Description: AGENDAHED.JPG
  

Item No:                    5B.

 

Meeting Date:           July 8, 2013

 

From:                          Raymond S. Sharp, Interim City Manager

 

Subject:                      First reading of an ordinance implementing a five percent increase in electric utility rates

 

 


Staff Recommendation:

Staff recommends adoption of the ordinance implementing a five percent rate increase for each of the next three years.

 

Analysis:

As part of the process for refinancing the FY 2004 bonds, the city’s financial consultants conducted a financial feasibility analysis for the Electric Utility.  The analysis is attached for reference.

 

This analysis was similar to those performed for the same purpose earlier in the year for refinancing the General Fund and Combined Utility bond issues.  The purpose of the financial feasibility analysis is to demonstrate to investors and rating agencies that the utility is financially sound and secure.

 

In the case of the Electric Utility analysis, it became apparent that the utility would require rate increases in order to meet its minimum fund balance requirements and to establish a stable fund balance in future years.

 

Electric and Finance staff spent considerable time analyzing the financial history and projected revenues and expenses to determine the cause(s) that necessitated rate increases.   Primarily, the need for rate increases is determined by two root causes:

 

 

 

A rate increase must accomplish two things:  First, it must stabilize the fund balance, so that year-by-year the fund balance remains relatively stable and specifically does not reflect a declining trend, which would be indicative of the utility’s inability to recover its costs through its rates.  Second, it must ensure the utility fund balance requirements, set by policy, are met in each year.  Should the utility fail to meet its fund balance requirements, then its transfers to the General Fund are eliminated or reduced, which would be catastrophic to the General Fund.

 

The financial feasibility analysis indicates that 5% rate increases, applied annually will achieve these two objectives.  The 5% increase is inclusive of anticipated GDPI index adjustments, which means that in each year in which the rate increase is applied, the utility will forego the annual index adjustment.

 

The attached rate ordinance establishes rates to become effective with all electric bills rendered on or after 1 November 2013, which represents a 5% increase over the current rates.  It also provides for a 5% rate increase on 1 November 2014, and on 1 November 2015.

 

Options:

1.  Adopt the electric utility rate ordinance as presented; or,

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

 

Fiscal Impact: 

The financial feasibility analysis indicates the proposed rate ordinance, if adopted, will ensure the utility meets its fund balance requirements for each of the three years and the utility fund balance will be stable throughout this time period.  This will allow the utility to meet its obligations to the General Fund.

Submission Date and Time:    7/8/2013 10:13 AM____

 

Department: City Manager

Prepared by:  R. Sharp                    

Attachments:         Yes X    No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes X  No ____

                                                 

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. _BLM,_____________                                     

                              

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 CERTAIN SUBSECTIONS OF §22 – 196 OF THE CODE OF ORDINANCES, PERTAINING TO ELECTRIC RATES, INCREASING THE RATES IN SCHEDULES RS (RESIDENTIAL SERVICE), GS (GENERAL SERVICE NON _ DEMAND), GSD (GENERAL SERVICE DEMAND), AND TOU (TIME OF USE); PROVIDING FOR AUTOMATIC ANNUAL INCREASES OF 5% PER YEAR FOR 2014 AND 2015; SPECIFYING HOW THE ANNUAL 5% RATE INCREASES IN 2013, 2014 AND 2015 ARE TO BE APPLIED IN CONJUNCTION WITH THE AUTOMATIC INCREASES SPECIFIED IN §22 – 166 OF THE CODE OF ORDINANCES; PRESERVING §22 – 196 EXCEPT AS AMENDED HEREBY; REPEALING ANY CONFLICTING ORDINANCES; PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE.

 

 

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

 

SECTION I.

 

§22 – 196 of the Code of Ordinances of the City of Leesburg, Florida, is hereby amended so that the subsections thereof listed below shall, following the effective date of this Ordinance, read as follows (NOTE: provisions in strikeout are being deleted from the existing ordinance, provisions in double underline are being added or amended by this Ordinance, and text not marked remains the same as in the existing ordinance):

 

(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 .....$10.62 11.77

                  All kwh, per kwh .....0.08129 0.090108

 

The rates per month shall become effective with all bills rendered on or after the first day of the month subsequent to adoption November 1, 2013. Such rates per month are subject to the annual inflation adjustment component pursuant to section 22-166, beginning as of October 1, 2016.

 

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 section 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 section 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 .....$10.62 11.77

                  All kwh .....0.08847 0.098067

 

The rates per month shall become effective with all bills rendered on or after the first day of the month subsequent to adoption November 1, 2013. Such rates per month are subject to the annual inflation adjustment component pursuant to section 22-166, beginning as of October 2, 2016.

 

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 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.

 

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 section 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 fee shall be as prescribed by the utility service fee schedule pursuant to section 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 section 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.   Application.

 

1.      GSD-1: 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.

 

2.      GSD-2: 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.

 

3.      GSD-3: 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.

 

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.

