2001 CC/CUA REG MIN Jan 02 - Laserfiche WebLink

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Director Clarke declared the deregulation problem was complex because it was a state problem that had federal intervention. He indicated that the "Mums," such as the Colton Electric Utility, maintained their vertical organization because of the following components: Colton Muni maintained the generation it owned: 30 MW of San Juan 3 MW of Palo Verde 3 MW of Hoover 5 MW of Idaho power contract 18 MW Pasadena contract Colton Muni had its own transmission. Colton Muni had its customer service. Colton Muni had its own maintenance department. Director Clarke said that the Colton utility was still a vertically integrated organization; however, he noted that as the City grew there would be a dependence on outside power. Pointing to peak usage during the summer months, Director Clarke cautioned that, unless it developed new supplies and developed its own generation or reduced its load, the City would have to go out on the open market and buy power. He stated that the City utility was buying futures to cover shortages. After discussion, Utility Director Clarke responded that the City of Colton would not be impacted by the proposed increase in electric rates. While AB1890 allowed five years for Munis to become the same type of entity, Director Clarke believed it would not happen because of existing conditions. He predicted there would be "reregulation of the deregulated market" before the conditions of AB1890 are invoked. Director Clarke tentatively agreed that rates would be stable for the next year, unless the summer months wreak havoc. He listed the following major projects that are identified as heavy users of electricity: Taormina recycling center; expansion of Conagra; Star Milling; expansion of Telco and possible business with Big League Dreams. Realizing that the Idaho contract and Pasadena contract will end in three years, Director Clarke informed that the department is negotiating to purchase power contracts. Upon inquiry, Director Clarke confirmed that the Staff was pursuing the idea of becoming a provider for natural gas. He provided information on conservation; seeking amendment to AB1890; future planning regarding build -out; public education through public benefit program; and the contract with Alliance Power. Utility Director Clarke, Assistant Electric Utility Director Tim Trewyn and Electric Engineer Manager Nitin Modi were commended for the job done in protecting the City. CITY MANAGER'S REPORTS AND RECOMMENDATIONS: r-1' None. City Council Mins Jan 2, 2001 4