Resolution No. 100451
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RESOLUTION NO. 10,045
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND ADOPTING AMENDMENTS TO NATURAL
GAS RATE SCHEDULES AND RULES FOR GAS SERVICE FOR
GAS DISTRIBUTED AND SUPPLIED BY THE CITY WITHIN ITS
BOUNDARIES
WHEREAS, the City Council of the City of Vernon(the "City
Council") adopted Ordinance No. 1122 on September 5,'2006, providing
that rates to be charged for.natural gas distributed and supplied by
the City within its boundaries shall be set by resolution; and
WHEREAS, from time to time the City Council has by resolution
established and amended certain rate schedules, rules for _gas service
and form agreements for natural gas users in the.City; and
WHEREAS, the City of Vernon (the "City") is currently
purchasing natural gas transmission service from the Southern
California Gas Company ("SoCalGas") under Wholesale Natural Gas Service
Rate Schedule No. GW-VRN permitted by the California Public Utilities
Commission in Docket Nos. 00-04-060, 05-12-044 and 01-12-018; and
WHEREAS, the City desires to attract more small commercial
customers to the City's gas system by reducing the City's natural gas
transportation rate contained in Rate Schedule G-2; and
WHEREAS, with the introduction of bond -financed, prepay gas
in the monthly supply portfolio, the "Commodity Charge" definition
contained in Rule No. 1 of Rules for Gas Service requires updating; and
WHEREAS, the Director of Light & Power has recommended that
gas tariffs and rules be amended effective September 1, 2009, to reduce
the transportation rate for small commercial customers to attract more
customers to the gas system, to change the methodology for the
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(connection cost allowance such that connection allowances are allocated)
more equitably across customer classes, to recognize bond -financed,
prepay gas flowing to retail gas customers, and to modify the
definition of "Commodity Charge;" and
WHEREAS, the City Council of the City of Vernon held a public
hearing on August 24, 2009, to amend Rate Schedule Nos. G-1, G-2, G-3,
G-4 and G-5 and amend Rule Nos. 1 and 14 of the Rules for Gas Service
in accordance with the recommendations of the Director of Light & Power
and finds that all persons have had the opportunity to be heard or to
file written comments to the proposed amendments; and
WHEREAS, the City Council has heard and considered all
evidence, both written and oral, presented in consideration of the
proposed amended Rate Schedule Nos. G-1, G-2, G-3, G-4 and G-5 and
amended Rule Nos. 1 and 14 of the Rules for Gas Service; and
WHEREAS, the City Council of the City of Vernon desires to
amend Rate Schedule Nos. G-1, G-2, G-3, G-4 and G-5 and amend Rule Nos.
1 and 14 of the Rules for Gas Service to implement the recommendations
of the Director of Light & Power.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS.FOLLOWS:
SECTION 1: The City.Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the rates, terms and conditions set forth in amended Rate
Schedule Nos. G-1, G-2, G-3, G-4 and G-5 as the City's rates, terms
and conditions for the distribution of natural gas supplied by the
City of Vernon, copies of which are attached hereto as Exhibit A and
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incorporated by reference, and adopts such amendments to go into
effect beginning September 1, 2009.
SECTION 3: The City Council of the City of Vernon hereby
approves amended Rule Nos. 1 and 14 of the Rules for Gas Service, a
copy of which is attached hereto as Exhibit B and incorporated by
reference, and adopts such amendments to go into effect beginning
September 1, 2009.
SECTION 4: Any provision contained in Resolution Nos. 9134,
9240, 9265, 9344, 9374, 9550 and 9732 not consistent with or in
conflict with this Resolution are hereby repealed. In all other
respects, Resolution Nos. 9134, 9240, 9265, 9344, 9374, 9550 and 9732
shall remain in full force and effect.
SECTION 5: The City Clerk of the City of Vernon shall
certify to the passage, approval and adoption of this resolution, and
the City Clerk of the City of Vernon shall cause this resolution and
her certification to be entered in the Book of Resolutions of the
Council of this City.
APPROVED AND ADOPTED this 24th day of August, 2009.
ATTEST:
UELA GIRON, City Clerk
Name: Hilario Gonzales
Title: Mayor / I'll a-ez- ICe
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STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 10,045, was
duly passed, approved and adopted by the City Council of the City of
Vernon at a regular meeting of the City Council duly held on Monday,
August 24, 2009, and thereafter was duly signed by the Mayor or Mayor
Pro-Tem of the City of Vernon.
Executed this day of August, 2009, at Vernon, California.
MANUELA GIRON, Ci y Clerk
(SEAL)
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EXHIBIT A
CITY OF VERNON
NATURAL GAS DEPARTMENT
Schedule G-1
RESIDENTIAL GAS SERVICE
APPLICABILITY
This schedule applies to natural gas service to individually metered single family premises, including
those separately metered in a multi -family complex, that have elected natural gas service from City of
Vernon's natural gas distribution system.
