Resolution No. 2014-059RESOLUTION NO. 2014-59
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON ESTABLISHING A TRANSMISSION REVENUE
BALANCING ACCOUNT ADJUSTMENT FOR 2015 IN ACCORDANCE
WITH VERNON'S TRANSMISSION OWNER TARIFF AND
PROVIDING FOR TARIFF SHEET CHANGES TO IMPLEMENT THE
ADJUSTMENT
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 is a Participating Transmission Owner
("PTO") with the California Independent System Operator Corporation, a
California nonprofit public benefit corporation ("CAISO"); and
WHEREAS, the CAISO requires a PTO to turn over operational
control of its transmission facilities and entitlements to the CAISO;
and
WHEREAS, in return, the CAISO collects revenues for each PTO
pursuant to calculations that reflect the expenses and capital costs
incurred by each PTO to provide transmission services; and
WHEREAS, the relationship between PTOs and CAISO is governed
by a Transmission Control Agreement ("TCA") which sets forth the
specific duties and obligations of all PTOs including the filing of a
Transmission Owner Tariff ("TO Tariff") with the Federal Energy
Regulatory Commission ("FERC"); and
WHEREAS, in order to ensure that all Transmission Revenue
Credits are flowed through to CAISO's open access transmission tariff
("CAISO Tariff") customers, the City annually updates its Transmission
Revenue Balancing Account Adjustment ("TRBAA") by a dollar amount
reflecting the proposed Transmission Revenue Credits adjusted for
difference between projected and actual credits from the prior year;
and
WHEREAS, a Notice of Public Hearing was published on or
before September 18, 2014, notifying all interested parties that a
hearing to consider evidence to establish the City's new TRBAA for 2015
was scheduled for October 7, 2014, at approximately 9 a.m., subject to
the hearing being continued or adjourned to a stated time and place
without further notice of public hearing; and
WHEREAS, a Public Hearing was held on October 7, 2014, in
which the City Council took evidence from staff and those other persons
in attendance who wished to be heard on the establishment of the City's
new TRBAA; and
WHEREAS, the Gas & Electric Department has prepared a
Report, with exhibits, dated on or about October 7, 2014, (" Report"),
which determines the new TRBAA for 2015 to be consistent with the TO
Tariff and supports the TRBAA and the changes to Appendix I of the TO
Tariff to implement the new TRBAA effective January 1, 2015; and
WHEREAS, the Gas & Electric Department has recommended that
the TRBAA and Appendix I to the TO Tariff implementing the new TRBAA be
approved; and
WHEREAS, the City Council has heard and considered all
evidence, both written and oral, presented in consideration of the
establishment of the City's new TRBAA and revised Appendix I to the
TO Tariff implementing the new TRBAA.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
- 2 -
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the above recitals are true and correct.
SECTION 2: The City Council of the City of Vernon hereby
further finds and determines that all persons have had the opportunity to
be heard or to file written comments to the proposed establishment of the
City's new TRBAA and amended Appendix I to the TO Tariff implementing the
new TRBAA, and, after due consideration of any and all evidence submitted
at the public hearing, determines that there are compelling reasons to
justify the establishment of the City's new TRBAA for 2015 and an amended
Appendix I to the TO Tariff implementing the new TRBAA for 2015, a copy
of which is attached hereto as Exhibit A and made a part hereof.
SECTION 3: The City Council of the City of Vernon hereby
approves, pursuant to the TO Tariff and to be effective on
January 1, 2015, the establishment of the City's new TRBAA for 2015 and
revised Appendix I to the TO Tariff implementing the new TRBAA for
2015, as described in the Report, a copy of which is attached hereto as
Exhibit B and made a part hereof.
SECTION 4: The City Council of the City of Vernon hereby
authorizes outside counsel to submit the City's new TRBAA for 2015, the
revised Appendix I to the TO Tariff, and supporting documentation, such
as the Report and this City Council Resolution, to FERC on behalf of
the City of Vernon.
- 3 -
SECTION 5: The City Clerk, or Deputy City Clerk, of the
City of Vernon shall certify to the passage, approval and adoption of
this resolution, and the City Clerk, or Deputy City Clerk, of the City
of Vernon shall cause this resolution and the City Clerk's, or Deputy
City Clerk's, certification to be entered in the File of Resolutions of
the Council of this City.
APPROVED AND ADOPTED this 7th day of October, 2014.
ATTEST:
Ana rcia
y C k-4 Deputy City Clerk
APPROVED AS TO FORM:
�' &
Katharine Mapes, ES .
