Los Angeles Municipal Code Art. 3 Powers and Duties in General

Power to Enter into Contracts of Specified Durations for Transmission Services Which Would Otherwise Fall Within the Jurisdiction of the Federal Energy Regulatory Commission.

Transmission Services Which Would Otherwise Fall Within the Jurisdiction of the Federal Energy Regulatory Commission.

Power to Enter into Contracts That Provide for the Purchase and Sale of Energy.

Related Products and Services, Utility Products and Services and Information Technology Products and Services to Persons or Entities Inside or Outside the City of Los Angeles and Inside or Outside the State of California. 23.137 Contract Authority of the General Manager of the Department of Water and Power for Specified Power Contracts. 23.138 Contract Authority of the General Manager of the Department of Water and Power Related to Energy Efficiency Projects.

Efficiency Projects, Utility Infrastructure Projects, Water Conservation and Solar Energy Projects. 23.142 Pole Attachments. 23.143 Authority of the Department of Water and Power Commissioners to Enter into Grid Interconnection and Operational Reliability Contracts.

and Power to Enter into Contracts and Financial Transactions for Environmental Credits, Including Emission Credits or Allowances and Renewable Energy Credits (RECs).

SECTION HISTORY

Based on Charter, Sec. 78. Repealed by Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

SECTION HISTORY

Based on Charter, Sec. 83. Repealed by Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

SECTION HISTORY

Based on Charter, Sec. 86. Amended by: Ord. No. 154,252, Eff. 9-11-80. Repealed by Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

SECTION HISTORY

Para. 1 based on Charter, Sec. 219.3; Para. 4 on Charter, Sec. 219.3, 219.4.
Amended by: Ord. No. 154,252, Eff. 9-11-80.
Repealed by Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

Sec. 23.133. Authority of the Board of Water and Power Commissioners and the General Manager of the Department of Water and Power to Enter into Contracts of Specified
Durations for Transmission Services Which Would Otherwise Fall Within the Jurisdiction of the Federal Energy Regulatory Commission.

(a) Notwithstanding any other ordinance, rule or law of the City of Los Angeles to the contrary, the Board of Water and Power

Commissioners (Board) under the authority of Charter Section 604(c) is authorized to delegate to the General Manager, the authority to enter into any transmission service agreement: (1) which does not exceed three years in duration; (2) which is two years in duration and will automatically renew for an additional term of two years, unless such option is terminated by either party, provided that in the reasonable but exclusive determination of the Los Angeles Department of Water and Power, such service does not jeopardize the tax-exempt status of any municipal bond(s) used to finance the Los Angeles Department of Water and Power’s facilities; or (3) which exceeds three years pursuant to an executed Governmental Person Use Certificate, in each case where the terms, conditions, and charges are pursuant to a transmission service tariff approved by the City Council.

(b) For any transmission service agreement that is requested pursuant to Section 211 of the Federal Power Act for a term in excess of three years, the Department of Water and Power (Department), through its General Manager or the General Manager’s designee, will immediately notify the City Council of the proposed terms of the request. Within ten City business days of such notification, the City Council, by a simple majority vote, may direct the Department to submit an agreement for its approval. If the City Council does not act with respect to the matter within ten City business days of such notification, the Board shall be authorized to enter into any written transmission service agreement if the duration of such agreement does not exceed five years, is approved by the City Attorney as to form and legality and is deemed by the Board necessary to satisfy such request made pursuant to Section 211 of the Federal Power Act, provided further the Department may enter into a written transmission agreement for more than five years if the Federal Energy Regulatory Commission by a final order requires the Department to enter into such an agreement, after the Department has exhausted all administrative and legal remedies. Under the authority of Charter Section 604(c), the Board of Water and Power Commissioners may delegate to the General Manager, the authority to enter into such agreement on its behalf.

(c) When a final order is issued by the Federal Energy Regulatory Commission pursuant to Section 211 of the Federal Power Act as required by subsection (b) of this ordinance, the Department shall notify City Council of the terms of such final order.

