AGENDA MEMORANDUM

Meeting Date: June 11, 2007

From:                          Paul Kalv, Electric Director

Subject:                      Resolution authorizing an agreement with R. W. Beck, Inc. for an Electric Cost of Service and Retail Rate Design Study

Staff Recommendation:

Staff recommends approval of an agreement for an Electric Cost of Service and Retail Rate Design Study.

Analysis:

Power supply received through FMPA together with the City’s ownership in the St. Lucie and Crystal River nuclear power plants represents more than 60% of the Electric Department’s annual operating expense.  Individual billing determinants that comprise the City’s total power supply cost include energy and demand billing rates for the FMPA provided portion of our power supply; energy billing rates for the St Lucie and Crystal River provided portion of our power supply; and a demand billing rate for all energy delivered to Leesburg.

In order to recommend appropriate retail electric rates to the Commission, it is important to understand the contribution to our total power supply cost that is attributable to each customer class (Residential, General Service Non-Demand, and General Service Demand).  Determining the proper cost allocation across customer classes is critically important in order to ensure that retail rates are developed to recover the appropriate share of our expenses from each customer class.

The last cost of service and rate study was performed during 2004 and it is appropriate to conduct a Cost of Service and Retail Rate Design study at this time in view of our changing cost of energy.

Options:

1.  Approve the Electric Cost of Service and Retail Rate Design Study Agreement, or;

2.  Such alternative action as the Commission may deem appropriate

Fiscal Impact: 

Although funds were not specifically appropriated in account number 041-1021-531-31-10 419230 in accordance with the adopted budget, $35,000 is available within the operating category for this purpose.

Submission Date and Time:    6/11/07 3:01pm____

Department: _Electric_______________ Prepared by:  __Connie Lambert______                      Attachments:         Yes_X__   No _____ Advertised:   ____Not Required __X___ Dates:   __________________________                      Attorney Review :       Yes_X__  No ____ _________________________________            Revised 6/10/04

Reviewed by: Dept. Head _Paul Kalv Finance  Dept. __________________                                    Deputy C.M. ___________________                                          Submitted by: City Manager ___________________

Account No. _041-1021-531-3110___ Project No. __419230____________ WF No. ______________________ Budget  _____$52,000___________ Available ____$51,565___________

RESOLUTION NO._______________

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH R.W. BECK, INC. FOR AN ELECTRIC COST OF SERVICE AND RETAIL RATE DESIGN STUDY; AND PROVIDING AN EFFECTIVE DATE.

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

            THAT the Mayor and City Clerk are hereby authorized to execute an agreement with R. W. Beck, Inc, whose address is 800 North Magnolia Ave, Suite 300, Orlando, Florida 32803, for an Electric Cost of Service and Retail Rate Design Study.

 THAT this resolution shall become effective immediately.

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the ___11th_ day of ____June_____ 2007.

                                                                            __________________________

                                                                             Mayor

ATTEST:

__________________________

City Clerk