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Resolution No. 2020-037 RESOLUTION NO. 2020-37 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON ESTABLISHING A TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT 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. a California nonprofit public benefit corporation ("CAISO"). C. The CAISO requires a PTO to turn over operational control of its transmission facilities and entitlements to the CAISO. D. 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. E. 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"). F. 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. G. 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 TRBAA for 2021 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. Resolution No. 2020-37 Page 2 of 16 H. A Public Hearing was held on October 20, 2020. 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 revised TRBAA. I. The Public Utilities Department has prepared a Report, with exhibits. dated on or about October 20. 2020 ("Report"), which determines the revised TRBAA for 2021 to be consistent with the TO Tariff and supports the TRBAA and the changes to Appendix I of the TO Tariff to implement the revised TRBAA effective January 1 , 2021 . J. The Public Utilities Department has recommended that the TRBAA and Appendix I to the TO Tariff implementing the revised TRBAA be approved. K. The City Council has heard and considered all evidence. both written and oral. presented in consideration of the establishment of the City's revised TRBAA and revised Appendix I to the TO Tariff implementing the revised TRBAA. 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 establishment of the City's revised TRBAA and amended Appendix Ito the TO Tariff implementing the revised TRBAA 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 revised TRBAA for 2021 and an amended Appendix I to the TO Tariff implementing the revised TRBAA for 2021 . a copy of which is attached hereto as Exhibit A and made a part hereof. SECTION 5. 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 TRBAA for 2021, and revised Appendix Ito the TO Tariff implementing the revised TRBAA for 2021 , as described in the Report. a copy of which is attached hereto as Exhibit Resolution No. 2020-37 Page 3 of 16 B and made a part hereof. SECTION 6. The City Council of the City of Vernon hereby authorizes outside counsel to submit the City's revised TRBAA for 2021 , 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 7, 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. 2020. LETICIA LOPEZ, Mayor ATTEST: /24g, LISA POPE, City CI rk (seal) AP R D AS O FO M; 'A NOLD M. A AREZ-GLASMAN. Interim City Attorney I CERTIFY THAT THE FOREGOING RESOLUTION NO. 2020-37 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 Mt7P?LISA POPE. City (seal) Resolution No.2020-37 Page 4 of 16 EXHIBIT A Resolution No.2020-37 Page 5 of 16 1PPEriDIX I Transmission Revenue Requirement and TRBAA The Vernon Base Transmission Revenue Requirement is S3,130,3951 973 531 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: S3004402.473.080 Balance of Difference between prior year Forecast and Actual SCE ETC Costs: ($343 0964.168) Interest on Difference between prior year Forecast and Actual SCE ETC Costs: ($26:25533,811) 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 pesitivenesative SS,63424,971 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 Kt 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 2020-37 Page 6 of 16 APPENDIX Transmission Revenue Requirement and TRBAA The Vernon Base Transmission Revenue 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.2020-37 Page 7 of 16 EXHIBIT B Resolution No.2020-37 Page 8 of 16 CITY OF VERNON PUBLIC UTILITIES DEPARTMENT REPORT REGARDING THE ESTABLSHMENT OF A REVISED TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT FOR CALENDAR YEAR 2021 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. 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 year's difference between projected and actual credits." This Report supports the establishment of a revised TRBAA based on the requirements of the TO Tariff and the ISO Tariff. Resolution No.2020-37 Page 9 of 16 SUMMARY Section 5.2 of the Vernon TO Tariff identifies the items to be reflected in the TRBAA 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 Resolution No.2020-37 Page 10 of 16 summary of the elements of the Vernon TRBAA proposed to be effective January 1 , 2021 is shown in Exhibit 1 . It shows that the balance in the Vernon TRBA as of September 30. 2020. which reflects services rendered through June 30, 2020. is negative $18.058. including interest. TRCs are projected to be negative $6.914. Taken together. these items sum up to a TRBAA to be effective for the twelve months starting January 1 , 2021 of negative balance of $24,971 . 