SECTION HISTORY

Based on Charter, Sec. 220. Amended by: Subsec. (6), Ord. No. 139,315, Eff. 11-29-69, showing Charter, Sec. 220 as amended at the Primary Nominating Election held 4-1-69, and Eff. 5-2-69; Subsec. (6), Ord. No. 154,252, Eff. 9-11-80; Subsec. (8) added by Ord. No. 156,354, Eff. 4-2-82. Repealed, new Section Added, Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00. Amended by: In Entirety, Ord. No. 174,480, Eff. 4-27-02; Subsec. (a), Ord. No. 183,143, Eff. 8-14-14; Subsec. (a), Ord. No. 188,768, Eff. 12-25-25.

SECTION HISTORY

Based on Charter, Sec. 220. Added by Ord. No. 154,252, Eff. 9-11-80. Repealed by Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

SECTION HISTORY

Based on Charter, Sec. 228. Added by Ord. No. 154,252, Eff. 9-11-80. Repealed by Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

Sec. 23.134. Authority of the Board of Water and Power Commissioners, with City Council Approval, to Establish Tariffs for Transmission Services Which Would Otherwise Fall Within the Jurisdiction of the Federal Energy Regulatory Commission.

Notwithstanding any other ordinance, rule or law of the City of Los Angeles to the contrary, the Board of Water and Power Commissioners shall have authority to establish and set all tariffs, terms, conditions and charges, subject to approval by a simple majority vote of the City Council, which relate to transmission services which would otherwise fall within the jurisdiction of the Federal Energy Regulatory Commission, or when necessary to avoid the exercise of the jurisdiction of the Federal Regulatory Commission under Section 211 of the Federal Power Act.

SECTION HISTORY

Based on Charter, Sec. 220.3. Repealed, new Section Added, Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

Sec. 23.135. Authority of the Board of Water and Power Commissioners and the General Manager of the Department of Water and Power to Enter into Contracts That Provide for the Purchase and Sale of Energy.

(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.

Sec. 23.136. Authority of the Department of Water and Power to Sell Electric Energy and Related Products and Services, Water Related Products and Services, Utility Products and Services and Information Technology Products and Services to Persons or Entities Inside or Outside the City of Los Angeles and Inside or Outside the State of California.

(1) The City Council of the City of Los Angeles expressly finds that it is in the best interest of the City of Los Angeles that the Department of Water and Power be authorized to engage in other business enterprises to sell and deliver expanded services through Department of Water and Power resources or through those resources that may exist through other marketing and sales channels such as Brokers, Marketers or strategic alliances which the Department of Water and Power may develop from time to time. It is further found that expanded products and services as set forth in this section will provide benefits to the City of Los Angeles and will not interfere with the role of the Department of Water and Power as a provider of water and power to the City’s inhabitants.

(2) Notwithstanding any other ordinance, rule or law of the City of Los Angeles to the contrary and under the authority of Charter Section 680, the Department of Water and Power is authorized to engage in the following business enterprises whether inside or outside the City of Los Angeles or the State of California:

(a) Sell electric energy, electric capacity and related products and services including but not limited to products that generate, store,
deliver, use, conserve, affect, monitor, manage or measure energy and services related to the design, procurement, installation, use,
operation, or maintenance of energy or energy related products to any person or entity, on a wholesale, retail or exchange basis.

(b) Provide utility products and services, including, but not limited to services for the maintenance, management, or administration
of electric energy, equipment or systems associated with the production, transmission, distribution or use of electricity.

(c) Arrange, bundle, finance, facilitate or market products and services of other providers whose products and services are related to
energy.

(d) Buy, sell, or otherwise trade natural gas on a wholesale basis.

(e) Provide information technology, products and services including but not limited to fiber optic leases, network services and
communications services related to energy and water services in accordance with City Council policies.

(3) The Department of Water and Power is further authorized to sell water related products and services pertaining to water delivery, water quality, water storage, metering, water audits and the design, procurement, installation, operation, and maintenance of water related equipment and systems to any person or entity within its retail service areas.

