HomeMy WebLinkAboutAGENDA BAKCUP 05-26-94
.. ..
Central Contra Costa SanitafY District
BOARD OF DIRECTORS PAGE 1 OF 2
May 26, 1994
NO.
S.PLANT OPERATIONS a.
DATE.
May 23, 1994
BOARD MEETING OF
SUBJECT
AUTHORIZE APPROVAL FOR CENTRAL CONTRA COSTA
SANITARY DISTRICT STAFF TO ENTER INTO A LONG-TERM
AGREEMENT FOR NATURAL GAS TRANSPORTATION WITH
MOJAVE PIPELINE COMPANY
TYPE OF ACTION
AUTHORIZE APPROVAL
SUBMITTED BY
John C. Pearl
Plant Maintenance Division Mana er
INITIATING DEPT./DIV.
Plant Operations Department
ISSUE: The Board of Directors approval is required for agreements over $50,000.
BACKGROUND: Central Contra Costa Sanitary District's (CCCSD) treatment plant presently
receives natural gas through Pacific Gas and Electric's (PG&E) intrastate pipeline. This pipeline and
PG&E's accompanying rates ("tariffs") are regulated by the California Public Utilities Commission
(CPUC) .
Mojave Pipeline Company is proposing to build a new pipeline from central California to
Sacramento to transport natural gas from the southwestern United States. This pipeline would
have branches to serve, among others, northern Contra Costa County. It is presently expected
that this pipeline will cross the northern portion of the District's property. Sacramento Municipal
Utility District (SMUD) is the "anchor," or core customer, for Mojave Pipeline Company in the
Sacramento area.
Mojave Pipeline Company is presently wholly-owned by EI Paso Natural Gas, one of the largest
natural gas suppliers and transporters in the United States. Mojave's present facilities originate in
Topock, AZ, where three major pipelines from the southwestern United States and Rocky Mountain
gas producing basins converge on their way to California. Mojave's northern expansion is an
extension of an interstate system; therefore, it is regulated at the federal, and not the state (CPUC)
level.
Mojave Pipeline Company has proposed a 15-year, fixed-price contract for transportation services
of natural gas from Topock, AZ, to a point on the plant site. The rate begins at 47 cents per
10,000 BTU's, a decatherm, and will be escalated at the rate of one percent per year. The District
will be responsible for constructing connections to the Mojave Pipeline Company system. Mojave's
projected "in-service date," the date of beginning gas transportation to the District, is presently the
first quarter of 1996.
TCr'V
1302 /91 JCP
REVIEWED AND RECOMMENDED FOR BOARD ACTION
'r
....
~
I
AUTHORIZE APPROVAL FOR CENTRAL CONTRA COSTA
SANITARY DISTRICT STAFF TO ENTER INTO A LONG-TERM
AGREEMENT FOR NATURAL GAS TRANSPORTATION WITH
MOJAVE PIPELINE COMPANY
SUBJECT
PAGE 2
DATE
OF 2
May 23, 1994
Mojave Pipeline Company is in direct competition with our present supplier of service, PG&E, who
has offered short-term reduced rates in an effort to be competitive; PG&E has !lQ1 offered to sign
a competitive long-term contract with CCCSD.
The District has been negotiating, with the aid of counsel, a proposed agreement with Mojave
Pipeline Company for gas transportation. The agreement contains clauses that allow us to
terminate for non-performance by Mojave, change to another gas supplier that has transportation
rights on the new Mojave pipeline system, or increase our usage volume if landfill gas is curtailed
or eliminated. The agreement also has clauses for extension at the end of the initial 15-year
period.
The basic advantages to the District are low, predictable, and long-term rates for transportation of
natural gas in California, no differentiation of rates between seasons or uses, and the elimination
of the consequences of CPUC decisions that may negatively impact the District.
RECOMMENDATION: Authorize approval for District Staff to enter into a long-term agreement for
natural gas transportation with Mojave Pipeline Company.
1302B-7/91