Spiegel & McDiarmid, LLP
Special Counsel to City
- 4 -
Name: W. Michael MCComick
Title: Mayor / P4ayer—P3^a-gem
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Ana B=cia y� Deputy City Clerk of the City
of Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 2014-59, 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, October 7, 2014, and thereafter was duly
signed by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this _8 day of October, 2014, at Vernon, California
(SEAL)
A a Barc
2xCy 61sr / Deputy City Clerk
- 5 -
EXHIBIT A
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is $2,208,426*2.482.151 and is comprised
of the following components:
Base TRR costs not subject to ETC Adjustment Clause: $498,480
ETC Adjustment Clause:
Forecast SCE ETC Costs: $1482-7WI 989,120
Balance of Difference between prior year
Forecast and Actual SCE ETC Costs: ($26,4404,4401
Interest on Difference between prior year
Forecast and Actual SCE ETC Costs: ($346 ,009)
The ETC Adjustment Clause is: The projected SCE ETC Cost for the next calendar year,
plus the true -up (positive or negative) of the prior October through September SCE ETC
Cost with interest calculated pursuant to 18 C.F.R. § 35.19a. The ETC Adjustment
Clause will be recalculated annually and filed with the Commission with a proposed
effective date of January 1 of each year.
The TRBAA is a positive $43;3M2.458 for calendar year 20142015.
Vernon's Gross Load, consistent with its TRR, used by the ISO to develop the Transmission
Access Charge is 1,181,728 MWhs.
All of Vernon's transmission facilities and Entitlements placed under the ISO's Operational
Control are High Voltage Facilities as defined by the ISO Tariff.
The TRBAA will be recalculated annually consistent with the ISO Tariff approved by the
Vernon City Council, and provided to the ISO.
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is $2,482,151 and is comprised of the
following components:
Base TRR costs not subject to ETC Adjustment Clause: $498,480
ETC Adjustment Clause:
Forecast SCE ETC Costs: $1,989,120
Balance of Difference between prior year
Forecast and Actual SCE ETC Costs: ($4,440)
Interest on Difference between prior year
Forecast and Actual SCE ETC Costs: ($1,009)
The ETC Adjustment Clause is: The projected SCE ETC Cost for the next calendar year,
plus the true -up (positive or negative) of the prior October through September SCE ETC
Cost with interest calculated pursuant to 18 C.F.R. § 35.19a. The ETC Adjustment
Clause will be recalculated annually and filed with the Commission with a proposed
effective date of January 1 of each year.
The TRBAA is a positive $12,458 for calendar year 2015.
Vemon's Gross Load, consistent with its TRR, used by the ISO to develop the Transmission
Access Charge is 1,181,728 MWhs.
All of Vernon's transmission facilities and Entitlements placed under the ISO's Operational
Control are High Voltage Facilities as defined by the ISO Tariff.
The TRBAA will be recalculated annually consistent with the ISO Tariff approved by the
Vernon City Council, and provided to the ISO.
EXHIBIT B
CITY OF VERNON GAS & ELECTRIC DEPARTMENT
REPORT REGARDING THE ESTABLSHMENT OF A NEW
TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT
FOR CALENDAR YEAR 2015
October 7, 2014
The City of Vernon ("Vernon" or "City") is a Scheduling Coordinator and a
Participating Transmission Owner ("PTO") in the California Independent System
Operator Corporation ("ISO"). To participate in the ISO, PTOs are required to turn
over administrative control of their transmission facilities and entitlements to the ISO.
In return, the ISO collects revenues for each PTO pursuant to calculations that
reflect the expenses and capital costs incurred by each PTO to provide transmission
services.
The relationship between PTOs and the ISO is governed by a Transmission Control
Agreement ("TCA"), which sets forth the specific duties and obligations of all PTOs.
The TCA requires all PTOs to file a Transmission Owner Tariff ("TO Tariff") with the
Federal Energy Regulatory Commission ("FERC").
Pursuant to Section 5.2 of the TO Tariff, Vernon updates its Transmission Revenue
Balancing Account Adjustment ("TRBAA") annually. The TRBAA is a tariff
mechanism designed to ensure that all Transmission Revenue Credits ("TRCs") are
flowed through to ISO open access transmission tariff ("ISO Tariff') customers via
annual update filings at the FERC by PTOs. Appendix F, Schedule 3, Section
6.1(b), of the ISO Tariff describes the annual TRBAA calculation as "a dollar amount
based on the projected Transmission Revenue Credits as adjusted for the true up of
the prior year's difference between projected and actual credits." This Report
supports the establishment of a new TRBAA based on the requirements of the TO
Tariff and the ISO Tariff.
