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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/06/2012 - ITEMS RELATING TO WATER AND ELECTRIC DEVELOPMENT FDATE: November 6, 2012 STAFF: Brian Janonis Lance Smith AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 7 SUBJECT Items Relating to Water and Electric Development Fees and Charges for 2013. A. Second Reading of Ordinance No. 113, 2012, Amending Chapter 26 of the City Code to Revise Water Rates and Charges. B. Second Reading of Ordinance No. 115, 2012, Amending Chapter 26 of the City Code to Revise Electric Development Fees and Charges. EXECUTIVE SUMMARY The proposed water increase is a flat 4% across the board to all customer classes. Electric development fees are proposed to decrease an average of 2.4% for residential and decrease an average of 1.6% for commercial development. There are no changes in the monthly rates for wastewater or stormwater services being proposed for 2013. Both Ordinances were unanimously adopted on First Reading on October 16, 2012. STAFF RECOMMENDATION Staff recommends adoption of the Ordinances on Second Reading. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary - October 16, 2012 (w/o attachments) COPY COPY COPY COPY ATTACHMENT 1 DATE: October 16, 2012 STAFF: Brian Janonis Lance Smith AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 22 SUBJECT Items Relating to Utility Rates, Fees and Charges for 2013. A. First Reading of Ordinance No. 113, 2012, Amending Chapter 26 of the City Code to Revise Water Rates and Charges. B. First Reading of Ordinance No. 114, 2012, Amending Chapter 26 of the City Code to Revise Electric Rates, Fees and Charges. C. First Reading of Ordinance No. 115, 2012, Amending Chapter 26 of the City Code to Revise Electric Development Fees and Charges. EXECUTIVE SUMMARY The following monthly rate increases are recommended for 2013: Service % Annual Increase Water 4.0% Electric 4.33% The proposed water increase is a flat 4% across the board to all customer classes. The electric rate increases which average 4.33% are proposed to vary by customer class from 3.35% to 5.33%. The proposed changes will impact individual electric customers more or less than the customer class averages and will vary by season. Electric development fees are proposed to decrease an average of 2.4% for residential and decrease an average of 1.6% for commercial development. There are no changes in the monthly rates for wastewater or stormwater services being proposed for 2013. With the rate changes contained in the proposed Ordinances, a typical single family customer’s monthly utility bill will increase $5.01 in the summer from $162.96 to $167.97 and $2.95 from $131.03 to $133.98 in non-summer months. BACKGROUND / DISCUSSION The recommended 2013 rate increases reflect the rates and revenues that are proposed in the City Manager’s Recommended 2013-2014 Budget. All proposed rates would be effective for meter readings on or after January 1, 2013. A. Monthly Water Rates - First Reading of Ordinance No. 113, 2012, Amending Chapter 26 of the City Code to Revise Water Rates and Charges. Staff proposes a 4% water rate increase. The need for this increase is due to the High Park Fire. The increase is a flat across the board increase to all rate classes. With the proposed rate, a typical single family residential customer’s monthly bill will increase 4% as shown in the following table: COPY COPY COPY COPY October 16, 2012 -2- ITEM 22 The High Park Fire in June 2012 affected the watershed serving Fort Collins Utilities on the Cache Le Poudre. Initial estimates of costs associated with stabilizing the soil suggest it could cost Fort Collins Utilities up to $10 million. With the City of Greeley and the Tri-districts also being affected by the fire, inter-governmental coordination of these erosion control efforts have reduced the estimated cost for soil stabilization by Fort Collins Utilities to $4-5 million. Fort Collins Utilities continues to work with federal agencies to determine if any federal funds exist to reimburse Fort Collins Utilities for these efforts. At this time Fort Collins Utilities cannot be assured of any federal funds in 2013, yet the mitigation efforts need to continue in the spring of 2013. There was an increase in demand for water during the hot, dry 2012 summer which is not expected to continue into 2013. The longer term trend of decreasing demand due to conservation efforts has resulted in operating revenues remaining at the same level over the last 5 years even with the recent rate increases (3% in 2007, 2010 and 2011 and 6% in 2012). Some revenue growth is expected in 2012 over 2011 due to higher demand. However, it is not sufficient to maintain water rates at the 2012 levels