HomeMy WebLinkAboutAgenda Report - March 21, 2001 E-15 PHm
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` CITY OF LODI COUNCIL COMMUNICATION
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AGENDA TITLE: Set Public Hearing for April 18, 2001 to introduce Ordinance for the implementation
of a Market Cost Adjustment mechanism
MEETING DATE: March 21, 2001
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council set a public hearing for April 18, 2001 and by
ordinance approve a Market Cost Adjustment policy and mechanism.
BACKGROUND INFORMATION: The City of Lodi's historical power purchase strategy has been to be
in a partial deficit energy position in the winter season. This strategic
position has been very successful because the price for power on the
spot and short-term market was generally very low during this period. The gas and electric energy market
has seen dramatic volatility in recent months and has caused the City of Lodi to take various mitigation
strategies. The nature of the market situation has caused the cost of purchased energy to be significantly
higher than originally budgeted, although without the mitigation strategies would have been much more
severe. It is anticipated that the market will improve, but should remain volatile for at least two more
years.
The Market Cost Adjustment will allow the Electric Utility Department to better follow the market and to
capture both recent under -collections and future costs. This mechanism would be adjusted on a quarterly
basis and would utilize an approved formula. The formula will reflect a true up of prior costs and a rolling
twelve-month projection of purchased power costs. The mechanism is designed to minimize spikes to the
adjustment rates. It is anticipated that the adjustment may go up or down depending on the various short
and long-range strategies the City of Lodi elects to employ and the state of the power market at the that
time.
FUNDING: Not Applicable
A, //� /J/�_ a- -
Alan N. Vallow
Electric Utility Director
ANV/Ist
C: City Attorney
APPROVED:
H. Cixon Olynn - City Manager
PROOF OF PUBLICATION
(2015.5 C.C.P.)
STATE OF CALIFORNIA,
County of San Joaquin.
I am a citizen of the United States and a resident of
the County aforesaid; I am over the age of eighteen
years, and not a party to or interested in the above -
entitled matter. I am the principal clerk of the
printer of the Lodi News -Sentinel, a newspaper of
general circulation, printed and published daily,
except Sundays and holidays, in the City of Lodi,
California, County of San Joaquin, and which news-
paper has been adjudged a newspaper of general
circulation by the Superior Court, Department 3, of
the County of San Joaquin, State of California,
under the date of May 26th, 1953, Case Number
65990; that the notice, of which the annexed is a
printed copy (set in type not smaller than non-
pareil), has been published in each regular and
entire issue of said newspaperand not in any supple-
ment thereof on the following dates, to -wit:
........ March..2......................................
all in the year 2001„
I certify (or declare) under penalty of perjury that
the foregoing is true and correct.
Dated at Lodi, California, this .... ?4.... day of
March
11 2001
:........VY[J:
Signature
This space is for the Ctl�Mftt}Ys Filing Stamp
i I
aIAR 29 X9 5 I
Bucii
CITY Cf 0i,
Proof of Publication of
...............Public Hearing..........................
PROOF OF PUBLICATION
NOTICE OF PUBLIC HEARING
NOTICE' Is NIRiEBY OIvEN that on".
Wednesday, Aprh; 1s,-2001 at the tour of;
7:00 p.m., or as soon thereafter as the matter_j
may be heard, the Clty Council will conduct ah.
Public Hearing at the Carnegie Wrum, 305 West:
Pine Street, Lodi, to consider Ula following mat-';
ter:
Z) Introduce ordinance for the ImpiemeMstlon of
a Market Cost Adjustment Policy and
Mechanismm
Information regarding this fern may be obtained
In the office of the Utility Department Director,
1331 South Ham Lane, Lod, California. All Inter-
ested persona are Invited to present their views
and comments on this matter. Written statements
may be Ned with the City Clerk at any time prior
to the hearing scheduled herein, and gral state-
ments may be made at Bald hearing.
If you challenge the subject matter In court, you
may be limited to raising only those Issues you or
someone alae raised at the Public Hearing
described In this notice or in written correspon-
denoll delivered to the Cly Clerk 221 West Pine
Street, at or prior to the Public Hearing.
fay Order of the Lod Cly Council:
Susan J. Blaekson
Cly Clerk
tads March 21, 2001
Approved as to form:
Rendall A. Hays
City Attorney
March 24, 2001 ^ 3197
3197
S, -j61 /n t
PROOF OF PUBLICATION
This space is for the County Clerk's Filing Stamp
(2015.5 C.C.P.)
