NOT YET APPROVED Attachment A
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Resolution No.
Resolution of the Council of the City of Palo Alto Approving a NAESB Base Contract for Sale and Purchase of Natural Gas with JPMorgan Chase Bank, N.A. and Authorizing the City Manager or Their Designee to Transact Under the Contract for a Portion of the City’s Natural Gas Requirements
RECITALS
A. On April 23, 2012, the Council adopted Resolution 9244 amending the Gas Utility Long-Term Plan (GULP) Objectives, Strategies, and Implementation Plan to discontinue the laddering purchase strategy and implement gas supply rates that change monthly according to market prices.
B. In accordance with GULP, the City must purchase and, incidental to purchases, sell gas to meet the needs of its gas customers by contracting for terms varying from less than one month to one month. The City's Energy Risk Management Polic y provides that the City will transact in accordance with that Policy and the City’s Municipal Code, and in a manner consistent with authority granted by Council to the City Manager.
C. By Ordinance No. 5387, adopted August 15, 2016, Council approved changes to the Municipal Code specifically streamlining the purchase and sale of wholesale utility commodities and services and explicitly allowing for standard form master agreements.
D. The natural gas standard form master agreement is based on the North American Energy Standards Board, Inc. (NAESB) Base Contract for Sale and Purchase of Natural Gas 2006 version and includes Special Provisions and a Credit Support Addendum (Master Agreement).
E. By Resolution 10074 adopted October 3, 2022, Council Authorized the City Manager to purchase a portion of the City’s natural gas requirements from certain prequalified natural gas suppliers under specified terms and conditions during calendar years 2023 through 2028, inclusive.
F. JPMorgan Chase Bank, N.A. (JPMorgan) desires to execute a Master Agreement with the City in order to be a supplier for delivery during calendar years, 2026 through 2035, inclusive, so long as JPMorgan continues to be qualified and otherwise eligible to transact with the City.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
SECTION 1. The Council hereby approves the NAESB Base Contract for Sale and NOT YET APPROVED Attachment A
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Purchase of Natural Gas combined with the Special Provisions and Credit Support Addendum (“Master Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), attached as Exhibit A.
SECTION 2. The Council hereby authorizes the City Manager or their designee to transact under the Master Agreement for a portion of the City’s natural gas requirements from JPMorgan by negotiating one or more individual transactions under the Master Agreement, including, but not limited to, contracts, addenda, confirmations, and transactions, subject to Section 3.
SECTION 3. The transactions negotiated under the Master Agreement shall conform to the following requirements:
a. The date for natural gas delivery for each transaction shall not exceed 36 months from the date the transaction is executed;
b. The delivery date for any transaction shall not extend beyond December 2035; c. The maximum aggregate of all transactions executed under this Master Agreement = shall be $150 million;
d. All transactions shall be subject to the Palo Alto Municipal Code; and e. All transactions shall be subject to the City’s Energy Risk Management Policy, Guidelines, and Procedures.
SECTION 4. The Council delegates to the City Manager, or their designee, the authority to execute on behalf of the City the Master Agreement with JPMorgan, as well as any related documents or agreements necessary to administer the Master Agreement that are consistent with the requirements in Section 3 and approved by the City Attorney.
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NOT YET APPROVED Attachment A
6059776
SECTION 5. Adoption of this resolution is not subject to California Environmental Quality Act (CEQA) review as it is an administrative governmental activity that will not result in any direct or indirect physical change to the environment (CEQA Guidelines 15378(b)(5)).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager
Director of Administrative Services
Director of Utilities