Resolution No. 2015-065RESOLUTION NO. 2015-65
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON ADOPTING A NEW TRANSMISSION REVENUE
REQUIREMENT FOR 2016 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
("ISO"), and the Federal Energy Regulatory Commission ("FERC") has
approved its existing Transmission Owner Tariff ("TO Tariff"); and
WHEREAS, the ISO reimburses the City according to the City's
current Transmission Revenue Requirement ("TRR") in return for the City
turning over to the ISO the operation and control of the City's
transmission entitlements; and
WHEREAS, each PTO must include in its TO Tariff its Gross
Load, which the ISO uses to calculate its grid -wide Transmission Access
Charge ("TAC") rates, and which is related to the City's ability to
recover its full TRR; and
WHEREAS, the City's transmission entitlements include rights
under certain contracts (each an "ETC") including (i) an agreement with
the City of Los Angeles Department of Water and Power entitled "Los
Angeles -Vernon Adelanto-Victorville-Lugo Firm Transmission Service
Agreement" (the "LAWDP ETC"); (ii) an agreement with Southern
California Edison Company ("SCE") entitled "Amended and Restated
Edison -Vernon Victorvi.l.l.e-Lugo Ei.rm Transmission Service Agreement"
(the "SCE Victorville-Lugo ETC"); and (iii) an agreement with SCE
entitled "Amended and Restated Edison -Vernon Mead Firm Transmission
Services Agreement" (Lhe "SCE Mead ETC"); and
WHEREAS, the City's costs under the LADWP ETC, the SCE
Victorville-Lugo ETC, and the SCE Mead ETC have traditionally been
based upon a negotiated fixed "path -specific" rate charged by LADWP or.
SCE, based on the actual costs of the specific transmission lines made
available under each ETC, multiplied by the amount of transmission
capacity guaranteed to the City under each ETC; and
WHEREAS, on August 1., 2008, SCE filed a petition with FERC
seeking to amend the pricing structure under the SCE Victorville-Lugo
ETC and the SCE Mead ETC to replace the negotiated path -specific rates
set forth in those ETCs with a `postage -stamp" rate which reflects the
blended rate SCE charges to the ISO for the actual usage of all of
SCE's transmission lines by customers of the ISO; and
WHEREAS, the postage -stamp rate which SCE charges to the ISO
is derived from SCE's TRR and, therefore, will change each time SCE
amends its TRR; and
WHEREAS, on September 30, 2008, FERC accepted, subject to
refund and hearing and settlement procedures, SCE's proposed revisions
under the SCE Victorville-Lugo ETC and the SCE Mead ETC to replace the
negotiated path -specific rates set forth in those ETCs with a postage -
stamp rate, and thus the City's costs under the SCE Victorville-Lugo
ETC and the SCE Mead ETC will vary proportionately with any changes in
SCE's TRR; and
WHEREAS, the City reached a settlement agreement (the "SCE
Settlement") with SCE to amend the SCE Victorville-Lugo ETC and the SCE
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Mead ETC to replace the path-spec_if_ic rates set forth in those ETCs
with SCE's postage -stamp rate after a phase -in period that began on
August 1, 2009, during which the City's path -specific rates in those
ETCs are gradually stepped -up over three years (the "Phase -In Rates")
until the path -specific rates are equal to SCE's postage -stamp rate as
of January 1, 2013; and
WHEREAS, under the SCE Settlement, the City's costs for the
SCE Victorville-Lugo ETC and the SCE Mead ETC are equal to (i) from
August 1, 2009, until December 31, 2012,.the Phase -In Rates, and
beginning on January 1, 2013, the SCE postage -stamp rate, in each case
multiplied by (ii) the amount of transmission capacity guaranteed to
the City under each ETC; and
WHEREAS, FERC approved the SCE Settlement pursuant to an
order issued September 11, 2009, 128 FERC 91 61,237 (2009), in FERC
Docket Nos. ER08-1343-000, ER08-1.353-000, ER09-187-000, ER09-187-001,
EL09-19-000, and ER09-446-000 ("SCE Settlement Order"); and
WHEREAS, on behalf of the City, the Brattle Group, an
experienced utilities consulting firm, developed a tracking mechanism
