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HomeMy WebLinkAboutAgenda Packet 07/08/2003 UTILITY ADVISORY COMMITTEE PUBLIC WORKS CONFERENCE ROOM PORT ANGELES, WA c~B362 · lULY B~, ~'FIG3 3:00 P.M, AGENDA I. CALL TO ORDER II, ROLL CALL III. APPROVAL I--IF' MINUTES F'OR ,JUNE 1 ~]~ ~:~nl-13 IV. LATE ITEMS V, DISCUSSION ITEMS A. WATER CONSERVATION ~TAGE II IMPLEMENTATION B. AMENDMENT TO CH2M HILL AGREEMENT I-~.. ~'LUORIDATION PROJECT UI~DATE (VERBAL) D. rt. ONTRIBUTION TO ELEC)TRIC RURAL ECONOMIC DEVELOI~MENT REVOLVING F'UND FOR 2nn3 E. MORSE CREEK HYDROELECTRIC PROJECT (VERBAL) F'. ELECTRIC UTILITY RATE ADJUSTMENT G. RAYONIER LEACHATE - QUARTERLY REF~ORT VI. NEXT MEETING DATE - AUGUST 1Z~ 2nn3 VII. ADJOURNMENT UTILITY ADVISORY COMMITTEE Port Angeles, Washington June 10, 2003 ~.~ I. Call to Order: Chairman Erickson called the meeting to order at 3:00 p.m. II. Roll Call: Members Present: Chairman Erickson, Councilmember Rogers, Dean Reed, Allen Bentley, Councilman Williams Members Absent: Councilman Campbell Staff Present: Mike Quinn (4:15), Glenn Cutler, Tim Smith, Ken Ridout, Scott McLain, Gary Kenworthy, Steve Sperr, Larry Dunbar, Doyle McGinely, Dave Ireland, Cate Rinehart Others Present: Brian Gawley (3:30) - Daily News III. Approval of Minutes: Chairman Erickson asked if there were any additions or corrections to the meeting of May 13, 2003. Allen Bentley moved to approve the minutes. Councilmember Rogers seconded the motion. Councilman Williams abstained due to absence at the meeting. The motion carried. IV. Discussion Items A. Purchase Of Surplus Manlift Truck From The City Of Blaine Washington Dave Ireland, Operations Manager, explained that truck #162 was reaching the manufacturer's recommended replacement point in 2004 at an estimated cost of $250,000. The City of Blaine ordered a new manlifi truck in 2002 which was found to be too large for the city alleys. The track has been placed in their surplus equipment inventory and is available at a cost of $120,000. The City of Port Angeles's equipment fund currently has $175,000 accumulated for replacing #162. There was a brief discussion. Councilman Williams moved to support staff to draft a letter of proposal to the City of Blaine to purchase the surplus manlift for $120,000 contingent upon the approval of the purchase by the City Council. Councilmember Rogers seconded the motion, which carried unanimously. UTILITY ADVISORY COMMITTEE June 10, 2003 B. Completion Of Magna Drive Installation Doyle McGinely, Water, Wastewater Collection Superintendent, advised that two drive units had been installed at Pump Station #4 as of February 2003 and a final calibration had been done. The units are being monitored for savings and the data for incentive payments from the Bonneville Power Administration will be available at the end of September. There was a brief discussion. No action taken. Information only. C. Conservation Program Rebate Adjustments Larry Dunbar, Power Resources Manager, advised the Bonneville Power Administration (BPA) would be making changes to the Conservation and Renewables Discount (C&RD) program that are anticipated to reduce program expenditures. As of April 30'h customer participation in the C&RD program was 10.6% above the performance target and if participation remains at this level or increases the budget will be used up earlier than anticipated. Staff intends to make appropriate adjustments to the program including lowering rebates for energy conservation improvements. A short discussion followed. No action taken. Information only. D. Amendment No. 2 To The Consultant Agreement with Skillings-Connolly, Contract #22-02 Stephen Sperr, Engineering Manager, stated it was necessary to amend the agreement to provide engineering services related to the elimination of sewage pump station #1. The additional tasks include design of a gravity sewer from pump station #1 to pump station #3 and a variety of smaller directed services not originally anticipated. A short discussion followed. Dean Reed moved to recommend City Council authorize the Mayor to sign Amendment No. 2 in the amount of $70,385.39 to Skillings-Connolly, Inc. for a total contract amount of $256,937.41. Councilmember Rogers seconded the motion, which carried unanimously. E. Update On Combined Sewer Overflow Events Stephen Sperr, Engineering Manager, noted the five sites that require monitoring as part of the Wastewater Treatment Plant's National Pollution Discharge Elimination System permit. Brown and Caldwell are in the process of developing an acceptable plan to achieve the permit requiremem of no more than one event per CSO outfall per year by the year 2015. A discussion followed. No action taken. Information only. UTILITY ADVISORY COMMITTEE June 10, 2003 F. Phase 1, Septage Receiving Station Stephen Sperr, Engineering