(4) Notwithstanding any other provision of this section, the Department of Water and Power is not authorized to provide electric services or any other services which may be provided by another utility or direct competitor to any person or entity whether situated inside or outside the City of Los Angeles unless and until the City Council has authorized direct transactions between electricity suppliers and end use customers as provided by Section 680(b) of the City Charter.

SECTION HISTORY

Added by Ord. No. 171,634, Eff. 7-27-97. Amended by: Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

(a) Findings and Requirements.

(1) The California Electric Utility Industry has experienced and is continuing to experience a dramatic unprecedented restructuring
which entreats all electric utilities both publicly owned and privately owned to operate efficiently and competitively.

(2) In order to meet the demands of this new direct competition for power supply which exists in the California electric utility
industry, and expeditiously take advantage of opportunities for competitive sales which are presented to the Department of Water and
Power, the Department must be reposed with contract authority which is subject to certain criteria which can be exercised quickly and
without undue administrative encumbrances.

(3) The Los Angeles City Charter reposes in the Mayor and the City of Los Angeles, with the concurrence of the Board of Water
and Power Commissioners wide authority to set, by way of ordinance, the contract authority of the General Manager of the
Department of Water and Power.

(4) The City Council and the Mayor desire to authorize the Board of Water and Power Commissioners to delegate contract
authority to the General Manager of the Department of Water and Power to enter into certain long term contracts with Department
customers so long as the Department’s Chief Accounting Employee concludes that the contracts satisfy the conditions of this Section
23.137. These contracts may bind the Department for a minimum of 7 and a maximum of 10 years in duration. The contracts entered
into pursuant to this authorization must exceed certain costs to the Department of providing the arrangements embraced in such
contracts; and the revenues from the contracts must meet the Section 23.137(b) specified requirements.

(5) The Los Angeles City Council and the Mayor further desire to authorize the Board of Water and Power Commissioners to
delegate contract authority to the General Manager of the Department of Water and Power to enter into any contract to invest in cost
effective energy efficiency projects for customers, including any contract to finance such a project with Department funds so long as
the Department’s Chief Accounting Employee concludes that the contracts satisfy the conditions of this Section 23.137. These
contracts may be granted only if that customer has signed a long term contract for generation with

(i) the Department;

(ii) the Department recovers the principal amount of payments it makes plus accrued interest over a period not to exceed
seven years from the date of execution of the long term contract or the term of the contract less 1 year, whichever is shorter;

(iii) the total investment does not exceed one year of the total contract revenues from that customer;

(iv) the interest rates to be charged will be at or above the Department of Water and Power’s cost of funds;

(v) sufficient tangible collateral, credit ratings and/or approved bank letters of credit shall be provided by the customer to
fully protect the amount of the DWP investment; and

(vi) the Department shall not use funds which are planned for debt reduction.

This authorization does not limit the existing authority of the Board of Water and Power Commissioners and the General Manager to
continue energy efficiency programs subject to Commission and Council approval.

(6) The Department of Water and Power’s Chief Accounting Employee must certify that each contract conforms with the
provisions of this Ordinance. Each contract will be reviewed, on a quarterly basis, by the Chief Accounting Employee and an
independent auditing firm approved by the City Council to assure the contract complies with the authority granted to the General
Manager of the Department of Water and Power.

(7) Each contract as provided in this section shall be subject to quarterly reports from the General Manager of the Department of
Water and Power to the Board of Water and Power Commissioners and to the City Council and the Mayor. The report shall identify
and enumerate all contracts entered into pursuant to the authorization, provide the essential provisions of the contracts, certify that the
conditions of this contract authority have been fully complied with and evaluate the financial impact on the DWP Action Plan of any
discounts which have been provided under the terms of this ordinance.

(b) Delegation. Notwithstanding any ordinance, rule or law of the City of Los Angeles to the contrary and under the authority of Charter Sections 373 and 604(c), the Board of Water and Power Commissioners is hereby authorized to delegate to the General Manager of the Department of Water and Power, without further authorization or approval, the power and authority to enter into long term contracts with Department of Water and Power customers, subject to the following limitations:

(1) The Chief Accounting Employee of the Department must first certify that the proposed contract satisfies all the requirements of this Section 23.137.

