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<br /> <br />ITEM NO. 1 <br />STAFF REPORT <br /> <br /> <br />DATE: MARCH 7, 2023 <br />TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS <br />FROM: BILL SMITH, CITY MANAGER <br />PREPARED BY: BRIAN DICKINSON, PUBLIC WORKS AND UTILITY SERVICES <br />DIRECTOR <br />SUBJECT: PRESENTATION ON IMPLEMENTATION OF A POWER COST <br />ADJUSTMENT (PCA) FOR THE ELECTRIC UTILITY - <br />INFORMATIONAL ITEM. <br />RECOMMENDED ACTION <br /> <br />Staff recommends that the City Council take the following action: <br /> <br />No Action – Informational Item Only. <br /> <br />BACKGROUND <br /> <br />The City of Colton has to purchase wholesale power supply through the California Independent <br />System Operator (CAISO), and natural gas supplies on the open market to supplement its <br />existing power purchase contracts to meet daily demands. <br /> <br />Colton’s cost of wholesale purchased power has increased 209.96% from October through <br />December, 2022, and wholesale Natural Gas prices have increased between 148.33% - 248.75% <br />during the same period. <br /> <br />ISSUES/ANALYSIS <br /> <br />The adopted budget for purchased power in the current fiscal year is $31,114,793. Given the <br />increased power cost expenses referenced above, the projected year-end expenses for such are <br />$52,575,564, resulting in a variance of $21,460,771. <br /> <br />The Department is deferring lower priority Capital Improvement Projects this Fiscal Year, <br />utilizing Reserve Funds, and is proposing to reduce the General Fund Transfer (GFT) by $2 <br />1 <br />Packet Pg. 7