 

1.       GSD-1. Billing demand of 21kW—499kW:

 

                  Customer charge .....$22.66 25.02

                  Demand charge .....10.55 11.38

                  Energy rate .....0.04165 0.045991

 

2.      GDS-2. Billing demand of 500—1,999 kW:

 

      Customer charge .....$40.16 44.34

      Demand charge .....12.05 12.99

      Energy rate .....0.03806 0.042024

 

3.      GSD-3. Billing demand of 2,000 kW or more:

 

      Customer charge .....$80.32 88.68

      Demand charge .....14.96 16.13

      Energy rate .....0.03304 0.036481

 

The rates per month shall become effective with all bills rendered on or after the first day of the month subsequent to adoption November, 2013. Such rates per month are subject to the annual inflation adjustment component pursuant to section 22-166, beginning as of October 2, 2016.

 

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 section 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 section 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 section 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".

 

 

 

(13)            Rate Schedules TOU – 1 and TOU – 2, Time of Use Rates.

 

a.       Availability.  Available throughout the entire territory served by the City subject to equipment availability. This is an optional service available at the customer’s request.  Customer may choose either rate schedule TOU-R1 or TOU-R2.

 

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 ordinance and the general rules and regulations of the City’s electric utility. Standby or resale service is not permitted. No customer who elects to obtain service under this TOU rate schedule shall be eligible for any other load management credits offered by the City to residential customers.

 

e.        Rates per month.  The following rate schedules shall apply to this TOU rate:

 

      Customer Charge                                             $11.10 11.77

 

Rate per kWh:                                                      

 

 

TOU-R1

TOU-R2

Winter – On-peak

$0.404134

$0.424341

$0.265005

$0.278255

 

Winter – Off-peak

 

0.060165

0.063173

 

0.070985

0.074534

 

Summer – On-peak

 

0.352527

0.370153

 

0.230715

0.242251

 

Summer – Off-peak

 

0.062573

0.065702

 

0.072777

0.076416

 

Winter – On-peak is defined as the hours from 7 a.m. to 9 a.m. on Monday through Friday during the months of December, January and February, excluding any federal holiday occurring on those days.  Winter – Off-peak is defined as all other hours during the months of December, January and February.

 

Summer – On-peak is defined as the hours from 3 p.m. to 5 p.m. on Monday through Friday during the months of March through October, excluding any federal holiday occurring on those days.  Summer – Off-peak is defined as all other hours during the months of March through October.

 

The rate per month is subject to the annual inflation adjustment component pursuant to §22 - 166. Promptly after each annual inflation adjustment, the City will for informational purposes notify the Florida Public Services Commission in writing of its then current rates including any annual inflation adjustment.

 

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.        Maximum Charge. After the customer’s first three billing months under this rate schedule, at the customer’s request, the City will calculate the total billings the customer would have been charged under the basic residential rate, Rate RS, and refund to the customer any excess of the actual billings under this rate over such calculated amount.

 

h.       Term of Service.   Service under this TOU rate schedule 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 City ordinance.  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.  A customer taking service under this rate schedule who elects to transfer to another rate will be prohibited from taking service on this rate schedule again for a minimum of twelve (12) months.

 

SECTION II.

 

The rates set by this Ordinance shall take effect November 1, 2013, and remain in effect until October 31, 2014. On November 1, 2014, those rates each shall increase by 5%, and the increased rate shall remain in effect until October 31, 2015. Beginning November 1, 2015, the rates in effect from November 1, 2014 through October 31, 2015, each shall increase by 5%, and those increased rates shall remain in effect until September 30, 2016. On October 1, 2016, and each year thereafter, the automatic increases specified by §22 – 166 of the Code of Ordinances shall be applied to each rate schedule listed above. Between the effective date of this Ordinance and October 1, 2016, the annual increases specified in this Ordinance shall take the place of the automatic increases provided by §22 – 166.

 

SECTION III.

 

Except as specifically amended by this Ordinance, the provisions of §22 – 196 of the Code of Ordinances shall continue in full force and effect in the form existing prior to this Ordinance, and the rate increases specified in §22 – 166 shall continue to apply annually to any rates not specifically increased by this Ordinance.

 

SECTION IV.

 

All ordinances or part 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 ordinance, in which case those ordinances so affected shall be hereby repealed in their entirety.

 

SECTION V.

 

If any portion of this Ordinance is declared invalid or unenforceable, and to the extent that 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 the ordinance shall continue in full force and effect as if it were enacted without including the portion found to be invalid or unenforceable.

 

SECTION VI.

 

This Ordinance shall become effective upon its passage and adoption according to law, provided that the rate increases hereby imposed shall not take effect until November 1, 2013.

 

PASSED AND ADOPTED at the regular meeting of the City Commission of the City of Leesburg, Florida, held on the                        day of                                                 , 2013.

 

 

 

                                                                              THE CITY OF LEESBURG, FLORIDA

 

 

 

                                                                              BY:                                                                 

                                                                                          MAYOR

 

 

 

Attest:                                                                  

        CITY CLERK