2005 AGN JAN 18 I10 - Laserfiche WebLink

Browse Search

CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF JANUARY 18,2005 TO: HONORABLE MAYOR AND CITY COUNCIL Item #10 FROM: Jeannette Olko, Electric Utility General Manager ��) I () I SUBJECT: Approval of Contract Electrical Rate with Discover Plastics, Inc. - T 0 DATE: January 6, 2006 BACKGROUND: The City of Colton Electric Utility Department is authorized by resolution No. R-74-94 to develop contract rates with customers whose loads exceed 150 kW. Rates shall be designed to meet the electric utility's revenue requirements, encourage growth, and to provide mutual benefits to both the electric utility and its customers. DISCUSSIONIANALYSIS: Discover Plastics, Inc., located at 570 Birch Ct., is a plastic mold injection plant, and a new business in the City of Colton. They have equipment that recycles plastics by re-melfing and processing waste materials. Currently, they use more than 358 kW and average more than 80,000 kWh per month. At the request of the customer, a rate analysis was performed and a rate developed that reflects the cost to serve the customer, while providing a 25% savings to them. The term of this contract is for one (1) year, at which time the account will be re-evaluated to determine if the proposed rate is appropriate. It is anticipated that within the year, Discover Plastics, Inc. will upgrade their service panel, thus increasing their production and energy use. FINANCIAL IMPACT: Revenue is estimated to be $3,000 less per month for the term of the proposed contract. However, total revenue to the utility will be positive with the increase in production and energy use. ALTERNATIVES: Do not approve the contract rate with Discover Plastics, Inc. This will restrict the ability of the customer to afford the investment that is necessary to upgrade its electrical system, thus delaying the ability of the customer to increase load and production. This will result in both short and long term loss of energy sales and revenue to the utility. None. CONFLICT OF INTEREST: None RECOMMENDATION: Staff recommends approval of Contract Rate with Discover Plastics, Inc.