HomeMy WebLinkAboutAgenda Report - June 7, 2023 C-28CITY OF
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CALIFORNIA
AGENDA ITEM 1:,o 2 8
COUNCIL COMMUNICATION
AGENDA TITLE: Accept Informational Item Providing City Council with An Update of Lodi Electric Utility's
Economic Development Discount Rate Program
MEETING DATE: June 7, 2023
PREPARED BY: Business Development Manager
RECOMMENDED ACTION: Accept Informational Item Providing City Council with An Update of Lodi
Electric Utility's Economic Development Discount Rate Program
BACKGROUND INFORMATION: Lodi Electric Utility has offered its commercial and industrial accounts a
discount on its consumption of power ranging from 2 percent to 8 percent
depending on the number of net, new full-time positions created
annually. Known as the EDR program, this incentive decreases the cost of doing business by lowering power
costs and increases business competitiveness of Lodi -based businesses, both effective economic
development tools for the City of Lodi and Lodi Electric Utility.
In 2021, the EDR program changed from its original form to incentivize greater numbers of new employment.
Originally requiring an annual renewal, the discount and number of jobs required were:
2
percent
One to three new 'obs
4
percent
Four to six new 'obs
6
percent
Seven to nine new jobs
8
percent
Tenor more new jobs _
For electric account holders who had already created, or had imminent plans to create more than twenty jobs,
the new FY22 discount rate would be in effect for a maximum of five years. The extended time period for the
discount would allow businesses to plan operating budgets over a longer horizon than one year. The below
table reflects the number of years the discount remains in effect the higher the number of new full-time
positions funded.
# new
'obs
Year 1
Year 2
Year 3 Year 4 Year 5
10-20
8%
21-30
8%
8%
31-40
8%
8%
8%
8%
41-50
8%
8% 8%
>50
8%
8%
8% 8% 8%
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Stephen Schwabauer, City Manager
Accept Informational Item Providing City Council with An Update of Lodi Electric Utility's Economic Development Discount Rate Program
The discount is given monthly on the account holder's consumption and is shown on the monthly utility bill. The
below table gives the total value of the EDR program discount in each of the last two complete fiscal years and
the fiscal year to date.
Fiscal Year 23 to April 30, 2023 Fiscal Year 22
$563,285 $579,286
Fiscal Year 21
$380,117
The increase in discount amounts is attributable to increased levels of consumption and higher discount levels
to account holders based on higher numbers of net, new positions. Currently, nine accounts receive the discount
including Rich Products, Pacific Coast Producers, Cepheid, Costco, Epic Plastics, Mepco, Scientific Specialties,
Sanborn Chevrolet and Ford Construction.
According to Lodi Municipal Code, businesses receiving the discount must undergo an audit of the number of
net, new positions funded six months from the start of the EDR discount program year. This fiscal year the audit
revealed no change in the number of net, new positions funded. All companies are complying with program
requirements.
Other popular economic development incentive programs offered by the Utility include: 1) New Business Monthly
Discount, 2) Zero Percent Loan Financing, 3) Customized Energy Efficiency Rebates, 4) EV Charger Rebates,
5) Energy Efficiency Engineering Consultation, and 6) Keep Your Cool program for small markets, and other
small business with refrigerated products for sale.
FISCAL IMPACT: Program discount levels as shown above.
FUNDING AVAILABLE: Not applicable.
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B. Astrida Trupovnieks
Business Development Manager