HomeMy WebLinkAboutAgenda Packet 08/12/2003 UTILITY ADVISORY COMMITTEE
MEETINGS
PORT ANGELESy WA c:jiCt3E:~2
AUGUST 1 ~ 200;3
AGENDA
IV. LATE ITEk4S
VII. AD~IDURNMENT
UTILITY ADVISORY COMMITTEE
Port Angeles, Washington
July 8, 2003 ~
I. Call to Order:
Vice Chairman Campbell called the meeting to order at 3:00 p.m.
II. Roll Call:
Members Present: Vice Chairman Campbell, Councilmember Rogers, Dean Reed (3:05),
Aile~ Bentley,
Members Absent: Councilmember Erickson
Staff Present: Craig Knutson, Glenn Cutler, Scott McLain, Gary Kenworthy, Stephen
Sperr, Larry Dunbar, Bill Beverford, Cate Rinehart
Others Present: Brian Gawley - Daily News
Paul Lamoureux
Jan and A1 Hare
III. Approval of Minutes:
Vice Chairman Campbell asked if there were any additions or corrections to the meeting of June
10, 2003. Allen Bentley moved to approve the minutes. Councilmember Rogers seconded the
motion. Vice Chairman Campbell abstained due to absence at the meeting. The motion carried.
IV. Discussion Items
A. Stage II Water Shortage Declaration
Stephen Sperr, Engineering Manager, explained that the Peabody Heights Reservoir would be taken out
of service in August to permit the installation ora floating cover. With the reservoir out of service the
City water pumps may not be able to keep up with demands at peak usage times. Implementing Stage 1I
of the Water Shortage Plan, which involves voluntary conservation measures, should help reduce
demand while the reservoir is nonfunctional. Total down time is anticipated to be four to six weeks. A
discussion followed with the suggestion that an explanation be available on the website.
No action taken. Information only.
UTILITY ADVISORY COMMITTEE
July 8, 2003
B. Amendment No. 2 To The Consultant Agreement With CH2M Hill, Contract #00-28
Stephen Sperr, Engineering Manager, pointed out the necessity to amend the consultant agreement to
include Task #8, Spruce Street Pump Station and Waterline design. Task #8 would proceed as a means
to expand the Fairmount subzone. There was a brief discussion.
Dean Reed moved to recommend City Council authorize the Mayor to sign Amendment No. 2 to
the Consultant Agreement with CIt2M Hill, in the amount of $211,654, for a total contract
amount not to exceed $921,726. Allen Bentley seconded the motion, which carried unanimously.
C. Fluoridation Project Update
Glenn Cutler, Director of Public Works and Utilities, reported the Washington Dental Association
Service had put together a SEPA checklist.
No action taken. Information only.
D. Contribution To Electric Utility Rural Economic Development Revolving Fund For
20O3
Scott McLain, Deputy Director of Power Systems, explained that $100,000 is budgeted in 2003 from the
Light Fund for economic development activities in the City. The City can receive a $25,000 credit on
excise taxes owed to the State by contributing $50,000 through the Electric Utility Rural Economic
Development revolving Fund. A short discussion followed.
Couneilmember Rogers moved to recommend City Council authorize the transfer of $50,000 from
the Electric Fund to the Electric Utility Rural Economic Development Revolving Fund. Allen
Bentley seconded the motion. Dean Reed opposed. The motion carried.
E. Morse Creel* Hydroelectric Project
Scoa McLain, Deputy Director of Power Systems, noted that most of the pipeline projects were
complete with the exception of a small slide area and the tailrace barrier still needs to be constructed this
summer. The project is expected to be operational October 1, 2003. There was a short discussion
regarding FERC and instream compliance.
No action taken. Information only.
F. Electric Utility rate Adjustment
Scott McLain, Deputy Director of Power Systems, summarized the various components that will result
in increased costs to the electric utility on October 1, 2003. Some of these factors include the
replacement of power for an expiring contract with LG&E, the Columbia Storage Power Exchange,
transmission charges, use of reserves for rate mitigation, implementation of the safety net CRAC,
unbudgeted expenditures, and inflation of expenses. The proposed schedule for adjusting rates was
2
UTILITY ADVISORY COMMITTEE
July 8, 2003
reviewed. A discussion followed.
Couneilmember Rogers moved to recommend City Council set a public hearing date at the July
15, 2003 meeting. Dean Reed seconded the motion, which carried unanimously.
G. Rayonier Leachate - Quarterly Report
No action taken. Information only.
V.. Late Items
None.
VI. N~¥t M..eeti,~2' The ~e'~t meeting wi!! be August 12, 2002.
VII. Adjournment: The meeting adjourned at 4:15 p.m.
Councilman Campbell, Vice Chairman Cate Rinehart, Administrative
Assistant
710/03
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3
pORTANGELES
WASHINGTON, U.S.A.