Manager, pointed out that there are no locations in Clallam County that accept septage for treatment and disposal. The City and County have discussed funding a septage receiving station at the City's Wastewater Treatment Plant. This station could be installed and operated at a minimum initial cost and would be a potential revenue source. Staff indicated sufficient capacity for receiving the septage. A brief discussion followed. No action taken. Information only. G. Fluoridation Project Update Glenn Cutler, Public Works and Utilities Director, advised the Washington Dental Service Association and CH2M Hill had put together a draft transfer agreement. No firm prices have been established. The temporary facility is currently planned for the south the of the landfill. Further information will be forthcoming. No action taken. Information only. It. Electric Utility Reserves Report Scott McLain, Deputy Director of Power Systems, reported the reserve funds that have been used for projects not previously budgeted included the fiber optics project, the Laurel Street slide repair, the oil handling warehouse, and a few minor projects. A discussion followed. No action taken. Information only. L Stormwater Utility Discussion Gary Kenworthy, Deputy Director of Engineering, presented a variety of information for review and discussion which included the proposed stormwater utility budget and list of Capital Facilities Projects. A lengthy discussion followed. Items of deliberation included a list of rated projects, capacity issues regarding staff, and a study of the most effective package to get the projects done. No action taken. Information only. V. Late Items None. VI. Next Meeting: The next meetingwillbeJuly8,2003. VII. Adjournment: The meeting adjoumed at 4:50 p.m. 3 UTILITY ADVISORY COMMITTEE May 13, 2003 Councilmember Erickson, Chairman Cate Rinehart, Administrative Assistant 6/I l/03 N:M°WKS\LIGHT~CONS\CATE\june 10meet.wpd 4 WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: July 8, 2003 TO: UTILITY ADVISORY COMMITTEE FROM: Stephen Sperr, Engineering Manager RE: Stage II Water Shortage Declaration Summary: Peabody Heights Reservoir will be taken out of service in August to permit installation ora floating cover. With this reservoir out of service, the City's water pumps may not be able to keep up with demands at peak usage times. Public Works & Utilities (PW&LY) staff plans to implement Stage li of the Water Shortage Plan, which involves volunt0xy conservation measures to reduce peak demands during the time that Peabody Heights Reservoir is out of service. Recommendation: For information only. This announcement will be included in the July 15, 2003 City Council meeting package. Background/Analysis: A contract was awarded for thc construction of a floating cover for thc Peabody Heights Reservoir to C.W. Ncal on March 18, 2003. The cover was required as part of a Bilateral Compliance Agreement with the Department of Health. In order to install the cover, the reservoir has to be emptied and kept out of service for the duration of the installation. The intent, at the time of award, was to complete the installation in July, in expected dry weather (the cover installation cannot progress during rain events), but before water demands reach their annual peak. On June 11, a change order was issued changing the cover material from polypropylene to hypalon. The change was necessitated by recent evidence of apparent premature failures of some polypropylene reservoir covers that are 5 to 7 years old. With the lead time needed for approval of the design and fabrication of the material, it is expected that installation of the cover will begin in August instead of July. The total time that the reservoir is anticipated to be out of service is 4- 6 weeks. The work will occur during peak summer water demands that may result in pumps at the City's water source, the Ranney Collector well, not being able to supply enough water to the City's other major reservoir, Black Diamond Reservoir during peak usage times. In order to lessen the impact of the reservoir being out of service during this time, it is recommended that voluntary conservation actions be encouraged by declaring a Stage 2 Water Shortage. July 8, 2003 UAC meeting Stage 2 Water Shortage Page 2 of 5 The City's current Water Shortage Response Ordinance, PAMC 13.46, has five stages as summarized in the following table: Stage Water Shortage Action Declaration by Condition I Anticipated Internal Preparations City Manager II Serious Voluntary Conservation City Manager III Critical Limited Outdoor Restrictions City Council Mandatory Outdoor IV Emergency Restrictions and Indoor City Council Conservation V Regional Disaster Water Rationing City Council Attached is an excerpt fi.om the Water Shortage Response Plan