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Home My WebLink Aboutcc min 2004/05/19 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA May 19, 2004 6:00P.M. An Adjourned Regular Meeting of the City Council of the City of Chula Vista was called to order at 6:08 p.m. in the Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Councilmembers: Davis, McCann, Salas, Rindone, and Mayor Padilla ABSENT: Councilmembers: None ALSO PRESENT: City Manager Rowlands, City Attorney Moore, and Deputy City Clerk Bennett PLEDGE OF ALLEGIANCE TO THE FLAG, MOMENT OF SILENCE ORAL COMMUNICATIONS There were none. ACTION ITEM 1. RESOLUTION NO. 2004-166, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING THE MUNICIPAL ENERGY UTILITY FEASffiILITY REPORT AND PEER REVIEW ANALYSIS REPORTS; AND DIRECTING STAFF TO (1) RETURN TO COUNCIL BY JUNE 8, 2004 FOR FURTHER CONSIDERATION OF THE CONSULTANT'S RECOMMENDATION TO IMPLEMENT CITY MUNICIPAL ENERGY UTILITY BUSINESS MODELS; (2) PREPARE AND DISTRmUTE A REQUEST FOR PROPOSAL FOR A FULL- REQUIREMENT GREENFIELD DEVELOPMENT AND COMMUNITY CHOICE AGGREGATION SERVICE PROVIDER AND RETURN TO COUNCIL FOR FURTHER ACTION; (3) CONTINUE TO WORK WITH THE CALIFORNIA PUBLIC UTILITIES COMMISSION TO ASSERT THE CITY'S POSITION REGARDING THE DEVELOPMENT OF COMMUNITY CHOICE AGGREGATION RULES, EXIT FEES AND MUNICIPAL DEPARTMENT LOAD FEES; (4) CONTINUE TO WORK WITH SANDAG TO IMPLEMENT REGIONAL ENERGY OPTIONS; AND (5) CONTINUE TO ACTIVELY MONITOR AND INFLUENCE PENDING AND NEW CALIFORNIA PUBLIC UTILITIES COMMISSION, CALIFORNIA ENERGY COMMISSION, STATE AND FEDERAL ENERGY RULES AND LEGISLATION In August 2000, the Council directed staff to investigate any and all energy options that the City could pursue to potentially protect Chula Vista residential and commercial ratepayers from exponential rate increases and better position the City to deal with the volatility and uncertainty of the energy market. The proposed resolution accepts the Municipal Energy Utility Feasibility Report and Peer Review Analysis Reports and directs staff to take further actions. --.----.--.-. ACTION ITEM (Continued) Department of Conservation and Energy Services Director Meacham introduced the following consultants for the City: Wally Duncan of Duncan, Weinberg, Genzer and Pembroke; Brian Griess, Thomas Crooks, Patrick Mealoy, and John Dalessi of Navigant Consulting Incorporated; and Barry McCarthy of McCarthy and Berlin. Mr. Mealoy presented the Municipal Energy Utility Feasibility Analysis, discussing the study approach, methodology; structural options evaluated, City energy requirements, the top 20 California electric utilities, and electricity supply strategies. He stated that the study examined two supply options for the City, a contract strategy and a generation ownership strategy; and the Community Choice Aggregation (CCA),; Greenfield Development (Greenfield), Combined CCAIGreenfield, and Municipal Distribution Utility (MDU) structural options were evaluated. Mr. Dalessi presented the benefits and risks associated with the CCA, Greenfield, CCAIGreenfield, and MDU options. Mr. Mealoy presented the conclusions and recommended a combined CCAIGreenfield implementation plan, since not only does this option offer the most financial benefits, it also is extremely competitive, has fewer up-front costs and risks, and falls under a state-sanctioned program. He also encouraged the City to continue to pursue a CCA program and continue to participate in the ongoing California Public Utilities Commission (CPUC) process. He recommended the development and implementation of a generation ownership strategy and that the CCA and Greenfield start out supplied via contracts and then transition into a generation ownership. He believed that the City should delay consideration of the MDU for several years, pending the outcome of the CCAIGreenfield recommendation. He also recommended against the City entering into any natural gas distribution business. At 7:58 p.m., Mayor Padilla announced a recess. The meeting reconvened at 8:13 p.m., with all members present. Mr. Meacham introduced consultants Michael Bell, representing RW. Beck; Thomas Beach, representing Cross Border Energy; and Dr. Fred Pickel, with Tabors, Caramanis and Associates, who reported their findings on