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HomeMy WebLinkAboutMinutes 01/08/1996UTILITY ADVISORY COMMITTEE Port Angeles, Washington January 8, 1996 /. Call to Order: Chairman Myers called the meeting to order at 4:35 p.m. Roll Call: Members Present: Members Absent: Staff Present: Gary Braun [arr. 5:30 p.m.], Larry Doyle, Joe Michalczik, and Bill Myers. Cathleen McKeown. C Knutson, B. Titus, C. Hagar, S. Kenyon, K Godbey, and S. McLaln. III. Election of Officers As Council has not yet appointed new representatives to the Committee, and Councilmember McKeown was absent and Councilman Braun would not be attending until the latter half of the meeting, it was the general consensus that the election of officers be postponed to the next meeting. IV. Approval of Minutes: Joe Michalczik moved to approve the minutes of the November 13, 1995, meeting. Councilman Doyle seconded the motion, which carried by a majority, with Councilman Doyle abstaining as he had not attended that meeting. V. Discussion Items: Prior to the meeting, Councilman Braun had requested that Item A, Power Resource Options, be moved to the end of the agenda so he could participate in the discussion. This was acceptable. B. Disconnection of Commercial Customer Customer Service Manager Kenyon provided a brief review of his memo. Mr. Kenyon requested the Committee recommend to Council that utility service to Birney's Restaurant be terminated immediately if payment arrangements are breached. Discussion followed, and Mr. Kenyon responded to questions posed by the Committee. He informed the Committee that the City had not been forced to cut service to a commercial account since 1984. Attorney Knutson explained that there was no specific policy regarding action to take in this -1- Utility Advisory Committee January 8, 1996 kind of situation. The Ordinance allows the Customer Service Manager and City Manager to work out payment plans and allows service to be cut if payment is delinquent. Joe Michalczik asked who owned the property, and Mr. Kenyon explained that Swain's owns the property and had not been notified of the delinquency problem. In the event that Birney's must close its doors, Swain's will be liable for four months of the delinquent balance (approxiamtely $2,400). Mr. Michalczik felt Swain's should be notified of the problem, as it will be liable for the utility bill if Birney's goes out of business and refuses to pay its arrearage~ After further discussion, Joe Michalczik moved to have Customer Service Manager Kenyon work with Attorney Knutson to draft a letter or enter into discussion with Swain's General Store informing them of the $12,000 delinquent balance owed by Birney's and that the UAC will recommend disconnection of service if payment arrangements are breached. Councilman Doyle seconded the motion. After further limited discussion, a vote was taken on the motion, which carried unanimously. C. Deposit Requirements A decision was recently handed down by the Ninth Circuit Court of Appeals which affects the way in which the City enforces its utility lien rights. Scott Kenyon reviewed the information he had provided including the three options offered by staffto protect the City and ratepayer's interests. Discussion followed, and Mr. Kenyon responded to questions and clarified the way deposits are currently handled. The Committee was reluctant to consider option three, requiring a deposit of all renters regardless of previous credit history. Chairman Myers felt those with good credit histories were being penalized by being asked to pay a deposit to help defray losses incurred because of credit risks. Attorney Knutson stated that several utilities have felt the same way, and feel they will not be able to get their legislative bodies to require a deposit at all. There was lengthy discussion, and Mr. Kenyon explained that approximately 2500 delinquent notices are generated per month, of which 200 per month will need continual work and reminders. In essence, he spends 25% of his time on 200 customers. It is Mr. Kenyon's hope that this can be abated if deposits are increased every time a customer gets into collection trouble. The Committee went on to suggest and discuss other options to help cure collection problems. Mr. Kenyon stated that option one could be enforced immediately, but option two would require an ordinance change. The Committee remained opposed to option three, as penalizing those who pay their bills on a timely basis. Mr. Kenyon suggested that a change in policy be instituted. Currently, someone who has paid late twice in one year does not have to pay a deposit; he suggested that anyone who has paid late one or more times must pay a deposit. After further discussion, Councilman Doyle moved to recommend implementation of options one and two and direct staff to draft aa amending ordinance, if necessary, to tighten deposit requirements on new accounts, so a deposit would be required of anyone having one or more late payments in their credit history. Joe Michalczik -2- Utility Advisory Committee January 8, 1996 seconded the motion, which carried unanimously. D. Elimination of lnterest on Utility Deposits Customer Service Manager Kenyon reviewed the information provided in the packet. Finance Director Godbey explained to the Committee that paying interest on utility deposits is an administrative nightmare. The expense involved in computing and reconciling the interest is more than the amount of interest accumulated. Discussion followed regarding refunding of utility deposits. Councilman Doyle moved to recommend to Council eliminating interest on utility deposits. Joe Michalczik seconded the motion, which carried unanimously. A. Power Resource Options Light Director Titus distributed two handouts and reviewed the information provided in the packet. Councilman Braun felt the UAC would be able to give more time and discussion to the issues than the Council, and therefore, the UAC should definitely be involved in discussions concerning contract and rate negotiations with Bonneville or any other possible power supplier. This was agreed to by the rest of the Committee. Director Titus continued reviewing the issue, and at Councilman Braun's request, responded to questions posed by the Committee regarding the Power Resource Options Issue Paper. Some of the other possible power sources are larger than BPA, are willing to give contracts longer than five years, and offer lower rates than BPA. In 1992, Congress passed a law opening up transmission of power nationwide. Utilities that own the transmission cannot block access to other users, and must charge other entities the same rates they charge themselves. Director Titus then went on to explain regulations regarding transmission and how it is separated from charges and regulations for power. Director Titus felt diversification was in the best interest of the ratepayers and illustrated why. Director Titus continued to respond to questions and clarify issues regarding diversification and informed the Committee of the possible rates power will be sold. Concern was expressed over whether service levels would be reduced with a change in power source, and Director Titus explained that the only change ratepayers should see is a lower rate on their power bill. Director Titus informed the Committee that there are a limited number of inexpensive power sources available and once those are sold offthe next available power will be more expensive, and so on. Entities that wait to enter the marketplace will pay a higher price. Director Titus reviewed the activity schedule he had provided and stated the Council must reach a decision on resource diversification by February 6, 1996. After further discussion, Director Titus distributed an update on regional electric utility issues for the Committee's information; there was no discussion on this item. Director Titus requested the Committee make a recommendation to diversify resources and direct staff to submit a revised firm resource exhibit to Bonneville to that effect. Joe -3- Utility Advisory Committee January 8, 1996 Michalczik moved to recommend Council agree to diversify resources and direct staff to submit a revised firm resource exhibit to Bonneville to that effect. Councilman Doyle seconded the motion. After brief discussion, a vote was taken on the motion, which carried unanimously. Councilman Doyle moved to recommend to the City Council that the Utility Advisory Committee be the primary body where discussions take place for resource acquisition strategies. Councilman Braun seconded the motion. After limited discussion, a vote was taken on the motion, which carried unanimously. Late Items: None. Next Meeting: The next meeting of the Utility Advisory Committee will be held on Monday, February 12, 1996, at 4:30 p.m. Adjournment: The meeting adjourned at 7:10 p.m. t~irm~ifl ' ,) - D~p~t~ City ~lerk ~- -4-