1996 ADJ MIN OCT 15 - Laserfiche WebLink

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Director Clarke mentioned that PCA is one mechanism to do that. For example, since residential sales were somewhat higher than anticipated, the City did over collect which produced a small amount of residential PCA money that the City could either hold to mitigate future costs or can be rolled back to the customers. Councilmember Bennett asked if we could put together a report for the next agenda that outlines the steps we would have to take to give a reduction to our residents. Director Clarke responded that the number can be calculated but it would be a short term (2 or 3 month) reduction. Councilmember Sanders asked to what degree of the PCA monies did we over collect. Director Clarke responded that it was a modest amount in the range of $50,000 and $100,000. We set the PCA. We did forecast and our expectations were a little aggressive. Director Clarke explained that baseline is a different issue than the PCA. We have run the analysis before for the change from 250 to 400. Southern California Edison has a myriad of baseline allowances and those are based on geographical regions. Those regions most closely aligned with the City of Colton give a baseline allowance between 327 and 380. For the City of Colton to give a 400 kilowatt hour allowance in the first block would result in approximately $50,000 a month in revenues that would have to be assessed at a higher block. Councilmember Sanders inquired as to the kilowatt plus and a band break. Director Clarke responded that normally when you look at the band, there is a special study that is called a Frequency Analysis, and you group all your sales data then you look for a natural break and that is where you find a break point. That occurs at around 250, there is not another break until you get around 400 kilowatt hours. You can set it at any level you would like. The higher you go the more it impacts the higher use customers because you are transferring more money into that block of space. To Councilmember Hansen's question, about what would be powered at the 250 unit level, Director Clarke said it would cover basic needs: a refrigerator, which would account to half or two-thirds of the 250 level, depending on the efficiency of the unit; most of the lighting needs for a family of four; and basic cooking needs if you don't have an electric oven and you have a microwave with a gas stove it should cover the microwave use and the lighting in the kitchen. Councilmember Hansen compared the drop in revenue to the net profit of the Electric Utility of $2.3 million. Director Clarke responded the City cannot have a profit and a part of that money goes into the debt service reserve which is to continue 30 years. Director Clarke said that while the City had sales in excess of our projected expenditures, we have also had additional power costs that do not show in the report. The City had costs that went into effect this year and that is why it raised the PCA. The second allocation from San Juan goes into effect starting January of this year which adds $600,000 a year to the requirement of our San Juan obligation. Also the City had additional costs of $300,000 for its share of the transmission facilities to bring that home. This totals $1 million plus $1.5 million of debt U. n r% -r i C wVft&