TITLE
Recommendation to adopt resolution authorizing City Manager, or designee, to execute Customer Natural Gas Transportation/Service Agreements and all necessary amendments between the City of Long Beach and utility customers that procure their natural gas supply from third-party marketers, for a period of five years, with automatic one-year renewal options, at the discretion of the City Manager. (Citywide)
DISCUSSION
Similar to other California natural gas utilities, the Long Beach Gas and Oil Department (LBGO) permits certain customer classifications to procure natural gas supply from third-party marketers and use the City of Long Beach’s pipeline system to transport this gas to end-user facilities. Customers permitted to acquire natural gas supplies from third-parties are primarily LBGO’s largest customers and must be classified under Gas Rate Schedule 5 (Compressed Natural Gas), Schedule 7 (Electric Generation), or Schedule 9 (Transportation and Exchange). While these customers are not charged for the natural gas commodity, they are charged transmission rates that correspond to their rate classification.
On June 12, 2012, the City Council approved Customer Natural Gas Transportation/Service Agreements (Agreements) with ten customers: National Gypsum, Long Beach Memorial Hospital, Toyota, Asphalt Products, American Textile, Community Hospital, St. Mary’s Hospital, Bloom Energy, California State University Long Beach, and Home Depot (fuel cells). These Agreements will expire on July 31, 2017. New Agreements must be executed to ensure uninterrupted service to these customers. The Agreements will be for an initial five-year period, after which the Agreements will renew automatically each year. Any party may terminate the Agreement at any time by giving the other party 90 days prior written notice.
This matter was reviewed by Deputy City Attorney Richard F. Anthony on April 11, 2017 and by Revenue Management Officer Geraldine Alejo on April 17, 2017.
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