SUMMARY
Section 5.2 of the Vernon TO Tariff identifies the items to be reflected in the TRBAA
TRBAA Report 2015
Page 2 of 5
and sets forth the procedure for revising the Transmission Revenue Balancing
Account ("TRBA") on an annual basis, as follows:
5.2 Transmission Revenue Balancing Account Adjustment
The Participating TO shall maintain a TRBA that will ensure that all
Transmission Revenue Credits and the refunds, specified in Sections 6
and 8 of Appendix F, Schedule 3 of the ISO Tariff, flow through to
transmission customers.
The TRBAA shall be equal to: TRBAA = TRCF + TRCT+ I.
TRCT = The balance representing the prior period difference between
the projected Transmission Revenue Credits and the actual credits.
TRCF = The forecast of Transmission Revenue Credits for the
following calendar year.
I = The interest balance for the TRBA, which shall be calculated using
the interest rate pursuant to Section 35.19(a) of FERC's regulations
under the Federal Power Act (18 C.F.R. § 35.19(a)). Interest shall be
calculated based on the average TRBA principal balance each month,
compounded quarterly.
Transmission Revenue Credits ("TRCs") are defined in Section 3.12 of the current
Vernon TO Tariff as follows:
3.12 Transmission Revenue Credit: The sum of all revenues received by
the Participating TO from the ISO for Wheeling service.
The TRBAA is based on the balance in the TRBA as of September 30 of the current
year and a forecast of the TRCs expected to be received in the following year. A
summary of the elements of the Vernon TRBAA proposed to be effective January 1,
2015 is shown in Exhibit 1. It shows that the balance in the Vernon TRBA as of
TRBAA Report 2015
Page 3 of 5
September 30, 2014, which reflects services rendered through June 30, 2014, is a
debit of $14,888, including interest. TRCs are projected to be a credit of $2,430.
Taken together, these items sum up to a TRBAA to be effective for the twelve
months starting January 1, 2015 of a debit, or positive, balance of $12,458.
All of the Vernon transmission entitlements that are reflected in Vernon's
transmission rates and the TRBAA are high voltage facilities. Therefore, there is no
need to allocate TRCs or other TRBAA components between high voltage and low
voltage rates.
CALCULATION OF THE NEW TRBAA
The TRBAA is equal to the sum of: TRCF + TRCT+ I.
The balance in the TRBA of a debit of $14,888 as of September 30, 2014 represents
the sum of the TRCT and the I components.
The TRCT Component of Vernon's TRBAA
TRCT represents a balance that reflects the difference for the prior period between
the projected TRCs and the actual credits. The prior period in this case is the
twelve-month period starting October 1, 2013 and ending September 30, 2014.
A summary of the determination of the September 30, 2014 balance in the Vernon
TRBA is shown in Exhibit 2. The TRCT component reflects 1) the previously
projected 2013 TRCs for Vernon of $34,766 or $2,897.17 per month, for the months
October through December 2013, and 2) projected 2014 TRCs of ($13,331) or
($1,110.92) per month, for the months January through September 2013—both
elements as reflected on Line No. 10 of Exhibit 2. Adjustments for actual payable
TRCs reflecting high voltage wheeling revenues payable to the TO (i.e., Vernon) are
reflected in Line 11 of Exhibit 2 and produce the under (over) collection figures for
the monthly payable TRC balances reflected in Line 14 of Exhibit 2. The monthly
balances are carried forward from month to month in Line 14 of Exhibit 2. Interest is
calculated monthly (the I component) on the average monthly balance and is
compounded quarterly into the monthly payable TRC balances pursuant to Section
TRBAA Report 2015
Page 4 of 5
5.2 of the Vernon TO Tariff. The interest calculation for payable TRC balances is
shown in Lines 16-20 of Exhibit 2. The TRBA balance on September 30, 2014 is
shown in Line 25 of Exhibit 2.
The I (Interest) Component of Vernon's TRBAA
As discussed above, the I component reflects interest on payable balances and on
payments for prior year TRCs. As provided in Section 5.2 of Vernon's TO Tariff,
monthly interest carrying costs are calculated using the 18 C.F.R. § 35.19(a) interest
rates and calculation method. These interest rates are published by FERC and
reflect the prime rate values published in the Federal Reserve Bank's "Selected
Interest Rates."