UTILITY ADVISORY COMMITTEE MEMO
DATE: August 12, 2003
TO: UTILITY ADVISORY COMMITTEE
FROM: Tom McCabe, Solid Waste Superintendent
SUBJECT: Benefit Dump Day
Summary: The City of Po~ _angeles held Lhe onnu~ event cn April 27, 2003~ ,The goal was to
divert the majority of the refuse to the recycling area to Conserve valuable landfill space and to
insure that the current cell will not reach capacity before December 2006. The Food Bank
received $3,259 cash and 5,840 lbs. of food. The cost of the event is included in the landfill
tipping fees.
Recommendation: Information Only.
Background / Analysis: Clean-Up Days, Free Dump Days, or Recycle Days are common events for rural
communities. The City of Port Angeles Solid Waste Division sponsors an annual Benefit Dump Day for
all Clallam County residents. Residents may haul all non-hazardous waste to the Landfill Site for free on
the designated Free Dump Day. All landfill fees are waived for this event. Residents are requested to donate
cash or food items to benefit the Port Angeles Food Bank.
Restrictions:
· One load per household
· 3/4 ton pick-ups or cars with trailers (5 ft x 8 ft)
· Limit on tires, refrigerators, freezers, and other appliances of four each.
Promotion / Advertising:
· Peninsula Daily News
· Sequim Gazette
· KONP Radio
· Peninsula News Net
· Channel 21
· Flyers at landfill
· City utility bills
Staff for the Event:
· City Staff
· Clallam County Staff
· Food Bank Staff
· Community Service Workers
UAC August 12, 2003
Page 2
Modifications:
· Relocation of the food and money collection point
Metal pile was reduced prior to the event
Demographic of Users:
Agency Vehicles Tons Tip Fees
City of P.A 473 ( 692 ) 168.45 ( 271.96 ) $12,937
Sequim 255 ( 185) 105.40 ( 72.62) $ 8,095
Forks 18 ( 34) 7.38 ( 17.43) $ 567
East County 378 (381) 168.49 ( 154.50) $12,941
WestCounty 255 (152) 117.45 ( 64.38) $ 9,020
~ Totals i ~'"'~""~ ( 1,444 ) i 567.17 ( 596.g,9 )
2002 Numbers )
Advertising Cost:
Agency Costs Number of Ads
Daily News $685 4
Sequim Gazette $ 285 2
KONP Radio $ 340 20
Peninsula News Net $ 250 20
Total $1,560
Event Costs:
Expenditures Cost
Tipping Fee's not collected $ 43,560
Employees and Equipment $ 5,357
Advertising $ 1,560
Tire Recycling $ 1,700
Total $ 52,177
The City of Port Angeles presented a brief summary to the Solid Waste Advisory Committee July 17,
2003. The Committee thanked the City and encouraged the City to continue this event in the furore. They
felt this event contributes to reducing illegal dumping m Clallam County.
WASHINGTON, U.S.A.
UTILITY ADVISORY { OMMITTE£ MEMO
DATE: August 12, 2003
TO: UTILITY ADVISORY COMMITTEE
FROM: Bill Beverford, Water/Wastewater Collection Superintendent
RE: Leak Detection 2003 Results
' Summary: The City has contracted with Utility Services Associates to locate leaks in the
water distribution system for the past thirteen years. Detecting and repairing these leaks results
in recovery of water revenue and water conservation. This year's leak detection survey was
performed from May 19th through May 23, 2003. The estimated combined water loss that was
detected and repaired was found to be 51,120 gallons per day.
Recommendation: Information Only
Background/Analysis: Each year the Water/Wastewater Collection Division contracts with
Utility Services Associates to perform a leak detection survey of approximately one-fifth, (1/5),
of the water distribution system. This year's leak survey was performed over a five day period.
Extremely sensitive sound amplification instruments and computer based correlations are used
for pinpointing leaks. The utility's preparation of finding, locating, and uncovering the necessary
contact points for the specialized equipment usually takes about ten(10) working days.
The main location of the survey was "A" to 'T' Streets, from West 5th Street to US Highway 101
West. We also utilized this equipment to eliminate our piping system as a suspected source of
customer's ground water issues in two different locations. This year we surveyed approximately
twenty miles of water distribution mains. A total of six (6), leaks were detected with an
estimated water loss of 51,120 gallons of water per day. These leaks were generally small in
nature, averaging about 14 gallons per minute, but on a cumulative basis, this continued water
loss could account for approximately 18,658,800 gallons of water annually.
All of the detected leaks have been repaired.
Attach: Summary &survey and Pinpointing Reporl,
Summary of Survey and Pinpointing Report
Client: City of Port Angeles, WA Date: 05/26/2003
Period Covered: 05/19/03 to 05/23/03
TOTAL ANNUAL WATER LOSS
General Area Covered: North & Northeast areas of the
water distribution system.
