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HomeMy WebLinkAboutReso. 1988-432 - Adopting the power cost adjustment pertaining to city of redding municipal utilities- schedule of rates • • RESOLUTION NO. 9,- V•12, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING ADOPTING THE POWER COST ADJUSTMENT PERTAINING TO CITY OF REDDING MUNICIPAL UTILITIES—SCHEDULE OF RATES . li In order that the City' s electric rates will be automatically reset in response to Western' s Revenue Adjustment Clause , IT IS HEREBY RESOLVED by the City Council of the City of Redding that Council hereby adopts a Power Cost Adjustment pertaining to City of Redding Municipal Utilities—Schedule of Rates . BE IT FURTHER RESOLVED that a true copy of said Power Cost Adjustment is attached hereto and incorporated herein by reference. 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 6th day of December , 1988 , and was duly adopted at said meeting by the following vote: CO Buffum, Carter, Dahl , Fulton, & Johannessen w AYES: COUNCIL MEMBERS: 09 N NOES: COUNCIL MEMBERS : None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS : None n Cr K. AUrICE JOHANNESSEN, Mayor op City of Redding op ATTEST: FORMp'PROVED: eiGe 7/4e..11/6- ETHEL A. NICHOLS , City Clerk RA PALL A. HAYS , C ty Attorney N 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 made effective every May 15 and November 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. 1 .a) will be divided by the adjusted sum of all retail kilowatthour sales for the R1 : 300 1 - o 4 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. 1 .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 sunm 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: 300 2 • 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 . J� 1 R1 : 300 3 -