HomeMy WebLinkAboutResolutions - No. 2001-176RESOLUTION NO. 2001-176
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING
REVISION IN THE MARKET COST ADJUSTMENT SCHEDULE
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WHEREAS, as recently as two months ago there were dire predictions of blackouts for up to
every third day this summer. In order to provide reliable and un -interruptible power to it's customers in the
face of possible blackouts, the City of Lodi's Electric Utility Department (EUD) purchased power resources
within the last six months to have excess power supply available. At that time the value of this excess
capacity was projected by NCPA and others to have a value of up to $400/Mwh through the end of this
calendar year. The EUD entered into contracts at levels between $120 to $170 per Mwh which saved the
City over $12,000,000.00 compared to exposure to the spot market last winter; and
WHEREAS, the power markets have changed radically in the last two months due to price caps
imposed by the Federal Energy Regulatory Commission (FERC) on June 19, 2001. Wholesale market
prices applicable to Northern California have dropped significantly since the price cap policy has been in
effect. Spot market prices for on -peak power have generally ranged from $200 to $400 per Mwh this
calendar year through early June 2001 for Northern California delivery. Prices for the last two weeks have
been on the order of $50 to $80 per Mwh. With these new price caps in place, it appears that prices (spot
and forward) will hold at $90 or lower. Given the contract purchases by EUD are above these levels for
the remainder of this calendar year, there is a significant increase in the EUD's power costs which require
the MCA to be revised upward. Beginning in 2002, the EUD has power contracts on the order of $65,
which may afford the ability to revise the MCA downward; and
WHEREAS, Lodi is not alone in facing new rate increases. Intervention by FERC in the power
markets and the continuing effects of the PG&E bankruptcy have driven up the costs of most NCPA
members. Palo Alto has recently raised their rates in excess of 40 percent and Roseville has announced
a proposed increase of up to 20 percent. Lodi's proposed MCA raises system average rates between 15
and 20 percent compared to current levels. Lodi's rates, as proposed, will maintain an estimated 30%
advantage over PG&E's current rates; and
WHEREAS, the Electric Utility Department staff will continue to explore other means of reducing
both bulk power and operating costs. A full report and review of the MCA will be scheduled for a Council
meeting in October.
NOW, THEREFORE, BE IT RESOLVED, that the Lodi City Council does hereby authorize a
revision to the Market Cost Adjustment (MCA) Schedule attached as Exhibit A.
Dated: July 18, 2001
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I hereby certify that Resolution No. 2001-176 was passed and adopted by the Lodi City Council in
a regular meeting held July 18, 2001 by the following vote:
AYES:
COUNCIL MEMBERS — Hitchcock, Howard, Land and Mayor Nakanishi
NOES:
COUNCIL MEMBERS — None
ABSENT:
COUNCIL MEMBERS — None
ABSTAIN:
COUNCIL MEMBERS — Pennino
SUSAN J.BLACKSTON
City Clerk
2001-176
• CITY OF LODI
i ELECTRIC UTILITY DEPARTMENT
• ' 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. 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 will be activated to provide for
increases or decreases in the City's charges for electric service.
Rates:
The Market Cost Adjustment (MCA) is applied to specific classes as a cents per kWh charge by a
Market Cost Adjustment Billing Factor (MCABF). For some classes, the MCA may be zero. The
following schedule provides the MCABF by class.
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 mo hly consumption.
Class
Cents per
kWh
Date
Effective
EA, EE under 300 kWh
2.5
August
1, 2001
EA, EE 301 to 600 kWh
3.5
August
1, 2001
EA, EE above 600 kWh
4.5
August
1, 2001
ED, EF
0
August
1, 2001
EM
0
August
1, 2001
EL
0
August
1, 2001
G1
3.0
August
1, 2001
G2
3.0
August
1, 2001
G3
1.9
August
1, 2001
G4
1.9
August
1, 2001
G5
1.3
August
1, 2001
11
0
August
1, 2001
Effective August 1, 2001
MCA -1/1 Ordinance No. 1701