RATES
Monthly Service Charge:
Transportation Charge:
$10
24.548 Cents per Therm
Commodity Charge: Commodity Charge is equal to the City's Weighted Average Cost of Gas
calculated at the SoCalGas Citygate for gas purchased by the City for each
month for customers purchasing gas from the City. Gas supply will
consist of monthly index price gas, daily market priced gas, and long-term
supply purchased for customers purchasing gas from the City. The
Commodity Charge includes the cost of transporting the gas to the
SoCalGas Citygate. Bond -financed, prepaid gas may be provided to
customers at prices not to exceed market prices for monthly index price
gas. From time -to -time, the Commodity Charge may include a Purchased
Gas Adjustment that will be used maintain a zero sum gain to COV for gas
sales.
Commodity Administrative Fee: 0.300 Cents per Therm
SPECIAL NOTES
1. Residential customers receiving natural gas service from the City of Vernon are not eligible for
Schedule G-CARE (SoCalGas Rate), or any other SoCalGas rates or SoCalGas benefit programs.
2. Costs for connection of Customer's facility to City's gas system shall be shared between
Customer and City. City shall contribute an amount equal to four cents per Therm
multiplied by customer's projected annual usage, not to exceed fifty percent of the total
connection cost incurred for work done by the City. Customer shall pay the balance of
costs. The total connection cost includes traffic control, trenching, piping, repaving, and
Page 1 of 2
City of Vernon Council Resolution , effective
installation of the meter, regulator(s), and other equipment required by the City. An
"Application and Contract for Natural Gas Service" is required.
3. In the event of curtailment, any Customer unable or unwilling to curtail shall be assessed
penalty based on the rate per Therm that SoCalGas would charge customers whose volumes used
are in violation of curtailment. The City shall not be liable for damages caused by curtailment,
discontinuance, or shut off of gas service.
4. Gas purchased under this schedule shall be used only by the Customer and such Gas may not be
sold, transported, assigned, distributed, exchanged, or otherwise transferred to benefit another
customer or provide non -municipal natural gas to any natural gas user, transporter, or consumer
within the City.
5. Any additional transmission costs, taxes, fees, regulatory surcharges, and interstate or intrastate
pipeline charges, incurred by City on behalf of Customer will be passed through to Customer at
cost.
Page 2 of 2
City of Vernon Council Resolution , effective
CITY OF VERNON
NATURAL GAS DEPARTMENT
Schedule G-2
SMALL COMMERCIAL GAS SERVICE
APPLICABILITY
This schedule is for combined gas commodity and transportation service to small commercial customers
using less than 250,000 Therms per year that have elected gas service through City of Vernon's natural
gas system. This schedule is also applicable to all other non-residential customers that have elected
Core Service.
RATES
Monthly Service Charge: $50
Monthly Transportation Charges: Rate, in Cents per Therm
Tier I 0 — 4,187 Therms 14.548
Tier II Over 4,187 Therms 6.500
Commodity Charge: Commodity Charge is equal to the City's Weighted Average Cost of Gas
calculated at the SoCalGas Citygate for gas purchased by the City for each
month for customers purchasing gas from the City. Gas supply will
consist of monthly index price gas, daily market priced gas, and long-term
supply purchased for customers purchasing gas from the City. The
Commodity Charge includes the cost of transporting the gas to the
SoCalGas Citygate. Bond -financed, prepaid gas may be provided to
customers at prices not to exceed market prices for monthly index price
gas. From time -to -time, the Commodity Charge may include a Purchased
Gas Adjustment that will be used to maintain a zero sum gain to COV for
gas sales.
Commodity Administrative Fee: 0.30 Cents per Therm
Pagel of 2
City of Vernon Council Resolution , effective
SPECIAL NOTES
1. Customers purchasing Gas Commodity from City of Vernon shall provide an estimate of each
month's consumption, days of operation, and a facility contact responsible for natural gas
consuming equipment.
2. Costs for connection of Customer's facility to City's gas system shall be shared between
Customer and City. City shall .contribute an amount equal to four cents per Therm
multiplied by customer's projected annual usage; not to exceed fifty percent of the total
connection cost incurred for work done by the City. Customer shall pay the balance of
costs. The total connection cost includes traffic control, trenching, piping, repaving, and
installation of the meter, regulator(s), and other equipment required by the City. An
"Application and Contract for Natural Gas Service" is required.
3. In the event of curtailment, any Customer unable or unwilling to curtail shall be assessed
penalty based on the rate per Therm that SoCalGas would charge customers whose volumes
used are in violation of curtailment. The City shall not be liable for damages caused by
curtailment, discontinuance, or shut off of gas service.
