Title
Recommendation to Authorize the General Manager to Execute the Transmission Owner Rate Case Program Agreement between The Northern California Power Agency and Alameda Municipal Power. (Alameda Municipal Power)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
In October, the Public Utilities Board approved the Transmission Owner Rate Case Program Agreement between the Northern California Power Agency and Alameda Municipal Power (AMP) and recommended it for City Council approval. This agreement provides a framework for the cost distribution of transmission advocacy services on behalf of AMP and other members. As this agreement does not have an end date, City Council approval is required.
BACKGROUND
AMP is a member of the Northern California Power Agency (NCPA) which was formed by various Northern California municipal utilities on July 19, 1968, through the Joint Powers Agreement (JPA) to provide for the purchase, use, or sale of revenue-producing facilities, including electric generating and transmitting facilities, as well as other supporting programs such as scheduling and dispatch services and legislative advocacy services. Under the JPA, individual member public agencies use their common powers more efficiently to acquire, purchase, generate, transmit, distribute, sell, interchange, and pool electric capacity and energy. AMP currently receives benefits from various projects and programs offered at NCPA. NCPA is expanding activities related to transmission advocacy. These activities were previously conducted within the Transmission Agency of Northern California (TANC), a joint powers agency that was established in 1984.
TANC was first created to develop the California-Oregon Transmission Project (COTP) on behalf of its members. The COTP is a 340-mile long, high voltage transmission line between the California-Oregon border and Central California, completed and energized in 1993. In 2014, per Resolution No. 5033, AMP and the Cities of Healdsburg, Lodi, Lompoc, Santa Clara, Ukiah, and the Plumas-Sierra Rural Electric Cooperative (Layoff Entities) laid off their COTP interests to other COTP participants, namely the Sacramento Municipal Utility District (SMUD), the Modesto Irrigation District, and the Turlock Irrigation District (Districts) for a period of 25 years.
NCPA has developed a Special Conditions Services Agreement under the Power Management and Administrative Services Agreement, the “Transmission Owner Rate Case Program Agreement”, to set forth a framework for the cost distribution of transmission advocacy services.
DISCUSSION
For many years, TANC acted to protect the value of its transmission assets and to support participating members in limiting their exposure to transmission when transacting in the California Independent System Operator (CAISO) markets. TANC has historically placed particular focus on intervening in the Pacific Gas and Electric Co. (PG&E) transmission owner (TO) rate cases at the Federal Energy Regulatory Commission (FERC), which directly impact the transmission rates paid by AMP and all members within CAISO for their delivered energy. More recently, the combined voting shares have grown for members outside of the CAISO balancing authority, such as SMUD and the Modesto and Turlock Irrigation Districts. Their interest in participating in transmission advocacy related to CAISO is limited. With rising transmission costs impacting NCPA members, NCPA has stepped up to take over this advocacy work moving forward.
For fiscal year (FY) 2025, NCPA increased its budget by $580,000 for transmission advocacy work. Alameda’s 4.75 percent share, $27,550, was included in AMP’s FY 2025 budget. Previously, AMP was allocated a four (4) percent share of TANC’s advocacy work, a difference of a little over $4,000. Favorable outcomes in the intervention of TO cases at FERC can result in savings of millions of dollars of transmissions costs across NCPA members each year.
Because the Transmission Owner Rate Case Program Agreement does not have a specified termination date, City Council approval is required. The program agreement can be terminated by consent of all parties, or individual participants may withdraw by submitting notice at least two years in advance of the effective date of such withdrawal.
ALTERNATIVES
• Authorize the General Manager of AMP to execute the Agreement.
• Do not authorize the General Manager of AMP to execute the Agreement and give another direction to staff.
FINANCIAL IMPACT
This program agreement obligates AMP to 4.75 percent of annual program costs. AMP’s share of $27,550 was included in AMP’s FY 2025 budget, which represents an increase of $4,350 from prior years’ TANC allocations. There is no additional funding requested.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
AMP Strategic Plan - Business Resiliency
o Maintain rates at 15 percent or more below PG&E and 10 percent or more below local CCAs
This action also supports the City of Alameda’s (City) Strategic Plan Priority to Practice Fiscally Responsible, Equitable and Inclusive Governance.
ENVIRONMENTAL REVIEW
The City finds that its actions are not a project as defined by California Environmental Quality Act (CEQA) Guidelines Section 15378, which excludes “continuing administrative…activities” and “organization or administrative activities of governments…” The City further finds that it can be seen with certainty that there is no possibility that the activity will result in a direct or reasonably foreseeable indirect change in the environment. The project involves the transition of transmission advocacy work on AMP’s behalf from TANC to NCPA, both joint powers agencies of which AMP is a member, and there is no potential for direct or indirect changes in existing conditions as a result.
The City further finds that its actions are exempt from CEQA pursuant to CEQA Guidelines section 15268, which excludes ministerial actions. More specifically, the City finds its action is subject to the commonsense exemption because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Authorize the General Manager to execute the Transmission Owner Rate Case Program Agreement between NCPA and AMP.
Respectfully submitted,
Timothy Haines, General Manger
By,
Benjamin Rings, Energy Resources Analyst
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibit:
1. Transmission Owner Rate Case Program Agreement