NOT YET APPROVED Attachment A
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5 Resolution No. _____
Resolution of the Council of the City of Palo Alto Authorizing the City Manager or Their Designee to Transact for Electric Supplies to Meet the City’s Electrical Loads under Electric Master Agreements, under Specified Terms and Conditions During Calendar Years 2026 through 2040, Inclusive
R E C I T A L S
A. By Resolution 10204 adopted in 2024, the City Council authorized the City Manager or their designee to transact electric supplies to meet the City’s electrical loads under electric Master Agreements with suppliers during a 15-year delivery period, between calendar years 2025 through 2039, under the following conditions:
I. The maximum term of any transaction shall not exceed three years, commencing on the date of execution of the transaction; II. No transaction entered into shall extend beyond December 31, 2039; III. The maximum expenditure under any Master Agreement shall not exceed $75 million in the aggregate.
B. The Resolution also noted Council’s approval of an Energy Risk Management Policy, via Resolution 9272 1, which provided for the oversight and controls necessary to manage risks inherent in transacting electric supply under the Master Agreements; the Risk Management Policy has since been updated, most recently in June 2024 via Resolution 101662.
C. Since the authorization provided in 2024 via Resolution 102043, staff has undertaken over 20 transactions totaling $59.7 million, of which $33.1 million is outstanding, meaning that delivery will occur during or after August 2026; D. In December 2016, via Resolution 9652 4, Council approved a standard form electric master agreement based on the year 2000 version of the Edison Electric Institute (EEI) Master Power Purchase and Sale Agreement. This standard form agreement has been made available to any wholesale utility supplier on the City’s website since that time; however, execution of, and delegation of authority to transact under, standard form master agreements with specific suppliers remains subject to Council approval before any transactions may be completed.
The Council of the City of Palo Alto does RESOLVE as follows:
1 Resolution 9272: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=53542&dbid=0&repo=PaloAlto 2 Resolution 10166: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=62033&dbid=0&repo=PaloAlto 3 Resolution 10204: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=62085&dbid=0&repo=PaloAlto 4 Resolution 9652: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=54485&dbid=0&repo=PaloAlto 2 6059777
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5 SECTION 1. The Council authorizes the City Manager or their designee to execute transactions under Council-approved Master Agreements with pre-approved suppliers to purchase and/or sell electricity supplies and related services to meet the City’s forecasted electricity load and regulatory requirements, subject to the following conditions:
(a) The date for delivery of the electricity supplies for each transaction shall not exceed 36 months from the date the transaction is executed; (b) The delivery date of any transaction shall not extend beyond December 2040; (c) The maximum aggregate transaction limit under each Master Agreement shall be $125 million. However, as an additional risk mitigation measure, Utilities staff will notify the City’s Utilities Risk Oversight and Coordinating Committee 9 (UROCC) whenever a given supplier approaches the $75 million transaction limit authorized by Resolution 10204, to permit the UROCC to advise staff on whether to authorize additional transactions up to the $125 million authorized herein for that supplier;
(d) All transactions shall be subject to the Palo Alto Municipal Code; (e) All transactions shall be subject to the City’s Energy Risk Management Policy; and (f) The $33.1 million worth of outstanding transactions (to be delivered during or after August 2026) shall be applied against the $125 million maximum expenditure limit per Master Agreement established herein.
SECTION 2. The suppliers that have Master Agreements with the City and are authorized to transact are listed below; this list may be expanded with City Council approval. a. Avangrid Renewables, LLC;
b. BP Energy Company;
c. Cargill Power Markets, LLC;
d. Constellation Energy Generation, LLC;
e. DRW Energy Trading LLC;
f. Dynasty Power Inc.;
g. NextEra Energy Marketing, LLC;
h. NRG Business Marketing LLC;
i. PacifiCorp;
j. Powerex Corp;
k. Shell Energy North America (US), L.P.;
l. Silicon Valley Clean Energy Authority (SVCE); and
m. Turlock Irrigation District.
9 The UROCC, which consists of the Directors of Utilities, Public Works, and Administrative Services, as well as a representative from the City Manager’s Office, ensures proper risk management controls are in place with respect to the City’s energy procurement, and ensures compliance with the Council-approved Energy Risk Management Policy.
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5 SECTION 3. The Council hereby finds that authorizing the City Manager or their designee to transact for electric supplies to meet the City’s electrical loads under electric Master Agreements will not result in any direct or indirect physical change in the environment, and therefore does not constitute a project requiring environmental assessment for the purposes of the California Environmental Quality Act, pursuant to CEQA Guidelines section 15378(b)(5).
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
_____________________________ _____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
_____________________________ ______________________________ Assistant City Attorney City Manager
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Director of Administrative Services
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Director of Utilities