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HomeMy WebLinkAboutordinance.council.042-84 CITY OF ASPEN, COLORADO o DINANCE No. SERIES OF 1984 AN ORDINANCE ENTITLED "ELECTRICAL RATE PROCEDURES AND METHODS," ENACTING A NEW SECTION 23-18.1 OF THE MUNICIPAL CODE OF THE CITY OF ASPEN, COLORADO, CONCERNING NOTICE AND HEARING PROCEDURES FOR SETTING RATES FOR RETAIL ELECTRICAL SERVICE~ ESTABLISHING A NEW POLICY FOR SETTING RATES FOR RETAIL ELECTRICAL SERVICE BY THE ASPEN ELECTRIC DEPARTMENT; PROVIDING FOR ADOPTION OF A RATE SCHEDULE BASED ON THE NEW POLICY AND FOR PERIODIC ADJUSTMENT THEREOF~ AND PROVIDING FOR THE CONTINUANCE OF CURRENT ELECTRICAL RATE SCHEDULES UNTIL THE NEW SCHEDULE IS ADOPTED. WHEREAS, the Colorado General Assembly has recently man- dated certain notice and hearing requirements for setting rates for electrical service by municipal utilities, which requirements are set forth at C.R.S. § 40-3.5-104; and WHEREAS, the City Council desires to bring its present elec%rical ratemaking procedures into compliance with these new statutory requirements. WHEREAS, the City's present wholesale electrical purchase contract with the Public Service Company of Colorado expires on December 16, 1984, while the City will begin the wholesale purchase of electricity on the same date under a new contract with the Municipal Energy Agency of Nebraska (MEAN); and WHEREAS, the City expects to supplement its wholesale electrical purchases under the MEAN contract with wholesale purchases from the Ruedi Reservoir Hydroelectric Power Project (Ruedi Project) beginning in 1985. WHEREAS, the City Council desires to enact a retail rate policy based on the MEAN contract, the Ruedi Project,~:'and other power supplies and to set a schedule of rates pursuant to that policy both in accordance with the notice and hearing procedures required by C.R.$. § 40-3.5-104. WHEREAS, the City Council desires to provide for the review and adjustment of the retail rate schedules on a calendar year basis, and for the monthly adjustment of the new retail rate schedules as required by any MEAN Pooled Energy Adjustment Costs, also both in accordance with the notice and hearing requirements of C.R.S. § 40-3.5-104, and WHEREAS, the City Council desires to continue the pre- sent retail rate schedule based on Ordinance 43, Series of 1980, until new rate methods and rate schedules are enacted. NOW WHEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO: SECTION 1 Notice and Hearing Requirements for Electrical Ratemaking. That a new Section 23-18.1 be and hereby is enacted into the Municipal Code of the City of Aspen, Colorado, to read as follows: Section 23-8.1, Electrical Ratemaking Procedures. (a) All rates for electrical service shall be established by ordinance and in. accordance with the additional procedures required by this section. (b) No change shall be made in any electrical rate or charge or in any rule, regulation, or contract relating to or affecting any electrical base rate, charge, or service, or in any electrical privilege or facility, except after thirty days' notice to the public. Such notice shall be given by keePing open for public inspection at the office of the Director of Finance new schedules stating plainly the changes to be made in the schedules then in force and the time when the changes will go into effect. In addition, such notice shall be given by publishing the proposed new schedule, or if that is impractical due to the size or bulk of the proposed new schedule, by publishing a notice of the availability of the proposed new schedule for public inspection, at least once in at least one newspaper of general circulation in the authorized service area at least thirty days and no more than sixty days prior to the date set for public hearing on and adoption of the new schedule. (c) In addition to the notice provided for in paragraph (b) of this section, should %he Aspen Electric Department serve customers who live outside the municipal corporate boundaries, notice of any change in any electrical rate Or charge or in any'rule, regulation, or contract relating to or affecting any electrical base rate, charge, or service or any change in any electrical privilege or facility shall be given by mailing to such customer notification of any such change. (d) The notice required by paragraphs (b) and (c) of this section shall also specify the date, time, and place at which the public hearing shall be held by the City Council to consider the proposed new schedule. The notice shall specify that each electrical utility customer shall have the right to appear, per- sonally or through counsel, at such -3- hearing for the purpose of providing testimony regarding the proposed new 'schedule. Said pu~%ic hearing shall be held on the date and time and at the place set forth in t~e notice; except that City Council may adjourn and recon- vene