developed by the Department of Public Works & Utilities (PW&U), showing guidance in the implementation of a Stage 2 Water Shortage. It is recommended that a Stage II Water Shortage be declared by the City Manager one week before the reservoir will be drained, and continue through the duration of the cover installation. PW&U staff will monitor water consumption and implement the strategies outlined in the Water Shortage Response Plan. If, during the installation of the floating cover, water consumption approaches a level where the Ranney Collector well can not keep up with demand, a Stage 3 Water Shortage may be recommended. City Council will be kept updated as to water conservation efforts before a Stage IH is implemented. N:\UAC~Final~July 8 UAC Stage 2 Water Shortage Declaration.wpd July 8, 2003 UAC meeting Stage 2 Water Shortage Page 3 of 5 WATER SHORTAGE RESPONSE PLAN STAGE II VOLUNTARY CONSERVATION The City of Port Angeles declares a Stage II - Immediate voluntary reductions in consumption are necessary. The public information campaign should begin at this time. STAGE II IMPLEMENTATION 1. Strategy: __ City of Port Angeles Water/Wastewater Collection Division Utilities Team __ Target Departments Employee Awareness 2. Public Information: __ Public Contact Employees Conservation Information Phone Number __ Billing Messages News Releases 3, Follow-up: __ Prepare Information on Water Usage STRATEGY PORT ANGELES WATER/WASTEWATER COLLECTION DIVISION Under the direction of the Director of Public Works & Utilities, the utility will provide news releases, conservation materials, and information necessary to coordinate the campaign on voluntary water conservation. Utilities Team: 1. Deputy Director of Public Works & Utilities 2. Water/Wastewater Collection Maintenance Superintendent 3. Water/Wastewater Collection Maintenance Supervisor 4. Lead Workers Keep Informed: 1. Director of Public Works & Utilities 2. City Manager 3. City Council 4. Department Personnel 5. Public-to-Employee Contact July 8, 2003 UAC meeting Stage 2 Water Shortage Page 4 of 5 TARGET DEPARTMENTS PURPOSE: To inform - Municipal, Industrial, and new Development of Potential water Restrictions: Target 1. Fire Department 2. Parks & Recreation Department 3. Public Works & Utilities Department 4. Daishowa America 5. P.U.D. #1 of Clallam County 6. Peninsula Golf Course 7. School District #121 IN- ~IOUSE STAGE II RESPONSE 1. Fire Department: Have more dry drills and reduce vehicle washing per day. 2. Parks and Recreation Department: Reduce irrigation cycle time and frequency. 3. Water/Wastewater Collection Operations: Eliminate all routine flushing, vehicle waslfing. 4. Utility Construction: Allow only vibratory compaction. 5. Telemetry: 24 hour Flow Control - Keep staff updated water consumption. 6. Respond to and repair all water main leaks on a same-day basis. EMPLOYEE AWARENESS PURPOSE: Keep staff Informed. 1. Postings at City Hall 2. Copy Sent to all Department Heads and Division Managers 3. Postings for Each Department 4. City Pay Check - Information PUBLIC CONTACT EMPLOYEES PURPOSE: Provide Correct Information to Staff Having Contact With Public Contact Points: 1. City Manager's Office 2. Department of Public Works & Utilities 3. Utility Maintenance Crews 4. Utility Administration 5. Utility Billing 6. Department of Parks and Recreation 7. Permit Desk Keep informed by: I. Information Memos 2. Telephone 3. Distribute Information on Conservation Practices 4. Use of Phone Log for Complaints July 8, 2003 UAC meeting Stage 2 Water Shortage Page 5 of 5 CONSERVATION INFORMATION PHONE NUMBER PURPOSE: To Provide Current Status on Water Usage Information via Phone recorded Message. Sample Message: Date: August 1, 2000 Thank you for calling the City of Port Angeles Water/Wastewater Collection Division. Due to low rainfall and the flows in the Elwha River, we are encouraging all customers to use water wisely. [State amount of water used versus what is pumped to town and where we are with our conservation target of 4.5million gallons a day.] If you would like information on water conservation or water waste complaints, please call 417-4855 or 417-4849. PHONE LOG Customers may call up to report neighbors/businesses, etc., who are wasting water. These complaints must be followed up by encouraging the reported party's cooperation and conservation information. UTILITY BILL MESSAGE PURPOSE: Customer Notification of Voluntary Conservation Sample Message: Low rain fall- please conserve water outdoors - for more information call 417-4855 or 417-4849. 1. Message may be 20 characters in length with a maximum of seven (7) lines. 2. Message may be sent to all customers. 3. Message may be discontinued at any time if conditions change. 