§ 13.04.175. Reserve for stranded investment.

A.

There is created a separate account within the light and power fund known as the "reserve for stranded investment" (the "reserve").

B.

"Stranded investment" for purposes of this section means:

1.

The difference between the city's prudently incurred costs of electricity from its generation-related assets and obligations and the local market price of electricity as established by a regional power pool approved by the Federal Energy Regulatory Commission; and

2.

Appropriate values associated with ancillary services, reliability and self-sufficiency; and

3.

Such industry restructuring related costs as may be expressly approved or which are appropriate for recovery by California municipal utilities under the decisions of either the Federal Energy Regulatory Commission or the California Public Utilities Commission; and

4.

Such industry restructuring related costs as may be authorized by state law.

This section shall be construed and applied in a manner which is consistent with state and federal law.

C.

Funds collected and placed into the reserve shall be used exclusively to pay for stranded investment and for no other purpose.

D.

No moneys shall be expended from the reserve without city council approval.

E.

The general manager of the water and power department shall calculate and determine stranded investment. The city council shall hold a public hearing to review and approve such determination annually or more frequently as may be necessary.

F.

The director of finance shall administer the reserve in consultation with the general manager of the water and power department.

G.

The director of finance, in consultation with the general manager of the water and power department, shall recommend, and the city council approve, the manner in which funds are transferred between the light and power fund and the reserve.

H.

The activities of the reserve shall be reported in the city's annual financial report and in the power department's annual report. A separate schedule shall be provided annually to the city council which presents the details of the activities of the reserve.

I.

Interest earned on the reserve shall be deposited therein.

J.

At such time as the purpose of the reserve has been fulfilled and no further stranded investment remains unpaid, the director of finance shall terminate the reserve and transfer any balance therein to the light and power fund unrestricted reserve for reimbursing the ratepayers.

(Ord. 6695 § 1, 1996)