AGENDA MEMORANDUM

 

 

Meeting Date:           June 8, 2009

 

From:                          Paul Kalv, Electric Utility Director

 

Subject:                      Resolution authorizing execution of a professional services agreement with Utility Consulting Services to analyze electric rate costs and allocation.

 

 

 

Staff Recommendation:

Staff recommends approval of the resolution authorizing execution of the agreement with Doug Handley d/b/a Utility Consulting Services for a not to exceed amount of $50,000.00.

 

Analysis:

In order to ensure electric retail rates properly reflect the cost to serve the various customer classes, the City of Leesburg requires an electric rate study.  Staff proposes that these services be provided to the City by Mr. Doug Handley of Utility Consulting Services. The study will address the level of the City’s rates relative to its costs and the allocation of costs between rate classes. Other services will include a review of the bulk power cost adjustment methodology and general consultation and presentations as authorized by the City.

 

Mr. Handley performed the last formal Cost of Service Study and rate design for the City of Leesburg completed in 2004.  Since 2004, wholesale power supply costs have increased significantly and our retail rates may not currently be allocated across the customer classes in the most equitable manner.  Additionally, because our current base rates do not adequately recover power supply expenses, the Bulk Power Cost Adjustment has grown significantly.

 

The rate study is needed now to appropriately allocate costs and will also serve as proper base rates levels as we consider the potential for future movement into a Smart Meter deployment and alternative rate structures.

 

Phase I of the study will not exceed $25,000.00.  If the results of Phase I are favorable the City may approve the professional to proceed with Phase II for a cost not to exceed $25,000.00.

 

Looking at the last 12 months, the statistical relationships between customer classes, kWh Energy usage, and revenue received paint a very interesting picture.


 

 

12 Months Ending March 2009

  Rate

# Customers

% Customers

kWh

% kWh

Revenue

% Revenue

Residential

17,817

84%

212,873,862

43%

$30,645,896

46%

Non Demand

2,950

14%

55,211,292

11%

$8,168,841

12%

Demand

465

2%

232,453,767

46%

$28,478,143

42%

TOTAL

21,232

100%

500,538,921

100%

$67,292,880

100%

 

 

The commission is being requested to waive the formal solicitation process on this project.  The firm selected is familiar with the City’s rate structure and results in lower cost to provide the deliverables of this project.  The results of this study may also benefit some customers with lower rates if costs are reallocated.  Selecting a firm through the formal RFP process would delay passing these savings on to those customers.  The services provided are highly specialized and the result of a formal solicitation may likely be an agreement with the firm recommended here.

 

Options:

1.  Approve execution of the agreement with Doug Handley d/b/a Utility Consulting Services; or

2.  Such alternative action as the Commission may deem appropriate

 

Fiscal Impact

Funds are available in the account listed here.

 

 

Submission Date and Time:    6/4/2009 8:09 AM____

 

Department: _Electric Department______

Prepared by:  _Mike Thornton________                     

Attachments:         Yes__X__   No ______

Advertised:   ____Not Required __X___                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. _________JB_______                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. 041-1021-521-3110___

 

Project No. __419200___________

 

WF No. ______________________

 

Budget  ____$100,000.00_________

 

Available ___$100,000.00_________


 

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 DOUG HANDLEY UTILITY CONSULTING SERVICES TO PERFORM A RATE STUDY TO ACCURATELY ALLOCATE COSTS; 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 DOUG HANDLEY d/b/a UTILITY CONSULTING SERVICES whose address is 9487 Silver Buttonwood Street, Orlando, Florida 32832 for professional services in an electric rate study to determine cost allocations.

 

             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 __8th___ day of ___June__ 2009

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk