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Resolution No. 2019-043RESOLUTION NO. 2019-43 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON ESTABLISHING A TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT FOR 2020 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, in its November 15, 2018, filing before FERC, the City informed FERC of an inadvertent error in the TRBAA stated in its October 31, 2018, TRBAA filing for calendar year 2019 and proposed to correct for this error in its TRBAA filing for calendar year 2020, and FERC accepted the City's proposal to correct and account for this inadvertent error in its TRBAA filing for calendar year 2020; and WHEREAS, a Notice of Public Hearing was published on September 26, 2019, notifying all interested parties that a hearing to consider evidence to establish the City's new TRBAA for 2020 was scheduled for October 15, 2019, 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 WHEREAS, a Public Hearing was held on October 15, 2019, 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 Public Utilities Department has prepared a Report, with exhibits, dated on or about October 15, 2019 ("Report"), which determines the new TRBAA for 2020, accounting for the error identified in the TRBAA filing for calendar year 2019 consistent with FERC's order, 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, 2020; and WHEREAS, the Public Utilities Department has recommended that the TRBAA and Appendix I to the TO Tariff implementing the new TRBAA be 2 - 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: 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 from California Environmental Quality Act ("CEQA") review, because it is a fiscal and administrative 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 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, accounting for the error identified in the TRBAA filing for calendar year 2019 consistent with FERC's order, 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 2020 and an amended Appendix I to the TO Tariff implementing the new TRBAA for 2020, a copy of which is attached hereto as Exhibit A and made a part hereof. SECTION 4: The City Council of the City of Vernon hereby approves, pursuant to the TO Tariff and to be effective on January 1, - 3 - 2020, the establishment of the City's new TRBAA for 2020, and revised Appendix I to the TO Tariff implementing the new TRBAA for 2020, as described in the Report, a copy of which is attached hereto as Exhibit B and made a part hereof. SECTION 5: The City Council of the City of Vernon hereby authorizes Outside counsel to submit the City's new TRBAA for 2020, 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. SECTION 6: 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 15th day of October, 2019. ATTEST: p� y1 Lisa M. Pope, dity Clerk APPROVED AS TO FORM, Katharine Mapes, Esq'. Spiegel & MCDiarmid, LLP Special Counsel to City C� Name: Miss A. Ybarra Title: - 4 - STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, Lisa M. Pope, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2019-43, 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 15, 2019, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this �/ Nday of October, 2019, at Vernon, California. (SEAL) - 5 - r Lisa M. Pope, ity Clerk EXHIBIT A APPENDIX I Transmission Revenue Requirement and TRBAA The Vernon Base Transmission Revenue Requirement is $Z,446JW53 13, 0395 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: $2,'QW=�88,72,7O0300 4440 Balance of Difference between prior year Forecast and Actual SCE ETC Costs: ($47,a 12343 270 Interest on Difference between prior year Forecast and Actual SCE ETC Costs: ($22,68426255) 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 l of each year. The TRBAA is a negative osp hive $21,1768,634 for calendar year 204920. Vernon's Gross Load, consistent with its TRR, used by the ISO to develop the Transmission Access Charge is ,','-, 54,4921,119,215 NMs. 