4. Gas purchased under this schedule shall be used only by the Customer and such Gas may not be
sold, transported, assigned, distributed, exchanged, or otherwise transferred to benefit another
customer or provide non -municipal natural gas to any natural gas user, transporter, or consumer
within the City.
5. Any additional transmission costs, taxes, fees, regulatory surcharges, and interstate or intrastate
pipeline charges, incurred by City on behalf of Customer will be passed through to Customer at
cost.
Page 2 of 2
City of Vernon Council Resolution , effective
CITY OF VERNON
NATURAL GAS DEPARTMENT
Schedule G-3
LARGE COMMERCIAL GAS TRANSPORTATION
APPLICABILITY
This schedule is for City of Vernon gas transportation service to large commercial customers
using at least 250,000 Therms per year. Customers receiving service under this schedule may
purchase commodity gas from a Third -Party Supplier or may request to purchase commodity gas
from City of Vernon under Schedule G-4.
RATES
Monthly Customer Charge: $300
Monthly Transportation Charges: Rate, in Cents per Therm
Tier I 0 — 20,833 Therms 11.609
Tier 11 20,834 — 83,333 Therms 5.388
Tier III Over 83,333 Therms 4.020
SPECIAL CONDITIONS, GENERAL. The following Special Condition is applicable to all
customers, whether they receive transportation -only service or both transportation and
commodity service.
1. Costs for connection of Customer's facility to City's gas system shall be shared
between Customer and City. City shall contribute an amount equal to four cents
per Therm multiplied by customer's projected annual usage, not to exceed fifty
percent of the total connection cost incurred for work done by the City. Customer
shall pay the balance of costs. The total connection cost includes traffic control,
trenching, piping, repaving, and installation of the meter, regulator(s), and other
equipment required by the City. An "Application and Contract for Natural Gas
Service is required.
SPECIAL CONDITIONS, TRANSPORTATION -ONLY SERVICE. The following Special
Conditions are applicable to customers that receive transportation -only service. If customers
receive commodity service from COV, the following Special Conditions do not apply and the
Special Conditions in Schedule G-4 apply.
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City of Vernon Council Resolution effective
1. As a condition precedent to service under this schedule, a "Natural Gas Transportation
Agreement" must be executed with City. The Transportation Agreement shall provide
specific terms and conditions consistent with this schedule.
2. Transportation of natural gas shall be consistent with SoCalGas Rule No. 30,
"Transportation of Customer -Owned Gas," except where it conflicts with Vernon's rates
and rules.
3. Nomination procedures shall apply to gas transported and delivered to Customer by
Vernon as follows.
(a) All nominations shall be communicated to Vernon (or its designated agent) thirty
(30) minutes prior to SoCalGas' deadlines. Communication shall be confirmed by email
or facsimile.
(b) All determinations by Vernon as to allocation points and/or maximum daily
quantities related thereto or as to the procedures utilized for any allocation process, when
made'by Vernon, shall be final.
(c) In the event of a declared Over -Nomination Event by SoCalGas, if any Customer is
unable or unwilling to reduce its transportation nomination within the two (2) hour
window allotted by SoCalGas and Customer's nominations exceed 110% of its gas usage,
Customer may, at Vernon's sole discretion, be assessed a charge based on the rate per
Therm that SoCalGas would charge customers whose nomination exceed 110%.
(d) Winter Deliveries. During November through March, any Customer unable or
unwilling to nominate and deliver volumes meeting the minimum requirement as
specified by SoCalGas in its current applicable Rule 30, may, at Vernon's sole discretion,
be assessed a charge based on the rate per Therm that SoCalGas would charge customers
whose nomination and delivery fails to meet the minimum requirement as specified by
SoCalGas in its current applicable Rule 30.
4. In the event of curtailment, any Customer unable or unwilling to curtail shall be assessed
penalty based on the rate per Therm that SoCalGas would charge customers whose
volumes used are in violation of curtailment. The City shall not be liable for damages
caused by curtailment, discontinuance, or -shut off of gas service.
5. Monthly imbalances shall be resolved as follows.
(a) Over -Deliveries. Vernon shall permit Customer to carry-over, to the following
month, over -delivery volumes of up to 10% of Customer's consumption for the month in
which the over -delivery occurred. Any Customer volumes carried over will be applied
first to the following month's consumption. Any volumes of over -deliveries in excess of
10% of Customer's consumption shall be purchased by Vernon by crediting to the
Customer an amount that is not less than the volume of over -deliveries times the
Page 2 of 3
City of Vernon Council Resolution , effective
SoCalGas Buy -Back Rate in SoCalGas Schedule G-IMB for the month in which the
excess imbalance was incurred.