4. Call Judy Hamilton, Programmer/Analyst, ext. 4622 to schedule message. NEWS RELEASE PURPOSE: Provide public with current and appropriate information to respond to. Contact: Glenn A. Cutler, Director of Public Works & Utilities News Releases: 1. Port Angeles Daily News 2. KONP Radio 3. Channel 3 News - Dennis Bragg 4. 1610 Radio WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: July 8, 2003 TO: UTILITY ADVISORY COMMITTEE ]FROM: Stephen Sperr, Engineering Manager RE: Amendment No. 2 to the Consultant Agreement with CH2M Hill, Contract #00-28 Summary: It is necessary to amend the agreement with Ch2M Hill to provide engineering services related to the design of a new Spruce Street Pump Station, including expansion of its pressure zone, and adjust existing task budgets to reflect ongoing Elwha Dam Removal assistance and tasks that are complete or nearing completion. A scope and budget for the additional work has been negotiated. Recommendation: Forward a favorable recommendation to City Council authorizing the Mayor to sign Amendment No. 2 to the Consultant Agreement with CH2M Hill, in the amount of $211,654.00, for a total contract amount not to exceed $921,726.00. Background/Analysis: On August 30, 2000, the City signed an Agreement for Professional Services with CH2M Hill to provide engineering support services for the following projects (tasks): 1. Elwha Dam Removal - The planned removal of two dams on the Elwha River and the impact on the City's domestic and industrial water supplies. 2. GWI Compliance Assistance - Meeting the requirements of a Bilateral Compliance Agreement with the Department of Health (DOH) addressing the City's water source being designated a groundwater under the influence of surface water (GWI). 3. Black Diamond Improvements - The design of a roof, chlorination facilities, and other items for the City's Black Diamond Reservoir. 4. Peabody Heights Reservoir Cover - The design of a floating roof and drainage facilities for this reservoir. 5. Water System Plan Update - Updating the City's Water System Plan for approval by the DOH. 6. Other Services as Directed. Task No. 1 is an ongoing project that will last at least for the duration of this Agreement. Task Nos. 2, 3 and 5 are complete and Task 4 is scheduled for completion by October 31, 2003. Amendment No. 1 to the Agreement, executed April 3, 2002, adjusted some of the original tasks' budgets and added Task 7, the predesign for a new High Zone Reservoir, to be funded jointly by the City's Water Utility and Clallam County PUD#1 (currently on hold, pending DOH approval of the PUD's waste system plan). July 8, 2003 UAC Meeting Amendment No. 2 to CH2M Hill Agreement Page 2 of 3 There is a need for a second amendment to the Agreement to reflect the current status and budgets of the tasks. A new task, Task 8 - Spruce Street Pump Station and Waterline, is proposed to be added to the agreement. Task 8 includes the design of a new pump station to replace the existing one that supplies water to the Fairmount pressure subzone. As part of DOH's review of the City's 2002 update to the Water System Plan, it is required that we increase the water pressure to customers south of SR101 in the area around Doyle Road. The simplest way to do this is to expand the Fairmount subzone. Task 8 will combine this work with the installation of fire flow capability at the pump station, a project already in the 2003 Water Utility Budget. Because of limited right-of-way at the existing Spruce Street Pump Station and the need to expand its capacity and add fire flow, the pump station will be constructed in a new location, unopened City right-of-way at the south end of C Street. In addition to the pump station, new connecting pipe across SR101 to the south will be designed to connect services south of the highway that require an increase in water pressure. At the same time, a large section of the existing 20-inch Elwha transmission pipeline that is in the C Street right-of-way, crosses SR101 and in the Doyle Road right-of-way will be replaced. The Elwha transmission pipeline replacement work is also in the 2003 Water Utility budget. The following is a table summarizing the budgets and funding sources for all tasks under the existing Agreement and the proposed Amendment No. 2 to the Agreement. The duration of the Agreement will be extended from August 31, 2003, to August 31, 2004 and is based on the completion of all Tasks. TASK AMOUNT REVISED TASK THROUGH AMOUNT CITY FUNDING TASK AMEND. NO. 1 (AMEND. NO. 2) BUDGETs SOURCE(S) 1. Elwha Dam Removal Mitigation $59,889 $156,131 $220,000 Federal Ongoing Goverm'nent~ 2. GWI Compliance Assistance $139,398 $94,668 $144,668 Water Utility2 Completed 3. Black Diamond Improvements $126,934 $126,934 $126,934 PWTF & Completed DWSRF loans3 4. Peabody Heights Reservoir Cover $109,815 $109,815 $165,000 PWTF loan3 To be completed by 10131/03 5. Water System Plan Update $115,648 $115,648 $115,648 Water Utilitiy4 Completed 6. Other Services as Directed $105,455 $155,455 $155,455 Water Utili~ ( $75,600 Expended to date, $29,855 remaining before Amend. No.2) 7. New 2.5 MG High Zone Reservoir $52,933 $52,933 $20,000 Water Utility6 On hold 8. Spruce Street Pump Station and n/a $110,142 $125,000 Water Utility7 Waterline New Total $710,072 $921,726 $1,072,705 July 8, 2003 UAC Meeting Amendment No. 2 to CH2M Hill Agreement Page 3 of 3 ~ Reimbursement of most of the costs under this task to be provided per 1999 Congressional Appropriations Bill wording. 