07:10 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Dean Batchelor Dean.Batchelor@CityofPaloAlto.org Director of Utilities City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 10/11/2022 12:07:12 PM Viewed: 10/18/2022 10:02:06 AM Signed: 10/18/2022 10:02:28 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Kiely Nose Kiely.Nose@CityofPaloAlto.org Director, Administrative Services/CFO City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Uploaded Signature Image Using IP Address: 199.33.32.254 Sent: 10/18/2022 10:02:30 AM Viewed: 10/19/2022 10:38:49 PM Signed: 10/19/2022 10:39:00 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Ed Shikada Ed.Shikada@CityofPaloAlto.org Ed Shikada, City Manager City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 10/19/2022 10:39:02 PM Viewed: 10/21/2022 10:47:02 AM Signed: 10/21/2022 10:47:08 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Signer Events Signature Timestamp Patrick Burt pat@patburt.org Mr Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 98.37.159.0 Sent: 10/21/2022 10:47:10 AM Viewed: 10/28/2022 11:27:56 AM Signed: 10/28/2022 11:28:13 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Lesley Milton Lesley.Milton@CityofPaloAlto.org City Clerk City Clerk Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 174.194.130.191 Signed using mobile Sent: 10/28/2022 11:28:16 AM Viewed: 10/28/2022 12:58:43 PM Signed: 10/28/2022 12:58:52 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 10/4/2022 12:58:32 PM Certified Delivered Security Checked 10/28/2022 12:58:43 PM Signing Complete Security Checked 10/28/2022 12:58:52 PM Completed Security Checked 10/28/2022 12:58:52 PM Payment Events Status Timestamps