(b) Under -Deliveries. Vernon shall permit Customer to carry-over, to the following
month, under -delivery volumes of up to 10% of Customer's consumption for the month
in which the under -delivery occurred. Any volumes of under -deliveries up to 10% of
Customer's consumption shall be applied to the following month's consumption. Any
volumes of under -deliveries in excess of 10% of Customer's consumption shall be sold to
Customer by Vernon at a rate that is not more than the volume of under -deliveries times
the SoCalGas Standby Procurement Charge in SoCalGas Schedule G-IMB for the month
in which the excess imbalance was incurred.
(c) Imbalance Trading. Vernon has no program for trading of monthly imbalances
amongst Vernon customers; however, Vernon, or Vernon's gas management agent, may;
at its sole discretion, be willing to facilitate imbalance trading through SoCalGas
consistent with Schedule G-IMB. As such, Vernon, specifically does not imply an
obligation to facilitate imbalance trading.
(d) Stricter Provisions. Should SoCalGas impose additional, more restrictive, balancing
provisions upon Vernon, the stricter provisions will be adopted and implemented by
Vernon, as required by SoCalGas, and thereafter will apply to Customer. Such more
restrictive balancing conditions may include the winter balancing rules contained in
SoCalGas Rule 30. Customer shall be subject to changed balancing requirements at the
time such balancing is imposed by SoCalGas upon Vernon, irrespective of prior written
notice to Customer; however, Vernon will attempt to provide advance written notice to
Customer.
6. Gas transported under this schedule shall be used only by the Customer and such Gas
may not be sold, transported, assigned, distributed, exchanged, or otherwise transferred to
benefit another customer or provide non -municipal natural gas to any natural gas user,
transporter, or consumer within the City.
7. Any additional transmission costs, taxes, fees, regulatory surcharges, and interstate or
intrastate pipeline charges, incurred by City on behalf of Customer will be passed through
to Customer at cost.
Page 3 of 3
City of Vernon Council Resolution , effective
CITY OF VERNON
NATURAL GAS DEPARTMENT
Schedule G-4
LARGE COMMERCIAL GAS COMMODITY
APPLICABILITY
This schedule is for gas, commodity service to large customers receiving transportation service under
Schedules G-3 or G-5 through City of Vernon's natural gas system.
RATES
Commodity prices hereunder are in addition to rates pursuant to Schedules G-3 or G-5.
Commodity Charge: Commodity Charge is equal to the City's Weighted Average Cost of Gas calculated
at the SoCalGas Citygate for gas purchased by the City for each month for
customers purchasing gas from the City. Gas supply will consist mainly of index
price gas, daily market priced gas, and long-term supply purchased for customers
purchasing gas from the City.- The Commodity Charge includes the cost of
transporting the gas to the SoCalGas Citygate. Bond -financed, prepaid gas may be
provided to customers at prices not to exceed market prices for monthly index price
gas. From time -to -time, the Commodity Charge may include a Purchased Gas
Adjustment that will be used to maintain a zero sum gain to COV for gas sales. The
Commodity Administrative Fee shall also be added.
Customized Price: Customers eligible for this Rate Schedule G-4 shall also have the option to
Option: request mutually agreeable fixed prices, indexed prices, and other customized
pricing options for specific months and quantities (Customized Price Gas).
Customized prices shall be passed through at COV's cost from its supplier(s), plus
the Commodity Administrative Fee.
Commodity Administrative Fee: 0.30 cents per Therm
SPECIAL CONDITIONS
1. As a condition precedent for a large commercial gas commodity service, a "Natural Gas
Commodity Agreement" must be executed between COV and Customer. This agreement shall
provide specific terms and conditions consistent with COV's natural gas tariff.
Pagel of 2
City of Vernon Council Resolution , effective _,
2. Customers purchasing gas commodity from City of Vernon shall provide an estimate of each
month's consumption, days of operation, and a facility contact responsible for natural gas
consuming equipment.
3. Gas purchased under this schedule shall be used only by the Customer and such Gas may not be
sold, transported, assigned, distributed, exchanged, or otherwise transferred to benefit another
customer or provide non -municipal natural gas to any natural gas user, transporter, or consumer
within COV.
Page 2 of 2
City of Vernon Council Resolution , effective
CITY OF VERNON
NATURAL GAS DEPARTMENT
Schedule G-5
ELECTRIC GENERATION GAS TRANSPORTATION
APPLICABILITY
This schedule is for City of Vernon gas transportation service to electric generation customers
using at least 36,500,000 Therms per year (100,000 Therms per day). Customers receiving
service under this schedule may purchase commodity gas from a Third -Party Supplier or may
request to purchase commodity gas from City of Vernon pursuant to Schedule G-4.
