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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/21/2009 - SECOND READING OF ORDINANCE NO. 077, 2009 AMENDING ITEM NUMBER: 10 AGENDA ITEM SUMMARY DATE: July 21, 2009 FORT COLLINS CITY COUNCIL STAFF: Terri Bryant Bob Micek SUBJECT Second Reading of Ordinance No. 077, 2009 Amending Chapter 26, Article VI, Division 4 of the City Code Relating to Excess Circuit Charge. RECOMMENDATION Staff recommends adoption of this Ordinance on Second Reading. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on July 7, 2009, allows the Utilities to respond promptly to a customer's request for excess capacity service based on the proposed Code provision. The charges for the service will be stated in the Code and revised when electric cost of service studies are updated. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary- July 7, 2009. (w/o original attachments) 2. Electric Board minutes, July 1, 2009. ATTACHMENT 1 ITEM NUMBER: 20 AGENDA ITEM SUMMARY DATE: July 7, 2009 FORT COLLINS CITY COUNCIL STAFF: Terri Bryant Bob Micek SUBJECT First Reading of Ordinance No.077�2009 Amen_ding°Chaptery 26,Article VI,Division 4 of the City Code Relating to Excess Circuit Charge/ RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading EXECUTIVE SUMMARY This Ordinance allows the Utiliti e�spon��d promptly to a�`cu`w�is request for excess capacity service based on the proposed Code provision. The charges forjthe service will be stated in the Code and revised when electric cost of-:service studies are-updated. BACKGROUND Large commercial and industrial electric customers may request electrical distribution services related to excess circuit capacity. Currently, the Electric Utility reviews individual customer requests for these services, determines the impact to service disruption and the distribution system, and forms a special services agree ents ettt in�g \he charge,_for phi' additional service. A special services agreement with each(Customer'allows,the Utility to properly bill for the excess circuit capacity requested. Ordinance11No. 057,2009, adopted June 2,2009, requires the Utilities to bring all special services agreements tfiarmodify rates, fees or charges before the Council for approval. The excess circuit capacity charge is a modification of the standby charges. The electric distribution system is designed with certain levels of redundancy whereby, if service to a facility is disrupted, service can be rerouted through alternative routes to reconnect to a customer. When a customer wants immediate backup service for an automatic throw over (ATO) or by manually performing the same operation,the Utility will provide a service path that is always available in case of a disruption, so that switching is immediate and no outage is experienced. The charges for this service are based•omthe costs-relevant-to,the-facilities needed to provide immediate switching capabilities. Current commercial tariffs have a Disfribution Standby Charge designed to recover the capital and operations and maintenance(,O&M) expenses associated with the reserved capacity, should a customer want to-purchase.it-for-aitermittent-or stand-by loads. A customer load supplied for immediate backup does not need additional substation capacity. Without substation July 7, 2009 -2- Item No. 20 costs, the facilities charge is 62.4% of the standard facilities charge. Immediate switching of customer load from one source to another source increases infrastructure costs by 33%. Based on this, the facilities charge for excess circuit capacity service calculates to 20.8% of the current facilities charge (62.4% x 33%). In order to accommodate and expedite the process for customers who may request excess circuit capacity, utilities staff is recommending codification of the excess circuit capacity charge. This would allow the Utilities to respond promptly to a customer request for this service. The suggested Code change wi,l l'be'�prese to ed toithe�El e tr'\c Board at its regular July 1, 2009 meeting. Excerpts from the minutes of that meeting wtll.not be,available by the packet distribution deadline for the July 7 Council kmeet ngEx��., s rented to thCode change will be provided prior to Second Reading on July 21, 2009. r ATTACHMENT 2 Electric Board ! Excerpt from minutes, July 1, 2009 D���� DRAFT I Excess Circuit Capacity Electric Systems Engineering Manager Bob Micek presented information regarding-a Code change to facilitate excess circuit capacity needs.for GS50 and GS750 customers. Large commercial and industrial customers may request immediate back-up for their electrical systems. A special services agreement with each customer allows Utilities to properly bill for the excess circuit capacity requested. An ordinance adopted by Council requires Utilities to bring all special agreements that modify