Aquarium Seeks Council OK To Reduce LB Gas Dept. Surcharge For Fuel Cell/Electricity Generating Project; LB Gas Dept. Mgm't Seeks Authority To Enable Similar Size Reductions -- Or Increases -- On Others
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UPDATE: Council votes 8-0 (Price absent) to approve all four contracts below(Jan. 20, 2015) -- An item on tonight's City Council agenda asks Councilmembers to approve a request by the Long Beach Aquarium of the Pacific for a reduction in a LB Gas Dept. surcharge currently applied to those using natural gas to generate electricity.
The LB Gas Dept. has authority to reduce the surcharge by a small amount with Council approval on "case by case" basis...but that amount isn't big enough to suit the Aquarium for a planned project; it wants nearly double the amount of the reduction. In response, the LB Gas Dept. is asking the Council to enable the larger reduction to facilitate the Aquarium's planned project...and LB Gas Dept. management is simultaneously seeking authority to reduce, or increase, the amount of the surcharge on others in the future.
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"The Aquarium of the Pacific (AOP) contacted LBGO for assistance with its proposal to purchase and install natural gas powered fuel cell units to provide the AOP with its base load of electrical power," a LB Gas Dept. agendizing memo says. "While AOP expects these fuel cells to lower its electrical costs somewhat and provide an extremely clean source of energy, the project would be economically unfeasible to the AOP without a slight reduction in the cost of natural gas service from LBGO."
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[LB Gas Co. agendizing memo] In addition to routine gas transmission and service charges, LBGO currently charges a $O.05/therm surcharge on the natural gas commodity supplied to electric generation customers. On a case-by-case basis, LBGO may increase or decrease this surcharge up to $O.03/therm, subject to approval of City Council. To achieve economic feasibility for the proposed AOP fuel cell project, a full reduction of the $O.05 surcharge is necessary. This reduction is recommended to facilitate AOP's utilization of a new, environmentally-friendly technology which will also result in increased natural gas sales for LBGO.
To allow LBGO greater flexibility to incentivize similarly environmentally-friendly technologies, it is also recommended that the City Council increase LBGO's ability to adjust the current maximum allowable surcharge adjustment to $0.05/therm, on a case-by-case basis as approved,,,
FISCAL IMPACT
This action is anticipated to result in increased natural gas sales revenue for LBGO due to an incremental increase in gas sales to the AOP. There is no local job impact associated with this action.
Left unexplained: If reducing the surcharge for the Aquarium is expected to produce increased natural gas sales revenue for the LB Gas Dept., what was the basis for imposing the surcharge on others in the first place?
The item is on the "consent calendar" (items not normally discussed unless Councilmembers or the public request separate discussion) but we presume some discussion will take place on this.
The Planning Commission also voted to increase (instead of Council proposed decrease) the required size for outdoor posters giving notice of upcoming hearings while standardizing the size (a Council recommendation) to standard size E.
The motion, which passed on a 4-0 vote, asked city staff to begin informally asking persons who contact the city about hearing matters how they learned of the upcoming hearing (via written notice, outdoor posted notice, internet or social media) and report the findings to the Planning Commission. The Planning Commission's recommendation will now presumably be forwarded to the City Council.
