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HomeMy WebLinkAboutAgenda Report - October 18, 2017 G-01 PHTM CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: MEETING DATE: PREPARED BY: AGENDA ITEM c3I Public Hearing to Consider Introducing an Ordinance Amending Lodi Municipal Code Chapter 13.20 — "Electrical Service" by Repealing Section 13.20.185 — "Schedule CSS — California Solar Initiative Surcharge" and Reenacting as follows, "Schedule RES — Renewable Energy Surcharge" October 18, 2017 Electric Utility Director RECOMMENDED ACTION• Public hearing to consider introducing an ordinance amending Lodi Municipal Code Chapter 13.20 — "Electrical Service" by repealing Section 13.20.185 — "Schedule CSS — California Solar Initiative Surcharge" and reenacting as follows, "Schedule RES — Renewable Energy Surcharge." BACKGROUND INFORMATION: In 2006, California Senate Bill 1 (SB 1), known as the California Solar Initiative (CSI), mandated all electric utilities to offer a solar photovoltaic program to provide incentives to support the development and installation of solar systems throughout each utility's service territory. Based upon the CSI funding requirements, Lodi Electric Utility's (LEU) annual obligation was approximately $600,000 from 2008 through 2017. The City Council chose to fund LEU's CSI program by approving the California Solar Initiative Surcharge (Schedule CSS), an additional rate schedule applied to all customer classes at $0.00125 per kilowatt hour, with effective dates of January 1, 2008 through December 31, 2017. LEU has successfully completed the CSI program requirements as mandated by SB 1. As of June 30, 2017, there are 694 customer -owned solar system installations with a total capacity of 7.5 MW as shown in the following table. Quantity Type System Capacity 641 Residential 3.2 MW 53 Commercial 4.3 MW Total 7.5 MW While the CSI requirements are no longer in effect, the State of California has subsequently adopted new unfunded renewable energy requirements for electric service providers. The current Renewables Portfolio Standard (RPS) requires 50 percent renewable energy resources by 2030. With LEU's current resources, including historic carryover, its projection for 2030 is 30 percent; the average cost of meeting the current RPS requirements is estimated at $1.1 million annually. In addition, proposed RPS legislation would make this even more aggressive with a 50 percent requirement by 2025, 60 percent by 2030, and 100 percent carbon free by 2045; increasing the average annual impact by $1 million. The additional costs associated with RPS compliant energy could be partially offset by continuing the current surcharge. APPROVED: CAA.t.--r• �v� Stephen Schwabauer, City Manager Public Hearing to Consider Introducing an Ordinance Amending Lodi Municipal Code Chapter 13.20 — "Electrical Service" by Repealing Section 13.20.185 — "Schedule CSS — California Solar Initiative Surcharge" and Reenacting as follows, "Schedule RES — Renewable Energy Surcharge" October 18, 2017 Page 2 of 2 Therefore, staff recommends repealing and reenacting this rate schedule to take effect January 1, 2018, to assist in funding renewable energy requirements mandated by the State. This action would not increase customers' electric utility bills. FISCAL IMPACT: The proposed rate schedule change would not result in a rate increase for electric utility customers but would continue to provide approximately $600,000 in revenue annually to partially offset costs associated with renewable energy related mandates. Should Council elect to discontinue the surcharge, larger rate increases will be necessary to fully fund these mandates. FUNDING AVAILABLE: Not applicable. E Izabeth A. Kirkley 9 Electric Utility Director EAK/Ist ORDINANCE NO. AN ORDINANCE OF THE LODI CITY COUNCIL AMENDING LODI MUNICIPAL CODE CHAPTER 13.20 - ELECTRICAL SERVICE - BY REPEALING SECT -ION 13.20.185 SCH4E-DU CSS CALIFORNIA SOLAR INITIATIVE SURCHARGE IN ITS ENTIRETY, AND REENACTING SECTION 13.20.185 -SCHEDULE RES - RENEWABLE ENERGY SURCHARGE IN ITS ENTIRETY BE IT ORDAINED BY THE LODI CITY COUNCIL AS FOLLOWS: SECTION 1. Lodi Municipal Code Chapter 13.20 - Electrical Service is hereby amended by repealing Section 1-3.