2003 AGN JUN 03 I10 - Laserfiche WebLink

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Item #10 CITY OF COLTON AGENDA REPORT For the City Council Meeting of June 3, 2003 TO: HONORABLE MAYOR AND CITY COUNCIL APPROVAL: DARYL PARRISH, CITY MANAGER FROM: THOMAS K. CLARKE, UTILITY DIRECTOR SUBJECT: Approval to Enter into Contracts with PPM Energy, Inc., for the Purchase of One Megawatt Firm Wind Powered Electrical Energy DATE: May 26, 2003 BACKGROUND: On January 1, 2003, Senate Bill 1078 became law and requires local publicly owned utilities to establish and implement a Renewable Portfolio Standard (RPS) that recognizes the intent of the Legislature to encourage renewable resources, while taking into consideration the effect on rates, reliability, financial resources, and the goal of environmental improvement. The law also requires that each local publicly owned utility report to its customers, on an annual basis, the fuel mix used to serve its customers and the expenditure of public goods funds for renewable resources. The public policy goal of the law is "...to increase the use of renewable energy sources within California to 20 percent and to improve the diversity, reliability, public health and environmental benefits of the energy mix." After establishing a current baseline, Investor Owned Utilities (IOUs) are generally required to procure additional renewable resources at 1°/a per year until the resource mix reaches 20% renewable, within specified spending limits. The IOUs deadline for meeting the 20% requirement is December 31, 2017. Municipalities are required to adopt and enforce a RPS standard and report annually to their customers regarding the use of renewable energy within their service territory. The City of Colton RPS calls for the addition of renewable resources to meet a portion of City's electric energy needs. DISC USSION/ANALYSIS: In February 2002, the Southern California Public Power Authority (SCPPA) issued a request for proposals for renewable energy projects on behalf of its members, including City of Colton. A proposal from PPM, a wholly owned subsidiary of PacifiCorp Holdings, Inc., and Scottish Power, attracted several SCPPA members and was able to achieve the necessary minimum subscription to go forward. This energy can be relied upon during summer months and scheduled on a firm basis thus reducing hourly scheduling burden and price risk associated with deviations between amounts actually generated versus those scheduled.