1997 AGN NOV 18 I14 - Laserfiche WebLink

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CITY OF COLTON CITY COUNCIL AGENDA REPORT For City Council Meeting of November 18, 1997 TO: Honorable Mayor and City Council APPROVAL: Len Wood, Interim City Manager FROM: Thomas K. Clarke, Utility Director's SUBJECT: Approval of Electric Service Contract for Telco Foods, Inc. DATE: November 11, 1997 BACKGROUND The Customer Service Policy includes Rate Schedule CS that entitles commercial and industrial electric customers with a peak demand in excess of 150 kiloWatts to negotiate their electric rate. DISCUSSION/ANALYSIS Telco Foods, Inc., is an electric customer whose load qualifies for a negotiated rate. The Utility staff has run a traditional cost of service study using historic revenue requirements and allocators developed from Telco's most recent twelve months of service with the City. The results of this study indicated that the allocated share of the systems revenue requirement lowered the Telco payments by approximately 9.3%. This would have reduced their annual payment to about $215,000 from $237,000 or savings of around $22,000. According to the procedure outlined in the Customer Service Policy, the customer has to request service under Rate Schedule CS. Upon receipt of that request, staff performs the required analyses, addresses any rate design issues with the customer, and completes the agreement for City Council approval. All steps have been completed except for approval of the formal agreement. ALTERNATIVES The Customer Service Policy was modified precisely to allow for these types of agreements between the City and eligible electric customers. It is in the best interest of the City, the Electric Utility, and those customers opting for this type of service, to create fair and equitable electric rates. This is especially true as we all enter the new restructured electric industry. It would only be at the customers' option to choose an alternative rate, one that best suits the electrical service requirements of the customer. Page 1 of 2 T Item # 14