HomeMy WebLinkAbout2010-06-22 - AGENDA REPORTS - ELECTRICITY PURCHASE (2)CONSENT CALENDAR
DATE:
SUBJECT:
DEPARTMENT:
Agenda Item:
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval
Item to be presented by:
June 22, 2010
Jon Bischetsrieder
AWARD A CONTRACT FOR THE PURCHASE OF
ELECTRICITY
Administrative Services
RECOMMENDED ACTION
1. City Council approve switching energy service providers from Southern California Edison
(SCE) to Glacial Energy of California, and award a contract for the purchase of electricity to
Glacial Energy in an amount not to exceed $225,000.
2. Authorize the City Manager or designee to modify the award in the event other issues of
impossibility of performance arise, execute up to three (3) annual renewal options not to
exceed $225,000 each, plus price changes authorized by the California Public Utilities
Commission (CPUC), contingent upon the appropriation of funds by the City Council in the
annual budget for such Fiscal Year, and execute all documents, subject to City Attorney
approval.
BACKGROUND
In the late 1990s, legislation was passed to deregulate the electric industry. Direct Access (DA)
service is an optional program that gives customers the choice of purchasing electricity directly
from an electric service provider (ESP) instead of from Southern California Edison (SCE). As a
result of the energy crisis of 2000-2001, customers' ability to switch to DA service was
suspended .by the California Legislature, effective September 2001.
On October 11, 2009, Governor Schwarzenegger signed Senate Bill (SB) 695 into law,
allowing for a partial re -opening of DA service. Under SB 695, all retail non-residential
customers in SCE's service area are permitted to switch to DA service starting in 2010, subject
to the following conditions:
POED
The California Public Utilities Commission (CPUC) is expected to adopt rules for the
partial DA re -opening and implement a reopening.schedule by April 2010 to phase in
new DA load over a period of three to five years.
For SCE's service area, SB 695 allows for an increase in DA load of approximately
4,000 gigawatt -hours (GWh) over existing DA load levels of approximately 7,700
GWh.
On Thursday, March 11, 2010, the California Public Utilities Commission (CPUC) issued a
Final Decision (D.10-03-022) that established the rules for implementation of the Partial
Reopening of Direct Access (DA) under Senate Bill (SB) 695. The Final Decision establishes
April 11, 2010 as the effective date for the Partial Reopening of DA and identifies the start of
the Open Enrollment Window (OEW) as April 16, 2010..
The new program for non-residential customers applies only to metered accounts. Staff reviewed
the accounts and selected three of the larger accounts upon which to test the ability of the new
program to save funds. The City obtained the assistance of Texzon to process the City's request.
CPUC rules required a notice of intent to be submitted, beginning April 16. Although SCE
reached its load limit on April 16, the City was notified on May 5 that our Notice of Intent (NOI)
was accepted. The notification established a due date of July. 8 to have our new service provider
submit the Direct Access Service Request.
City staff worked with Texzon to obtain rate quotes for our three service accounts. The rates
received were:
Glacial Energy of California
Commerce Energy
3Phases Renewable
$.0682 per kWh
$.0733 per kWh
$.08011 per kWh
The average cost per kWh from Southern California Edison to provide electricity for the
comparison year was $.07665. The rate quote from Glacial Energy of California provided the
most immediate savings potential based on historical usage. Glacial Energy of California is
approved by the CPUC as an energy service provider.
ALTERNATIVE ACTIONS
Other action as determined by the City Council.
FISCAL IMPACT
Staff expects annual savings in excess of $20,000.
-z-