said hearing as it deems necessary. (e) The City Council, for good cause shown, may allow changes without requiring the thirty days' notice and public hearing by an order specifying the changes to be made, the circumstances necessitating the change without requiring the thirty days' notice and public hearing, the time when the changes shall take effect, and the manner in which the changes shall be published. SECTION 2 Policy for Setting Retail Electrical Rates. A. ~ayment for Electrical Service. Ail retail customers of the Aspen Electric Department (Department) shall pay for electrical service during the monthly meter reading cycle of the Department as follows: 1. Each commercial customer shall pay the sum of: a. The commercial customer's use of electri- city in kilowatt-hours (kWh) during the Department's monthly meter reading cycle multiplied by the Commercial Customer Retail Rate, and b. A monthly commercial customer service charge. -4- 2. Each residential customer shall pay the sum of: a. The residential customer's use of electricity in kWh during the Department's monthly meter reading cycle multiplied by the Residential Customer Retail Rate, and b. A monthly residential customer service charge. B. Retail Electric Rates. 1. The Coz~ercial Customer Retail Rate in dollars per kWh for each month of the Rate Period shall be the sum of: a. The Purchased Power Subrate. b, The Commercial City Facility Subrate. c. The MEAN Pooled Energy Adjustment Subrate. 2, The Residential Customer Retail Rate in dollars per kWh for each month of the Rate Period shall be the sum of: a. The Purchased Power Subrate. b. The Residential City Facility Subrate. c. The MEAN Pooled Energy Adjustment Subrate. C. Rate Criteria. The criteria for setting retail electric rates shall be: 1. Retail rates shall be set on a straight-line meter rate basis with a monthly customer ser- vice charge. A straightline meter rate is based on a calculation which divides revenue requirements by energy sales in kWh. 2. Revenue requirements and energy sales shall be determined on a calendar year basis, except for revenue requirements related to MEAN Pooled Energy Adjustment Costs. 3. Two classes of rates shall be established, residential and commercial, with the dif- ference in the two rates being related to an apportionment of City Facility Costs on a weighted average basis between the commercial and residential customers. 4. The items which shall be considered in deter- mining the revenue requirement are: -6- a. The costs of power and energy purchased from MEAN including: i) MEAN demand costs. ii) MEAN first block energy costs. iii) MEAN second block energy costs. iv) MEAN pooled energy adjustment costs for each month. b. The costs of hydropower purchases from sources solely or jointly owned by the City of Aspen. c. The costs of other purchased power, e.g., Western Area Power Administration (WAPA) post-1989 marketing program allocations to Aspen. d. City facility costs. e. Revenues from monthly customer service charges. 5. Total energy requirements for the Rate Period shall be projected on the best available information. 6. Total energy sales for the Rate Period shall be based on the projected total energy --7-- requirements during the Rate Period, reduced by a distribution system loss percentage esti- mated on the best available information. D. Definitions. 1. The Rate Period shall be a fully projected twelve-month period, commencing on January 1 and ending on December 31 of the ensuing year. 2. City Facility Costs shall be the sum of the following projected costs chargeable to the Aspen Electric Fund (Fund) during the Rate Period: a. All operational costs, including the cost of salaries, benefits, materials, and ser- vices, but excluding the costs of power and energy purchases; b. All capital costs including capital expenditures and debt service; and c. Any adjustments to the Fund balance. 3. As related to purchase of power and energy from MEAN, the following definitions shall apply: a. WHEELING LOSSES: -8- i) WL = the losses charged by WAPA Salt Lake City for wheeling MEAN power from the Continental Divide to the Colorado Ute Electric Association facilities, Expressed as a decimal. Unitless. ii) CL = the losses charged by the COlorado Ute Electric Association for wheeling MEAN power to the point of delivery for Aspen. Expressed as a decimal. Unitless. b. ENERGY PRODUCTION AND REQUIREMENTS: i) The MEAN Billing Period shall be the period between the successive MEAN billing meter readings, which readings are taken, as nearly as practical, on the same date of each month. ii) HE = the total energy delivered to the City of Aspen for the MEAN Billing Period, from all Aspen hydropower facilities and from the initial WAPA post-1989 marketing program allocation. The amount of energy received from each source --9-- shall be determined at the MEAN point of delivery to Aspen and shall consider all applicable delivery losses. Units are kWh. iii) AE = the total energy requirements of the City of Aspen for the MEAN Billing Period, as measured at the MEAN point of delivery to Aspen by MEAN metering equipment. Units are kWh. iv) ME = the net energy requirements of the City of Aspen during the MEAN Billing Period, as supplied by MEAN and as determined by the following formula: ME = AE - HE Units are kWh. v) MBEU = the amount of energy for which the City of Aspen will be billed by MEAN during the MEAN Billing Period, as determined by the following formula: MBEU = ME / (1-WL-CL+(WL x CL)) Units are kWh. -10- C · !DE!