RATES
Monthly Customer Charge: $700
Monthly Transportation Charges: 3.574 Cents per Therm
SPECIAL CONDITIONS, GENERAL. The following Special Condition is applicable to all
customers, whether they receive transportation -only service or both transportation and
commodity service.
1. Costs for connection of Customer's facility to City's gas system shall be shared
between Customer and City. City shall contribute and amount equal to four cents
per Therm multiplied by customer's projected annual usage, not to exceed fifty
percent of the total connection cost incurred for work done by the City. Customer
shall pay the balance of costs. The total connection cost includes traffic control,
trenching, piping, repaving, and installation of the meter, regulator(s), and other
equipment required by the City. An "Application and Contract for Natural Gas
Service" is required.
SPECIAL CONDITIONS, TRANSPORTATION -ONLY SERVICE. The following Special
Conditions are applicable to customers that receive transportation -only service. If customers
receive commodity service from COV, the following Special Conditions do not apply and the
Special Conditions in Schedule G-4 apply.
Page 1 of 3
City of Vernon Council Resolution , effective
1. As a condition precedent to service under this schedule, a "Natural Gas Transportation
Agreement" must be executed with City. The Transportation Agreement shall provide
specific terms and conditions consistent with this schedule.
2. Transportation of natural gas shall be consistent with SoCalGas Rule No. 30,
"Transportation of Customer -Owned Gas," except where it conflicts with Vernon's rates
and rules.
3. Nomination procedures shall apply to gas transported and delivered to Customer by
Vernon as follows.
(a) All nominations shall be communicated to Vernon (or its designated agent) thirty
(30) minutes prior to SoCalGas' deadlines. Communication shall be confirmed by email
or facsimile.
(b) All determinations by Vernon as to allocation points and/or maximum daily
quantities related thereto or as to the procedures utilized for any allocation process, when
made by Vernon, shall be final.
(c) In the event of a declared Over -Nomination Event by SoCalGas, if any Customer is
unable or unwilling to reduce its transportation nomination within the two (2) hour
window allotted by SoCalGas and Customer's nominations exceed 110% of its gas usage,
Customer may, at Vernon's sole discretion, be assessed a charge based on the rate per
Therm that SoCalGas would charge customers whose nomination exceed 110%.
(d) Winter Deliveries. During November through March, any Customer unable or
unwilling to nominate and deliver volumes meeting the minimum requirement as
specified by SoCalGas in its current applicable Rule 30, may, at Vernon's sole discretion,
be assessed a charge based on the rate per Therm that SoCalGas would charge customers
whose nomination and delivery fails to meet the minimum requirement as specified by
SoCalGas in its current applicable Rule 30.
4. In the event of curtailment, any Customer unable or unwilling to curtail shall be assessed
penalty based on the rate per Therm that SoCalGas would charge customers whose
volumes used are in violation of curtailment. The City shall not be liable for damages
caused by curtailment, discontinuance, or shut off of gas service.
5. Monthly imbalances shall be resolved as follows.
(a) Over -Deliveries. Vernon shall permit Customer to carry-over, to the following
month, over -delivery volumes of up to 10% of Customer's consumption for the month in
which the over -delivery occurred. Any Customer volumes carried over will be applied
first to the following month's consumption. Any volumes of over -deliveries in excess of
10% of Customer's consumption shall be purchased by Vernon by crediting to the
Page 2 of 3
City of Vernon Council Resolution , effective_
Customer an amount that is not less than the volume of over -deliveries times the
SoCalGas Buy -Back Rate in SoCalGas Schedule G-IMB for the month in which the
excess imbalance was incurred.
(b) Under -Deliveries. Vernon shall permit Customer to carry-over, to the following
month, under -delivery volumes of up to 10% of Customer's consumption for the month
in which the under -delivery occurred. Any volumes of under -deliveries up to 10% of
Customer's consumption shall be applied to the following month's consumption. Any
volumes of under -deliveries in excess of 10% of Customer's consumption shall be sold to
Customer by Vernon at a rate that is not more than the volume of under -deliveries times
the SoCalGas Standby Procurement Charge in SoCalGas Schedule G-IMB for the month
in which the excess imbalance was incurred.
(c) Imbalance Trading. Vernon has no program for trading of monthly imbalances
amongst Vernon customers; however, Vernon, or Vernon's gas management agent, may,
at its sole discretion, be willing to facilitate imbalance trading through SoCalGas
consistent with Schedule G-IMB. As such, Vernon specifically does not imply an
obligation to facilitate imbalance trading.
(d) Stricter Provisions. Should SoCalGas impose additional, more restrictive, balancing
provisions upon Vernon, the stricter provisions will be adopted and implemented by
Vernon, as required by SoCalGas, and thereafter will apply to Customer. Such more
restrictive balancing conditions may include the winter balancing rules contained in
SoCalGas Rule 30. Customer shall be subject to changed balancing requirements at the
time such balancing is imposed by SoCalGas upon Vernon, irrespective of prior written
notice to Customer; however, Vernon will attempt to provide advance written notice to
Customer.
