Loading...
HomeMy WebLinkAboutMinutes - December 14, 1999 SS257 CITY OF LODI INFORMAL INFORMATIONAL MEETING "SHIRTSLEEVE" SESSION CARNEGIE FORUM — 305 WEST PINE STREET TUESDAY, DECEMBER 14, 1999 An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, December 14, 1999 commencing at 7:00 a.m. ROLL CALL Present: Council Members — Hitchcock, Land, Nakanishi, Pennino and Mann (Mayor) Absent: Council Members — None Also Present: City Manager Flynn, Deputy City Manager Keeter, Finance Director McAthie, Electric Utility Director Vallow, City Attorney Hays and City Clerk Reimche Also in attendance was a representative from the Lodi News Sentinel and The Record. TOPIC(S) 1. Electric Utility Risk Management and Open Access (Due to a conflict of interest, Council Member Pennino abstained from discussion of this matter and vacated his Council seat.) ADJOURNMENT No action was taken by the City Council. The meeting was adjourned at approximately 8:30 a.m. ATTEST: Alice imch'e� 4� City Clerk MW U 9 x r� Risk Management Workshop • Introduction — Market Evolution & Risk — Need for Risk Management — History & Changes at NCPA • NCPA Commission Policy & Gen Mgr Guidelines • NCPA Interim Policy, Processes & Procedures — Trade & Procurement Process (Pooling Agreement) — Functional Responsibilities — Transaction Authorizations, Limits & Controls — Credit Risk • Summary & Current Activities Market Volatility PX ZMCP INP15) rt ISO E%POQ (UPI 51 411199 - 10121N3 AN 11N PX ISO PX &,-0d AR ISOIu14a Aw PXOd Arg 1100n Ary aw 1999 92111 9391 925.44 42119 92187 95191 111* 921]9 921A9 112.59 SWO 1S1S1 119.29 aN — NN aN — aw aN un i — - uw - NN 1 SIN SIN 991 4 AWN i } xwl -L•iO EaPuA —P%ACP L' L C• O n y c O > U 3 ori L y � � v o W3 Y s O J _ I Y a L 7 1! L' L C• O n O > .y � 7 y L r� z s O 3 r y Y b 1! L' O > .y � 7 y L r� z s 3 3 Z Types of Risk • Market - price, liquidity, basis, customer, weather • system - physical delivery, equipment failures • Credit - Cuunter-Party & Member W p(embcr • Administrative - internal business processes • Other - Icgal, regulatory, & political Need for Risk Management Ht) tical A Fuluscial Requirements ❑ Docs prize vulatdily & sit° o`c physical un"Itaulucs -vera rYYt (m•reaal rxut? e too. w pu.,a. ❑ Are the phyizal !R r+l.Y6p nuW.da urn.• financial rcyuircmenu YnJ fICL/I un u1,uYIYI� exposed? mwYld W A++r fNad:Wl u04yananr (. Q. G-1 ❑ Wes the exposure 1 Rau SWAJ YdYn ex"cd lire nisi Fw,a,l Wlcrance? Ec,mpta: Objective of Risk Management To management rills to ensure that the acct ities of the Member Utility anJ the activities of NCPA performed on behalf of the Member, do not cxpox the Member Utility - to loascs Out rcdu:e uperuing margin W una:;epublc levels - :umpfumuc any other of iu phi sial and f naknzial ubjcaitca uul zonunilmaus Managing Risk To increase the probability of ruud uutcunita and reduce the prubability of bar! uutcuntes • Must identify, understand & m an age risks. aw.ar arc, r r ttra - r 1 ♦ Ebad "ad l NCPA Commission Fhk Maaatenmat policy • 1/99 Ganeral ►onager and ROC ttespotul►ama • n ... I.Pud molly lr.Jug yr.u.s e, ynceJuru A 11— • Aawrmg th.l I.Jh IJu At Al.wbfn nay sY sp—n, rel, maoagemul laarructieos to be /ullo.ed by ?NCPA • Creauag J, nd'siauuatud • credit final pub'y ler bti si.e a ....ttr•paruea App—Ing the — and amlla of specific financial lid ..udmrar Inauumeau • Aasarug t►al apprapruu authority deleearivar an u puce aaJ full—ad • Seluae quabfyiag panmCters and finaorial limlu for buun.eu relatloathips .n► Couorer•parue • Iasuluuad app,.pA,u sad timely rill,—aanng and regular rtportlag fur use by Commission ..J \CPA uoag,meol NCPA Risk Management Histur% 1991 Cum Wool N.skw A Oper.u.wl Audk • Genual Slauagu G.Wta.e. - sap rd • 1999 suuatic plamtng station • C.mmlaalea Policy Cludeane - Jan 99 • EsubW►1tUC - Feb 99 • 19991nurlm JPt-Ju199 • Curtest rocas - Authorities and Oeltg"as - CreJa Ponder Traataru.m T racl,lag and Reporu g - O ... Lp frade d Fhl,scraupy, Peslorm.ace Targ.0 aaJ Blah Jleultn. \7 ] ) , )} ;] \| \ } ;� s2 J R }\� �} �k\ 2 a a a & @ \/\(}j ) , )} ;] ;� s2 J R 2 a a a & @ \/\(}j ..... .......... " || ' 2■ !a ....:.