1 Council Meeting of
October 29, 2024
Honorable Mayor and Members
of the City Council
City Hall
Torrance, California
Members of the Council:
SUBJECT: Community Development — Determine California Environmental Quality Act (CEQA) Exemption, Adopt RESOLUTION of Intent to Consider Fuel Oil Pipeline Franchise Application from Zenith Energy West Coast Terminals LLC, and Set Date for Public Hearing. Expenditure: None.
RECOMMENDATION
Recommendation of the Community Development Director that City Council:
1) Determine that the project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines; and 2) Adopt a RESOLUTION of Intent to consider an oil pipeline franchise application from Zenith Energy West Coast Terminals LLC; and
3) Set the date of November 19, 2024 for a public hearing at 6:30 PM during the regular Council meeting to be held in the City Council Chamber at 3031 Torrance Boulevard, Torrance CA 90503.
FUNDING
None required.
BACKGROUND/ANALYSIS
Zenith Energy West Coast Terminals LLC has made application to extend its existing Franchise held under Franchise Ordinance Number 3474. The pipeline franchise expired October 21, 2024 which was 25 years after the effective date. The purpose of this Council item is to set a public hearing date for the public to give input on granting a new franchise. When Franchise Ordinance No. 3474 was adopted in 1999, the annual franchise fee was set at $11,638.97. Per Section 6231.5 of the Public Utilities Code (PUC), franchise fees are calculated based on length (26,514 feet) and size of pipeline (16-inch pipe @ $0.352 per foot ($9,332.93)) plus the Consumer Price Index (CPI) as escalation factor. In 2024, the City received $23,613.20 from Zenith Energy West Coast Terminals LLC.
The pipelines (16-inch & 12-inch) under this Franchise Ordinance are common carrier which allow other carriers to utilize the pipelines to carry products. The rates for common carrier pipelines are controlled by the California Public Utilities Commission (CPUC) and are specified in the Public Utilities Code. The rates are not subject to negotiation. While the 16-inch pipelines (#519) are active, the 12-inch pipelines have been abandoned in place. Active pipelines require a Franchise Ordinance in order for use.
8D
ATTACHMENT 5
2 On August 5, 2024, Zenith Energy West Coast Terminals LLC made an application to the City of Torrance for a renewal of its existing franchise for certain pipelines and appurtenances to transport fuel oil products.
The City of Torrance approved Ordinance No. 3474, on September 14, 1999; granting Southern California Edison Company (SCE) an oil pipeline franchise with a 25-year term allowing SCE, its successors and assigns, to construct, lay, operate, test, maintain, use, renew, repair, replace, move, change the size and number of and remove or abandon in place a system of pipes and appurtenances not to exceed sixteen inches in internal diameter. This Franchise Ordinance includes 16-inch (26,514 feet in length) and 12-inch (511 feet in length) fuel oil pipelines.
In 2003, SCE partially assigned its rights, title, interest, and obligations under Ordinance No. 3474 to Pacific Terminals LLC, specifically related to the 16-inch fuel oil pipelines. SCE retained ownership of the 12-inch fuel oil pipelines, which were eventually abandoned. Staff notes that SCE will be providing documentation to confirm the abandonment-in-place of the 12-inch pipeline and that it is no longer active. Following the acquisition, Pacific Terminals LLC underwent a name change and subsequently sold the company to Zenith Energy West Coast Terminals LLC in October 2020.
Section 6201 et. Seq. of the Public Utilities Code contains specific requirements and procedures for the granting of a franchise. Zenith Energy West Coast Terminals LLC has made an application to the City for a franchise in accordance with these procedures. In order to grant the requested franchise, the City Council must take the following actions:
• Determine that the project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the Guidelines implementing CEQA; • Publish a notice of the City's intended action to consider the franchise application, including the date, time and place of the public hearing at which time written protest or objections may be heard, within 15 days after the passage of the RESOLUTION; • Conduct a public hearing to consider an ordinance awarding the fuel oil pipeline franchise not less than 20 days or more than 60 days after adoption of the RESOLUTION of Intent; • Introduce an ordinance to grant the franchise after completion of the required public hearing and consideration of written protests, if any.
FINDINGS AND ALTERNATIVES
The requested franchise is for a 10-year period with one 10-year option to extend and will provide Zenith Energy West Coast Terminals LLC with the right and privilege to maintain and operate the existing fuel oil pipelines. The locations of the pipelines are shown in Exhibit A and is incorporated in the attached RESOLUTION of Intent.
