HomeMy WebLinkAboutAgenda Report - June 21, 2000 E-17AGENDA TITLE: Letter of Agreement for Services between the City of Lodi and the Northern California Power
Agency (not to exceed $10,500)
MEETING DATE: June 21, 2000
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council authorize the City Manager to execute the attached
Letter of Agreement (LOA) between the City of Lodi and the Northern
California Power Agency (NCPA) not to exceed $10,500.
BACKGROUND INFORMATION: The purpose of the attached LOA is to provide the City of Lodi with a review
of its Public Benefits efforts through the National Resources Defense Council
contractor Pacific Energy Associates, Inc. (PEA). PEA is to provide a review
of the City's efforts with regard to the Legislative provisions of AB1890 and
the specifics of the individual programs undertaken and offered by the City.
FUNDING:
FUNDING AVAILABLE
PREPARED BY
ANV/JS/1st
C: City Attorney
Public Benefits Program: 164607
Vicky McAthie, Pinance Director
A' //�
Alan N. Vallow
Electric Utility Director
Jack Stone, Manager, Business Planning and Marketing
APPROVED:
H. Dixon Flynn - City Manager
Developed in partnership with NCPA
Table of Contents
City of Lodi — Lighting the Way
1
The Power of Joint fiction
2
Playing R Uital Role in California's Electric marketplace
3
The Challenge of Summer 2000
4
City of Lodi's Solution — Planning for Growth 6 Demand
5
Keeping the lights On
6
What You Can Do
Residential Customers
Commercial Customers
Contact Information
7
8
9
City of Lodi
Lighting the Way
The City of Lodi, in partnership with the
Northern California Power Agency f NCPA,
is devoted to the purchasing, generation,
transmission, pooling and conservation of elec-
tric energy for our customers and those of the
20 other NCPA member utilities throughout
Northern California. Through joint action
witn NCPA, we have become a primary sup-
plier of power scheduling and interchange
management services to public agencies and
power marketers throughout Northern
California.
The City of Lodi and other publicly owned
utilities currently serve one-quarter of Northern
California's electric needs — generating,
purchasing and transmitting over 20 trillion
kilowatts of power. This represents a customer
base roughly one third the size of that currently
served by Pacific Gas & Electric Company (PG&E).
In addition, 70% of our energy supply through
NCPA is clean, renewable electricity — helping
protect our families' health, as well as the
environment. Our renewable generation
resources include a geothermal plant at The
Geysers in Lake County and a hydroelectric
project in Murphys, CA.
The Power of Joint Action
NCPA has been helping improve electric
service and reliability, and lowering electric
rates for its member customers by as much
as 20%. It was established in 1968 as a
way for its .member utilities to break PG&E"
monopoly on electric pricing and transmission
— and for over 30 years, NCPA and the other
municipals remained the sole competitors to
Investor Owned Utilities (IOUs) like PG&E.
The competition that the City of Lodi and
NCPA bring undoubtedly influences electric
pricing throughout the state — which benefits
all ratepayers.
NCPA membership is open to municipalities,
rural electric cooperatives, irrigation districts
and other publicly owned entities interested
in the purchase, aggregation, scheduling and
management of electrical energy. Unlike IOUs,
NCPA members are owned, operated and
governed locally — giving them the knowledge
and flexibility to better serve their communities,
nCPR members include:
■ City of Alameda
• City of Biggs
■ City of Gridley
• City of Healdsburg
• City of Lodi
■ City of Lompoc
■ Port of Oakland
■ City of Palo Alto
• City of Redding
• City of Roseville
• City of Santa Clara
• Truckee Donner Public Utility District
■ Turlock Irrigation District
■ City of Ukiah
• Plumas-Sierra Electric Cooperative
In addition, NCPA offers the benefits
of joint action to several associate level
members, including:
• City of Davis
■ City of Santa Barbara
■ Association of Bay Area Governments
Power (ABAG)
■ Bay Area Rapid Transit District
■ Lassen Municipal Utility District
■ Placer County Water Agency
2
Playing H Uital Role in California's Electric marketplace
In 1996, Assembly Bill 1890 restructured
California's electric market — giving ratepayers
the opportunity to choose their own electricity
providers in a competitive marketplace.
