HomeMy WebLinkAboutResolutions - No. 2012-206RESOLUTION NO. 2012-206
A RESOLUTION OF THE LODI CITY COUNCIL
ESTABLISHING THE CITY OF LODI RENEWABLE
ENERGY RESOURCES PROCUREMENT PLAN
WHEREAS, on April 12, 201 I, the Governor of the State of California signed California
Senate Bill 2 of the First Extraordinary Session (SBX1-2, Chapter 1, Statutes of 2011, First
Extraordinary Session) (SBX1-2), known as the California Renewable Energy Resources Act,
which became effective on December 10,2011; and
WHEREAS, SBX1-2 requires that the amount of electricity generated per year from
eligible renewable energy resources be increased to an amount that equals at least 20 percent
of the total electricity sold to retail customers in California per year by December 31, 2013, 25
percent by December 31, 2016, and 33 percent by December 31, 2020; and
WHEREAS, in accordance with this law, Lodi is required to establish a Renewable
Energy Resources Procurement Plan (RPS Procurement Plan) and a Program for Enforcement
of the RPS Plan, and in December 2011, the Program for Enforcement was adopted by the City
Council: and
WHEREAS, although the California State Energy Commission (CEC) has not published
the final details of its renewable energy requirements, the City must establish its RPS
Procurement Plan by December 31, 2012; and
WHEREAS, the attached RPS Procurement Plan is based on the current version of the
CEC's renewable energy requirements, and after the CEC has finalized the requirements, this
plan may be modified as necessary; and
WHEREAS, no significant financial impact is expected from the approval of the RPS
Procurement Plan through calendar year 2016, and the plan contains a rate limiter of two
percent of annual gross electric sales.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve
and establish the City of Lodi Renewable Energy Resources Procurement Plan, as attached.
Dated: December 19, 2012
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hereby certify that Resolution No. 2012-206 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held December 19, 2012, by the following vote:
AYES: COUNCIL MEMBERS— Hansen, Johnson, Katzakian, Mounce, and
Mayor Nakanishi
NOES: COUNCIL MEMBERS— None
ABSENT: COUNCIL MEMBERS— None
ABSTAIN: COUNCIL MEMBERS —None,, -2
Z;5JOHL
City Clerk
2012-206
Lodi Electric Utility Department
Renewable Energy Resources Procurement Plan
December 2012
CITY OF LODI
RENEWABLE ENERGY RESOURCES PROCUREMEI PLAN
1.00 INTRODUCTIONAND PURPOSE
Senate Bill 2 of the first extraordinary session (SBX1-2) was chaptered into the Public Utilities
Code (Section 399) by Governor Jerry Brown. Under SBX1-2 the City of Lodi (City), a Publicly
Owned Utility, must adopt and implement a renewable energy resources procurement plan
(FSS Procurement Plan) to reach and maintain a renewable energy content of 33% by the end
of calendar year 2020. At the end of calendar year 2010, the City was compliant with the
energy purchase requirements of SBXI-2.
This document outlines the requirements of SBX1-2 and the City's minimum requirements for
the procurement of renewable energy. In addition to the development of an RPS Procurement
Plan, SBX1-2 requiresthe City to adopt and implement a separate program for the enforcement
of the RPS Procurement Plan.' The City's RPS enforcement program was approved by Lodi City
Council Resolution 2011-195 on December 21,2011.
With all future resource needs, the City's Electric Utility Department (EUD), through the Risk
Oversight Committee, shall apply this document, as approved by the City Council, to assure that
the City's retail electric customers are provided at least a minimum quantity of electricity
products from eligible renewable energy resources and products consistent with the targets set
by SBX1-2.
1.10 PLAN MODIFICATIONS/AMENDMENTS
This RPS Procurement Plan may be modified or amended by an affirmative vote of the Lodi City
Council during a publicly noticed meeting. Any Council action to modify or amend the plan
must be publicly noticed in accordance with Section 4.00, applicable Public Utilities Codes,
and/or applicable sections of the Government Code.
1 Pursuant to § 399.30(e), POUs must have adopted a "program for enforcement" of the RPS Procurement Plan on or
before January 1,2012 at a publicly noticed meeting.
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Lodi Electric Utility Department
Renewable Energy Resources Procurement Plan
December 2012
2.00 PROCUREMENT REQUIREMENTS FOR RENEWABLE ENERGY
SBX1-2 created several very specific requirements for the procurement of renewable energy for
the resale to electric customers. Section 2.00 of this document details the procurement
requirements of SBX1-2 and adopts these requirements as minimum standards for the City's
procurement of retail energy.
2.10 COMPLIANCE PERIODS (PUC §399.30(b))
The amendment of SBX1-2 created three distinct compliance periods. At the end of each
compliance period, a specific target for renewable energy must be met unless "waivers of
timely compliance" are incurred. Each of the compliance periods includes the following: 1)he
retail sales percentage target for renewable energy; and 2) the allowed percent from each
Content Category.
A Compliance Period 1: January 1, 2011, to December 31, 2013, inclusive.
