HomeMy WebLinkAboutReso 2011-050 - ISDA Master Agreement
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RESOLUTION NO. 2011 - 50
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
REDDING APPROVING AND AUTHORIZING THE ELECTRIC
UTILITY. DIRECTOR TO EXECUTE THE ISDA MASTER
AGREEMENT BETWEEN THE CITI ENERGY, INC., AND THE
REDDING ELECTRIC UTILITY
WHEREAS, the City Council has taken deliberate steps through the adoption of a series of resolutions
giving authority to the Electric Utility Director, or his designee, to purchase natural gas and electricity
commodities; and
WHEREAS, City Council Resolution No. 2009-46 authorizes the Electric Utility Director, or his
designee, to purchase natural gas and/or electric commodities in a total amount not to exceed $25
million per year and a term not to exceed 12 years; and
WHEREAS, the portfolio of Redding' s existing physical gas purchases includes a discounted pre-paid
gas contract, which is priced at a floating daily commodity index price that is currently obtained
through offsetting fixed price gas transactions, which have some imbedded transaction costs and
market risks; and
WHEREAS, the Redding Electric Utility Department desires to reduce its transaction costs and
market risks by using . financial transactions instead of physical gas transactions as a hedging
instrument; and
WHEREAS, physical electric commodity transactions have become less liquid at certain trading
points where the City commonly engages in wholesale market transactions with market participants
utilizing financial energy transactions instead of the traditional physical electric commodity
transactions; and
WHEREAS, in order to facilitate procurement of natural gas and electric financial products the
Redding Electric Utility Department requests the existing natural gas and electric commodity
purchasing authority of the Electric Utility Director, or his designee, be modified to authorize financial
transactions subject to the existing position limits.
NOW, THEREFORE, BE IT RESOLVED that the City Council ofthe City of Redding approves the
following:
1.
Execution of the International Swaps and Derivatives Association Agreement and
Transactions. The City Council approves and authorizes the Electric Utility Director, or his
designee, to execute and the City Clerk to attest the International Swaps and Derivatives
Association Agreement (Agreement) between the Redding Electric Utility Department and
Citi Energy Inc., under terms to be negotiated to the satisfaction of the Electric Utility Director,
or his designee, and approved as to form by the City Attorney, and to execute transactions there
under, subject to the existing $25 million per year limitation under Resolution No. 2009-46.
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2. Official Actions. The Electric Utility Director, or his designee, the City Clerk, and all other
proper officers of the City are authorized and directed to take all actions and do all things
necessary or desirable hereunder with respect to the business ofthe Agreement including, but
not limited to, the execution and delivery of any and all other agreements, amendments to
agreements, applications, certificates, instruments, and other documents that they, or any of
them, may deem necessary or desirable and consistent with the business ofthe Agreement or
the purpose of this resolution.
3. Effective Date. This resolution will take effect immediately upon its adoption.
I HEREBY CERTIFY that the foregoing resolution was introduced, read, and adopted at a
regular meeting of the City Council on the 19th day of April, 2011, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
Bosetti, Dickerson, Jones, Sullivan, and McArthur
None
None \
None
Attest:
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Form Approved:
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PAMELA Mi~'k
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