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Re: Purchase of Natural Gas
(a) Approve and Order Executed Gas Services Agreement (Agreement) with State of California Department of General Services (DGS) Program
(b) Authorize Chief Engineer and General Manager to Execute Future Addenda, Amendments, and All Related Documents
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Summary: The Total Energy Facility at the A.K. Warren Water Resource Facility (Warren Facility) is fueled primarily by digester gas, but at times must supplement with natural gas to ensure stable operation and meet plant load demands. Under California Public Utilities Code rules, the Warren Facility is classified as a "non-core" user of natural gas, and the gas must be purchased from independent suppliers rather than from Southern California Gas Company. The Districts have purchased non-core gas from DGS since 2004. DGS purchases gas at a mix of long- and short-term prices to create a pool of gas purchased by numerous agencies, cities, and counties. Purchasing a mix of long- and short-term gas provides greater price certainty and limits the impact of short-term price fluctuations. The previous agreement expired June 30, 2026. The proposed Agreement is for a one-year term through June 30, 2027, but will continue indefinitely unless terminated by February 15 of each year. Staff has determined that the “Project” is exempt or otherwise not subject to the provisions of the California Environmental Quality Act (CEQA) pursuant to California Public Resources Code Section 21084 and Title 14 of the California Code of Regulations (“CEQA Guidelines”) Section 15301. This item is consistent with the Districts’ Guiding Principle of commitment to fiscal responsibility and prudent financial stewardship.
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