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Home My WebLink AboutAgenda Report - October 18, 1989 (58)COUNCIL COMMUNICATION TO: THE CITY COUNCIL COUNCIL MEETING DATE: OCTOEER 18, 1989 FROM: THE CITY MANAGER'S OFFICE SUBJECT: ELECTRIC UTILITY INFORMATION PROGRAM - NEWSLETTER EXPLAINING 1989 RATE INCREASE RECOMMENDED ACTION: That the City Council authorize sending an informational newsletter to Lodi custcmers as a first step in a Departmental Information Program. BACKGROUND INFORMATION: The City Council directed the Electric Department to investigate an informational program which would better inform Lodi consumers. Such an informational program would supplement the information provided in the media. The investigation was to provide two immediate results: first, a newsletter explaining the 1989 rate increase; second, an economic analysis of the cost/benefit of an on-going informational program. An information newsletter (attached hereto) has been prepared which generally explains the impact of the rate increase, its proportionment toward residential users, and growth of inflation over the period since the last electric revenue increase. The cost of preparing and distributing the newsletter is $5,524 as detailed in the attached cost estimate. The staff has not had opportunity to fully explore cost/benefit of all appropriate informational program alternatives. We will submit our analysis of an on-going program to you shortly. While the staff recommends sending the newsletter, we recognize the excellent ,lob done by the News -Sentinel keeping the public informed. In fact, nearly all material contained in the newsletter has received coverage by the press. Henry J. Rice Electric Utility Director Attach. (3) CC/NEWSL/TXTU.01D r_. City electric rates are always a large percent (%) below PG&E. Present Lodi residential rates are 38.7%below PG&E. (Based upon 500 kilowatt-hours monthly average residential usage,) The proposed Lodi electric rate increase to become effective November I, 1989, will result in a residential rate 21.1% below the present PG&E rate for the above usage, A f t e r January 1, 1990, the Lodi residential rate will be 34.2% below PG&E for the above usage. This results because PG&E has applied for an electric rate increase to become effective January 2, 1990. Therefore, Lodi residential rates will almost return to the present difference currently enjoyed by our customers. EFFECT ON RESIDENTIAL CUST02CERS With City Council approval of the proposed rates, a residential customer who uses 500 kilowatt-hours (kwh) of electricity per month (typical average customer usage) would see a monthly electric bill increase of $4.79 in summer, from $32.73 to $37.52; and $4.96 in winter, from $34.33 to $39.29. A residential individual bill may differ from this example. COMPARISON WITH PG&E LOCAL RESIDENTIAL RATES In comparfng the proposed Lodi rates to PG&E's present local base customer rates at the usage of 500 kwh, there would be a monthly difference of 58.05 in suer, $37.52 (Lodi) to $45.53 (PG&E); and $8.19 in winter, 839.29 to $47.48. PG&E has a requested increase scheduled to be implemented January 1, 1990, which will additionally widen the difference. ELECTRIC RATE ADJUSTMFM Customer GateQory Residential (EA) Small Commercial (Gz) Medium Commercial (G2) Industrial �G3) Twelve Month Number of Increase Perces Customers 28,500 14.0% 2,070 5.3% 210 4.4% 19 0_4$ 30 40 a0 CITY G. LODI ELECTRIC UTILITY DEPARTMENT 0 RESIDEMtAL SMALL COYYERCUL MEDIUM COMMERCIAL LARGE COMMANDUSTRLAL = rASTING ® POST 11/t/89 OM POST 1/1/90 ELECTRIC RATE ADJUSTMENT Customer Cat.eaory Residential (FA) Small Commercial (G1) Medium Commercial (G2) Industrial (G3) City electric rates are always a large percentage (%) below PG&E. The graph at the left illustrates average savings in percent that Lodi customers realize over those of the surrounding investor-owned electric utility (PG&E). Savings comparisons are shown based on the existing rates for Lodi and PG&E, on the Lodi 11/1/89 rate adjustment, and on the PG&E requested rates for 1/1/90. Number of Customers 18,500 2,070 210 19 THE EFFECT OF THE ELECTRIC UTILITY PROPOSAL ON RESIDENTIAL CUSTOMERS. Twelve Month Increase Percent 14.0% 5.3% 4.4% 0.4% With