HomeMy WebLinkAboutAgenda Report - July 17, 1991.4 OF
Cllr' OF LORI
c�4ra�'
COUNCIL COMMUNICATION
J
AGENDA TITLE: USE OF "PURCHASED POWER COST '(PPCA) FOR A
THREE-MONTH PERIOD
MEETING DATE: JULY 17, 1991
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council approve application of the PPCA at
a level of 11 mills/kwh beginning with bills prepared on
or after August 1, 1991 and terminating with completion
of the October 1331 billing cycle.
BACKGROUND INFORMATION: The Electric Rate Proposal approved by the City Council
January 16, 1991 acknowledged that language was added in
the tariff sheets to incorporate a PPCA clause to protect
against revenue erosion. The PPCA was characterized as a
method to collect revenue to cover significant expense items which were not
anticipated.
Wbm the January 16, 1991 proposal was made, vie could not adequately project the
full impact of either the Middle East war on fuel prices or large purchases of
supplemental energy during our summer peak load period.
The success of `Desert Storm' maintained stable fuel prices, but adjustment in power
plant operation planned for summer 1991 will result in unanticipated energy
purchases during the summer period. Power plant operation is set by Northern
California Power Agency (NCPA). ?he power plants being controlled include
hydroelectric, geothermal steam and gas turbine. Hydroelectric and gas turbine
production is expected to remain consistent with the budget, however, geothermal
steam production has been restructured to maintain capacity for future periods.
Project participants have determined that such altered production will require some
supplemental purcheses of energy this summer and next.
Such supplemental purchases of energy this sunnier will be from PG&E and others and
result in an increased Lodi revenue requirernent of approximately $1,250,000.
These peak period purchases were not anticipated when the NCPA budget was
incorporated into our rate determination. Imposition of a PPCA during August,
September and October will collect most of the revenue difference attributable to
this summer peak period.
APPROVED:
1
THOMAS A. PETERSON
City Manager
CC-PPCA/CO.COM cc -1
Use o f "Purchased Power Cost Adjustment" (PPCA) for a Three -Month Period
July 17, 1991
Page two
Anticipated revenue shortfall of approximately $1,250,000 i s expected to be
collected as follows:
Month Anticipated Sales PPCA Collection Amount
August 37,858,000 kwh
September 37,997,000 kwh
October 28,769,000 kwh
11 mills/ kwh $416,488
11 mills/kwh 417,967
11 mi l 1s/kwh 316,459
$1,150,914
Existing
rates applied to a
residential customer using
the average amount of energy
per month
of 550 kwh would
yield $49.72. Application
of this PPCA would increase
that bill
$6.05 per month to
$55.77 over the three-month
period.
FUNDING: None Required
Henry J. R i e
Electric Utility Director
cc: Assist. Electric Utility Director
Manager, Rates & Resources
CC-PPCA/CO.COM
A RESCLLT[ION OF THE ISI CITY OJLNCL
AL MHOFI?]U APPLICATION OF THE 7 -CHAS ) POWER COST ADJUSTMENT"
(PPCA) FOR A THREE-MONTH FEP"
WHEREAS, Ordinance 1507 adopted by the Lodi City Council on
January 16, 1991 approved the establishment of revised rates for the
sale of electric energy by the City of Lodi, and acknowledged that
language had been included in the tariff sheets to incorporate a
"Purchased Power Cost Adjustment" (PPCA) clause which would enable
the City to later collect revenue to cover significant expense items
which were not anticipated; and
WHEREAS, because of adjustment in power plant operation in 1991,
unanticipated supplemental purchases of energy from Pacific Gas and
Electric and others will result in an increased Lodi revenue
requirement of approximately $1,250,000;
NOW, THEREFORE, BE IT RESOLVED, the Lodi City Council hereby
approves application of the PPCA, thereby increasing residential
customer billings at a level of 11 mills/kwh beginning with bills
prepared on or after August 1, 1991 and terminating with completion of
the Gctober 1991 bi lling cycle.
Dated: July 17, 1991
I hereby certify that Resolution No. 91-138 was passed and
adopted by the Lodi City Council in a regular meeting held July 17,
1991 by the following vote:
Ayes : Council Members - Pinkerton, Sieglock, Snider and
Hinchman (Mayor)
Noes : Council Members - Pennino
Absent: Council members - None
akeYl /)1
Alice M. Ach�e
City Clerk
91-138
RES91138/TXTA.02J