18,658,800.0 GALLONS
SUR VEY DATA
Distance Surveyed: feet, miles
iime Spent Surveying: 2~.92 hours
Points Surveyed Access Points Requiring further investigation
Hydrants 8s
Valves 386 Leak sounds on: Valves 2
Services 279 Hydrants 0
Other 1 Services 5
Total 7si Other o
Total 7
PINPOINTING DATA
LEAK TYPE ~n~SER rr~ SPENY TOTAL, TOTAL, LARGEST, LARGVe. ffr, SMALLE~ SMALLEST, AVERAGE
MAIN LINE 3 2.33 25.0 36000.0 10.0 14.400.0 5.00 7200.00 8.33
METER 2 0.50 0.5 720.0 0.2 360.0 0.25 360.00 0.25
SERVICE LINE 1 1.08 10.0 14400.0 10.0 14400.0 10.00 14400.00 10.00
TOTALS 6 3.92 35.50 51120 n. a, n. a n. et n. a 5.92
Sites Investigated for Pinpointing 7
Other Time Spent on Project (includes pinpointing false leak sounds) 9.16 hrs.
pORTANO Es
W A S H i N G T O N, U, $, A.
UTfl. TY ADVISORY GOM IITTEE IEtaO
DATE; August 12, 2003
TO: UTILITY ADVISORY COMMITTEE
FROM: Jeff Young, WWTP Superintendent
SUBJECT: Interim Septage Receiving Action Plan
Summary'.' Minimal conversion a~ the x3DN. TP would a!!ow th'e City to process s~*p~c waste from
haulers within Clallam County. City Council approval is needed to take septic waste from outside
of the City. The fee for disposal of septic waste has been established at eleven cents ($0.11) per
gallon.
Recommendation: Forward a favorable recommendation to accept septage generated from
outside of the City beginning September 1, 2003, at the rates established in Chapter 3.70 of the
Port Angeles Municipal Code.
Background / Analysis: Chapter 13.64 of the Port Angeles Municipal Code (PAMC), Section
13.64.090 prohibits septic waste from outside the City unless specifically approved by the City
Council. With City Council approval necessary structural changes can be made to begin receiving
septage from outside of the City by September 1, 2003. All of the regulations found in Chapter
13.64 of the PAMC will be incorporated into the process. This includes charging an annual permit
fee and eleven cents ($0.11) a gallon to dispose of the waste. Certified septic pumpers will be
issued a Industrial Waste Permit and Septic Hauler Permit. Waste generated from outside Clallam
County would not be accepted.
The 2002 budget contains fimds for a Septage Receiving Station. Many options have been
considered for a permanent station and we are still working on a permanent site. In the interim the
City could realize revenue by accepting septage with minimal conversion required at the Treatment
Plant. This would consist of redirecting a storm drain to the Plant Headworks. This conversion can
be done by the Street Division at a cost of approximately $5,000.
Plant loading and installation locations to minimize odor release and provide for an effective
treatment have been analyzed and no adverse conditions were found.
D:\wwtphM EM OSXu ac~sepactplan 7 0 3 .wpd
pORTANOELES
WASHINGTON, U.S.A.
UTILITY aDVISORY (;OMMITTEE M£MO
DATE: August 12, 2003
TO: UTILITY ADVISORY COMMITTEE
FROM: Stephan Sperr, Engineering Manager
R~: CSO Flow Monitoring Upgrades
Summary: Geotivity, Inc. has installed and maintains flow measuring and recording devices at
each of the City's 5 Combined Sewer Overflow (CSO) sites as required by the Wastewater
Treatment Plant's (WWTP) National Pollutant Discharge Elimination System 0XFPDES) permit.
The flow recorders need to be upgraded to ones that can provide "realtime" data so that public
notification and dry weather overflow notification requirements in the NPDES can be met.
Recommendation: Authorize the Mayor to sign a purchase contract with Geotivity for an
amount not to exceed $34,500.
Background/Analysis: In January 2000, the City replaced the Flo-tote flow recorders at each of
the 5 CSO sites with R_MI 1100 flow recorders. The R/VII 1100 units are products of Geotivity,
Inc., who completed the installations in February 2000. Currently they also maintain the units
and do monthly data uploads, which they post on a website for the City and its consultants use.
The latest NPDES permit issued to the WWTP on May 31, 2002, includes specific monitoring
and reporting requirements for the 5 CSO sites. They include a process for public notification of
CSO events and immediate notification to the Department of Ecology of dry weather overflows.
In order to meet these requirements, the flow monitoring devices at each CSO should be capable
of notifying City staff when a CSO event is occurring. Geotivity has developed a "realtime"
CSO flow recorder, Qtrek V2, that transmits data via cellular phone technology to Geotivity.
Geotivity then converts the data to a format that the City or its consultant can access and use for
analysis and reporting purposes. In addition, this system will notify the City via email of CSO
events as they occur, which would trigger a notification process that the City is developing.
Another benefit of these flow recorders is that once we know a CSO event is occurring, we can
go to a CSO site and take grab samples, which is another requirement of the CSO permit.
Currently, City staffhave to guess when there is a rain event that is likely to trigger a CSO event,
and go to the CSO sites to sample. If the CSO event has not occurred when they arrive, they
have to come back later, wasting time and resources.