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 $3,130,395 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: $3001,440 Balance of Difference between prior year Forecast and Actual SCE ETC Costs: ($343,270) Interest on Difference between prior year Forecast and Actual SCE ETC Costs: ($26,255) 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 yew. The TRBAA is a positive $8,634 for calendar year 2020. Vernon's Gross Load, consistent with its TRR, used by the ISO to develop the Transmission Access Charge is 1,119,215 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. CITY OF VERNON PUBLIC UTILITIES DEPARTMENT REPORT REGARDING THE ESTABLSHMENT OF A NEW TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT FOR CALENDAR YEAR 2020 October 15, 2019 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 years 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 2020 Page 2 of 6 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, 2020 is shown in Exhibit 1. It shows that the balance in the Vernon TRBA as of TRBAA Report 2020 Page 3 of 6 September 30, 2019, which reflects services rendered through June 30, 2019, is positive $14,868, including interest. TRCs are projected to be negative $6,234. Taken together, these items sum up to a TRBAA to be effective for the twelve months starting January 1, 2020 of positive balance of $8,634. 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 positive $14,868 as of September 30, 2019 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, 2018and ending September 30, 2019. A summary of the determination of the September 30, 2019 balance in the Vernon TRBA is shown in Exhibit 2. The TRCT component reflects 1) the previously projected 2018 TRCs for Vernon of $38,427 or $3,202.25 per month, for the months October through December 2018, and 2) projected 2019 TRCs of $21,176 or $1,764.67 per month, for the months January through September 2019—both elements as reflected on Line No. 2 of Exhibit 2. Adjustments for actual payable TRCs reflecting high voltage wheeling revenues payable to the TO (i.e., Vernon) are reflected in Line 3 of Exhibit 2. Distribution of non-refundable interconnection amounts (further discussed below) are reflected in Line 4 of Exhibit 2. Prior year TRBAA Adjustment (further discussed below) is reflected in Line 5 of Exhibit 2 and produce the under (over) collection figures for the monthly payable TRC balances reflected in Line 6 of Exhibit 2. The monthly balances are carried forward from TRBAA Report 2020 Page 4 of 6 month to month in Line 7 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 5.2 of the Vernon TO Tariff. The interest calculation for payable TRC balances is shown in Lines 8-10 of Exhibit 2. The TRBA balance on September 30, 2019 is shown in Line 14 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, 2019. 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 2020. These forecast TRCs reflect projected wheeling revenues. Wheeling revenues, which correspond to ISO Charge Type 384, are projected to be a credit or negative $6,233.82, as shown in Exhibit 3. These projections are based on the accruals for services provided during the twelve- month period ending June 30, 2019, which are reflected in the ISO's invoices to Vernon through September 30, 2019. A summary of the monthly accruals for the twelve months ending September 30, 2019 is shown in Exhibit 4. Distribution of Non -Refundable Interconnection Amounts TRBAA Report 2020 Page 5 of 6 Under Section 7.6 of Appendix DD of the ISO Tariff, "Application of Non -Refundable Amounts," "(t)he CAISO shall calculate and disburse available non-refundable interconnection study deposits and interconnection financial security in conjunction with the annual reassessment performed during the year that the withdrawal period ends." As a Participating Transmission Owner, Vernon received a share of the non- refundable interconnection financial security and study deposit amounts for projects withdrawn through December 31, 2018. In particular, Vernon received $79.33 in the month of April 2019 and $8,708.56 in the month of September 2019 for projects withdrawn through December 31, 2018. In order to distribute those funds to its ratepayers through its TRBAA mechanism in accordance with Section 7.6 (c) of Appendix DID, Vernon includes Line 4 in the spreadsheet it uses to calculate its TRBAA, Exhibit 2 to this report. That line is entitled "Distribution of Non -Refundable Interconnection Amounts" and tracks funds distributed by the ISO from month to month. Prior Period TRBAA Adjustment In the October 31, 2018 submittal, Vernon stated that the TRBAA for calendar year 2019 is negative $21,176. However, in the November 15, 2018 amended filing, Vernon explained that there was an inadvertent error in calculating the 2019 TRBAA and that the correct 2019 TRBAA should have been negative $10,361 rather than the negative $21,176 included in its October 31 filing. Vernon proposed to correct and account for this error in its TRBAA filing for calendar