(1) Notwithstanding any other ordinance, rule or law of the City of Los Angeles to the contrary, under the authority of Charter Section 674, the Board of Water and Power Commissioners shall have independent authority to purchase and sell surplus wholesale energy, transmission service and ancillary services for a period not to exceed three years, without further City Council approval subject to all the following limitations:
(a) Contracts that provide for or include the use of the Department of Water and Power’s (Department’s) transmission assets shall comply with the transmission service tariff approved by City Council pursuant to Section 23.134 of this Chapter, as applicable;
(b) The Energy Services Executive Risk Policy Committee as set forth in Section 10.5.3(1)(g)(ii) of the City of Los Angeles Administrative Code shall provide a written formal comprehensive risk management policy recommendation to the Board of Water and Power Commissioners relating to the purchase and sale of wholesale energy by June 30, 2003. A representative of the City Attorney’s Office shall be a nonvoting member of this Committee;
(c) Prior to entering into any wholesale energy contract after September 30, 2003, the Board of Water and Power Commissioners by resolution shall establish the Department’s comprehensive risk management policy relating to the purchase and sale of wholesale energy after consideration of the Energy Services Executive Risk Policy Committee’s written recommendation. Such policy shall be submitted to the City Council by Ordinance and shall address the following key objectives:
(i) Assistance to the State of California during energy emergencies without compromising the Department’s financial integrity; and
(ii) Ensure Department’s resources and assets are available to serve the Department’s retail customers; and
(iii) Prohibit speculative transactions (i.e., sleeve, parking transactions and unhedged forward contracts as defined in the policy) by establishing trading protocols, controls, and security to ensure that all wholesale energy contracts entered into are consistent with this Section; and
(iv) Prevent the Department from intentionally engaging in transactions that facilitate dysfunctional wholesale energy markets; and
(v) Establish maximum daily and annual delegated authority for the General Manager to enter into wholesale energy contracts subject to the limitations set forth in subsection (2) of this Section.
(d) Every contract shall contain the payment, default, remedy and other terms and conditions, as authorized by the Board of Water and Power Commissioners; and
(2) The Board of Water and Power Commissioners under the authority of Charter Section 604(c) is authorized to delegate to the General Manager of the Department of Water and Power the authority to enter into contracts pursuant to this section, provided that the contracts do not exceed 18 months in duration, 2,000 megawatts per transaction, and a price of $2,500 per megawatt-hour.
(3) The Department of Water and Power shall retain an outside auditor or a comparable third party approved by the Board of Water and Power Commissioners to annually audit and prepare a report relating to the activities authorized under this section. The audit report shall provide, but is not limited to, an assessment of the adequacy of risk management controls and compliance with the provisions set forth in this Section pertaining to the purchase and sale of wholesale energy.
(4) Pursuant to Charter Section 370, business transactions authorized under this Section shall be in writing or made orally and tape recorded or memorialized electronically, including but not limited to e-mail.
SECTION HISTORY
Added by Ord. No. 156,354, Eff. 4-2-82.
Amended by: Ord. No. 172,353, Eff. 1-30-99.
Repealed, new Section Added, Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.
Amended by: Ord. No. 173,877, Eff. 5-18-01; In Entirety, Ord. No. 175,099, Eff. 3-27-03; Subsec. (2), Ord. No. 177,678, Eff. 8-17-06; Subsec. (2), Ord. No. 185,638, Eff. 8-5-18.