TITLE
Recommendation to adopt resolution authorizing City Manager to amend Gas Rate Schedules 1-10 to redefine the cost of gas and special conditions for City gas utility customers. (Citywide)
DISCUSSION
On August 21, 2007, the City Council approved the execution and implementation of a longterm natural gas commodity prepay agreement (Prepay Agreement). As a result, Long Beach Gas and Oil (LBGO) proposes to redefine the cost of gas and revise the special conditions associated with each rate, as established in the LBGO Gas Rate Schedule for all commodity customers. The proposed changes will not affect the actual gas rates applicable to LBGO's customers.
The proposed definition for cost of gas will be an amount equal to LBGO's weighted average cost per therm of gas supply purchased, necessary to meet the forecasted volume demand for the month. In addition, the cost of gas shall include the cost to administer the transportation, purchasing, remarketing, balancing, etc., of LBGO's natural gas requirements, as well as the cost for any financial transactions implemented to reduce market exposure for the cost of gas. The gas purchased will be comprised of anyone or combination of three increments of supply as follows:
a) Interstate supplies delivered into the Southern California Gas (SoCalGas) intrastate pipeline system without consideration of SoCalGas (or any other intrastate pipeline company providing similar services) pipeline transportation and other system costs associated with intrastate delivery to the City of Long Beach (City);
b) Gas storage withdrawals; and
c) Any local gas delivered directly into LBGO's pipeline system.
These proposed changes would be effective for services received on and following the date on which the Prepay Agreement becomes effective, currently scheduled for November 1, 2007.
The proposed changes impact only the commodity portion of the gas rates and affect all gas rate schedules, with the exception of transportation customer ra...
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