(2) The term of any such contract shall be a minimum of seven years and shall not exceed ten years.

(3) Prior to completing the negotiation of any long term contracts, the Department of Water and Power shall complete or contract to complete, and keep up-to-date a cost of service study (“Study”) which shall include, but not be limited to, generation, transmission and distribution costs for the Department’s customers. The Study shall be reviewed and concurred in by the independent auditor described in Section 23.139 and the Department’s Chief Accounting Employee. Any disagreement regarding the Study among the independent auditor, the Department’s Chief Accounting Employee, and the General Manager shall be resolved by the Board of Water and Power Commissioners.

(4) The Department of Water and Power shall collect from each customer the revenues necessary to cover the marginal costs of
generation, the debt service applicable to that customer, and such additional margins as can be obtained competitively.

(5) Prior to the start of negotiations with a given customer, the DWP’s Chief Accounting Employee shall furnish to the General
Manager complete information on the cost to serve that customer and negotiations shall not be completed until the Study specified in
Section 23.137(b)(3) is completed.

(6) The Department of Water and Power shall collect transmission and distribution revenues based on the costs identified in the
Study.

(7) Notwithstanding the cost of recovery requirements described above in Sections 23.137(b)(3), (4), (5) and (6), until the
Department’s market is open to competition, the total rate for each customer only can be reduced below the Electric Rate Ordinance
rates in effect as of October 1, 1997 by a maximum of 5% (actual discount to be calculated at 1/2% for each year of a long-term
contract commitment). The contract shall provide that after the Department’s market is open to competition the customer shall pay to
the Department the California Power Exchange (Cal PX) rate for generation, the applicable Department Electric Rate Ordinance rate
for transmission and distribution, and all other standard charges applicable for the balance of the contract term. In the event that the
Cal PX rate is no longer accepted by Department as the regional pricing index for the market rate of generation or in the event that the
Cal PX ceases to exist, the Department is authorized to replace the Cal PX rate with the average rate of the top four western power
trading hubs.

(8) If the Los Angeles City Council modifies the electric rate provisions in the Electric Rate Ordinance No. 168436, in effect as of
October 1, 1997, prior to opening the Department’s market to competition, then the Customer may choose the lower of the rate
established in Subsection 23.137(b)(7) or the rate provisions applicable to the Customer under the modified Electric Rate Ordinance.
If the electric rate provisions set forth in a modified Electric Rate Ordinance are higher than the applicable rates set forth in the
Electric Rate Ordinance in effect as of October 1, 1997, then the Customer will pay the higher applicable rate discounted by the same
percentage applied to the contract.

(9) The Department General Manager and the Chief Accounting Employee shall certify that the conditions described in this
ordinance have been met before executing any contract with the signature of both individuals. The Chief Accounting Employee and
independent auditor described in Section 23.139 shall then verify, on at least a quarterly basis, whether the conditions described in this
Section have been met.

SECTION HISTORY

Added by Ord. No. 171,969, Eff. 5-9-98.
Amended by: Subsecs. (f), (g), and adding (h), Ord. No. 172,551, Eff. 5-20-99; Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00..

The Board of Water and Power Commissioners under the authority of Charter Sections 373 and 604(c) is authorized to delegate to the General Manager of the Department of Water and Power the authority and the power to enter into contracts with Department of Water and Power customers for energy efficiency projects, subject to the following limitations:

(a) The Chief Accounting Employee of the Department must first certify that the proposed contract satisfies all the requirements of this Section 23.138.

(b) Only customers that have signed long term contracts with the Department for generation service pursuant to the provisions of Section 23.137 shall be eligible for the abovementioned energy efficiency project contracts.

(c) The funds provided by the Department of Water and Power to finance these customer energy efficiency projects pursuant to the long term contracts, along with the applicable interest payments which must be at or above the Department’s cost of funds, shall be fully recovered by the Department within a period not to exceed 7 years from the date of execution of the long term contract specified in Section 23.137, or within the term of the long term contract less 1 year, whichever is shorter.