R E l.`/'Ell Vtw— D
--
NOTICE OF PUBLIC HEARING
5. Tne Electric Many Ueparimem snan tu.-nrin r
the City Council a notice of any proposed activatiol
APRIL 18, 2001
of Change in the MCA Billing Factor. Airy a: ivat of
STATE OF CALIFORNIA, NOTICE IS HEREBY GIVEN that on Wednesday,
APR 1 2 2 0 01
or change in the MCA Billing Factor ,,quire!
approval by the CAy Council.
April 18, 2001 at the hour of 7:00 p.m., or as soon
thereafter as the matter may be heard, the City
S. The Electric Utility Department genera0 r ;hal
Count of San Joaquin. . Council will conduct a Public Hearing at the
County Q O'itf 0 -Jerk Pine
the
makeMCA Billing Factors effective as a r ae firs
day of the appropriate month. Adjustments to the
Ca Forum, 305 West Street. Lod. to
1thr of ( consider the introduction of an ordinance (as
E �' C7 `l I
MCA shall be no more frequent than quarte,ty and
n0 less than semi-annually.
described below) for the implementation of a Market
Cost Adjustment Policy and Mechanism.
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PROPOSED ORDINANCE
YM,[R COST AaJO%?WW eM1 W,0 r.CTOR
SECTION 1.Lod Municipal Code Chapter 13.20 -
Electrical Service, Article III. Rates, is hereby
•^' °"'"0�'" "a' "'• °• `^°�^ ^ °"•^ c...• >.,.» .
"� •' °"•° "�'°` "« a �«, awn«.cro
I am a citizen of the United States and a resident o amended by adding Section 13.20.175 - Schedule
a•"Nf 0" °i•
MCA - Market Cost Adjustment as follows:
c'••• a "
the County aforesaid; I am over the age of eighteel
• SCHEDULE MCA- MARKET COST ADJUST-
EA. It 70, m foo nn* } soo , a,. a0c•-_
MENT
years, and not a party to or interested in the above
wa l=_a.w.. wo.«. I a.000
APPLICABIIlTY: t
ev 1 00x0
entitled matter. I am therinci al clerk of the When in effect, this schedule is applicable to an
P P
a••'-1°0
areas served by the Chy and to all kilowatt-hours.
bided under all rate schedules as defined under the
printer of the Lodi News -Sentinel, a newspaper o special conations of the rate schedules labeled
a,
_ Purchased Power Adjustment
general circulation, printed and published daily PURPOSE:
-
Generally, pourer supply costs will be recovered
except Sundays and holidays, in the City of Lodi through application of the base rates. In the event
that substantial changes in projected power supply
California, County of San Joaquin, and which news costs either or decreases. %
MandatoryThis
not io nd sn nee s•rued
Market Cost Adjustment Billing Factory vvall be ads
vated to provide for increases of decreases in the
paper has been adjudged a newspaper of generl city's charges for electric service. The Electric
nanceenis intended ll M co
or given effect in a manner which imposes upo- tre
Chy, or any officer or employee thereof, a mancato.
Utility Director shall develop and recommend a
ry duty of care towards persons or property w •hrn
circulation b the Superior Court, Department 3, ( MCA Billing Factor to be effective on a specified
y P P
the City or outside of the City so as to provica a
basis
date for Ma approval of the City Council,
the Count of San Joaquin, State of Californi APPLICATION OF MARKET COST
County Q
of civil liability for damages, except as ou e: -
wise
Sectiopos,Odberaw.
Section 3. - Severability. If any provision of this c rci-
ADJUSTM£NT:
Whenstment
under the date of May 26th, 1953, Case Numb, (MCABF) fMarket
mate
nance of the application thereof to any person or pr.
stances bold invalid, such she l riot
Factorparticular Schad--
9affect
tions f
other provisions M applications W the crdi•
p
ule as designated in the attached MCABF table, in
65990; that the notice, of which the annexed is cams per kWh, shall be applied to kilowatt-hours
nano which can be given effed without the in, slid
provision or application. To this end, the
sold on and oder the effective date. and continuing
of this ordinance are severable. The City Ca,.Oc;l
thereafter unlit the next base rate change or until a
printed copy (set in type not smaller than no revision to the Markel Cost Adjustment Biding
Aeby declares that 8 would have -adopted -nis
Factor becomes effective. The dollar amount to be
ordnance irrespective ofthe invalidity ofany par ic•
ular portion thereof.
pareil), has been published in each regular at added to or subtracted from each bill due to the
Mand Cost Adjustment shall be obtained by mufti-
prying the number of kilowatt-hours for which the bill
SECTION 4. All ordinances end parts of ardinarces
in
entire issue of said newspaperand not in any suppl-•; Is rendered by the applicable Markel•.Coat
conflict
in �tyd herewithrd are repealed insofar s: cr,
'Adjustment Biding Factor.
