AGENDA MEMORANDUM
Meeting Date: June 8, 2009
From: Paul Kalv, Electric Utility Director
Subject: Resolution authorizing execution of a professional services agreement with Utility Consulting Services to analyze electric rate costs and allocation.
Staff Recommendation:
Staff recommends approval of the resolution authorizing execution of the agreement with Doug Handley d/b/a Utility Consulting Services for a not to exceed amount of $50,000.00.
Analysis:
In order to ensure electric retail rates properly reflect the cost to serve the various customer classes, the City of Leesburg requires an electric rate study. Staff proposes that these services be provided to the City by Mr. Doug Handley of Utility Consulting Services. The study will address the level of the City’s rates relative to its costs and the allocation of costs between rate classes. Other services will include a review of the bulk power cost adjustment methodology and general consultation and presentations as authorized by the City.
Mr. Handley performed the last formal Cost of Service Study and rate design for the City of Leesburg completed in 2004. Since 2004, wholesale power supply costs have increased significantly and our retail rates may not currently be allocated across the customer classes in the most equitable manner. Additionally, because our current base rates do not adequately recover power supply expenses, the Bulk Power Cost Adjustment has grown significantly.
The rate study is needed now to appropriately allocate costs and will also serve as proper base rates levels as we consider the potential for future movement into a Smart Meter deployment and alternative rate structures.
Phase I of the study will not exceed $25,000.00. If the results of Phase I are favorable the City may approve the professional to proceed with Phase II for a cost not to exceed $25,000.00.
Looking at the last 12 months, the statistical relationships between customer classes, kWh Energy usage, and revenue received paint a very interesting picture.
|
12 Months Ending March 2009 |
||||||
|
Rate |
# Customers |
% Customers |
kWh |
% kWh |
Revenue |
% Revenue |
|
Residential |
17,817 |
84% |
212,873,862 |
43% |
$30,645,896 |
46% |
|
Non Demand |
2,950 |
14% |
55,211,292 |
11% |
$8,168,841 |
12% |
|
Demand |
465 |
2% |
232,453,767 |
46% |
$28,478,143 |
42% |
|
TOTAL |
21,232 |
100% |
500,538,921 |
100% |
$67,292,880 |
100% |
The commission is being requested to waive the formal solicitation process on this project. The firm selected is familiar with the City’s rate structure and results in lower cost to provide the deliverables of this project. The results of this study may also benefit some customers with lower rates if costs are reallocated. Selecting a firm through the formal RFP process would delay passing these savings on to those customers. The services provided are highly specialized and the result of a formal solicitation may likely be an agreement with the firm recommended here.
Options:
1. Approve execution of the agreement with Doug Handley d/b/a Utility Consulting Services; or
2. Such alternative action as the Commission may deem appropriate
Fiscal Impact:
Funds are available in the account listed here.
Submission Date and Time: 6/4/2009 8:09 AM____
|
Department: _Electric Department______ Prepared by: _Mike Thornton________ Attachments: Yes__X__ No ______ Advertised: ____Not Required __X___ Dates: __________________________ Attorney Review : Yes___ No ____
_________________________________ Revised 6/10/04 |
Reviewed by: Dept. Head ________
Finance Dept. _________JB_______
Deputy C.M. ___________________ Submitted by: City Manager ___________________ |
Account No. 041-1021-521-3110___
Project No. __419200___________
WF No. ______________________
Budget ____$100,000.00_________
Available ___$100,000.00_________ |
RESOLUTION NO._______________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH DOUG HANDLEY UTILITY CONSULTING SERVICES TO PERFORM A RATE STUDY TO ACCURATELY ALLOCATE COSTS; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT the Mayor and City Clerk are hereby authorized to execute an agreement with DOUG HANDLEY d/b/a UTILITY CONSULTING SERVICES whose address is 9487 Silver Buttonwood Street, Orlando, Florida 32832 for professional services in an electric rate study to determine cost allocations.
THAT this resolution shall become effective immediately.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the __8th___ day of ___June__ 2009
__________________________
Mayor
ATTEST:
__________________________
City Clerk