HomeMy WebLinkAboutReso 2001-026 - Natural Gas Procrement RESOLUTION NO. 2001-.2 g
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
REDDING AUTHORIZING THE ELECTRIC UTILITY TO ENTER
INTO ENABLING AGREEMENTS TO HAVE ENHANCED NATURAL
GAS PROCUREMENT CAPABILITY
WHEREAS:
A. City Council Resolution No. 2000-200 authorized Redding Electric Utility(REU)to construct
a 43-megawatt gas turbine generation unit at Redding Power Plant that will consume approximately 10,000
million British Thermal Units per day(10,000 mm Btu) of natural gas.
B. The natural gas markets,partly as a result of the financial weakness of the state's investor-owned
utilities (IOUs), have become quite volatile.
C. Current purchase authorization guidelines limit REU to entering into agreements for 12 months
or less.
D. The long-term natural gas transportation nomination process is a dynamic process that can change
materially over several days, partly as a result of the financial weakness of the state's IOUs.
E. By having firm pipeline contract transportation rights,significant savings in the procurement cost
of natural gas can be realized from having the capability to access the natural gas markets near the wellhead,
rather than at the burner tip.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL THAT:
1. It is in the best interests of the City's utility customers that REU has enhanced natural gas
transportation procurement capability.
2. The City Manager or his designees are hereby authorized to enter into and sign enabling
agreements on behalf of the City of Redding, subject to the approval as to form by the City Attorney, where
such agreements provide REU with the ability to purchase and/or sell firm physical gas transportation service
for an indefinite period,not to exceed 25 years in length,where the combined costs for such services do not
exceed $3 million per year.
I HEREBY CERTIFY the foregoing resolution was introduced,read and adopted at a regular meeting
of the City council of the City of Redding on the 6th day of February 2001 by the following vote
AYES: COUNCIL MEMBERS: Cibula, Pohlmeyer, Stegall and McGeorge
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: Kight
ABSTAIN: COUNCIL MEMBERS: None
a •
1 AVID . f GE I '�!-�, f'or
Attest: Form Approved:
14,A\
741-
Connie Stroh. ayer, City,a W. Leonard Wingate, C tyAttorney