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Resolution 2010-12 1 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result of that market manipulation was the energy crisis of2000-2001; and WHEREAS, in 2001, the State of California rescinded deregulation, returning most ratepayers to the same monopolistic electricity providers that they had prior to deregulation, resulting in the loss of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 2 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 3 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: ~- 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)