AGENDA MEMORANDUM

 

 

MEETING DATE:   May 14, 2007

 

FROM:                       Bill Pfeilsticker, Finance Director

 

SUBJECT:                  Ordinance amending Section 22-196 (1) Rate Schedule RS, Residential Service, (2) Rate Schedule GS, General Service, Non-demand, (3) Rate Schedule GSD, General Service, Demand, (4) Bulk Power Cost Adjustment.

 

Staff Recommendation:

Staff recommends approval of an ordinance amending Section 22-196 (1) Rate Schedule RS, Residential Service, (2) Rate Schedule GS, General Service, Non-demand, (3) Rate Schedule GSD, General Service, Demand, and (4) Bulk Power Cost Adjustment

 

Analysis:

Based on recommendations received in the electric and gas rate study performed in 2004, the City implemented an automatic annual rate adjustment using the Gross Domestic Products Implicit Price Deflator Index (GDP) provided by the Bureau of Economic Analysis. Cost increases for raw materials such as copper and oil have caused prices to outpace this index for renewal and replacement items such as wire, conduit, transformers and other copper and petroleum based commodities. In addition, salaries and other operating costs have increased at rates higher than the inflation index to keep pace with inflation 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, energy rate, and one of three components of the fuel cost adjustment. Therefore, the customer will only experience a net increase of 3% to 5%. 

 

Because the proposed increase is equal for all customer classes and does not cause change to rate structure between customer classes, Florida Public Service Commission (PSC) does not have jurisdiction over this change, therefore a detailed rate study will not be required. The new rates presented in the ordinance will be forwarded to the Public Service Commission in the form of tariff sheets.  The ordinance can now be submitted for second reading.

 

City staff will soon recommend, by a later resolution to the City Commission, that a new rate study for gas and electric rates to correct inadequate energy rates compared to energy costs in some customer classes.

 

Options:        

1.      Approve ordinance amending the Code of Ordinances Section 22-196, subsections 1-5, electric rate schedules including bulk power cost adjustment, or

2.      Such alternate action as the Commission may deem appropriate.

 

Fiscal Impact

This change will result in an additional $4,794,128 in revenue across all classes and provide for future expenditures anticipated in fiscal year 2008.

 

Submission Date and Time:    6/20/2007 4:19 PM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____ ______                     

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 _____________________

 


ORDINANCE NO.                                       

 

 

AN ORDINANCE OF THE CITY OF LEESBURG, FLORIDA, AMENDING §22 – 196 (1), (2), (3), and (4) OF THE CODE OF ORDINANCES; PERTAINING TO ELECTRIC RATES; CHANGING THE RATE STRUCTURE IN THE “RS” – RESIDENTIAL, “GS” – GENERAL SERVICE, AND “GSD” – GENERAL SERVICE DEMAND, RATE CLASSIFICATIONS; PROVIDING A SAVINGS CLAUSE; REPEALING CONFLICTING ORDINANCES; AND PROVIDING AN EFFECTIVE DATE.

 

 

BE IT ENACTED BY THE PEOPLE OF THE CITY OF LEESBURG, FLORIDA:

 

SECTION I.

 

Subsections 1 through 4, inclusive, of Section 22 – 196 of the Code of Ordinances of the City of Leesburg are hereby amended as set forth below.

 

Sec. 22 – 196. Electric rates; schedules; adjustments; deposits.

 

The rates for the furnishing of electrical service by the city shall be as follows:

 

(1)        Rate schedule RS, residential service.

 

a.         Availability: This rate is available to all applicable customers in the service area;

 

b.         Applicability: The residential electric rate applies to an electrical service supplying electricity to a single-family residence. Service provided under this section shall not be shared with or resold to others;

 

c.         Character of service: Service shall be single-phase, sixty (60) cycles and approximately 120/240 volts. If three (3) phases are desired, additional charges must be paid by the customer;

 

d.         Limitations: Service is subject to all of the rules and regulations of this tariff and general rules and regulations of the utility. Standby or resale service is not permitted;

 


e.         Rate per month.

 

Customer charge . . . $ 9.94 per month

All kwh, per kwh . . . $0.07296 per kwh

 

The rates per month shall become effective with all bills rendered on or after the first day of the month subsequent to adoption. Such rates per month are subject to the annual inflation adjustment component pursuant to §22 – 166. 

