Resolution No. 2018-007RESOLUTION NO. 2018-07
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON AMENDING NATURAL GAS RATE SCHEDULE NO. G-2
FOR GAS DISTRIBUTED AND SUPPLIED BY THE CITY WITHIN
ITS BOUNDARIES
WHEREAS, in connection with the operation of the Vernon
natural gas system, the City owns, operates and maintains a gas
distribution system, which includes not only mains and appurtenances
but also meters, laterals and other connection infrastructure; and
WHEREAS, the City Council of the City of Vernon 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, by memorandum dated March 6, 2018, the General
Manager of Public Utilities has recommended that the City Council amend
natural gas tariff G-2 (Small Commercial Gas Service), to allow
commercial gas customers on the G-2 rate schedule to elect a fixed
price for gas supply for specified quantities during a specified term,
up to five years; and
WHEREAS, the City Council of the City of Vernon desires to
approve the amended natural gas tariff G-2 (Commercial Gas Service).
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), because it is a governmental fiscal activity that will not
result in direct or indirect physical changes in the environment, and
therefore does not constitute a "project" as defined by CEQA
Guidelines section 15378.
SECTION 3: The City Council of the City of Vernon hereby
revises rate tariff G-2 (Small Commercial Gas Service), to read as set
forth in Exhibit A to this Resolution. Such amendment shall become
immediately effective.
SECTION 4: 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 6th day of March, 2018.
ATTEST:
rV
Mari E. Ayala, Jity Clerk
APPROVED AS TO FORM:
tkll�- �
Brian Byun, /
Senior Deputy City Attorney
- 2 -
Name: Melissa' A. arra
Title: Mayor /
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Maria E. Ayala, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 2018-07,
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, March 6, 2018, and thereafter was duly signed by the Mayor or
Mayor Pro-Tem of the City of Vernon.
Executed this 12:+" day of March, 2018, at Vernon, California.
(SEAL)
- 3 -
�--t�
Mar' E. Ayala, ity Clerk
EXHIBIT A
CITY OF VERNON
NATURAL GAS DEPARTMENT
Schedule G-2
COMMERCIAL GAS SERVICE
APPLICABILITY
This schedule is for combined gas commodity and transportation service to commercial
customers using less than 250,000 Therms per year receiving Core gas service through City of
Vernon's natural gas system. This schedule is also applicable to all other non-residential
customers, regardless of usage volume, that have elected Core Service.
Monthly Service Charge: $50
Monthly Transportation Charges: Rate, in Cents per Therm
Tier I 0 — 4,187 Therms 17.312
Tier II Over 4,187 Therms 7.735
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 City for
gas sales.
Commodity Administrative Fee: 0.30 Cents per Therm
Fixed Price Option: Customers with annual gas consumption above 180,000 Therms shall have
the option to request a mutually agreeable fixed price on an annual basis
for specific quantities (Fixed Price Gas). Fixed Price Gas shall be passed
through at City's cost plus 0.40 Cents per Therm to cover additional
administrative work for customized billing and additional gas
management. This 0.40 Cents per Therm is in addition to the Commodity
Administrative Fee. A Fixed Price Addendum must be executed between
Page 1 of 2
City of Vernon Council Resolution 2018-_ effective 2018
Customer and City in order to formalize Fixed Price Gas. Customer shall
be responsible for payment of Fixed Price Gas in accordance with City of
Vernon Contract for Gas Service, to which Customer agreed when
applying for gas service in the first instance, and which incorporates by
reference the City of Vernon Rules for Gas Service.
SPECIAL NOTES
1. Prior to the commencement of service, 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 covered by City
up to three times the projected annual transportation revenue to the City from the
account. Customer shall pay the balance of the costs. The total connection costs include
traffic control, trenching, piping, repaving, and installation of the meter, regulator(s), and
other equipment required by the City. See also Rule 14. 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 2018-_ effective , 2018
FIXED PRICE ADDENDUM
City of Vernon Natural Gas Rate G-2
Customer:
Maximum Fixed Price Acceptable to Customer: $O.xxx per Therm
Actual Fixed Price Provided by City of Vernon: $ (To be provided by City)
City of Vernon Signature Validating Actual Price:
Estimated
Month Total
Therms
Fixed
Price
Quantity
Variable
Price
Estimate
Estimated
Month Total
Therms
Fixed
Price
Quantity
Variable
Price
Estimate
Fixed Price Addendum Page 1 of 2
City of Vernon Council Resolution 2018 effective , 2018
If during any Month Customer is unable to consume all specified Fixed Price Gas, the portion not
consumed shall be purchased by City according to the Monthly Commodity Charge, minus 1.0 cent per
Therm. Such price may result in a loss or gain for Customer compared to the Fixed Price, dependent on
current market conditions. The Variable Price shall be the Monthly Commodity Charge.