given the uncertainty around the weather and the anticipated increase in operating and maintenance costs associated with the High Park Fire. The vast majority of the costs of operating the water system are fixed and do not vary based on customer demand. However, the High Park Fire has affected the metal content in water taken from the Cache Le Poudre resulting in higher variable treatment costs for the foreseeable future. This rate increase is not related to Halligan Reservoir which is to be funded from the Water Rights Reserve. The Water Rights Reserve is funded by developers’ cash-in-lieu-of water rights payments and is restricted to the purchase of water rights and water storage only. A new rate class is being proposed for service to commercial customers with an average daily use in excess of 2.0 million gallons. B. Monthly Electric Rates - First Reading of Ordinance No. 114, 2012, Amending Chapter 26 of the City Code to Revise Electric Rates, Fees and Charges. Fort Collins wholesale and retail electric rates are among the lowest in the region and nation. This will continue to be true following the 4.33% electric rate increase proposed for 2013. The 4.33% increase is the system annual average and will not be applied to all customer rate classes. Based on a cost-of-service study the proposed rates vary by rate class and season as follows: COPY COPY COPY COPY October 16, 2012 -3- ITEM 22 1This is a new rate class proposed for 2013 The 4.33% overall annual increase consists of a 3.83% increase for purchased power from Platte River Power Authority (PRPA) and a 0.5% increase for the new Fort Collins Solar Program, which is included in the City Manager’s Recommended Budget. Platte River’s 2013 purchase power rate increase is due to several key factors: • Reduced surplus sales • Increased fuel costs • Increased renewable energy costs The higher increases for the commercial rate classes are due to purchased power costs being a higher percentage of total costs for these rate classes. A new rate class is being proposed for service to industrial customers connected directly to a substation. Customers who qualify for this rate class do not share in the costs associated with the operation and maintenance of the distribution infrastructure between the substations and meters. The renewable energy purchased from PRPA is increasing from $0.019 per kilowatt-hour to $0.024 per kilowatt-hour. This increase is due to the higher costs of purchasing Renewable Energy Credits (RECs) with the associated energy compared to purchasing RECs that are not bundled with the associated energy. Maintenance and decommissioning costs for some of the Vestas turbines at Medicine Bow are also accounted for in the price increase. Staff is also proposing to delete the Code duplication and clarify the terms of payment for each rate class by referring all rate classes to Section 26-713. COPY COPY COPY COPY October 16, 2012 -4- ITEM 22 Monthly Utility Bill Summary The following chart summarizes the impact of the proposed rate changes on a typical single family residential customer during the summer: The following chart summarizes the impact of the proposed rate changes on a typical single family residential customer during the non-summer months: The average non-summer utility bill is expected to be $142.80 in 2013 and the average utility bill in the Summer is expected to be $183.51 in 2013, or 29% higher than the non-summer bill. The following two charts compare Fort Collins Utilities’ monthly utility bill to others along the Front Range in 2012 at non-summer rates and then at summer rates. COPY COPY COPY COPY October 16, 2012 -5- ITEM 22 COPY COPY COPY COPY October 16, 2012 -6- ITEM 22 C. Plant Investment Fees (PIFs) and Electric Development Fees - First Reading of Ordinance No. 115, 2012, Amending Chapter 26 of the City Code to Revise Electric Development Fees and Charges. City Code requires staff to present water, wastewater and stormwater plant investment fees to Council for approval no less than every other year. These fees were last changed in 2011 effective on January 1, 2012. No changes are recommended for 2013 for water, wastewater and stormwater plant investment fees. Electric Development Fees Electric development fees are also required to be approved by City Council no less than every second year although historically staff has recommended annual changes. The current electric development fees were approved by Council in 2011 and were effective January 1, 2012. There is a small decrease in fees recommended for 2013. Electric development fees recover both actual on-site costs (building site charges) and allocated off-site costs (electric capacity charges) to serve commercial or residential development. These fees are