for the City's TRR ("TRR Tracking Mechanism") to allow the City's ERR
to be adjusted annually, effective January 1 of each year, to reflect
changes in the City's costs under the SCE Victorville-Lugo ETC and the
SCE Mead ETC that change as a result of (i.) the stepped -up rates
implemented between August 1, 2009 and December 31, 2012; or (.ii) any
change in SCE's TRR on or after January 1, 2013; and
WHEREAS, on the basis of The Brattle G.roup's analysis and
evidence from City staff, which was considered during a public meeting
of the City Council held on July 13, 2009, the City, on July 15, 2009
("July 15 FERC Filing"), filed with FERC proposed revisions to its TO
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Tariff proposing stated TRRs for each of the years 2010 to 2012, which
dollar amounts were also included in the SCE Settlement ("TO Tariff
Revisions"); and
WHEREAS, the City also submitted in the July 15 FERC Filing a
request to utilize an "ETC Adjustment Clause" to adjust automatically
each year the costs the City incurs attributable to any changes in
SCE's TRR associated with SCE's High Voltage Existing Contracts Access
Charge ("HVECAC") rate; and
WHEREAS, FERC approved the City's request to utilize an ETC
Adjustment Clause to reflect annual projected changes to SCE's TRR, in
an order issued September 11, 2009, 128 FERC 91 61,235 (2009), in FERC
Docket No. EL09-64-000 ("TO Tariff Order_"); and
WHEREAS, under the TO Tariff Order., the City's TO Tariff
revisions went into effect on August 1, 2009; and
WHEREAS, on January 6 2015, the City approved revisions to
the template used to calculate the annual ETC Adjustment Clause; and
WHEREAS, on April 8, 2015, FERC approved the City's 2015
filing with FERC reflecting modifications to the base TRR as calculated
using the revised ETC Adjustment Clause template; and
WHEREAS, the City is required under the TO Tariff Order to
submit annual filings with FERC reflecting modifications to the base
TRR; and
WHEREAS, a Notice of Public Hearing was published on October
1, 2015, notifying all interested parties that a hearing to consider
evidence to establish the City's new TRR was scheduled for October 20,
2015, at approximately 9:00 a.m., subject to the hearing being
continued or adjourned to a stated time and place without further
notice of public hearing; and
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WHEREAS, on October 20, 201.5, the City Council held a Public
Hearing in which the City Council took evidence from staff and those
other persons in attendance who wished to be heard on the calculation
of the City's new TRR under the City's amended TO Tariff; and
WHEREAS, the TRR for. 2016 is shown in the amended Appendix I
to the TO Tariff, a copy of which is attached hereto as Exhibit A and
made a part hereof; and
WHEREAS, the Gas & Electri-c Department has prepared a Report,
dated October 20, 2015, with exhibits, a copy of which is attached
hereto as Exhibit B and made a part hereof, which reiterates its
previous conclusions that the TRR and ETC Adjustment Clause mechanism
developed by The Brattle Group, approved by FERC under the amended TO
Tariff, and revised in 2015 are reasonable and which calculates the
amount derived under the ETC Adjustment Clause for 2016; and
WHEREAS, the Gas & Electric Department has recommended the
City adopt the TRR shown in the amended Appendix I to the TO Tariff,
attached as Exhibit A, to be effective on January 1, 2016; and
WHEREAS, the City Council. has heard and considered all
evidence, written and oral, presented in consideration of the
establishment of the City's new TRR under the amended TO Tariff.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION l: 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 an effect on the
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environment.
SECTION 3: 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 adoption of the
City's TRR, and after due consideration of any and all evidence
submitted at the Public Hearing, determines there are compelling
reasons to justify the adoption of the City's TRR and Gross Load, to be
effective January 1, 2016.