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 REVISED TRBAA The TRBAA is equal to the sum of: TRCF + TRC- + I. The balance in the TRBA of a negative $18.058 as of September 30. 2020 represents the sum of the TROT and the I components. The TRCT Component of Vernon's TRBAA TRC- 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 . 2019 and ending September 30, 2020. A summary of the determination of the September 30. 2020 balance in the Vernon TRBA is shown in Exhibit 2. The TRCT component reflects 1) the previously projected 2019 TRCs for Vernon of $21 ,176 or $1 .764.67 per month. for the months October through December 2019. and 2) projected 2020 TRCs of negative $8.634 or $719.54 per month, for the months January through September 2020—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 and produce the under (over) collection figures for the monthly payable TRC balances reflected in Resolution No.2020-37 Page 11 of 16 Line 5 of Exhibit 2. The monthly balances are carried forward from month to month in Line 6 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 7-9 of Exhibit 2. The TRBA balance on September 30. 2020 is shown in Line 13 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. 2020. 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 2021. These forecast TRCs reflect projected wheeling revenues. Wheeling revenues, which correspond to ISO Charge Type 384. are projected to be a credit or negative $6.913.77. as shown in Exhibit 3. These projections are based on the accruals for services provided during the twelve- month period ending June 30, 2020, which are reflected in the ISO's invoices to Vernon through September 30. 2020. A summary of the monthly accruals for the twelve months ending September 30. 2020 is shown in Exhibit 4. Resolution No 2020-37 Page 12 of 16 Distribution of Non-Refundable Interconnection Amounts 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 June 30, 2020. In particular, Vernon received $2,046.62 in the month of April 2020 and $10.318.79 in the month of September 2020 for projects withdrawn through June 30. 2020. 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. RECOMMENDATIONS 1. Approve the revised calculated TRBAA of a negative $24,971 , 2. Approve replacing the existing TRBAA of positive $8.634 with the revised TRBAA for 2021 of a negative $24,971. 3. Approve the attached revised Appendix I of Vernon's TO Tariff reflecting the TRBAA of negative $24,971 . 4. Authorize outside counsel to submit Vernon's TRBAA and supporting documentation. such as this Report and the City Council Resolution approving the revised TRBAA to FERC. Resolution No.2020-37 Page 13 of 16 AI BICIDI El F G I H I I 1 2 3 CITY OF VERNON 4 TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT(TRBAA) 5 CALENDAR YEAR 2021 6 7 DESCRIPTION TOTAL 8 9 [1] Balance in TRBA on September 30, 2020 ($18,058) 10 including interest 11 12 [2] Forecast Transmission Revenue Credits ($6,914) 13 14 [3] TRBAA ($24,971) 15 16 17 18 Source: 19 [4] Exhibit 2, Column 0, Line No.13. 20 [5] Exhibit 3, Column F, Line No.13. 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 E i e(; 12 R$ R e 1it a 7 § k! !`g k ±46 2 0 !R k - « - ; _ 04 ,_ . - . k/ — g $ A 7 k'a § ` }2 ® « k 3 « = cc 8 8 7 2f ; _|8 9 I 5 E R . a u.u.E i • �� © - k k " ■2 k _ |E § k i ` @; m ~/= e 22 ) : �\ k ci . ■ I # ■/ ;/& ; ,o � ! k 2° 5 ■`1 q • !. . & a . k <) ■ I A AA ; 6!S ,o I' - § k§ @ & § k i-, . - k_ - . . ir)eJ —k. i , i z a# Ol ■|; - =�o g2 \ [ ) ta as k $-§ 1§� a ; !§ To 0� , A A 2k 3 at ; 2 § r.3 _ | - k I $ )2 k ' - k & - ■ ! my m 6,¥, r o • k k �~ .`7. ' !� \ E 8S , ■Aa a k ° k© § G©§ 2 ` §i ; " ± k I a2 © ;|■ ; 4 �; \ ; - ©\ k".. k Ja ; ` a ! ; m , a a« R 8 4 A ■ !. ■ 1 2Es ~ q:a ! /§ ! - & & E 2§ a !E k . E | 2 | i $ op ! ( ( t 11I § §| i f | 52 | 7 §§: I © » h 1| k §(§ | -Ii H+)+41 j 11 1 11 14111^ Resolution No.2020-37 Page 15 of 16 A } B I C I D E F I G 1 CITY OF VERNON 2 FORECAST TRANSMISSION CREDITS 3 for Calendar Year 2021 TRBAA 4 5 6 MONTH Wheeling Total 7 8 [1] January-21 ($576.15) ($576.15) 9 [2] February-21 ($576.15) ($576.15) 10 [3] March-21 ($576.15) ($576.15) 11 [4] April-21 ($576.15) ($576.15) 12 [5] May-21 ($576.15) ($576.15) 13 [6] June-21 ($576.15) ($576.15) 14 [7] July-21 ($576.15) ($576.15) 15 [8] August-21 ($576.15) ($576.15) 16 [9] September-21 ($576.15) ($576.15) 17 [10] October-21 ($576.15) ($576.15) 18 [11] November-21 ($576.15) ($576.15) 19 [12] December-21 ($576.15) ($576.15) 20 21 [13] Total ($6,913.77) ($6,913.77) 22 23 24 25 26 28 29 30 31 32 33 34 Resolution No.2020-37 Page 16 of 16 A I B I C I D I E IFJGI H 1 I 1 Vernon Historical Transmission Credits 2 for Calendar Year 2021 TRBAA 3 4 Wheeling Revenues 5 ISO INVOICE 6 Month CT 384 7 Final Adjustments Total 8 9 [1] July-19 ($805.19) ($805.19) 10 [2] August-19 ($281.65) ($281.65) 11 [3] September-19 ($539.11) ($539.11) 12 [4] October-19 ($622.93) ($622.93) 13 [5] November-19 ($421.28) ($421.28) 14 [6] December-19 ($227.71) ($227.71) 15 [7] January-20 ($271.80) ($271.80) 16 [8] February-20 ($557.18) ($557.18) 17 [9] March-20 ($1,458.47) ($1,458.47) 18 [10] April-20 ($7,654.08) ($7,654.08) 19 [11] May-20 ($3,548.25) ($3,548.25) 20 [12] June-20 ($3,548.25) ($3,548.25) 21 22 [13] ($19.935.91) 23 24 25 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. 