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HomeMy WebLinkAboutCC Reso 2023-08 - Amending Power Cost Surcharge Rider RESOLUTION NO. 2023-08 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH AMENDING 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: 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 additional cost pressures brought upon by the California energy market's price volatility due to drought, natural gas prices, and inflation; and WHEREAS: Council adopted Resolution 2022-54 Adopting a Power Cost Surcharge Rider to ensure that the Utility would fully recoup the cost to deliver power to Ukiah customers; and WHEREAS: The Power Cost Surcharge Rider implemented in October 2022 was based on the actual difference of cost to provide power less the cost projected in January 2022, and is recalculated on a bi-annual basis; and WHEREAS: The California energy market's price volatility has increased to an even greater level and recovery of those costs is significantly delayed by using a bi-annual recalculation of the Power Cost Surcharge; and WHEREAS: In order to offset the volatility, a more frequent recalculation of the Power Cost Surcharge value with an adjustment due to bill timing would allow the Utility to recoup the added costs in a timelier manner; and WHEREAS: Under California Proposition 26, court rulings have indicated that electric rates must meet the cost-of-service requirements of the utility. The amended Power Cost Surcharge, based on actual costs, will meet the Proposition 26 requirements; and WHEREAS: The City Manager and Staff recommend proceeding with the amended Power Cost Surcharge Rider as outlined in Exhibit A; and WHEREAS: The Power Cost Surcharge will be applied to all customer's usage, regardless of when the energy was used, and modified and applied, either up or down, based on actual costs on March 1st, June 1st, September 1st, December 1st every year with the first Amended Power Cost Surcharge to begin on March 15t, 2023; 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 February 1, 2023, to receive the City Manager's Report and consider adopting a resolution to amend the Power Cost Surcharge Rider. Legal notices were published successfully in accordance with City Code section 3953; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Ukiah hereby adopts the Amended Power Cost Surcharge Rider, as set forth in Exhibit A. BE IT FURTHER RESOLVED PASSED AND ADOPTED at a regular meeting of the City Council of the City of Ukiah on the 111 day of February 2023, by the following roll call vote: AYES: Councilmembers Orozco, Sher, Crane, Duenas, and Mayor Rodin NOES: None ABSENT: None ABSTAIN: None Mari Rodin, Mayor ATTEST: istine Lawler, City Clerk Exhibit A City of Ukiah Amended Power Cost Surcharge Rider This amends the City of Ukiah Power Cost Surcharge Rider as per Resolution No.2023-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 previous I 2-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 and for bill timing adjustments. The Surcharge is set as the difference between Surcharge Factor of quarterly and the January 2022 Surcharge Factor. The Surcharge can be negative or positive. The Surcharge is implemented quarterly on March I", June I", September I", and December I", with the first Power Cost Surcharge to begin on March I,2023.