REPORT TO THE CITY COUNCIL
June 13, 2019
FROM: MICHAEL CARBAJAL, Director
Department of Public Utilities
BY: BRIAN SPINDOR, PE(WA), Assistant Director - Wastewater
Department of Public Utilities - Wastewater Management Division
SUBJECT
Title
Authorize the City Manager to execute an Amended and Restated Biomethane Purchase and Sales Agreement with Colony Energy Partners, LLC.
Body
RECOMMENDATIONS
Staff recommends the City Council approve and authorize the City Manager, or designee, to execute an amended and restated agreement with Colony Energy Partners, LLC. (Colony), to convert the City of Fresno's (City) Digester Gas to Biomethane, which can then be sold as Renewable Natural Gas and Regulatory Credits.
EXECUTIVE SUMMARY
The City's Fresno-Clovis Regional Water Reclamation Facility (RWRF) is currently flaring approximately 1,200,000 standard cubic feet per day of methane-containing Digester Gas (equal to approximately 260,000 MMBtu per year). Colony will convert the Digester Gas to a Biomethane product and sell Biomethane and Regulatory Credits to third parties. The City will receive a percentage of the sales. The amended and restated agreement addresses expenses incurred by Colony due to delays as a result of a labor dispute and clarifies requirements in the agreement for the City and Colony.
BACKGROUND
On January 11, 2018, Council approved a Biomethane Purchase Agreement with Colony. In August 2018, the City received a grievance from the International Union of Operating Engineers, Stationary Engineers, Local 39 (Local 39). The grievance claimed the City did not properly notify Local 39 of its intention to have Colony operate the gas conditioning facility. Progress was delayed for approximately four months while the City negotiated with Local 39. The grievance was successfully settled between the City and Local 39.
During this same period the City and Colony worked to together to address additional discrepancies and unclear languag...
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