HomeMy WebLinkAboutAgenda Packet 11/08/2005 UTILITY ADVISORY COMMITTEE
PUSLIC WORKS CONFERENCE ROOIVl
PORT ANGEL£S~ WA
NOVEMBER B, ~00~
3:00 P.M.
AGP'NDA
I. CALL TO ORDER
Ii. ROLL ~ALL
III. APPROVAL OF MINUTES FOR OCTOBER 1 1 ~ 2005
IV. LATE ITEMS
V. DISCUSSION ITEMS
B. WATE~ASTEWATER RATE STUDY PRESENTATION (LARRY/HDR)
(YvoNNE)
D.PUD WH~LE~ALE WATER ~ONTRA~T EXTENSION
E,~TORMWATER PHASE II BRANT APPLICATION (GARY)
F,ELECTRI~ LEGISLATION SUMMARY {S~OTT)
VII. ADUDU~NMENT
UTILITY ADVISORY COMMITTEE
GUEST SIGN UP SHEET
PRINT NAME ORGANIZATION
N: \PWKS\LIGHT\CONS\CATE\SIGNUP.wpd
UTILITY ADVISORY COMMITTEE
Port Angeles, Washington
October 11, 2005
L Call to Order: ~
Chairman Rogers called the meeting to order at 3:00 p.m.
Il. Roll Call:
Members Present: Chairman Rogers, Allen Bentley, Mayor Headrick, Dean Reed
Members Absent: Councilmember Erickson
Staff Present: Mark Madsen, William Bloor, Glenn Culler, Scott McLain, Gary
Kenworthy, Steve Sperr, Cate Rinehart.
Others Present: None
III. Approval of Minutes:
Chairman Rogers asked if there were any corrections to the meeting minutes of August 9, 2005 or
September 13, 2005. Allen Bentley moved to approve the minutes. Dean Reed seconded the
motion, which carried unanimously.
IV. Late Items: Eclipse.4nnexation - Electrical
Executive Session
V. Discussion Items:
A. Department Of Ecology Fiscal Year 2007 Funding Cycle Application
Steve Sperr, Engineering Manager, reviewed the information contained in the packet, responded to
questions, and provided clarification. It was noted that the application for grant and/or loan funding
through the Department of Ecology was due October 31, 2005.
Dean Reed moved to recommend City Council authorize the Mayor to sign the Fiscal Year 2007
Funding Cycle Application certification, in an amount not to exceed $600,000. In addition, ifa
grant or loan is approved~ to authorize the Mayor to execute the agreement. Mayor Headrick
seconded the motion, which carried unanimously.
B. Stormwater Phase 2 Rules
Gary Kenworthy, City Engineer, noted that the public review draft had been delayed largely because after
comments had been requested 700 responses had been received. Because there is so much information to
1
UTILITY ADVISORY COMMITTEE
October 11, 2005
go through the draft review is not expected until the last part of 2006.
Information only. No action taken.
C. Northwest Coalition For Affordable Power
Scott McLain, Deputy Director for Power Systems, explained that a broad based group of utilities,
government agencies, industrial and commercial customers, and other organization had formed a coalition
to put pressure on the Bonneville Power Administrator to propose a wholesale power rate for the next
rate period that is more in line with rates in effect prior to the energy crisis of 2001. No definite budget
had been developed but $1 per customer was suggested to help with costs.
Allen Bentley moved to recommend forwarding to City Council a resolution in support of the
Northwest Coalition for Affordable Power including $8,000 for financial assistance. Dean Reed
seconded the motion, which carried unanimously.
VI. Late Item: Eclipse Annexation - Electrical
Scott McLain, Deputy Director for Power Systems, advised that negotiations had taken place with
Clallam County PUl) to assume the load in the western annexation. A purchase price of about $363,000
had been reached. Transferring facilities east of Eclipse will be done no later than the end of December
2005 with western part taking place by March 2006.
Information only. No action taken.