(d) The funds provided by the Department of Water and Power to finance a customer energy efficiency project shall not exceed one year’s worth of the long term contract revenues to be derived by the DWP from that customer and shall not be from funds which are planned for debt reduction.

(e) The Department’s Chief Accounting Employee and independent auditor described in Section 23.139 shall determine, on at least a quarterly basis, whether the conditions described in this Section have been met. These quarterly audits shall include a description of the number and type of energy efficiency contracts entered into and an analysis and summary of delinquency and default rates by

customers.

(f) The Department’s General Manager and the Department’s Chief Accounting Employee shall conduct credit checks on
customers seeking DWP energy efficiency investments and develop necessary safeguards to insure repayment.

SECTION HISTORY

Added by Ord. No. 171,969, Eff. 5-9-98.
Amended by: Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

The General Manager of the Department of Water and Power shall appoint an independent auditing firm, whose selection and general tasks shall be approved by the City Council, to provide the services described in Section 23.137 and 23.138.

SECTION HISTORY

Added by Ord. No. 171,969, Eff. 5-9-98. Amended by: Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

(a) The General Manager of the Department of Water and Power, on a quarterly basis within 30 days of the end of any calendar quarter, shall provide to the Board of Water and Power Commissioners and to the Mayor and the Los Angeles City Council:

(1) a report summarizing the essential provisions of all new contracts entered into pursuant to the authority vested in the General

Manager herein including an evaluation of the financial impact on the Department of Water and Power Action Plan dated November 13, 1997 of any rate discounts provided to customers under the terms of this ordinance, and

(2) copies of the reports of the independent auditor hired under the provisions of Section 23.139 herein who shall certify in their

report that all conditions and limitations upon the General Manager’s contracting authority set forth in Section 23.137 and 23.138 of the Los Angeles City Administrative Code have been satisfied.

(b) If and when the City Council requires the Department of Water and Power to allow its customers to purchase generation from an alternative supplier, this ordinance will terminate.

SECTION HISTORY

Added by Ord. No. 171,969, Eff. 5-9-98. Amended by: Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

Sec. 23.141. Additional Contracting Authority of the General Manager of the Department of Water and Power Related to Energy Efficiency Projects, Utility Infrastructure Projects, Water Conservation and Solar Energy Projects.

The Board of Water and Power Commissioners under the authority of Charter Sections 373 and 604(c) is authorized to delegate to the General Manager of the Department of Water and Power the authority and the power to enter into loan agreements with Department of Water and Power customers for water conservation and energy efficiency projects (WCEEP), solar energy projects (SEP) and utility infrastructure projects (UIP), subject to the following requirements.

(a) The Chief Accounting Employee of the Department must first certify that the proposed contract satisfies all the requirements of

this section.

(b) Only Department of Water and Power customers that have not received energy efficiency project loans under Section 23.138

shall be eligible for loans under this section.

(c) All customers receiving WCEEP, SEP, and UIP loans shall be the service account holder of record with the Department for the

facility where the equipment will be installed and shall remain full service customers of the Department of Water and Power for the life of the loan. Full service includes, but is not limited to, generation, transmission, and distribution services, except the customer will be allowed to own and operate on-site solar generation facilities.

(d) All customers receiving SEP loans shall install the solar energy system by using a business entity that has a City of Los Angeles

Business Tax Registration Certificate and whose principal place of business is located within the City of Los Angeles. This requirement shall be made an express condition precedent to every SEP loan.

(e) The funds provided by the Department of Water and Power to finance Water and Power Customer Energy Efficiency programs (WCEEP), Solar Energy Projects (SEP), Utility Infrastructure Project (UIP) loans, and any other Green Retrofit Program loans as contemplated by Los Angeles Administrative Code Section 5.532, along with applicable interest payments, shall be at the Department’s cost of funds and shall be fully recovered within the life of the measure(s) financed up to a maximum of twenty years.

