Resolution 2010-12
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RESOLUTION NO. 2010-12
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY OPPOSING
THE PROPOSED CALIFORNIA CONSTITUTIONAL AMENDMENT BALLOT
INITIATIVE ENTITLED "NEW TWO-THIRDS VOTE REQIDREMENT FOR LOCAL
PUBLIC ELECTRICITY PROVIDERS" AND KNOWN AS PROPOSITION 16
WHEREAS, in 1997 the State of California deregulated the electricity market with the
intent to give consumers a choice in electricity providers, ending decades of monopolized
electricity markets; and
WHEREAS, deregulation promised lower rates and better service through
increased competition; and
WHEREAS, the deregulation of the electricity market led to market manipulation by
some investor-owned electricity providers which later admitted to fraudulent behavior. A direct
result of that market manipulation was the energy crisis of2000-2001; and
WHEREAS, in 2001, the State of California rescinded deregulation, returning most
ratepayers to the same monopolistic electricity providers that they had prior to deregulation,
resulting in the loss of free-market competition and consumer choice; and
WHEREAS, in 2002, in response to the collapse of deregulation and its failure to
provide electricity consumers with a choice of electricity providers, the California Legislature
passed, Assembly Bill 117 , enabling communities to establish Community Choice Aggregation
programs; and
WHEREAS, on September 24, 2002, the Governor signed into law Assembly Bill 117
(Stat. 2002, Ch. 838), which authorizes any California city or county, whose governing body so
elects, to combine the electricity load of its residents and businesses in a community-wide
electricity aggregation program known as Community Choice Aggregation; and
WHEREAS, Community Choice Aggregation enables any city or county or combination
thereof to purchase electricity on behalf of its residences and businesses, and can require and
obtain a higher percentage of renewable energy in its energy portfolio than that provided by
investor-owned utility; and
WHEREAS, Community Choice Aggregation offers Californians the opportunity to
choose their electricity provider and obtain electricity that is qualified as renewable energy, as
established by the California Energy Commission; and
RESOLUTION NO. 2010-12
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WHEREAS, Community Choice Aggregation gives authority to participating local
governments to issue municipal revenue bonds to build publicly-owned, renewable energy
resources to supply electricity to their residents, thereby playing an important role in California's
greenhouse gas reduction target as mandated in Assembly Bill 32, California's Global Warming
Solutions Act; and
WHEREAS, all debt obligations incurred by Community Choice Aggregators are
payable with the electricity revenue of participating customers, and not the general funds of any
of the participating cities or counties; and
WHEREAS, Community Choice Aggregation programs are mandated under law to
provide electricity users in their service territory with a minimum of four opportunities to opt out
of service provision by the Aggregator and instead continue to receive service from the
incumbent utility; and
WHEREAS, Community Choice Aggregation enables any city or county or combination
thereof to purchase electricity on behalf of its residences and businesses, and can require and
obtain a higher percentage of renewable energy in its energy portfolio than that provided by
investor-owned utility; and
WHEREAS, Community Choice Aggregation programs are certified by the California
Public Utilities Commission and must comply with basic requirements in order to ensure public
confidence in the program; and
WHEREAS, on May 28, 2009, a request for title and summary was made to the
California Attorney General for an initiative to amend the California Constitution, entitled "New
Two-Thirds Vote Requirement for Local Public Electricity Providers", and a copy of which is
attached hereto and incorporated by this reference; and
WHEREAS, Pacific Gas & Electric Company, the incumbent investor-owned utility in
Gilroy, which in recent years has become an opponent of Community Choice Aggregation, is
the sole major donor to the ballot initiative campaign entitled "New Two-Thirds Vote
Requirement for Local Public Electricity Providers"; and
WHEREAS, The "New Two-Thirds Vote Requirement for Local Public Electricity
Providers" would require submitting any Community Choice Aggregation proposal to the voters
within the proposed jurisdiction of an aggregator for a two-thirds vote of approval, and would
require a two-thirds vote of approval by the voters if any type of public finance is used, including
bonds, cash, income, assets or equity to implement or expand a Community Choice Aggregation
program; and
WHEREAS, The "New Two-Thirds Vote Requirement for Local Public Electricity
Providers" would effectively preclude any entity from becoming an electricity aggregator as well
as virtually prohibiting any existing Municipal utility, all of whom operate on non-profit, public
interest basis, from entering into any new competitive market in California;
RESOLUTION NO. 2010-12
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NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Gilroy
fully supports maintaining the consumer's right to choose energy from clean, renewable sources
as provided for under the Community Choice Aggregation law; and
BE IT FURTHER RESOLVED, that the City Council of the City of Gilroy strongly
opposes "New Two-Thirds Vote Requirement for Local Public Electricity Providers" as being
against the interest of California's electricity ratepayers, against the public interest, and a
potential setback for renewable energy production; and
BE IT FURTHER RESOLVED, that the City Council of the City of Gilroy strongly
urges other Community Choice Aggregation programs, cities, counties, special districts and
Local Agency Formation Commissions to adopt similar resolutions opposing the "New Two-
Thirds Vote Requirement for Local Public Electricity Providers".
PASSED AND ADOPTED this 3rd day of May, 2010, by the following vote:
AYES: COUNCILMEMBERS:
ARELLANO, BRACCO, DILLON,
GARTMAN, TUCKER, WOODWARD
and PINHEIRO
NOES: COUNCILMEMBERS:
NONE
ABSENT: COUNCILMEMBERS:
NONE
APPROVED:
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ert inheiro, Mayor
Sliawna Freels, City Clerk
RESOLUTION NO. 2010-12
I, SHA WNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Resolution No. 2010-12 is an original resolution, or true and correct copy ofa city
resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council
held on the 3rd day of May, 2010, at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the City of Gilroy this 6th day of May, 2010.
(Seal)