HomeMy WebLinkAboutResolutions - No. 2014-110RESOLUTION NO. 2014-110
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING THE
LODI ELECTRIC UTILITY GREENHOUSE GAS FREE ALLOWANCE
PROCEEDS SPENDING PLAN
WHEREAS, the California Cap and Trade Regulation allocates a specified number of
allowances to qualified electrical distribution utilities for free; and
WHEREAS, the City of Lodi Electric Utility (LEU) receives these free allowances each year
and is permitted to consign these allowances at auction and receive the proceeds from the sale; and
WHEREAS, California Cap and Trade Regulation restricts the manner in which the proceeds
received from the sale of the freely -allocated allowances can be used and requires the LEU to report
annually to the California Air Resources Board on the manner in which this allowance value is used;
and
WHEREAS, the proceeds received from the sale of freely -allocated allowances must be
used exclusively for the benefit of retail rate -payers consistent with the goals of Assembly Bill 32, the
Global Warming Solutions Act of 2006; and
WHEREAS, LEU staff has drafted the attached Greenhouse Gas Free Allowance Proceeds
Spending Plan and proposes to use the revenue received on renewable resources, energy
efficiency, indirect costs associated with the implementation of Cap and Trade and/or Renewables
Portfolio Standard activities, and projects/programs that address the potential for impacts of Cap and
Trade regulations on low-income customers; and
WHEREAS, specific projects will be identified and funding for those projects will be approved
in accordance with existing City policies and procedures; and
WHEREAS, revenues received from the sale of freely -allocated allowances will be deposited
in the Environmental Compliance Fund 168 with funds appropriated as part of the annual budget
process; and
WHEREAS, the City's Risk Oversight Committee was presented with the Greenhouse Gas
Free Allowance Proceeds Spending Plan at its June 11, 2014, meeting and recommended City
Council approval.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve the
Lodi Electric Utility Greenhouse Gas Free Allowance Proceeds Spending Plan.
Dated: June 18, 2014
I hereby certify that Resolution No. 2014-110 was passed and adopted by the City Council of
the City of Lodi in a regular meeting held June 18, 2014, by the following vote:
AYES: COUNCIL MEMBERS — Hansen, Johnson, Mounce, Nakanishi, and
Mayor Katzakian
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — Non
VA::)OHLL-OLSON
City Clerk/Legislative Affairs Officer
2014-110
LODI ELECTRIC UTILITY
GREENHOUSE GAS FREE ALLOWANCE PROCEEDS
SPENDING PLAN
BACKGROUND
AB 32 requires California to return to 1990 levels of greenhouse gas emissions by 2020. All
programs developed under AB 32 contribute to the reductions needed to achieve this goal. The
Cap and Trade Program is a key element in California's climate plan and is designed to provide
covered entities the flexibility to seek out and implement the lowest -cost options to reduce
emissions.
The City of Lodi Electric Utility (LEU), as an electrical distribution utility, receives an annual
direct allocation of California Greenhouse Gas (GHG) allowances, or "free allowances." These
free allowances are currently scheduled for receipt by the LEU through 2020 and are consigned
at auction. The City receives the proceeds which are currently deposited in the 168
Environmental Compliance Fund.
PURPOSE
The purpose of the Greenhouse Gas Free Allowance Proceeds Spending Plan is to identify
activities and programs the LEU will pursue to spend the proceeds received at auction in
accordance with regulations set forth by the California Air Resources Board. In summary,
auction proceeds must be used for the benefit of retail ratepayers consistent with the goals of
AB 32.
PLAN
The LEU Greenhouse Gas Free Allowance Proceeds Spending Plan includes the following
options and will be reviewed each year as part of the annual budget process as to which
specific programs and activities will be implemented:
Investments in renewable resources including, but not limited to, generation projects or
the purchase of electricity.
2. Investments in energy efficiency programs
3. Projects or programs that address the indirect costs
Trade and/or Renewables Portfolio Standard activities
4. Projects or programs that address the potential for
regulations on low-income customers
from implementation of Cap and
impacts of the Cap and Trade
Specific projects will be identified and funding for those projects will be approved in accordance
with existing City policies and procedures.
The LEU will report to the CARB by June 30 of each year, how it has spent, or plans to spend,
the proceeds received through auction of its GHG free allowances and will seek approval from
its Risk Oversight Committee prior to submitting said report.