HomeMy WebLinkAboutAgenda Report - November 17, 1999 H-034
CITY OF LODI COUNCIL COMMUNICATION
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AGENDA TITLE: City of Lodi Electric Utility Open Access Policy
MEETING DATE: November 17, 1999
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council adopt the proposed Open Access Policy and
related actions described below.
BACKGROUND INFORMATION: Through passage of AB1890, the State legislature intended to create
a competitive electric utility industry throughout California. While
much of the language of AB1890 was very specific as to investor-
owned utilities, it is felt that actual implementation of the requirements by municipal -owned utilities was
within the purview of their respective governing boards. In Lodi's case, the governing board is the City
Council.
There are four components to electric service: 1) generation; 2) transmission; 3) distribution; and 4) billing
services. At this time, the Electric Utility Department proposes open access for the generation
component of electric service and the imposition of a temporary Competition Transition Charge (CTC).
The Department's recommendation is based on the following:
1. Denying customers open access to generation does not meet the intent of AB1890 and would subject
the City to whatever remedies the legislature may decide to take. In addition, the City would be
perceived by its customers as possibly not acting in their best interests by restricting access to a
means of lowering their energy costs.
2. With the advent of the Independent Systems Operator (ISO), retaining control of the City's small
portion of the California -Oregon Transmission Project (1.89%) is probably moot and of little financial
impact. No policy changes are recommended for transmission.
3. By keeping control of the distribution component, the City will be able to insure that the electric system
is operated and maintained to its current high standards and that system upgrades are undertaken in a
manner that is responsive to customer needs. This arrangement also provides a vehicle for the City to
collect in -lieu taxes used to support needed public services.
4. Continuing to provide billing -related services allows the City to maintain control over metering, billing
and collection and insures customers will get what they pay for. No policy changes are recommended
for these services.
5. The City's electric generating portfolio contains a number of above market resources. This "stranded
investment" must still be paid down in some manner in order to prevent significant revenue erosion.
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APPROVED:
l H. Dixon Flynn City Manager
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CITY OF LODI COUNCIL COMMUNICATION
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Recent project debt restructuring has reduced debt service cash flow requirements as far as possible
for the present, leaving the remainder to be paid for through an AB1890-sanctioned Competition
Transition Charge (CTC). The CTC would be chargeable to customers utilizing an alternate electric
energy provider. It is estimated that the City of Lodi will need to maintain a CTC through fiscal year
2005, depending on market conditions.
The attached milestone chart shows the ambitious schedule that must be met in order to offer open
access to all customer classes by July 1, 2000. This includes completion and implementation of new
policies, procedures and electric rate schedules as well as changes to supporting accounting and billing
systems required to support to offer Open Access.
In summary, the above policy is intended to give customers maximum access to reliable electric power
without compromising the reliability or quality of the City's electric and public services.
FUNDING: Not applicable
Alan N. Vallow
Electric Utility Director
PREPARED BY: Jack Stone, Manager Business Planning and Marketing
ANV/JLS/Ist
C: City Attorney
Finance Director
APPROVED:
H. Dixon Flynn - City Manager
City of Lodi Electric Utility Department Open Access Milestones
November December January February March April
1999 1999 ' 2000 2000 2000• 2000
Adopt Open Access (OA)Policies
Initiate Customer Surveys and Meetings
Initiate Marketing Program
Development and Implementation
Adopt Open Access Rules
and Regulations
Adopt Metering and Billing Procedures
Initiate Unbundled Rate Study and Pricing
Approve New Products and Services
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
Open Access
Rads and Pricing
Marketing and
Customer Service
Contract Management
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