 

f.          Minimum charge: The minimum monthly bill shall be the customer charge plus other applicable charges, covered by ordinance, state statutes or federal law;

 

g.         Terms of payment: All bills and charges for electric current are due and payable twenty (20) days following date of billing. If not paid within twenty (20) days a carrying charge equal to five (5) percent of the total bill is added. Service is discontinued if bill and carrying charge are not paid on or before thirty (30) days succeeding that in which electricity shall have been furnished by the city as stated in all bills rendered;

 

h.         Billing adjustments: See "Bulk Power Cost Adjustment," "Energy Conservation Cost Recovery," and "Tax Adjustment Clause";

 

i.          Deposits. Deposits for each account shall be required as set forth more particularly in section 22-181 of this Code.

 

j.          Reconnection charge: When service is cut off for nonpayment of bill, and when connection service is requested to be performed after normal business hours, the reconnection fee shall be as prescribed by the Utility Service Fee Schedule pursuant to §22–6 of this Code. When service is cut off for meter-tampering, the charge to reconnect shall be as prescribed by the Utility Service Fee Schedule pursuant to §22–6 of this Code plus damages and penalties allowed by state statutes.

 

(2)        Rate schedule GS, general service, nondemand.

 

a.         Availability. This rate is available to all applicable customers in the service area;

 

b.         Applicability. This rate shall be applicable to all electrical services not covered by any of the other rate categories, residential electrical rate, general service demand rate and flat service rate;

 

c.         Limitation. Service is subject to all of the rules and regulations of this tariff and general rules and regulations of the utility. Standby or resale is not permitted.

 

d.         Rate per month.

 

Customer charge . . . $ 9.94 per month

All kwh. . . . . . . . . . . .$0.07968 per kwh

 

The rates per month shall become effective with all bills rendered on or after the first day of the month subsequent to adoption. Such rates per month are subject to the annual inflation adjustment component pursuant to section 22 – 166. 

 

e.         Minimum charge. The minimum monthly bill shall be the customer charge plus other applicable charges, covered by ordinance, state statutes or federal law;

 

f.          Terms of payment. All bills and charges for electric current are due and payable twenty (20) days following date of billing. If not paid within twenty (20) days a carrying charge equal to five (5) percent of the total bill is added. Service is discontinued if bill and carrying charges are not paid on or before thirty (30) days succeeding that in which electricity shall have been furnished by the city as stated in all bills rendered;

 

g.         Billing adjustments. See "Bulk Power Cost Adjustment," "Energy Conservation Cost Recovery," and "Tax Adjustment Clause";

 

h.         Deposits. Deposits for each account shall be required as set forth more particularly in § 22-181 of this Code.

 

i.          Reconnection charge: When service is cut off for nonpayment of bill, and when connection service is requested to be performed after normal business hours, the reconnection charge shall be as prescribed by the Utility Service Fee Schedule pursuant to §22–6 of this Code. When service is cut off for meter tampering, such reconnection charge shall be as prescribed by the Utility Service Fee Schedule pursuant to §22–6 of this Code  plus damages and penalties allowed by state statutes.

 

(3)        Rate schedule GSD, general service, demand.

 

a.         Availability. This rate is available to all applicable customers in the service area;

 

b.         Applicability. Such rate is applicable to nonresidential customers with an electrical demand requirement of 20 kw or more throughout the area served by the utility;

 


c.         Special provisions. Any customer whose demand is greater than twenty (20) kw, but less than fifty (50) kw, may at the option of the customer elect to be billed at the General Service Rate Schedule, GS Code 444.2. If the customer modifies electrical usage to the extent the General Service Demand rate, GSD Code 444.3, produces lower billing, customer may at its option rescind the election to be billed at the General Service Rate Schedule, GS Code 444.2, provided however, that the option of being billed at the General service rate schedule, GS Code 444.2 shall then no longer be available to such customer;

 

d.         Character of service. The service shall be three-phase, sixty (60) cycles and approximately one hundred twenty (120) volts or higher, at utility option;

 

e.         Limitations. Standby or resale is not permitted;

 

f.          Rate per month.

 

Customer charge . . . $ 21.11 per month

            All kw, per kw . . . $8.69400 per kw

All kwh, per kwh . . . $0.03882 per kwh

 

            The rates per month shall become effective with all bills rendered on or after the first day of the month subsequent to adoption. Such rates per month are subject to the annual inflation adjustment component pursuant to Section 22-166. 

 

g.         Minimum charge. The minimum monthly charge shall be not less than the sum of customer charge and the demand charge for the currently effective billing demand, plus other applicable charges covered by ordinances, state statutes or federal law;

 

h.         Billing demand. The maximum fifteen-minute integrated demand established during the current billing period;

 

i.          Power factor. When the power factor is less than ninety (90) percent, the billing demand may be determined upon the basis of ninety (90) percent of the calculated kVa, demand;

 

j.          Deposits. Deposits for each account shall be required as set forth more particularly in § 22-181 of this Code.