year 2020, and will do so with the applicable FERC interest rate. On January 31, 2019, the Commission accepted Vernon's proposal to correct and account for the erroneous calculation of the 2019 TRBAA when it submits its annual TRBAA filing for 2020. Exhibit 5 to this report shows the calculation of the Transmission Revenue Balancing Account (TRBA) as filed on October 31, 2018 and the calculation of the TRBA with corrected October 2017 beginning balance. With the correction, the September 30, 2018 ending balance changed from negative $18,078 to negative $7,263, indicating TRBAA Report 2020 Page 6 of 6 the 2019 TRBA was overstated by $10,815. Accordingly, the 2019 TRBAA should have been negative $10,361 (negative $7,263 of September 301h TRBA balance plus negative $3,098 of Forecast Transmission Revenue Credit). As shown in line 5 of Exhibit 2, the TRBA calculation for 2020 accounts for the inadvertent error in the 2019 TRBA calculation. 1. Approve the newly calculated TRBAA of a positive $8,634, 2. Approve replacing the existing TRBAA of negative $21,176 with the new TRBAA for 2019 of a positive $8,634. 3. Approve the attached revised Appendix I of Vernon's TO Tariff reflecting the TRBAA of positive $8,634. 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. TRBAA Report 2020 Exhibit 1 A B C D E F G H I i (1] [2] [3) (4] (5] CITY OF VERNON TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT (TRBAA) CALENDAR YEAR 2020 DESCRIPTION TOTAL Balance in TRBA on September 30, 2019 $14,868 including interest Forecast Transmission Revenue Credits ($6,234) TRBAA $8,634 Source: Exhibit 2, Column O, Line No.14. Exhibit 3, Column F, Line No.13. 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 d \ K § § ■ m# a m r :£@ g ); \ ®— �a })) ! (§F 4 © ■ - # k &£ /R N ! |§ ! 7f t 2 [; a !� 0 ® . w ) \� § - `§m ), : ; ]■E § ! !■■ § B E E R rE E EEr y TRBAA Report 2020 Exhibit 3 A B C D I E F G 1 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] MONTH January-19 February-19 March-19 April-19 May-19 June-19 July-19 August-19 September-19 October-19 November-19 December-19 Total CITY OF VERNON FORECAST TRANSMISSION CREDITS for Calendar Year 2020 TRBAA Wheelina Total ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) 519.49 519.49 ($6,233.62) ($6,233.82) 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 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 A B I C I D I E IFIGI H II i [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] Vernon Historical Transmission Credits for Calendar Year 2020 TRBAA Wheeling Revenues ISO INVOICE Month CT 384 Final Adjustments July-18 ($52.62) August-18 ($112.30) September-18 ($264.44) October-18 ($412.46) November-18 ($93.70) December-18 $19.67 January-19 ($231.34) February-19 ($309.25) March-19 $21.76 April-19 ($426.98) May-19 ($2,844.15) June-19 ($1,528.01) Total ($52.62) ($112.30) ($264.44) ($412.46) ($93.70) $19.67 ($23134) ($309.25) $21.76 ($426.98) ($2,844.15) ($1,528.01) ($6.233.821 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Z Q N N O S y 0 W O N O S W O O z Z_ U Z Z L m {Iy� p W mn {Yy b Y Z Z Q am n l7 h ' V O< A < N M N N � Q g GF W m m W m > W > W A N M N S Oy 2e 0 NNI� O O p O N S O O v O Z N N ZN b N F W �p { pm N IIz U= q E N 11 W N N N U N O C O o y a W m N V N g N N N S p m q O y N N S O� N N N OmI S N If�l 0 NYC Z Q �Pp q M pQ Z'^ r ^ N N ^ r ry f O p ts LL LL T N m 8 nN01 N m <Vi n K VY mN 1Uf1 N N n pO N N pp< r 0 N N l0 ^ 1f1YN N m r m N Q n w `a w n, c$ w w' w N, � i w � S N S N p� 0 xmy 0 O^ m✓ SO S N n N h N n G r N O Q pEC p O y W S S O f0 N y y O x N 1� A O tm7, 0 O m � b n h m YI p Y p p py N N p8 N A m nOY N L O N it m H r c o E� w w N $ $ In » i egg azz umi, S S n rc ao N N Y vU � o � z 9 z z p9 § oti z � a s e z 09 5£ i 4a¢K i i$ a5� x n W 500 0 5y 0 62F O33 Q << .� 2 a9K 9 E ao w TRANSMITTAL COMMUNICATION CITY CLERK'S OFFICE INTEROFFICE DATE: October 22, 2019 TO: Abraham Alemu, Interim General Manager of Public Utilities FROM: Deborah Juarez, Records Management Assistant n M RE: Resolution No. 201943 — A Resolution of the City Council of the City of Vernon Establishing a Transmission Revenue Balancing Account Adjustment for 2020 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. 2019-43 referenced above, which was approved by City Council on October 15, 2019, and an original notarized affidavit of Tilahun Alemu 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: Resolution No.2019-43 CERTIFICATE STATE OF CALIFORNIA ) ) as COUNTY OF LOS ANGELES) I, Lisa Pope, 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. 