2 Funded by the Water Utility. Some work items in this task were deleted based upon negotiations with National Park Service and DOH on federal funding of water mitigation facilities related to Elwha Dam Removal Project. a A Public Works Trust Fund Loan (1% interest) and Drinking Water State Revolving Fund Loan (5 % interest) were obtained to cover the City's reservoirs per a Bilateral Compliance Agreement with the Washington State Department of Health (DOH). 4 $200,000 budgeted in 2000-2001 from water rates. ~ - Directed services are likely to be funded by the Water Utility. 6_ Water Utility will fund predesign; the rest of the project funding to be negotiated. 7 _ $50,000 budgeted in 2003 for Spruce Street Pump Station design; remaining funds for this task are from 2003 Elwha Transmission Main design budget. ~ - Total expenditures for the years 2000-2002 plus 2003 budgeted amount, if any. This includes planning, predesign and design, but not construction costs. N:\UAC~Final~July 8 UAC CH2M Hill Amend #2.wpd WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO ])ATE: July 8, 2003 TO: UTILITY ADVISORY COMMITTEE FROM: Scott McLain, Deputy Director of Power Systems SUBJECT: Contribution to Electric Utility Rural Economic Development Revolving Fund for 2003 Summary: The City Council established the Electric Utility Rural Economic Development IRevolving Fund (Fund) in 1999. By contributing $50,000 to this fund, the Electric utility can receive a $25,000 credit on its excise taxes owed to the State. The Electric utility has been budgeted to contribute to this fund again for the year 2003 in the amount of $50,000. It is expected that the Economic Development Steering Committee will utilize these funds for the [City's Economic Development efforts. Recommendation: Forward a favorable recommendation to City Council authorizing the transfer of $50,000 from Electric Fund to the Electric Utility Rural Economic Development Revolving Fund. I Background / Analysis: In 1999, the City established the Electric Utility Rural Economic Development Revolving Fund (Fund) and the Electric Utility contributed $50,000 into the fund in 1999 and $75,000 in 2000 through 2002. By contributing at least $50,000 to the Fund, the Electric Utility can receive a credit of $25,000 on its excise taxes for the year. The Electric Utility has budgeted to contribute $100,000 to the City's Economic Development Fund in 2002 and by contributing $50,000 through the Electric Utility Rural Economic Development Revolving Fund we can receive the $25,000 credit for 2003. Funds are limited to $350,000 per year for the entire State. The Electric fund has received a $25,000 credit each year since 1999. When the Fund was created in 1999, the Economic Development Steering Committee was designated as the board that oversees the fund. It is expected that this board will designate the funds to be used for the City's Economic Development efforts as the qualifying project designed to achieve job creation or business retention. It is recommended that $50,000 be transferred to the Electric Utility Rural Economic Development Revolving Fund. WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: July 8, 2003 TO: UTILITY ADVISORY COMMITTEE FROM: Scott McLain, Deputy Director for Power Systems RE: Electric Utility Rate Adjustment Summary: Several components of the electric rate will be increasing in cost starting October 1, 2003. It will be necessary to adjust the retail electric rates at that time to maintain the electric fund in a financially prudent position. Adjustments to the industrial transmission class is not necessary as that rate is based on the wholesale cost components and adjusts automatically. Recommendation: Forward a favorable recommendation to City Council to adjust the consumption component of all classes of customers except the industrial transmission class by $.0046 and adjust demand charges and fixed cost lighting accounts by 9.76%. Background/Analysis: Several components that are included in the electric rates are increasing on October 1, 2003. An adjustment to the retail electric rates will be necessary to maintain the electric fund in a prudent manner. Changes to each of the