The calculation of interest is reflected in Exhibit 2 and is included as an integral part
of the calculation of the TRBA balance on September 30, 2014. It is not reflected as
a separate line item in Exhibit 1.
The TRCF Component of Vernon's TRBAA
The TRCF component of Vernon's TRBAA stands for the forecast of TRCs for the
following calendar year, in this case 2015. These forecast TRCs reflect projected
wheeling revenues.
Wheeling revenues, which correspond to ISO Charge Type 384, are projected to be
a credit of $2,430, as shown in Exhibit 3.
These projections are based on the accruals for services provided during the twelve-
month period ending June 30, 2014, which are reflected in the ISO's invoices to
Vernon through September 30, 2014. A summary of the monthly accruals for the
twelve months ending September 30, 2014 is shown in Exhibit 4.
TRBAA Report 2015
Page 5 of 5
RECOMMENDATIONS
1. Approve the newly calculated TRBAA of a positive $12,458,
2. Approve replacing the existing TRBAA of positive $13,331 with the new
TRBAA for 2015 of a positive $12,458..
3. Approve the attached revised Appendix I of Vernon's TO Tariff reflecting the
TRBAA of positive $12,458.
4. Authorize outside counsel to submit Vernon's TRBAA and supporting
documentation, such as this Report and the City Council Resolution
approving the new TRBAA to FERC.
EXHIBIT - 1
TRBAA Report 2015
Exhibit 1
19
CITY OF VERNON
TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT (TRBAA)
CALENDAR YEAR 2015
TOTAL
Balance in TRBA on September 30, 2014 $14,888
including interest
Forecast Transmission Revenue Credits ($2,430)
TRBAA $12,458
16
17
18 Source:
19 Line 9 Exhibit 2, Column N, Line No.25.
20 Line 12 Exhibit 3, Column E, Line No.23.
22
23
28
29
30
34
35
36
Lue
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EXHIBIT - 2
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EXHIBIT - 3
TRBAA Report 2015
Exhibit 3
A
B C I D
E F
1
MONTH
January-15
February-15
March-15
April-15
May-15
June-15
July-15
August-15
September-15
October-15
November-15
December-15
Total
CITY OF VERNON
FORECAST TRANSMISSION CREDITS
for Calendar Year 2015 TRBAA
Wheeling Total
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
202.54 202.54
($2,430.45) ($2,430.45)
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
EXHIBIT - 4
TRBAA Report 2015
Exhibit 4
A I
B I C I
D E F G H I
1
Vernon Historical Transmission Credits
for Calendar Year 2015 TRBAA
Wheeling Revenues
ISO INVOICE
Month CT 384
Final
July-13 ($491.15)
August-13 ($183.04)
September-13 ($117.99)
October-13 ($54.62)
November-13 ($214.83)
December-13 ($429.91)
January-14 ($127.04)
February-14 ($161.43)
March-14 ($209.14)
April-14 ($266.11)
May-14 ($80.83)
June-14 ($94.37)
Total
($491.15)
($183.04)
($117.99)
($54.62)
($214.83)
($429.91)
($127.04)
($161.43)
($209.14)
($266.11)
($80.83)
($94.37)
($2.430.45)
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
TRANSMITTAL COMMUNICATION
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: October 9, 2014
TO: Carlos Fandino, Director of Gas & Electric
FROM: Deborah Juarez, Records Management Assistant
RE: Resolution No. 2014-59 — A Resolution of the City Council of the City of Vernon
Establishing a Transmission Revenue Balancing Account Adjustment for 2015 in
Accordance with Vernon's Transmission Owner Tariff and Providing for Tariff Sheet
Changes to Implement the Adjustment
Transmitted herewith is a certified copy of Resolution No. 2014-59 referenced above, which was
approved by City Council on October'7, 2014, and an original notarized affidavit of Carlos R. Fandino Jr.
for your transmittal to the appropriate party.
Please ensure that a copy of the transmittal communication is sent to my attention for the file.
Thank you.
Enclosures
c: Abraham Alemu
Resolution No. 2014-59
AFFIDAVIT OF
CARLOS R. FANDINO JR.
STATE OF CALIFORNIA
ss.