2019-43 - A Resolution of the City Council of the City of Vernon Establishing a Transmission Revenue Balancing Account Adjustment for 2020 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 V��e� non, County of Los Angeles, State of California, on thisg';t day of October 2019. SEAL: ap /�c Ian Lisa Pope City Clerk AFFIDAVIT OF TILAHUN ALEMU STATE OF CALIFORNIA ) SS. COUNTY OF LOS ANGELES Tilahun Alemu, being duly swam, deposes and states that he is the Interim General Manager of Vernon Public Utilities, that the "City of Vernon Public Utilities Department Staff Report Regarding the Establishment of a New Transmission Revenue Balancing Account Adjustment for Calendar Year 2020," including Exhibit 1 through 5 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. Tilahun Alemu Date CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 -x�srnrsr. rcx- .-f �kcrefeocesr.�c `r.•rsreneoer - ^_,•_-,^.�torrsassrK.rscerscseeeee.�ssesr�se A notary public or other officer completing this certificate vexes only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of Call forma ) County of / On 10(s before me, �Ld Date He a end Title of the Officer personally appeared 0 Uri Name(s) of Signers) who proved to me on the basis of satisfactory evidence to be the personw'whose name�sris/tt r subscribed jo the within instrument and acknowledged to me that he/;he/Jhe9 executed the same in his/her/Otefr authorized capacityfRs'J', and that by hisDr6r/tW-rsignatureWon the instrument the perso5K,, or the entity upon behalf of which the persony)'acted, executed the instrument. ------------- CINGY GAWAN Notary Public - Caldomia Los Angeles County i i Commission # 2158651 My Comm. Expires Jun 30 2020+ Place Notary Seal Above I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my nd and of ial s UL Signature Signature ry u is OPTIONAL Though this section is optional, completing this information ran deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Docum L Title or Type of Document: i G{A-ij I \ Document Date: I0 Number of Pages: I Signers) Other Than Named Above: CapacttyQea) C im d by I r Signer's Name: U !X gner's Name: Corporate Officer — Title(s): Q fiM^ Corporate Officer — TRIe(s): Partner — I _ Limited r General VVV Partner — L7 Limited ❑ General Individual Attorney in Fact Individual ❑ Attorney in Fact Trustee —. Guardian or Conservator Trustee Guardian or Conservator _ Other. Other. Signer Is Representing: Signer Is Representing: @2014 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-878-6827) Item #5907 STAFF REPORT AGENDA APPROVED 10115/19, SO City Council Agenda Item Report Agenda Item No. CO V-449-2019 Submitted by: Abraham Alemu Submitting Department: Public UtOkies Meeting Date: October 15, 2019 SUBJECT A Resolution Establishing a Transmission Revenue Balancing Account Adjustment for 2020 in Accordance with Vernon's Transmission Owner Tariff and Providing for Tariff Sheet Changes to Implement the Adjustment Recommendation: A. Find that approval of this action is exempt from California Environmental Quality Act ("CEQA') review, because it is a fiscal and administrative activity that will not resuk 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. Conduct a Public Hearing; and C. Adopt a resolution establishing a Transmission Revenue Balancing Account Adjustment for 2020 in accordance with Vernon's Transmission Owner Tariff and providing for Tariff Sheet changes to implement the adjustment. Background: The City of Vernon is a Scheduling Coordinator and a Participating Transmission Owner ('PTO') in the Caldbms Independent System Operator Corporation ("ISO'). To participate in the ISO, PTOs are required to tan over admifstrative control of their transmission ficilaies and entitlements to the ISO. In muM 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 CTCA'), 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 TarK Vernon updates its Transmission Revenue Balancing Account Adjustment C'MAA') annually. The TRBAA is a tari f nechansm desiged to ensue that all Transmission Revenue Credits C'Ws') are flowed through to ISO open access transmission tariff("ISO Tariff) customers via annual update flings 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 for 2020, based on the requiremeras of the TO Tarffand the ISO Tarim The Report accounts for the inadvertent error identified in the TRBAA Ming for calendar year 2019 consistent with FERC's order. Fscal Impact: None. AGENDAAPPROVED 10/15119, SD ATTACHMENTS • 1. Notre of Pubfic Hearing to Establish TRBAA for 2020 • 2. Resolution Establishing TRBAA for 2020 41 �'F vggry City of Vernon Z ?