2020-37 - A Resolution of the City Council of the City of Vernon Establishing a Transmission Revenue Balancing Account Adjustment 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 Rf ernon, County of Los Angeles, State of California, on this W31.4 day of October 2020 . SEAL: eid(PLAW., Lisa Pope City Clerk AFFIDAVIT OF TILAHUN ALEMU STATE OF CALIFORNIA ) ss. COUNTY OF LOS ANGELES ) Tilahun Alemu, being duly sworn, deposes and states that he is the General Manager of Vernon Public Utilities, that the"Vernon Public Utilities Staff Report Regarding the Establishment of a Transmission Revenue Balancing Account Adjustment for Calendar Year 2021," including Exhibits 1 through 4 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 City of 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. 1-1,614A,et/I VOY-Gelt / 0/2 //z Tilahun Alemu Date CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 gigithle S;Yc....a.A.4 A notary public or other officer completing this certificate verifies 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 California 1 ) County of Lc finJr./ell ) / . On P/Zl/.ZO ZC before me, Ara 1&1i'If?o ,,/c'(h, Ala/iry ilia c Date r Here Insert Name and Title of the Officer personally appeared / /In`)L.IT) '' /"Ili(,( Name(s)of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the person(s), or the entity upon behalf of which the person(s)acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. w - AHA KARINA RUEOA ;T `'�. Notary Public•California G.. i 0 los Angela County. i; � � � Commission x 2265054 Slgna re 1_ My Comm.Eap 29.zon E Signet re of Notary Public Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document r / .T. r Title or Type of Document: �7#k41 V/t �f ` ' ='hc//f �t'J7i Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(les) Claimed by Signer(s) Signer's Name: Signer's Name: Corporate Officer — Title(s): L Corporate Officer — Title(s): Partner — Limited l 1 General Partner — : Limited .1 General Individual L Attorney in Fact 7 Individual I 'Attorney in Fact 1 Trustee i Guardian or Conservator Trustee E Guardian or Conservator i 'Other: Other: Signer Is Representing: Signer Is Representing: ©2015 National Notary Association•www.NationalNotary.org• 1-800-US NOTARY(1-800-876-6827) Item#5907 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 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 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 bya 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 Citys 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 Vemon'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/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 be a.m.(orto as soon thereafter as the matter can be heard),to: Consider evidence to adopt resolutions adopting a revised Transmission Revenue Requirement and establishing Vemon's revised Transmission Revenue Balancing Account Adjustment for its high voltage(over Notice Type: GPN GOVT PUBLIC NOTICE 200 kV)transmihe ssion pursuant to(all lVemateoutsided Transmission Owner Tariff. Ad Description Notice of Public HearingTransmission Revenue Requirements and The proposed resolution Vernon will 1.b available for - q public review at Vrt City Hall,4305 Santa Fe Transmission Revenue Adjustment Avenue,Vernon,CA 90058,beginning October 1 or by contacting the City Clerk at Citvaerk@ci.vemon.ca.us or 323-583-8811,ext. To the right is a copy of the notice you sent to us for publication in the 546. 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 Alemu,Public Utilities General Manager on Clerk,if required,and mailed to you after the last date below. Publication 4305 Santetaa Fe Avenue,Vernon,CA 90058 date(s)for this notice is(are): (323) 583-8811 Ext. 250 or AAlemuacr.vemon.ca.u8 10/01/2020, 10/08/2020 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 wilt not comply with any other provision An invoice will be sent after the last date of publication. If you prepaid this of this chapter,c w li not be sufficient under the provisions or covenants 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 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. /21 Lisa Pope,City Clerk 10/1,10/8/20 PRE-3403052N HUNTINGTON PARK BULLETIN III I II IIUhI II III III III III IIII IIIII II * A 0 0 0 0 0 5 5 2 7 3 4 6 * of v 4 Ea �'� `1`i�-� �0 4305 Santa Fe Avenue City of Vernon k , . Vernon, CA 90058 (323) 583-8811 . : • 0,ate Gf,V{CY tµ OJ 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@ci.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. Lisa Pope,City Clerk Posted:October 1,2020 Published:October 1 and October 8,2020