� exist
.
ment thereof on the following dates, to -wit: CALCULATION OF THE POWER COST ADJUST-
SEC71OOeNrtS. ThisA Market
eel C,6t
MENT BILLING FACTOR:
hall be effective on
Adjusimutility
billings prepared by the City of Lodi on or agar
1. When the Electric utility Director deems that
Ap r i 1 2 1 O in have
'ire 1, 2001,
.... . , . .. . .... . . .. . .. . .. • . • ... substantial changes power supply costs
occurred relative to the casts Included in base rates,
the Markel Cost Adjustment Billing Factor shad be
Information regarding this matter may be obtain. d
in the office of the Electric Utility Departm- ,t
activated following Etre approval of the City Council.
Director, 1331 South Ham Lane, Lod, California. F11
i
2
all in the year 2 O O 1 . The Billing Factor shall remain in effect until Ne
•' -"'
interested personas are invited to present their vie,
and commands on this matter. Written stateme,us
next base rate change or until a revision to the
Billing Factor is necessary.
may be filed with the City Clerk at any time prior '�
3. While the Billing Factor is activated, a Market
the hearing scheduled herein, and oral statemen. s
Cost Adjustment account shall be maintained.
I certify (or declare) under penalty of perjury tha' Entries into this account shad be:
may the trade at said hearing.
If you challenge the subject matter incoun.you mav
a. The balance from the previous month•
be limited to raising only those issues you or sora-
b. The increase or decrease in charges for elec-
the foregoing is true and correct. b.
tric service bided using the applicable Baling Factor,
one else raised at the Public Hearing described ih
notice
ce clerk ot2z correspondence
t�P ne sceei�
and
Led:
the
C. Any interest accruing to the account.
California at or prior to Me Public Hearin 9•
Dated at Lodi, California, this .....1 • day of 4. The MCA Biding Factor shad be designed by giv
By Order of the Lodi City Council:
Ing consideration to the fallowing factors:
a. Rale stability is desirable and frequent changes
Susan J. &aflcstdn
in the MCA Biding Factor are undesirable.
Apr 11 2001 b. The financial Integrity of the Electric Utility
by applying a MCA
Department shad when
Biding Fodor, when necessary, to ensure that the
necessary
I /} Electric edUtility Department does rid ovound fin or
V,r�.', r!' undercdted the revenue required for sound finan-
Oath Ark 21, 2001
Approved as to forth:
Randall A. Hays
City AComay
. ..... ciat
Signature
operation. ...
April 2. 10. 2001 —3231
3231
PROOF OF PUBLICATION
Please immediately confirm receipt
of this fax by calling 333-6702
CITY OF LODI
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
ADVERTISING INSTRUCTIONS
SUBJECT: PUBLIC HEARING FOR INTRODUCTION OF DRAFT ORDINANCE FOR THE
IMPLEMENTATION OF A MARKET COST ADJUSTMENT POLICY AND MECHANISM
PUBLISH DATE(s): MONDAY, APRIL 2, 2001
TUESDAY, APRIL 10, 2001
TEAR SHEETS WANTED: Three (3) please
SEND AFFIDAVIT AND BILL TO:
DATED: MARCH 30, 2001
ORDERED BY:
JACQUELINE L. TAYLOR
DEPUTY CITY CLERK
SUSAN BLACKSTON, CITY CLERK
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
NNIFEITY
. PERRIN
IP—U-T—Y CLERK
Verify Appearance of this Legal in the Newspap 2 er -Copy to File:
1
AFemed to the Sentinel at at a� iime) on O—(date)
Sharon Phoned t confirm receipt of all p ges at (time Jac(in
C.ompcIczli t ww s- com
fornubrdvins.Joc
NOTICE OF PUBLIC HEARING
APRIL 18, 2001
NOTICE IS HEREBY GIVEN that on Wednesday, April 18, 2001 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 introduction of
an ordinance (as described below) for the implementation of a Market Cost Adjustment
Policy and Mechanism.
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PROPOSED ORDINANCE:
SECTION 1. Lodi Municipal Code Chapter 13.20 - Electrical Service, Article Ill.