� I AGEN DA11ArrPP�t�PS5/R/�tOgqV�cED 4305 Saa&CW AN£du8D Vernon, CA 9W58 (323)583-8811 NOTICE OF TWO SEPARATE PUBLIC HEARINGS REGARDING THE ESTABLISHMENT OF VERNON'S NEW TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT AND ADOPTION OF A NEW GROSS LOAD AND NEW TRANSMISSION REVENUE REQUIREMENT The City of Vemon will conduct a Public Hearing, which you may attend. PLACE: Vemon City Hall City Council Chamber 4305 Santa Fe Avenue Vernon, CA 90058 DATE & TIME: Tuesday, October 15, 2019, at 9:00 a.m. (or as soon thereafter as the matter can be heard) PURPOSEISUBJECT: (1) To consider evidence to establish Vemon'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 new Gross Load and new Transmission Revenue Requirement for its high voltage (over 200 kV) transmission entitlements (all located outside the City) pursuant to Vernon's Transmission Owner Tariff. DOCUMENTS FOR REVIEW: Copies of a Resolution Establishing a Transmission Revenue Balancing Account Adjustment for 2020 and a Resolution Adopting a New Gross Load and New Transmission Revenue Requirement will be available for public examination a Vemon City Hall, located at 4305 Santa Fe Avenue, Vemon, CA from October 4, 2019 through October 15, 2019. Please send your comments or questions to: Abraham Alerru City of Vernon, Public Utilities 4305 Santa Fe Avenue, Vernon, CA 90058 (323) 583-8811 Ext. 250 AAlxmu@ci vemon.ca.us PROPOSED CEQA FINDING: find that approval of the proposed action is exempt from California Environmental Quality Act ("CEQA") review, because it is a fiscal and administrative 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. I you challenge the adoption/approval of the establishment of Vernon's new Transmission Revenue Balancing Account Adjustment, or Vernon's new Gross Load and new Existing Transmission Contract Adjustment or any provision thereof in court, you may be limited to raising only those issues you or someore else raised at the hearing described in this notice or in written correspondence delivered to the City of Vernon at, or prior to, the meeting. Americans with Disabilities Act (ADA): In compliance with ADA, ifyor need special assistance to participate in the meeting, please contact the Office of the City Clerk at (323) 583-8811 em 546. The hearing may be continued or adjourned or cancelled and rescheduled to a stated time and place without further notice of a public hearing. Dated: 9/23/19 Deborah HaningtonjiErim City Clerk AGENDAAPPROVED 10/15/19, SO CALIFORNIA NEWSPAPER SERVICE BUREAU DAILY JOURNAL CORPORATION Mailing Address : 915 E FIRST ST, LOS ANGELES, CA 90012 Telephone IBM)]88-T840l Fax (800)464-2839 Visit us r@ wwx.LegaWtlstore.mm Deborah Harrington CITY OF VERNON CITY CLERK 4305 SANTA FE AVE VERNON, CA 90058 PRE# 3297924 NOTICE OF Two SEFARATE FORM MEMINi REGARDING THE ESTABLISHMENTOF VERNON'S MEW iMNSMI5310X REVENUE BALANCING ACCOUNT ADJUSTMENT AND ADOPTION OF A New GROSS LOAD AND New COPY OF NOTICE TRANSMSSION REVENUE REQUIREMENT rM UY w Varm wA cmMa a FutliC Hesrg Mrr✓r Yau rraY a0me] PLACE Venn City HSI W5ame FF AAuer�Y Notice Type: GPN GOUT PUBLIC NOTICE °Prtq"CA 90658 DATECOVIVI Ad Description aav'adar mn«neaa maEmaNes�n Notice of Two Separate Public Hearings - The establishment of Vernon's New °e°earal Transmission Revenue Balancing Account Adjustment an c! Adoption of a New o RRIQUI EVENTME CT(l) TO Otri rse� eae,w zn",. recta Nei, m To the right is a cepy of the notice you sent to us for publication in tits Inuw y xh n cam me I. HUNTINGTON PARK BULLETIN. Please mad this notice Carefully and Call us City Ai wnseer IIeQwCiiAi.msn with any corrections. The Proof of Publication will be filed with the County e ..1edeo . G ayL� 11. - Clerk. if to the last data below. Publication Fa.n RFV ly 1.1 required, and mailetl you after „drays Inw xV1 vsla.- tlate(S) for BIIS notice Is (am): 1 I m and' T NI F—Mn, to Vevle TDOCUMENTS 0912 019 FOR RENEWC.' PaTmvnavm a F.I. sn �F^91ONM� 1 ADMAtnityri . a ..- A= a Nea' Gw own and Non Taa,raam R.— RFMNa�errl II b weletle M qdc eian .- M 1— An inwice be the last date If this C'lern,o .kcal xm VCAQe twiny. s . will sent after of publication. you prepaid In order in full, you will not receive an inwice. 