AGENDA MEMORANDUM

 

 

Meeting Date:           October 11, 2010

 

From:                          Jerry Boop, Finance Director, CPA, CGFO

 

Subject:                      Ordinance amending Section 22-196 of the Code of Ordinances pertaining to section (3) General Service Demand (GSD), updating section f., Rate per Month, a component of Electric Service Rates.

 

 

Staff Recommendation:

Staff recommends adopting the proposed rates and revisions to Section 22-196 pertaining to General Service Demand, updating section f., Rate per Month.

 

Analysis:

Following adoption of resolution 8467 by the City Commission June 8, 2009, the City of Leesburg engaged Doug Handley, doing business as, Utility Consulting Services, to perform certain rate analysis of the City’s electric rates and provide recommendations for consideration.  Two recommendations came forward as a result of that study.  The first recommendation which involved a reallocation of power costs between base rates and the Bulk Power Cost Adjustment (BPCA) was adopted upon second reading at the regular City Commission meeting December 14, 2009.  The second recommendation was to study the City’s Demand Rate Structure and propose adjustments to this structure, if necessary.  Both studies were performed and completed with the understanding that any and all adjustments recommended by the consultant were to be revenue neutral.

 

The intent of the second recommendation was to evaluate and recommend potential restructured rates for the general service demand class to (a) segregate the class according to size and (b) to implement an appropriate price signal that more closely reflects demand charges from the Florida Municipal Power Agency (FMPA) and, therefore, encourages energy conservation and efficiency by large customers. 

 

Utility Consulting Services proposes that the City segregate its basic demand customers into three separate rate classes as follows:

 

·         GSD-1             Demand over 20 kW and less than 500 kW

·         GSD-2             Demand of 500 kW or more but less than 2,000 kW

·         GSD 3             Demand of 2,000 kW or more

 

 

 

Table 2 presents a calculation of the annual revenues from the existing GSD rates and the proposed restructuring of GSD rates.  As can be seen, the proposed rates are revenue neutral to each of the proposed classes of customers.  Table 3 provides a summary of the existing rates, the restructured GSD rates, and the proposed rates to be effective November 1, 2010 after including the effect of the annual inflation adjustment applicable to each rate.

 

Options:

1.  Adopt staff recommendation of the proposed rates and revisions to Ordinance 22-196 pertaining to General Service Demand, updating section f., Rate per Month, or;

2.  Such alternative action as the Commission may deem appropriate

 

 

Fiscal Impact

None. The demand rate restructuring was completed on the basis and with the understanding that it would be revenue neutral.

 

Submission Date and Time:    10/20/2010 2:53 PM____

 

Department: ____Finance___________

Prepared by:  ____Jerry Boop______                      

Attachments:         Yes_X__   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head __JB____

 

Finance  Dept. _______JB_________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________


 

 

ORDINANCE NO.___________________

 

 

AN ORDINANCE OF THE CITY OF LEESBURG, FLORIDA, AMENDING SECTION 22-196 OF THE CODE OF ORDINANCES PERTAINING TO ELECTRIC RATES; ESTABLISHING UPDATED RATES FOR ELECTRIC GENERAL SERVICE DEMAND (GSD); PROVIDING FOR RATES TO BE EFFECTIVE NOVEMBER 1, 2010; PROVIDING FOR CONFLICTS AND PROVIDING AN EFFECTIVE DATE.

 

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

SECTION 1.

 

      Section 22-196 of the Code of Ordinances of the City of Leesburg, Florida is hereby amended as follows:

 

                                   Existing GSD Rate       Proposed Rates

GSD-1      

Billing Demand of 21kW-499kW

Rate Schedule                                GSD                            GSD-1

Customer Charge                           22.57                           22.66

Demand Charge                             10.51                           10.55

Energy Rate                                   .04149                         .04165

 

 

APPLICATION:

For electric service for commercial or industrial lighting, power and any other purpose to any Customer with a measured demand in excess of 20 kW and less than 500 kW.  Customers with a demand of 20 kW or less may enter into an agreement for service under this schedule based on a demand charge for a minimum of 21 kW.

 

Term of service:

Not less than one year.

           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                          Existing GSD Rate            Proposed Rates

GSD-2      

Billing Demand 500 – 1,999 kW

Rate Schedule                                GSD                            GSD-2

Customer Charge                           22.57                           40.16

Demand Charge                             10.51                           12.05

Energy Rate                                   .04149                         .03806

 

 

APPLICATION:

For electric service for commercial or industrial lighting, power and any other purpose to any Customer with a measured demand of 500 kW and less than 2,000 kW.  Customers with a demand of less than 500 kW may enter into an agreement for service under this schedule based on a demand charge for a minimum of 500 kW.

 

Term of service:

Not less than one year.

 

 

 

 

                                          Existing GSD Rate            Proposed Rates

GSD-3      

Billing Demand 2,000 kW or more

Rate Schedule                                GSD                            GSD-3

Customer Charge                           22.57                           80.32

Demand Charge                             10.51                           14.96

Energy Rate                                   .04149                         .03304

 

 

APPLICATION:

For electric service for commercial or industrial lighting, power and any other purpose to any Customer with a measured demand of 2,000 kW or more.  Customers with a demand of less than 2,000 kW may enter into an agreement for service under this schedule based on a demand charge for a minimum of 2,000 kW.

 

Term of service:

Not less than one year.

 

 

 

 

 

 

 

 

 

 

SECTION 2.

 

All ordinances or parts of ordinances which are in conflict with this ordinance are hereby repealed, to the extent necessary to alleviate the conflict, but shall continue in effect insofar as they are not in conflict herewith, unless repeal of the conflicting portion destroys the overall intent and effect of any of the conflicting ordinances, in which case those ordinances so effected shall be hereby repealed in their entirety.

 

 

SECTION 3.   

 

If any portion of this ordinance is declared invalid or unenforceable, and to the extent it is possible to do so without destroying the overall intent and effect of this ordinance, the portion deemed invalid or unenforceable shall be severed herefrom and the remainder of this ordinance shall continue in full force and effect as if it were enacted without including the portion found to be invalid or unenforceable.

 

SECTION 4. 

 

This ordinance shall become effective upon passage

 

 

PASSED AND ADOPTED at the regular meeting of the City Commission of the City of Leesburg, Florida, held on the 25th day of October, 2010.

 

 

 

 

 

                                                                               __________________________________

                                                                               Mayor

 

ATTEST:

 

 

 

______________________________________

City Clerk