CSO Flow Monitoring Upgrades
August 12 UAC Meeting
Page 2 of 2
The City has received a quote to trade in 4 of the RMI 1100 flow monitom and upgrade to the
Qtrek V2, including installation, of $30,800. It is recommended that $34,500 be allocated for
this work to allow for contingencies. A Qtrek V2 will not be installed at the Pump Station 1 CSO
site, as that site will be eliminated by the end of 2004. The monthly operating cost to maintain
them, upload and scrub the data, will be $400. Because a Geotivity crew will not have to visit
each of the sites once a month (ave. cost $1400), the estimated net monthly operating cost
savings will be $1000.
Attachment: Quote fi.om Geotivity
,v~ 801 Dalton Road
Quotation: Kelowna, BC V1X
7X3
Prepared Steve Sperr Prepared ier (250) 491-1439
for: by:
Company: City of Port An§eles Company: GEOtivity
Phone: (360) 417-4821 Phone: (250) 491-1439
Email: ssperr@ci.port-angeles.wa.us Email: jmeier@mygeotivity.com
Address: Position: Regional Manager
Date: August 7, 2003 Thank you
for the
opportunity
to be of
service.
Trade in of Equipment to Q2 # of Per unit cost Discoun Cost
Units t
4 $8,800 $2,450 $25,400
Qtrek V2 is a rugged flexible system that is capable of collecting
quality data in the harsh sewer environment. The V2 is appropriate
for permanent or portable applications and is coupled with
advanced communication ports designed to support industry
standard telnet and HyperTerminal applications in most operating
systems such as Windows, Macintosh, and Linux. The V2 can take
up to sixteen different sensors at one time, eight digital and eight
analog, and comes standard with two depth one velocity sensor
and digital float switch. Any sensors with a 4-20ma or 0-5V input
can be utilized, including, but not limited to, ultrasonic level,
redundant velocity, temperature, pH and water quality. This allows
for expandable, highly integrated flow monitoring when several
measurements are required; or the platform can be use only one
sensor if a weir or flume equation is the preferred method of
measurement.
Highly accurate depth, velocity, and water quality data can be
collected on a user-defined interval. Data processing and review
can be facilitated through the internet. This high tach, user-friendly
technology makes analysis and reporting more efficient and
effective.
Monitor Site removal 4 $450 $1800
Monitor Installation 4 $900 $3600
Wireless Connectivity/site/month 4 $50 $200
Rain Gauge Data uploaded to server monthly 1 $200 $200
Total Capital Cost $30,800
Monthly Operating Costs $400
Equipment is warranted for one year parts and labor. Page I of 2
Current delivery time is two weeks.
Shipping. brokerage and other fees are F.O.B. GEOtivity Warehouse, Kelowna SC Canada.
All shipping and brokerage fees are paid by client
W A $ H [ N G T O N, ~. $. A.
UTILITY ADVISORY GOMMiTTEE M£MO
DATE: August 12, 2003
TO: UTILITY ADVISORY COMMITTEE
FROM: Larl'y Dunbar, Power Resources Manager
SUBJECT: Purchase of Conservation Agreement Amendment
Summary: The City has offered its commercial and industrial utility customers participation in
the Bonnev~l!e Power Admird~trafion ?ard~a~e uf Consecration Agreement pregram ~ince June
18, 2001. The current agreement, if not amended, will expire on September 30, 2003.
Recommendation: Forward a favorable recommendation to authorize the Director of Publi~
Works and Utilities to sign the Purchase of Conservation Agreement Amendment with
Bonneville Power Administration.
Background/Analysis: On June 18, 2001, the City Council authorized the Mayor to enter into
the Purchase of Conservation Agreement with the Bonneville Power Administration (BPA).
Under the Agreement, the City provided rebates for lighting conservation projects to its
commercial and industrial customers.
On September 18, 2001, the City Council accepted an amendment to the Agreement to provide
commercial and industrial customers incentives for energy conservation measures in addition to
lighting projects. Commercial and industrial customers seeking an incentive from the City
prepared project proposals including an energy analysis, method for determining and verifying
energy savings, and estimated cost. Each project proposal was submitted to BPA for review and
acceptance. Incentives were based on $0.18 per kWh saved not to exceed 80% of total project
cost. The City was reimbursed for its administrative costs under the program in an amount not to
exceed 15% of the incentive paid to the customer.
The current Agreement if not amended will expire on September 30, 2006. The proposed
amendment extends the term of the Agreement to September 30, 2006, revises the incentive to be
based on energy conservation measure life not to exceed 60% of total project costs, and does not
include any reimbursement of the City's administrative costs. The proposed amendment could
provide up to $450,000 in energy conservation rebates to the City's commercial and industrial
customers consisting of $150,000 for lighting conservation projects and $300,000 for other
energy conservation measures.
The City has until September 30, 2003 to accept the amendment to the Agreement. The City
Attorney has not reviewed the proposed amendment.
pORTAN ELES
WASHINGTON, U.S.A.
UTILITY ADVISORY COMMITTEE MEMO
DATE: August 12, 2003
TO: UTILITY ADVISORY COMMITTEE
FROM: Scott McLain, Deputy Director for Power Systems
SUaJECT: October 2003 Electric Rate Adjustment
Summary: At the August 5, 2003 City Council meeting, revenue requirements and possible
retail rate options were presented for Council consideration. Council directed additional
discussion and rate recommendations for the Council meeting on August 19; 2003.