6. Gas transported under this schedule shall be used only by the Customer and such Gas
may not be sold, transported, assigned, distributed, exchanged, or otherwise transferred to
benefit another customer or provide non -municipal natural gas to any natural gas user,
transporter, or consumer within the City.
7. Any additional transmission costs, taxes, fees, regulatory surcharges, and interstate or
intrastate pipeline charges, incurred by City on behalf of Customer will be passed through
to Customer at cost.
Page 3 of 3
City of Vernon Council Resolution , effective
EXHIBIT B
Rule No. 1.
For the purpose of these Rules the terms and expressions listed below shall have the meanings
set forth opposite them when initially capitalized in the text.
Agent Marketer (Agent): Agents are individuals, companies, or consortiums that are appointed
by noncore customers to act on their behalf in activities such as the purchasing, nominating and
balancing of gas supplies. As an example, however, Agents bear no financial responsibility for
the transportation imbalances incurred by the customers they represent.
British Thermal Unit (Btu1. The standard unit for measuring a quantity of thermal energy. One
Btu equals the amount of thermal energy required to raise the temperature of one pound of water
one degree Fahrenheit and is exactly defined as equal to 1,055.05585262 joule, rounded to
1,055.056 joule. (A joule is equal to one watt -second.)
Commodity Administrative Fee: Fee charged to customers who procure supply directly from
COV to cover gas purchasing expenses.
Commodity Charge: Commodity Charge is equal to the City's Weighted Average Cost of Gas
calculated at the SoCalGas Citygate for gas purchased by the City for each month for customers
purchasing gas from the City. Gas supply will consist of monthly index price gas, daily market
priced gas, and long-term supply purchased for customers purchasing gas from the City. The
Commodity Charge includes the cost of transporting the gas to the SoCalGas Citygate. Bond -
financed, prepaid gas may be provided to customers at prices not to exceed market prices for
monthly index price gas. From time -to -time, the Commodity Charge may include a Purchased
Gas Adjustment that will be used maintain a zero sum. gain to COV for gas sales.
COV: City of Vernon
Contracted Marketer: Contracted Marketers are individuals, companies, or consortiums that
arrange for natural gas procurement -related activities on behalf of noncore customers.
Contracted Marketers must enter into a contract with SoCalGas and meet certain credit
requirements. They must comply with SoCalGas' Rules 30 and 35 and all other tariffs which
address the transportation and management of customer -owned gas on SoCalGas' system.
Core Service: Core Service consists of all residential usage regardless of size, all commercial
usage less than 20,800 Therms per month, and all other customers that have elected Core Service
under Rate Schedule G-2.
Curtailment: When SoCalGas and/or Vernon (jointly or separately referred to hereafter in this
definition as "Utility") or other transmission pipeline used by Vernon, initiates suspension of gas
service, Utility may temporarily reduce the daily quantity of gas it will transport or deliver or
terminate service entirely for certain service categories as needed for operational and/or
contractual requirements. Curtailment is implemented when, in the Utility's judgment, there
exists a restriction or limitation on Utility transmission or distribution pipelines necessary for the
Page 2 of 19 ,
City of Vernon Council Resolution , effective , 2009
Rule No. 14. SERVICE CONNECTIONS AND FACILITIES ON CUSTOMER'S
PREMISES
A. General. The City will construct, own, operate and maintain natural gas lines only along
public streets, roads and highways which the City has the legal right to occupy, and on
public lands and private property across which rights of way or easements satisfactory to
the City may be obtained at the Customer's cost and without cost or condemnation by the
City. Upon request by the City, the applicant shall provide such rights of way or
easements.
B. Connection Costs. Connection costs include traffic control, surface sawing, trenching,
boring, pipe, tapping, backfill, surface restoration, meter, regulators, electronic corrector,
and any other labor and equipment necessary for the City to connect Customer. The cost
for service connections shall be shared between. Customer and City. City shall contribute
an amount equal to four cents per Therm multiplied by Customer's projected annual
usage, not to exceed fifty percent of the total connection cost incurred for work done by
the City. Customer shall pay the balance of costs above the City's contribution.
All installed facilities up to and including the meter, regulator(s) and electronic corrector
shall be owned and maintained by City of Vernon.
Customer may request City of Vernon to conduct additional work at Customer's expense
to modify Customer house line piping.
C. Meter Installations. The Customer shall provide an approved location for the Meter or
Meters and associated equipment on the Premises which at all times shall be accessible
for inspection, reading, and testing. If requested by City, Customer shall allow City, at
City's expense, to install and maintain an active phone line terminating at the gas meter
for the purpose of City of Vernon telephonically communicating with the meter.