(f) Excluding residential customers and the City of Los Angeles, the funds provided by the Department of Water and Power to

finance WCEEP, SEP, and UIP loans shall not exceed one year’s worth of revenues to be derived from that customer. However, the Department of Water and Power may provide loans for amounts greater than one year’s worth of revenues if the Board of Water and Power Commissioners approve each of those loans on an individual basis. The funds provided to finance WCEEP loans to residential customers will be limited to the earlier of the payback period of the project financed or ten years, pursuant to Subsection (d).

(g) Excluding any loans made to the City of Los Angeles, the Department of Water and Power’s aggregate outstanding loan balance

pursuant to this ordinance shall not exceed $15 million without further City Council approval.

(h) The Department of Water and Power’s General Manager and/or the Department’s Chief Accounting Employee shall conduct

credit checks on customers seeking Department of Water and Power WCEEP, SEP, and UIP loans and develop necessary safeguards to insure repayment.

(i) The Department of Water and Power’s Chief Accounting Employee shall determine, on at least a quarterly basis and through a

generally accepted sampling method, whether the conditions described in this section have been met. These quarterly audits shall include a description of the number of WCEEP, SEP, and UIP loan agreements entered into and an analysis and summary of delinquency and default rates by customers, and administrative costs and expenses. The General Manager and the Chief Accounting Employee shall report these findings to the Board of Water and Power Commissioners and to the City Council on at least an annual basis.

SECTION HISTORY

Added by Ord. No. 172,550, Eff. 5-17-99. Amended by: Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00; Ord. No. 179,147, Eff. 9-30-07; Subsec. (e), Ord. No. 182,721, Eff. 10-30-13.

The Board of Water and Power Commissioners under the authority of Charter Section 373 is authorized to enter into pole attachment agreements by resolution with telecommunication companies and others who desire to attach telecommunication equipment to Department of Water and Power-owned and jointly owned utility poles. The Board of Water and Power Commissioners shall act on every pole attachment agreement subject to this section, including renewal agreements, the Board of Water and Power Commissioners shall not delegate the approval of said agreements to Department of Water and Power management or its staff, each agreement shall have a term of up to ten (10) years, may be renewed for additional ten (10)-year terms, shall be limited to a maximum of one-half percent of the total number of Department of Water and Power-owned and jointly-owned utility poles, and must assure that space will be available to the City for communications infrastructure.

SECTION HISTORY

Added by Ord. No. 172,606, Eff. 6-28-99. Amended by: Sec. 23.141 Redesignated by Ord. No. 172,693, Eff. 8-8-99; Ord. No. 173,236, Eff. 6-19-00, Oper. 7-1-00.

(SUPPLEMENTAL REFERENCES)

RE DEPARTMENT OF WATER AND POWER:

Bonded indebtedness, creation and refunding. See Charter, Sec. 229.

Bonds, principal and interest on. See Charter, Sec. 223.

Contracts, deposits and bond waivers. See Charter, Sec. 220(8).

Funds: Water Revenue Fund and Power Revenue Fund. See Charter, Sec. 221.

Hospital, medical or surgical benefits. See Charter, Sec. 220.4.

Power to borrow money. See Charter, Secs. 224; 224 1/2; 224 3/4; 226; 227.

Retirement System. See Charter, Sec. 220.1.

Social Security. See Charter, Sec. 220.2.

Special Budget. See Charter, Sec. 222.

Water & Power Dept. Money – Treasurer Investments. See Charter, Sec. 60(b).

(1) Subject to the provisions of Section 245 of the City Charter and its successors, the Board of Water and Power Commissioners shall have the authority, without further City Council approval, to enter into grid interconnection contracts and operational reliability contracts, and amendments to those contracts, with the APX, IPA, ISO, NERC, PX, RTG, RTO, SRP, WSCC, WSPP in substantial conformance to existing contracts, subject to all of the following limitations:

(a) This section applies only to grid interconnection and operational reliability contracts and amendments to those contracts. Energy

sale and purchase transactions, ancillary service sales, and transmission service transactions are not included within the authority granted in this section. This section also does not apply to contracts, or amendments to those contracts, which provide for the purchase of products or equipment.