various components will be explained below and sumnaarized in the table following the components. The costs included under the component explanations include only those costs attributed to the distribution classes of customers (excludes industrial transmission class). LG&E replacement power: The expiration of our wholesale power supply contract with LG&E on September 30, 2003 is the largest individual component of increased costs. The LG&E contract saved the City's customers about $1,250,000 per year over the last seven years. Replacement of that power by the Bonneville Power Administration will add $660,450 to wholesale power costs for the distribution customers. Columbia Storage Power Exchange (CSPE): This wholesale power contract expired on March 31, 2003. This contract supplied a very small amount of power to the City, but has been at virtually no expense for the past two years because the bonds that paid for this contract were paid off at that time. The increased cost to replace this component of wholesale power is about $98,980. Transmission charges: Bouneville's transmission customers (including the City of Port Angeles) agreed to a transmission increase of 2.5% beginning October 1, 2003. This increase will add about $33,300 in costs to the distribution customers. Utility Advisory Committee Memo July 8, 2003 Electric Utility Rate Adjustment Page 2 Use of reserves for rate mitigation: In the past two years, the City Council agreed to use $1,700,000 of electric utility reserves ($850,000 per year) to reduce the effect of the rate increase that was implemented on October 1, 2001. The net effect on rates including taxes is $943,500 per year. Reductions in expenditures and capital projects that were rate funded (mainly the acquisition of the UGA electric system) resulted in no reduction to the reserve level. I am recommending that we continue the same level of reserve reduction during the following two year period. This should use $1,700,000 of reserves over the next two year period. 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 between 15% and 17% through the 2006 rate period. Because of reductions in the load based and financial based CRAC's during the period, the net effect over our current rates (the BPA wholesale rates that our retail rates are based on) is a 5% increase. This increase results in increased costs of $388,500 to the distribution class. Attachment 1 is a graph of the projected CRAC'S. Unbudgeted expenditures: At the last UAC meeting, I reported on various projects that have been funded from the electric utility fund, but were no included in the budget process that sets the retail rates. These projects include items such as the Laurel slide repair and increases in costs for the oil handling warehouse. Various projects usually amount to about $100,000 per year. These costs are paid from distribution customer class reserves. Because of the strength of the electric reserves, I am not recommending we increase rates to cover these ad hoc expenses. Inflation of expenses: Inflation levels for general expenses (labor and supplies) has 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 is about $95,000 per year. Again, because of the strength of our reserve levels, I am not recommending that we increase retail rates to cover the increased inflation costs. Summary of cost increases: 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 USE OF $850,000 $943,500 .00372 7.82% .00836 RESERVES UNFUNDED $90,000 $100,000 .00039 .83% EXPENDITURES .00875 INFLATION $85,600 $95,000 .00037 .79% .00912 Utility Advisory Committee Memo July 8, 2003 Electric Utility Rate Adjustment Page 3 It is my recommendation to increase rates beginning October 1, 2003 for the first four items in the table for an increase in the consumption charge only by $.0046. This will mean the average residential customer (1500 kWh per month) will see an increase in their monthly bill of 8.2%, or a change in their bill from $82.25 to $89.15. I am recommending that the basic charge remain the same at $11.00. These recommendations would result in the following rates: BASIC ENERGY CHARGE DEMAND CHARGE CHARGE EXISTING PROPOSED EX1STING PROPOSED RESIDENTIAL $11.00 $.0475 $.0521 GENERAL SERVICE $15.00/$37.50 $.0478 $.0524 GENERAL SERVICE $30.00/$75.00 $.0310 $.0356 $3.05 $3.35 DEMAND PRIMARY $200.00 $.0316/$.0180 $.0362/$.0226 $3.76 $4.13 The proposed schedule for adjusting rates is as follows: July 8, 2003 Review proposal at UAC July 15, 2003 Set public heating date August 5, 2003 Council presentation/open public hearing August 12, 2003 Return to UAC if necessary August 19, 2003 Final comments/close public heating September 2, 2003 City Council adopt new rates N:XPWKS~LIGHTXPOWM~v~EMOS\uac elec rates 2003.wpd --- Percentage Increase Over Base Rates ~- ~ peJe~,lleQ sUOlle~)