VII. Adjourn To Executive Session - 3:34 p.m.
Return to regular session - 4:13 p.m.
VIII. Next meeting date: November 8, 2005
XI. Adjournment: The meeting was adjourned at 4:13 p.m.
Chairman Rogers Cate Rinehart, Administrative Specialist II
2
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W A S H I N G T O N, U. $, A,
UTILITY ADVISORY COMMITTEE MEMO J
J
DATE: November 8, 2005
To: UTILITY ADVISORY COMMITTEE
FROM: Jeff Young, Wastewater Division Superintendent
SUBJECT: Septage Receiving Update
Summary: Since March 2005 the septage receiving loading on the plant has doubled and
continues at that rate.
Recommendation: Information only.
Background/Analysis: The Wastewater Treatment Plant (WWTP) has processed 1,311,602
gallons of septage from private haulers since September 23, 2003. Since the authorization of
long-term contracts in March 2005, there has been a noticeable increase in the amount of septage
received. Offering the long-term stability in the rates because of the long-term contracts has
increased revenues due to the increased disposal volumes. There have been no permit violations
or negative impact on the plant processes during that time. Additional loading of the WWTP is
beneficial since it allows the plant to operate more effectively by being closer to its design
parameters. The current rate for accepting septage is eleven cents per gallon.
PWOIO1 06 [Revised07~24/03]
1)ORTANGELES
UTILITY ADVISORY GOMMITTEE ME O
DATE: November 8, 2005
To: UTILITY ADVISORY COMMITTEE
FROM: Larry Dunbar, Power Resources Manager
SUBJECT: Water and Wastewater Rate Adjustments
Summary: HDR Engineering, Inc. and City staff completed a rate study for thc Water and
Wastewater Utilities. Thc study will be presented to the Utility Advisory Committee including
the recommended retail rate adjustments. It will be necessary to adjust retail water and
wastcwater rates at this time to maintain the funds in a financially prudent position.
Recommendation: Forward a favorable recommendation to City Council to proceed with a
public hearing on the rate study and proposed rate adjustments.
Background/Analysis: The City contracted with HDR Engineering, Inc. earlier this year to
assist staff with a rate study for the Water and Wastewater Utilities. A rate study includes a load
forecast, review of the revenue requirements, capital projects, and reserves. The last rate study
was completed in 2002, which was the basis for setting rates for years 2003 through 2005.
The City Council set a public hearing date on November 15, 2005 for a presentation of the study
and to allow public input to the process after the presentation. The public heating will be
continued to December 6, 2005 at which time the public heating will be closed. City Council
will be requested to consider adoption of new rate ordinances at the December 6, 2005 City
Council meeting.
Proposed changes to the rate ordinances include: water base and consumption charges; water
system development fee; wastewater base and consumption charges (including combined sewer
overflows); and sewer system development fee. The proposed retail rate adjustments will be
included in the presentation.
Staffrecommends forwarding a favorable recommendation to City Council to proceed with a
public hearing on the rate study and the proposed rate adjustments.
