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<br />February 10, 2009
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<br />WHEREAS, On October 2S, 200S the Federal Energy Regulatory Commission ("FERC" or "Commission") issued Order No. 719, 125 FERC ~
<br />61,071,73 Fed. Reg. 64,099 Carder 719").
<br />WHEREAS, Order 719, IS C.F.R. S 35.2S(g)(l )(iii) provides: "Each Commission-approved independent system operator and regional transmission
<br />organization must permit a qualified aggregator of retail customers to bid demand response on behalf of retail customers directly into the Commission-
<br />approved independent system operator's or regional transmission organization's organized markets, unless the laws and regulations of the relevant electric
<br />retail regulatory authority expressly do not permit a retail customer to participate."
<br />WHEREAS, Order No. 719, IS C.F.R. S 35.2S(g)(I)(i)(A) provides: "Every Commission-approved independent system operator or regional
<br />transmission organization that operates organized markets based on competitive bidding for energy imbalance, spinning reserves, supplemental reserves,
<br />reactive power and voltage control, or regulation and frequency response ancillary services (or its functional equivalent in the Commission-approved
<br />independent system operator's or regional transmission organization's tariff) must accept bids from demand response resources in these markets for that
<br />product on a basis comparable to any other resources, if the demand response resource meets the necessary technical requirements under the tariff, and submits
<br />a bid under the Commission-approved independent system operator's or regional transmission organization's bidding rules at or below the market-clearing
<br />price, unless not permitted by the laws or regulations ofthe relevant electric retail regulatory auhority."
<br />WHEREAS, the City Council has detemlincd that it would be harmful to the demand response program to be implemented by the City, the
<br />collective interests of the City's electric utility system, and the City's retail customers, to pemlit any entity other than the City to aggregate demand response
<br />on behalf of its retail customers.
<br />NOW, THEREFORE, BE IT ORDAINED by the City COlli1ci! of the City of Martinsville, Virginia, that:
<br />A. The City Council, as the retail electric regulatory authority for the City and its retail electric consumers, determines it to be desirable that the
<br />aggregation of demand response on behalf of its retail customers to be bid directly into the organized electric and ancillary services markets administered by
<br />the regional transmission organization that includes the City (or any successor independent system operator or regional transmission organization) be
<br />performed by the City or its authorized designee.
<br />B. The City or its authorized designee is the sole entity pennitted to aggregate retail customers' demand response and bid demand response on
<br />behalf of retail customers of the City directly into any Commission-approved independent system operator's or regional transmission organization's organized
<br />electric markets
<br />C. Retail customers on the City's electric system desiring to bid their demand response into a Commission-approved independent system opcrator's
<br />or regional transmission organization's organized electric markets may do so only by participating in the program established by the City or its authorized
<br />designee.
<br />D. The City or its authorized designee is the sae entity permitted to bid demand response on behalf of retail customers of the City directly into any
<br />Commission-approved independent system operator's or regional transmission organization's organized markets for energy imbalance, spinning reserves,
<br />supplemental reserves, reactive power and voltage control, or regulation and frequency response ancillary services (or its functional equivalent in the
<br />Commission-approved independent system operator's or regional transmission organization's tariff)
<br />E. Retail customers of the City's electric system desiring to bid tJleir demand response into a Commission-approved independent system operator's
<br />or regional transmission organization's organized markets for energy imbalance, spinning reserves, supplemental reserves, reactive power and voltage control,
<br />or regulation and frequency response ancillary services (or its functional equivalent in the Commission-approved independent system operator's or regional
<br />transmission organization's tariff) may do so only by participating in the program established by the City or its authorized designee
<br />F. The Director of the Electric Department is authorized to adopt any necessary regulations to implement this Ordinance.
<br />G. If any section, subsection, paragraph, clause or provision or any part thereof of this Ordinance shall be linally adjudicated by a court of
<br />competent jurisdiction to be invalid, the rcmainder of this Ordinance shall be unaffected by such adjudication ,Uld all the remaining provisions of this
<br />Ordinance shall remain in full force and effect as though such section, subsection, paragraph, clause or provision or any part thereof so adjudicated to be
<br />invalid had not, to the extent of such invalidity, been includcd herein.
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<br />Council asked that this item be included on the February 24, 2009 agenda for public
<br />input and for a second reading to avoid any legal challenge. Discussion points
<br />included: this ordinance protects the city's retail market and deals solely with
<br />purchase of power and protects the residential customers' rates; it is possible that
<br />third party aggregators will start accepting bids beginning February 2009 and this
<br />could make an impact if ordinance is not adopted at this meeting; there was
<br />discussion on the need for more time to study the issue before voting; stressed this
<br />ordinance deals solely with purchase of power and has nothing to do with the
<br />agreements that city has already agreed upon with AMP-Ohio; discussion on
<br />requirements for adopting on emergency basis with city attorney pointing out that
<br />Council can adopt the ordinance at tonight's meeting on an emergency basis; Council
<br />does have the option of rescinding the ordinance after hearing public comments at the
<br />next meeting if Council desires to do so.
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