HomeMy WebLinkAboutOrd 1048 PD Municipal Utility Authorizing CM or Designee LATE
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CITY OF PALM DESERTS TINUED TO
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COMMUNITY SERVICES DEPARTMENT
STAFF REPORT
REQUEST: CONSIDERATION OFA PROPOSED ORDINANCE ESTABLISHING
A PALM DESERT MUNICIPAL UTILITY AND AUTHORIZING THE
CITY MANAGER OR HIS DESIGNEE TO TAKE ALL NECESSARY
STEPS TO CREATE AND ESTABLISH A MUNICIPALLY OWNED
UTILITY.
SUBMITTED BY: Robert Kohn, Director of Special Programs
DATE: May 8, 2003
CONTENTS: Ordinance No. 1048
Recommendation:
Waive further reading of Ordinance No.1048 and pass to second reading, establishing
a Palm Desert Municipal Utility and authorizing the City Manager or his Designee to move
forward with all necessary steps to create and establish a municipally-owned utility.
Executive Summary:
City staff has talked with several consulting firms regarding the operation of a municipal
utility. Certain steps must occur in order to be involved in the legislative processes,
preservation of municipal utility options and "grandfather" issues relating to the formation
of a municipal utility. The first step is to adopt Ordinance No.1048 making clear the
City's intent to form and operate a municipal utility. Adoption of this Ordinance provides
the City a vested interest in development of the finer details (implementation) of AB117 as
they are defined by the California Public Utilities Commission. The passage of AB117
opened the door for cities, counties, special districts and others to form municipal utilities
without the "taking" of Independent Operating Utilities distribution and related systems.
Discussions have been held between City staff, industrial/commercial property owners, and
developers in an effort to determine whether or not there is interest in forming a "Spot"
municipal utility. Staff considers this option as step two.
Discussion:
A Cost Benefit Analysis of the north, undeveloped area has been completed by a
consulting firm named ENCO Utility Services. Actual formation of a"Spot" municipal utility
would be step three and have considerably lower risk than providing services to the entire
City.
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STAFF REPORT
MAY 8, 2003
Spot Municipal Utility Page 2
A "Spot" municipal utility is a publicly-owned (Public Works) utility established for the
purpose of supplying commercial/industrial development within its boundaries with services
such as light, water, power, heat, transportation, telephone service, or other means of
communication, waste disposal, and sewer. Adoption of this Ordinance allows the City to
proceed with tasks that reserve its right to form and operate a municipal utility. Preserving
future options is accomplished by the establishment of the City as a Municipal Energy
Utility.
Step four allows the City to become a Community Choice Aggregator. AB117 allows local
governments to form and operate a municipal utility as a "Community Choice Aggregator.
The private utilities must allow the usage of their distribution systems and the Municipal
Energy Utility acts as a "power broker". Transmission fees and other potential fees may
be charged by the private utilities. The amount of the potential fees is unknown or
undetermined at this time. There are conditions for approval by the California Public
Utilities Commission if the City decides to become an Aggregator. Staff needs to
investigate these conditions further before a recommendation is made to Council.
The City is in a unique position with passage of AB117. It is an opportune time to evaluate
and make comparisons on the most cost effective means of providing reliable energy
supply to City facilities, residents and businesses and controlling at least some of the costs
and revenues generated by the delivery of energy to local residents and businesses.
Submitted by:
/44-44-
ROBERT P. KOHN SHEILA GILLIG
DIRECTOR, SPECIAL PROGRAMS ASSISTANT CITY M ER,
COMMUNITY SERVICES
CARLOS ORTEG PAUL GIBSON
CITY MANAGER FINANCE DIRECTOR
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