rates, fees or charges before Council for approval. The excess capacity charge is a modification to the standby charges. The charges for this service are based on the costs of the facilities needed to provide immediate switching capabilities. There are current tariffs that include a charge to recover capital, and operations and maintenance expenses for reserved capacity. The immediate switching of the load from one source to another increases feeder r infrastructure costs. Staff is recommending codification of the excess circuit capacity charge to expedite customer requests for this service. The customer is switching at their discretion from one source to another. The feeder should have the capacity, and the design of the system can hold 67 percent on any feeder. The customer is asking to have 50 percent of capacity and would pay for the infrastructure costs. What is at the customer site? The customers site is the source facility with a tie. If one source is lost, then the other automatically opens. Are the feeders at the same substation? Transmissions would have to be at the same substation. There are two feeder ties to the customer's facility on two transformers, and the switch is at their facility. If they need to go from one to the other, the customer performs the switching. The rate is described in the ordinance and will apply to that specific customer's needs. Vice Chairperson Yurash favored a motion stating the Electric Board likes the concept but did not see the actual code language. Mr. Catanach stated the proposed rate would be 75 cents per kilowatt for GS50 customers and 90 cents per kilowatt for GS750 customers. Vice Chairperson Yurash stated the draft Code language needs to be provided by staff when these types of items come to the board. Draft Electric Board Minutes 1 July 1,2009 Assistant City Attorney Jenny Lopez-Filkins clarified the attorney's office can work with that as much as possible, but the language is not changed until it is approved by Council. The attorney's office works for Council. They are looking for more of a recommendation or a concept. Vice Chairperson Yurash stated he is uncomfortable and doesn't think it is appropriate to come to the Board with this type of item without the actual language. Can ire come to you in the future with a concept? That is up to the board. Vice Chairperson Yurash stated the actual Code language needs to be here and as a citizen; the secrecy about last minute changes needs to stop. Staff needs to maintain transparency and should have a standard operating procedure for this. Chairperson Morris clarified to the Board it is a recommendation to add Code language and not approving the actual language. Board Member Barnish motioned to approve the concept of a Code change to facilitate excess capacity circuit needs of GS50 and GS750 customers. Board Member Bihn seconded the motion. Discussion: Utilities Executive Director Brian Janonis asked if there is a possibility staff can bring this back next month with Code language. This is part of a special agreement, and City Council has to approve the agreements. This language change would have the rates included in the Code; so the customers know what they are paying. I,Vould this be controversial ivith Council? don't know if this would be controversial, but we are trying to help the process. We would still like to see the language; do you have a customer waiting for this? We do have a request from a customer at this time. Vice Chairperson Yurash would like to see the language as a Board and then make motions codifying scenarios that currently are special agreements. It is just Code change, specifying the rates that would be in Code. The board isn't qualified to set the rates. This change takes out the special agreements. Motion should remain as is. Vote on the motion: Yeas-5/Nays-1 Reason_for Nay vote: Draft Electric Board Minutes 2 July 1,2009 Board Member Wolley is opposed to the motion due to the lack of understanding of what this is for. Motion passed with five votes for and one against. Taken by: Meagan Peil Board Secretary Fort Collins Utilities Draft Electric Board Minutes 3 July I, 2009 ORDINANCE NO. 077, 2009 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 26, ARTICLE VI, DIVISION 4 OF THE CODE OF THE CITY OF FORT COLLINS RELATING TO EXCESS CIRCUIT CHARGE WHEREAS,the City's electric utility has large commercial and industrial customers that are interested in obtaining immediate backup service in the event electric service to a customer facility is disrupted; and WHEREAS, the City's electric utility is able to provide uninterruptible and immediate backup service to its large commercial and industrial customers at a rate that accounts for the increased electric utility operations,maintenance,and infrastructure costs associated with providing such service; and WHEREAS, staff has proposed revisions to the City Code in order to clarify the terms, conditions and rates for this service. