HomeMy WebLinkAboutAgenda Report - February 20, 2001 B-01 SMt 4
CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: Adopt Resolution Authorizing the City Manager and the Electric Utility Director to Execute
Electric and Natural Gas Energy Purchase and Sale Agreements (EUD)
MEETING DATE: February 20, 2001
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council authorize the City Manager and the Electric Utility
Director to execute electric and natural gas energy purchase and sale
agreements for periods up to ten years.
BACKGROUND INFORMATION: At the January 30, 2001, City Council Meeting, the City Council authorized
the Northern California Power Agency (NCPA) to enter into long-term electric
and natural gas energy purchase and sale contracts on behalf of the City of
Lod i.
Continued volatility in the electric and natural gas markets coupled with recent defaults on the part of California
investor owned utilities have created an environment of credit uncertainty between counterparties to many energy
transactions. As a result, NCPA has been unable to enter into long-term energy transactions on behalf of the City.
Counterparties to potential transactions are now requiring direct City approval of all transactions.
In order to meet appropriate bid price deadlines, it is imperative that the City be in a position to authorize purchase and
sale transactions within the time frame allowed by the market participants — often less than 24 hours.
All reasonable attempts will be made by City staff to continue to bring term transactions before the Council where time
permits. When doing so would jeopardize a transaction deemed to be in the City's best interest, it is requested that
the City Manager or Electric Utility Director be authorized to approve energy purchase and sales transactions for a
period up to ten (10) years.
FUNDING: Through existing Bulk Power Purchases
Alan N. Vallow
Electric Utility Director
PREPARED BY: Jack Stone, Manager, Business Planning and Marketing
ANV/JS/1st
City Attorney
Finance Director
APPROVED: ;;p J6,
H. Dixon Flfhn - Ck Manager
RESOLUTION NO. 2001-34
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY
MANAGER AND ELECTRIC UTILITY DIRECTOR TO EXECUTE ELECTRIC
AND NATURAL GAS ENERGY PURCHASE AND SALE AGREEMENTS
WHEREAS, at the January 30, 2001 City Council meeting, the City Council authorized
the Northern California Power Agency (NCPA) to enter into long-term electric and natural gas
energy purchases and sale contracts on behalf of the City of Lodi; and
WHEREAS, continued volatility in the electric and natural gas markets coupled with
recent defaults on the part of California investor owned utilities have created an environment of
credit uncertainty between counterparties to many energy transactions; and
WHEREAS, as a result, NCPA has been unable to enter into long-term energy
transactions on behalf of the City. Counterparties to potential transactions are now requiring
direct City approval of all transactions; and
WHEREAS, in order to meet appropriate bid price deadlines, it is imperative that the
City be in a position to authorize purchase and sale transactions within the time frame allowed
by the market participants, which is often less than 24 hours; and
WHEREAS, all reasonable attempts will be made by City staff to continue to bring term
transactions before the Council where time permits; and
WHEREAS, when time is of the essence and a delay would jeopardize a transaction
deemed to be in the City's best interest, staff recommends that the City Council authorize the
City Manager or Electric Utility Director to approve energy purchase and sales transactions for
a period up to ten (10) years.
NOW, THEREFORE, BE IT RESOLVED, that the Lodi City Council hereby authorizes
the City Manager or Electric Utility Director to execute Electric and Natural Gas Energy
Purchase and Sale Agreements for periods up to ten years on behalf of the City of Lodi.
Dated: February 20, 2001
I hereby certify that Resolution No. 2001-34 was passed and adopted by the Lodi City
Council in a special meeting held February 20, 2001 by the following vote: Lodi.
AYES: COUNCIL MEMBERS — Hitchcock, Howard, Land and Mayor Nakanishi
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — Pennino
SUSAN J. BLASTON
City Clerk
2001-34