-20.185 Schedt- e -CSS - n a`Selar-initiative Surchar-ge-in its entirety, and reenacting Section 13.20.185 Schedule RES - Renewable Energy Surcharge in its entirety, and shall read as follows: SECTION43 0,1-85-SCHEDULE-CSS--.CALI.FOR T SQL-AR-INI-T-IATIVE SJR -CHARGE A. AP-R=!CAsl•LIT. This schedule is applieabl- - - - - • - •y -the -city of Lodi. Each cueto fr chat „e-apllicablc rate(s) :. - - _ . _ • - , s tar Initiati• e+rge —) 1.9 each I.iIowati—he r t Ih elivered to tho oustemeen -- TheC-S^^',,S-Shaft-4uc tyes--for customers, -p rtieipating in the-Ledi-olar Rebate Pilot Program: California -Senate Bill 1 (S$ 1) mandates -that -all electric utilities -e fer-a-solar photovolte e-pregrar that provides ineeetives to support the -development -and installation of r sys'- 4e glinut their given sere erritory. Based upon SB 1 funding requirements; Lodi Electric Utility shall -make available-approx - - - - - - :-1nnnrs annuaity-botweon the years 2008-2017. B. Rates. Effective-enh;no render -ed a or after January 1, 2008 -until Decembef , 2017, a surcharge per kilowatt hour (kWh-) will be applied to ail kWh sold—The CSS shall be applied to all kWh sold and wiII-heen-diunted-: he -surcharge amount of $0.00125 will be aped-to-all-k-eensumed-by-ea h `stomer 1n .amu-fae Glasses, All-f-urrds-callested-endef-th --surcharge-will be -placed in an -account solely-feF-the--purpose of iFF)p le menting- he -L -df -Solar Rebate-P4lot-Rfograrre SECTION 13.20.185 SCHEDULE RES - RENEWABLE ENERGY SURCHARGE A. Applicability. This schedule is applicable to all electric customers served by the City of Lodi. Each customer shall pay the applicable rate(s) plus the Renewable Energy Surcharge (RES) for each kilowatt-hour (kWh) delivered and sold to the customer. The RES shall fund costs associated with the following activities: • Lodi Electric Utility's purchase of renewable and/or carbon free energy; • Community solar or other community renewable energy efforts; and/or • Customer incentives associated with renewable energy and/or distributed generation. B. Rates. A surcharge of $0.00125 will be applied to all kWh delivered and sold to each customer in all rate classes and shall not be discounted. All funds collected under this surcharge will be placed in an account solely for the purposes identified above. 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, Effective Date and Publication. This Ordinance shall take effect on January 1, 2018. In lieu of publication of the full text of the ordinance within fifteen (15) days after its passage, a summary of the ordinance may be published at least five (5) days prior to and fifteen (15) days after adoption by the City Council, and a certified copy shall be posted in the office of the City Clerk pursuant to Government Code section 36933(c)(1). ATTEST: JENNIFER M. FERRAIOLO City Clerk Approved this day of , 2017 DOUG KUEHNE Mayor State of California County of San Joaquin, ss. I, Jennifer M. Ferraiolo, City Clerk of the City of Lodi, do hereby certify that Ordinance No. was introduced at a regular meeting of the City Council of the City of Lodi held October 18, 2017, and was thereafter passed, adopted, and ordered to print at a regular meeting of said Council held , 2017, by the following vote: AYES: COUNCIL MEMBERS — NOES: COUNCIL