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLIES as follows: Section 1. That Section 26-467 of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 26-467. General service 50, schedule GS50. (a) Availability. The general service 50,schedule GS50 shall be available within the corporate limits of the City and the suburban fringe. (b) Applicability. This schedule applies to customers served at the established secondary voltage of the City's distribution system. This schedule applies only to individual services with an average metered demand not less than fifty(50)kilowatts and not greater than seven hundred fifty(750) kilowatts. (c) Monthly rate. The monthly rates for this schedule are as follows: (1) Fixed charge, per account: Twenty-five dollars and zero cents ($25.). An additional charge of forty dollars and zero cents ($40.) may be assessed if telephone communication service is not provided by the customer. (2) Coincident demand charge, per kilowatt: Thirteen dollars and twelve cents ($13.12) but not less than one cent($.01) per kilowatt-hour. (3) Distribution facilities demand charge, per kilowatt: Four dollars and thirty- one cents ($4.31). (4) Energy charge, per kilowatt-hour: One and eighty-six one-hundredths cents ($0.0186). (5) In lieu of taxes and franchise: a charge at the rate of six and zero-tenths(6.0) percent of all monthly service charges billed pursuant to this Section. (d) Renewable resource. Energy generated by the power of wind may be available at a premium price in accordance with the provisions of a special services agreement between the utility and the customer, as such agreements are authorized in this Section. (e) Excess capacity charge. A monthly capacity charge of two dollars ($2.) per kilowatt may be added to the above charges for service to intermittent loads in accordance with the provisions of the electric service rules and regulations. (f) Standby service charges. Standby service, if available, will be provided on an annual contract basis at a level at least sufficient to meet probable service demand (in kilowatts) as determined by the customer and approved by the utility according to the following: (1) Standby distribution charge. a. The monthly standby distribution charge shall be three dollars and sixty-two cents($3.62)per kilowatt of contracted standby service.This charge shall be in lieu of the distribution facilities charge. For all metered kilowatts in excess of the contracted amount, the standby distribution charge shall be ten dollars and eighty-six cents($10.86)per kilowatt. b. In the event the contractual kilowatt amount is exceeded,the beginning date of the contract period will be reset. The first month of the new contract period will become the current billing month and such month's metered demand shall become the minimum allowable contract demand for the standby service. Requests for standby service may be subject to a waiting period. An operation and maintenance charge may be added for special facilities required to provide standby service. (2) Standby generation and transmission charge. All charges incurred by the utility under Platte River Power Authority's applicable tariffs, as may be amended from time to time, will be billed to the customer as a standby generation and transmission charge. (g) Excess circuit charge. In the event a utility customer in this rate class desires excess circuit capacity for the purpose of controlling the available electric capacity, of a backup circuit connection, this service, if available, will be provided on an -2- annual contract basis at a level at least sufficient to meet probable backup demand (in kilowatts) as determined by the customer and approved by the utility according to the following: (1) The excess circuit charge shall be seventy-five cents ($0.75) per contracted kilowatt of backup capacity per month. For any metered kilowatts in excess of the contracted amount, the excess circuit charge shall be two dollars and twenty-five cents ($2.25) per kilowatt. (2) In the event the contractual kilowatt limit is exceeded,a new annual contract period will automatically begin as of the month the limit is exceeded. The metered demand in the month of exceedance shall become the minimum contracted demand level for the excess circuit charge. Section 2. That all subsequent subsections of Section 26-467 shall be renumbered accordingly. Section 3. That Section 26-468 of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 26-468. General service 750, schedule GS750. (a) Availability. The general service 750, schedule GS750 shall be available within the corporate limits of the City and the suburban fringe. (b) Applicability. This schedule applies to customers served at the primary voltage of the City's