Under AB 1890, IOUs were required to turn
over their transmission to the California Inde-
pendent System Operator (CAISO). The CAISO is
now responsible for operating and maintaining
the reliability of California's transmission lines,
also called the "electric grid". In turn, the IOUs
are allowed to recover all of their stranded costs
for investments in electric power generation.
However, distribution and transmission of
power are still regulated under the California
Public Utilities Commission (CPUC) and the
Federal Energy Regulatory Commission (FERC).
Unlike IOUs, publicly owned utilities (such as
the City of Lodi) were not required to join the
CAISO. In fact, federal tax law prohibits these
publicly financed entities from joining the
CAISO without endangering their tax-exempt
bond status.
The City of Lodi and other publicly owned
utilities are currently working to resolve this
matter with the Internal Revenue Service,
Congress and the CAISO — with the end goal
of joining the CAISO to enhance the state's
generation resources and transmission assets.
Haw DCPR Members Fit Into California's newly Restructured Electric Market
Electric Service in the City of Lodi is controlled and operated locally — providing generation,
transmission and distribution of power to customers in our own home town.
The City of Lodi' electricity comes from NCP/Ns geothermal, hydroelectric, combustion turbine
power plants & purchased power contracts.
The City of Lodi determines how much power our customers need — and works through NCPA
to schedule through the CAISO for power to be transmitted over the statewide grid.
Power is distributed to electricity customers over City of Lodi -owned distribution lines.
When generation or transmission resources are low, the CAISO will call on NCPA resources
to help meet demand — and to help protect the integrity and reliability of California's
electric system. The City of Lodi recognizes the importance of preserving the statewide grid and
works closely with NCPA and CAISO to achieve this goal.,
The Challenge of Summer 2000
"Reliable electric service is of utmost importance to the safety, health
and welfare of the state's citizenry and economy." — AS 1890 (1996)
Situation
California's dynamic economic expansion has
brought unprecedented numbers of new
businesses and individuals to the Golden
State. This good fortune has also brought
new demands for electricity — and raised the
question of whether the state's aging genera-
tion and transmission facilities can handle it.
The California Energy Commission (CEC)
and the federal Department of Energy (DOE)
have each recently released reports that raise
concerns over California's ability to keep pace
with its growth and demand when it comes
to electric generation and reliability. They cite
fast -paced customer consumption (or "load
growth-), stagnant development of new
generation and transmission facilities and the
possibility of unusually hot weather conditions
as reasons for their concern.
The California Independent System Operator
(CAISO) — which is responsible for preserving
the integrity of the states electric grid —
shares these concerns. Currently, the CAISO
monitors the integrity and reliability of
California's electric grid — particularly under
hot weather conditions — through a system
of "Alerts." At Stage 1, all customers are
encouraged to conserve electricity. At Stage 2,
interruptible load customers have their power
curtailed. At Stage 3, all users are warned that
involuntary load shedding is imminent in order
to prevent system failure.
Challenges
In 1998, load requirements and unusually
hot weather required the CAISO to curtail
"interruptible load" customers on four summer
days_ The probability of that occurrence in
1998 was only 2.5%. According to the CEC
report, without investment in additional
generation and transmission upgrades, there
will be a 20% chance of Stage 2 Alerts occur-
ring during normal weather conditions in
2002. And if loads grow as anticipated, Stage
2 Alerts could be expected — on any given
weekday — as frequently as 50% of the time
by 2004.
If you factor in unusually hot weather, or
generation or transmission outages, the CAISO
could then be faced with the more serious
Stage 3 Alerts and "rolling brown -outs" —
where power is turned off involuntarily in
certain sections of the grid. We could also
experience the worst -case -scenario — voltage
collapse and system black -out.