Staff reviewed the project to determine the required level of review under CEQA. The City's action to grant a franchise for the existing fuel oil pipelines is categorically exempt from the provisions of the California Environmental Quality Act in accordance with Section 15301 (Existing Facilities). The proposed project is exempt from CEQA which applies to projects involving the operation, repair, maintenance, permitting, leasing, licensing or minor alteration of existing public or private structures, facilities, mechanical equipment or topographical features
L
3 involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The proposed project is a renewal of a Pipeline Franchise Ordinance with no expansion of use. No special circumstances exist that would create a reasonable possibility that the project will have a significant adverse effect on the environment. Therefore, the project is exempt under CEQA.
If the RESOLUTION of Intent is adopted, the required notice of public hearing will be published and an ordinance granting the requested franchise will be prepared and submitted for City Council consideration.
Should the City Council choose not to adopt the RESOLUTION of Intent, thereby expressing its intention not to consider an award of a fuel oil pipeline franchise, the applicant which has been established as a common carrier and a public utility by the California Public Utilities Commission would have three available options. The first option would be to request City approval to physically remove the pipeline from the City's right-of-way. The second option would be to leave the pipeline in its current location, but seal it where it enters and leaves the City, thereby rendering it unusable. The third option would be for the applicant to initiate a condemnation action against the City in order to obtain, through eminent domain, a subsurface easement or other rights to utilize the pipeline within the City. In such a condemnation action, the applicant would have to demonstrate that public interest and public necessity requires acquisition of the easement, and the applicant would be required to pay the City its fair market value.
The City Council May consider taking one of the following actions:
1. Determine that the project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the Guidelines implementing CEQA and adopt the attached RESOLUTION of Intent (Attachment A) and set the Public Hearing date as November 19, 2024;
2. Determine that the project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the Guidelines implementing CEQA and adopt the attached RESOLUTION of Intent and set Public Hearing for another date;
3. Not adopt the attached RESOLUTION of Intent;
4. Provide staff with further direction.
Staff recommends that the City Council take the first action.
SUMMARY
Zenith Energy West Coast Terminals LLC has made application to renew its existing pipeline franchise. The most recent franchise for the fuel oil pipelines granted by the City of Torrance expired October 21, 2024. Zenith Energy West Coast Terminals LLC is requesting that the City grant a new pipeline franchise for the portion of the pipelines located within the City of Torrance.
The California Public Utilities Code specifies that granting a franchise by ordinance requires the granting body to first adopt a RESOLUTION of Intent to consider the franchise application and to conduct a public hearing. The Code also requires that a notice of public hearing be published within 15 days after the passage of the RESOLUTION of Intent to consider the franchise application including the date, time, and place of the public hearing at which written protests or objections may be heard.
LIAkeith C Michelle G. Ramirez
Community Developmen
4 The attached RESOLUTION of Intent has been prepared in conformance with the applicable Public Utilities Code sections. It is recommended that the City Council adopt the attached Resolution of Intent and set the public hearing date for November 19, 2024.
Respectfully submitted,
MICHELLE G. RAMIREZ
COMMUNITY DEVELOPMENT DIRECTOR
CONCUR:
_c_o t, Aram Chaparyan
City Manager
By Y 2-----e<C7—
Oscar Martinez
Planning Manager
Attachments: A) RESOLUTION of Intent
B) Zenith Energy West Coast Terminals LLC request to renew Franchise Ordinance Number 3474
S ATTACHMENT A
RESOLUTION NO. 2024-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TORRANCE, CALIFORNIA, DECLARING ITS
INTENTION TO CONSIDER AN APPLICATION FOR AN
OIL AND PETROLEUM PRODUCTS PIPELINE
FRANCHISE FROM ZENITH ENERGY WEST COAST
TERMINALS LLC AND SETTING THE DATE FOR A
PUBLIC HEARING AT WHICH PROTESTS OR
OBJECTIONS MAY BE RECEIVED
WHEREAS, Franchise Ordinance No. 3474 was granted to Southern California Edison Company, a California Corporation, on September 21, 1999 and became effective on October 21st, 1999 for a 25-year term; and WHEREAS, Franchise Ordinance No. 3474 operates 16 inch and 12 inch fuel oil pipelines at 26,515 feet in length and at 511 feet in length, respectively; and WHEREAS, on February 1, 2002, Southern California Edison Company assigned its rights and interests of the 16 inch fuel oil pipelines under that certain City of Torrance Franchise Ordinance No. 3474 to Pacific Terminals LLC but retained its rights for the 12 inch Fuel Oil pipelines; and
WHEREAS, Southern California Edison Company subsequently abandoned in place the 12 inch Fuel Oil pipelines in accordance with applicable conditions prescribed in the Franchise Ordinance; and
WHEREAS, on June 1, 2009, Pacific Terminals LLC changed its name to Plains West Coast Terminals LLC; and
WHEREAS, on October 16th, 2020, the name Plains West Coast Terminals LLC was changed to Zenith Energy West Coast Terminals LLC which is the operator of the pipelines; and
WHEREAS, Zenith Energy West Cost Terminals LLC has been assigned and has assumed contracts pertaining to Franchise Ordinance No. 3474; and WHEREAS, the current Franchise Ordinance No. 3474 expired on October 21, 2024, Zenith Energy West Coast Terminals LLC; and
WHEREAS, on August 5th, the City received an application from Zenith Energy West Coast Terminals LLC to renew the pipeline for a 10-year period with one 10-year option to extend.