Rates, is hereby amended by adding Section 13.20.175 — Schedule MCA — Market Cost
Adjustment as follows:
SCHEDULE MCA — MARKET COST ADJUSTMENT
APPLICABILITY:
When in effect, this schedule is applicable to all areas served by the City and to all
kilowatt-hours billed under all rate schedules as defined under the special conditions of
the rate schedules labeled Purchased Power Adjustment.
PURPOSE:
Generally, power supply costs will be recovered through application of the base rates. In
the event that substantial changes in projected power supply costs occur, either
increases or decreases, the Market Cost Adjustment Billing Factor will be activated to
provide for increases or decreases in the City's charges for electric service. The Electric
Utility Director shall develop and recommend a MCA Billing Factor to be effective on a
specified date for the approval of the City Council.
APPLICATION OF MARKET COST ADJUSTMENT:
When applicable, the Market Cost Adjustment Billing Factor (MCABF) for a particular rate
schedule as designated in the attached MCABF table, in cents per kWh, shall be applied
to kilowatt-hours sold on and after the effective date, and continuing thereafter until the
next base rate change or until a revision to the Market Cost Adjustment Billing Factor
becomes effective. The dollar amount to be added to or subtracted from each bill due to
the Market Cost Adjustment shall be obtained by multiplying the number of kilowatt-hours
for which the bill is rendered by the applicable Market Cost Adjustment Billing Factor.
CALCULATION OF THE POWER COST ADJUSTMENT BILLING FACTOR:
1. When the Electric Utility Director deems that substantial changes in power supply
costs have occurred relative to the costs included in base rates, the Market Cost
Adjustment Billing Factor shall be activated following the approval of the City
Council.
2. The Billing Factor shall remain in effect until the next base rate change or until a
revision to the Billing Factor is necessary.
3. While the Billing Factor is activated, a Market Cost Adjustment account shall be
maintained. Entries into this account shall be:
a. The balance from the previous month;
b. The increase or decrease in charges for electric service billed using the
applicable Billing Factor; and
C. Any interest accruing to the account.
4. The MCA Billing Factor shall be designed by giving consideration to the following
factors:
a. Rate stability is desirable and frequent changes in the MCA Billing Factor
are undesirable.
b. The financial integrity of the Electric Utility Department shall be
maintained by applying a MCA Billing Factor, when necessary, to ensure
that the Electric Utility Department does not overcollect or undercollect
the revenue required for sound financial operation.
5. The Electric Utility Department shall furnish to the City Council a notice of any
proposed activation or change in the MCA Billing Factor. Any activation or
change in the MCA Billing Factor requires approval by the City Council.
6. The Electric Utility Department generally shall make the MCA Billing Factors
effective as of the first day of the appropriate month. Adjustments to the MCA
shall be no more frequent than quarterly and no less than semi-annually.
MARKET COST ADJUSTMENT BILLING FACTOR
The Market Cost Adjustment Billing Factor by designated rate schedule, in cents
per kilowatt-hour, shall be shown in this Section. Certain classes may have a
tiered MCABF by level of monthly consumption.
Class
Cents per
kWh
Date
Effective
EA, EE under 300 kWh
1.250
June 1, 2001
EA, EE 301 to 600 kWh
1.900
June 1, 2001
EA, EE above 600 kWh
3.000
June 1, 2001
ED, EF
0.000
June 1, 2001
EM
0.000
June 1, 2001
EL
0.000
June 1, 2001
1
2.000
June 1, 2001
G2
2.000
June 1, 2001
G3
0.000
June 1, 2001
G4
0.000
June 1, 2001
G5
0.000
June 1, 2001
11
0.000
June 1, 2001
Section 2. - No Mandatory Duty of Care. This ordinance is not intended to and shall
not be construed or given effect in a manner which imposes upon the City, or any officer
or employee thereof, a mandatory duty of care towards persons or property within the
City or outside of the City so as to provide a basis of civil liability for 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 it would have adopted this ordinance irrespective of the
invalidity of 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 Schedule MCA — Market Cost Adjustment shall be effective on
applicable electric utility billings prepared by the City of Lodi on or after June 1, 2001.
Information regarding this matter may be obtained in the office of the Electric Utility
Department Director, 1331 South Ham Lane, Lodi, California. All interested persons are
invited to present their views and comments on this matter. Written statements may be
filed with the City Clerk 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, Lodi, California at or
prior to the Public Hearing.
By Order of the Lodi City Council:
Susan J. Blackston
City Clerk
Dated: March 21, 2001
Approved as to form:
Randall A. Hays
City Attorney