SECTION 4: The City Council of the City of Vernon hereby
declares that:
(a) any determination made pursuant to this Resolution
regarding the validity or reasonableness of any portion of any TRR or
TO Tariff shall apply only prospectively from the date of this
Resolution; and
(b) in no way shall this Resolution affect the City
Council's adoption or determination of any previous TRR or TO Tariff.
SECTION 5: The City Council of the City of Vernon hereby
approves, pursuant to the TO Tariff and to be effective on January 1,
2016, the establishment of the City's new TRR and Appendix I to the TO
Tariff implementing the new TRR, as described in the Gas & Electric
Report dated October 20, 2015.
SECTION 6: The City Council of the City of Vernon hereby
authorizes outside counsel to submit the City's TRR, the amended
Appendix I: to the Vernon TO Tariff, and supporting documentation, such
as the Report, and this City Council Resolution approving the new TRR,
to FERC on behalf of the City of Vernon.
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SECTION 7: 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 20hh day of October, 2015.
ATTEST:
it
kna Baku
_C--ty--C-10 rs /Deputy City Clerk
APPROVED AS TO FORM:
���I-\
Katharine Mapes, Esq.
Spiegel & McDiarmid, LLP
Special Counsel to City
a
Name: W. Michael McCormick
Title: Mayor
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I Ana Barcia Ety_Ck / Deputy City Clerk of the City
of Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 2015-65, 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 October 20, 2015, and thereafter was duly signed
by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this "' day of October, 2015, at Vernon, California.
(SEAL)
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.AheBa cia'
City C1e k'/ Deputy City Clerk
APPENDIX I t' :=,v Fed)
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is S2,? 10,9 2 9 7_ 3 rxd i and is comprised
of the following components:
Base TRR costs not subject to ETC Adjustment Clause: $498,480
ETC Adjustment Clause:
Forecast SCE ETC Costs:
Balance of Difference between prior year
Forecast and Actual SCE ETC Costs: ($ l4r�h,t"i .: % I)
Interest on Difference between prior year
Forecast and Actual SCE ETC Costs: ($6"08k5 2627)
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 a 8.41_1,, for calendar year 201 0.
Vernon's Gross Load, consistent with its TRIZ, used by the ISO to develop the Transmission
Access Charge is 1,181,728 MWhs.
Alt 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 $2,973,047 and is comprised orthe
following components:
Base TRR costs not subject to ETC Adjustment Clause: $498,480
ETC Adjustment Clause:
Forecast SCE I FC Costs: $2,575,200
Balance of Difference between prior year
Forecast and Actual SCE ETC Costs: ($95,371)
Interest on Difference between prior year
Forecast and Actual SCE ETC Costs: ($5,262)
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 I of each year.
The TRBAA is a positive $411 for calendar year 2016.
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 defiled 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.
CITY OF VERNON GAS AND ELECTRIC
DEPARTMENT
REPORT REGARDING THE ESTABLISHMENT OF A REVISED NEW
TRANSMISSION REVENUE REQUIREMENT ASSOCIATED WITH VERNON'S
HIGH VOLTAGE ENTITLEMENTS
October 20, 2015
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. These calculations are known as Transmission Revenue Requirements
("TRRs").
The relationship between PTOs and the ISO is governed by a Transmission Control
Agreement ("TCA"), which sets forth specific duties and obligations of all PTOs. The
TCA requires all PTOs to file a Transmission Owner Tariff ("TO Tariff") and TRR with
the Federal Energy Regulatory Commission ("FERC"). The TCA further requires all
PTOs to file any changes in their TRRs with FERC. Each PTO must also include in
its TO Tariff its Gross Load which the ISO uses to calculate its grid -wide
Transmission Access Charge ("TAC") rates, and which is related to the City's ability
to recover its full TRR.