COUNTY OF LOS ANGELES
Carlos R. Fandino, Jr., being duly sworn, deposes and states that he is
the Director of the Vernon Gas and Electric Department; that the "City of Vernon
Gas and Electric Department Staff Report Regarding the Establishment of a New
Transmission Revenue Balancing Account Adjustment for Calendar Year 2015,"
including Exhibit 1 through 4 that are part of that Report, were prepared under his
supervision; that the report and exhibits are correct to the best of his knowledge,
information, and belief; and that he presented this report to the Vernon City
Council as the basis for the Transmission Revenue Balancing Account
Adjustment and Transmission Owner Tariff Appendix I Amendment that is being
filed by Vernon at the Federal Energy Regulatory Commission.
Carlos R. Fandin r. Date
ACKNOWLEDGMENT
State of California)
County of Los Angeles)
On October 8, 2014 before me, Marisol Trujillo, Notary Public
(insert name and title of the officer)
personally appeared Carlos R. Fandino, Jr.
who proved to me on the basis of satisfactory evidence to be the person*whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/Ihey executed the same
in his/Ihen*lreir authorized capacitykies), and that by his/hedtheir signature(s) on the instrument
the person(+ , or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
1 Commission
L T 1918O
Commission 8 191641fi
-s Notary Public • California
Los Angeles County
M Comm. Expires Dec 23, 2014 r
CERTIFICATE
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES)
I, Ana Barcia, Deputy City Clerk of the City of Vernon,
County of Los Angeles, State of California, hereby certify that
the attached is a full and complete copy of:
RESOLUTION NO. 2014-59 - A Resolution of the City Council of
the City of Vernon Establishing a Transmission Revenue
Balancing Account Adjustment for 2015 in Accordance with
Vernon's Transmission Owner Tariff and Providing for Tariff
Sheet Changes to Implement the Adjustment
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the official Seal of the City of Vernon, County of Los Angeles,
State of California, on this 1?j day of October 2014.
SEAL:
Ana Bar is
Deputy City Clerk
STAFF REPORT
RECEIVED
OCT 01 2014
\��, CITY ADMINISTRATION
STAFF REPORT
v VERNON GAS & ELECTRIC DEPARTMENT
DATE: October 7, 2014
TO: Honorable Mayor and City Council `�t�
kO'
FROM: Carlos Fandino, Director of Vernon Gas & Electric
RE: Establishment of New Transmission Revenue Balancing Account Adjustment
(TRBAA) for 2015 ("TRBAA" Report)
Recommendation
It is recommended that the City Council conduct a Public Hearing and:
Find that the approval of the TRBAA referenced in this document is exempt under the
California Environmental Quality Act (CEQA) in accordance with Section
15061(b)(3), the general rule that CEQA only applies to projects that may have an
effect on the environment; and
2. Approve the Resolution establishing a New Transmission Revenue Balancing
Account Adjustment (TRBAA) for 2015 which:
a. Adopts the newly calculated TRBAA of a positive $12,458;
b. Adopts the replacement of the existing TRBAA of positive $13,331 with the
new TRBAA for 2015 of a positive $12,458;
c. Adopts the attached revised Appendix I of Vernon's TO Tariff reflecting the
TRBAA of positive $12,458;
d. Authorizes outside counsel to submit Vernon's TRBAA and supporting
documentation to FERC on behalf of the City of Vernon.
Backeround
The City of Vernon ("Vernon" or "City") is a Scheduling Coordinator and a Participating
Transmission Owner ("PTO") in the California Independent System Operator Corporation
("ISO"). To participate in the ISO, PTOs are required to turn over administrative control of their
transmission facilities and entitlements to the ISO. In return, the ISO collects revenues for each
PTO pursuant to calculations that reflect the expenses and capital costs incurred by each PTO to
provide transmission services.
The relationship between PTOs and the ISO is governed by a Transmission Control Agreement
("TCA"), which sets forth the specific duties and obligations of all PTOs. The TCA requires all
PTOs to file a Transmission Owner Tariff ("TO Tariff) with the Federal Energy Regulatory
Commission ("FERC").
Pursuant to Section 5.2 of the TO Tariff, Vernon updates its Transmission Revenue Balancing
Account Adjustment ("TRBAA") annually. The TRBAA is a tariff mechanism designed to
ensure that all Transmission Revenue Credits ("TRCs") are flowed through to ISO open access
transmission tariff ("ISO Tariff') customers via annual update filings at the FERC by PTOs.
Appendix F, Schedule 3, Section 6.1(b), of the ISO Tariff describes the annual TRBAA
calculation as "a dollar amount based on the projected Transmission Revenue Credits as adjusted
for the true up of the prior year's difference between projected and actual credits."
