DATE: June 14, 2022
SUBJECT:
Title
RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A MEMORANDUM OF UNDERSTANDING WITH NATIONAL STEEL AND SHIPBUILDING COMPANY (NASSCO), REGARDING LOW CARBON FUEL STANDARD (LCFS) CREDITS GENERATED FROM ELIGIBLE ELECTRIFIED EQUIPMENT LOCATED AT NASSCO FOR USAGE COVERING THE PERIOD FROM JULY 1, 2022 THROUGH DECEMBER 31, 2027
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EXECUTIVE SUMMARY:
The State of California's Low Carbon Fuel Standard (LCFS) program expanded its optional participant definition in 2019 to include some operations by the District and its tenants. National Steel and Shipbuilding Company (NASSCO) utilizes several pieces of electrified equipment that qualify under the LCFS program for credit. These credits can be sold on the LCFS Market for funds that can be invested into future electrification projects at the District or on tenant leaseholds.
This proposed Memorandum of Understanding (MOU) with NASSCO would allow the District and NASSCO to earn credits from NASSCO operations that utilizes electrified equipment. The MOU specifies a 95/5 split of net revenue from credits with NASSCO receiving 95% and the District 5%. Proposed MOU would cover credits generated from July 1, 2022 through December 31, 2027, when the MOU will be evaluated for renewal or modification.
RECOMMENDATION:
Recommendation
Adopt a resolution authorizing the Executive Director to execute a memorandum of understanding with National Steel and Shipbuilding Company (NASSCO), regarding Low Carbon Fuel Standard (LCFS) credits generated from eligible electrified equipment located at NASSCO for usage covering the period from July 1, 2022, through December 31, 2027
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FISCAL IMPACT:[h1]
The sale of LCFS credits covered by the proposed Memorandum of Understanding is expected to result in revenue in the approximate amount of $366,490 per quarter. Of that amount, $18,090 would be revenue to the District per calendar year quarter. This would result in $1,045,200 to NASSCO, and...
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