Resolution No. 2020-036 RESOLUTION NO. 2020-36
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON
ADOPTING A REVISED TRANSMISSION REVENUE REQUIREMENT
FOR 2021 IN ACCORDANCE WITH VERNON'S TRANSMISSION
OWNER TARIFF AND PROVIDING FOR TARIFF SHEET CHANGES TO
IMPLEMENT THE ADJUSTMENT
SECTION 1 . Recitals.
A. 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.
B. 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').
C. 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.
D. 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.
E. 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 Victorville-Lugo Firm 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" (the "SCE
Mead ETC').
F. 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.
G. 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
Resolution No. 2020-36
Page 2 of 17
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.
H. 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.
I. 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.
J. The City reached a settlement agreement (the SCE Settlement") with SCE to
amend the SCE Victorville-Lugo ETC and the SCE Mead ETC to replace the path-
specific 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.
K. 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.
L. FERC approved the SCE Settlement pursuant to an order issued September 11 .
2009. 128 FERC 1161 .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").
M. 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 TRR 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.
N. 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 proposed
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Page 3 of 17
revisions to its TO 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").
O. 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.
P. 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 1161 ,235 (2009). in FERC Docket No. EL09-64-000 ("TO Tariff Order.).
Q. Under the TO Tariff Order. the City's TO Tariff revisions went into effect on August
1. 2009.
R. On January 6, 2015. the City approved revisions to the template used to calculate
the annual ETC Adjustment Clause.
S. 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.
T. On October 15. 2019. the City approved revisions to the Gross Load included in
the City's TO Tariff that updated the Gross Load to be based on a fiscal year 2019
test year. rather than 2016 actual load data.
U. On December 20. 2019. FERC approved the City's 2019 filing with FERC reflecting
revisions to the Gross Load included in the City's TO Tariff.
V. The City is required under the TO Tariff Order to submit annual filings with FERC
reflecting modifications to the base TRR.
W. A Notice of Public Hearing was published on October 1 and 8, 2020. notifying all
interested parties that a hearing to consider evidence to establish the City's revised
TRR was scheduled for October 20. 2020. 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.
X. On October 20. 2020. 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 revised TRR.
Resolution No. 2020-36
Page 4 of 17
Y. The TRR for 2021 is shown in the amended Appendix Ito the TO Tariff. a copy of
which is attached hereto as Exhibit A and made a part hereof.
Z. The Public Utilities Department has prepared a Report. dated October 20. 2020.
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 2021.
AA. The Public Utilities 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. 2021 .
BB. The City Council has heard and considered all evidence. written and oral.
presented in consideration of the establishment of the City's revised TRR.
NOW. THEREFORE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
VERNON AS FOLLOWS:
SECTION 2. The City Council of the City of Vernon hereby finds and determines
that the above recitals are true and correct.
SECTION 3. The City Council of the City of Vernon finds that this action does
not constitute a project" pursuant to section 15378(b)(2) of the Guidelines to the
California Environmental Quality Act ('`CEQA"), because such action constitutes an
administrative activity: and even if the adoption of the proposed item did constitute a
project. it would be exempt in accordance with CEQA Guidelines section 15061(b)(3).
the general rule that CEQA only applies to projects that may have an effect on the
environment.
SECTION 4. 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. to be effective January 1. 2021 .
SECTION 5. 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.
Resolution No. 2020-36
Page 5 of 17
SECTION 6. The City Council of the City of Vernon hereby approves. pursuant
to the TO Tariff and to be effective on January 1. 2021. the establishment of the City's
revised TRR and Appendix Ito the TO Tariff implementing the revised TRR, as
described in the Public Utilities Department Report dated October 20. 2020.
SECTION 7. The City Council of the City of Vernon hereby authorizes outside
counsel to submit the City's TRR. the amended Appendix Ito the Vernon TO Tariff. and
supporting documentation. such as the Report. and this City Council Resolution
approving the revised TRR. to FERC on behalf of the City of Vernon.
SECTION 8. The City Clerk shall certify the passage and adoption of this
resolution and enter it into the book of original resolutions.