Customer shall be responsible for payment of Fixed Price Gas in accordance with City of Vernon
Contract for Gas Service, to which Customer agreed when applying for gas service in the first
instance, and which incorporates by reference the City of Vernon Rules for Gas Service.
CUSTOMER: CITY OF VERNON:
Signed Signed
Printed Printed
Title Title
Date Date
Fixed Price Addendum Page 2 of 2
City of Vernon Council Resolution 2018-_ effective 2018
STAFF REPORT
Of rEq�
RECEWF
RECEIVE®
. h
2018 FER 2 12018
MAR 01 G`VFLT tN9v6
CITY CLERK'S OFFICE STAFF REPORT
PUBLIC UTILITIES DEPARTMENT
DATE: March 6, 2018
TO: Honorable Mayor and City Council
FROM: Kelly Nguyen, General Manager of Public Utilities
RE: Proposed Resolution Amending Natural Gas Rate Schedule G-2
(Commercial Gas Service) to Add a Fixed Price Option
Recommendation
A. Find that approval of the proposed action is exempt under the California Environmental
Quality Act ("CEQA") review, because it is a governmental fiscal activity that will not
result in direct or indirect physical changes in the environment, and therefore does not
constitute a "project" as defined by CEQA Guidelines section 15378; and
B. Adopt a resolution modifying the gas tariff to allow commercial gas customers on the
G-2 rate schedule to elect a fixed price for gas supply.
Background
This is a proposed gas tariff change to allow commercial gas customers on the G-2 rate schedule
to elect a fixed price for gas supply for specified quantities during a specified term, up to five
years. Fixed prices provide valued price stability to COV customers, presently desirable
following the six -dollar price spike in December 2017, and also because fixed price offerings are
historically low, near three dollars per MMBtu. A redline version of the proposed, modified G-2
rate schedule is attached. The following elements are considered for this new service to Vernon
gas customers.
Eligible Customers
This program is designed for larger customers receiving bundled gas service from City of
Vernon, specifically 22 customers consuming at least 180,000 Therms per year. The cut-off at
180,000 Therms is because of a natural break in customer size below 180,000. This service has
diminishing value to smaller customers because the cost component of natural gas for them is
less significant. Consequently, the 22 largest customers will each be contacted to introduce the
program, assess interest, and proceed based on each customer's interest. The distribution of the
top 22 customers is shown below. The two largest customers are removed such that the scale is
Page 1 of 3
not skewed. This is because the largest customer consumes over 3,800,000 Therms per month,
over three times the third customer in size.
1,400,0(k
1,200,000
1,000,000
800,000
600,000
400,000
200,000
Annual Bundled Gas Consumption: Top Customers
Two top customers are removed: 3,800,000
and 2,700,000Therms per year.
Cutoff for Fixed Price Option at 180,000Th/yr
............
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 6163 65 67 69
Customer Count
Wholesale Gas Purchase
Fixed price gas provided to customers will be purchased through the Resource Management
group such that the risk of price fluctuations is hedged, alleviating price risk to COV. Staff will
work diligently through the customer list such that, ideally, one wholesale purchase can be made
to cover the fixed price supply to the customers. If we assume that 60 percent of the eligible
customer load purchases 80 percent of their requirements at a fixed price, the wholesale purchase
will be approximately 2,400 MMBtu per month to provide a perfect hedge. Preliminary
discussions have occurred with one credible supplier. The supplier has approved COV's credit to
make up to a three-year purchase at this level of volume.
Procedure for Customer to Elect a Fixed Price
For each customer, monthly quantities will be established with an upper limit price accepted by
signature. The format for this is shown on the new addendum to the G-2 Rate Schedule. This
communication will be done prior to Resource Management making the overall purchase. When
the fixed price is then secured by Resource Management, COV will then write in the final price
on the addendum. The completed addendum will then be sent to the customer.