Recommendation: Forward a favorable recommendation to implement option one of the
retail rate proposals to increase electric rates in October, and defer a decision on an
adjustment due to the BPA wholesale power increase until April of 2004.
Background/Analysis: At the August 5, 2003 City Council meeting a presentation was given
discussing the revenue requirements for the electric utility due to increases in wholesale power
costs.
Three retail rate options were presented. The issue was sent back to UAC to prepare a
recommendation to City Council for its August 192 meeting. Any action on rates would occur at
the September 2nd meeting.
The City Council memo and presentation from the August 5th, 2003 meeting is attached. A
minor change from the original council memo was included in the presentation. Because of the
timing of the proposed wholesale increase due to the SN-CRAC implementation and possible
settlement ora related lawsuit, it is recommended that we delay any decision on a rate adjustment
related to BPA rates (SN-CRAC) until April 2004.
Staff is recommending option 1 of the three rate options presented. This rate would follow
wholesale rates more closely and still use reserve funds to mitigate rates for the next two years.
This also avoids drawing down our reserve fund too quickly, and preserves funds for future rate
mitigation.
pORT. ANGELES
WASHINGTON, U.S.A.
CITY COUNCIL MEMO
DATE: August 5, 2003
To: CITY COUNCIL
FROM: Glenn A. Cutler, Director of Public Works and Utilities
SUBJECT: Proposed Electric Rate Adjustment
ISummary: Several cost components relating to the City;s wholesale cost of power will be
increasing in cost starting October 1, 20~J3. it will.oe necessary to adjust rctml elec~ac rates at
that time to maintain the electric fired in a financially prudent position. Details of the
recommended rate adjustment will be presented before City Council, along with input from a
mblic hearing.
Recommendation: Open public hearing after staff presentation on recommended rate
adjustments. Continue public hearing to August 19th City Council meeting.
Background/Analysis: Two power' supply contracts are expiring, along with increases in two
other components of the City's wholesale power supply. It will be necessary to increase retail
rates to our customers to maintain the electric fund in a financially prudent manner. The
following descriptions of thc various components only apply to customers served from the
distribution system of thc City. The Industrial transmission customer class has a retail rate that is
based on the wholesale cost of power, and adjusts automatically to wholesale rates changes.
LG&E replacement power: The City has been receiving about 20% of its power supply for the
past seven years under a contract with Louisville Gas and Electric. This contract expires on
September 30, 2003 and must be replaced with power fi'om the Bonneville Power
Administration. Power under this contract was priced at $14.62 per mWh for the first five years
and $19.10 per mWh for the last two years. The replacement of this power with BPA power will
cost about $34.27 per mWh. This power contract has saved the City about $1,200,000 per year.
The replaccrnent power will add $660,450 per year to wholesale power costs for the distribution
system (non-industrial) customers.
Columbia Storage Power Exchange (CSPE): This power supply contract expired on March 31,
2003. Thc contract supplied a very small amount of power to thc City, but has been at virtually
no expense to the City for the last two years, as the bonds that financed the contract were paid off
at that time. Thc increased cost to replace this component of wholesale power is about $98,980
per year for the distribution system customers.
August 5, 2003 City Council
Re: Proposed Electric Rate Adjusmaent
Page 2
Transmission charges: Bonneville's transmission customers (including the City of Port Angeles)
agreed to a transmission cost increase of 2.5% beginning October 1, 2003. This increase will add
about $33,300 per year in costs to the distribution customers.
Safety Net CRAC (SN CRAC): The administrator at BPA has released the initial record of
decision for the safety net CRAC level. The actual level of the SN CRAC ranges fi.om 15% to
17% through the 2006 rate period. Reductions in the load based and fmancial based CRAC's
during the period will cause the combined effect of the three CRACs to be an increase to current
rates of about 5%. If the SN CRAC is implemented at this level in October, the distribution
custom, ers will see an increase in costs of $388,500. Attached is a graph of the projected CRACs
through the 2006 mt~p~od
There are some late developments concerning the various CRACs. A pending lawsuit filed by
several public utilities that relates to the amount of Federal power allocated to the private utilities
may be settled. If this settlement occurs, the net amount of the three CRACs will be reduced, and
would also reduce the required increase to retail rates for the City. The amount of the SN CRAC
above represents the outcome under the initial record of decision by the BPA administrator. The
final decision will not be known until late August or early September. These rate issues are
being brought before City Council at this time so there will be ample time to consider the various
rate options, and receive public comment prior to implementing new rates in October. If a
settlement of this lawsuit does occur, revised recommendations will be presented at a future City
Council meeting for consideration.
The four items discussed above are all related to the cost of wholesale power supply for the City
and are the only increases in costs that the recommendations in this rate adjustment will cover.
Three other cost issues will be discussed below, but are not included in the recommended rate
adjustment.