MEMBERS — ABSENT: COUNCIL MEMBERS — ABSTAIN: COUNCIL MEMBERS — I further certify that Ordinance No. was approved and signed by the Mayor on the date of its passage and the same has been published pursuant to law. Approved as to Form: JENNIFER M. FERRAIOLO City Clerk JANICE D. MAGDICH City Attorney 2 Background Customer Solar Installations Renewables Portfolio Standard (RPS) Requirements Current (SB 350) Proposed (SB goo) LEU Energy Resources Financial Impact Options Staff Recommendation 2 2006 —California Senate Bill 1 (SB 1) California Solar Initiative (CSI) mandated electric utilities provide incentives to promote development and installation of new solar systems with declining rebates to transition solar industry to be self-sustaining without incentives. LEU's requirements Incentives of —$600,000 annually for 10 years (2008-2017) Up to an installed customer solar capacity of —7.1 MW Funded via CSI Surcharge (Schedule CSS) of $o.00i25/kWh Currently due to sunset December 31, 2017 3 Residential Commercial TOTAL • 641 • 3.2 MW • 53 • 4.3 MW • 694 • 7.5 MW 4 504 100% 8o% 6o% 4o% 20% o% Current (SB 350) Proposed (SB goo) 40% 45% iLi 100% 8o% 6o% 4o% 20% o/ 50% 6o% i00% carbon free 2020 2024 2027 2030 2026 2030 2045 5 California Eligible Renewable Energy Resources 6 Geothermal Solar Wind Biomass Bio -Fuel Small Hydro (<3o MW) Ocean/Tidal Current ■ Unspecified Power 49D/ --- •-- ■ Natural Gas 13% ■ Geothermal 21% All Renewables 24% ■ Large Hydro 14% 7 ■ Small Hydro 0.4% Solar 1.8% ■ Biomass 0.4% (PAWN 250,000 2 WOOD 150,000 100,000 50,000 0 Compliance Period 2 RPS Requirement vs. LEU Renewable Energy Compliance Period 3 25% 1 1 45% 406 • 1 50% • 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Future RPS Historic Carryover iSci/air Projects Existing R PS 4.11"M' RFS Req. 8 (MWh) 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 SBioo Requirement vs. LEU Renewable Energy 50% 6o% L aONAI ado NS ,o a0�0 2021 r •• l00% !.!12316aQa� '.! !.! 1,03(3 a0"11110111 a0�a -ISI Ck • 1 1 1 Carbon -Free Offset 1 1 Future RPS Large Hydro Historic Carryover Soar Projects Existing RPS —.—RPS Req. 9 Current Average incremental cost • $1.1 million/year Proaosed Additional average incremental cost • $1 million/year 10 Combined Average incremental cost • $2.1 million/year Customer Class / Usage Current / Proposed Surcharge Residential A 1 Low Usage — 350 kWh Average Usage — 550 kWh illmm- High Usage — 750 kWh l Small Commercial Medium Commercial $29.76 i Large Commercialil $302.25 Industrial A4 $1,209.00 $0.44 $0.69 $0.944 $4.38, 11 1) Let CSI Solar Surcharge (Schedule CSS) sunset December 31, 2017 $o.00125/kWh monthly charge goes away Repeal Schedule CSS and reenact as Renewable Energy Surcharge (Schedule RES) effective January 1, 2018 Provides---$600,000/year toward $1.1 million average annual revenue requirement to meet current renewable mandates Supports Council direction for small, incremental rate adjustments Funds renewable energy related projects for the benefit of all customers No added impact to customer bills In accordance with LEU Financial Strategic Area of Focus 12 Introduce an ordinance amending Lodi Municipal Code Chapter 13.20 - "Electrical Service" by repealing Section 13.20.185 - "Schedule CSS - California Solar Initiative Surcharge" and reenacting as follows, "Schedule RES - Renewable Energy Surcharge." 