HomeMy WebLinkAboutAgenda Report - March 18, 2009 E-07 PHE---1
4DCITY OF LODI
COUNCIL COMMUNICATION
M
AGENDA TITLE: Set a Public Hearing on April 1, 2009 to Introduce Ordinance amending
Chapter 13.20 "Electrical Service" by adding a new Section 13.20.315 titled
Schedule EDR -- Economic Development Rates (EUD)
MEETING DATE: March 18,2009
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: Set a Public Hearing on April 1, 2009 to Introduce Ordinance
Amending Chapter 13.20 "Electrical Service" by adding a new
Section 13.20.315 titled Schedule EDR (Industrial Development
Incentive Discount).
BACKGROUND INFORMATION: Over the years, many electric utilities have implemented special
discounted rate tariffs to encourage economic/industrial
development within their service areas.
A report preparedfor the Electric Utility Department (EUD) by MBMC, Inc. in late 2006 highlighted a
number of California electric utility economic/industrial incentive rates. MBMC found that most electric
utilities that offered such rates, targeted high "load factor" industrial and/or manufacturing customersfor
either business expansion or for relocation to their service areas by offering rate discounts of various
amounts and for various periods.
Given the relativelyweak financial condition of the electric utility at the time, staff elected not to
recommend the establishment of an economic development discount program. Given recent
improvements in the electric utility's financials and declining economic conditions for business, however,
EUD believes consideration of an economic/industrial development discount rate is now appropriate to
further EUD and community goals related to industrial and business development.
As such, EUD is proposing establishment of an Economic Development Rate (EDR) discount to be
available to new or expanded industrial businessesfor a two year period beginning July 1, 2009. Key
elements of the proposed program for industrial customers are as follows:
• Incentivesare providedfor 36 monthsto qualified customers;
• Applies to new or expanded industrial load only (i.e. no retail);
• 10 percent base discount;
• Extra 5 percent "job creations" discount (minimum 25 jobs for G2 customers and 50 jobs
otherwise);
• Extra 5 percent discount for new or expanded facilities that receive a Silver or higher "Leadership
in Energy and Environmental Design" (LEED) designation;
• Extra 5 percent discountfor qualified entitiesthat are located within the designated Enterprise
Zone;
• No entity may receive a total discount in excess of 20 percent and discounts do not apply to billing
surcharges;
APPROVED:
wig, City Manager
Set a Public Hearing on April 1, 2009 to Introduce Ordinance amending Chapter 13.20 "Electrical Service" by adding a
new Section 13.20.315 titled Schedule EDR -- Economic Development Incentive Discount (EUD)
March 18,2009
Page 2 of 2
• Minimum load addition of 50 to 200KW depending on rate class;
• 45 percent minimum "load factor"; and
• June 30, 2011 sunset
In addition, Schedule EDR proposestwo additional discounts —onefor newtourism and wine industry
businesses and one for new green technology businesses.
• a 10 percent discount to new businesses that are substantially and directly related to tourism
and/or the wine industry. Examples of such businesses include those that are marketing Lodi
and/or local wine products, hotel including bed and breakfast establishments, and restaurants, gift
shops and boutique -type stores within or immediately adjacent to the downtown Lodi shopping
district. This provision responds to comments by the Lodi Chamber of Commerce at the City
Council's January 13, 2009 Shirtsleeve on this subject.
a 10 percent discount to new businessesthat are substantially and directly involved in the
development, marketing, sale, manufacturing and/or installation of green technology products and
services. Examples of such businesses include those directly involved in solar, wind, geothermal,
biomass, and fuel cell industries. Green Technology Businessesthat are otherwise eligible for an
EDR Industrial Business discount may elect to apply for that discount in lieu of the Green
Technology Business discount.
Once in effect, it is EUD's intent to review the effectiveness of the proposed economic development
incentive program during the first 18 months of operation and report the findings to City Council. At that
time, Staff may propose (i) extending the program in its original form; (ii) modifying the program to
enhance its effectiveness; or (iii) allowing the program to sunset on June 30, 2011.
FISCAL IMPACT: The fiscal impact of Schedule EDR is difficult to project, but the proposed
discounts are expected to have a relatively minor impact on the electric utility. On
average, the electric utility expected its incremental cost to provide service to
qualified new and/or expanded customers.
FUNDING: None required.
Jord n Ayers
Deputy City Manager/Internal 6fervices Director
George F. Morrow
Electric Utility Director
ORDINANCE NO.