The attached TRBAA Report supports the establishment of a new TRBAA based on the
requirements of the TO Tariff and the ISO Tariff.
Fiscal Imuact
There is no known fiscal impact.
Attachments
EXHIBIT - A
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is $2,208,4z6-2,482,151 and is comprised
of the following components:
Base TRR costs not subject to ETC Adjustment Clause: $498,480
ETC Adjustment Clause:
Forecast SCE ETC Costs: $1482,76AL989,120
Balance of Difference between prior year
Forecast and Actual SCE ETC Costs: ($26,F>404.440)
Interest on Difference between prior year
Forecast and Actual SCE ETC Costs: ($3461.009)
The ETC Adjustment Clause is: The projected SCE ETC Cost for the next calendar year,
plus the true -up (positive or negative) of the prior October through September SCE ETC
Cost with interest calculated pursuant to 18 C.F.R. § 35.19a. The ETC Adjustment
Clause will be recalculated annually and filed with the Commission with a proposed
effective date of January 1 of each year.
The TRBAA is a positive $13-,MI2,458 for calendar year 29142015.
Vernon's Gross Load, consistent with its TRR, used by the ISO to develop the Transmission
Access Charge is 1,181,728 MWhs.
All of Vernon's transmission facilities and Entitlements placed under the ISO's Operational
Control are High Voltage Facilities as defined by the ISO Tariff.
The TRBAA will be recalculated annually consistent with the ISO Tariff approved by the
Vernon City Council, and provided to the ISO.
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is $2,482,151 and is comprised of the
following components:
Base TRR costs not subject to ETC Adjustment Clause: $498,480
ETC Adjustment Clause:
Forecast SCE ETC Costs: $1,989,120
Balance of Difference between prior year
Forecast and Actual SCE ETC Costs: ($4,440)
Interest on Difference between prior year
Forecast and Actual SCE ETC Costs: ($1,009)
The ETC Adjustment Clause is: The projected SCE ETC Cost for the next calendar year,
plus the true -up (positive or negative) of the prior October through September SCE ETC
Cost with interest calculated pursuant to 18 C.F.R. § 35.19a. The ETC Adjustment
Clause will be recalculated annually and filed with the Commission with a proposed
effective date of January 1 of each year.
The TRBAA is a positive $12,458 for calendar year 2015.
Vernon's Gross Load, consistent with its TRR, used by the ISO to develop the Transmission
Access Charge is 1,181,728 MWhs.
All of Vernon's transmission facilities and Entitlements placed under the ISO's Operational
Control are High Voltage Facilities as defined by the ISO Tariff.
The TRBAA will be recalculated annually consistent with the ISO Tariff approved by the
Vernon City Council, and provided to the ISO.
EXHIBIT- B
CITY OF VERNON GAS & ELECTRIC DEPARTMENT
REPORT REGARDING THE ESTABLSHMENT OF A NEW
TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT
FOR CALENDAR YEAR 2015
October 7, 2014
The City of Vernon ("Vernon" or "City") is a Scheduling Coordinator and a
Participating Transmission Owner ("PTO") in the California Independent System
Operator Corporation ("ISO"). To participate in the ISO, PTOs are required to turn
over administrative control of their transmission facilities and entitlements to the ISO.
In return, the ISO collects revenues for each PTO pursuant to calculations that
reflect the expenses and capital costs incurred by each PTO to provide transmission
services.
The relationship between PTOs and the ISO is governed by a Transmission Control
Agreement ("TCA"), which sets forth the specific duties and obligations of all PTOs.
The TCA requires all PTOs to file a Transmission Owner Tariff ("TO Tariff") with the
Federal Energy Regulatory Commission ("FERC").
Pursuant to Section 5.2 of the TO Tariff, Vernon updates its Transmission Revenue
Balancing Account Adjustment ("TRBAK) annually. The TRBAA is a tariff
mechanism designed to ensure that all Transmission Revenue Credits ("TRCs") are
flowed through to ISO open access transmission tariff ("ISO Tariff') customers via
annual update filings at the FERC by PTOs. Appendix F, Schedule 3, Section
6.1(b), of the ISO Tariff describes the annual TRBAA calculation as "a dollar amount
based on the projected Transmission Revenue Credits as adjusted for the true up of
the prior year's difference between projected and actual credits." This Report
supports the establishment of a new TRBAA based on the requirements of the TO
Tariff and the ISO Tariff.
