AGENDA MEMORANDUM

 

 

Meeting Date:           May 14, 2007

 

From:                          Bill Pfeilsticker, Finance Director

 

Subject:                      Ordinance amending Section 22-246 - Gas sService rRate sSchedule

 

 

Staff Recommendation:

Staff recommends approval of the Ordinance amending Section 22-246  - Gas sService rRate Sschedule to increase Customer Charge and Delivery Charge for all classes.

 

Analysis:

Based on recommendations received in the electric and gas rate study performed in 2004, the City implemented an automatic annual rate adjustment based on the Gross Domestic Products Implicit Price Deflator Index (GDP) provided by the Bureau of Economic Analysis. Cost increases for raw materials have caused prices to outpace this index for renewal and replacement items such as steel pipe, fittings, meters and petroleum based commodities. In addition, salaries and other operating costs have increased at rates higher than the inflation index to keep pace with inflated economy and competition. Management has begun research to determine if the GDP index is the appropriate index to be using for our needs.

 

Staff has determined that an immediate increase of 8% for all rate classes will provide correction to the rate compression suffered as a result of the deficiency between the GDP index and actual inflation. The 8% increase will only affect the customer charge and delivery charge. Therefore, the average customer will experience a net increase of 2.5% to 3.2%. 

 

All utility rates will continue to be adjusted annually for inflation on October 1 of each year pursuant to Section 22-166.

 

There is no requirement to present this rate change to the Public Service Commission.

 

City staff will recommend by a later resolution that the City ccommission a new rate study for gas and electric rates to correct the deficiency between energy rates compared to wholesale cost for energy, distribution expenses, and renewal and replacement costs.

 

Options:

1.  Adopt the ordinance to amend Section 22-146 Gas rate schedule as presented; or,

2.  Such alternative action as the Commission may deem appropriate

 

Gas Rate Comparison

May 6, 2007

Prepared By: Finance Department

 

 

 

 

 

 

 

 

 

 

 

 

Current Rates

 

Proposed Rates

 

 

 

Rate

Cost

 

Rate

Cost

Change

Residential (Average 30 therms per month)

 

 

 

 

 

 

City of Leesburg

 

 

 

 

 

 

 

 

Customer Charge

 

        6.28

       6.28

 

           6.78

       6.78

 

 

Delivery Charge

 

 0.430000

      12.90

 

    0.464400

     13.93

 

 

Fuel Adjustment Charge

 

 0.912667

      27.38

 

    0.912667

     27.38

 

 

Energy Conservation Adjustment

 

 0.050000

       1.50

 

    0.050000

       1.50

 

 

 

 

 

      48.06

 

 

     49.59

3.2%

 

 

 

 

 

 

 

 

 

Commercial (Average 500 therms per month)

 

 

 

 

 

 

City of Leesburg

 

 

 

 

 

 

 

 

Customer Charge

 

        9.42

       9.42

 

         10.17

     10.17

 

 

Delivery Charge

 

 0.430000

    215.00

 

    0.464400

    232.20

 

 

Fuel Adjustment Charge

 

 0.912667

    456.33

 

    0.912667

    456.33

 

 

Energy Conservation Adjustment

 

 0.050000

      25.00

 

    0.050000

     25.00

 

 

 

 

 

    705.75

 

 

    723.70

2.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Rate Comparison

 

 

 

 

 

 

 

 

Florida Municipalities:

 

 

 

 

 

 

 

 

City of Leesburg (including the increase)

 

 

 

 $  49.46

 

 

Energy Services of Pensacola

 

 

 

 

 

     65.29

 

 

City of Gainesville

 

 

 

 

 

     41.65

 

 

City of Tallahassee

 

 

 

 

 

     50.94

 

 

 

 

 

 

 

 

 

 

 

Regulated Natural Gas Companies:

 

 

 

 

 

 

 

City Gas Company of Florida [2]

 

 

 

 

 

 $  52.16

 

 

Peoples Gas System, Inc. [3]

 

 

 

 

 

     53.41

 

 

St. Joe Natural Gas Company

 

 

 

 

 

     38.83

 

 

 

 

 

 

 

 

 

 

Commercial Rate Comparison

 

 

 

 

 

 

 

 

Florida Municipalities:

 

 

 

 

 

 

 

 

City of Leesburg (including the increase)

 

 

 

  $723.70

 

 

Energy Services of Pensacola

 

 

 

 

 

    993.25

 

 

City of Gainesville

 

 

 

 

 

    836.48

 

 

City of Tallahassee

 

 

 

 

 

    765.46

 

 

 

 

 

 

 

 

 

 

 

Regulated Natural Gas Companies:

 

 

 

 

 

 

 

City Gas Company of Florida

 

 

 

 

 

 $ 713.66

 

 

Peoples Gas System, Inc.

 

 

 

 

 

    679.45

 

 

St. Joe Natural Gas Company

 

 

 

 

 

    450.11

 

 

 

 

 

 

 

 

 

 

[2]

City Gas Company of Fla > Brevard Co on central east coast and in Miami Dade an Broward Co.

 

 

[3]

Peoples Gas > Florida including Orlando, tampaTampa, Lakeland, Jacksonville, Kissimmee, and St Petersburg

 

 


Fiscal Impact

This rate change will result in an additional $265,915 in FY2008.

 

 

 

Submission Date and Time:    5/11/2007 1:48 PM5/9/2007 9:50 AM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. __________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________