HomeMy WebLinkAboutAgenda Report - June 17, 2020 C-08AGENDA ITEM c-g
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AGENDA TITLE:
MEETING DATE:
PREPARED BY:
Adopt Resolution Authorizing City Manager to Execute Base Contract, and
Special Provisions to Base Contract, with Clean Energy Renewable Fuels, LLC,
of Newport Beach, for Sale and Purchase of Natural Gas
June 17,2020
Public Works Director
REGOMMENDED ACTION Adopt resolution authorizing City Manager to execute Base
Contract, and Special Provisions to Base Contract, with Clean
Energy Renewable Fuels, LLC, of Newport Beach, for sale and
purchase of natural gas.
BACKGROUND INFORMATION: The California Air Resources Board (CARB) developed the Low
Carbon Fuel Standard (LCFS) program in compliance with
Assembly Bill 32 (the Global Warming Solutions Act of 2006) to
reduce the carbon intensity of transportation fuels used in California by 10 percent by 2020. The
CARB regulations allow dispensers of compressed natural gas (CNG), such as the City of Lodi, to earn
revenue in the form of LCFS credits by partnering with producers of Renewable Natural Gas (RNG).
RNG is methane captured from the decomposition of organic materials at landfills, agricultural
facilities, and wastewater treatment plants that has been cleaned and treated to meet natural gas
pipeline quality standards. The pipeline quality biomethane is then injected into the national Natural
Gas pipeline grid and the CNG we currently use would be displaced with RNG. This "displacement"
means that for every unit of RNG that is injected into the pipeline, an equal unit of fossil fuel is not
extracted from the earth.
Staff issued a Request for Proposals for RNG Services on February 10,2020. Two proposals were
received by the February 21 ,2020 deadline: Clean Energy Renewable Fuels, LLC and U.S. Gain. The
proposalfrom US Gain was deemed not responsive because it contained several irregularities and did
not include all receipts of addenda. ln anticipation of a contract award, Clean Energy Renewable
Fuels, LLC presented a detailed presentation on the RNG program at the March 10,2020 Shirtsleeve
meeting.
lf awarded, Clean Energy Renewable Fuels, LLC will deliver RNG in equivalent volumes to the CNG
dispensed at the City's CNG station. They will also perform the tracking, reporting, and sale of the
LCFS credits on behalf of the City. There are no modifications required to our existing equipment or
fleet. The credits are based on the amount of CNG dispensed from our CNG Station, which is
approximately 82,000 gasoline gallon equivalents per year. This equates to LCFS credit revenue of
approximately $24,000 per year, which will be applied to the City's Transit Division.
Staff recommends authorizing City Manager to execute Base Contract, and Special Provisions to Base
Contract, with Clean Energy Renewable Fuels, LLC, of Newport Beach, for sale and purchase of
natural gas.
APPROVED:
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, City Manager
611012020
Adopt Resolution Author¡zing City Managerto Execute Base Contract, and Speciel Provisions to Base Contrâct, with Clean Energy Renewable Fuels, LLC, of
Newport Beach, for Sale and Purchase of Natural Gas
Junè 17 ,2020
Page 2
FISCAL IMPACT:This proposed contract is a revenue contract which will add revenue to
the transit fund on a quarterly basis each year.
FUNDING AVAILABLE: Not applicabte
rles E. Swimley, Jr
Public Works Director
Prepared by Georgia Graham, Transportation Manager
CES/GG/tc
Attachments
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