N:\UAC~Final\Water & Wastewater Rate Adjustments.doc
City of Port Angeles
Water and Wastewater
Rate Study Results
Presentation to the Utility Advisory Committee
November 8, 2005
Presented bY:
Angie sanchez VlrnoChe, Financial Services Manager
Glossary of Acronyms
· AWC - Association of Washington Cities
· CF - Cubic Feet
· CIP - Capital Improvement Plan
· CSO - Combined Sewer Overflow
· DOE - Department of Ecology
· O&M - Operation & Maintenance
· PWTF - Public Works Trust Fund
· SDC - System Development Charge
Overview & Purpose
of the Presentation
· Overview of the rate
setting process & previous
studies
· Review the results of the
water & wastewater rate
studies
· Review the proposed rates
· Moving forward
Overview of the
Rate Setting Process
Compares the revenUes of the
utility to its eXPenses to determine
the overall level of rate adjuStment
Design rates for each class of
service to meet the revenue needs
of the utility~ along with any other
rate design goals and objectives
Note: No cost of service completed
2
Water Utility Looking Back
· Water rate study completed in 2002
· 2002 study projected a 29% increase required
by 2006
· Previous rate adjustments:
- 2003 - 4%
- 2004 - 4%
- 2005 - 3%
· Projected approximately $1 M Ilion of reserves
used to supplement revenue deficiency while
rates phased in
Wastewater Utility Looking Back
· Wastewater rate study completed in 2002
· 2002 study projected a 1.4% required increase
by 2006
· No rate adjustments implemented in 2003-2005
· Overall utility rates were sufficient for the time
period
- $229,000 of rate stabilization reserve used in 2003 for
one time increase in professional services
· In 2005, DOE mandated CSO fees in the
amount of 5.5% increase
3
Developing Revenue
i
Requ rements
I--D~ 6
Overview of the
water& Wastewater Revenue
· Reviews an extended time
period (2006-2011)
· Utilizes a "cash basis"
approach
- O&M
- Taxes/transfers
- CIP funded from rates
- Debt service
· Applied the City's
financial/rate setting policies
4
Key Assumptions
Revenues Debt Service - Wastewater
- Rate revenues based on 2005 - Combination of existing bonds
Budget & City's load forecast & loans
- Miscellaneousrevenues - Useofnewdebtissues(2OO7-
escalated 0%-3% per year 2010)
· Operation & Maintenance · Includes DOE mandated
2015 CSO schedule
- Utilized 2005 Budget to develop . Taxes & Transfers
baseline expenditures
- Escalation factors range from - State & City Utility Taxes
.5% to 10% per year - Departmental Transfers
Debt Service - Water · Water & Wastewater Capital
- Combination of existing bonds & Projects
loans - From City's Capital
- Use of new debt issues (2007- Improvement Plans
2010)
Review of Water Revenue
Requirement
5
Water Utility Key Factors
Water capital expenditures total $9.8
Million during 2006-2011
Annual capital funding from rates
below depreciation target
Capital projects funded by:
- Reserves - $1,2 Million
- SDC's- From $42,000to$204,000
per year
- Donations - $3.2 Million
- New PVVTF - $1.8 Million
- New Bond Issues - $2,9 Million
Use of $367.000 of reserves in 2006
to minimize rate adjustment
Debt obligation is 22% of revenue
capacity in 2006, Increases up to
35% by 2011
Summary of the Water Revenue
Requirement ($000's)
Budget Pmj~l~d
,~0~ ~ 2007 2{~8 20Q0 20t0 2011
[~ ~ ~2 ~5 ~o ~7 ~5 1,0~ 1,03;
6
Water Capital Improvement Projects
Budgd Pro,coted
Ending Water Reserve
Fund Balances ($O00's)
$'~,~6/ $,1,1Sl $t;002 s842 $936
Note: Used total of $367,000 from Rate Stabilization Reserve in 2006
7
Summary & Conclusions of the
Water Revenue Requirement
· Rates are insufficient for the
test period
· Required rate increase of
$4.67 for average residential
customer in 2006
- Additional future adjustments
are required
- Will revisit projected
adjustments annually
· Reserves used in 2006, not
