HomeMy WebLinkAbout19626 - RESOLUTIONS - 7/28/1999 RESOLUTION NO. 19626
OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, AUTHORIZING
CONTRACTING WITH SEMPRA ENERGY
SALES FOR THE NATURAL GAS '
COMMODITY REQUIREMENTS FOR THE
CITY'S TWO COGENERATION PLANTS FOR A
PERIOD OF TIME NOT TO EXCEED 42
MONTHS.
WHEREAS, the City of Palm Springs owns and operates two cogeneration plants utilizing
natural gas as a fuel.
WHEREAS, the natural gas market has been deregulated and natural gas is a commodity item
available at deregulated prices.
WHEREAS, the City relies on its provider of natural gas to make recommendations during the
term of any purchase agreement concerning whether to utilize NGI index pricing, fixed rate unit
winter price protection, or fixed rate unit year-round pricing.
WHEREAS, Sempra Energy Sales is the deregulated arm of Sempra Energy which is the parent
company of Southern California Gas Company, the nation's largest natural gas utility serving 18
million people.
WHEREAS, the City's representative from Sempra Energy Sales has successfully advised the
City in the past resulting in a twelve month savings of approximately $150,000.
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs as
follows:
SECTION 1. That City Council hereby authorizes contracting with Sempra Energy Sales for the
natural gas commodity requirements for the City's two cogeneration plants for a
period of time not to exceed 42 months.
SECTION 2. Service is to begin at 12:01 a.m., October 1, 1999.
SECTION 3. Sempra Energy Sales shall make market-based recommendations to the City
relative to when to maximize saving by the City by locking in fixed pricing.
SECTION 4. In response to recommendation by Sempra Energy Sales, the City Manager may
act to better the City's position at any time during the life of the Agreement by
locking in winter price protection for the months of November, December,
January and February, provided the lock rate unit price is $2.65 per MMBtu, or
lower.
SECTION 5. In response to recommendation by Sempra Energy Sales, the City Manager may '
act to better the City's position at any time during the life of the contract by
locking in year-round firm fixed unit pricing, provided the lock rate price is $2.25
per MMBtu, or lower.
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STAFF REPORT
Res. No. 19626 13u
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SECTION 6. For any portion of the contract period for which the City Manager has not elected
a fixed price option,the billing price shall be the Natural Gas Intelligence (NGI)
Southern California Border Index price.
ADOPTED this 28th day of July, 1999.
AYES: Members Barnes, Hodges, Oden, Reller-Spurgin and Mayor Kleindienst
NOES: None
ABSENT: None
ATTEST: CITY OF PALM SPRING , CALIFORNIA
City Clerk anager
REVIEWED &APPROVED: ('
PURNATURALGAS.WPD
STAFF REPORT