HomeMy WebLinkAboutReso 2014-070 - Measure Provision C s
RESOLUTION NO. 2014-070
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
REDDING TO EXERCISE RPS OPTIONAL COMPLIANCE
MEASURE PROVISION C (1) FOR THE CITY OF REDDING
ELECTRIC SYSTEM
WHEREAS:
1. Pursuant to the passage of Senate Bill 1078, the City of Redding (Redding) formally
adopted the City's Renewables Portfolio Standard (RPS) on June 9, 2003, which called for
Redding to meet or exceed a standard of 20 percent of Redding's annual energy needs to be
provided by renewable resources by 2017, including hydroelectric generation of all sizes;
2. On September 23, 2010, the California Air Resources Board approved the Renewable
Electricity Standard that required California's publicly-owned utilities to procure
renewable resources for 33 percent of their annual energy needs by 2020, and may include
hydroelectric generation for up to 20 percent of the goal if allowed under the utility's
previously adopted policy;
3. On March 1, 2011, the City Council revised its RPS policy to adopt the Renewable
Electricity Standard of 33 percent by 2020;
4. Senate Bill 2 in the First Extraordinary Session (SBX1-2) was signed by Governor Brown
on April 12, 2011, requiring all electric utilities in California to obtain 33 percent of their
annual energy needs from renewable resources by 2020, and does not allow hydroelectric
generation greater than 30 megawatts to count toward the goal;
5. SBX1-2 retroactively mandated that publicly-owned utilities procure an average of 20
percent renewables in Compliance Period 1 (2011 through 2013);
6. On October 15, 2013, the City Council adopted Redding's RPS Enforcement Program that
includes optional compliance measures to increase Redding's flexibility in complying with
SBX1-2 should factors beyond the reasonable control of Redding interfere with its ability
to meet the procurement requirements of SBX1-2;
7. The Redding Electric Utility must notify the City Council of any potential for lack of
compliance with the requirements of SBX1-2 that may be considered for a notice of
violation and penalty imposition, provide an explanation and analysis to the City Council
on such potential for lack of compliance with SBX1-2, as well as a plan of corrective action Dl
and timeframe for returning the City back into compliance; .N
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8. This resolution serves as such notice, provides such explanation, and identifies a plan for
corrective action;
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9. On June 9, 2010, in compliance with all state laws and regulations of the time, Redding
sold excess Renewable Energy Credits (RECs) for 2011 and 2012 to mitigate rate
pressures;
10. Redding's renewable energy procurement is an average of 6.7 percent for Compliance
Period 1 (2011 = 0%, 2012 = 0%, and 2013 = 24%);
11. Without utilizing the optional compliance measures available in Redding's RPS
Enforcement Program, the City is at risk of non-compliance with the Compliance Period 1
target;
12. If the 2011 and 2012 REC shortfall was to be covered by purchases of eligible renewable
energy resources, Redding would be obligated to spend approximately $9 million to meet
the Compliance Period 1 obligation;
13. Cost Limitation C (1)provides that:
"Incorporating the annual RPS expenditure into Redding's current portfolio should not
require rate increases of more than 1.5 percent per year at any time during the life of the
considered RPS procurement."
14. Purchasing $9 million in renewable energy resources equivalent to a 5.8 percent rate
increase (2.9 percent per year for the 2-year period), violating Cost Limitation C (1);
15. Following the passage of SBX1-2, Redding ceased the sale of excess RECs, bringing
Redding's RPS to 24 percent in 2013; and
16. Redding expects to be in full compliance with SBX1-2 through 2020.
THEREFORE, BE IT RESOLVED by the City Council that:
1. The City Council acknowledges that the sale of excess RECs for 2011 and 2012 was done
so under Redding's existing RPS policy (Resolution 2003-92).
2. The City Council acknowledges that without the use of optional compliance measures,
Redding would be out of compliance with SBX1-2 for the first compliance period.
3. The City Council exercises Cost Limitation C (1) of the Redding Electric Utility
Renewables Portfolio Standard Enforcement Program, which states:
a. "Incorporating the annual RPS expenditure into Redding's current portfolio should
not require rate increases of more than 1.5 percent per year at any time during the
life of the considered RPS procurement."
I HEREBY CERTIFY that the foregoing resolution was adopted at a regular meeting of
the City Council on the 17`h day of June, 2014,by the following vote:
AYES: COUNCIL MEMBERS: Cadd,Jones,McArthur, Sullivan, &Bosetti
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
RICK BOSETTI,Mayor
Attest: Form Approved:
I'AME1 A'MIZE,:= =Clerk RICHARD A. DUVERNAY,G' y Attorney