adjusted annually to reflect changes in costs of labor and materials. While some costs continue to increase, an adjustment to the development fee model used to calculate the fees has resulted in a decrease in costs of approximately 2% for most developments. The table below shows the changes for a typical single family lot and a model commercial development. FINANCIAL / ECONOMIC IMPACTS The rates are projected to increase 2012 annual operating revenues of the Water Fund by 4% and the Light and Power Fund by 4.33%. The projected revenue from the rate increases is included in the City Manager’s Recommended 2013-2014 budget projections. The increases are necessary to fund purchased power, the Fort Collins Solar Program, and to ensure treated water quality is not diminished as a result of the High Park Fire. The proposed rate ordinances will increase costs for a typical residential customer by $5.01 in the summer from $162.96 to $167.97 and $2.95 from $131.03 to $133.98 in non-summer months. Utility programs can help customers to reduce their water and electric use and to lessen the financial impact of the rate increases. ENVIRONMENTAL IMPACTS Funding from the proposed electric rate increase will allow the Utilities to continue programs and services aimed at meeting the goals and objectives of the Energy Policy and Climate Action Plan. Accurate seasonal price signals may delay/ avoid the need for additional peak electric generation. Water rates provide funding for conservation programs and environmental regulatory compliance. COPY COPY COPY COPY October 16, 2012 -7- ITEM 22 STAFF RECOMMENDATION Staff recommends adoption of the Ordinances on First Reading. BOARD / COMMISSION RECOMMENDATION At its September 20, 2012 meeting, the Water Board unanimously voted to recommend approval of the proposed 2013 water. The Energy Board unanimously recommended approval of the proposed 2013 electric increase at its October 4, 2012 meeting. The draft Board minutes are attached. PUBLIC OUTREACH Notice of the proposed electric rate changes was published in the Coloradoan on September 30, 2012, and a mailing was sent city electric customers outside of the city limits in accordance with state requirements. Commercial customers have been advised of the proposed increases. Staff plans to conduct outreach to all customers following adoption of the Ordinances. ATTACHMENTS 1. Water Board minutes, September 20, 2012 2. Electric Board minutes, October 5, 2012 3. Powerpoint presentation ORDINANCE NO. 113, 2012 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 26 OF THE CODE OF THE CITY OF FORT COLLINS TO REVISE WATER RATES AND CHARGES WHEREAS, the City Council is empowered and directed by Article XII, Section 6, of the Charter of the City of Fort Collins, Colorado, to from time to time fix, establish, maintain and provide for the collection of such rates, fees or charges for utility services furnished by the City as will produce revenues sufficient to pay the costs, expenses and other obligations of the water utility, as set forth therein; and WHEREAS, Section 26-118 of the Code of the City of Fort Collins, requires that the City Manager analyze the operating and financial records of the water utility during each calendar year and recommend to the City Council the user rate fees to be in effect for the following year; and WHEREAS, the Poudre watershed was damaged by the 2012 High Park fire and will result in additional operating and capital costs for treatment and mitigation; and WHEREAS, the Water Board considered the proposed water rates, fees and changes for 2013 at its September 20, 2012 meeting and recommended approval of the rate changes by an unanimous vote; and WHEREAS, the City Manager has recommended to the City Council that the following water use rates be imposed for the billing year beginning January 1, 2013 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That Section 26-41 of the Code of the City of Fort Collins is hereby amended by the addition of two new definitions which read in their entirety as follows: Average daily demand shall mean the annual total water demand divided by the number of days in the year. Peaking factor shall mean the ratio of the highest amount of water delivered in a single day for the year to the average daily demand for that year. Section 2. That Section 26-126 of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 26-126. Schedule A, flat rates for unmetered construction water use. For residential and nonresidential premises under construction with a planned meter size greater than one (1) inch, no flat unmetered water service will be provided. For residential and nonresidential premises under construction with a planned meter size of one (1) inch or less, the following