Laserfiche WebLink
ITEM #24 <br />CITY OF COLTON <br />AGENDA REPORT <br />FOR COUNCIL MEETING OF JUNE 5, 2007 <br />TO: HONORABLE MAYOR AND CITY COUNCIL <br />FROM: Jeannette Olko, Electric Utility General Manager <br />SUBJECT: Contract Amendment for Jon Lin Inc. / McCain Foods <br />DATE: May 29, 2007 <br />BACKGROUND: <br />On December 3, 2002 the Colton City Council approved an Electric Service Agreement between <br />Jon -Lin Inc. and the City of Colton. Under terms of the agreement, the price for electric service is <br />$.0989 per kilowatt hour for a term of 60 months from an effective date of May 15, 2002. Staff <br />has been working with the new owner of Jon -Lin Inc., Mc Cain Foods, for the last several months <br />on the appropriate time -of -use rate to charge for electric service. <br />McCain Foods is requesting an amendment of the existing contract rate for three months to allow <br />both parties time to determine which time -of -use rate is more appropriate to charge. <br />DISCUSSION/ANALYSIS: <br />There are currently two time -of -use rates. The load factor for McCain Foods indicates that they <br />should be placed under the LG2 TOU rate; however, Mc Cain Foods has asked for additional time <br />to improve their load factor by adding additional shifts so that they operate more during mid -peak <br />and off-peak hours. The improved load factor would qualify McCain Foods for the LG1 TOU rate. <br />FINANCIAL IMPACT: <br />If the current rate is extended McCain Foods is expected to pay approximately $76,600 a month <br />compared to an estimated $77,500 a month for LG1 TOU rate; a difference of approximately <br />1.3%. If McCain Foods were to be charged the LG2 TOU rate they would pay approximately <br />$130,000 a month, which would be 67% more than the current rate. <br />ENVIRONMENTAL IMPACT: <br />None. <br />CONFLICT OF INTEREST — Gift Disclosure Requirements <br />McCain Foods <br />President: Dale Morrison President CEO <br />Contact: Michael Weech <br />