4
City of Lodi's Solution
Planning for Growth 5 Demand
To help avoid potential electric service
disruptions within our communities, the City
of Lodi has planned its generation and trans-
mission resources to meet such growth and
peak demand circumstances. Our NCPA gen-
eration and transmission resources include a
reserve factor of 10% of customer load.
That means that in circumstances like those
foreseen in the CEC and DOE reports, the
City of Lodi can "step-up" our resources
to meet the needs of our customers.
However, the City of Lodi and NCPA have
made an additional commitment — to protect
not only the reliability of our own system, but
to do what we can to maintain the integrity of
the state's overall electric transmission system
as well. As such, when the CAISO is unable
to meet its own needs during peak demand
times, the City of Lodi and NCPA have consis-
tently offered our generation and transmission
as 'reliability must run" resources — providing
electricity when it is needed most.
Resources load Reserue
Keeping the Lights On
The Benefits of a Good Public "fllert" System
When you flip the switch, the light should go
on. It's that simple.
That's why the City of Lodi has made deliver-
ing power and preserving the integrity and
reliability of our local electric systems our highest
priority. And this is why we are so proud of
our superior record in this area.
But even with superior reliability and excep-
tional planning, California's electric system
is still at risk from unanticipated generation
shortfalls and system emergencies that are
outside of our — or anyone's — control.
The system is simple.
Stage 1 — below 7%
In order to lessen the risk and impact of
"surprise" shortfalls, the City of Lodi and NCPA
participate in the CAISOS "Alert- system
to help warn the public and other electricity
users to conserve, cut-back or even postpone
certain electric usage during high-risk "peak"
times.
By heeding these simple warnings, customers
themselves can help increase the system's
reliability — and in essence, help keep their
own lights on. In fact, the City of Lodi offers
incentives to customers who volunteer for
interruptible service.
Stage 2 — below 5%
Stage 3 — below 1.5%
Stage 1: Encourages customers to conserve electricity where possible when the electricity
"reserve" falls below 7%.
Stage 2: Urges customers to reduce non -urgent electricity usage when the electricity
"reserve° falls below 5%.
Stage 3: Warns customers to immediately postpone electric usage of major appliances such
as washing machines, clothes dryers, swimming pool pumps and even to set air
conditioners to 85 degrees — and could require involuntary service interruptions
—when the electricity 'reserve" falls below 1.5%.
What You Can DO —Residential Customers
Power Tips to Help You Through Hlert Conditions
Du,ing hot summer months, increased demand for electricity to run air conditioners and other
cooling devices can put a serious strain on the electric grid.
While the City of Lodi does everything it can to prepare for these increased demands, there are a
few things residential and commercial customers can do to help as well.
Before the Lights Go Out
Itir Conditioners
❑ Set your thermostat to at least 78 degrees — and 84 degrees on the hottest days.
❑ Check air conditioner filters monthly, and replace or clean as needed.
❑ Shade the air conditioning condenser if its on the west side of the house for better efficiency.
❑ Be careful not to restrict the free flow of air to the air conditioning unit.
Hir Infiltration
❑ Replace weather-stripping and caulking around doors and windows, as needed.
❑ Plug leaks in attics, basements and fireplaces to keep cool air in and warm air out.
Hppliances
❑ Clean coils of your refrigerator and freezer.
❑ Use your dishwasher, clothes dryer and other heat producing appliances in the morning
or after 8 p.m. — not during the hottest part of the day.
Swimming Pools
❑ Reduce filtering to approximately S-6 hours and 2 hours for sweeping (or check operating
manual. Keep filtering and sweeping equipment clean and lubricated. On the hottest days,
set equipment timers to avoid operation from noon to 8 p.m.
Shading
❑ Plant shrubs and trees to shade your house in the hot summer months. They will lose
their leaves and let the sun warm your home in the colder winter months.
❑ Keep drapes, blinds and shades closed to keep the sun's warming rays out of your home.
❑ Install sunscreens on windows.