APPROVED AND ADOPTED this 20th day of October 0.
ETICIA LOPEZ, Mayor
ATTEST:MrLPrZc
LISA POPE, City Cl rk
(seal)
AP ROVED AS TO EO M:
RNOLD M. ALVAREZ-GLASMAN,
Interim City Attorney
I CERTIFY THAT THE FOREGOING RESOLUTION NO. 2020-36 was passed and adopted
by the City Council of the City of Vernon at the regular meeting on October 20. 2020 by the
following vote:
AYES: 5 Council Members: Davis, Gonzales. Menke, Ybarra. Lopez
NOES: 0
ABSENT: 0
ABSTAIN: 0
01.1 LISA POPE. City Clerk
(seal)
Resolution No.2020-36
Page 6 of 17
EXHIBIT A
Resolution No.2020-36
Page 7 of 17
I4PPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is$3,130,3951.973,581,and is comprised
of the following components:
Base TRR costs not subject to ETC Adjustment Clause: S498,480
ETC Adjustment Clause:
Forecast SCE ETC Costs: $3004 4102,473,080
Balance of Difference between prior year
Forecast and Actual SCE ETC Costs: ($-34-372-7-8964,168)
Interest on Difference between prior year
Forecast and Actual SCE ETC Costs: (S26,25533.811)
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 pesitiveneeative$8,6-3424,971 for calendar year 20281.
Vemon'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 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.
Resolution No 2020-36
Page 8 of 17
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Re\enue Requirement is S1,973,581 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: $2,473,080
Balance of Difference between prior year
Forecast and Actual SCE ETC Costs: ($964,168)
Interest on Difference between prior year
Forecast and Actual SCE ETC Costs: ($33,811)
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$24,971 for calendar year 2021.
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.
Resolution No.2020-36
Page 9 of 17
EXHIBIT B
Resolution No.2020-36
Page 10 of 17
CITY OF VERNON PUBLIC UTILITIES DEPARTMENT
REPORT REGARDING THE ADOPTION OF A REVISED TRANSMISSION
REVENUE REQUIREMENT ASSOCIATED WITH VERNON'S HIGH VOLTAGE
ENTITLEMENTS
October 20, 2020
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
one (the "SCE Victorville-Lugo ETC" described in SCE's FERC Rate Schedule 360)
Resolution No.2020-36
TRR Report M�1 I of 17
Page 2 off 6
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 kV 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
those ETCs have been gradually stepped-up under incrementally increasing fixed
Resolution No.2020-36
TRR ReportP iof17
Page 3 of 6
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 Groups 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.
In January 2015. the City approved revisions to the template used to calculate the
Resolution No 2020-36
TRR Reporr5A°f 1
Page 4 of 6
ETC Adjustment Clause 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: the City has prepared this year's filing using that
revised 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
ETCCr = 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, 2021 is shown in Exhibit 1. The ETC Adjustment Clause to be
effective for the twelve months starting January 1 , 2021 is $1,475.101 .
The ETCCF Component
The ETCCF component stands for the forecast of SCE ETC costs for the following
calendar year. in this case 2021. These forecast SCE ETC costs reflect 2021 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, in November 2020;
Vernon will true up any differences in its SCE ETC costs when it makes its 2022
Resolution No 2020-36
TRR Report 5A or 17
Page 5 of 6
TRR filing.
The ETCCF for 2021 SCE ETC costs are projected to be $2.473,080 as shown in
line 8 of Exhibit 1.
The ETCCT Component
ETCCI 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 . 2019 and ending September 30. 2020.
A summary of the determination of the September 30. 2020 balance in the ETC
Adjustment Clause is shown in Exhibit 1 . The ETCCT component reflects 1) the
previously projected 2019 SCE ETC costs of$199.060 per month, for the months
October through December 2019 and projected 2020 SCE ETC costs of $250.120
per month, for the months January through September 2020. 2) actual 2019 SCE
ETC costs of$ 210.160 per month. for the months October through December 2019
and $179.820 per month. for the months January through September 2020. 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, 2020 of negative
$964.168 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."
