HomeMy WebLinkAboutResolutions - No. 2019-138RESOLUTTON NO. 2019-138
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING
THE REVISED 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
LEU to report annually to the California Air Resources Board (CARB) on the manner in which
this allowance value is used; and
WHEREAS, on June 18,2014, by Resolution No. 2014-110, the City Council approved
the LEU Greenhouse Gas (GHG) Free Allowance Proceeds Spending Plan (Plan) to identify the
eligible use of proceeds consistent with CARB regulations; and
WHEREAS, recent updates and revisions to California Cap and Trade Regulations have
expanded the eligible use of GHG free allowance proceeds and as such, the Plan has been
revised to include those additional eligible uses; and
WHEREAS, the Revised LEU GHG Free Allowance Proceeds Spending Plan, attached
as Exhibit A, identifies activities and programs LEU will pursue to spend the proceeds received
at auction through 2030 in accordance with regulations set forth by CARB; and
WHEREAS, specific projects will continue to be identified and funding for those projects
will be approved in accordance with existing City policies, procedures, and the City's Risk
Oversight Committee (ROC); and
WHEREAS, the City's ROC was presented with the Revised Plan at its June 13,2019
meeting and recommended City Council approval.
NOW, THEREFORE, BE lT RESOLVED that the Lodi City Council does hereby approve
the Revised Lodi Electric Utility Greenhouse Gas Free Allowance Proceeds Spending Plan,
attached hereto as Exhibit A.
Dated: July 17,2019
I hereby certify that Resolution No. 2019-138 was passed and adopted by the City Council of
the City of Lodi in a regular meeting held July 17,2019, by the following vote:
AYES: COUNCIL MEMBERS - Johnson, Kuehne, Mounce, Nakanishi, and
Mayor Chandler
NOES: COUNCIL MEMBERS - None
ABSENT: COUNCIL MEMBERS - None
ABSTAIN: COUNCIL MEMBERS - None
NIFER
City Clerk
201 9-1 38
FERRAIOLO
Exhibit A
LODI ELECTRIC UT¡LITY
GREENHOUSE GAS FREE ALLOWANCE PROCEEDS
SPENDING PLAN
July 2019
BACKGROUND
The GlobalWarming Solutions Act of 2006 (AB 32) requires California to return to 1990 levels of
greenhouse gas emissions by 2020. SB 32 (Statutes of 2016) requires further reductions in
greenhouse gas emissions to 40 percent below 1990 levels by 2030. All programs developed in
response to the originalAB 32 directives, and periodically refined though the California Air
Resources Board's (CARB) Scoping Plan process, 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 receípt by the LEU through 2030 per AB 398 and
are consigned at auction. The City receives the proceeds which are currently deposited in its
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. ln summary,
auction proceeds must be used for the primary 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:
1. lnvestments in renewable energy resources including, but not limited to, generation
projects, energy storage projects and/or the purchase of generation from eligible
renewable energy resources.
2. lnvestments in energy efficiency programs.
3. Projects or programs that address the potential for impacts of the Cap and Trade
regulations including, but not limited to, efforts to mitigate impacts on low-income
customers.
1
4. Fuel switching including, but not limited to, electric vehicle (EV) rebates and/or
incentives, EV fueling supply equipment rebates, and/or infrastructure investment for
transportation electrification.
5. Projects or activities that reduce emissions of sulfur hexafluoride or hydrofluorocarbons
associated with electrical distribution system equipment.
6. Wildfire risk reduction activities.r
7. Administrative, outreach and education program expenses as permitted.
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.
1 Allowable only after CARB adopts a standardized system for quantifying GHG emissions reductions and
provided the risk reduction is in conformance with applicable Public Utilities Code.
2