Resolution No. 2012-097RESOLUTION NO. 2012-97
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE REMOVAL OF
CERTAIN LANGUAGE TO THE PUBLIC BENEFITS CHARGE AND
THE ALLOCATION OF FUNDS TO OFFSET THE RENEWABLE
POWER COST PASS-THROUGH TO CUSTOMERS
WHEREAS, the City of Vernon ("City") is a chartered municipal
corporation of the State of California that owns and operates a system
for the generation, purchase, transmission, distribution and sale of
electric capacity and energy; and
WHEREAS, the City provides electric service to its customers
pursuant to electric service rate schedules; and
WHEREAS, pursuant to Assembly Bill 1890 the City added a
Public Benefits Charge of 2.85 percent to the electric service rate
schedules and provided that the Public Benefits Charge would be
assessed through January 1, 2012; and
WHEREAS, the City enacted its Public Benefits Charge,
pursuant to Section 385 of the California Public Utility Code which
requires local publicly owned electric utilities to establish the
Public Benefits Charge to fund investment by the utility and other
parties, and has used the proceeds associated with the charge to fund
public benefit programs and projects; and
WHEREAS, state law does not provide for the expiration of
the Public Benefits Charge as to publicly owned electric utilities;
and
WHEREAS, by memorandum dated June 5, 2012, the Director of
Light & Power has recommended the deletion of certain language to the
Public Benefits Charge to remove language pertaining to the
termination date of the Public Benefits Charge and recommends the
allocation of Two Million Dollars per year of the funds derived from
the Public Benefits Charge to offset the renewable power cost pass-
through to customers.
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 Public Benefits Charge provided for in the
electric service rate schedules is hereby amended to read as follows:
Public Benefits Charge: A mandatory Public Benefits Charge has
been assessed pursuant to Assembly Bill 1890, signed into law by
the Governor on September 20, 1996. The charge of 2.85 percent of
the total bill before any special fees or charges.
SECTION 3: The City Council of the Vernon hereby approves
and authorizes the allocation of Two Million Dollars per year of the
funds derived from the public benefits charge to offset the renewable
power cost pass-through to customers.
SECTION 4: The City Council of the City of Vernon hereby
instructs the City Administrator or his authorized designees to
undertake whatever actions are necessary to fulfill and carry out the
intent and purpose of this Resolution.
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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
the City Clerk's certification to be entered in the File of
Resolutions of the Council of this City.
APPROVED AND ADOPTED this 19th day of June, 2012.
, C/1tj7 Clerk
- 3 -
Name: William J. Davis
Title:Mge�l/ Mayor Pro -Tem
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution
No. 2012-97, 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 Tuesday, June 19, 2012, and thereafter was duly signed by the
Mayor or Mayor Pro -Tem of the City of Vernon.
Executed this � day of June, 2012, at Vernon, California.
(SEAL)
4
Clerk
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: June 21, 2012
TO: Carlos Fandino, Director of Light & Powe
FROM: Willard Yamaguchi, City Clerk
RE: Resolution No. 2012-97 — A Resolution of the City Council of the City of Vernon
Approving and Authorizing the Removal of Certain Language to the Public Benefits
Charge and the Allocation of Funds to Offset the Renewable Power Cost Pass -Through to
Customers
Transmitted herewith is a copy of Resolution No. 2012-97 referenced above, which was approved by City
Council on June 19, 2012.
Thank you.
WY:dj
Attachment
c: Abraham Alemu
Resolution Nos. 2012-97, 7062
RECEIVED
JUN 0 7 2012
CIT, CLERK'S OFFICE
DATE:
TO:
FROM:
SUBJECT:
PURPOSE
Light & Power Department
STAFF REPORT
June 5, 2012
Honorable Mayor and City Council
Carlos R. Fandino, Jr., Director of Light & Power Q(
Continuation and Use of the Public Benefits
RECEIVED
JUN 0 6 2012
CITY ADMINISTRATION
The City of Vernon ("Vernon" or "City") provides electric service to its customers
pursuant to electric service rate Schedules. Pursuant to Assembly Bill 1890, which
was signed into law by the Governor on September 20, 1996, the City added a
Public Benefits Charge of 2.85 percent to the electric service rate schedules. At that
time, the electric service rate schedules further provided that the Public Benefits
Charge would be assessed through January 1, 2012.
Staff has since determined, and upon the advice of counsel, that state law does not
provide for the expiration of the Public Benefits Charge. This Staff Report supports
the continuation of the Public Benefits Charge in the City's electric service rates.
Further, the Staff Report supports allocating some of the funds from the Public
Benefits Charge to offset the renewable power cost pass-through to customers.
SUMMARY
Section 385 of the California Public Utility Code required local publicly owned
electric utilities, such as Vernon, to establish the Public Benefits Charge to fund
investments by the utility and other parties in any or all of the following:
• Cost-effective, demand-side management services to promote energy
efficiency and energy conservation;
• New investment in renewable energy resources and technologies consistent
with existing statutes and regulations which promote those resources and
technologies;
• Research, development and demonstration programs for the public interest to
advance science and technology which is not adequately provided by
competitive and regulated markets; and
• Services provided for low-income electricity customers, including, but not
limited to, energy efficiency services, education, weatherization and rate
discounts.
Staff Report
PBC 2012
Page 2 of 3
Vernon complied with the law, enacting its Public Benefits Charge on 12/15/1997 to
be effective on1/1/1998. Vernon has used the proceeds associated with the charge
to fund public benefit programs and projects.
EXPIRATION DATE
The Public Benefits Charge in the electric service rate schedules currently provide
that the charge of 2.85 percent will be assessed "through January 1, 2012." It is this
portion of the charge that Staff is proposing to change, by striking the sentence
which reads "In accordance with the mandates of Assembly Bill 995, the Public
Benefits Charge of 2.85 percent will be assessed through January 1, 2012."
Removal of this language will cause the charge to remain in place. Staff has
determined, after seeking the advice of regulatory counsel, that the so-called "sunset
date" included in Assembly Bill 995 applies only to the Public Benefits Charges
collected by electrical corporations. It does not apply to local publicly owned electric
utilities, such as Vernon. Because the provisions applicable to local publicly owned
electric utilities do not contain termination date for the Public Benefits Charge,
Vernon is required to retain the charge, and the language providing for its sunset
should be removed.
USE OF PUBLIC BENEFITS CHARGES
The City will continue to collect public benefit charges and fund investments
consistent with the AB 1890 legislation. Funds collected from the public benefits
charge shall be allocated to fund all eligible programs in an equitable manner.
Procurement of renewable energy is one of the programs eligible for funding from
public benefits charges. The Light and Power Department is recommending that on
annual basis, $2 million of the public benefits charges be allocated to offset the
renewable power cost pass-through to customers. The recommendation was
presented and agreed to by the Advisory Committee on Electric Rates at its special
meeting held on April 30, 2012.
RECOMMENDATIONS
It is recommended the following be submitted for City Council consideration at the
June 19, 2012 meeting:
Approve striking the sentence "In accordance with the mandates of Assembly
Bill 995, the Public Benefits Charge of 2.85 percent will be assessed through
January 1, 2012." from the City of Vernon Light and Power Department electric
service rate schedules.
Approve the allocation of $2 million per year of the funds derived from the
public benefits charge to offset the renewable power cost pass-through to
customers.
Staff Report
PBC 2012
Page 3 of 3
FISCAL IMPACT
The recommendation does not impact the Department's budget. Allocation of some
of the public benefits funds to offset the renewable power cost pass-through,
however, could limit availability funds for other programs eligible for funding from the
public benefits charges.
CRF:AA:ah
Attachments