~D AND i) HC (X) = the concurrent integrated 60-minute capacity available to the City of Aspen from every Aspen hydropower facility and from the WAPApost-1989 marketing program during hour "X" of the MEAN Billing Period. The total capacity a~ailable to Aspen from these sour- ces shall be measured concurrently at all points of delivery to Aspen and shall consider all delivery losses. Units are kilowatts (kW). ii) AD(X) = the total integrated 60 minute demand of the City of Aspen during hour "X" of the MEAN Billing Period. This value shall be measured concurrently with HC(X) and must be determined for each hour of the MEAN Billing Period. AD(X) is measured at the MEAN-installed meter for deliveries to Aspen. Units are kW. iii) DEM(X) = The net demand of the City of Aspen as supplied by MEAN during -11- hour "X" of the MEAN Billing Period. This value shall be determined for each hour of the MEAN Billing Period according to the following formula: DEM(X) = AD(X) - HC(X) Units are kW. iv) MAXDEM = the maximum value of all values of DEM(X) determined during the MEAN Billing Period. Units are kW. v) The minimum MEAN Billing Demand shall be determined in accordance with the published MEAN Schedule of Rates and Charges. vi) The MEAN Billing Demand Units (MBDU's or billed demand) as deter- mined each MEAN Billing Period shall be the greater of MAXDEM and the Minimum MEAN Billing Demand. d. CHARGES: i) The MEAN Demand Charge shall be the charge in dollars per kWh of billed demand as described in the published MEAN Schedule of Rates and Charges. -12- ii) The MEAN First Block Energy Charge shall be the charge in dollars per kWh for the first 200 kwh of energy per kW of billed demand as described in the MEAN Schedule of Rates and Charges. iii) The MEAN Second Block Energy Charge shall be the charge in dollars per kwh of energy in excess of the first 200 kwh of energy per kW of billed demand as described in the MEAN Schedule of Rates and Charges. iv) The MEAN Pooled Energy Adjustment Charge shall be the adjustment assessed by MEAN on all energy sales by MEAN as described in the published MEAN Schedule of Rates and Charges. D. Purchased Power Subrate Calculation. 1, MEAN Billing Demand Costs shall be calculated as follows: a. The sum of the projected MBDU's for January 1 through March 31 of the Rate Period multiplied by the MEAN Demand -13- Charge in effect on January 1 of the Rate Period shall be added to b. the sum of the projected MBDU's for April 1 through December 31 of the Rate Period multiplied by the MEAN Demand Charge which is projected to be in effect as of April 1 of the Rate Period. 2. MEAN First Block Energy Costs shall be calcu- lated as follows: a. For each month from January 1 through March 31 of the Rate Period the lessor of: i) projected MBDU's multiplied by 200, or ii) projected MBEU's shall be determined and the sum of the resultants for each month multiplied by the MEAN First Block Energy Charge in effect on January 1 of the Rate Period. b. For each month from April 1 through December 31 of the Rate Period the lessor of: -14- i) projected MBDU's multiplied by 200, or ii) projected MBEU's shall be determined and the sum of the resultants for each month multiplied by the MEAN First Block Energy Charge in effect on April 1 of the Rate Period. c. The above two resultants shall then be summed. 3. MEAN Second Block Energy Costs shall be calcu- lated as follows: a. For each month of the Rate Period pro- jected MBDU's multiplied by 200 shall be subtracted from the projected MBEU's for the subject month. b. If the resultant for any month is less than zero, then the resultant for that month shall be set equal to zero. c. The resultant determined for each month shall be the Second Block Energy Units (SBEU's) for that month. d. The sum of SBEU's for January 1 though March 31 of the Rate Period shall then be -15- multiplied by the MEAN Second Block Energy Charge in effect on January 1 of the Rate Period, and this resultant shall be added to e. the sum of the SBEU's for April 1 through December 31 of the Rate Period multiplied by the MEAN Second Block Energy Charge as of April 1 of the Rate Period. 