13 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 TO CONSIDER INTRODUCING AN ORDINANCE AMENDING LODI MUNICIPAL CODE CHAPTER 13.20, "ELECTRICAL SERVICE," BY REPEALING SECTION 13.20.185, "SCHEDULE CSS - CALIFORNIA SOLAR INITIATIVE SURCHARGE," AND REENACTING AS FOLLOWS, "SCHEDULE RES - RENEWABLE ENERGY SURCHARGE" (AS IDENTIFIED ON THE ATTACHED EXHIBIT A) PUBLISH DATE: SATURDAY, SEPTEMBER 30 AND OCTOBER 7, 2017 LEGAL AD TEAR SHEETS WANTED: One (1) please SEND AFFIDAVIT AND BILL TO: LNS ACCT. #0510052 JENNIFER M. FERRAIOLO, CITY CLERK City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 DATED: TUESDAY, SEPTEMBER 26, 2017 ORDERED BY: JENNIFER M. FERRAIOLO CITY CLERK PAMELA M. FARRIS DEPUTY CITY CLERK ELIZABETH BURGOS ADMINISTRATIVE CLERK Verify Appearance of this Legal in the Newspaper — Copy to File (date) (pages) LNS Phoned to confirm receipt of all pages at (time) _ES PMF (initials) Emailed to the Sentinel at krystals@lodinews.com at (t+me) on forms\advins.doc DECLARATION OF POSTING PUBLIC HEARING TO CONSIDER INTRODUCING AN ORDINANCE AMENDING LODI MUNICIPAL CODE CHAPTER 13.20, "ELECTRICAL SERVICE," BY REPEALING SECTION 13.20.185, "SCHEDULE CSS — CALIFORNIA SOLAR INITIATIVE SURCHARGE," AND REENACTING AS FOLLOWS, "SCHEDULE RES — RENEWABLE ENERGY SURCHARGE" (AS IDENTIFIED ON THE ATTACHED EXHIBIT A) On Tuesday, September 26, 2017, in the City of Lodi, San Joaquin County, California, a Notice of Public Hearing to consider introducing an ordinance amending Lodi Municipal Code Chapter 13.20, "Electrical Service," by repealing Section 13.20.185, "Schedule CSS — California Solar Initiative Surcharge," and reenacting as follows, "Schedule RES — Renewable Energy Surcharge" (attached and marked as Exhibit A) was posted at the following locations: Lodi City Clerk's Office Lodi City Hall Lobby Lodi Carnegie Forum WorkNet Office I declare under penalty of perjury that the foregoing is true and correct. Executed on September 26, 2017, at Lodi, California. ORDERED BY: JENNIFER M. FERRAIOLO CITY CLERK PAMELA M. FARRIS ELIZABETH BURGOS DEPUTYCITY CLERK ADMINISTRATIVE CLERK N:\Administration\CLERK\Public Hearings\AFFADAVITS\DECPOSTEUD.DOC CITY OF LODI Carnegie Forum 305 West Pine Street, Lodi rNOTICE OF PUBLIC HEARING Date: October 18, 2017 Time: 7:00 p.m. For information regarding this notice please contact: Jennifer M. Ferraiolo City Clerk Telephone: (209) 333-6702 1 NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that on Wednesday, October 18, 2017, 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) Consider introducing an ordinance amending Lodi Municipal Code Chapter 13.20, "Electrical Service," by repealing Section 13.20.185, "Schedule CSS — California Solar Initiative Surcharge," and reenacting as follows, "Schedule RES — Renewable Energy Surcharge" (as identified on the attached Exhibit A). 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, 2"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 Order of the Lodi City Council: fifer M. raiolo y Clerk Dated: September 26, 2017 Approved as to form: i.anice D. Magdich City Attorney AVISO: Para obtener ayuda interpretativa con esta noticia, por favor (lame a la oficina de la Secretaria Municipal, a las (209) 333-6702. CLERK\PUBHEAR\NOTICES\Noteud.doc 9/25/17 Exhibit A Proposed Renewable Energy Surcharge SECTION 13.20.185 SCHEDULE RES — RENEWABLE ENERGY SURCHARGE A. Applicability. This schedule is applicable to all electric customers served by the City of Lodi. Each customer shall pay the applicable rate(s) plus the Renewable Energy Surcharge (RES) for each kilowatt-hour (kWh) delivered and sold to the customer. The RES shall fund costs associated with the following activities: • Lodi Electric Utility's purchase of renewable and/or carbon free energy; • Community solar or other community renewable energy efforts; and/or • Customer incentives associated with renewable energy and/or distributed generation. B. Rates. A surcharge of $0.00125 will be applied to all kWh delivered and sold to each customer in all rate classes and shall not be discounted. All funds collected under this surcharge will be placed in an account solely for the purposes identified above.