Report 2011-131 Recommendation 34 Responses

Report 2011-131: City of Vernon: Although Reform Is Ongoing, Past Poor Decision Making Threatens Its Financial Stability (Release Date: June 2012)

Recommendation #34 To: Vernon, City of

To ensure that it can demonstrate sufficient analysis and provide justification for its decisions on significant energy-related transactions, the city should develop an integrated energy strategy that examines all elements of its energy needs, sources, and objectives.

Annual Follow-Up Agency Response From October 2016

The Director of Vernon Gas & Electric (VG&E) adopted a thorough Integrated Resource Plan (IRP) effective November 2014 which was produced by staff in the Resource Planning Division. The purpose of the plan was to analyze and account for any and all variables as they pertain to energy-related transactions and document a strategy to identify the City's energy needs, sources, and objectives. VG&E staff are in the process of updating the IRP; however, the CEC is in the process of creating new requirements which will ultimately have an impact on the City's IRP. These CEC guidelines will be provided to the City when available, but there is no anticipated timeframe as to when the finalized parameters will be in place.

Attached is the related Integrated Resource Plan which articulates the City's methods for scheduling energy resources.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From October 2015

The Gas & Electric Department is currently preparing an Integrated Resource Plan (IRP) that will outline the amount, type, and scheduling of resources needed to meet the City's future energy needs at the lowest, reasonable cost. Once finalized, the IRP will be presented to City Council for adoption. The Department has established the Light & Power Department Policy and Procedure, Integrated Resource Plan Procedure to guide the preparation of the IRP.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From July 2014

The Gas & Electric Department is currently preparing an Integrated Resource Plan (IRP) that will outline the amount, type, and scheduling of resources needed to meet the Citys future energy needs at the lowest, reasonable cost. Once finalized, the IRP will be presented to City Council for adoption. The Department has established the Light & Power Department Policy and Procedure, Integrated Resource Plan Procedure to guide the preparation of the IRP. A copy of said document is included.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

In early 2014, the Finance Director and Director of Light & Power expect to present a proposed integrated energy strategy to City Council for adoption. This will be part of the long term financial modeling for the Light & Power Department. The Finance Director, Director of Light & Power, and Electric Rates Committee will continue to work together to develop the proposal based on an updated rate study to be completed by Michael Bell Management Consulting later in the year. Among other specialized services for local governments, Michael Bell Management Consulting specializes in municipal electric utility management and planning.

California State Auditor's Assessment of 1-Year Status: No Action Taken

6-Month Agency Response

The city indicates that by the end of June 2013 the finance director and the director of light & power will develop and present for city council adoption, a formal process and guidelines regarding significant energy-related transactions, but does not specify whether those guidelines will include all elements that we recommended.

California State Auditor's Assessment of 6-Month Status: No Action Taken

60-Day Agency Response

The city did not address this recommendation in its August 2012 response. (See 2013-406, p. 197)

California State Auditor's Assessment of 60-Day Status: No Action Taken

All Recommendations in 2011-131

Agency responses received after June 2013 are posted verbatim.