 


k.         Reconnection charge: When service is cut off for nonpayment of bill, and when connection service is requested to be performed after normal business hours, the reconnection charge shall be as prescribed by the Utility Service Fee Schedule pursuant to §22–6 of this Code.. When service is cut off for meter tampering, there shall be a reconnection charge as prescribed by the Utility Service Fee Schedule pursuant to §22–6 of this Code, plus damages and penalties allowed by state statute;

 

l.          Terms of payment. All bills and charges for electric current are due and payable twenty (20) days following date of billing. If not paid within twenty (20) days a carrying charge equal to five (5) percent of the total bill is added. Service is discontinued if bill and carrying charge are not paid on or before thirty (30) days succeeding that in which electricity shall have been furnished by the city as stated in all bills rendered;

 

m.        Term of service. Service under this rate shall be for a minimum initial term of twelve (12) months from commencement of service and shall continue thereafter until receipt of notice by the city from the customer to disconnect, or upon disconnect by the city as provided by ordinance, or until the customer's demand is below twenty (20) kw for a consecutive twelve-month period. Customers taking service under another rate schedule who elect to transfer to this rate must remain on this rate for a minimum of twelve (12) months. Where special equipment to serve the customer is required, the city may require a specified term of service contract.

 

n.         Special provisions.

 

1.         Any customer other than residential whose monthly demand is greater than twenty (20) kw but does not exceed forty-nine (49) kw for more than two (2) months out of the preceding twelve (12) consecutive months ending with the current billing period may, at the option of the customer, elect to be billed at the General Service Rate Schedule, GS Code 4442. Provided, that once a customer has exceeded forty-nine (49) for more than two (2) months out of the preceding twelve (12) consecutive months, no rate change option is available. If the customer modifies electrical usage to the extent the General Service Demand Rate (GSD Code 4443) produces lower billing, customer may, at its option, rescind the election to be billed at the General Service Rate Schedule, GS Code 4442; provided, that the option of being billed at the General Service Rate Schedule, GS Code 4442, shall then no longer be available to such customer.

 

2.         The city may, under the provisions of this rate, require a contract with the customer. Whenever the customer increases his electrical load, which increase requires the city to increase facilities installed for the specific use of the customer, a new term of service may be required.

 

3.         Any church or religious institution may, at their option, regardless of their demand, elect to be billed at the General Service Non Demand rate and may not rescind such election thereafter for a period of twelve (12) months. This election may be for the sanctuary and related Sunday School or religious educational buildings.

 

o.         Billing adjustments. See "Bulk Power Cost Adjustment," "Energy Conservation Cost Recovery," and "Tax Adjustment Clause";

 

(4)        Bulk Power Cost Adjustment, BPCA.

 

a.         Applicability. To the monthly rate of each filed rate schedule as indicated with reference to billing adjustment.

 

b.         The rate charged by the City for electric energy furnished to consumers of electricity shall be decreased or increased $0.0001 per kWh for each $0.0001, or major fraction thereof, decrease below or increase above $0.04933 (The annual inflation adjustment component shall also be applied) per kWh as determined by the average cost to the City each month. This amount includes a demand related component of $0.04244 per kWh plus $0.006990 per kWh for the cost of fuel on October 1, 1973. The Finance Director may apply a levelized bulk power cost adjustment to expand the recovery period based on a 12-month forward looking approach and can adjust the bulk power cost adjustment monthly if necessary. In addition, the Finance Director may calculate the cost to the City and exclude “true-up” credits received from the power supply agency. The City shall not impose a municipal public service tax on a “fuel adjustment charge” in accordance with Florida Statutes 166.231.

 

SECTION II.

 

If any portion of this ordinance is declared invalid or unenforceable, then 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 III.

 

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 affected shall be hereby repealed in their entirety. However, except as specifically amended or repealed by this Ordinance, all portions of §22 – 196 shall continue in full force as they existed prior to the adoption of this Ordinance.

 

SECTION IV.

 

This ordinance shall become effective upon its passage and adoption according to law.

 

PASSED AND ADOPTED at the regular meeting of the City Commission of the City of Leesburg, Florida, held on the   25th      day of             June                 , 2007.

 

 

THE CITY OF LEESBURG, FLORIDA

 

 

 

BY:                                                                 

Mayor

 

 

 

Attest:                                                             

City Clerk