TRANSMISSION REVENUE REQUIREMENT
At present, the City's high voltage transmission assets consist of three long-term
contracts (known as "existing transmission contracts" or "ETCs") which provide the
City with dedicated access to high voltage transmission facilities owned by other
entities. Specifically, the City has contractual entitlements to utilize transmission
assets pursuant to one long-term transmission contract with the Los Angeles
Department of Water and Power ("LADWP") and two long-term transmission
contracts with Southern California Edison ("SCE"). The ETCs with SCE consist of
TRR Report 2016
Page 2 of 6
one (the "SCE Victorville-Lugo ETC" described in SCE's FERC Rate Schedule 360)
providing 11 MW of transmission capacity along the path between the Victorville-
Lugo midpoint and the point of interconnection with the City's internal transmission
system (the "City Gate"), and one (the "SCE Mead ETC" described in SCE's FERC
Rate Schedule 207) providing 26 MW of transmission capacity along the path
between the Mead 230 substation and the City Gate.
The costs of these ETCs make up the majority of the costs recovered through the
City's TRR. Until recently, for each of the ETCs, the City paid the owner of the
transmission facilities a fixed rate which was specific to the transmission path
provided under each ETC.
On August 1, 2008, SCE proposed to increase its TRR and associated rates in
FERC Docket No. ER08-1343-000. In a related filing submitted in FERC Docket No.
ER08-1353-000, SCE proposed to transition both of its ETCs with Vernon from their
current, fixed "path -specific" rates to a so-called "postage stamp" rate methodology
which reflects the blended rate which SCE charges the ISO pursuant to its own
TRRs for the actual usage of all of SCE's transmission facilities by customers of the
ISO (the "HVECAC Rate"). The HVECAC Rate that SCE proposed in its TO Tariff is
derived from SCE's TRR and, therefore, will change each time SCE amends its
TRR.
On September 30, 2008, FERC accepted, subject to refund and hearing and
settlement procedures, SCE's proposed revisions to its TO Tariff to transition the
negotiated path -specific rates set forth in the SCE Victorville-Lugo ETC and the SCE
Mead ETC to the uniform HVECAC Rate, and thus the City's costs under those
ETCs will vary proportionately with any changes in SCE's TRR.
The City reached a settlement agreement (the "SCE Settlement") with SCE to
amend the SCE Victorville-Lugo ETC and the SCE Mead ETC to fully transition the
path -specific rates set forth in those ETCs to SCE's HVECAC Rate after a phase -in
period that began on August 1, 2009, during which the City's path -specific rates in
TRR Report 2016
Page 3 of 6
those ETCs have been gradually stepped -up under incrementally increasing fixed
rates (the "Phase -In Rates") until the path -specific rates are equal to the HVECAC
Rate as of January 1, 2013. FERC approved the SCE Settlement pursuant to an
order issued September 11, 2009, 128 FERC ¶ 61, 237 (2009), in FERC Docket
Nos. ER08-1343-000, ER08-1353-000, ER09-187-000, ER09-187-001, EL09-19-
000, and ER09-446-000 ("SCE Settlement Order").
On behalf of the City, The Brattle Group, an experienced utilities consulting firm,
developed a TRR tracking mechanism clause for the City's TRR ("ETC Adjustment
Clause"), which allows the City's TRR to be adjusted annually, effective January 1 of
each year, to reflect changes in the City's transmission expenses associated with
any changes implemented by SCE in the HVECAC Rate associated with the SCE
Victorville-Lugo ETC and the SCE Mead ETC.
On the basis of The Brattle Group's analysis and evidence from City staff, which was
considered during a public meeting of the City Council held on July 13, 2009, the
City, on July 15, 2009 ("July 15 FERC Filing"), filed with FERC the proposed (i)
revisions to its TO Tariff proposing the City's stated TRRs for each of the years 2010
to 2012, which dollar amounts were also included in the SCE Settlement ("TO Tariff
Revisions") and (ii) the ETC Adjustment Clause tracking mechanism.
The July 15 FERC Filing acknowledged that, to the extent that the SCE Settlement
was accepted, because the stated Phase -In Rates would be fixed, the ETC
Adjustment Clause for the term of the Phase -In Rates would be zero.