0.1E. .19 vla•+e agile I'Mr. .nerwA OwwAb Crry SMOy Fe McUMieea ab5W Fe Awnue Vemm. CA 9(p59 l Let5W 11 „. IISDa P ROFDSEO CEDR FMgMG FrM WI yi,i aAn Ermn]mmrlM Quart, FCEOA'I) V— a0.11 tlul Yell. in dretl m ndretl FYri crai and NeeFNe does inre: pcau i. aaer.a er LFQA GudMm awumpny 9 11alyiHr0 RA NNANEVMw TOM alm�e . . .aem Rawnw Oalanon9 nl ADIUM.I, Ar Vwrcn'a m' Gov Load . m' E.01 TW .— 4¢Mya Or 9y ,AO,oO.ri may EeY b r'aMatl tic.e=.--.'�Mdin NFMIi Innin_ delM1eal lO eN C, N VemOn M o p rreNrg. e n M 'Ai in Onnn n ^a rM ,Note —Nor,i pAs�ref ¢n. me �ry Oer4 el (]2al5al R911 in 14E TM Fit, ^' ' in y Or wtfeanet a vRlied an]'z It W M a HIM And Va�a'.MMMiun-e' -_. ce O/a PEYe Irana4 A IIII 1 * A 0 0 0 0 0 5 2 2 5 1 7 4* AGENDA APPROVED 10/15/19. SD 6mvan xemym imwim Gry avk HUea Tw nuxnxorox ruu euLuTn AGENDA APPROVED 10115/19, SD RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON ESTABLISHING A TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT FOR 2020 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 AGENDA APPROVED 10/15/19, SD reflecting the proposed Transmission Revenue Credits adjusted for difference between projected and actual credits from the prior year; and WHEREAS, in its November 15, 2018, filing before FERC, the City informed FERC of an inadvertent error in the TRBAA stated in its October 31, 2018, TRBAA filing for calendar year 2019 and proposed to correct for this error in its TRBAA filing for calendar year 2020, and FERC accepted the City's proposal to correct and account for this inadvertent error in its TRBAA filing for calendar year 2020; and WHEREAS, a Notice of Public Hearing was published on September 26, 2019, notifying all interested parties that a hearing to consider evidence to establish the City's new TRBAA for 2020 was scheduled for October 15, 2019, 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 WHEREAS, a Public Hearing was held on October 15, 2019, 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 Public Utilities Department has prepared a Report, with exhibits, dated on or about October 15, 2019 ("Report"), which determines the new TRBAA for 2020, accounting for the error identified in the TRBAA filing for calendar year 2019 consistent with FERC's order, 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, 2020; and WHEREAS, the Public Utilities Department has recommended that the TRBAA and Appendix I to the TO Tariff implementing the new TRBAA be 2 - AGENDA APPROVED 10/15/19, SD 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: 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 from California Environmental Quality Act ("CEQA") review, because it is a fiscal and administrative 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 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, accounting for the error identified in the TRBAA filing for calendar year 2019 consistent with FERC's order, 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 2020 and an amended Appendix I to the TO Tariff implementing the new TRBAA for 2020, a copy of which is attached hereto as Exhibit A and made a part hereof. SECTION 9: The City Council of the City of Vernon hereby approves, pursuant to the TO Tariff and to be effective on January 1, - 3 - AGENDA APPROVED 10/15/19, SD 2020, the establishment of the City's new TRBAA for 2020, and revised Appendix I to the TO Tariff implementing the new TRBAA for 2020, as described in the Report, a copy of which is attached hereto as Exhibit B and made a part hereof. SECTION 5: The City Council of the City of Vernon hereby authorizes outside counsel to submit the City's new TRBAA for 2020, 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. SECTION 6: 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 15hh day of October, 2019. ATTEST: Lisa M. Pope, City Clerk APPROVED AS TO FORM: Katharine Mapes, Esq. Spiegel & McDiarmid, LLP Special Counsel to City Name: Title: =1= AGENDAAPPROVED 10/15/19, SD STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, Lisa M. Pope, 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, October 15, 2019, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this day of October, 2019, at Vernon, California. (SEAL) - 5 - Lisa M. Pope, City AGENDA APPROVED 10/15/19, SD EXHIBIT A AGENDA APPROVED 10/15/19, SD APPENDIX I Transmission Revenue Requirement and TRBAA The Vernon Base Transmission Revenue Requirement is $2,446,80*3 13, 0395 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: ei.'W 88- N3001.a40 Balance of Difference between prior year Forecast and Actual SCE ETC Costs: ($447-7-1�2343.2701 Interest on Difference between prior year Forecast and Actual SCE ETC Costs: ($2i68226.255) 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 negative oso hive $2-F,4-7688 634 for calendar year 204-920. Vernon's Gross Load, consistent with its TRR, used by the ISO to develop the Transmission Access Charge is ',' °,--r?