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Resolution No. _____
Resolution of the Council of the City of Palo Alto Extending the City Manager’s Authority to Execute Transactions under Master Renewable Energy Certificate Purchase and Sale Agreements with Pre-qualified Suppliers at an Annual Expenditure Not Exceeding $5,000,000 During Calendar Years 2025-2030
R E C I T A L S
A. The City of Palo Alto (the “City") provides electricity to residential and commercial customers located within its jurisdictional boundary.
B. The Council established the PaloAltoGreen voluntary renewable energy program (the “PAG Program”) in March 2003.
C. Implementing the PAG Program involves the City’s purchase and sale of renewable energy certificates (“RECs”) to meet the PAG Program's retail customer demands in a competitive manner.
D. California’s Senate Bill 100 (2018) requires all load serving entities to have a Renewable Portfolio Standard (RPS) of at least 60 percent by 2030. RPS enforcement procedures adopted by the California Energy Commission (CEC) allow for limited use of unbundled RECs to meet RPS requirements. In 2011, through Resolution No. 9215, the Council approved the City of Palo Alto’s RPS Procurement Plan, which allows for limited use of unbundled RECs to meet RPS requirements, in adherence to the CEC RPS enforcement regulations.
E. Through Resolution No. 9322, the Council approved a Carbon Neutral Plan for the electric supply portfolio to achieve carbon neutrality in calendar year 2013 with a rate impact not to exceed 0.15 c ents per kilowatt hour. The Carbon Neutral Plan allows for the use of RECs to achieve carbon neutrality.
F. In 2020, through Resolution No. 9913, the Council approved a new procurement strategy whereby the City does not keep all of the output of its long -term, in-state renewable resources, but instead exchanges that output for less expensive out- of-state renewable generation, with the net proceeds used to fund local dec arbonization programs (the “REC Exchange Program”).
G. In 2013, through Resolution No. 9379, the Council delegated authority to the City Manager, or their designee, to execute purchases and sales of RECs to meet the needs of City’s PAG Program, RPS, and Carbon Neutral Plan by negotiating and executing Master Agreements with the following 13 pre-qualified suppliers, in an aggregate amount not to exceed five million dollars ($5,000,000) annually during calendar years 2013 through 2018, inclusive.
1. 3Degrees Group, Inc.
2. Bonneville Environmental Foundation
3. Constellation Energy Commodities Group
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4. EDF Trading North America, LLC
5. Element Markets, LLC
6. Idaho Wind Power Partners 1, LLC
7. Lakeview Green Energy, Inc.
8. Nexant, Inc.
9. NextEra Energy Power Marketing, LLC
10. Pacific Corp.
11. Powerex Corp.
12. Shell Energy North America (US), L.P.
13. Sterling Planet Holdings, Inc.
H. Master Agreements were negotiated and executed with the thirteen suppliers listed above and expenditures for calendar year 2013 through 2018 were within the delegated annual expenditure amount.
I. In 2016, through Resolution 9652, the City Council approv ed a Standard Form Master REC Agreement that incorporates the contract terms and conditions required in City of Palo Alto Municipal Code Section 2.30.340(c). As a result, new REC suppliers are able to execute the Standard Form Master REC Agreement with the City after staff determines that they are qualified.
J. Through Resolution 9831, Council authorized the City Manager to execute purchases and sales of RECs in furtherance of the City’s PAG Program, RPS, and Carbon Neutral Plan with pre -qualified suppliers via Master Agreements during calendar years 2019 through 2024, inclusive.
K. In October 2019, through Resolution 9863, Council approved an updated Master REC Agreement and modified the approval process for individual agreements such that Council approval of individual REC Master Agreements is no longer required where Council has authorized the City Manager to award and sign REC contracts with qualified, eligible counterparties, as described in Palo Alto Municipal Code Section 2.30.340(c).
L. Since Resolution 9652 was approved in 2016, the City has executed new REC Master Agreements with the following 11 suppliers:
1. Renewable Power Strategies, LLC
2. ACT Commodities Inc.
3. STX Commodities LLC
4. Anew Environmental, LLC
5. AQC Environmental Brokerage Services, Inc.
6. Ecohz, Inc.
7. GO2 Markets, Inc.
8. Verdant Energy Services LLC
9. Bridge to Renewables, LLC
10. SCB Brokers LLC
11. Carbon Solutions Group, LLC
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M. Extension of the authority delegated to the City Manager under Resolution No. 9831 is needed to implement the City’s PAG Program, RPS Procurement Plan, Carbon Neutral Plan, and REC Exchange Program.
The Council of the City of Palo Alto does hereby RESOLVE, as follows:
SECTION 1. The Council hereby authorizes the City Manager, or their designee, to execute purchases and sales of RECs in furtherance of the City’s PAG Program, RPS Procurement Plan, Carbon Neutral Plan, and REC Exchange Program with pre-qualified suppliers via Master Agreements. The aggregate REC transactions shall not exceed the annual expenditure amount of five million dollars ($5,000,000) during calendar years 2025 through 2030, inclusive.
SECTION 2. The Council finds that the adoption of this resolution extending the City Manager’s authority to execute purchases and sales of RECs is not a project subject to California Environmental Quality Act (CEQA) review because adoption of this resolution is an administrative government activity that will not result in any direct or indirect physical change to the environment as a result (CEQA Guidelines section 15378(b)(5)).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ___________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ___________________________ Deputy City Attorney City Manager
___________________________
Director of Utilities
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Director of Administrative Services