(b) The Board of Water and Power Commissioners must consider and act on every individual contract and all amendments and

shall not delegate this authority.

(c) The contracts may contain performance penalties and emergency energy exchange assistance provisions. Emergency energy

exchange assistance shall only apply as defined in this section.

(d) The total amount of money applied to standard fees and dues contained within the contracts shall not exceed $250,000 per year

per contract.

(e) The contracts shall not transfer ownership, operational or jurisdictional control of any of the Department’s facilities. This section

does not apply to amendments to contracts approved by the City Council after September 1, 1999, which have transferred ownership, operational or jurisdictional control of any of the Department’s facilities.

(f) The term of every contract shall not exceed ten years. However, if the said contract is amending or replacing an existing contract

that has been previously approved by the City Council, the term of said contract shall not exceed the term provided for in the existing contract.

(2) Definitions. The following definitions shall apply to the following terms used in this section:

(a) “ancillary service” shall mean those services necessary to support the transmission of energy from generation resources to loads while maintaining reliable operation of the Department of Water and Power’s system in accordance with good utility practice.

(b) “APX” shall mean the Automated Power Exchange or its successor.

(c) “Department” shall mean the Department of Water and Power of the City of Los Angeles.

(d) “emergency energy exchange assistance” shall mean coordinated mutual aid between the Department and other parties during an emergency situation. An emergency situation shall encompass any abnormal system condition which requires immediate manual or automatic action to preserve or restore stable operation of the interconnected grid, to preserve or restore reliable, safe and efficient service as quickly as reasonably practicable, and to prevent loss of load, equipment damage, or tripping of system elements that could affect the reliable operation of the Department’s grid.

(e) “energy” shall mean the electrical energy produced, flowing or supplied by generation, transmission or distribution facilities,
being the integral with respect to time of instantaneous power, measured in units of watt-hours.

(f) “grid” shall mean the system of transmission lines and associated facilities that are owned by the Department or under the
operational control of the Department.

(g) “interconnection” shall mean transmission facilities that connect one power system to another power system where the
transmission facilities emerge from one and only one substation of the two transmission systems and are functionally separate from
each other, and such facilities are, or can be, operated and planned as a single facility.

(h) “IPA” shall mean Intermountain Power Agency or its successor.

(i) “ISO” shall mean the California Independent System Operator or its successor.

(j) “NERC” shall mean the North American Electric Reliability Council or its successor.

(k) “PX” shall mean the California Power Exchange or its successor.

(l) “reliable operation” shall mean operation of the Department’s grid that follows pre-established criteria in order to maintain

desired performance under contingency or steady state conditions.

(m) “RTG” shall mean Regional Transmission Group, a voluntary organization, approved by the Federal Energy Regulatory Commission and composed of transmission owners, transmission users and other entities, organized to efficiently coordinate the planning, expansion and use of transmission on a regional or inter-regional basis.

(n) “RTO” shall mean Regional Transmission Organization, a regional transmission institution, approved by the Federal Energy

Regulatory Commission.

(o) “SRP” shall mean the Salt River Project Agricultural Improvement and Power District or its successor.

(p) “WSCC” shall mean the Western Systems Coordinating Council or its successor.

(q) “WSPP” shall mean the Western Systems Power Pool or its successor.

(3) The General Manager of the Department shall report to the Mayor and the City Council annually, within 30 days of the end of each calendar year, the essential provisions of all contracts entered into pursuant to the authority vested in the Board of Water and Power Commissioners herein and shall certify in such report that all conditions and limitations upon the Board of Water and Power Commissioners’ contracting authority set forth in this section have been satisfied.

(4) If any section, subsection, sentence, clause, or phrase in this ordinance or the application thereof to any matter or circumstance is for any reason held invalid, the validity of the remainder of the ordinance or the application of such provision to other matters or circumstances shall not be affected thereby. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases or the application thereof to any matter or circumstance is to be held invalid.