sufficient to fund future
deficiencies
Note: Rate increase for Residential 5/8" Meter
Review of Wastewater Revenue
8
Wastewater Utility Key Factors
Wastewater capital expenditures
total $28.6 Million during 2006-2011
- $18.8 Million related to CSO
Annual capital funding from rates
below depreciation target
Capital projects funded by:
- Reserves- $675,000
- SDC's - From $37,000 to $191,000
per year
- Donations - $7.35 Million
- New debt issues - $1.23 Million Less
CSO & $18.0 Million related to CSO
Debt obligation is 31% of revenue
capacity in 2006. increases up to
60% by 2011 with addition of CSO
debt
Summary of the Wastewater Less
CSO Revenue Requirement ($O00's)
9
Wastewater Capital Less CSO
Improvement Projects
Budge~ Pro,iected
Ending Wastewater Less CSO
Reserve Fund Balances ($O00's)
Rate Stab~iza~o 1.~30 1,130 1,1~0 1,130 1,130 1,1
10
Summary of the Wastewater CSO
Revenue Requirement ($O00's)
22
Wastewater CSO CaPital
Improvement Projects
Budget iP~e(~ed
200~ 2O06 2O0? ~ 2O09 ~tO ~t
C~ Pmf~s~ ~s~ 65,~ 75,~ 0 0 0 0 0
U~ ~ ~ ~ 0 ~,~ 0 0 0 0 0
N~ Fr~is S~t Gr~ ~ 0 ~ 2,~,~ 0 0 0 0
R~er Tank Mo~s 0 0 ~,~ 2,~,~ 0 0 0
11
Ending Wastewater CSO Reserve
Fund Balance ($000's)
Fe¢a City Taf~Jet Ending B~lince $2~111
[Total Re.rye BalanCe $9 $304 $S91 $1,1~8 ~l?G
Summary & ConclUsions of the
Wastewater Revenue Requirement
Wastewater rates less CSO's are
slightly deficient for the test pedod
Proposed rate increase of $1.55 for
2006
Currently minimal capital funding
- Proposed rate edjuatmer~s attempt to
buiLd-up cash reserves for future capital
rleeds
- Proposed rate adjustments for 2006~
2008
CSO fees are deficient for test period
CSO capital projects require significant
funding from debt
Proposed rate increase of $2,20 in
200~
- Pursue other f~nding sltemstives
- Proposed and projected fees build-up
cash reserve to a~count for long-term
debt payments
~-'-~ Note: Rate increase for Residential > 430 CF 26
12
Proposed Rates
Key Assumptions of the Rate Designs
· Maintain current rate structures
· Rates are based on an overall adjustment
- Residential Water (5/8" Meter)
· Proposed increase of $2.85 monthly for 2006
· Proposed increase of $0.23 per 100 CF consumption charge for
2006
- Residential Wastewater Less CSO's (~- 430 CF)
· Proposed increase of $1.55 monthly for 2006, $1.80 for 2007 &
$2.10 for 2008
- Residential CSO's (> 430 CF)
· Proposed increase of $2.20 monthly for 2006, $2.30 for 2007 &
$2.40 for 2008
,.,ombined monthly increase $8.42 for 2006 (based on 790 CF)
13
Ke~¢ Assumptions of the Rate Designs
(continued)
· VVater & Wastewater System Development Fees
- Increased Water fee from $1,025 in 1999 to $1,200 in
2006. Future year adjustments are based on inflation
- Increased Wastewater fee from $745 in 1999 to $870 in
2006. Future year adjustments are based on 10% per
year
· VVater Connection & Sewer Permit Fees
-/~Clarifying that the cost of, street cuts are not included
Note: City calculated fees
Water :PropOSed Rates
14
Water Monthly Bill Comparison
(1,000 CF)
Notes: Residential rate
~J.~-""~ AWC 2004 Rate Survey 32
Wastewater Proposed Rates
15
Wastewater Monthly Bill Comparison
Less CSO (1,000 CF)
Notes: Pod[ A~geles residential rate = fiat rate
AWC 2004 Rate Survey 34
Combined Water & WasteWater
Monthly Bill Comparison
(1,000 CF & Less CSO)
Notes~ Residential rates
^wc 200. Rate Survey
16
Water Connection &
Development Fees Comparison
il
Wastewater Connection &
Development Fees Comparison
17
Concluding Comments
The proposed rates reflect
the findings and
conclusions of the rate
studies
· Recommend proposed
adjustments to water &
wastewater rates effective
January 2006
Recommend an equal
adju.stment to all classes of
service
· Policy direction needed to
develop final rate proposal
Questions/Discussions
18
W A S H I N G T O N, U. S, a.