SUMMARY
Section 5.2 of the Vernon TO Tariff identifies the items to be reflected in the TRBAA
TRBAA Report 2015
Page 2 of 5
and sets forth the procedure for revising the Transmission Revenue Balancing
Account ("TRBA") on an annual basis, as follows:
5.2 Transmission Revenue Balancing Account Adjustment
The Participating TO shall maintain a TRBA that will ensure that all
Transmission Revenue Credits and the refunds, specified in Sections 6
and 8 of Appendix F, Schedule 3 of the ISO Tariff, flow through to
transmission customers.
The TRBAA shall be equal to: TRBAA = TRCF + TRCT+ I.
TRCT = The balance representing the prior period difference between
the projected Transmission Revenue Credits and the actual credits.
TRCF = The forecast of Transmission Revenue Credits for the
following calendar year.
I = The interest balance for the TRBA, which shall be calculated using
the interest rate pursuant to Section 35.19(a) of FERC's regulations
under the Federal Power Act (18 C.F.R. § 35.19(a)). Interest shall be
calculated based on the average TRBA principal balance each month,
compounded quarterly.
Transmission Revenue Credits ("TRCs") are defined in Section 3.12 of the current
Vernon TO Tariff as follows:
3.12 Transmission Revenue Credit: The sum of all revenues received by
the Participating TO from the ISO for Wheeling service.
The TRBAA is based on the balance in the TRBA as of September 30 of the current
year and a forecast of the TRCs expected to be received in the following year. A
summary of the elements of the Vernon TRBAA proposed to be effective January 1,
2015 is shown in Exhibit 1. It shows that the balance in the Vernon TRBA as of
TRBAA Report 2015
Page 3 of 5
September 30, 2014, which reflects services rendered through June 30, 2014, is a
debit of $14,888, including interest. TRCs are projected to be a credit of $2,430.
Taken together, these items sum up to a TRBAA to be effective for the twelve
months starting January 1, 2015 of a debit, or positive, balance of $12,458.
All of the Vernon transmission entitlements that are reflected in Vernon's
transmission rates and the TRBAA are high voltage facilities. Therefore, there is no
need to allocate TRCs or other TRBAA components between high voltage and low
voltage rates.
CALCULATION OF THE NEW TRBAA
The TRBAA is equal to the sum of: TRCF + TRCT+ I.
The balance in the TRBA of a debit of $14,888 as of September 30, 2014 represents
the sum of the TRCT and the I components.
The TRCT Component of Vernon's TRBAA
TRCT represents a balance that reflects the difference for the prior period between
the projected TRCs and the actual credits. The prior period in this case is the
twelve-month period starting October 1, 2013 and ending September 30, 2014.
A summary of the determination of the September 30, 2014 balance in the Vernon
TRBA is shown in Exhibit 2. The TRCT component reflects 1) the previously
projected 2013 TRCs for Vernon of $34,766 or $2,897.17 per month, for the months
October through December 2013, and 2) projected 2014 TRCs of ($13,331) or
($1,110.92) per month, for the months January through September 2013—both
elements as reflected on Line No. 10 of Exhibit 2. Adjustments for actual payable
TRCs reflecting high voltage wheeling revenues payable to the TO (i.e., Vernon) are
reflected in Line 11 of Exhibit 2 and produce the under (over) collection figures for
the monthly payable TRC balances reflected in Line 14 of Exhibit 2. The monthly
balances are carried forward from month to month in Line 14 of Exhibit 2. Interest is
calculated monthly (the I component) on the average monthly balance and is
compounded quarterly into the monthly payable TRC balances pursuant to Section
TRBAA Report 2015
Page 4 of 5
5.2 of the Vernon TO Tariff. The interest calculation for payable TRC balances is
shown in Lines 16-20 of Exhibit 2. The TRBA balance on September 30, 2014 is
shown in Line 25 of Exhibit 2.
The I (Interest) Component of Vernon's TRBAA
As discussed above, the I component reflects interest on payable balances and on
payments for prior year TRCs. As provided in Section 5.2 of Vernon's TO Tariff,
monthly interest carrying costs are calculated using the 18 C.F.R. § 35.19(a) interest
rates and calculation method. These interest rates are published by FERC and
reflect the prime rate values published in the Federal Reserve Bank's "Selected
Interest Rates."
The calculation of interest is reflected in Exhibit 2 and is included as an integral part
of the calculation of the TRBA balance on September 30, 2014. It is not reflected as
a separate line item in Exhibit 1.