„-,'"" L 1 99,2I5 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. AGENDA APPROVED 10/15/19, SO APPENDIX I Transmission Revenue Requirement and TRBAA The Vernon Base Transmission Revenue Requirement is $3,130,395 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: $3001,440 Balance of Difference between prior year Forecast and Actual SCE ETC Costs: ($343,270) Interest on Difference between prior year Forecast and Actual SCE ETC Costs: ($26,255) 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 $8,634 for calendar year 2020. Vernon's Gross Load, consistent with its TRR, used by the ISO to develop the Transmission Access Charge is 1, 119,215 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. AGENDA APPROVED 10/15/19, SD EXHIBIT B AGENDA APPROVED 10/15/19, SD CITY OF VERNON PUBLIC UTILITIES DEPARTMENT REPORT REGARDING THE ESTABLSHMENT OF A NEW TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT FOR CALENDAR YEAR 2020 October 15, 2019 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 rile a Transmission Owner Tariff ("TO Tarifr) 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 AGENDAAPPROVED 10/15/19, SD TRBAA Report 2020 Page 2 of 6 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, 2020 is shown in Exhibit 1. It shows that the balance in the Vernon TRBA as of AGENDA APPROVED 10/15/19, SO TRBAA Report 2020 Page 3 of 6 September 30, 2019, which reflects services rendered through June 30, 2019, is positive $14,868, including interest. TRCs are projected to be negative $6,234. Taken together, these items sum up to a TRBAA to be effective for the twelve months starting January 1, 2020 of positive balance of $8,634. 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 positive $14,868 as of September 30, 2019 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, 2018and ending September 30, 2019. A summary of the determination of the September 30, 2019 balance in the Vernon TRBA is shown in Exhibit 2. The TRCT component reflects 1) the previously projected 2018 TRCs for Vernon of $38,427 or $3,202.25 per month, for the months October through December 2018, and 2) projected 2019 TRCs of $21,176 or $1,764.67 per month, for the months January through September 2019—both elements as reflected on Line No. 2 of Exhibit 2. Adjustments for actual payable TRCs reflecting high voltage wheeling revenues payable to the TO (i.e., Vernon) are reflected in Line 3 of Exhibit 2. Distribution of non-refundable interconnection amounts (further discussed below) are reflected in Line 4 of Exhibit 2. Prior year TRBAA Adjustment (further discussed below) is reflected in Line 5 of Exhibit 2 and produce the under (over) collection figures for the monthly payable TRC balances reflected in Line 6 of Exhibit 2. The monthly balances are carried forward from AGENDA APPROVED 10/15/19, SD TRBAA Report 2020 Page 4 of 6 month to month in Line 7 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 5.2 of the Vernon TO Tariff. The interest calculation for payable TRC balances is shown in Lines 8-10 of Exhibit 2. The TRBA balance on September 30, 2019 is shown in Line 14 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, 2019. 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 2020. These forecast TRCs reflect projected wheeling revenues. Wheeling revenues, which correspond to ISO Charge Type 384, are projected to be a credit or negative $6,233.82, as shown in Exhibit 3. These projections are based on the accruals for services provided during the twelve- month period ending June 30, 2019, which are reflected in the ISO's invoices to Vernon through September 30, 2019. A summary of the monthly accruals for the twelve months ending September 30, 2019 is shown in Exhibit 4. Distribution of Non -Refundable Interconnection Amounts AGENDAAPPROVED 10/15/19, SD TRBAA Report 2020 Page 5 of 6 Under Section 7.6 of Appendix DD of the ISO Tariff, "Application of Non -Refundable Amounts," "[t]he CAISO shall calculate and disburse available non-refundable interconnection study deposits and interconnection financial security in conjunction with the annual reassessment performed during the year that the withdrawal period ends." As a Participating Transmission Owner, Vernon received a share of the non- refundable