flat rates will apply per month until the permanent meter is set: ¾-inch construction service, flat charge per month $ $24.98 1-inch construction service, flat charge per month $ $47.63 Section 3. That Section 26-127 (a) Residential Rates and that Section 26-127 (b) Nonresidential Rates of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 26-127. Schedule B, meter rates. (a) Residential Rates. (1) Residential customers with one (1) dwelling unit. a. Base Charge. Residential customers with one (1) dwelling unit shall pay a base monthly charge of fourteen dollars and fourteen cents ($14.14). b. Quantity Charge. Residential customers with one (1) dwelling unit shall pay a monthly quantity charge as follows: For the first seven thousand (7,000) gallons used per month, a charge of two dollars and eighteen and nine tenths cents ($2.189) per one thousand (1,000) gallons. For the next six thousand (6,000) gallons used per month, a charge of two dollars and fifty-one and six tenths cents ($2.516) per one thousand (1,000) gallons. For all additional gallons used per month, a charge of two dollars and eighty-nine and four-tenths cents ($2.894) per one thousand (1,000) gallons. (2) Residential customers with two (2) dwelling units. a. Base Charge. Residential customers with two (2) dwelling units shall pay a base monthly charge of sixteen dollars and sixty-one cents ($16.61). b. Quantity Charge. Residential customers with two (2) dwelling units shall pay a monthly quantity charge as follows: -2- For the first nine thousand (9,000) gallons used per month, a charge of two dollars and ten and nine tenths cents ($2.109) per one thousand (1,000) gallons. For the next four thousand (4,000) gallons used per month, a charge of two dollars and forty-two and four-tenths cents ($ 2.424) per one thousand (1,000) gallons. For all additional gallons used per month, a charge of two dollars and seventy-eight and nine-tenths cents ($2.789) per one thousand (1,000) gallons. (3) Residential customers with more than two (2) dwelling units. a. Base Charge. Residential customers with more than two (2) dwelling units shall pay a base monthly charge of fourteen dollars and three cents ($14.03) for the first dwelling unit and four dollars and sixty-seven cents ($ 4.67) for the second and each additional dwelling unit. b. Quantity Charge. Residential customers with more than two (2) dwelling units shall pay a monthly quantity charge of two dollars and three and seven-tenths cents ($2.037) per one thousand (1,000) gallons used in the winter season months of November through April. They shall pay a monthly quantity charge of two dollars and fifty-four and seven-tenths cents ($2.547) per one thousand (1,000) gallons used in the summer season months of May through October. The meter reading date shall generally determine the seasonal monthly quantity charge; however, no customer shall be billed more than six (6) full billing cycles at the summer quantity charge. (b) Nonresidential Rates. (1) Base charge. Nonresidential, except for special users as described in Section 26-127 (c) customers shall pay a base monthly charge based on meter size as follows: -3- Meter Size (inches) Monthly Base Charge ¾ $ 12.66 1 35.31 1½ 96.02 2 144.71 3 220.71 4 346.49 6 672.15 8 1187.42 (2) Quantity charges. Nonresidential customers shall pay a monthly quantity charge of one dollar and seventy-six and one-tenth cents ($1.761) per one thousand (1,000) gallons used in the winter season months of November through April. They shall pay a monthly quantity charge of two dollars and twenty and one-tenth cents ($2.201) per one thousand (1,000) gallons used in the summer season months of May through October. The meter reading date shall generally determine the seasonal monthly quantity charge; however, no customer shall be billed more than six (6) full billing cycles at the summer quantity charge. (3) Charges for excess use. Monthly water use in excess of the amounts specified in the following table shall be billed at two dollars and fifty- three cents ($2.530) per one thousand (1,000) gallons used in the winter season months of November through April. c Monthly water use in excess of the amounts specified below shall be billed at three dollars and sixteen and four-tenths cents ($3.164) per one thousand (1,000) gallons used in the summer season months of May through October. The meter reading date shall generally determine the seasonal billing excess quantity charge; however, no customer shall be billed more than six (6) full billing cycles at the summer excess quantity charge. Meter Size (inches) Specified Amount (gallons per month) ¾ 100,000 1 300,000 1½ 625,000 2 1,200,000 3 1,400,000 4 2,500,000 Section 4. That Sections 26-127 (c) and (d) are renumbered