Keeping the lights on: An ongoing report of local power conditions
Uploaded: Wednesday, March 7, 2001 8:30 a.m.

Manager can negotiate power contracts
Council approves plan with careful oversight

by Marv Snow

The Palo Alto City Council has approved an an ordinance giving the city manager authorization to sign long-term power supply contracts, but only after they increased the number of council members to be assigned to a power Oversight Committee from three to four.

The ordinance was originally presented to the council on Feb. 12, but was sent to the Utilities Advisory Commission for study and recommendation. That body concurred with Palo Alto Utilities Director John Ulrich, but recommended modifications to the emergency ordinance: a reduction in the amount of megawatts that could be purchased--from 75 to 50--and the creation of an oversight committee.

"There is a strong possibility that the contract between Western Area Power Authority and PG&E will be changed or become invalid," Ulrich told the Council. "What we would like to do is move ahead and get on with the negotiations. It's not a solution but an insurance policy."

"I have an alarm bell going off in my head," Councilman Gary Fazzino said. "It's a very major situation. We need flexibility of speed."

Councilman Bern Beecham told Fazzino that the city's staff could, currently, negotiate a contract of up to two years.

"The oversight committee would be setting the perimeters," City Manager Frank Benest said. "If you have an offer on the table on a Wednesday, there is no way in our current system to get to you on Monday. That's a reality."

"This is not an ordinary matter," Ulrich said. "There is a considerable risk that PG&E is going bankrupt. There is every likelihood of that happening."

Fazzino had concerns of an oversight committee made up of some City Council members having too much authority in approving contracts without the concurrence of the full council. "An individual councilman does not have the power," he said.

City Attorney Ariel Calonne informed the council that the oversight committee would have the authority to approve contracts.

"What I'm seeing here is a compromise," Councilwoman Nancy Lytle said. "I feel better about it because the committee is subject to the Brown Act (must post agendas and hold open meetings)."

The ordinance, which will expire on March 1, 2002, allows the purchase of 50 megawatts of power. No contract will last more than 10 years and contracts must be of different quantities of power from different sources. The ordinance also creates a standing oversight committee comprised of four council members, to be appointed by the mayor. The committee would have the power to review and approve how the city manager can exercise his authority to negotiate and sign contracts.

The ordinance also calls for an internal review by the city auditor of the city manager's actions. All power contracts must be approved by the city attorney.


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