AN ORDINANCE OF THE LODI CITY COUNCIL
AMENDING CHAPTER 13.20, "ELECTRICAL
SERVICE," by adding a new Section 13.20.315 titled
Schedule EDR Economic Development Rates
BE IT ORDAINED BY THE LODI CITY COUNCILAS FOLLOWS:
SECTION 1. Lodi Municipal Code Section 13.20.210 is hereby amended by adding anew
section 13.20.315titled Schedule EDR to read as follows:
SCHEDULE EDR
ECONOMIC DEVELOPENT RATES
APPLICABILITY:
This rate is available to qualified commercial customers for the purpose of (i) new
industrial business attraction or existing industrial facility expansion, (ii) new business
attraction directly related to tourism and/or the wine industry and (ii) new business
attraction directly related to the green technology sector. Customers must file an
application requesting an Economic Development Rate (EDR) discount priorto taking
electric service for the qualified new or expanded load.
Industrial Businesses
QUALIFYING CUSTOMERS:
An industrial customer is one who operates facilities that are not involved in the sale of
goods and services directly to the public as determined by the Electric Utility Department
(EUD).
BASE DISCOUNT:
The Base Discountshall equal ten percent (10%) of the electric bill associatedwith the
qualified new or expanded load. The Base Discount shall not apply to the Solar
Surcharge, CEC fee, State Energy Tax or any other assessment or charge levied on
electric bills after the effective date of this rate schedule unless specifically provided
otherwise. (Note: The EDR is not available for G I customers.)
JOBS CREATION DISCOUNT:
An EDR qualified customer may receive an additional five percent (5%) discount of the
electric bill associated with the qualified new or expanded load if they create a minimum
of 25 newjobs (G2 customers) or 50 newjobs (G3, G4, G5 and 11 customers). If the new
job count associated with qualified new or expanded load falls below this level in any
given month, no Jobs Creation Discount shall be applied for that month. The Jobs
Creation Discount shall not apply to the Solar Surcharge, CEC fee, State Energy Tax or
any other assessment or charge levied on electric bills after the effective date of this rate
schedule unless specifically provided otherwise.
ENERGY EFFICIENCY DISCOUNT:
An EDR qualified customer may receive an additional five percent (5%) discount of the
electric bill associated with the qualified new or expanded load if the new facilities
constructed for the new or expanded load are awarded a Silver or higher "Leadership in
Energy and Environmental Design" (LEED) designation. Following receipt of the
applicable LEED certification, the additional discount shall become effective for the
remainder of the EDR period.
ENTERPRISE ZONE DISCOUNT:
An EDR qualified customer may receive an additional five (5%) discount of the electric
bill associated with the qualified new or expanded load if the new or expanded load are
located within the boundaries of the City's Enterprise Zone as set forth at the time of
customer application.
MAXIMUM DISCOUNT LEVEL:
In no event may a single new or expanded load receive a total discount in excess of
twenty percent (20%) of the electric bill associated with the qualified new or expanded
load.
MINIMUM LOAD ADDITION:
To qualify for the Economic Development Incentive Discount, the new or expanded load
must be sized at or greater than the following:
G2 50 kilowatts KW
G3
G4 100 KW
G5 200 KW
I1 I 2DO KW
Customer must provide information satisfactoryto EUD regarding the planned size of the
new or expanded load. The new or expanded load eligible for an EDR shall be separately
metered. If a customer's discounted load level falls below the applicable minimum level in
any given month, no discount shall be applied for that month.
LOAD FACTOR:
Customer shall maintain a monthly load factor of at least 45 percentfor the load receiving
a discount. If the load factor falls belowthis level in any given month, no discount shall be
applied for that month.
SCHEDULE 11 AMENDMENT
On the effective date of this Schedule EDR, the provision of the 11 Rate Schedule
providing for a 10% discount in electric rates for twelve months if a customer adds 200
KW or more of electric load, shall be null and void.
2
Tourism and/or Wine Industry Businesses
QUALIFYING CUSTOMERS:
The EDR shall apply only to those new businesses that are substantially and directly
related to tourism and/orthe wine industry as determined by EUD. Examplesof such
businesses include those that are marketing Lodi and/or local wine products, hotel
including bed and breakfast establishments, and restaurants, gift shops and boutique -
type stores within or immediately adjacent to the downtown Lodi shopping district.
