HomeMy WebLinkAboutResolutions - No. 2020-288RESOLUTION NO. 2020-288
ADOPT RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE
CONTRACT 20 -SNR -02347 FOR ELECTRIC SERVICE BASE RESOURCE
WITH UNITED STATES DEPARTMENT OF ENERGY WESTERN AREA POWER
ADMINISTRATION SIERRA NEVADA REGION
WHERAS, the Central Valley Project (CVP), first devised in 1933 to provide irrigation and
municipal water to much of California's Central Valley, is a network of dams, reservoirs, canals,
hydroelectric power plants and other facilities; and
WHEREAS, CVP generation is used first to operate the CVP and to pump and deliver
water; and
WHEREAS, the Western Area Power Administration (WAPA), a power marketing
administration under the U.S. Department of Energy, markets the remaining generation to various
customers, including the City of Lodi Electric Utility (LEU); and
WHEREAS, LEU's existing base resource contract with WAPA expires on December 31,
2024 and on September 16, 2020, WAPA offered 2025 CVP base resource contracts which
entitles LEU to receive 0.55792 percent of the CVP hydropower resource marketed and sold by
WAPA, beginning January 1, 2025, and ending December 31, 2054; and
WHEREAS, as part of the new contracts, all existing customers retained 98 percent of
their existing base resource percentage and LEU's share represents a small decrease from LEU's
existing contract share; and
WHEREAS, contracts must be executed and returned to WAPA by March 16, 2021; and
WHEREAS, any time before July 1, 2024, LEU can reduce the base resource percentage
or terminate the contract; and
WHEREAS, the new contract will become effective upon execution by WAPA and shall
remain in effect through December 31, 2054, subject to prior termination; and
WHEREAS, several factors exist as part of this new contract to help mitigate risk
associated with variable costs and generation, including contract provisions that permit
termination at least every five years, proportionality limitations when determining customer
contributions to annual revenue requirements, and valuable carbon -free attributes to help utilities
meet future regulatory requirements; and
WHEREAS, while it is anticipated the average annual cost will increase over time due to
inflation and other regulatory requirements placed on generating facilities, additional value will
likely be realized as the demand for carbon -free resources increases and efforts continue to
improve the operating efficiency of these generating resources; and
WHEREAS, the proposed contract provisions provide surety over the long term, and
importantly, termination provisions offer options to seek alternative resources if costs increase
and generation conditions deteriorate.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize
the City Manager to execute Contract 20 -SNR -02347 for Electric Service Base Resource with the
United States Department of Energy Western Area Power Administration Sierra Nevada Region;
and
BE IT FURTHER RESOLVED, pursuant to Section 6.3q of the City Council Protocol
Manual (Res. No. 2019-223), the City Attorney is hereby authorized to make minor revisions to
the above -referenced document(s) that do not alter the compensation or term, and to make
clerical corrections as necessary.
Dated: December 2, 2020
I hereby certify that Resolution No. 2020-288 was passed and adopted by the City Council
of the City of Lodi in a regular meeting held on December 2, 2020 by the following vote:
AYES: COUNCIL MEMBERS — Chandler, Nakanishi, and Mayor Kuehne
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Mounce
ABSTAIN: COUNCIL MEMBERS — None
'JENNIFER CUSMIR
City Clerk
2020-288