Resolution No.2020-36
TRR Report I of 17
Page 6 of 6
Interest is calculated monthly on the average cumulative monthly balance and is
compounded quarterly. The interest component is negative S33.811 . as shown in
Lines 20-24 of Exhibit 1 .
RECOMMENDATIONS
1 . Approve the establishment of a revised TRR for 2021 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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CERTIFICATE
STATE OF CALIFORNIA )
ss
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. 2020-36 - A Resolution of the City Council of
the City of Vernon Adopting a Revised Transmission Revenue
Requirement for 2021 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 o yernon, County of Los Angeles,
State of California, on this rn day of October 2020 .
SEAL:
Lisa Pope
City Clerk
STAFF REPORT
City Council Agenda Item Report
Agenda item No. COV-358-2020
Submitted by: Jessica Balandran
Submitting Department: Public Utilities
Meeting Date: October 20, 2020
SUBJECT
Transmission Revenue Requirement and Transmission Revenue Balancing Account Adjustment for 2021
Recommendation:
A. Adopt Resolution No. 2020-36 adopting a revised Transmission Revenue Requirement for 2021 in
accordance with Vemon's Transmission Owner Tariff and providing for Tariff Sheet changes to
implement the adjustment; and
B. Adopt Resolution No. 2020-37 establishing a Transmission Revenue Balancing Account Adjustment
for 2021 in accordance with Vemon'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
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 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). The TCA further requires all PTOs to file any changes in their TRRs
with FERC. Each PTO must also include it's Gross Load, which the ISO uses to calculate its grid-wide
Transmission Access Charge (TAC) rates, which is related to the Citys ability to recover its full TRR.
At present, the City's high voltage transmission entitlements 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 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.
The attached TRR Report supports establishing a revised transmission revenue requirement associated
with Vernon's high voltage entitlements.
Further, 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 establishing a revised TRBAA for 2021, based on the
requirements of the TO Tariff and the ISO Tariff.
Pursuant to Government Code Section 54354.5, the public hearing notice was published in the Los
Angeles Wave on October 1 and 8, 2020, and posted on the City Hall posting board and website on
October 1, 2020 (Attachment 2).
Fiscal Impact:
The City will recover incurred costs of the Existing Transmission Service Contracts (ETC).
Attachments:
1. Resolution No. 2020-36 Transmission Revenue Requirement
2. Resolution No. 2020-37 TRBAA
3. Notice of Public Hearing - Transmission Revenue Requirement
SUPPORTING DOCUMENTATION
CALIFORNIA NEWSPAPER SERVICE BUREAU
DAILY JOURNAL CORPORATION
Mailing Address:915 E FIRST ST, LOS ANGELES,CA 90012
Telephone(800)788-7840 I Fax (800)464-2839
Visit us @ www.LegalAdstore.com
LISA POPE
CITY OF VERNON CITY CLERK
4305 SANTA FE AVE
VERNON, CA 90058 PRE# 3403052
NOTICE OF CITY COUNCIL PUBLIC HEARING
The City Council of the City of Vernon will
conduct a public hearing,which you may attend.
at Vernon City Hall,City Council Chamber,4305
Santa Fe Avenue, Vernon. CA 90058, on
COPY O F NOTICE Tuesday,October 2020 at 9:00 a.m.( as
soon thereafter as the matter can be heard),to:
Consider evidence to adopt resolutions
adopting a revised Transmission Revenue
Requirement and establishing Vernon's
revised Transmission Revenue Balancing
Account Adjustment for its high voltage(over
Notice Type: GPN GOVT PUBLIC NOTICE 2000;V)transmission w isty) entitlements
suant nts(alVe careoutd
Transmission Owner Tariff.
Ad Description
Notice of Public Hearin -Transmission Revenue Requirements and The proposed resolution will Hall, available for
g � public review at Vernon City 4305 Santa Fe
Transmission Revenue Adjustment Avenue,Vernon,CA 90058,beginning October 1
or by contacting the City Clerk at
CityCleric@ci.vemort.ca.us or 323-583-8811,ext.
To the right is a copy of the notice you sent to us for publication in the 646.
