SUBJECT
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Authorizing the City Manager to execute the Renewable Natural Gas (RNG) Supply offer Contract with Clean Energy Renewable Fuels, LLC for the clean fuel production tax credit. The tax credit is equal to the product of the applicable amount per gallon (or gallon equivalent) for any transportation fuel that is produced by El Metro at a qualify facility during the year and the emission factor for such fuels determined under the code.
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PREVIOUS COUNCIL ACTION
N/A
BACKGROUND
The Renewable Fuel Standard (RFS) is a national program that focuses on reducing dependence on foreign oils, achieving greenhouse gas reductions, and growing the nation’s renewable energy industry. It was created in 2005 under the Energy Policy Act. Each year Congress establishes a Required Volume Obligation (RVO) that establishes the amount of renewable fuels production must bring to market. Credit values fluctuate on the open market and currently trading at $3.50. 5% of RIN value would be $0.20-$0.22 per GGE.
Clean Energy can offer the following for RNG supply:
- Pay 5% D3 RIN credit on total natural gas vehicle volume, but RNG delivery will remain flexible.
- 5% of the average D3 RIN credit (over the past two years) translates to approximately $4,500/month based on annual volume of 250,000 GGE.
- The RIN share is distributed via ACH payment or check to El Metro on a quarterly basis.
- Clean Energy is responsible for all compliance and reporting associated with the sale and sharing of RIN credits.
COMMITTEE RECOMMENDATION
N/A
STAFF RECOMMENDATION
recommendation
Staff recommends the approval of this resolution.
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Fiscal Impact
Fiscal Year: 2024
Budgeted Y/N?: N
Source of Funds: El Metro Revenue
Account #: 558-0000-373-2023
Change Order: Exceeds 25% Y/N: N
FINANCIAL IMPACT:
Refund will be deposited in El Metro Operations revenue account.