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CITY OF ALAMEDA RESOLUTION NO. 12 8 7 4
URGING CONGRESS TO ADOPT
FEDERAL INDUSTRY RESTRUCTURING LEGISLATION
ELIMINATING PRIVATE USE RESTRICTIONS OF
TAX -FREE PUBLIC FINANCING
WHEREAS, the electric utility industry is undergoing considerable change in
consumers will ultimately be provided the ability to choose local power suppliers;
WHEREAS, California has adopted a specific restructuring proposal in which the
Northern California Power Agency and its members will participate; and
WHEREAS, the California plan provides for the creation of an Independent
System Operator, (ISO), to assure open transmission access to a competitive marketplace; and
WHEREAS, the Califomia plan provides consumer -owned utilities with
assurances of stranded cost recovery in return for their participation in the ISO and offering
customer choice in a timely and fair manner; and
WHEREAS, a reliable electric system is fundamental to our state and local
economy as well to the well being of the people of the region; and
WHEREAS, an ISO is necessary to ensure electric system reliability in a
competitive market; and
WHEREAS, consumer -owned utilities have historically financed their
transmission and generation projects for the exclusive benefit of their retail customers with
federal tax -free bonds that have severe "private use restrictions" imposed by the current tax
codes; and
WHEREAS, consumer -owned utilities appear to be prohibited from participating
in ISO's and offering customer choice because of "private use restrictions" that impose severe
retroactive penalties for their violation, which penalties would be financially catastrophic for
both issuers and holders of tax -free bonds; and
WHEREAS, Congress is now deliberating comprehensive federal electric utility
restructuring legislation; and
WHEREAS, Congress can and should take steps to permit and facilitate the
participation of California's consumer -owned utilities in ISO's and the competitive market for
the benefit of their consumers, while recognizing that customer choice eliminates a consumer -
owned utility's exclusive right to serve customers in its jurisdiction.
NOW, THEREFORE, BE RESOLVED that the City Council of the City of
Alameda, by adoption of this resolution, urges Congress to promptly take the following action
with respect to "private use restriction" on federal tax-free bonds:
Eliminate "private use restrictions" of the Internal Revenue Service Code
of Regulation on existing assets financed by tax-free bonds when any
owner or right-holder to those assets is competing and offering customer
choice or when assets are placed or taken under operational control at an
Independent System Operator under state approved restructuring.
I, the undersigned, hereby certify that the foregoing
Resolution was duly and regularly adopted and passed by the Council
of the City of Alameda in regular meeting assembled on the 6th
day of May , 1997, by the following vote to wit:
AYES: Councilmembers Daysog, DeWitt, Kerr, Lucas
and President Appezzato - 5.
NOES: None.
ABSENT: None.
ABSTENTIONS: None.
IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the
official seal of said City this 7th day of May , 1997.
Dian Felsch, Ci
City of Alameda
y Clerk