AR 050206 Resource Adequacy Policy

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF MAY 02, 2006 TO: HONORABLE MAYOR AND COUNCIL MEMBERS FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: Approval of Resolution No. 06 -XXX, Resource Adequacy Program DATE: April 20, 2006 BACKGROUND: Resource Adequacy (RA) is a mandatory planning and procurement process to ensure adequate resources to serve all customers. The program as proposed by the California ISO (CAISO) requires that Load Serving Entities (LSEs) meet a planning Reserve Margin for their obligation to serve their customers. The program provides deliverability criteria that each LSE must meet. Rules are provided for counting resources towards meeting those obligations. Those resources that are counted on must make themselves available to the CAISO for the capacity on which they were counted. The ISO's Reliability Requirements Program is intended to compliment the State's efforts to implement Resource Adequacy programs. DISC USSION/ANALYSIS: To comply with the CAISO Market Redesign and Technology Update Tariff regarding Resource Adequacy, the cities of Anaheim, Azusa, Banning, Colton, Riverside, and Pasadena developed in conjunction with Thompson Coburn a Resource Adequacy Program. This Resource Adequacy Program identifies the Electric Utility as the responsible party for the development of Resource Adequacy Plans that will guide the purchase of capacity resources that are adequate to serve the utility's customers. These Plans will be prepared each year for the following year, and will identify capacity resources owned or contracted for that will total 115% of the City's forecasted monthly peak loads for October through April, and 103.5% of the City's forecasted monthly peak load for May through September. The Electric Utility will present this annual plan to both the Utilities Commission and the City Council by September 1 each year, and will forward the plan to the CAISO by September 30 each year. In addition, the utility will prepare a monthly plan for capacity, energy, and demand. The utility must report to the City Council, the Utilities Commission, and the CAISO any failure to comply with the requirements of the program. The Utilities Commission recommended approval of the policy at the April 24, 2006 commission meeting. FINANCIAL IMPACT: None. ENVIRONMENTAL IMPACT: None.