Customer Billing
The gas billing system does not presently have the ability to accommodate multiple commodity
prices for retail customers; however, the proper result can be achieved manually. For the fixed -
price customer group, an Excel workbook will be used each month to calculate the weighted
Page 2 of 3
average cost of the fixed price and variable price supply for each customer. The calculated price
will be manually input into the billing system for each customer, and the calculation is included
in each customer billing statement. Though manually intensive, this is readily possible because
less than 20 customers are expected to elect a fixed price.
Administrative Component of Fixed Price
The proposed fixed price language includes an administrative component of $0.004 per Therm to
cover the additional billing effort and gas management. The billing component is $0.002 per
Therm is based on $1,100 per month of labor cost. The gas management component is also
$0.002 per Therm based on additional weekend transaction activity in Resource Management.
The administrative component for fixed price transactions is in addition to the Commodity
Administrative Fee of $0.003 per Therm.
Mitigating Financial Risk to COV
Fixed price sales to commercial customers will be backed by fixed price purchases from
Vernon's wholesale gas suppliers, facilitated through the Resource Planning Group.
Accordingly, price risk is mitigated. Volume risk is mitigated as customers will not be allowed to
purchase more than their maximum projected loads, and they will be responsible for price
variations in the event they do not take their entire fixed price commitment. The remaining
financial risk component is if a customer stops payment prior to the end of a fixed price
transaction (for example, bankruptcy), and the fixed price is above market at such time. Such
likelihood is very low.
Other Changes to G-2 Rate Schedule
Beyond the fixed price option, the name for the G-2 Rate Schedule has been changed from
"Small Commercial Gas Service" to "Commercial Gas Service." This is appropriate because
several larger customers have elected G-2 service to receive the higher level of service priority
associated with Core service. Additionally, Special Note 2 has been modified to streamline the
language relating to the connection allowance. The "four cents" language no longer applies, as
the three-year allowance is always more beneficial to the customer.
Propositions 218 and 26
This proposed change is not a rate increase imposed on customers. Rather it gives each customer
the option to elect for a fixed price. Subject to approval by the City Attorney, these changes do
not require notification to all customers giving them the opportunity to protest.
Financial Impact to COV
This is a new, optional service for COV gas customers. It is designed such that the COV natural
gas enterprise is revenue neutral, supported by the administrative component of the fixed price.
Fiscal Impact
None.
Attachment(s)
1. Resolution
2. G-2 Commercial Gas Service Schedule — Redline
Page 3 of 3
CITY OF VERNON
NATURAL GAS DEPARTMENT
Schedule G-2
COMMERCIAL GAS SERVICE , - Deleted: SMALL
-------------------------------------- ----------------------
APPLICABILITY — K Formatted: Right: 0.5"
This schedule is for combined gas commodity and transportation service to commercial customers - - - - Formatted: Justified, Right: 0.5"
using less than 250,000 Therms per year jeceiving Core gas service through City of Vernon's - - _ _ _ � ' Deleted: small
natural gas system. This schedule is also applicable to all other non-residential customers,. Deleted: that have elected
regardless of usage volume, that have elected Core Service.
-----------;s, Deleted:I
RATES Formatted, Indent: Left: 0", Right: 0.5"
Formatted: Right: 0.5"
Monthly Service Charge: $50
Monthly Transportation Charges: Rate, in Cents per Therm
Tier I 0 — 4,187 Therms 17.312
Tier Il Over 4,187 Therms 7.735
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
i' exceed market prices for monthly index price gas. From time -to -time, the
i
Commodity Charge may include a Purchased Gas Adjustment that will be
used to maintain a zero sum gain togjty forgas sales.- - - - - - - - - - -
Formatted: Justified, Indent: Left: 0", Hanging: 1.5',
Right: 0.5"
Deleted: COv
Commodity Administrative Fee: 0.30 Cents per Therm .... Deleted: W
--------------------- _ Formatted: Right: 0.5"
Fixed Price Option: Customers with annual gas consumption above 180,000 Therms shall have Deleted - ---------------------rage Break --------------------
the option to request a mutually agreeable fixed price on an annual basis for
specific quantities (Fixed Price Gas). Fixed Price Gas shall be passed
through at City's cost plus 0.40 Cents per Therm to cover additional
administrative work for customized billing and additional gas management.