The Customer shall, at its own expense, provide a new and approved location whenever
the existing location becomes inaccessible for inspecting, reading, or testing.
Page 17 of 19
City of Vernon Council Resolution , effective 2009
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: August 31, 2009
TO: Donal O'Callaghan, Director of Light & Power
FR Nelly Giron, City Clerk
RE: Resolution No. 10,045 - A Resolution of the City Council of
the City of Vernon Approving and Adopting Amendments to
Natural Gas Rate Schedules and Rules for Gas Service for Gas
Distributed and Supplied by the City Within Its Boundaries
Transmitted herewith is a copy of Resolution No. 10,045 referenced
above, which was approved by City Council on August 24, 2009.
Thank you.
NG:dj
c: Resolution No. 10,045
RECEIVED
'psi.. b A STAFF REPORT
Gli� CLERK'S O�F1C� Ae�R�oVEq AUG z 4 'off clrY COUNCIL
— LIGHT & POWER
DATE: July 22, 2009 r�
TO: Honorable Mayor and City Council -
FROM: Donal O'Callaghan Director of Light & Power
RE: Recommendation for Gas Tariff Changes
This is a recommendation to make changes to three specific areas of the Gas Tariff, as
follows.
1. Reduce the transportation rate for small commercial Schedule G-2 customers to
attract more to the gas system.
2. Change the methodology for the connection cost allowance such that connection
allowances are allocated more equitably across customer classes.
3. Add language to the commodity charge definition to specify that bond financed,
prepay gas is included in commodity sales to Vernon retail customers.
G.-2: Rate: Bp, d,u!R Ki2n
This recommendation is to reduce COV's natural gas transportation rate, G-2,
applicable to smaller commercial customers. The purpose for reducing the rate is to
attract more of these customers to the COV gas system:
Cost savings for smaller commercial customers has not been adequate to attract them
to the system. For example, under the current rate, a customer using 15,000 Therms
per month saves approximately $6,300 per year; however, the lowest customer
connection cost ,for this size customer is approximately $7,000, making the payback
more than a year, which is not attractive to conversion to COV service.
The wholesale transportation rate paid by COV is significantly lower than COV's current
G-2 rate charged to customers, allowing COV the opportunity to lower the G-2 rate.
This proposal is reduce the Tier 2 component of the G-2 rate from its present level of
$0.09548 per Therm to $0.06500 per Therm, a 32 percent decrease within Tier 2. The
result is a reduction in payback from more than a year to approximately eight months for
a customer using 15,000 Therms per month. Staff has identified up to a dozen
customers in this class that will be attracted to the COV system as a result. COV also
benefits from additional gross revenue to the city's gas enterprise that can be utilized to
cover costs of operating the gas system.
Staff recommends a reduction of the G-2 natural gas transportation rate to attract more
small commercial customers to the COV gas system. Specifically, the recommendation
is to reduce the G-2 Tier 2 rate from $0.09548 to $0.06500 per Therm.
A proposed, modified version of Rate Schedule G-2 is attached.
Modify Connection Cost Allowance
This recommendation is to modify the methodology for determining the monetary
allowance given to new customers connecting to the COV gas system. The reason for
the change is to provide allocations that are more equitable across customer classes.
At present, the Tariff specifies that COV covers all costs from the distribution main to
the customer property line, and the customer covers all costs from the property line to
the interconnect with the customer's house line, including meter, regulator, flow
computer, etc. The present methodology allocates a relatively large allowance to the
smallest customers, compared to their margin contribution to the system. Conversely, it
gives a relatively small allowance to larger customers, compared to their larger margin
contribution.
The present language with sections to be removed struck out is:
Costs for connection of Customer's facility to City's gas system shall be shared
between Customer and City.
Awned gas lint stemei:'s prepeFty-line. GUStemer-shall -pay sGStS fFGM
nrnncr y limo te the GORReGtOOR pointyfi+h Q isle mor'c hA, -qp I*Fje
inGl ,ding the GOSt fGF the ., eteF and tuft, lateF An "Application and Contract for
Natural Gas Service" is required.
The proposed methodology is a formula. Specifically, customers are given an
allowance of four cents per Therm for their annual consumption, not to exceed 50
percent of COV's total connection cost (street -side and customer -side).
The result of the proposed methodology is that the allowance for the smallest customers
is reduced substantially. For middle -range customers, it is increased somewhat. For
the largest customers, it is increased substantially. Even with the increased allowance
to customers, COV is able to recover its contribution within six months of service to
each newly connected customer.
Staff recommends the following new language, underlined, in place of the existing
language.