BASE DISCOUNT:
The Base Discount shall equal ten percent (10%) of the electric bill associatedwith the
qualified new or expanded load. The Base Discount shall not apply to the Solar
Surcharge, CEC fee, State Energy Tax or any other assessment or charge levied on
electric bills after the effective date of this rate schedule unless specifically provided
otherwise.
"Green" Technoloay Businesses
QUALIFYING CUSTOMERS:
The EDR shall apply only to those new businessesthat are substantially and directly
involved in the development, marketing, sale, manufacturing and/or installation of green
technology products and services as determined by EUD. Examples of such businesses
include those directly involved in solar, wind, geothermal, biomass, and fuel cell
industries. Green Technology Businessesthat are otherwise eligible for an EDR
Industrial Business discount may elect to apply for that discount in lieu of this Green
Technology Business discount.
BASE DISCOUNT:
The Base Discountshall equal ten percent (10%) of the electric bill associatedwith the
qualified new or expanded load. The Base Discount shall not apply to the Solar
Surcharge, CEC fee, State Energy Tax or any other assessment or charge levied on
electric bills after the effective date of this rate schedule unless specifically provided
otherwise.
General Provisions
LENGTH OF DISCOUNT:
As to any customer, the EDR shall apply for a period of thirty six (36) months
TERM CIE' EDR SCHEDULE:
This Schedule EDR shall be in effect until June 30, 2011 for new customers. Once a
customer is placed on this rate schedule, however, that customer's discount shall be in
effect for thirty six (36) months unless terminated earlier as provided in this schedule.
IMPLEMENTATION:
EUD shall be responsiblefor establishing administrative rules and processes for
administering this rate schedule. Customers shall provide information on a timely basis to
enable EUD to verify eligibility and to administer the terms of this rate schedule.
SECTION 2. No Mandatory Duty of Care. This ordinance is not intendedto and shall not be
construed or given effect in a manner which imposes upon the City, or any officer or
employee thereof, a mandatoryduty of care towards persons or propertywithin the City or
outside of the City so as to provide a basis of civil liabilityfor damages, except as otherwise
imposed by law.
SECTION 3. Severability. If any provision of this ordinance or the application thereof to any
person or circumstances is held invalid, such invalidity shall not affect other provisions or
applications of the ordinance which can be given effect without the invalid provision or
application. To this end, the provisions of this ordinance are severable. The City Council
hereby declares that itwould have adopted this ordinance irrespectiveof the invalidityof any
particular portion thereof.
SECTION 4. All ordinances and parts of ordinances in conflict herewith are repealed
insofar as such conflict may exist.
SECTION 5. This ordinance shall be published pursuantto lawand shall become effective
30 days from the date of passage and adoption.
SECTION 6. This amended Schedule referenced above shall be effective on applicable
electric utility billings prepared by the City of Lodi on or after July 1, 2009, or the first date
allowable under State law.
ATTEST:
RANDIJOHL
City Clerk
El
Approved this 15t" day of April, 2009
LARRYHANSEN
MAYOR
State of California
County of San Joaquin, ss.
I, Randi Johl, C i Clerk of the City of Lodi, do hereby certify that Ordinance No. 1801 was
introduced at a regular meeting of the City Council of the City of Lodi heldApril 1,2009, and
was thereafter passed, adopted, and ordered to print at a regular meeting of said Council
held April 15, 2009, by the following vote:
AYES: COUNCIL MEMBERS— Hansen, Hitchcock,Katzakian, Mounce, and
MayorJohnson
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
Ifurther certifythat Ordinance No. 1801 was approved and signed bythe Mayoron the date
of its passage and the same has been published pursuantto law.
Approved to Form:
D. STEPHEN SCHWABAUER
City Attorney
5
RANDIJOHL
City Clerk
CITY OF LODI
ELECTRIC UTILITY DEPARTMENT
SCHEDULE EDR
ECONOMIC DEVELOPMENT INCENTIVE DISCOUNT
APPLICABILITY:
This rate is available to qualified commercial customersfor the purpose of industrial business
attraction or existing industrial facility expansion and (ii) new businesses directly related to
tourism and/or the wine industry. Customers must file an application requesting an Economic
Development Incentive Discount (EDR) prior to taking electric service for the qualified new or
expandedload.
Industrial Businesses
QUALIFYING CUSTOMERS:
An industrial customer is one who operates facilities that are not involved in the sale of goods
and services directly to the public as determined by the Electric Utility Department (EUD).