as 26-127 (d) and (e) respectively and that a new section 26-127 (c) of the City Code is added as follows: -4- (c) High Volume Industrial Rates 1. High Volume Industrial Rates apply to any customer with an Average daily demand in excess of 2,000,000 gallons per day. The specific rate for any qualifying customer shall be based upon the applicable peaking factor for that customer as follows: Peaking Factor Monthly charge per thousand gallons 1.00 – 1.09 $1.430 1.10 – 1.19 $1.490 1.20 – 1.29 $1.550 1.30 – 1.39 $1.600 1.40 – 1.49 $1.660 1.50 – 1.59 $1.710 1.60 – 1.69 $1.770 1.70 – 1.79 $1.830 1.80 – 1.89 $1.880 1.90 – 1.99 $1.940 > 2.00 $2.000 Section 5. That the amendments to the Chapter 26 of the City Code contained herein shall go into effect in for meter readings on or after January 1, 2013. Introduced, considered favorably on first reading, and ordered published this 16th day of October, A.D. 2012, and to be presented for final passage on the 6th day of November, A.D. 2012. _________________________________ Mayor ATTEST: _____________________________ City Clerk -5- Passed and adopted on final reading on the 6th day of November, A.D. 2012. _________________________________ Mayor ATTEST: _____________________________ City Clerk -6- ORDINANCE NO. 115, 2012 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 26 OF THE CODE OF THE CITY OF FORT COLLINS TO REVISE ELECTRIC DEVELOPMENT FEES AND CHARGES WHEREAS, the City Council is empowered and directed by Article XII, Section 6, of the City Charter to fix, establish, maintain and provide for the collection of such rates, fees or charges for utility services furnished by the City as will produce revenues sufficient to pay the costs, expenses and other obligations of the electric utility, as set forth therein; and WHEREAS, the City Council has determined that it is appropriate for new development to contribute its proportionate share of providing capital improvements; and WHEREAS, Section 26-471 of the City Code requires that the electric development fees be reviewed annually by the City Manager and that the fees be presented to the City Council for approval no less than biennially; and WHEREAS, on November 1, 2011 the City Council adopted Ordinance No. 143, 2011, which established the electric development fees now in effect; and WHEREAS, the City Manager and staff have recommended to the City Council the following adjustments to the electric development fees and charges for all invoices paid on or after January 1, 2013; and WHEREAS, based on the foregoing, it is the desire of the City Council to amend Chapter 26 of the City Code to revise electric development fees and charges. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That Section 26-472 (b) and (c), “Residential electric development fees and charges” of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 26-473. Residential electric development fees and charges. (b) The ECF shall be the total of the site footage charge, dwelling charge and systems modification charge, to be determined as follows: (1) The site footage charge shall be the combined total of: a. four and five hundred fifty thousandths cents ($0.04550) per square foot of developed site square footage, including all applicable tracts but excluding the area dedicated public rights-of-way; and Secondary Service Size Charge (up to 65 feet) Plus Per Foot Charge For Each Foot Over 65 1/0 service $ 646.00 $4.71/Foot 4/0 service $ 790.00 $5.51/Foot 350 kCM Service $ 892.00 $7.24/Foot 1/0 Mobile Home Service $505.00 N/A 4/0 Mobile Home Service $624.00 N/A b. ten dollars and two cents ($10.02) per lineal foot of the developed site abutting a dedicated street or roadway. (2) The dwelling unit charge shall be as follows: a. or a single-family panel size with one-hundred-fifty-amp service (nonelectric heat), one thousand two hundred seventy-three dollars ($1,273.) per dwelling unit; b. For a single-family panel size with two-hundred-amp service or with one-hundred-fifty-amp service (electric heat), two thousand one hundred sixty-nine dollars ($2,169.) per dwelling unit; c. For a multi-family panel size with one-hundred-fifty-amp service (nonelectric heat), eight hundred forty-nine dollars ($849.) per dwelling unit; d. For a multi-family panel size with two-hundred-amp service or with one-hundred-fifty-amp service (electric heat), one thousand five hundred eighteen dollars ($1,518) per dwelling unit. (3) A system modifications charge will apply when a new or modified service will require infrastructure in addition to or different from the standard base electrical system model. The differential costs associated with such system modifications will be included in the calculated ECF. (c) A Building Site Charge ("BSC") for any new or