HUNTINGTON PARK BULLETIN.Please read this notice carefully and call us Please send your comments or questions to:
with any corrections.The Proof of Publication will be filed with the County Abraham�t Alemu,Public Utilities General Manager
Clerk,if required,and mailed to you after the last date below.Publication 30y of s Santa Fe Avenue,Vernon,CA 90058
date(s)for this notice is(are): (323) 583-8811 Ext. 250 or
AAlemuad.vemon.ca.ug
10/01/2020, 10/08/2020 During the hearing, any person interested,
inducing all persons owning property in the local
agency,may appear and be heard as to whether
the proposed rates and charges are
discriminatory or excessive. or will not be
sufficient under Government Code Section
54515.or will not comply with any other provision
An invoice will be sent after the last date of publication. If you prepaid this or is chapter, ill not be suany o under the
provisions or covenants
ovenants of any outstanding
order in full,you will not receive an invoice. revenue bonds of the local agency payable from
the revenues of the enterprise,or on any other
matter relating to said proposed resolution or
ordinance or the rates or charges proposed
therein.
If you challenge the adoption of the
adoption/approval of the establishment of
Vemon's revised Transmission Revenue
Requirement or revised Revenue Balancing
Account Adjustment or any provision thereof in
court, you may be limited to raising only those
Issues you or someone else raised at the haanng
described in this notice or in written
correspondence delivered to the City of Vernon
at,or prior lo,the meeting.
In compliance with the Americans with Disabilities
Act (ADA), if you need special assistance to
participate in the meeting, please contact the
Office of the City Clerk at (323) 583-8811 ext.
546.
The hearing may be continued, adjourned, or
cancelled and rescheduled to a stated time and
place without further notice of a public hearing.
Lai
Lisa Pope.City Clerk
10/1,10/8/20
PRE34030529
HUNTINGTON PARK BULLETIN
III I II III III III IIIIII II I II IIII I liii II
* A 0 0 0 0 0 5 5 2 7 3 4 6 *
o 4305 Santa Fe Avenue
City of Vernon ; . ' ;!46. . Vernon, CA 90058
�fteV17:7?f,,iti
�� (323) 583-8811
•
V�LY%TA
NOTICE OF CITY COUNCIL PUBLIC HEARING
The City Council of the City of Vernon will conduct a public hearing,which you may attend,at Vernon City Hall,City
Council Chamber,4305 Santa Fe Avenue,Vernon,CA 90058,on Tuesday,October 20,2020,at 9:00 a.m.(or as soon
thereafter as the matter can be heard),to:
Consider evidence to adopt resolutions adopting a revised Transmission Revenue Requirement and
establishing Vernon's revised 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.
The proposed resolution will be available for public review at Vernon City Hall, 4305 Santa Fe Avenue, Vernon, CA
90058,beginning October 1 or by contacting the City Clerk at CityClerk@ci.vernon.ca.us or 323-583-8811,ext.546.
Please send your comments or questions to:
Abraham Alemu,Public Utilities General Manager
City of Vernon
4305 Santa Fe Avenue,Vernon,CA 90058
(323)583-8811 Ext.250 or AAlemu(dci.vernon.ca.us
During the hearing,any person interested,including all persons owning property in the local agency,may appear and be
heard as to whether the proposed rates and charges are discriminatory or excessive, or will not be sufficient under
Government Code Section 54515, or will not comply with any other provision of this chapter, or will not be sufficient
under the provisions or covenants of any outstanding revenue bonds of the local agency payable from the revenues of the
enterprise,or on any other matter relating to said proposed resolution or ordinance or the rates or charges proposed therein.
If you challenge the adoption of the adoption/approval of the establishment of Vernon's revised Transmission
Revenue Requirement or revised Revenue Balancing Account Adjustment or any provision thereof in court,you may
be limited to raising only those issues you or someone 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.
In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in the
meeting,please contact the Office of the City Clerk at(323)583-8811 ext. 546.
The hearing may be continued, adjourned, or cancelled and rescheduled to a stated time and place without further
notice of a public hearing.
Lt l ill / -
Lisa Pope,City Clerk
Posted:October 1,2020
Published:October 1 and October 8,2020