Use of reserves for rate mitigation: The retail rates that were approved in October 2001 included
the use of $1,700,000 in electric utility reserves to reduce the effect of the rate increase for two
years. If there is no adjustment to retail rates for this item, the reserve fund would continue to be
reduced by $850,000 per year. The annual revenue requirement to discontinue reducing reserve
levels is $943,500, including taxes. Reductions in expenditures and capital projects resulted in
little use of reserves during the 2001-2003 period, so it is recommended that the City continue to
utilize its reserves into the next two year period to help mitigate rate increases.
Unbudgeted expendit ,ures: Several projects are funded each year fi-om the electric utility fund that
are not included in the initial budget, and were not included in the revenue requirements to set
rates in 2001. These projects include items such as the Laurel Street slide repair and increased
costs for the oil handling warehouse. Various projects usually amount to about $100,000 per
year. These costs are paid from the distribution customer's reserves. Because of the strength of
the electric fund reserves, I am not recommending we increase rates to cover these ad hoc
expenses.
August 5, 2003 City Council
Re: Proposed Electric Rate Adjustment
Page 3
Inflation of expenses: Inflation levels for general expenses (labor and supplies) have increased by
about 2% per year and are expected to remain at that level for the next two years. Additional
costs to distribution system customers are about $95,000 per year. Again, because of the strength
of the reserve levels, I am not recommending that we increase retail rates to cover the increased
inflation costs.
If the three items above are not included in the rate adjustment, we can expect to utilize about
$1,025~600 in reserves each year.
The table below summarizes the various cost components and their effects on the cost per kWh,
per cent increase for a residential customer, and the cumulative increase. Adjustments to retail
rates are recommenueu for the fllst four kems. ~:~
Distribution Including Cost per % increase Cumulative
cost taxes KWH (residential) Increase
LG&E $595,000 $660,450 .00259 5.45% .00259
CSPE $89,170 $98,980 .00039 .82% .00298
Transmission $30,000 $33,300 .00013 .28% .00311
SN CRAC $350,000 $388,500 .00153 3.21% .00464
Below: items not recommended to be included in rate adjustment.
Discontinue $850,000 $943,500 .00372 7.82% .00836
Use of Reserves
Unfunded $90,000 $100,000 .00039 .83% .00875
Expenditures
Inflation $85,600 $95,000 .00037 .79% .00912
Three options for retail rate adjustments will be discussed during the City Council presentation to
recover the revenue requirements for the four wholesale power cost increases. No action will be
required until the September City Council meetings, for an implementation on October 1, 2003.
If there are any changes in costs due to settlement of the lawsuit, these changes will be reflected
in a reduced rate increase recommendation.
The proposed schedule for adjusting rates is as follows:
August 5, 2003 City Council presentation/open public heating
August 12, 2003 Return to UAC if necessary
August 19, 2003 Final comments/close public hearing
September 2na or 16th Final rate recommendation/City Council adopt new rates
N:\CCOUNC1L\CC2003\CC0805~Electric Rate Adjustment ProposaI.wpd
City of Port Angeles
October 2003
Rate Adjustment
City Council Meeting
August 5, 2003
· Presentation
· Open Public Hearing
· Continue Public Hearing to August 19, 2003
Why Increase Electric Rates? ,
Wholesale Power Components
· LG&E Power Supply Contract
· CSPE Power Supply Contract
· Transmission Charges
· BPA Wholesale Increases - SN CRAC
2
LG&E Power Supply Contract
· 11 MW serves 20% of City's load
· Seven year contract expires Sept. 30, 2003
· Saved City $1.2 M per year in power costs
· $14.62 & $19.10 replaced with $34.27 per mWh
· Will ada $660,000 to dlstfibufioncustomer costs
CSPE Power Supply Contract
· 30 year contract with Columbia Storage
Power Exchange
· Small amount of power - diminished during
term of contract
· Very low cost - no cost for past two years
· Cost to replace this power - $99,000/year
3
Transmission Charges
· Customers agreed to 2.5% increase in
transmission charges
· Will add about $33,000 to transmission
costs
SN CRAC
· Three Cost Recovery Adjustment Clauses in
power supply contract with BPA
· LB CRAC and FB CRAC already implemented
· Administrator indicates SN CRAC will trigger
October 1, 2003
· Net effect of three CRAC's is 5% increase in
BPA current rates
· Will begin effecting rates April 1, 2004
4
Estimate Based on SN-03: Final Studies
SN CRAC
· Pending lawsuit may be settled
· Outcome of settlement discussions will not
be known until mid September
· If settlement does occur, increase required
due to combination of CRAC's will be
reduced
· Propose postponing any rate adjustments
due to BPA rate changes until April 2004
5
Other Items Affecting Costs
· Use of Reserves
· Unbudgeted Expenditures
· Inflation of Expenses
Use of Reserves
· In 2001, $850,000 in reserves per year were
designated to mitigate the 2001 rate increase
· Reductions in expenses and capital spending
have resulted in little use of reserves
· Recommend continuing to use reserves at
this level to mitigate current rate adjustment
· Re-evaluate reserve levels and rate effects in
two years
6
Unbudgeted Expenditures
· In a typical year, about $100,000 ofunbudgeted
expenses are funded from the electric fund
· Recent items include the Laurel Street slide
repair, and additional costs for the oil handling
warehouse
- .Not~rE6orfimending an increase in rates to 'Cover
these costs at this time
Inflation
· Inflation levels at about 2%
· Expected to remain at that level for next
two years
· Not recommending we increase rates at this
time to cover inflation
7
Summary of Cost Increases
Distribution Cost per kVfn Cumulative
Cost Cost
Including Taxes
SN CRAC implementation delayed until April 2004.
