HomeMy WebLinkAboutReso 97-203 - Authorizing the Electric Utility to enter into enabling Agreements in order to have enhanced wholesale Marketing Capability. a � �� � •
RESOLUTION NO. 97-�
A RESOLUTION OF THE CITY CO�JNCId� OF THE CITY OF
REDDING AUTHORIZING THE ELECTRIC UTILITY TO ENTER INTO
ENABLING AGREEMENTS IN ORDER TO AAVE ENHANCED
WHOLESALE MARKETING CAPABILITY.
WHEREAS:
A. City Council Resolution No. 93-18 provided the Electric Utility with the
authority to buy and sell electric power in the wholesale market on a real-time basis; and
Resolution No. 96-138 provided the authority for the purchase, sale and exchange of fuel
supplies in the short-term market.
B. The California Legislature passed Assembly Bill 1890 (AB1890) creating the
California lndependent System Operator (ISO) and the Power Exchange (PX); the operation of
both is scheduled to begin January 1, 1998.
C. The operating protocols of the ISO and PX remain undefined in total, and its
impact on the City's ability to function as in the past is not clearly delineated.
D. The Western Area Power Administration has served notice of cancellation of its
long-term firm power purchase from the City of Redding.
E. The City's load growth has not kept pace with past projections.
F. The changing conditions and uncertainty surrounding the wholesale electric
power market have created a need for the City's Electric Utility to have sufficient operating
flexibility to be able to deal with the rapidly-changing wholesale electric market.
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City
of Redding that:
l. ; It is in the best interests of the City's Electric Utility customers that the Electric Utility ��
have enhanced wholesale marketing capability.
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2. The City Manager, the Electric Utility Director, or their designees are hereby �
authorized to enter into and sign enabling agreements on behalf of the City of Redding, �
subject to approval as to form by the City Attorney, which: �
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a. Are of indefinite length and cancelable on not more than one year's written
notice; and
b. Will provide the City's Electric Utility with the ability to perform and/or
acquire brokerage services and/or marketing services to perform the following
in the wholesale markets:
(1) Purchase and/or sale of electric power.
(2) Purchase and/or sale of transmission for electric power.
(3) Purchase and/or sale of fuel.
(4) Purchase and/or sale of transportation of fuel.
(5) Exchange of power for fuel.
(6) Exchange of fuel for power.
(7) Purchase and/or sale of options to purchase or sell electric power.
3. The Electric Utility Director or his designee is authorized to approve—in ancillary
documentation—the transactions contemplated under the terms and conditions of any
executed enabling contract.
4. Any transactions with the New York Mercantile Exchange (NYMEX) shall be limited
and controlled as described in Attachment A attached hereto and made a part hereof by
reference.
I HEREBY CERTIFY the foregoing resolution was introduced, read, and adopted at a
regular meeting of the City Council on the 18th day of November, 1997, by the following
vote:
AYES: COUNCIL MEMBERS: Anderson, Kehoe, McGeorge and Murray
NOES: COLTNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
A , M or
Attest: Form Approved:
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Connie Strohmayer, Ci C erk ° W. Leonard Wingate,�Ci Attorney
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ATTACHMENT A
NYMEX POWER SALES AND PURCHASE CONTRACTS
Transactions on the NYMEX for sale or purchase of electric power for the City of Redding's
account shall be governed as follows:
1. Only the City Manager, the Electric Utility Director, or their designees shall authorize
any transactions for the City's account. .
2. Initial sale price shall be equal to or greater than the weighted average price the
City is required to pay by existing long-term contracts for the surplus energy
delivered to the California-Oregon border or other points of delivery. The sale of
contracts for future delivery of electric power shall not exceed the maximum number
of contracts which can be fulfilled by the City's take-or-pay power purchase
contracts. (At this time, November 1997, that number is 23 contracts per month.
The energy could be supplied from the MSR/BPA and PacifiCorp/City of Redding
contracts.)
3. All transactions for which the delivery period is at least one full month, but not more
than eleven full months into the future, shall begin with the sale of contracts for
electric power which is surplus to the expected needs of the City's electric utility.
4. Surplus electric power sold pursuant to No. 3, above, shall not be repurchased
unless at least one of the following conditions exists:
a. The City's need for power has increased.
b. The wholesale sales require additional power.
c. The price of electric power for a month in which the City has sold excess
power has declined to 90 percent of the price for which the power contract
was sold.
5. Not withstanding the provisions of No. 4 above, the City Manager, the Electric Utility
Director, or their designees, may sell or purchase contracts or electric power for the
next month as needed to more closely match the City's own load or wholesale
transactions to which the City is a party.
FR:kb
FR�201.97
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