Report to Mayor and City Council
Tuesday, November 07, 2023
Consent
SUBJECT:
Title
CONSIDER RESOLUTION NO. 23-122, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARSON, CALIFORNIA, DECLARING ITS INTENTION TO GRANT A PUBLIC UTILITY PIPELINE FRANCHISE TO ZENITH ENERGY WEST COAST TERMINALS, LLC AND SETTING THE PUBLIC HEARING" (CITY COUNCIL)
Body
I. SUMMARY
The City is considering a request from Zenith Energy West Coast Terminals, LLC ("Zenith") to renew its public utility pipeline franchise for 20 years (10 years plus two 5-year options to extend). The current franchise term commenced August 15, 1973, and expired on August 14, 2023. Pursuant to Charter Section 1001, the City Council must adopt a Resolution of Intention (Exhibit No. 1) and conduct a public hearing prior to granting Zenith a public utility pipeline franchise. This resolution declares the intent of the City Council and sets the public hearing date on November 21, 2023.
Zenith will be required to pay City annual fees established under Public Utilities Code Section 6231.5 that apply equally to all public utilities such as Zenith. As a result, based on Zenith's existing pipeline length of approximately 25,442 feet within City's right of way, Zenith will be paying the City a minimum of $30,553.46 per year with $30,553.46 representing the amount for the year 2023, resulting in a total of at least $611,069.20 (this does not include CPI adjustments) in continued revenues over the course of the 20-year term of the franchise (10 years plus two 5 year options to extend), plus the retroactive base annual fees covering the period from expiration of the existing franchise as of August 14, 2023 up to the time the renewed franchise goes into effect. This amount does not include the annual CPI adjustment, so the actual nominal revenue received by the City over the renewed term will be greater than this estimate.
II. RECOMMENDATION
Recommendation
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