FERC approved the City's July 15 FERC Filing, including the TO Tariff Revisions,
the City's proposed calculations of the TRR for years 2010 to 2012, and the City's
request to utilize an ETC Adjustment Clause, in an order issued September 11,
2009, 128 FERC ¶ 61,235 (2009), in FERC Docket No. EL09-64-000 ("TO Tariff
Order"). The City is required under the TO Tariff Order to submit annual filings each
year with FERC reflecting annual modifications to the base TRR of the City.
TRR Report 2016
Page 4 of 6
In January 2015, after the discovery of an accounting error in the template used to
calculate the ETC Adjustment Clause, the City approved revisions to the template
and submitted these revisions to FERC. On April 8, 2015, FERC approved the
City's 2015 TRR filing as calculated using the revised ETC Adjustment Clause
template.
CALCULATION OF THE ETC ADJUSTMENT CLAUSE
Section 5.3 of the Vernon TO Tariff identifies the items to be reflected in the ETC
Adjustment. The ETC Adjustment Clause shall be calculated as:
ETC Adjustment = ETCCF+ ETCCT+ I
ETCCF = The forecast of SCE ETC Cost for the following calendar year
ETCCT = The balance representing the prior period difference between the
projected cost of the SCE ETCs ("SCE ETC Cost") and the actual cost.
I = The interest balance for the ETC, 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 ETC true -up balance each month, compounded quarterly.
A summary of the elements of the Vernon ETC Adjustment Clause proposed to be
effective January 1, 2016 is shown in Exhibit 1. The ETC Adjustment Clause to be
effective for the twelve months starting January 1, 2016 is $2,474,567.
The ETCCF Component
The ETCCF component stands for the forecast of SCE ETC costs for the following
calendar year, in this case 2016. These forecast SCE ETC costs reflect 2016 rates
from Southern California Edison Company's draft FERC Filing, posted on its website
pursuant to its formula rate protocols (approved in FERC Docket No. ER11-3697).
That filing is scheduled to be made at FERC, in its final form, on December 1, 2015;
TRR Report 2016
Page 5 of 6
Vernon will true up any differences in its SCE ETC costs when it makes its 2017
TRR filing.
The ETCCF for 2016 SCE ETC costs are projected to be $2,575,200 as shown in
The ETCCT Component
ETCCT represents a balance that reflects the difference between prior year forecast
and actual SCE ETC costs. The prior period in this case is the twelve-month period
starting October 1, 2014 and ending September 30, 2015.
A summary of the determination of the September 30, 2015 balance in the ETC
Adjustment Clause is shown in Exhibit 1. The ETCCT component reflects 1) the
previously projected 2014 SCE ETC costs of $140,230 per month, for the months
October through December 2014 and projected 2015 SCE ETC costs of $165,760
per month, for the months January through September 2015, 2) actual 2014 SCE
ETC costs of $ 145,780 per month, for the months October through December 2014
and $172,790 per month, for the months January through September 2015, and 3)
refunds received by the City —all elements as reflected on Line No, 8, 15, and 16 of
Exhibit 1. The net of these elements produce the under (or over) collection figures
reflected in Line 17 of Exhibit 1. The ending balance is the sum of the beginning
balance on October 1 and the (over)/under collection — both elements as reflected
on Line 1 and 17 of Exhibit 1. The cumulative monthly balances are carried forward
from month to month and the ETCCT component on September 30, 2015 of negative
$95,371 is shown in line 19 of Exhibit 1.
The I (Interest) Component
The Interest component reflects interest on the difference between prior year
forecast and actual SCE ETC costs. The 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."
TRR Report 2016
Page 6 of 6
Interest is calculated monthly on the average cumulative monthly balance and is
compounded quarterly. The interest component is negative $5,262, as shown in
Lines 20-24 of Exhibit 1.
RECOMMENDATIONS
1. Approve the establishment of the City's revised new TRR for 2016 and
revised Appendix I to the TO Tariff.
2. Authorize outside counsel to submit the City's TRR, ETC Adjustment Clause
amount, the revised Appendix I to the TO Tariff, and this City Council
Resolution approving the TRR and ETC Adjustment Clause amount to FERC
on behalf of the City of Vernon.
