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HomeMy WebLinkAboutReso. 1989-383 - Rescinding resolution no. 88-432 and adopting a new power cost adj RESOLUTION NO. g y J g. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING RESCINDING RESOLUTION NO. 88-432 AND ADOPTING A NEW POWER COST ADJUSTMENT PERTAINING TO CITY OF REDDING MUNICIPAL UTILITIES--SCHEDULE OF RATES. WHEREAS, on December 6 , 1988 , by Resolution No. 88-432 , City Council adopted a Power Cost Adjustment pertaining to City of Redding Municipal Utilities--Schedule of Rates; and WHEREAS , the Electric Utility Commission and the Electric Department have recommended modifying Redding' s Power Cost Adjustment (PCA) procedure to improve coordination with the Western Area Power Administration (Western) Revenue Adjustment Clause (RAC) ; and l ' WHEREAS, such modification will result in the timing of f Western' s RAC and Redding' s PCA to be properly coordinated, and provide for the use of the exact RAC refund/charge amount from Western in calculating Redding' s PCA; NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Redding as follows : 1 . That Resolution No. 88-432 be and hereby is rescinded. 2 . That City Council hereby adopts the Power Cost Adjustment attached hereto and incorporated herein by reference to III 1 . pertaining to City of Redding Municipal Utilities—Schedule of . Rates. I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the 7th day of November , 1989 , and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS : Buffum, Dahl , Johannessen, & Carter NOES: COUNCIL MEMBERS : None ABSENT: COUNCIL MEMBERS: Fulton ABSTAIN: COUNCIL MEMBERS : None )<7, 01/eYSCOTT CARTER, Mayor City of Redding • ATTEST: ETHEL A. NICHOLS, City Clerk ORA PPROVED: RA 'DALL A. HAYS , ity Attorney -2- • • • CITY OF REDDING MUNICIPAL UTILITIES - SCHEDULE OF RATES POWER COST ADJUSTMENT APPLICABILITY To the entire City of Redding service area for all kilowatthours billed under all rate schedules. PURPOSE To appropriately adjust for increases and decreases in the Electric Utility' s wholesale power costs due to the Revenue Adjustment Clause (RAC) associated with purchases by the City of Redding from the Department of Energy, Western Area Power Administration (Western) . APPLICATION OF POWER COST ADJUSTMENT (PCA) The monthly PCA dollar amount to be added to or subtracted from each bill shall be obtained by multiplying the number of kilowatthours for which the bill is rendered by the applicable monthly PCA Factor. CALCULATION OF THE POWER COST ADJUSTMENT FACTORS A. The PCA Factor will be calculated and Iliad:, effective every June 15 and December 15 to reflect any changes in Western' s RAC. The PCA Factor will be calculated as follows: 1 . If Western' s RAC amount, in dollars, is a credit, (mon- ies owed to Redding by Western) then; a. Western' s RAC credit will be adjusted by; i. adding any amount, in dollars, that is over the PCA Balancing Account' s minimum balance of $300 ,000 , as recorded two months prior to the effective date of the PCA Factor being calculated, however, ii. if the two months prior balance of the PCA Balancing Account is below $300, 000 , then the necessary dollar amount required to restore the account to $300, 000 will first be sub- tracted from Western' s RAC credit, further, iii. if the dollar amount required to restore the Balancing Account to $300 ,000 is greater than Western' s RAC credit then the PCA Factor will be calculated under the provisions of Section A.2 . b. the adjusted refund dollar amount (as referenced in Section A. l .a) will be divided by the adjusted sum of all retail kilowatthour sales for the R1 : 293 1 • six-month period beginning twelve months prior to the effective date of the PCA Factor. c. the adjusted sum of retail kilowatthour sales (as referenced in Section A. 1 .b) will be determined by multiplying the historical total kilowatthour sales by an historical three (3) year average annual energy growth factor to reflect the Utility' s rate of growth in kilowatthour sales. d. the PCA Factor resulting from the calculations in Section A. l .b will be applied as a credit to all retail kilowatthour sales on a monthly billing cycle basis beginning with the effective date of the PCA Factor being calculated. e. If the calculation of the PCA Factor results in a credit of less than 0 . 01 cents per kilowatthour, then the PCA Factor will be 0 . 00 cents per kilowatthour. The RAC credits from Western will accrue with interest in the PCA Balancing Account. 2 . If Western' s RAC amount, in dollars, is a debit, (mon- ies owed to Western by Redding) then; a. Western' s RAC debit will be adjusted by; i. subtracting any amount, in dollars, that is over the PCA Balancing Account' s minimum balance of $300 , 000 as recorded two months prior to the effective date of the PCA Factor being calculated, however, ii. if the two months prior balance of the PCA Balancing Account is below $300 ,000 , then the necessary dollar amount required to restore the account to $300 ,000 will be added to Western' s RAC debit. b. the adjusted debit dollar amount (as referenced in Section A. 2 .a) will be divided by the adjusted sum of all retail kilowatthour sales for six-month the period beginning twelve months prior to the effec- tive date of the PCA Factor. c. the adjusted sum of retail kilowatthour sales (as referenced in Section A. 2 .b) will be determined by multiplying the historical total kilowatthour sales by an historical three (3) year average annual energy growth factor to reflect the Utility' s rate of growth in kilowatthour sales. d. the PCA Factor resulting from the calculations in Section A. 2.b will be applied as a charge to all R1 : 293 2 I I ,. • r retail kilowatthour sales on a monthly billing cycle basis beginning with the effective date of the PCA Factor being calculated. e. If the calculation of the PCA Factor results in a debit of less than 0. 01 cents per kilowatthour then the PCA Factor will be 0 . 00 cents per kilowatthour. The RAC debits from Western will be paid from the PCA Balancing Account. B. A PCA Balancing Account shall be maintained as an operating account for the purposes of accommodating the cash flow fluctuations inherent in the PCA process. 1 . Each month when a power bill is rendered from Western which includes any adjustment for West- ern' s RAC, the account' s balance will be calcu- lated as follows : a. Add (or subtract) Western' s monthly RAC charge, in dollars, from the balance which existed at the end of the prior month. b. Add (or subtract) the amount, in dollars, recovered (or refunded) from the application of the PCA Factor which was effective during the prior month. Such amount shall be the product of kilowatthours of energy billed during the month and the applicable PCA Factor. c. Add the amount, in dollars, of all interest earned on the average balance of the funds in the PCA Balancing Account. i. Funds from the monthly collection of the PCA will be invested by the City along with the City' s other cash accounts and therefore, will accrue interest at the average monthly rate paid on the City' s variable investment account. 2 . Best efforts will be made to maintain a minimum balance in the PCA Balancing Account of $300 ,000. 1 � ' I � I { R1:293 3