The City must procure an average of 20% of the calendar year's retail sales with
renewable energy. Renewable energy procured for this compliance period
should be comprised of not less than 50% of Content Category land not more
than 25%from Content Category 3.
B. Compliance Period 2: January 1, 2014, to December 31, 2016, inclusive.
The City must procure, at the end of compliance period 2, at least 25% of
calendar year 2016's retail sales with renewable energy. Renewable energy
procured for this compliance period should be comprised of not less than 65% of
Content Category land not more than 15%from Content Category 3.
C. Compliance Period 3: January 1, 2017, to December 31, 2020, inclusive.
The City must procure, at the end of compliance period 3, at least 33% of
calendar year 2020's retail sales with renewable energy. Renewable energy
procured for this compliance period should be comprised of not less than 75% of
Content Category land not more than 10%from Content Category 3.
D. Starting January 1,2021 and after renewable energy procurements shall at least
meet the end requirements of compliance period 3.
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Lodi Electric Utility Department
Renewable Energy Resources Procurement Plan
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2.20 CONTENT CATEGORY DEFINITIONS (PUC §399.30(c)(3))
As required by the Public Utilities Code, each compliance period shall further restrict the
procurement of energy through the concept of Content Categories (sometimes referred
to as energy buckets) that describe the criteria for differing eligible renewable energy
resource electricity products:
A. Content Category 1 (consistent with §399.16(b)(1): Resources in this category
shall either:
a. Have a first point of interconnection with a California balancing authority,
have a first point of interconnection with distribution facilities used to serve
end users within a California balancing authority area, or are scheduled from
the eligible renewable energy resource into a California balancing authority
without substituting electricity from another source. The use of another
source to provide real-time ancillary services required to maintain an hourly
or sub -hourly import schedule into a California balancing authority shall be
permitted, but only the fraction of the schedule actually generated by the
eligible renewable energy resource shall count toward this portfolio Content
Category.
b. Have an agreement to dynamically transfer electricity to a California
balancing authority.
B. Content Category 2 (consistent with §399.16(b)(21): Resources in this category
shall include firmed and shaped eligible renewable energy resource electricity
products providing incremental electricity and scheduled into a California
balancing authority.
C. Content Category 3 (consistent with §399.16(b)(3)): Resources in this category
shall include eligible renewable energy resource electricity products, or any
fraction of the electricity generated, including unbundled renewable energy
credits, that do not qualify under the criteria of Content Category 1 or Content
Category 2.
D. Grandfathered Resources (§399.16(d -D: Any contract or ownership agreement
originally executed prior to June 1, 2010, shall count in full towards the
procurement requirements, ifall of the following conditions are met:
(1 )The renewable energy resource was eligible under the rules in place as of the
date when the contract was executed.
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Renewable Energy Resources Procurement Plan
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(2) Any contract amendments or modifications occurring after June 1, 2010, do
not increase the nameplate capacity or expected quantities of annual
generation, or substitute a different renewable energy resource.
(3) The duration of the contract may be extended if the original contract
specified a procurement commitment of fifteen (15)or more years.
(4) "Eligible renewable energy resource" means an electrical generating facility
that meets the definition of a "renewable electrical generation facility" in Section
25741 of the Public Resources Code, subject to the following: ... (C) A facility
approved bythe governing board of a local publicly owned electric utility prior to
June 1, 2010, for procurement to satisfy renewable energy procurement
obligations adopted pursuant to former Section 387, shall be certified as an
eligible renewable energy resource by the Energy Commission pursuant to this
article, if the facility is a "renewable electrical generation facility" as defined in
Section 25741 of the Public Resources Code § 399.12(e)(1)(C).
Resources procured prior to June 1, 2010 shall be counted for RPS compliance
(G randfathered)without regard to the limitations on the use of each portfolio Content
Categoryas described in Section 2.20.
3.00 QUALIFYING CONDITIONS OF COMPLIANCE
Provisions of SBX1-2 allow for un -foreseen circumstances beyond the control of the
POU. Section 3.00 details the conditions of compliance allowed by the amendments of
SBX1-2.
3.10 EXCESS PROCUREMENT(§ 399.30(d)(1), §399.13(a)(4)(13))
The City shall be allowed to apply excess procurement from one compliance period to
subsequent compliance periods as long as the following conditions are met:
A. The accumulation of excess procurement of a compliance period beginning on or
after January 1,2011, can be applied to any subsequent Compliance Period.
B. In calculating the total quantity of excess procurement, the amount of
procurement associated with contracts of less than ten (10)years in duration
shall be deducted (not counted) from actual procurement quantities.
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Renewable Energy Resources Procurement Plan
December 2012
C. Excess procurement applied to future compliance periods must complywith the
definitions of Content Category 1, Content Category 2, or Grandfathered
Resources.
D. Resources from Content Category3 shall not be counted as excess procurement.
3.20 HISTORIC CARRY-OVER
A. The City shall be allowed to apply excel procurement, generated before January
1, 2011, procured prior to June 1, 2010, and was not applied to the RPS program
established by the City pursuantto former Utilities Code Section 387.