modified residential service shall be paid prior to issuance of a building permit for the related construction or modification. The BSC shall be based upon the current rates as of the time of issuance of the building permit. The BSC shall be the total of the secondary service charges, and any additional charges, determined as follows: (1) The secondary service charge shall be as follows: (2) Actual special costs to the utility of installation of secondary service resulting from site conditions shall be included in the BSC as additional charges. Such conditions may include, but are not limited to, frozen or rocky soil, concrete cutting and asphalt replacement. -2- Section 2. That Section 26-473 (b) and (c), “Nonresidential electric development fees and charges” of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 26-474. Nonresidential electric development fees and charges. (b) The ECF shall be the total of the site footage charge, kVA service charge and systems modification charge, to be determined as follows: (1) The site footage charge shall be the combined total of: a. four and five hundred fifty thousandths cents ($0.04550) per square foot of developed site square footage, including all applicable tracts but excluding the area of dedicated public rights-of-way; and b. forty dollars and eleven cents ($40.11) per lineal foot of the developed site abutting a dedicated street or roadway. (2) The kVA service charge shall be determined as follows. a. For customer electric loads served by the utility the kVA service charge shall be: i. Utility owned transformers: the kVA service charge shall be fifty-six dollars and sixty-eight cents ($56.68) per kilovolt- amp (kVA) of service load rating. ii. Customer owned transformers: the kVA service charge shall be forty-six dollars and twenty-three cents ($46.23) per kilovolt-amp (kVA) of service load rating. b. For the utility to receive customer generation in excess of the customer’s electric service provided by the utility, the following KVA service charge will also apply: i. Utility owned transformers: the kVA service charge shall be forty-six dollars and twenty-three cents ($46.23) per kilovolt- amp (kVA) of generation service rating in excess of the service load rating as paid per subparagraph (2)a.i. above. Such ratings shall be determined by the Utilities Executive Director. ii. Customer owned transformers: the kVA service charge shall be thirty-five dollars and seventy-three cents ($35.73) per kilovolt-amp (kVA) of generation service rating in excess of the service load rating paid per subparagraph (2)a.ii.above. -3- Such ratings shall be determined by the Utilities Executive Director. (3) A system modifications charge will apply when a new or modified service will require infrastructure in addition to or different from the standard base electrical system model. The differential costs associated with such system modifications will be included in the calculated ECF. (c) A Building Site Charge ("BSC") for extending primary circuitry to the transformer for any new or modified nonresidential service shall be invoiced and paid in the same manner and at the same time as the ECF is invoiced and paid pursuant to Subsection (a) of this Section. The BSC shall be the total of the primary circuit charge, transformer installation charge and any additional charges, determined as follows: (1) The primary circuit charge for service from the utility source to the transformer shall be as follows: a. for single-phase service, a charge of nine dollars and eighteen cents ($9.18) per foot of primary circuit; b. for three-phase service, a charge of seventeen dollars and ninety-five cents ($17.95) per foot of primary circuit. (2) The transformer installation charge shall be as follows: a. for single-phase service, a charge of one thousand three hundred dollars ( $1,300.) per transformer; b. for three-phase service, a charge of two thousand three hundred eighty dollars ($2,380.) per transformer. (3) Actual special costs to the utility of installation of service resulting from site conditions shall be included in the BSC as additional charges. Such conditions may include, but are not limited to, frozen or rocky soil, concrete cutting and asphalt replacement. Section 3. That the amendments to Chapter 26 of the City Code contained herein shall go into effect for all invoices paid on or after January 1, 2013. -4- Introduced, considered favorably on first reading, and ordered published this 16th day of October, A.D. 2012, and to be presented for final passage on the 6th day of November, A.D. 2012. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 6th day of November, A.D. 2012. _________________________________ Mayor ATTEST: _____________________________ City Clerk -5-