This 0.40 Cents per Therm is in addition to the Commodity Administrative
Fee. A Fixed Price Addendum must be executed between Customer and
City in order to formalize Fixed Price Gas. Customer shall be responsible
Page 1 of 2
City of Vernon Council Resolution 2018-_ effective , 2018
for payment of Fixed Price Gas in accordance with City of Vernon Contract
for Gas Service, to which Customer agreed when applying for gas service
in the first instance, and which incorporates by reference the City of Vernon
Rules for Gas Service.
SPECIAL NOTES
1. Prior to the commencement of service. 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 Covered by City _
un to three times the projected annual transportation revenue to the City from the account.
Customer shall pay the balance of the costs. The total connection costs include traffic
control, trenching, piping, repaving, and installation of the meter, regulator(s), and other
equipment required by the City. See also Rule 14. 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 2018-_ effective , 2018
Formatted: Right: 0.5"
Formatted: Justified, Right: 0.5"
Deleted: shared between Customer and City. City shall
contribute an amount equal to the greater of: (1) 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; or (2)
Formatted: Justified
Formatted: Justified, Right: 0.5"
Deleted:
FIXED PRICE ADDENDUM
City of Vernon Natural Gas Rate G-2
Customer:
Maximum Fixed Price Acceptable to Customer: $O.xxx per Therm
Actual Fixed Price Provided by City of Vernon: $ (To be provided by City)
ut or vernon,m
nature vanuaun rlcwal ruler.
Estimated Fixed Variabl
Total Price Price
Therms Quantit.✓ Estimat
Estimated Fixed Variabl
Total Price Price
Therms Quantit;✓ Estimat
N
�u
iU
Fixed Price Addendum Pa e Of 23 - 1
City of Vernon Council Resolution 0� 18-_ effective, _ _. 2018
Deleted: 1
Formatted: Default Paragraph Font, Font: 12 pt
Deleted: 2
Formatted: Default Paragraph Font, Font: 12 pt
Formatted: Normal, Left, No widow/orphan control
Deleted: 2013-64
Deleted: June 18, 2013
If during any Month Customer is unable to consume all sMified Fixed Price Gas, the portion not consumed
shall be purchased by City according to the Monthly Commodity Charge minus 1.0 cent per Therm. Such
price may result in a loss or gain for Customer compared to the Fixed Price, dependent on current market
conditions The Variable Price shall be the Monthly Commodity Charge.
Customer shall be responsible for payment of Fixed Price Gas in accordance with City of Vernon
Contract for Gas Service to which Customer agreed when aping for as service in the first
instance and which incorporates by reference the City of Vernon Rules for Gas Service.
CUSTOMER:
Signed
Printed
Date
CITY OF VERNON:
Signed
Printed
Title
Date
I
�n
Fixed Price Addendum Page J_of 22 1
-- - - - -
.
City of Vernon Council Resolution 0� lg_ effectivet _ _. 2018
Deleted: I
Formatted: Default Paragraph Font, Font: 12 pt
Deleted: 2
Formatted: Default Paragraph Font, Font: 12 pt
Formatted: Normal, Left, No widow/orphan control
Deleted: 2013-64
Deleted: June 18, 2013
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON AMENDING NATURAL GAS RATE SCHEDULE NO. G-2
FOR GAS DISTRIBUTED AND SUPPLIED BY THE CITY WITHIN
ITS BOUNDARIES
WHEREAS, in connection with the operation of the Vernon
natural gas system, the City owns, operates and maintains a gas
distribution system, which includes not only mains and appurtenances
but also meters, laterals and other connection infrastructure; and
WHEREAS, the City Council of the City of Vernon 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, by memorandum dated March 6, 2018, the General
Manager of Public Utilities has recommended that the City Council amend
natural gas tariff G-2 (Small Commercial Gas Service), to allow
commercial gas customers on the G-2 rate schedule to elect a fixed
price for gas supply for specified quantities during a specified term,
up to five years; and
WHEREAS, the City Council of the City of Vernon desires to
approve the amended natural gas tariff G-2 (Commercial Gas Service).