City Council approval of the proposed rates, a residential customer who uses 500 killowatt-hours (kwh) of electricity per month (typical average customer usage) would see a monthly electric bill increase of $4.79 in summer, from $32.73 to $37.52; and $4.96 in winter, from $34.33 to $39.29. A residential individual bill may differ from this example. COMPARISON WITH PG&E LOCAL RESIDENTIAL RATES- In comparing the proposed Lodi rates to PG&E's present local base customer rates at the usage of 500 kwh, there would be a monthly difference of $8.01 in summer, $37.52 (Lodi) to $45.53 (PG&E); and $8.19 in winter, $39.23 to $47.48. PG&E has a requested increase scheduled to be implemented January 1, 1990, which will additionally widen the difference. NEWSLETTER PRELIMINARY COST ESTIMATE 3ased on 22,000 copies of a two-sided, black and white, bulk rate iewsl etter: Label purchase Label printing Label application/Fold/Staple Typeset Printing Mailing (13.2/ f l yer ) $ 110 Finance Department 1,760 150 600 2,904 $5,524 25.1/flyer he Special Education class in Lodi and the Valley Regional in Stockton )ffer newsletter label application, folding and sealing services. COMMON RATE SCHEDULE DEFINITIONS Billing Cycle: The time period for which charges for electric power use are calculated. Billing Demand: The demand upon which billing tc, a customer is based. Common Areas: Areas which contain hallway and stairwell lighting, laundry rooms, swimming pool and other recreatior,z i areas, etc., which are available for use by all tenants. Customer Char e. A flat charge always collected regardless of the amount of energy used (does not apply to residential service). Demand: Demand is the average of the rate of energy consumption during a given period of time (interval, usually fifteen minutes). I t is measured in kilowatts (kw). Demand meTers record the highest demand occurring. Diversified Resistance Welder Load: The total of all installed individual resistance welder ratings as computed by the method shown in the Electric Utility Department's Pules and Regulations. Master Meterinq: The case where more than one premise has been allowed to be served through a single (master) meter. Metering Interval: The time period (usually fifteen minutes) over which demand readings are determined. Minimum Chai-ge: A provision in a rate schedule that a customer's bill cannot fall below a specified level (applies to residential service only). No billing for the Minimum Charge occurs once a certain level of energy has been purchased. Primary Service Voltage: The voltage class for service at 12,000 volts. totalizing: The time -interval by time -interval (usually fifteen minutes) summation of demand and energy from more than one set of meters. 'ihe highest such totalized demand is the Billing Demand for the Billing Cycle. Transfer from Residential to Commercial Service Within Ham- Business -license issuance initiates such transfer through ,:he City Finance Department. w RESIDENTIAL ELECTRIC BILL CALCULATIOK (Eased cn Rates tf ectTve 11/1/89) SUMX,ER (Kay through October) Example 1'1 - Usage 50 kwh Minimum Charge 5 4.00 Energy Charge First 440 ksh: 50 kwh x 5.06974 per kWh 3.49 Over 440 kwh: 0.00 Monthly Charge - your electric bill : 5-'4.00 (The Minimum Charge is higher than the Energy Charge; therefore, there is .na Energy Charge.) Example f2 - Usage 600 kwh Minimum Charge 4.00 Energy Charge First 440 kwh: 440 kwh x $.06974 per kWh 530.69 Over 440 kwh: 160 kWh r. $.11396 per kwh 18.23 $n—.,DT Konthly Charge - your electric bill : $46.92 (The Energy Charge is higher than the Kinimurn Charge; therefore, there I s w Minimum Charge.) WINTER (November through April) Example f3 - Usage 50 kvtb Minimum Charge $ 4.00 Energy Charge First 400 kwh: 50 kwh x S.06974 per kwh S 3.43 Over 400 kwh: 0.00 Monthly Charge - your electric bill: $ 4.00 (The Minimum Charge is higher than the Energy Charge; therefore, there i s no Energy Chzrge.) Example 4!4 - Usage 600 kwh Minimum Charge S 4.00 Energy Charoe First 406 kwh: 400 kwh >: S.05974 per kwh 527.90 Over 400 kwh: 200 kwh x 5.11396 per kwh 22.79 150.69 Monthly Chzrge - your electric bill : 250.69 (The Eneroy Charge is higher than the Minimus Charge; therefore, there is no M,inimurn Charge.)