HomeMy WebLinkAboutCC Reso 2022-54 - Adopting Power Cost Surcharge Rider RESOLUTION NO. 2022-54
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH ADOPTING THE POWER
COST SURCHARGE RIDER
WHEREAS: The City of Ukiah ("City") provides electric utility services to residents and
businesses in the City, and Ukiah Electric Utility is the City's publicly owned electric utility with
the City Council providing local governance and oversight; and
WHEREAS: The City has operated the municipal electric utility for more than 110 years and
the electric rates are based on the cost to provide service; and
WHEREAS: In accordance with the Ukiah City Code Division 4, Chapter 6, Sections 3950
through 3957, the City Council will hold a public hearing on August 17, 2022, to receive the
City Manager's Report and consider adopting a resolution to establish a Power Cost
Surcharge Rider. Legal notices were published successfully in accordance with City Code
section 3953; and
WHEREAS: The cost of service rates established to provide Ukiah customers with power
include generation, transmission, and distribution components; and
WHEREAS: The Electric Utility has experienced cost pressures brought upon by the
California energy market's price volatility due to drought, natural gas prices, inflation and
geopolitical issues; and
WHEREAS: The Electric Utility rates and budgets were based on cost of energy projections
in January 2022, but which fall short of the actual cost of energy purchased to provide Ukiah
customer's with electricity due to the market's volatility; and
WHEREAS: To meet these challenges and ensure that the Utility is fully recouping the cost
to deliver power to Ukiah customers, a Power Cost Surcharge will be implemented, adjusted
bi-annually and effective October 1 st and April 1 st every year. The Power Cost Surcharge will
be based on the actual difference of the cost to provide power less the cost projected in
January 2022; and
WHEREAS: Under California Proposition 26, court rulings have indicated that electric rates
must meet the cost of service requirements of the utility. The proposed Power Cost
Surcharge, based on actual costs, will meet the Proposition 26 requirements; and
WHEREAS: The City Manager and Staff recommend proceeding with the proposed Power
Cost Surcharge Rider as outlined in Exhibit A; and
WHEREAS: Beginning October 1, 2022, the Power Cost Surcharge will be applied to all
customer's usage and modified and applied, either up or down, based on actual costs on April
1st and October 1111 every year, thereafter.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Ukiah hereby
adopts the Proposed Power Cost Surcharge Rider, as set forth in Exhibit A.
BE IT FURTHER RESOLVED
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PASSED AND ADOPTED at a regular meeting of the City Council of the City of Ukiah on the
171" day of August 2022, by the following roll call vote:
AYES: Councilmembers Crane, Orozco, Rodin, Duenas, and Mayor Brown
NOES: None
ABSENT: None
ABSTAIN: None
Jim O rown, Mayor
ATTEST:
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Kristine Lawler, City Clerk
Exhibit A
City of Ukiah Power Cost Surcharge Rider
The Power Cost Surcharge (Surcharge) is a per kilowatt-hour (kWh) charge that is
used to ensure an adequate revenue stream to cover all power costs incurred by
Ukiah Electric's system: including generation, management of Utility owned
facilities, and transmission costs through Northern California Power Agency
(NCPA). The Surcharge will be assessed to all customers as an additional charge
per kWh to their standard rate.
Calculation:
A 12-month running sum of actual metered dollars invoiced and metered kWh of
load for the previous 12 months of the NCPA Net All Resources Bill (ARB)will be
maintained. The Surcharge Factor for a particular month will be calculated as the
previousl2-month sum of actual metered NCPA net ARB invoiced amounts divided
by the previous 12-month sum of the NCPA ARB metered kWh monthly loads
adjusted for distribution losses. The Surcharge is set as the difference between
Surcharge Factor of the semi-annual month and the January 2022 Surcharge Factor.
The Surcharge can be negative or positive.
The Surcharge is implemented semi-annually on October I"and April I", with the
first Power Cost Surcharge to begin on October 1, 2022.
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