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ABOUT ABAG POWER

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Background Information

What Is ABAG?
What Is ABAG POWER?
Who Is Eligible to Join ABAG's Power Purchasing Pool?
What Level of Commitment Is Required To Join?
What Range Of Services Will The Pool Offer?
What Are The Benefits of Participating In The ABAG Pool?
Other Questions?

WHAT IS ABAG?

Association of Bay Area Governments (ABAG) is a joint powers agency representing local governments in the nine-county San Francisco Bay Area. In addition to its regional and subregional planning functions, ABAG operates a variety of service programs for local governments in areas where economies of scale are an important factor in reducing costs. These service programs include a self-insurance pool, a workers' compensation program, and a financial services program for the pooled issuance of public debt.

WHAT IS ABAG POWER?

ABAG POWER (ABAG Publically OWned Energy Resources) is a separate joint powers agency formed to take advantage of the new energy regulatory environment. ABAG POWER's primary goal is to conduct pooled purchasing of natural gas and electricity on behalf of local governments and special districts who voluntarily join the Pool. Pooled purchasing enables local governments to achieve more competitive pricing from suppliers who are interested in larger and more attractive combined loads. At this time, ABAG POWER is principally interested in aggregating local government loads only.

The Pool is currently purchasing natural gas for 39 local governments and special districts in the Bay Area. The goals of the natural gas purchasing pool are:

Price Stability. The Program's gas purchasing strategy and cost allocation methods are designed to give members a reasonable degree of certainty of the costs to be shared.
Cost Savings. The Program attempts to provide gas procurement services for less than the equivalent services provided by the default provider (e.g. PG&E).

ABAG POWER suspended its electric aggregation program in July 2001 due to the volatility in the electric energy industry, and in September 2001 the California Public Utilities Commission (CPUC) suspended all new electric aggregation programs. We continue to monitor the regulatory landscape to judge the viability of future electric aggregation programs, especially in light of the State legislature's recent passage of the Community Aggregation bill (AB117). In addition ABAG is striving to become more involved in energy management programs that will benefit our members.

WHO IS ELIGIBLE TO JOIN ABAG POWER?

The Pool is open to all ABAG members and cooperating members in the Bay Area. In addition, ABAG is opening the Pool to other local governments and special districts in Northern California (PG&E service territory only) on a case-by-case basis.

WHAT LEVEL OF COMMITMENT IS REQUIRED TO JOIN ABAG POWER?

Local governments (and special districts) may join ABAG POWER by executing the Joint Powers Agreement. No commitment to purchase electricity or natural gas is necessary to join ABAG POWER. Once a member of ABAG POWER, an agency may join the natural gas pool by signing the Natural Gas Aggregation Agreement.

WHAT RANGE OF SERVICES WILL THE POOL OFFER?

For natural gas, ABAG offers natural gas purchasing, commodity management (i.e., nominations, balancing, storage, and pipeline rebrokering), and consolidated billing services. Distribution, meter reading, routine service, and emergency response are provided by the utility.

WHAT ARE THE BENEFITS OF PARTICIPATING IN THE ABAG POOL?

First, Pool members can rely on ABAG to monitor regulatory and legislative proceedings and to evaluate new Pool purchasing options as they develop.

Second, Pool members will own and operate the Pool. Through the oversight committee, members will have input into ABAG's purchasing decisions, administrative costs, and billing procedures -- critical factors which affect both performance and customer satisfaction.

Third, public sector aggregations like ABAG have a unique ability to leverage lower prices through the use of tax-exempt financing. ABAG is exploring the possibility of financing a multi-year purchase of natural gas for Pool members and will look for similar opportunities for electric purchases.

OTHER QUESTIONS?

For further information, contact JerryL@abag.ca.gov

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