HomeMy WebLinkAbout2007-22 NCPA LetterRESOLUTION NO. 2007-22
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF UHIAH APPROVING LETTER
REPRESENTING AGENCY RELATIONSHIP
BETWEEN LOAD SERVING ENTITY AND
DESIGNATED AGENT/TRUSTEE
WHEREAS, the California Independent System Operator ("CAISO") is currently in the
process of implementing the Market Redesign and Technology Upgrade project, which is
scheduled to be implemented on February 1, 2008, and
WHEREAS, one of the main objectives to be accomplished under MRTU is to develop a
market design that allows the CAISO to more effectively manage transmission congestion,
which CAISO has proposed to accomplish by implementing a new market pricing
mechanism titled Locational Marginal Pricing, which is used to determine the most cost-
effective use of resources to resolve transmission bottlenecks, and
WHEREAS, the CAISO has developed a mechanism called Congestion Revenue Rights that
can be used by Market Participants to hedge against the cost of congestion associated with
delivering resources to serve load obligations within a LMP based market, and
WHEREAS, Ukiah qualifies as a Load Serving Entity ("LSE") under the MRTU Tariff, and
therefore is eligible to receive an allocated share of CRRs, that can be used to hedge against
to cost of congestion incurred while delivering resources to serve its load obligations, and
WHEREAS, Ukiah is currently a member of Northern California Power Agency ("NCPA"),
and is a signatory to the NCPA Pooling Agreement, Metered Subsystem Aggregator
Agreement ("MSSA"), and the Scheduling Coordinator Pxogxam Agreement ("SCPA"),
which establish a contractual relationship between NCPA and Ukiah, and encompass many
of the functions that NCPA performs on Ukiah's behalf, including, but not limited to,
planning, scheduling, dispatch, and settlement services, and
WHEREAS, it has been assumed that NCPA would act on behalf of Ukiah far all CRR
related functions, but NCPA does not qualify as a LSF,, and therefore faces a contractual
limitation that does not allow NCPA to take rile to the CRRs acquired on behalf of Ukiah,
and
WHEREAS, the CAISO has proposed a solution that would allow NCPA to act on behalf
of the NCPA Pool Members' for the purposes of administering the acquired CRRs, which
will require NCPA to become the signatory to the Pro Forma MSS Aggregator CRR Entity
Agent Agreement, and
WHEREAS, NCPA will be requesting authority ffom the NCPA Commission, which
consists of Member representatives including Ukiah, to allow NCPA to enter into the
CAISO Pro F'oxma MSS Aggregator CRR Entity Agent Agreement on behalf of the NCPA
Pool Members, and
~ The NCPA Pool Members include Alameda Power and Telecom, City of Biggs, City of Gridley, City of
Healdsburg, City of Lodi, City of Lompoc, City of Palo Alto, Plumas-Sierra REC., Port of Oakland, and
City of Ukiah
WHEREAS, in addition to requiring NCPA to become the signatory to the Pxo Forma MSS
Aggregator CRR Entity Agent Agreement, each NCPA Pool Member, including L?kiah, will
be required to approve and sign the Letter Representing Agency Relationship Between Load
Serving Entity and Designated Agent/Trustee ("Letter of Agency"), and
WHEREAS, the Letter of Agency will assign authority to NCPA to act on behalf of Ukiah
with regard to CRRs matters, including, but not limited to, allowing NCPA to participate in
the CRR nomination process on behalf of Ukiah, to accept financial responsibility under the
Pxo Forma MSS Aggregator CRR Entity Agent Agreement, to perform settlement functions,
and to comply with other CAISO 'T'ariff requirements, and
WHEREAS, the Pro Forma MSS Aggregator CRR Entity Agent Agreement specifies that
NCPA, acting as the CRR Entity Agent, would be authorized by the aggregate CRR Entities
(NCPA Pool Members) per the Letter of Agency to act on their behalf with regard to CRR
matters, including, but not limited to, allowing NCPA to participate in the CRR nomination
process on behalf of the Poo] Members, to accept financial responsibilit<~ under the
agreement, to perform settlement functions, and to comply with other CAISO Tariff
requirements, and
WHEREAS, per the agreement, NCPA will be granted rights to participate in the CRR
nomination process on an aggregated basis on behalf of each of the aggregated CRR Entities
(NCPA Pool Members) on the basis of each individual CRR Entity's Load ratio share, which
will be set forth in Schedule 3 of the Pxo Forma MSS Aggregator CRR Entity Agent
Agreement, and
WHEREAS, the agreement specifies that NCPA will be required to comply with the
requirements fox creditworthiness applicable to Candidate CRR Holders ox CRR Holders,
including creditworthiness provisions of the CAISO Tariff and the relevant Business
Practice Manuals, and
WHEREAS, all revenues and costs associated with the aggregated NCPA Pool Member
CRR portfolio will be invoiced in the form of a CAISO charge type, which is consistent with
NCPA's authority under the SCPA to invoice all costs and revenues attributed to the
aggregate NCPA Pool Member CRR portfolio in accordance with the allocation
methodologies adopted in Appendix B of the SCPA,
NOW, THEREFORE BE IT RESOLVED that:
The City of Ukiah hereby delegates authority to NCPA to act on its behalf with regard to
CRR matters, including, but not limited to, authorizing and directing NCPA to participate in
the CRR nomination process on behalf of Ukiah, to accept financial responsibility on behalf
of Ukiah and other Members of the NCPA Pool utidex the Pxo Forma MSS Aggregator CRR
Entity Agent Agreement, to perform settlement functions, and to comply with other CAISO
Tariff requirements. "I1ie CAISO Letter of Agency, specifying that NCPA is acting on
behalf of L?kiah as its agent for all CRR functions specified in the Pro Forma MSS
Aggregator CRR Entity Agent Agreement, is hereby approved, and the City Manages is
hereby authorized to execute it on behalf of L?kiah.
PASSED AND ADOPTED on June 20, 2007, by the following roll call vote.
AYES: Councilmember Thomas, Crane, McCowen, Baldwin, and Mayor Rodin
NOES: None
,1BSENT: None
ABSTAIN: None
Ul.t,~ Cdr--i(~.c ti...
Mari Rodin, Mayor
ATTE T: .- - ~
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Linda 13rown,Actin CirS~ Clerk