interconnection financial security and study deposit amounts for projects withdrawn through December 31, 2018. In particular, Vernon received $79.33 in the month of April 2019 and $8,708.56 in the month of September 2019 for projects withdrawn through December 31, 2018. In order to distribute those funds to its ratepayers through its TRBAA mechanism in accordance with Section 7.6 (c) of Appendix DD, Vernon includes Line 4 in the spreadsheet it uses to calculate its TRBAA, Exhibit 2 to this report. That line is entitled "Distribution of Non -Refundable Interconnection Amounts" and tracks funds distributed by the ISO from month to month. Prior Period TRBAA Adjustment In the October 31, 2018 submittal, Vernon stated that the TRBAA for calendar year 2019 is negative $21,176. However, in the November 15, 2018 amended filing, Vernon explained that there was an inadvertent error in calculating the 2019 TRBAA and that the correct 2019 TRBAA should have been negative $10,361 rather than the negative $21,176 included in its October 31 filing. Vernon proposed to correct and account for this error in its TRBAA filing for calendar year 2020, and will do so with the applicable FERC interest rate. On January 31, 2019, the Commission accepted Vernon's proposal to correct and account for the erroneous calculation of the 2019 TRBAA when it submits its annual TRBAA filing for 2020. Exhibit 5 to this report shows the calculation of the Transmission Revenue Balancing Account (TRBA) as filed on October 31, 2018 and the calculation of the TRBA with corrected October 2017 beginning balance. With the correction, the September 30, 2018 ending balance changed from negative $18,078 to negative $7,263, indicating AGENDAAPPROVED 10/15/19, SD TRBAA Report 2020 Page 6 of 6 the 2019 TRBA was overstated by $10,815. Accordingly, the 2019 TRBAA should have been negative $10,361 (negative $7,263 of September 30th TRBA balance plus negative $3,098 of Forecast Transmission Revenue Credit). As shown in line 5 of Exhibit 2, the TRBA calculation for 2020 accounts for the inadvertent error in the 2019 TRBA calculation. RECOMMENDATIONS 1. Approve the newly calculated TRBAA of a positive $8,634, 2. Approve replacing the existing TRBAA of negative $21,176 with the new TRBAA for 2019 of a positive $8,634. 3. Approve the attached revised Appendix I of Vernon's TO Tariff reflecting the TRBAA of positive $8,634. 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. AGENDAAPPROVED 10/15/19, SD TRBAA Report 2020 Exhibit 1 A B C D E F G H I 1 [11 (21 [31 [41 [5] CITY OF VERNON TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT (TRBAA) CALENDAR YEAR 2020 DESCRIPTION TOTAL Balance in TRBA on September 30, 2019 $14,868 including interest Forecast Transmission Revenue Credits ($6,234) TRBAA $8,634 Source: Exhibit 2, Column O, Line No.14. Exhibit 3, Column F, Line No.13. 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 —.. .,.,,. .. ..,.. ..; )\ya | , AGENDA APPROVED 10/15/19, SD TRBAA Report 2020 Exhibit 3 A B c D I E F G 1 [1] [2) [3] [4] [5] [61 M [81 [9] [10] [11) [12] [131 MONTH January-19 February-19 March-19 April-19 May-19 June-19 July-19 August-19 September-19 October-19 November-19 December-19 Total CITY OF VERNON FORECAST TRANSMISSION CREDITS for Calendar Year 2020 TRBAA Wheeling Total ($519.49) ($51949) ($519.49) ($51949) ($519.49) ($51949) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) ($519.49) 519.49 5($ 19.49) ($6,233.82) ($6,233.82) 2 3 4 5 6 7 -L 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 AGENDAAPPROVED 10/15/19. SD TRBAA Report 2020 Exhibit 4 A B C I D I E IFIGI H I I 1 [1] [21 Vernon Hb[orl"I Transmission Credits for Calendar Year 2020 TRBAA Wheeling Revenues ISO INVOICE Manih CT 384 Final Adjustments Juy-18 ($52.62) August-18 ($112.30) Tolal (55262) ($112.30) 2 3 4 5 6 7 8 9 10 11 (31 [41 September-18 Odober.18 ($264.44) ($412.46) (5264.44) ($412.46) 12 13 [51 November-18 ($93.70) ($93.70) 74 (61 De.mber-18 $19.07 $19.67 75 [71 January-19 ($231.34) ($231.34) 16 181 February-19 ($309.25) ($309.25) 17 [91 Marts-19 52176 $21.76 18 (101 Apnl-19 ($426.98) ($426.98) 19 [111 May-19 ($2,844.15) (52,844.15) 20 (121 June-19 ($1,528.01) ($1,528.01) 21 [131 I"2�233611 22 M23 24 25 uy' an � S 8 E • kkov y9 � e R a_ g a B a �At s. 6 R $ s 9 kit � .� 8 R $ 4R � �•c oR E e s 8 E gel C '^ G R x =R 5 6 m 8 E S k!B F R� ff 8' S5 3 y3y3 S R 8 S a S @E 8 Sx s R R �, a R �•� A �� a a= a s SrtS S .a may_ Vs a _ 4 f t � fyF = E _ _ 9 € EKE s IN c a K - 9 K EEe. s -_ _ _