B. Excess procurement must be from facilities that were RPS -eligible under the
rules in place for retail sellers at the time of procurement, except that such
facilities need not be tracked in the Western Renewable Energy Information
System.
C. Historic carry-over shall be calculated by subtracting procurement generated
between January 1,2004, and December 31,2010, that was applied to the City's
RPS compliance obligation during that same period.
D. The City will submit claims for any historic carry-over to the California Energy
Commission by June -t 2013.
3.30 WAIVER OF TIMELY COMPLIANCE (§399.30(d)(2), §399.15(b)(5))
Under the concept of "Waiver of Timely Compliance", enforcement of timely
compliance shall be waived if it can be demonstrated that any of the conditions
described in the Public Utilities Code or any condition beyond the direct control of the
City will prevent timely compliance. In making its findings relative to the existence of
this condition, deliberations shall include only conditions within the direct control of the
City and consistent with the applicable Public Utilities Code.
In the event of a Waiver of Timely Compliance due to any of the factors set forth above,
the City may implement one or more of the following procedures:
A. Establish additional reporting for intervening years to demonstrate that
reasonable actions under the City's control are beingtaken (§399.15(b)(6)).
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Renewable Energy Resources Procurement Plan
December2012
B. Require a demonstration that all reasonable actions within the City's control
have been taken to ensure compliance in order to grant the waiver
(§399.15(b)(7)).
As described in the Public Utilities Code (§399.15(b)(9)), in no event shall deficits from
prior compliance periods be added to future compliance periods. However, excess
procurement from previous years may be used to gain compliance due any of the
unforeseen conditions allowing waiver of timely compliance.
3.40 COST LIMITATIONS FOR EXPENDITURES(099.30(d)(3), §399.15(c))
The amendments of SBX1-2 concede for cost limitations with regard to energy
purchases for the compliance periods. The City, at its sole discretion, may elect to
establish and adjust cost limitations for all eligible renewable energy resources used to
comply with the renewable portfolio standards. Any such cost limitations will be
developed consistentwith PUC §399.15(c). The City's EUD shall review the need for cost
limitations on an ongoing basis as part of prudent utility practices with regard to
forecasting of load growth and long-term energy needs.
As approved by the City Council, the RPS Procurement Plan includes a rate limiter of 2%
of EUD's gross annual sales. The 2% rate limiter is in addition to, not in substitution of,
any needed rate increases due to inflationary or other increase to the EUUs total cost
recovery requirement.
3.50 EXCLUSIVE CONTROL (§399.30(m))
In all matters regarding compliance with the RPS Procurement Plan, the Lodi City
Council shall retain exclusive control and discretion over the following; the mix (type) of
eligible renewable energy resources procured, additional generation resources procured
for purposes of ensuring resource adequacy and reliability, and the reasonable costs
incurred for eligible renewable energy resources owned by it.
4.00 REPORTING REQUIREMENTS0399.30(f), 099.30(g), §399.30(1))
As required by the Public Utilities Code, Publicly Owned Utilities must provide periodic
reporting on their progress and status of compliance with the legislated renewable
energy requirements. The following sections outline these requirements and the
applicable Public Utilities Code.
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Renewable Energy Resources Procurement Plan
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4.10 DELIBERATIONSOR CHANGES REGARDING PROCUREMENT PLAN (§399.30(f))
Before the Lodi City Council publicly deliberates on any portion of the RPS Procurement
Plan a notice of a public hearing must be posted in accordancewith the requirements of
the public utilities code. Contemporaneous with the posting of a notice for such a
meeting, the City shall notify the California Energy Commission (CEC) of the date, time,
and location of the meeting in order to enable the CEC to post the information on its
website. When City Staff present information to a majority of the City Council that
relates to the adopted renewable energy resources procurement status and/or plans,
this information shall also be made available to the public and the CEC through the
electronic posting of the documentation.
4.20 ANNUAL REPORTTO CEC REGARDING CONTRACT EXECUTION (§399.30(g))
Annually, the City's EUD shall submit a report to the CEC regarding procurement
contracts executed during the prior year. The annual report to the CEC regarding
contract execution shall include all of the following components:
A. A description of the eligible renewable energy resource, including the duration
of the contract or electricity purchase agreement.
B. A description and identification of the electrical generating facility providing the
eligible renewable energy resource underthe contract.
C. An estimate of the percentage increase in total retail sales of electricity from
eligible renewable energy resourcesthat will result from the contract.
4.30 REPORTSTO THE CEC AND CITY CUSTOMERS (§399.30(1))
Annually, the EUD will provide information to the CEC and customers regarding
renewable resources. The information to the CEC regarding renewable resources shall
include each of the following components:
A. Expenditures of public goods funds collected pursuantto Section 385 for eligible
renewable energy resource development, including a description of programs,
expenditures, and expected or actual results.
B. The resource mix used to serve its customers by energy source type.
C. The City's status in implementing and/or maintaining the renewable portfolio
standards pursuantto §399.30(a).
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