the Independent Peer Review Municipality Feasibility Analysis. Dr. Sue Macomber, representing the Utility Consumer's Action Network (UCAN), read into the record a letter dated May 13, 2004, from Michael Shames, Executive Director of UCAN, regarding the resolution to initiate energy policies and actions. Paul Finn, representing Local Power.Org, spoke in support of the Navigant report and about various issues regarding the Community Choice law. He recommended that the City put the CPUC on notice of the City's intentions and urge the CPUC to pass an ordinance to statutorily authorize the City to do a number of things. He also suggested consideration of renewable energy, which he believed could mitigate the City's exposure to the volatility of gas prices. Assistant City Manager Morris presented an update of franchise negotiations between the City and SDG&E. Page 2 - Council Minutes May 19, 2004 -- --- ACTION ITEM (Continued) Mayor Padilla reported that SDG&E declined the opportunity to participate and respond publicly to the recommendations by the consultants. Lupita Jiminez, representing the Green Party, stated that the City should not allow SDG&E to shape the power future of the City. She spoke in favor of a generation project at the Calpine location but opposed the re-powering of the Duke plant. She did, however, favor a 130- megawatt, dry-cooled plant for the Bayfront, with the caveat that it would lead to developing renewables, would accrue good jobs in the City, and would mitigate air impacts. She stated that although the Green Party supports the Greenfield strategy, it would prefer that all generation be supplied by solar power. Ms. Jiminez urged the Council to continue working towards economic development and health, environmental and quality oflife benefits for its citizens. Daniel Perez asked the Council to consider public opinion, as well as risks associated with the over-reliance on natural gas, when selecting a plan. Jim Bell asked the Council to pass the necessary ordinances to initiate the process. He also suggested consideration of the use of solar power and proposed that the City lobby the CPUC to raise the renewable caps to work on a net metering perspective. Kurt Kammerer expressed concern about the window of opportunity for some benefits to the City and suggested that the City move smartly. He spoke about rate parity and its benefits to the non-new consumers by way of a reduction in the overall consumption and creating on-site renewables that they would not have had under a status quo. Albert Huary, representing the Environmental Health Coalition, spoke in support of staffs recommendations and asked the Council to consider renewables as an important factor, to examine public health issues associated with power plants, and to look at mitigation for those areas that would be impacted. Alan Ridley encouraged the Council to consider wind energy. He submitted information regarding wind energy that he believed would reduce pollution, increase energy security, diversify the energy mix, and lower long-term energy costs. Mr. Ridley encouraged the Council not to focus solely on natural gas. Mr. Morris stated that the comprehensive reports would enable the community to determine its energy future. Mr. Huard outlined the reasons for moving forward with the resolution, stating that unless the City declares itself a CCA, it could effectively be assessed costs associated with exit; and SDG&E has taken the unique position that it is not required to provide information until such time that the City declares itself a CCA. ACTION: Mayor Padilla offered Resolution No. 2004-166, heading read, text waived. The motion carried 5-0. Page 3 - Council Minutes May 19, 2004 ------ 2. CITY MANAGER'S REPORTS There were none. 3. MAYOR'S REPORTS There were none. 4. COUNCIL COMMENTS There were none. ADJOURNMENT At 11: 12 p.m., Mayor Padilla adjourned the meeting to an Adjourned Regular Meeting with the Board of Port Commissioners on May 25,2004, at 4:00 p.m. in the Council Chambers, thence to the Regular Meeting of May 25, 2004, at 6:00 p.m. in the Council Chambers, and thence to an Adjourned Regular Meeting on May 27,2004, at 6:00 p.m. in the Council Chambers. orraine Bennett, Deputy City Clerk Page 4 - Council Minutes May 19, 2004 ~- -_.--J