1996 AGN OCT 01 I15 - Laserfiche WebLink

Browse Search

TO: FROM: SUBJECT: DATE_ CITY OF COLTON INTEROFFICE MEMORANDUM Council Member Sennett Thornas K. Clarke, Electric Utility director I'Interim },Nater & Waste, Electric Elates September 26, 19913 Director The current Electric Utility rates have been in effect since April of 1995. These rates appear to be producing sufficient rates to cover the costs of providing electric service to the Customers within Colton. At the present time we are preparing a cast of seance analysts to see if future rote changes may be necessary and to determine if customer classes are contributing their appropriateshare, However, it is not anticipated at this dale that any modification In the rates will be required in the short term. As you are aware': electric rates are comprised of base rate charges and Power Gast Adjustment (PCA) charges to cover the total costs of providing this service. The relationship and proper collection of these Iwo components is extremely Important to maintain the financial integrity of the Electric Utility. In reviewing our budget to preliminary financial reports, It appears That the rates we placed in effect track in April of 1€995 are meeting our expectations as far as producing sufficient revenues to moinlain Operations at lire current level, However, the distributiun between base rate revenues and PCA revenues needs to be monitored: Tile rate study that we are undertaking is in response to the current efforts in the slate to deregulate the electric industry. The deregulation will place file utility in a position where we will have to became more cost Conscious while at the same: time develop rates which will not only retain our current customers but enable us to attract' new customers within the city, This wilt require the utility to closely monitor title itean expenses, identify various asst eomponenis, and be resporisive to changes in not early the energy market, but also in customer attitude and service :requirements, It is Our intention to use the cost of service study, and th,; resulks of that effort to create a more. competitive utility and a more cont conscious utility. The deregulation of the electric industry is not prompting a reduction of rates nor a massive change in the design of rates. What it is requiring is that the utility become more conscious of how expenses are being charged to the various c €stemers and to customer Classes. In order to be cognizant of these costs, the Utility has taken the steps to revamp the accounting system nto Initiate the uniform systern accounting and to have the ability to prepare a series of management reports which allow us to more accurately identify and allocate the cost of service. From this exercise, we will be able to more competitively access rates On a class basis and, when necessary, on an individual basis. This not only allows us to charge proper rates but also respond the mandates of the stale and federal initiatives for deregulation, TKC:csk cc: Mayor and City Council Interim City Manager Freeman Assistant City Manager Parrish ITEM 3.5