HomeMy WebLinkAboutResolutions - No. 2020-82RESOLUTION NO. 2020-82
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING THE REVISED
LODI ELECTRIC UTILITY GREENHOUSE GAS FREE ALLOWANCE
PROCEEDS SPENDING PLAN; AUTHORIZING ONE-TIME BILL CREDITS
TO LODI ELECTRIC UTILITY CUSTOMER ACCOUNTS; AND
AUTHORIZING THE CITY MANAGER OR DESIGNEE TO COMPLETE ALL
NECESSARY ACCOUNTING ADJUSTMENTS AND/OR TRANSFERS
WHEREAS, on March 16, 2020, the City of Lodi declared a state of emergency in
response to the global health crisis and pandemic brought on by COVID-19 (Coronavirus); and
WHEREAS, stay at home orders were issued by the State of California and San Joaquin
County outlining directives for non-essential services and activities in an effort to slow the
spread of the disease; and
WHEREAS, this global pandemic and the resulting response to slow the spread of the
disease has impacted both residents and businesses throughout the Lodi community; and
WHEREAS, to respond to the unprecedented financial strain on our rate payers,
Lodi Electric Utility (LEU) is proposing to use funds not otherwise available to fund day-to-day
operating costs of the utility to help mitigate financial hardships likely being realized by LEU
customers via a one-time bill credit; and
WHEREAS, Public Utilities Code, Section 385 requires Public Benefits (PB) charges
collected from ratepayers to fund investments in certain activities including energy efficiency,
low-income assistance, renewable energy investments, and research and development; and
WHEREAS, Cap & Trade Regulations
consignment of freely allocated allowances, to
form of a fixed bill credit; and
allows for the return of proceeds, from the
customers in a non -volumetric manner in the
WHEREAS, in order to provide this Cap & Trade credit, a minor update to the LEU
Greenhouse Gas (GHG) Free Allowance Proceeds Spending Plan most recently approved by
Resolution 2019-138 is required, as included in Exhibit A attached hereto; and
WHEREAS, one-time bill credits will help mitigate costs incurred by ratepayers as a
result of State renewable energy mandates' as well as provide a kick-start to customers
interested in saving money by reducing energy costs with the installation and/or implementation
of energy efficient measures; and
WHEREAS, the total sum of the credits will depend on the actual number of accounts
credited but is estimated to total approximately $3 million to be equally allocated between LEU's
PB Fund 504 and GHG Fund 508; and
WHEREAS, LEU currently has sufficient funding available in both the PB and GHG
Funds for this one-time credit.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve
the Revised Lodi Electric Utility Greenhouse Gas Free Allowance Proceeds Spending Plan
dated April 2020; and
I As authorized by CCR Title 17, Division 3, Chapter 1, Subchapter 10, Article 5, Section 95892(d)(3)(D)
BE IT FURTHER RESOLVED that the Lodi City Council does hereby authorize one-time
bill credits to LEU customer accounts as follows to be equally funded by LEU Public Benefits
Fund 504 and Greenhouse Gas Fund 508; and
• $55 for residential
• $105 for small commercial (G1)
• $235 for city (ES)
• $1,945 for medium commercial (G2)
• $11,325 for small industrial (G3)
• $15,240 for medium industrial (G4)
• $22,555 for large industrial (G5)
• $36,150 for large industrial (primary metered) (11)
BE IT FURTHER RESOLVED that the Lodi City Council does hereby authorize the City
Manager or his designee to complete all necessary accounting adjustments and/or transfers.
Dated: April 29, 2020
I hereby certify that Resolution No. 2020-82 was passed and adopted by the City
Council of the City of Lodi in a special meeting held April 29, 2020, by the following vote:
AYES: COUNCIL MEMBERS — Chandler, Mounce, Nakanishi, and Mayor Kuehne
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
PAMELA M. FARRIS
Assistant City Clerk
2020-82
Exhibit A
LODI ELECTRIC UTILITY
GREENHOUSE GAS FREE ALLOWANCE PROCEEDS
SPENDING PLAN
April 2020
BACKGROUND
The Global Warming 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 original AB 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 receipt 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. In 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. Investments 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. Investments 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.
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.'
7. Non -volumetric return of proceeds to electric retail ratepayers.
8. 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.
' 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.
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