The TRCF Component of Vernon's TRBAA
The TRCF component of Vernon's TRBAA stands for the forecast of TRCs for the
following calendar year, in this case 2015. These forecast TRCs reflect projected
wheeling revenues.
Wheeling revenues, which correspond to ISO Charge Type 384, are projected to be
a credit of $2,430, as shown in Exhibit 3.
These projections are based on the accruals for services provided during the twelve-
month period ending June 30, 2014, which are reflected in the ISO's invoices to
Vernon through September 30, 2014. A summary of the monthly accruals for the
twelve months ending September 30, 2014 is shown in Exhibit 4.
TRBAA Report 2015
Page 5 of 5
RECOMMENDATIONS
1. Approve the newly calculated TRBAA of a positive $12,458,
2. Approve replacing the existing TRBAA of positive $13,331 with the new
TRBAA for 2015 of a positive $12,458..
3. Approve the attached revised Appendix I of Vernon's TO Tariff reflecting the
TRBAA of positive $12,458.
4. Authorize outside counsel to submit Vernon's TRBAA and supporting
documentation, such as this Report and the City Council Resolution
approving the new TRBAA to FERC.
EXHIBIT - 1
TRBAA Report 2015
Exhibit 1
A
B
C
D
E
F
G
H
1
CITY OF VERNON
TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT (TRBAA)
CALENDAR YEAR 2015
DESCRIPTION TOTAL
Balance in TRBA on September 30, 2014 $14,888
including interest
Forecast Transmission Revenue Credits ($2,430)
TRBAA $12,458
Source:
Line 9 Exhibit 2, Column N, Line No.25.
Line 12 Exhibit 3, Column E, Line No.23.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
EXHIBIT - 2
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EXHIBIT - 3
TRBAA Report 2015
Exhibit 3
A
B C I D
E F
1
MONTH
January-15
February-15
March-15
April-15
May-15
June-15
July-15
August-15
September-15
October-15
November-15
December-15
Total
CITY OF VERNON
FORECAST TRANSMISSION CREDITS
for Calendar Year 2015 TRBAA
Wheeling Total
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
($202.54) ($202.54)
202.54 202.54
($2,430.45) ($2,430.45)
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
EXHIBIT - 4
TRBAA Report 2015
Exhibit 4
A
B C
D E F G H I
1
Vernon Historical Transmission Credits
for Calendar Year 2015 TRBAA
Wheeling Revenues
ISO INVOICE
Month CT 384
Final
July-13 ($491.15)
August-13 ($183.04)
September-13 ($117.99)
October-13 ($54.62)
November-13 ($214.83)
December-13 ($429.91)
January-14 ($127.04)
February-14 ($161.43)
March-14 ($209.14)
April-14 ($266.11)
May-14 ($80.83)
June-14 ($9437)
Total
($491.15)
($183.04) ,
($117.99)
($54.62)
($214.83)
($429.91)
($127.04)
($161.43)
($209.14)
($266.11)
($80.83)
($94.37)
($2.430.45)
2
3
4
5
6
7
8
9
10
11
12
13
14
15
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9
SUPPORTING DOCUMENTS
NOTICE OF TWO SEPARATE PUBLIC HEARING
The City of Vernon will conduct two Public Hearings which
you may attend.
PLACE: Vernon City Hall
City Council Chambers
4305 Santa Fe Avenue
Vernon, CA 90058
DATE AND TIME: Tuesday, October 7, 2014, at 9:00 a.m., or
as soon thereafter as the matters may be
heard
PURPOSES: (1) To consider evidence to establish
Vernon's new Transmission Revenue Balancing
Account Adjustment for its high voltage
(over 200 kV) transmission entitlements
(all located outside the City) pursuant to
Vernon's Transmission Owner Tariff, and (2)
To consider evidence to establish Vernon's
new Existing Transmission Contract
Adjustment for its high voltage (over 200
kV) transmission entitlements (all located
outside the City) pursuant to Vernon's
Transmission Owner Tariff.
Any interested person may attend and may make an oral
presentation to the City Council at the time of each of the
hearings, or may present written comments prior to each hearing.
If you challenge the approval of the establishment of
Vernon's new Transmission Revenue Balancing Account Adjustment,
or Vernon's new Existing Transmission Contract Adjustment, or any
provision thereof in court, you may be limited to raising only
those issues you or someone else raised at the respective
hearing(s) 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(s) may be continued or adjourned to a stated
time and place without further notice of a public hearing.
Dated: September 16, 2014
Carlos Fandino
Director of Vernon Gas Electric