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CITY CLERK'S OFFICE
ORDoD1;T09: too oulpiu(i1;i41k,j0 41 31
DATE: October 26, 2015
TO: Carlos Fandino, Director of Gas & Electric
FROM: Deborah Juarez, Records Management Assistant
RE: Resolution No. 2015-65 — A Resolution of the City Council of the City of Vernon
Adopting a New Transmission Revenue Requirement for 2016 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. 2015-65 referenced above, for your transmittal,
which was approved by City Council on October 20, 2015.
Please ensure that a copy of the transmittal communication is sent to my attention for the file.
Thank you.
Enclosure
c: Abraham Alemu
Resolution No. 2015-65
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 copv of:
RESOLUTION NO. 2015-65 - A Resolution of the City Council of
the City of Vernon Adopting a New Transmission Revenue
Requirement for 2016 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 J2 day of October 2015.
SEAL:
Ana Bard
Deputy City Cler-.,_...-
�a,.: o'e1�,��'�"s
r-
s 3 2t�;:4�..
Z.t.315
i;i lY vl_.3 RK'-S u'I [' :RN®N GAS & ELECTRIC DEPARTMENT
DATE: October 20, 2015
TO: Honorable Mayor and City Council
FROM: Carlos Fandino Jr., Director of Vernon Gas & Electric Department
Originator: Abraham Alemu, Electric Resource Planning & Development
Manager jointly with Spiegel & McDiarmid, Outside Counsel
RE: Establishment of New Transmission Revenue Balancing Account Adjustment
(TRBAA) for 2016 ("TRBAA" Report)
Recommendation
A. Find that the establishment of a new Transmission Revenue Balancing Account
Adjustment (TRBAA) is exempt Linder 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
B. Conduct a Public Hearing; and
C. Approve the attached Resolution establishing a New Transmission Revenue Balancing
Account Adjustment for 2016 which:
1) Adopts the newly calculated TRBAA of a positive $411;
2) Adopts the replacement of the existing 'I'RBAA of positive $12,458 with the new
TRBAA for 2016 of a positive $411;
3) Adopts the attached revised Appendix I of Vernon's TO Tariff reflecting the
TRBAA of positive $411; and
D. Authorize outside counsel to submit the City of Vernon's TRBAA and supporting
documentation to the Federal Energy Regulatory Commission (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
Page 1 of 2
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 specit3c duties and obligations of all P"ros. 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 Impact
There is no known fiscal impact.
Attachment(s)
City of Vernon Notice of Public Hearing to establish New Transmission Revenue
Balancing Account Adjustment
Page 2 of 2
4305 Santa Fe Avenue
Vernon, CA 90058
(323) 583-8811
NOTICE OF TWO SEPARATE PUBLIC HEARINGS
'file City Council of 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 & Tuesday, October 20, 2015 at 9:00 a.m.
'TIME: (or as soon thereafter as the matter can be heard)
SUBJECTS: (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 tite City)
Pursuant to Vernon's Transmission Owner Tariff.
REQUEST: All parties are invited to be present and to submit statements orally or in writing
before or during the applicable public hearing
REVIEW OF Subject documents are available for inspection by the public at
THE FILE: Vernon City Hall, City Clerk Department, 4305 Santa Fe Avenue, Vernon,
California 90058, Monday through Thursday, 7:00 a.m. to 5:30 p.m. and on the
City's website at:hllh:_//�ti��n �gyoficrnun.oi,./�*o�crnnwnt'public_
m"tin"s'city c,omicil
PROPOSED Staff plans to recommend that the Vernon City Council determine
CEQA that the proposals will not have a significant effect on the environment and
FINDING: are exempt from the California Environmental Quality Act (CFQA)
If you desire to challenge the actions taken by the City Council or any portion thereof in court,
YOU may be limited to raising only those issues you or someone else raised at the applicable hearings
described in this notice or in written correspondence delivered to the City of Vernon during, or before, the
hearings.
The hearings may be continued or adjourned or cancelled and rescheduled to a stated time and
place without further official notice of the public hearings.
Dated:
Carlo�no h , Director of Vet nory gas & P?lectric