UTILITY ADVISORY COMMITTEE MEMO
DAXE: November 8, 2005
TO: UTILITY ADVISORY COMMITTEE
FROM: Yvonne Ziomkowski, Finance Director
G/cnn A. Cutler, Director of Public Works and Utilities
SUBJECT: Utility Bill Delinquency
Summary: A reduction to the number of days before a utility bill becomes delinquent is
proposed. The proposed reduction is intended to improve cash flow and customer service.
..
Recommendation: Forward a favorable recommendation to City Council to approve a 5-
day reduction to the number of days before a customer utility bill becomes delinquent.
Background/Analysis: The current ordinance allows customers up to 30 days to pay utility bills
before payment becomes delinquent. It is proposed that the number of days before a utility bill
becomes delinquent is changed from 30 lo 25 days. The change would apply to all of the City's
utilities (e.g., electric, water, wastewater, refuse).
The change will reduce the number of utility bills that indicate the prio~ month charges are
unpaid in the current month's billing. This frequently results in customer inquiries to verify their
prior month's payment was received.
By reducing the number of days before a utility bill becomes de]inquenl, all City-owned utilities
would improve cash flow. The reduction in working capital required ,x ould help keep rates
down.
The proposed amendment would be effeclive on utility bills beginning ,lanuary 1,2006.
N :\UAC~Final~A¢counts P.~eeivabteCJumge.doc
ORDINANCE NO.
AN ORDINANCE of the City of Pon Angeles, Washington, amending
the Pon Angeles Municipal Code relating to utili'q~ rates.
THE CITY COUNC1L OF THE CITY OF PORT ANGELES DO HEREBY ORDAIN
as follows:
Section .1. Section 3.64.075 and all provisions of Title 13 PAMC relating to utility
rates and charges are hereby amended to provide thru all amounts for utili~, services remaining
unpaid after the twenty-fifth da3, after the mailing of the bill shall be delinquent.
Section 2. Section 3,64,060 PAMC is amended, in its entirety, to read as follows:
5.64.060 Delinquent Bills - ~rnen. From and after Januaw_ l, 2006, all utiliW charges
accrued pursuant to any provision of this code All b,,~, ~^~w ,,~'-,~ ~ ,, shall be delinquent if
payment therefor is nol received by the CiD: on or before the thM~cth twenty-fifth day after the
mailing of the bill
Section 3. All other provisions of PAMC sections relating to delinquency of utility
accounts are ratified and remain in full force and effect as currently wrinen.
Section 4. Section 3.64.090 PAMC is deleted.
Section 5 - Severabiliw. lfany provisions oftl~s Ordinance, or its application to any
person or circumstances, is held invalid, the remainder of the Ordinance, or application of the
provisions of the Ordinance to other persons or circumstances, is nol affecled.
Section 6 - Effective Dale. This Ordinance shall take effecl on all billings beginning
January 1. 2006.
PASSED by the City Council of the CiD' of Pon Angeles m a regular meeting of said
Council held on the 6th day of December. 2005.
R/chard A. Headrick Mayor
ATTEST: APPRO\rlSD AS TO FORM:
Beck), J. Upton, City Clerk William E. Bloor, City Anomey
PUBLISHED:
By Summary
G:\Legal_ Backup\ORDiNANCES&RE~OLU'r 1ON$\2005-33.Ulili~yBillReleAmencJmenl.wpd
Seplember 21, 2005
-2-
pORTANGELE$
W A $ H I N (~ T O N, U.S. ,6,.
UTILITY ADVISORY GOMMITTEE ME O
DATE: November 8, 2005
'~o: UTILITY ADVISORY COMMITTEE
FROM: Scott McLain, Deputy Directo~ for Power Systems
SUBJECT: PUD Wholesale Water Contract Extension
Summary: City staffhas been negotiating with the PUD staffto formulate a new wholesale
water contract. Staffschedules and workload have delayed work on the new contract and require
an extension lo the existing wholesale contract.