| /� ! .............. . \ NCPA Authorities - PoolingI i Pooling Agreement ( I Pooling Agreement j Article 8.1 Article 8.7 • Article 8.1 • Article 8.7 • Article 8.11 - Schalula 2.02 - SchWulc 3.01 The obfOClbu of Ike Paul ctalr.l dupacb Ih.11 be As fallawc - (a) to Sao" do tomato ad atat rowdfuw/vi1 as the Casubiwd ?.rtla al Ibt W. al pnow.ble Cwt; - (h) u .."=push 16e « quLtOw.au O/ (s). Il...ulct SublataIMa. \CPA may KhtduM Or 06p.lch ba) m6mct M WaN • r -q'1 I..d a blab.. such fwd 6 044 aa► dr d.crsa+e M bw1Yy ad /Wanly OI &.Fk. ud w Maoist 1. rook Usa.Ab>t s�p.p.�.11u.oJay COAL Illtt� ttttbsill" Shote ^w to prOslde 1►. o.W .lilalsal .ad ".1 edtane u.a AL1 -,k ?.fly's .ad the r -I's pssrr.s..a .ad If a.mWloa ltNY![el. ■ §] �k! \*. _- \ ■ �!!� a � A � a ,;22f !§ }�)!j ���!!: ■ §] �k! \*. _- \ ■ �!!� a � 7:4� � a ,;22f !§ }�)!j ���!!: _- � a � 7:4� � a ,;22f |;,-- ■��!!i ���!!: n L 3 a 7 +i. L' a CIn o : s.1114 LV u 11 30 n a Z C C Y _ i Y rAr e S i^ CL. X21 _5�`g0�9'3�9y .7,if a'39Yo� col a CIn LV u 11 30 n a Z C C O a W .v, s 7 CL. 7 _ C 7 C= L 3LO gj E di 7 :i L v •� N L a u rJ 7 H 7 'v C a y m V i ) 2 ) � l - � � _2§ ��2 �e § , 2 % \]]4]�}2. S'(a�]§A)�)� =)}�\]3�7�! �e4.�I%)-)! �!/}/f%�}\ � w � � - 7 � � -±§--/� }5 o�&auuzG § � � .) _ ] ) k © @ «>272 ]�f�■;� @�§§9�fEe \ � \\\ C6. \\ - g 25 -4 z.2 d )\ƒ)kf\ \ � - = - g 25 -4 z.2 \ \ 2 ] uc = u ' -4 z.2 U \ � \ 5 \fj\\\)� Implementation Guidelines I I NCPA Credit Watch List I Credit Risk and Members • Qualifications based on data from other rating agencies • Ratings are dynamic and require periodic review • NCPA to act prudently • Events of non-compliance to be reported • Placed on list for Non-compliance • blinintum of 3 months • Currently One Entity on NCPA List • Mcntbcr contracts assigned to NCPA must be with NCPA Approved Counterparties • Munber transactiuns will be included in total cxposurc limit • Members must consult with NCPA pnut to committing to cttsute minimum Credit rcqulrcincnls / $ �3On k\ \§ \ \\ __. •}]j�44t7 13`]®72 z■7j\ �3On k\ \§ \ \\ 13`]®72 City of Lodi Electric Utility Department Open Access Milestones January February March April May June Adopt Open Access (OA)Policies Initiate Customer Surveys and Meetings Initiate Marketing Program Development and Implementation Adopt Open Access Rules ► Open Access and Regulations Adopt Metering and Billing Procedures 10V7 Rates and Pricing V Initiate Unbundled Rate Study and Pricing Marketing and ii Customer Service Approve New Products and Services p Contract Management Adopt Consumer Protection Services ;.. and Procedures Adopt CTC Charges Adopt Energy Service Provider Agreement Negotiate Agreements, as needed, with ' PG&E, Western, ISO, and others for Direct Access Lodi Electric Utility Department' Open Access Lodi Electric Utility Department Open Access oElectric Industry Restructuring • AB 1890 —Independent System Operator (ISO) —Power Exchange (PX) —Divestiture of Generation Plants —Rate Freeze/CTC Lodi Electric Utility Department Open Access oElectric Industry Restructuring (cont.) • Municipal Utilities —CTC Recovery —ISO —Open Access —Generation Competition Only —Public Benefit Programs —Other Lodi Electric Utility'Department Open Access o Open Access Policies • Implementation Date • Phase -In Period • Eligibility • Program Type Lodi Electric Utility Department Open Access oExamplek Open Access Policies • Implementation - July 2000 Phase In - 6 Months Eligibility - Large Commercial - Phase .One All Other Customers - Phase Two Lodi Electric Utility Department 'Open Access o Open Access Policies (cont.) • Other Municipal Programs —Pasadena —Roseville —Palo Alto SMUD