HomeMy WebLinkAboutReso 2001-036 - Natural gas Procurement RESOLUTION NO. 2001- 3(p
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
REDDING AUTHORIZING THE REDDING 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 of natural gas.
B. City council Resolution No. 2001-26 authorized REU to enter into long-term gas transportation
contracts not to exceed 25 years.
C. The natural gas markets,partly as a result of the financial weakness of the state's investor-owned
utilities, have become quite volatile.
D. Current purchase authorization guidelines limit REU to entering into gas commodity natural gas
agreements for 12 months or less.
E. The long-term commodity natural gas nomination process is a dynamic process that can change
materially over several days.
F. By having firm long-term natural gas commodity contracts,significant savings in the procurement
cost of natural gas can be realized.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL THAT:
1. It is in the best interests of the City's utility customers that REU have enhanced natural gas
commodity procurement capability.
2. The City Manager has requested authority to enter into such contracts pursuant to Redding
Municipal Code Section 4.20.120 I.7. on the basis that natural gas commodity purchases do not constitute a
public work contract.
3. The City Manager or his designees are hereby authorized to negotiate and sign multi-year contracts,
including an REU credit rating and/or credit enhancements, if necessary, on behalf of the City of Redding for
the purchase/sale of natural gas commodity, where such natural gas commodity transactions may include
balancing services. Such natural gas commodity contracts would be subject to their approval as to form by the
City Attorney,not greater than ten years in length,and the costs for such natural gas commodity shall not exceed
$16 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 March 2001 by the following vote:
AYES: COUNCIL MEMBERS: Cibula, Kight, Stegall and McGeorge
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: Pohlmeyer
ABSTAIN: COUNCIL MEMBERS: None
40,DAVID "' EORG " ay
Attest: Form App ed:
4111W# z�t /!/Z�2z
Connie Strolimayer, Ci y ' eritl W. Leonard Wingate, Ci torney (14