Recommendation: Forward a favorable recommendation to CiW Council to extend the
current wholesale water contract with Clallam PUD # 1 for a term of three months with the
rate adjustment January 1, 2006 equal to the same percentage increase as other classes of
customers and authorize the Cit), Manager to sign the contract extension.
Background/Analysis: City staff has had several meetings with Clallam PUD staffwith the
inlen! to creal¢, a new, long-term wholesale waler contract 1o serve the area in the Eastern UGA.
Several major issues have been discussed along with different contractual relationships.
Contracl language is now being written, but il is expected to be later than the first of the year
before the comract is finished and approved by both the Cily Council and the PUD Board of
Commissioners. In order to complete the conlract with the PUD, staffrecommends that the
current contract be extended by three months, wilh a new contract period ending March 31,
2006.
The City is also in the process of a rate study for the water utility. That study and its
recommendalions will be presented to UAC loday and Council in the near fmure. Staff
recommends Ii,at any rate changes for the wmer utility also be applied to the wholesale water
contract with ll~e PUD al the same percentage increase that is applied Io other classes of service
whhin the wmer ut/lily.
N: UAC~Fina]~U] ) Wholesale water con~ract extension doc
pORTANGELES
WASHINGTON, U.S.A.
ADVISORY COMMITTEE MEMO /
UTILITY
1
DATE: November 8, 2005
TO: UTILITY ADVISORY COMMITTEE
FROM: Gary W. Kenworthy P.E., Deputy Director of Public Works/City Engineer
SUBJECT: Stormwater Phase II Grant Application
Summary: The City has been designaled by the Department of Ecology (DOE) to be
regulated under the NPDES Phase I1 SIormwater Permit. We have requested DOE to reconsider
this designation. DOE is offering a $75,000 stormwater management ~ant to the City ~o
implement the Phase II requirement. In the event our request for reconsideration is not successful
would be advisable to take advantage of the grant offer.
ecommendation: Forward a favorable recommendation to Council in support of
submitting a Phase II Municipal Stormwater Management Granl Application and
authorize the Mayor to execute the grant should the City remain a Phase Il designated
mnnicipaliD, and be selected to receive the grant funding.
Background/Analysis: The City has been designated by the Department of Ecology (DOE) to
be regulated under the NPDES Phase I1 Smrmwater Permit. We have requested DOE to
reconsider lhis designation. In view of the large number of responses to the proposed DOE
Phase ll implementation, DOE has delayed further action until spring and our status will not be
known until that time. As part of the Phase I1 implementalion, DOE is offering grants to provide
financial assistance to the listed agencies. The City submitted a letter of intenl to apply for the
grant offering on August 29, 2005 lo keep our options open in the event we remained designated.
DOE has offered a $75,000 stormwater managemenl ~ant lo the City to implement the Phase I1
requirement. In the event our request for reconsideration is not successful it would be advisable
lo take advantage of the grant offer.
It is recommended that the UAC forward a favorable recommendation to City Council in support
of submitting a Phase II Municipal Stormx~ ater Management Grant Application and amhorize the
Mayor lo execute the grant should the City remain a Phase II designaled municipality and be
selected to receive the grant funding.
N: UAC'~DepDir'$tormwaler 1I Grant.doc
UTILITY ADVISORY COMMITTEE MEMO
DATE: November 8, 2005
To: UTILITY ADVISORY COMMITTEE
FROM: Scott McLain, Deputy Director for Power Systems
SUBJECT: Electric Legislation Summary
Summary: New legislation as been enacted this year at bolh the Federal and State level that
effects the elecIric utility. This memo is a summary of issues that the utility will need to address
in the upcoming year.
Recommendation: Information only.
Background/Analysis: New legislation has passed at both the Federal and State level that the
electric utility xxill need to address in the upcoming year.
Federal Issues: In August, the Energy Policy Act ol-2005 was passed. This Act amended or
made additions to the Public Utility Regulatory Policy Act of 1978 (PURPA). This new law puts
several requirements on utilities that must be carried out in one to lhree years. These include the
following:
Net Metering Services: The State implemented a similar slandard a few years ago, which
exempts the Chy from this standard. This requirement will he rolled into the intercormection
standards below.