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL FOR THE CITY OF TORRANCE:
6 Section 1. The City of Torrance hereby expresses its intent to consider franchise application from Zenith Energy West Cost Terminals LLC to operate and maintain existing Fuel Oil pipelines as described in Exhibit A, attached hereto and incorporated herein by reference.
Section 2. That pipeline franchise application is for a franchise period of 10 years with one 10-year option to extend.
Section 3. Franchise fees under the franchise will be paid annually to the City of Torrance pursuant to Section 6231.5(b) of the California Public Utilities Code.
Section 4. A public hearing to consider this application will be held on November 19, 2024 at 7:00 pm. in the city of Torrance, City Council chamber, 3031 Torrance Boulevard. All persons having any objection to the granting of the franchise may appear before the City Council and be heard at that time.
Section 5. A notice of the intention to consider the application for fuel oil pipeline franchise from Zenith Energy West Coast Terminals LLC will be published in a newspaper of general circulation within 15 calendar days following the adoption of this Resolution. The notice will include: date, time, and place of the scheduled public hearing; a statement that the franchisee will pay franchise fees, and failure to pay such fees as prescribed will result in the forfeiture of the franchise.
Section 6. The City Clerk will certify to the adoption of this resolution and shall cause a certified resolution to be filed in the Office of the City Clerk.
INTRODUCED, APPROVED AND ADOPTED this day of , 2024.
George K. Chen
Mayor
APPROVED AS TO FORM: ATTEST:
PATRICK Q. SULLIVAN, City Attorney
By:
Tatia Y. Strader Rebecca Poirier, MMC
Assistant City Attorney City Clerk
7 TORRANCE CITY COUNCIL RESOLUTION NO. 2024-
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES ) ss
CITY OF TORRANCE
I, Rebecca Poirier, City Clerk of the City of Torrance, California, do hereby certify that the foregoing resolution was duly introduced, approved, and adopted by the City Council of the City of Torrance at a regular meeting of said Council held on the 29th day of October 2024 by the following vote:
AYES: COUNCILMEMBERS
NOES: COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
ABSENT: COUNCILMEMBERS
Rebecca Poirier, MMC
Date: City Clerk of the City of Torrance
8 EXHIBIT A
DESCRIPTION OF ZENITH ENERGY WEST COAST TERMINALS LLC OIL LINES 16 Inch Fuel Oil Pipelines:
Enter City at 238th Street and Fulmar Avenue. West in 238th Street to Arlington Avenue. South in Arlington Avenue to 239th Street. West in 239th Street to Crenshaw Boulevard. North in Crenshaw Boulevard to Sepulveda Boulevard. West in Sepulveda Boulevard to Madrona Avenue. North in Madrona Avenue to Torrance Boulevard.
Leave City Streets and enter railroad right-of-way at Torrance Boulevard and Madrona Avenue.
And in 190th Street, Hawthorne Boulevard and 182nd Street where said streets crossing the Atchison, Topeka and Sante Fe Railroad right-of-way.
TOTAL FOOTAGE 26,515 feet
9 10
EXHIBIT A
ZENITH ENERGY WEST COAST TERMINALS LLC
LINE NO. SIZE FOOTAGE STATUS PRODUCT
519 16 inch 26,515 active Oil & Petroleum Products
11 ZENITH ENERGY
ATTACHMENT B
ZENITH ENERGY WEST COAST TERMINALS LLC
18000 Studebaker Rd.. Suite 960
Cerritos. CA 90703
August 5, 2024
City of Torrance
Community Development Department
3031 Torrance Boulevard
Torrance, CA 90503
Attn: Oscar Martinez, Planning Manager
RE: Franchise Ordinance 0-3474 Renewal Application
To Whom it May Concern,
Zenith Energy West Coast Terminals LLC (formerly Plains West Coast Terminals LLC) is the owner of Franchise Ordinance 0-3474. The original twenty-five term is due to expire on October 20, 2024.
This letter serves as our formal application to renew said Franchise with same or similar terms.
Please let us know the next steps to take in order to move forward.
If you have any questions, please feel free to contact me at [email protected] or (562-263-3919.
Sincerely,
Sec. c5leavf.
Becky Sitton
Right of Way Manager
Zenith Energy West Coast Terminals LLC