If the Lights Go Out
❑ Keep extra batteries on hand for flashlights, radios and clocks.
❑ Keep traditional corded phones handy — most cordless phones don't work without electricity.
❑ Avoid opening refrigerators and freezers — to keep cool air inside and keep food from spoiling.
7
What You Can Do —Commercial Customers
Before the lights Go Out
❑ Implement Voluntary Electric Curtailment and reduce to critical use requirements.
❑ Turn off air conditioners if health requirements permit.
❑ Turn off all non-essential, non-critical equipment and motors and appliances.
❑ Curtail all outdoor and non-critical indoor lighting. Be sure outdoor signs, decorative
lighting and display lighting are off.
Turn Off:
Lighting 5 Signage
❑ Advertising signs and displays
❑ Window display lighting
❑ All non-critical outdoor lighting
non -Critical Equipment
❑ Auxiliaries
❑ Cafeteria equipment
❑ Dispensing machines
❑ Elevators (minimize use)
❑ Escalators
❑ Cranes
❑ Copy and fax machines
❑ Battery chargers
❑ Computers
❑ Music systems
❑ Door and gate openers
❑ Drinking water chillers
❑ Calculators
Cooling 5 Heating Equipment
❑ Chillers
❑ Strip heaters
❑ Space conditioning (cooling and heating)
❑ Raise thermostat to 85 degrees in occupied areas
and turn off thermostats in unoccupied areas.
❑ Water heaters
❑ Maintenance and repair equipment
Water
❑ Cleaning equipment
❑ Circulating pumps
❑ Boilers and auxiliaries
❑ Pool pumps
❑ Reduce use of water
'Working together we can all help conserve energy — and keep our electric supplies reliable."
Contact the City of Lodi for more information on what else you can do to help save energy.
City of Lodi —Contact Information
For more information on how you can save energy please contact your local utility.-
Electric
tility:
Electric Utility Director:
Alan N. Vallow phone: 209-333-6762
For more information on the California Independent System Operators (CAISO)
emergency alert system, or their plan to maintain the reliability of California's electric
system, call 1-888-515-6397.
Or you can contact your local legislator to find out what the Legislature is doing to help make
sure the state has a reliable electric system.-
Assembly
ystem:
Assembly Utilities & Commerce Committee
Chairman Rod Wright 916-319-2083
Senate Energy, Utilities & Communications
Chairwoman Debra Bowen 916-445-9764
Assemblyman
Anthony Pescetti 916-362-4161
Senator
Patrick Johnston 209-948-7930
9.
RESOLUTION NO. 2000-108
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING
THE CITY MANAGER TO EXECUTE A LETTER OF AGREEMENT
WITH THE NORTHERN CALIFORNIA POWER AGENCY FOR A
REVIEW OF THE CITY'S PUBLIC BENEFIT PROGRAM
WHEREAS, staff recommends entering into an agreement with the Northern
California Power Agency (NCPA) for review of the City's Public Benefits Program
through the National Resources Defense Council contractor Pacific Energy Associates,
Inc.; and
WHEREAS, Pacific Energy Associates, Inc., will provide a review of the City's
efforts with regard to the Legislative provisions of AB1890 and the specifics of the
individual programs undertaken and offered by the City of Lodi.
NOW, THEREFORE, BE IT RESOLVED, that the Lodi City Council hereby
authorizes the City Manager to execute a Letter of Agreement with the Northern
California Power Agency for review of the City's Public Benefits Program through the
National Resources Defense Council contractor Pacific Energy Associates, Inc., in an
amount not to exceed $10,500.00.
Dated: June 21, 2000
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I hereby certify that Resolution No. 2000-108 was passed and adopted by the
Lodi City Council in a regular meeting held June 21, 2000 by the following vote:
AYES: Council Members — Hitchcock, Land, Nakanishi, Pennino
and Mann (Mayor)
NOES: Council Members — None
ABSENT: Council Members — None
ABSTAIN: Council Members — None
JAC UELINE L. TAYL
Inte City Clerk
2000-108