Time Based Rale Schedules: The City will be required Io offer lime-based rate schedules within
1 $ months (by February 2007). Charges for time-based rates would vary by both time-of-day
and month, based on our wholesale cost of power. Customers that request the rate would have a
smart meter installed.
Installation of Smart Meters for All Customers: The City must conduct an investigation and
issue a decision as to whether or not smar~ meters should be installed for all customers. This
would include a public hearing where both staff and the public would provide testimony for the
City Council, x~ hich would then make a decision on installing smart meters for all customers.
This hearing musl take place by September 2006, with a delermination made by September 2007.
N:'~UAC\Final~,Eleclric legislation summary.doc
Utility Advisory Committee
Page 2
November 8, 2005
lntercormection Services: EPA 2005 added language to PURPA that states: "utilities must, upon
request, provide interconneclion service to any customer that it serves". The City must hold a
public hearing on this issue by September 2006, and establish interconnection service
agreements by September 2007.
For the past two months, public utilities, along with the investor owned utilities in Washington
have been meeting 1o establish inlerconnection standards for generation facilities up to 20
megawatts in size. These ulilities have been working together to establish these standards so
they will be uniform throughout Washinglon. The standards are also melding the requirements
of the Net Metering Services requirement (RCW 80.60), SSB 5101 (an incentive bill for certain
renewable generation facilities), and the revised PURPA standards. Of course, these standards
will vary considerably based on the size of the generation facility, and the group is breaking the
20 mW size into several levels that will have different standards. The group has finished the first
standard, which covers generation up to 25 kW. (Most distribuled generation will be in this
range). The group is currently working on standards for generation from 25 to 300 kW, which
will be completed by the end of the year. Staffwill be bringing these standards to the UAC and
council for adoption as a group once all the standards are complete.
Cogeneration and Small Power Purchase and Sale Requirements: PURPA has also been
amended so utilities are no longer required to purchase power from Qualifying Facilities under
certain circumstances. This has been a conlentious issue for some private utilities that had a high
marginal rate for power resources. For public utilities that are served by the BPA, this has not
been a major issue.
State Issues: The two State issues are the Net Metering Services requirement (RCW 80.60), and
SSB 5101. These two issues are being rolled inlo the work being done on Jntercormection
services above.
The above informal/on is provided for information only.
N:',UAC~Final',Electric legislation summary.doc
pOR?ANGEI, ES
W AS H ~ N G T O N, U, $. ~,
UTILITY ADVISORY COMMITTEE MEMO
DATE: Novo-nber 8, 2005
To: UTILITY ADVISORY COMMITTEE
FROM: Gary W. Kenworthy P.E., Deputy Director of Public Works/City Engineer
SUBJECT: WUGA Utility Connection Fees Ordinance
;ummary: New utility facilities are almost constructed to provide water, wastewater, and
lectrical service to the recently adopted Western Urban Growth Area (WUGA). Connection fees
~ve been developed for the water and wastewater utilities to assist in recovery of the extension
COSTS.
Recommendation: Forward a favorable recommendation to the CiD' Council to adopt the
proposed WUGA Connection Fees ordinance.
Background / Analysis: The construction project for the extension of the water, wastewater,
and electrical service to the recently adopted Western Urban Growth Area (WUGA) is nearly
complete. At the start of the project, meetings were held with the project proponents and the
residents of the annexed area. In order to fund the utility extensions to Port Angeles Hardwood,
the major industrial client agreed to provide $500,000 toward the construction project. The
balance of the funding would come from the utilities involved and the General Fund. The
utilities would recover a portion of their funding contributions through WUGA connection fees
(Water & Wastewater) and Rates (Electrical). The WUGA connection fees are in addition to the
normal connection and system development fees paid by all new development in the City.