4. Purchased Hydropower Costs shall be those pro- jected expenditures from, or encumbrances on, the Fund during the Rate Period for the deli- very of power~d energy to the Department from all sources of hydropower solely or jointly owned by the City of Aspen. 5. Other Purchased Power Costs shall be those projected expenditures from, or encumbrances on, the Fund during the Rate Period for the purchase of power and energy from all sources except MEAN and sources of hydropower owned solely or jointly by the City of Aspen. 6. The Purchased Power Subrate in dollars per kWh shall be calculated as follows: MEAN Billing Demand Costs, MEAN First Block Energy Costs, MEAN Second Block Energy Costs, -16- Hydropower Purchases Costs, and Other Purchased Power Costs shall be summed, and this sum less the projected revenues from monthly customer service charges shall be divided by the total projected energy sales for the Rate Period. F. City Facility Subrate Calculation. 1. The Commercial City Facility Subrate in dollars per kWh shall be calculated as follows: a. The total City Facility Costs for the Rate Period shall be multiplied by the ratio of commercial electric customers to total electric customers as of January 1 of the Rate Period, and the resultant divided by b. the resultant of the total projected energy sales in kWh for the Rate Period multiplied by the ratio of commercial electric sales (kWh) to total electric sales (kWh) during the twelve month period immediately preceeding the Rate Period. -17- 2. The Residential City Facility Subrate in dollars per kWh shall be calculated as follows: a. The total City Facility Costs for the Rate Period shall be multiplied by the ratio of residential electric customers to total electric customers as of January 1 of the Rate Period, and the resultant divided by: b. the resultant of the total projected energy sales in kWh for the Rate Period multiplied by the ratio of residential electrical sales (kWh) to total electric sales (kWh) during the twelve month period immediately preceeding the Rate Period. MEAN Pooled Energy Adjustment Subrate C, alculation. The MEAN Energy Cost Adjustment Subrate in dollars per kWh shall be calculated for each month of the Rate Period as followS: The MEAN Pooled Energy Adjustment Charge in effect for the subject month shall be multiplied by the projected MBEU's for the month and the resultant then divided by the total projected energy sales for that month. -18- SECTION 3 Notice and Hearing on New Rate Policy and Schedule; Continuance of Current Rate Schedule. The rate policy provided by Section 2 hereof shall be published as soon as practical, while a public hearing thereon shall be held and the policy finally adopted or rejected by City Council no sooner than 30 days, but no later than 60 days after publication. A schedule of rates based on said policy shall be published as soon as practical thereafter, a public hearing held on the rate schedule, and the rate schedule adopted or rejected no sooner than 30 days, but no later than 60 days, after publication. The current rate schedule provided by ordinance 43, Series of 1980, shall remain in effect until a schedule based on Section 2 hereof is finally adopted. SECTION 4 Periodic Adjustment of Rate Schedule. The rate schedule adopted pursuant to Section 3 hereof shall be reviewed annually and any rate adjustments published at least 30 days before the last regularly scheduled City Council meeting in the calendar year, and adopted pursuant to Section 23-18.1 of the Municipal Code of the City of Aspen (hereafter Code). However, the rate schedule may be adjusted at any time subject to the full notice and hearing require- -19- ments of Section 23-18.1 of the Code, if, before the regular annual rate review, there is a substantial change in the revenue requirements, energy sales, or other conditions affecting the rate schedule. The City Council hereby finds that the infrequent, insubstantial, monthly· and automatic nature of any rate adjustments required by MEAN Pooled Energy Adjustment Costs constitutes good cause for dispensing with the full notice and hearing requirements of Section 23-18.1 of the Code and hereby orders that any MEAN Pooled Energy Adjustment Costs be immediately incorporated into the rate schedule upon their assessment by MEAN, and that notice of any such assessments be given by making the adjusted rate schedule available for public inspection pursuant to Section 23-18 of the Municipal Code of the City of Aspen. Section 5. A public hearing on the Ordinance shall be held on · 1984, in the City Council Chambers, Aspen City Hall, Aspen· Colorado. INTRODUCED, READ AND ORDERED published as provided by law by the City Council of the City of Aspen, colorado, at its regular meeting held at the City of Aspen on William Stirlin~~ Mayor ATTEST: K'a~hryn S. Koch City Clerk -20- FINALLY adopted, passed and approved on~ William Stirling ~ Mayor ATTEST: Kathryn S. Koch -21-