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), because it is a governmental fiscal activity that will not
result in direct or indirect physical changes in the environment, and
therefore does not constitute a "project" as defined by CEQA
Guidelines section 15378.
SECTION 3: The City Council of the City of Vernon hereby
revises rate tariff G-2 (Small Commercial Gas Service), to read as set
forth in Exhibit A to this Resolution. Such amendment shall become
immediately effective.
SECTION 4: 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 6th day of March, 2018.
ATTEST:
Maria E. Ayala, City Clerk
APPROVED AS TO FORM:
Brian Byun,
Senior Deputy City Attorney
Name:
Title: Mayor / Mayor Pro-Tem
- 2 -
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Maria E. Ayala, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. ,
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, March 6, 2018, and thereafter was duly signed by the Mayor or
Mayor Pro-Tem of the City of Vernon.
Executed this day of March, 2018, at Vernon, California.
(SEAL)
- 3 -
Maria E. Ayala, City Clerk
EXHIBIT A
CITY OF VERNON
NATURAL GAS DEPARTMENT
Schedule G-2
COMMERCIAL GAS SERVICE
APPLICABILITY
This schedule is for combined gas commodity and transportation service to commercial
customers using less than 250,000 Therms per year receiving Core gas service through City of
Vernon's natural gas system. This schedule is also applicable to all other non-residential
customers, regardless of usage volume, that have elected Core Service.
RATES
Monthly Service Charge: $50
Monthly Transportation Charges: Rate, in Cents per Therm
Tier I 0 — 4,187 Therms 17.312
Tier II Over 4,187 Therms 7.735
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 City for
gas sales.
Commodity Administrative Fee: 0.30 Cents per Therm
Fixed Price Option: Customers with annual gas consumption above 180,000 Therms shall have
the option to request a mutually agreeable fixed price on an annual basis
for specific quantities (Fixed Price Gas). Fixed Price Gas shall be passed
through at City's cost plus 0.40 Cents per Therm to cover additional
administrative work for customized billing and additional gas
management. This 0.40 Cents per Therm is in addition to the Commodity
Administrative Fee. A Fixed Price Addendum must be executed between
Page 1 of 2
City of Vernon Council Resolution 2018-_ effective , 2018
Customer and City in order to formalize Fixed Price Gas. Customer shall
be responsible for payment of Fixed Price Gas in accordance with City of
Vernon Contract for Gas Service, to which Customer agreed when
applying for gas service in the first instance, and which incorporates by
reference the City of Vernon Rules for Gas Service.
SPECIAL NOTES
1. Prior to the commencement of service, 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 covered by City
up to three times the projected annual transportation revenue to the City from the
account. Customer shall pay the balance of the costs. The total connection costs include
traffic control, trenching, piping, repaving, and installation of the meter, regulator(s), and
other equipment required by the City. See also Rule 14. 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 2018-_ effective , 2018
FIXED PRICE ADDENDUM
City of Vernon Natural Gas Rate G-2
Customer:
Maximum Fixed Price Acceptable to Customer: $O.xxx per Therm
Actual Fixed Price Provided by City of Vernon: $ (To be provided by City)
City of Vernon Signature Validating Actual Price:
Estimated
Month Total
Therms
Fixed
Price
Quantity
Variable
Price
Estimate
Estimated
Month Total
Therms
Fixed
Price
Quantity
Variable
Price
Estimate
Fixed Price Addendum Page l of 2
City of Vernon Council Resolution 2018-_ effective 2018
If during any Month Customer is unable to consume all specified Fixed Price Gas, the portion not
consumed shall be purchased by City according to the Monthly Commodity Charge, minus 1.0 cent per
Therm. Such price may result in a loss or gain for Customer compared to the Fixed Price, dependent on
current market conditions. The Variable Price shall be the Monthly Commodity Charge.
Customer shall be responsible for payment of Fixed Price Gas in accordance with City of Vernon
Contract for Gas Service, to which Customer agreed when applying for gas service in the first
instance, and which incorporates by reference the City of Vernon Rules for Gas Service.
CUSTOMER: CITY OF VERNON:
Signed Signed
Printed Printed
Title Title
Date Date
Fixed Price Addendum Page 2 of 2
City of Vernon Council Resolution 2018-_ effective 2018