Water connection fees were to be held to the value of the Dry Creek Water Association fees so
that existing customers, when connecting Io the new system, would nol have to pay additional
fees. Their connection fee would be equal Io lhe fee being refunded by the Dry Creek Water
Association. New water customers or existing customers fha! expand their water service would
pay the added WUGA connection fees. The proposed water connection base fee is $3,500 for
existing residential service and $5,600 for existing commercial service. New and expanded
water services would be charged a $3,500 base fee plus $4,500 for each additional Equivalent
Residential Unit (ERU). These fees were developed on the iota] estimated water system
construction and engineering costs of $2,930.000 with the utility subsidizing 50% of the
construction cost and all of the engineering costs.
W]3GA Utility Connection Fees Ordinance
November 8, 2005
Page 2
Wastewater connection fees were developed on the full costs of the wastewater extension
expense, since there was no existing service in the area. This will allow the City to also serve
customers in the WUGA that have not been annexed into the City. The proposed wastewater
base fee is $4,600 plus $1,900 for each additional ERU. These fees were developed on the total
estimated waslewater construction and engineering costs of $862,000.
There are no proposed electrical connection fees. The cost of the electrical construction,
engineering, and PUD system acquisition costs will be recovered through a five-year sumharge
on the electrical rates. The surcharge for electric customers in the WUGA will be 80% of the
difference between the City and PUD rates for a period of five years.
The ordinance provides for recovery of City Water and Wastewater Ulility costs, including
interest, from each owner only when they connect to the sewer. As noted above, existing Dry
Creek water customers will be connected to the new water system without net additional costs.
The individual connection costs to be collected are based on ERU's as estimated in the attached
Exhibit "A".
Exhibil "B", also attached, shows the total cost associated with the water main, wastewater force
main, and appurtenant pumping facilities needed to serve the WUGA.
The connection fee ordinance notes that at the time of payment, inlerest at the rate applicable
(6%) to the City at the completion of construction (11/18/2005) and accruing subsequently will
be added to the connection fee for a per/od not to exceed ten years. All requests for water and
wastewater service in the service area will be assessed accordingly. Any water or wastewater
service outside the original service area, which connects to or utilizes the water or waslewater
mains, will also be assessed using the above methods.
Attachments will be passed out at UAC meeting.
Attachments: Proposed Ordinance
Exhibit A - Fee Development Spreadsheet
Exhibit B - Project Cost Estimate Spreadsheet
N:\UAC'xFinaI~WUGA Utility Connection Fees Ordinance doc
pORTA GELES
UTILITY ADVISORY COMMITTEE MEMO
DATE: November 8, 2005
To: UTILITY ADVISORY COMMITTEE
FROM: Scott McLain, Deputy Director for Power Systems
SUBJECT: Electric Service Area Agreement, Western UGA
Summary: City staff has negotiated an agreement with Clallam PUD staff to apply the 1992
Electrical Service Area Agreement to the specific electrical infrastructure in the newly annexed
Western UGA.
Recommendation: Forward a favorable recommendation to City Council to authorize the
City Manager to sign the Electrical Service Area Agreement, Western UGA, for electrical
facilities in the Western UGA.
Background/Analysis: In 1992, the City and Public Utility District No. 1 of Clallam County
(PUD) entered into an agreement that specified the boundaries for the two utilities and how those
boundaries would change in the event of annexations. Also specified in the agreement was the
purchase price for the transfer of utilities should the City's boundaries change through
annexation.
The physical transfer of the facilities will take place in two phases as the City builds new
infrastructure that is required in the area. The first phase of construction is complete and the
transfer of customers will occur about the first of December. The second phase, which consists
of the customers along the highway west of Eclipse Drive, will be transferred before March 31,
2006.
To satisfy the rights and obligations of the 1992 agreement, the City will pay the PUD
$370,344.42 for PUD facilities, along with severance costs at actual cost for PUD crews to
disconnect various infrastructure.
A:\City-PUD annexation agreement.doc