Resolution No. 2015-032RESOLUTION NO. 2015-32
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON REPEALING RESOLUTION NO. 8927 AND
AUTHORIZING THE DIRECTOR OF GAS & ELECTRIC TO BUY,
SELL, AND EXCHANGE EMISSION REDUCTION CREDITS AND
RECLAIM TRADING CREDITS
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, on December 7, 2005, the City Council of the City of
Vernon adopted Resolution No. 8927 approving and authorizing Phase I
ERC purchases for the Vernon Power Plant and authorizing the Acting
City Clerk to execute and deliver any other documents incidental to the
purchase, sale or exchange of energy reduction credits on behalf of the
City; and
WHEREAS, by memorandum dated June 2, 2015, the Director of
Gas & Electric has recommended that Resolution No. 8927 be repealed and
authority be given to the Director of Gas & Electric, or the Director
of Gas & Electric's designee, to buy, sell, and exchange emission
reduction credits and reclaim trading credits on behalf of the City;
and
WHEREAS, the City Council desires to repeal Resolution
No. 8927 and authorize the Director of Gas & Electric, or the Director
of Gas & Electric's designee, to buy, sell, and exchange emission
reduction credits and reclaim trading credits on behalf of the City.
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 above recitals are true and correct.
SECTION 2: The City Council of the City of Vernon finds
that this action 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 a significant effect
on the environment, because these transactions would have no such
effect.
SECTION 3: The City Council of the City of Vernon hereby
approves and authorizes Director of Gas & Electric, or the Director of
Gas & Electric's designee, to buy, sell, and exchange emission
reduction credits and reclaim trading credits on behalf of the City
within the parameters of City polices.
SECTION 4: The City Council of the City of Vernon hereby
instructs the Director of Gas & Electric, or the Director of Gas &
Electric's designee, to purchase, sell or exchange of emission
reduction credits and reclaim trading credits on behalf of the City
with full power and authority to determine the nature and terms of any
such purchase, sale, or exchange of emission reduction credits and
reclaim trading credits, to bind the City to carry out any contract
arrangement or other transaction which shall be entered into, and to
fully effect and carry out the purpose of this Resolution.
SECTION 5: All resolutions or parts of resolutions,
specifically Resolution No. 8927, not consistent with or in conflict
with this resolution are hereby repealed.
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SECTION 6: 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 2nd day of June, 2015.
ATTEST:
4•
azo--
mkria E. ala
City Clerk /
Name: W. Michael McCormick
Title: Mayor
APPROVED AS TO FORM:
Brian W. Byun, Dep4ey City Attorney
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I Maria E . Ayala city clerk / f the City
of Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 2015-32, 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 2, 2015, and thereafter was duly
signed by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this LtK day of June, 2015, at Vernon, California.
(SEAL)
. Y•
aria E. yala
City Clerk /
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TRANSMITTAL COMMUNICATION
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: June 9, 2015
TO: Carlos Fandino, Director of Gas & Electric
FROM: Deborah Juarez, Records Management Assistant �T I
RE: Resolution No. 2015-32 — A Resolution of the City Council of the City of Vernon
Repealing Resolution No. 8927 and Authorizing the Director of Gas & Electric to Buy,
Sell, and Exchange Emission Reduction Credits and Reclaim Trading Credits
Transmitted herewith is a copy of Resolution No. 2015-32 referenced above, which was approved by City
Council on June 2, 2015.
Thank you.
c: Abraham Alemu
Resolution Nos. 2015-32, 8927
77'
I/
o")v`\`C VERNON
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DATE: June 2, 2015
STAFF REPORT
MAY 2 S 2015
ITY ADMINISTRATION
GAS & ELECTRIC DEPARTMEN r -n
TO: Honorable Mayor and City Council
FROM: Carlos Fandino Jr., Director of Vernon Gas & Electric Department ,I
Originator: Diana Figueroa, Administrative Secretary (X ;—
RE: Request to Repeal Resolution No. 8927 and Authorize the Director of Vernon
Gas & Electric to Buy, Sell and Exchange Emission Reduction Credits
(ERCs) and Reclaim Trading Credits (RTCs)
Recommendation
A. Find that transactions involving Reclaim Trading Credits and Emission Reduction
Credits are exempt under the California Environmental Quality Act (CEQA) in
accordance with CEQA Guidelines Section 15061(b)(3), the general rule that CEQA
only applies to projects that may have a significant effect on the environment, because
such transactions do not have an impact; and
B. Repeal Resolution No. 8927 wherein the Acting City Clerk was granted authority to
purchase, sell, or exchange ERCs for the City with full power and authority to
determine the nature and terms of any such purchase. Ordinance No. 1200, passed in
2012, annulled Resolution No. 8927 making it not legally valid; and
C. Authorize the Director of Vernon Gas & Electric, or his/her designee, to buy, sell and
exchange Emission Reduction Credits and Reclaim Trading Credits based on Vernon's
current Competitive Bidding and Purchasing Ordinance.
Background
Due to unrealized plans to develop a Vernon Power Plant (the Vernon Power Plant Project), the
City of Vernon Gas & Electric Department has excess amounts of Nitrous Oxide RECLAIM
Trading Credits (NOx RTCs) and Reactive Organic Gases ROG Emission Reduction Credits
(ROG ERCs) in its possession. Because the amounts exceed the City's current and projected
needs, VG&E has recently been exploring a means to monetize the overages to benefit the
City's financial situation.
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In December of 2005, the City authorized the acting City Clerk, or his/her designee, to
purchase, sell, or exchange NOx RTCs and/or ROG ERCs within the parameters of City
policies, as so stated in Resolution 8927. Subsequently, in 2012, Ordinance No. 1200 was
passed by the City Council to amend Article IV of Chapter 2, Sections 2.17 through 2.31 which,
in summary, revised the City's procurement processes to protect the efficiency, quality and
integrity of the purchasing system. The passage of Ordinance No. 1200 nullified the legal
validity of Resolution 8927. Therefore, staff is recommending the repeal of Resolution 8927
and the adoption of a Resolution that places the full power and authority to determine the nature
and terms of any RTC/ERC purchase with the appropriate party.
At this point in time, staff is requesting that the Director of Vernon Gas & Electric be appointed
as the authority to perform any and all duties associated to the purchasing, selling or exchanging
of the City's ERCs and RTCs. The Director is most knowledgeable of the fluctuating market
landscape and is capable of monitoring ebbs and flows to determine which dealings are optimal.
Smartly executed transactions will benefit the City in the short and/or long term.
Fiscal Impact
The goal of facilitating ERC and RTC transactions is to leverage supply and demand in the
market to optimize the City's financial position. It is estimated that the City could recognize
revenue up to $15,000,000 in fiscal year 2015-2016. The precise amount of revenue generated
will be based upon market conditions.
Attachment(s)
None.
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