Below: Items not recommended to be included in rate Bdt ?~m~nt
Retail Rate Options
Option 1
· Increase consumption charge to all rate
classes by $.0031 per kWh
· Average residential rate increase will be
5.7%
· Change in consumption c_harge from $.0475
to $.0506 per kWh
Advantages:
· Tracks costs best of three options
· Uses reserve funds to mitigate rate increase
Disadvantages:
· Slightly higher rates in first year
9
Average Residential Bill
1500 kWh
Existing Rate $82.25
Pronosed Rate ~o ,'., t ~
Rates of Other Utilities
City of Port Angeles (with option 1 increase) $86.90
Mason County PUD 3# $91.40
Clallam County PUD $102.49
~ Mason PUD #1 $103.45
Grays Harbor PUD $114.85
Puget Power $114.88
1500 kWh per month
10
Option 2
· Use 75% of $1,700,000 reserve fund in first
year, 25% in second year ,
· Residential consumption charge
- Year one $.0490
- Year two $.0525
Advantages:
· Increase slightly~less in first year
Disadvantages:
· Higher rates in second year
11
Option 3
· Rates remain the same-utilize reserves to
cover additional costs
· Would use $2,100,000 annually
· Would approach minimum reserve level in
two years -
Advantages:
· No immediate impact on rates
Disadvantages:
· Large rate increases needed when
minimum reserve level is reached
· Little flexibility in rate setting after
minimum reserve level is reached
12
Recommendation
· Obtain input from Council and customers
· Discuss at Utility Advisory Committee on
August 12, 2003
· Return to Council September 2, 2003 with
rate recommendation
Proposed Schedule
· Aug 5 Presentation/Open Public Hearing
· Aug 12 Return to UAC for Discussion
· Aug 19 Final Public Comments/Close Hearing
· Sept 2nd Final Rate Recommendation/Adopt Rates
13
Questions?
14
pORT
WASHINGTON, U.S.A.
UTILITY ADVISORY (~OMMITTi=I= MEMO
DATE: August 12, 2003
To: UTILITY ADVISORY COMMITTEE
FROM: Gary W. Kenworth~/P.~., Deputy Director of Public Works and Utilities/City
Engineer
RE: Stormwater Utility Discussion, Continued
Summary: At the request of the UAC, staff is providing additional information regarding project
locations, costs, and proposed staffing for a Stormwater Utility to facilitate discussion.
Recommendation: None, information provided for continued discussion purposes.
Background/Analysis: At the June 10, 2003 UAC meeting it was requested that staffprovide
added information regarding proposed projects (Apparent problem, location, proposed
improvements, and costs), and staff costs for further discussion regarding formation of a
Stormwater Utility.
In looking at potential projects we looked at those which would provide the most "bang for the
buck" in regards to solving problems in the three areas of concern; 1. Flooding, 2. Combined
Sewer Overflow (CSO) reduction, and 3. Economic development.
In regards to flooding there are several areas in the City which flood frequently during high
intensity or sustained rainfall events. The following areas, unranked, are potential candidates for
solving flooding problems:
· Storm manhole structures at Laurel and US 101 overflow with most events, are highly
visible, but damage is minimal.
The Canyon Edge and adjacent Ahlvers Road area has flooding problems which result in
many complaints.
Rose/Thistle area has no storm system, floods often with damage, and contributes to the
Canyon Edge problems.
The Campbell/Porter area also has no storm system and floods in many areas during
events.
"C" Street Extension (Penn Park) area has limited storm facilities, floods with damage,
and a source of many complaints.
Over Bluffdischarges ("N" St., 10m Street, "P" Street, & McDonald St.) cause severe
erosion problems during events with damage to properties.
Lincoln Park/Big Boy Pond flooding during sustained events flood ball fields and
fairgrounds. Pumping facilities at Big Boy Pond can only handle limited flows.
In regards to CSO reduction the downtown area and projects identified as a result of our Inflow
and Infiltration (I/I) Pilot Study would be the prime targets. Some potential projects are as
follows:
· Complete downtown disconnection of storm drain connections not corrected in
conjunctions with the downtown water main projects, Gateway, and the proposed
Convention Center.
Complete construction of storm drain in Lincoln Street from 4th to 7th Street.
· Albert/Eunice Street area storm drains.