2
Costs for connection of Customer's facility to City's gas system shall be shared
between Customer and City. City shall contribute an amount equal to four cents.
per Therm multiplied by customer's projected annual usage, not to exceed fift
percent of.the total connection cost incurred for work done by the City. Customer
shall pay the balance of costs. The total connection cost includes traffic control,
trenching, piping, repaving, and installation of the meter, regulator(s), and other
equipment required by the City. An "Application and Contract for Natural Gas
Service" is required.
The proposed, revised Gas Tariff pages are attached. They are revised rate schedules:
G-1, G-2, G-3, G-5, and Rule 14.
Modify Commodity Charge Definition to Accommodate Prepay Gas
This is a recommendation to recognize bond -financed, prepay gas flowing to retail gas
customers. The Tariff has stated that the retail gas "Commodity Charge" consists of
COV's actual gas cost for each month. Now that has changed with the introduction of
bond -financed, prepay gas in the monthly supply portfolio. The Commodity Charge
definition is proposed to be modified accordingly.
Staff recommends the following sentence be added within the definition of "Commodity
Charge" throughout the Tariff.
Bond -financed, prepaid gas may be provided to customers at prices not
to exceed market prices for monthly index price gas.
The proposed, revised Gas Tariff pages are attached. They are revised rate schedules:
G-1, G-2, GA and a revised Commodity Charge Definition from the Rules section.
Attachments
cc: Nelly Giron, (Original)
Judy Lehr
Document Control
3
NOTICE OF PUBLIC HEARING
The City of Vernon will conduct a Public Hearing which you
may attend.
PLACE: Vernon City Hall
City Council Chambers
4305 Santa Fe Avenue
Vernon, CA 90058
DATE AND TIME: Monday, August 24, 2009, at 9:00 a.m., or as
soon thereafter as the matter may be heard.
PURPOSE:
To amend the natural gas rate schedules and
rules for gas service for gas distributed
and supplied by the City of Vernon (the
"City") within its boundaries. These
amendments include amending the City's Gas
Municipal Utilities Department Schedules G-1
(Residential Gas Service), G-2 (Small
Commercial Gas Service), G-3 (Large
Commercial Gas Transportation), G-4 (Large
Commercial Gas Commodity) and G-5 (Electric
Generation Gas Transportation); and amending
Rule 1 (Definitions) and Rule 14 (Service
Connections and Facilities on Customer's
Premises) of the City's Gas Municipal
Utilities Department Rules for Gas Service.
Any interested
person may attend and may make an oral
presentation to the
City Council at the time of the hearing, or
may present written
comments prior to the hearing.
If you challenge the approval of the amended gas rates, the
amended rate schedules and the amended rules for gas services,
or any provision thereof in court, you may be limited to raising
only those issues you or someone else raised at the hearing
described in this notice or in written correspondence delivered
to the City of Vernon at, or prior to, the meeting.
Information may be obtained by contacting the office of the
City Clerk at the above address.
The hearing may be continued or adjourned or cancelled and
rescheduled to a stated time and place without further notice.
Dated: August 4, 2009
Sharon Barrett, Deputy City Clerk
usferxt ran n C r�x#tens, �J_Jnc_
The Only All Hispanic Owned Chain of Bilingual Newspapers
111 S. Avenue 59, Los Angeles, CA 90042-4211
Ph 323.341-7970 • Fax 323.341-7976 • www.egpnews.com
PROOF OF PUBLICATION
(2015.5 C.C.P.)
STATE OF CALIFORNIA,
COUNTY OF LOS ANGELES
I am a citizen of the. United States and a resident
of the County aforementioned; I am over the age of
eighteen years, and not a party to or interested in
the above -entitled matter. I am the principal clerk
of the printer of
EASTERN GROUP PUBLICATIONS'
EASTSIDE SUN, MEXICAN AMERICAN SUN
NORTHEAST SUN, BELL GARDENS SUN
VERNON SUN, COMMERCE COMET
CITYTERRACE COMET, MONTEBELLO COMET
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newspapers of general circulation, printed and
published THURSDAYS in the County of Los
Angeles, and which newspaper has been adjudicated
a newspaper of general circulation by the Superior
Court of the County of Los Angeles, State of
California, under the
date of JUNE 21. 1966.
CASE NUMBER 884861;
I the notice, of which the annexed is a printed
copy (set in type not smaller than nonpareil), has
been published in each regular and entire issue of
said newspaper and not in any supplement thereof
on the following dates, to -wit:
AUGUST 06 & 13,
all in the year 2009.
1 certify (or declare) under penalty of perjury that
the foregoing is true and correct.
Dated at LOS ANGELES, California,
this 13!hday of AUGUST, 2009.
This space is for the County Clerk's Filing Stamp
CITY OF VERNON
Proof of Publication of
Notice of Public Hearing:
Monday, August 24. 2009 — To amend the natural
gas rate schedules and rules for gas service
gnature