electric system,thirteen thousand two hundred/seven thousand six hundred twenty (13,200/7,620) volts nominal for three-phase power. This schedule applies only to individual services with an average metered demand of seven hundred fifty (750) kilowatts or greater. The General Manager, at his or her option, may enter into individual, written agreements with customers having an aggregated connected load of one thousand (1,000) kilowatts or more, which agreements shall establish the services to be provided and the amount to be charged to such customers. (c) Monthly rate. The monthly rates for this schedule are as follows: (1) Fixed charge, per account: Thirty dollars and sixty cents ($30.60). a. Additional charge for each additional metering point: Twenty-five dollars and ninety-two cents ($25.92). b. An additional charge of forty dollars and zero cents ($40.) for each metering point may be assessed if telephone communication service is not provided by the customer. -3- (2) Coincident demand charge,per kilowatt:Twelve dollars and ninety-two cents ($12.92) but not less than one cent ($0.01) per kilowatt-hour. (3) Distribution facilities demand charge, per kilowatt: a. First seven hundred fifty(750)kilowatts: Four dollars and twenty-five cents ($4.25). b. All additional kilowatts: Two dollars and ninety-one cents ($2.91). (4) Energy charge,per kilowatt-hour:One and eighty-three one-hundredths cents ($0.0183). (5) In lieu of taxes and franchise: a charge at the rate of six and zero-tenths(6.0) percent of all monthly service charges billed pursuant to this Section. (d) Renewable resource. Energy generated by the power of wind may be available at a premium price in accordance with the provisions of a special services agreement between the utility and the customer, as such agreements are authorized in this Section. (e) Excess capacity charge. A monthly capacity charge of two dollars ($2.)per kilowatt may be added to the above charges for service to intermittent loads in accordance with the provisions of the electric service rules and regulations. (f) Standby service charges. Standby service, if available, will be provided on an annual contract basis at a level at least sufficient to meet probable service demand (in kilowatts) as determined by the customer and approved by the utility according to the following: (1) Standby distribution charge. a. The monthly standby distribution charge shall be two dollars and eighty-four cents ($2.84) per kilowatt of contracted standby service. This charge shall be in lieu of the distribution facilities charge. For all metered kilowatts in excess of the contracted amount, the standby distribution charge shall be eight dollars and fifty-two cents($8.52)per kilowatt. b. In the event the contractual kilowatt amount is exceeded,the beginning date of the contract period will be reset. The first month of the new contract period will become the current billing month and such month's metered demand shall become the minimum allowable contract demand for the standby service. Requests for standby service may be subject to -4- a waiting period. An operation and maintenance charge may be added for special facilities required to provide standby service. (2) Standby generation and transmission charge. All charges incurred by the utility under the Platte River Power Authority's applicable tariffs, as may be amended from time to time, will be billed to the customer as a standby generation and transmission charge. (g) Excess circuit charge. In the event a utility customer in this rate class desires excess circuit capacity for the purpose of controlling the available electric capacity of a backup circuit connection, this service, if available, will be provided on an annual contract basis at a level at least sufficient to meet probable backup demand (in kilowatts) as determined by the customer and approved by the utility according to the following: (1) The excess circuit charge shall be fifty-nine cents ($0.59) per contracted kilowatt of backup capacity per month:For any metered kilowatts in excess of the contracted amount, the excess circuit charge shall be one dollar and seventy-seven cents ($1.77) per kilowatt. (2) In the event the contractual kilowatt limit is exceeded,a new annual contract period will automatically begin as of the month the limit is exceeded. The metered demand in the month of exceedance shall become the minimum contracted demand level for the excess circuit charge. Section 4. That all subsequent subsections of Section 26-468 shall be renumbered accordingly. Introduced,considered favorably on first reading,and ordered published this 7th day of July, A.D. 2009, and to be presented for final passage on the 21 st da ly, A.D. 2009. May r ATTEST De uty ty lerk -5- Passed and adopted on final reading on the 21 st day of July, A.D. 2009. Mayor ATTEST: City Clerk -6-