SECTION HISTORY

Added by Ord. No. 173,084, Eff. 3-19-00*. Amended by Ord. No. 173,364, Eff. 7-29-00, Oper. 7-1-00.

• The provisions of this Ordinance shall apply, and be retroactive to any actions taken by the Board of Water and Power Commissioners from September 1, 1999 to the present.

Sec. 23.143.1. Authority of the Board of Water and Power Commissioners and the General Manager of the Department of Water and Power to Enter into Contracts and Financial Transactions for Environmental Credits, Including Emission Credits or Allowances and Renewable Energy Credits (RECs).

(1) Notwithstanding any other provision of this Code to the contrary, the Board of Water and Power Commissioners and the General Manager of the Department of Water and Power shall have the authority to enter into contracts and financial transactions for environmental credits and Renewable Energy Credits (RECs), subject to the following:

(a) Definitions.

“Environmental Credit” means any environmental credit, attribute, allowance or benefit as may be defined by law, regulation, industry practice or convention, including, but not limited to, emissions credits or alternative fuel vehicle credits

used for the purposes of compliance with environmental or energy laws, regulations and policies.

“Renewable Energy Credit” or “REC” means any credit, attribute, allowance or benefit that is an environmental certificate representing proof that a certain quantity of energy was generated or purchased from a renewable energy resource, often denominated in units of megawatt-hours (MWh), although other units may be used.

(b) This section applies only to the purchase, sale or exchange of Environmental Credits and RECs by the Department of Water and Power for compliance with environmental or energy laws, regulations and policies that support its production of electricity to serve its retail customers or for environmental purposes. The Department shall not participate in the environmental markets to engage in speculative activities but rather to maintain compliance with environmental laws, regulations and policies.

(c) Contracts and financial transactions entered into pursuant to this section shall be subject to the following limitations:

(1) RECLAIM Trading Credits or RTCs: Spot purchase of single-year vintage credits shall not exceed $60.00 per pound.

(2) Emission Reduction Credits or ERCs: purchase of PM10/PM2.5, sulfur oxides (SOx), reactive organic gases (ROG), and

carbon monoxide (CO) ERCs shall not exceed the following: $700,000/lb/day for PM10/PM2.5, $200,000/lb/day for SOx,

$40,000/lb/day for ROG, and $15,000/lb/day for CO.

(3) Energy Policy Act Alternative Fuel Vehicle Credits: Purchase shall not exceed $5,000.00 per credit.

(4) Greenhouse Gas (GHG) Allowances, Offsets and Low Carbon Fuel Standard Credits: Purchase shall not exceed $150.00 per allowance. Greenhouse gases include, but are not limited to, carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and hydrocarbons.

(5) Renewable Energy Credits: Purchase shall not exceed $100/REC.

(6) Contracts and financial transactions entered into pursuant to this section shall be for a period not to exceed five (5) years
in duration from the date of execution, except that purchases for a longer term may be entered into in order to match or offset
the likely duration of specific output from specific facilities owned or contracted for by the Department.

(d) Prior to entering into any contract or financial transaction, the Board of Water and Power Commissioners, by resolution, shall
do the following:

(1) Establish an environmental and emission credit policy (Policy) relating to the purchase, sale and exchange of
Environmental Credits and RECs. The Policy will address the mechanisms by which the Department of Water and Power will
control business-related risks.

(2) Authorize the general payment, security, default, remedy and other terms and conditions as specified by the Board of
Water and Power Commissioners to be utilized in every contract or financial transaction.

(e) 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 and financial transactions pursuant to this
section, provided such transactions comply with the limitations set forth herein.

(f) The Department of Water and Power shall perform an annual audit using either an outside auditor or a comparable third party approved by the Board of Water and Power Commissioners relating to the activities authorized under this section. This audit need not be performed separately, but may be conducted in conjunction with other audits performed for the Department. 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. Within five (5) days after receipt of the audit report, the audit report shall be distributed to the Board of Water and Power Commissioners, the City Council and the Mayor.

SECTION HISTORY

Added by Ord. No. 182,949, Eff. 4-28-14.