In regards to Economic Development there are areas of potential development which would
benefit fi.om installation of storm utilities. Some of the areas not already noted above include:
l0th and Milwaukee Drive area
Milwaukee Drive and "P" Street area
· Upper Golf Course Road area
10th and "N" Street regional detention facility
Other projects which should be addressed, but not listed above include repair of Lincoln Street
Culvert, improvements for storm line outfalls which discharge over the bank at street and alley
ends and into our streams with erosion problems, stream restoration work, and other projects to
improve water quality in our stream and marine environment.
In order to manage the stormwater program to design and construction of the above and provide
utility formation support a project engineer level position is needed. Typical assigmnents will
include administration of utility, preliminary engineering and estimating for projects, grant and
loan applications and management, managing consultants in design and construction,
construction management, design, and program development. It is proposed that funding for the
position be divided equally between the new Stormwater Utility and the existing Wastewater
Utility due to the CSO reduction related functions proposed.
The Stormwater Utility, as proposed last fall, would generate approximately $265,000 in net
revenue above the current program. Originally, the Stormwater Budget was proposed to be split
nearly equally between operations and maintenance, administration engineering and planning,
and capital improvements. At UAC's direction we have revised the budget to focus on capital
improvements. The following table summarizes the revisions:
ACTIVITY ORIGINAL PROPOSED
BUDGET BUDGET
Operations & Maintenance $85,000 $15,000
Administration, Engineering, & Planning (0.5 FTE) $95,000 $50,000
Capital Improvements $85,000 $200,000
Total Stormwater Funded Budget $265,000 $265,000
The Capital Improvements which would install storm systems in areas like Porter/Campbell,
Rose/Thistle, Canyon Edge/Ahlvers, and "C" Street Extension under the new proposed budget
could result in a net reduction of operations and maintenance in the area of ditch cleaning. This
reduction would allow for an increase in the frequency of cleaning the remaining ditches. The
$15,000 shown for O & M in the proposed budget is for training of existing crews in water
quality protection and to provide materials for erosion control. No new street division positions
are proposed.
The $200,000 Stormwater Capital Improvements program could be developed to address the
three areas of concern; 1. Flooding, 2. Combined Sewer Overflow (CSO) reduction, and 3.
Economic development. In addition some funding could be set aside for matching grant and loan
programs for stream restoration, major repairs, or other stormwater related project which could
qualify.
A suggested first year program could be to design Ahlvers Road stormwater improvements to
relieve upstream flooding in Canyon Edge. In addition we would investigate the proper
stormwater improvements for the Laurel and US 101 flooding. Another highly visible project
which could be considered would be stormwater improvements in Park Street from Porter to
Race. This could dovetail with needed sewer improvements for economic growth to the south
and would also result in an improved roadway and sidewalks which are needed. We are currently
seeking grant funding for the sidewalks and discussing the City's participation in the sewer to
foster economic development. This project would address flooding, sewer overflows, and
economic development while meeting requests for school walking route sidewalks.
Another project which is designed and could be constructed immediately would be would be
completion of the Lincoln Street Sewer Separation project from 4th to 7th Steet. The first phase of
this project from 2na to 4th Street was constructed as part of the Safeway construction. The next
phases to complete the separation and resultant CSO reduction are costly and have deterred
economic improvements in that new buildings south of 4th are not allowed to discharge
stormwater runoff to the existing combined sewer system and are required to extend the storm
sewer to their development. Several developers for the old Chevron site have backed away from
their projects due to the cost of the stormwater extension, even thought the City has a completed
design and offered $100,000 participation. This project would support CSO reduction and
economic development. The engineers estimate is $ 200,000 from 4th to 6th Street and $100,000
from 6th to 7~ Street. Using the budgeted $100,000 we could complete the project over a two year
funding cycle ($100,000 each year) as one project with a total estimated cost of $300,000. This
could be accomplished under a City funded developer reimbursement agreement which would
allow the Storm Fund to be reimbursed as development which benefits from the project occurs.
The following table has been prepared to assist in the review of storm water projects:
Project Description. Estimated Project Type
Project Cost
Flooding CSO Econ. Other
& Eros. Red. Dev.
Laurel & US 101 $500,000* X
Canyon Edge & Ahlvers $500,000* X
Rose/Thistle area $500,000* X X
Campbell/Porter Area $500,000* X X
"C" Street Extension Area $500,000* X X
Over Bluff Disch. (N, 10th, P, McD) $100,000 ea. X
Lincoln Park/Big Boy Pond $250,000 X
Downtown CSO $500,000** X
Lincoln Storm 4t~ - 6th $200,000** X
Lincoln Storm 6th-7th $100,000'* X
Albert/Eunice Storm $250,000** X
10~h & Milwaukee Area $400,000* X
Milwaukee & "P" Area $800,000* X
Upper Golf Course Road Area $500,000* X
! 10~ & "N" Regional Detention $300,000 X
Lincoln Street Culvert Repairs $100,000 X
(City's Share)
Street Outfalls to Streams/Marine $50,000/yr X
Stream Rehabilitation (Matching $) $50,000 X
* Placeholder Estimates until Preliminary Engineering can be completed.
**CSO related work can be funded fully or partially from Wastewater Fund
· · ·