HomeMy WebLinkAboutReso 2009-166 - Gill Ranch Storage, LLC
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RESOLUTION NO. 2009 - 166
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
AUTHORIZING THE ELECTRIC UTILITY DIRECTOR TO SIGN A 28-
YEAR STORAGE CONTRACT WITH GILL RANCH STORAGE, LLC, AND
A 28-YEAR LEASE CONTRACT FOR WORKING GAS VALUED AT $13.6
MILLION WITH GILL RANCH STORAGE, LLC.
WHEREAS, the City Council has previously directed the Electric Utility Director and his
staff to negotiate a long-term natural gas storage contract with an initial investment in lieu of periodic
storage payments; and
WHEREAS, Electric Utility staff under the direction of the Electric Utility Director has
reached agreement with Gill Ranch Storage, LLC, for a 28-year contract with an initial investment of
$13.6 million; and
WHEREAS, Redding Electric Utility intends to utilize natural gas storage to fully realize
the benefits of its long-term, natural gas prepay; and
WHEREAS, the proposed contracts with Gill Ranch are judged to represent the least
cost/most stable alternative for such a long-term gas storage requirement; and
WHEREAS, the annual lease payment by Gill Ranch offsets the annual storage payment
byREU.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding
that the Electric Utility Director is authorized to sign:
I. A 28-year lease contract between the City of Redding (Lessor) and Gill Ranch Storage, LLC
(Lessee) for working gas derived by an investment from REU reserves of $13.6 million, and
further, the Lessor charges the Lessee an annual lease payment of$1.2 million.
2. A 28-year precedent contract for natural gas storage at Gill Ranch, with an annual storage charge
of $1.2 million paid by the City of Redding to Gill Ranch.
I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a regular
meeting of the City Council of the City of Redding on the 18th day of August, 2009, and was duly
adopted at said meeting by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
Dickerson, Jones, McArthnr, StegaU, and Bosetti
None
None
None
7Jv~;;fiij ~
RICK BOSETTI, Mayor
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Attest: - ~ -
Form Approved:
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RICHARD A. DUVERNAY, Ci