2002 AGN JUL 02 I17 - Laserfiche WebLink

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Item #17 CITY OF COLTON AGENDA REPORT For the City Council Meeting of July 2, 2002 TO: HONORABLE MAYOR AND CITY COUNCIL APPROVAL: DARYL PARRISH, CITY MANAGER FROM: THOMAS K. CLARKE, UTILITY DIRECTOR SUBJECT: Settlement of Complaint Against California Independent System Operator DATE: June 26, 2002 BACKGROUND: In September 2000, City of Colton along with Azusa, Banning, Riverside, and Anaheim filed a complaint at the FERC against California Independent System Operator (CISO) concerning charges improperly charged to the City. These costs were incurred by the CISO for the period from November 14, 2000 to December 12, 2000 to buy energy in real- time to meet the shortfalls due to under scheduling the resources by the investor own utilities (IOUs). DISCUSSION/ANALYSIS: During the period covered in the complaint, CISO allocated these costs to all loads, including the cities, regardless of whether they were responsible for the shortfalls or not. Starting from December 12, 2000, CISO began allocating these costs to those who were responsible for the shortfalls. The proposed Settlement Agreement, if accepted by FERC, would provide a refund to the City of Colton of about $219,000 which would be 50% of our claim for the period from November 14, 2000 to December 12, 2000. The litigation could lower the amount of settlement due to the FERC proceeding addressing possible refunds for sale made to the CAISO and California Power Exchange. Further, PG&E will likely seek to use its bankruptcy status to avoid paying its share of any refunds. ALTERNATIVES: The City may continue to litigate the case which would take a couple of years and involve additional costs to pursue. FISCAL IMPACT: There is no impact on the budget