BASE DISCOUNT:
The Base Discount shall equal ten percent (10%) of the electric bill associated with the qualified
new or expanded load. The Base Discount shall not apply to the Solar Surcharge, CEC fee,
State Energy Tax or any other assessment or charge levied on electric bills after the effective
date of this rate schedule unless specifically provided otherwise. (Note: The EDR is not
available for G I customers.)
JOBS CREATION DISCOUNT:
An EDR qualified customer may receive an additional five percent (5%) discount of the electric
bill associated with the qualified new or expanded load if they create a minimum of 25 new jobs
(G2 customers) or 50 new jobs (G3, G4, G5 and 11 customers). If the new job count associated
with qualified new or expanded load falls below this level in any given month, no Jobs Creation
Discount shall be applied for that month. The Jobs Creation Discount shall not apply to the Solar
Surcharge, CEC fee, State Energy Tax or any other assessment or charge levied on electric
bills after the effective date of this rate schedule unless specifically provided otherwise.
ENERGY EFFICIENCY DISCOUNT:
An EDR qualified customer may receive an additional five percent (5%) discount of the electric
bill associated with the qualified new or expanded load if the new facilities constructed for the
new or expanded load are awarded a Silver or higher "Leadership in Energy and Environmental
Design" (LEED) designation. Following receipt of the applicable LEED certification, the
additional discount shall become effective for the remainder of the EDR period.
EDR-1/3 Effective July 1, 2009
Ordinance No.
CITY OF LODI
ELECTRIC UTILITY DEPARTMENT
SCHEDULE EDR
ECONOMIC DEVELOPMENT INCENTIVE DISCOUNT
ENTERPRISE ZONE DISCOUNT:
An EDR qualified customer may receive an additional five (5%) discount of the electric bill
associated with the qualified new or expanded load if the new or expanded load are located
within the boundaries of the City's Enterprise Zone as set forth at the time of customer
application.
MAXIMUM DISCOUNT LEVEL:
In no event may a single new or expanded load receive a total discount in excess of twenty
percent (20%) of the electric bill associated with the qualified new or expanded load.
MINIMUM LOAD ADDITION:
To qualify for the Economic Development Incentive Discount, the new or expanded load must
be sized at or greater than the following:
G3 50 KW
G5 200 KW
11 200 KW
Customer must provide information satisfactoryto EUD regarding the planned size of the new or
expanded load. The new or expanded load eligible for an EDR shall be separately metered. If a
customer's discounted load level falls below the applicable minimum level in any given month,
no discount shall be applied for that month.
LOAD FACTOR:
Customer shall maintain a monthly load factor of at least 45 percentfor the load receiving a
discount. If the load factor falls below this level in any given month, no discount shall be applied
for that month.
SCHEDULE 11 AMENDMENT
On the effective date of this Schedule EDR, the provision of the 11 Rate Schedule providing for
a 10% discount in electric rates for twelve months if a customer adds 200 KW or more of electric
load, shall be null and void.
EDR-213 Effective July 1, 2009
Ordinance No.
CITY OF LODI
ELECTRIC UTILITY DEPARTMENT
SCHEDULE EDR
ECONOMIC DEVELOPMENT INCENTIVE DISCOUNT
Tourism and/or Wine Industry Businesses
QUALIFYING CUSTOMERS:
The EDR shall apply only to those businesses that are substantially and directly related to
tourism and/orthe wine industryas determined by the Electric Utility Department (EUD).
Examples of such businesses include those that are marketing Lodi and/or local wine products,
hotel including bed and breakfast establishments, and restaurants, gift shops and boutique -type
stores within or immediately adjacent to the downtown Lodi shopping district.
BASE DISCOUNT:
The Base Discount shall equal ten percent (10%) of the electric bill associated with the qualified
new or expanded load. The Base Discount shall not apply to the Solar Surcharge, CEC fee,
State Energy Tax or any other assessment or charge levied on electric bills afler the effective
date of this rate schedule unless specifically provided otherwise.
General Provisions
LENGTH OF DISCOUNT:
As to any customer, the EDR shall apply for a period of thirty six (36) months
TERM OF ED SCHEDULE:
This Schedule EDR shall be in effect until June 30, 2011 for new customers. Once a customer
is placed on this rate schedule, however, that customer's discount shall be in effect for thirty six
(36) months unless terminated earlier as provided in this schedule.
