2003 AGN JAN 07 I10 - Laserfiche WebLink

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FROM: ECT: TE: ITEM #10 CITY OF COLTON AGENDA REPORT For the City Council Meeting of January 7, 2003 HONORABLE MAYOR AND CITY COUNCIL THOMAS K. CLARKE, ELECTRIC UTILITY DIRECTOrri�"" Approval of Changes in the SCE Transmission Service Agreements to Comply with ISO Protocols December 23, 2002 BACKGROUND: The City of Colton has six existing transmission contracts with SCE to bring the City's generation entitlement to serve our load. In 1997, the City and SCE entered into the Restructuring Agreement in order to facilitate both parties entry into the deregulation market created by AB 1890. DISCUSSION/ANALYSIS: The 1997 Colton-Edison Restructuring Agreement requires the City's transmission operation entitlement to be turned over to the ISO starting January 1, 2003. Pursuant to this agreement, the City has to enter into Transmission Service Agreements with SCE to conform to ISO scheduling and congestion protocol, as well as revenue requirements for transmission line that currently serves the City. At present, the City has decided not to become participating transmission owner. The City and SCE agreed to implement the Restructuring Agreement provisions in modified form to meet the ISO's scheduling and congestion management protocols starting January 1, 2003. The staff, along with other cities, negotiated the Transmission Service Agreements with the SCE. The City's special legal counsel in Washington, DC has also reviewed the Agreements. According to these agreements, the City will continue to have its existing transmission rights, but it will meet the scheduling and transmission loss requirements consistent with the ISO Tariff, which is applicable to all other entities. Further, the SCE transmission service rate will be changed based on the applicable ISO transmission service rate structure. ALTERNATIVES: Approval of these changes fulfills the commitment the City made in the Restructuring Agreement. Failure to follow through with this change will require further action at FERC to go through an unnecessary procedure. FISCAL IMPACT: The existing transmission rates from SCE will go up from about $400k to $620k per year with a total increase of about $220k. Any other changes in the SCE