IMPLEMENTATION:
EUD shall be responsiblefor establishing administrative rules and processesfor administering
this rate schedule. Customers shall provide information on a timely basis to enable EUD to
verify eligibility and to administerthe terms of this rate schedule.
EDR-3/3 Effective July 1,2009
Ordinance No.
�IFOS14
Please immediately conflim receipt
of this by calling 333-6702
CITY OF LODI
P. 0.130X 3006
LODI, CALIMRNIA 95241-1910
ADVERTISING INSTRUCTIONS
SUBJECT PUBLIC HEARING TO CONSIDER INTRODUCTION OF AN ORDINANCE
AMENDING CHAPTER 13.20, "ELECTRICAL SERVICE," BY ADDING A
NEW SECTION 13.20.315 TITLED, "SCHEDULE EDR — ECONOMIC
DEVELOPMENT RATES
PUBLISH DATE: SATURDAY, MARCH 21,2009
TEAR SHEETS WANTED: One (1) please
SEND AFFIDAVIT AND BILL TO:
DATED: THURSDAY, MARCH 19,2009
ORDERED BY:
JE6AlFER MIPERRIN, CMC
ASSISTANT 6TY CLERK
RANDI JOHL, CITY CLERK
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
RANDIJOHL
CITY CLERK
MARIA BECERRA
ADMINISTRATIVE CLERK
Faxed to the Sentinel at 369-1084 at,, 1
,• kil ri O� (date)
LhS Pnonea to cont rm rece pt of W pages at .3 JMP 6 R CF (iniva s)
formsladvins.doc
DECLARATION OF POSTING
PUBLIC HEARING TO CONSIDER INTRODUCTION OF AN ORDINANCE
AMENDING CHAPTER 13.20, "ELECTRICAL SERVICE," BY ADDING A
NEW SECTION 13.20.315 TITLED, "SCHEDULE EDR —
ECONOMIC DEVELOPMENT RATES"
On Friday, March 20, 2009, in the City of Lodi, San Joaquin County, California, a Notice
of Public Hearing to consider introduction of an ordinance amending Chapter 13.20,
"Electrical Service," by adding a new Section 13.20.315 titled, "Schedule EDR —
Economic Development Rates" (attached and marked as Exhibit A) was posted at the
following locations:
Lodi Public Library
Lodi City Clerk's Office
Lodi City Hall Lobby
Lodi Carnegie Forum
declare under penalty of perjurythat the foregoing is true and correct.
Executed on March 20, 2009, at Lodi, California.
JE IFER M PERRIN, CMC
ASSISTANT CITY CLERK
N:1Administration\cLERxlFocros\n$cPosTEUD.noc
ORDERED BY:
RANDIJOHL
CITY CLERK
MARIA BECERRA
ADMINISTRATIVE CLERK
• CITY OF LODI NOTICE OF PUBLIC HEARING
Carnegie Forum Date: April 1, 2009
- 305 West Pine Street, Lodi Time: 7:00 p.m.
For information regarding this notice please contact
Randi Johl�"
City Clerk EX, H'I B 1 A
Telephone: (209) 333-6702
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on Wednesday, April 1, 2009, at the hour of
7:00 p.m., or as soon thereafter as the matter may be heard, the City Council will
conduct a public hearing at the Carnegie Forum, 305 West Pine Street, Lodi, to
consider the following matter:
a) Introduce ordinance amending Chapter 13.20, "Electrical Service," by
adding a new Section 13.20.315 titled, "Schedule EDR — Economic
Development Rates"
Information regarding this item may be obtained in the Electric Utility
Department, 1331 South Ham Lane, Lodi, (209) 333-6762. All interested
persons are invited to present their views and comments on this matter. Written
statements may be filed with the City Clerk, City Hall, 221 West Pine Street,
2I,d Floor, Lodi, 95240, at any time prior to the hearing scheduled herein, and oral
statements may be made at said hearing.
If you challenge the subject matter in court, you may be limited to raising only
those issues you or someone else raised at the public hearing described in this
notice or in written correspondence delivered to the City Clerk, 221 West Pine
Street, at or prior to the close of the public hearing.
By Qrder—Qf the Lodi City Council:
f1
Ran
City Clerk
Dated: March 18, 2009
Approved as to form:
D. Stephen Schwabauer
City Attorney
CLERKV'UBHEAFMOTICESW016ud.dx 3/17109