2002 AGN DEC 03 I14 - Laserfiche WebLink

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Item #14 CITY OF COLTON CITY COUNCIL AGENDA REPORT For City Council Meeting of December 3, 2002 TO: Honorable Mayor and City Council FROM: Thomas K. Clarke, Electric Utility Director SUBJECT: Approval of Electric Service Contract for Jon -Lin, Inc. DATE: November 25, 2002 BACKGROUND The Customer Service Policy industrial electric customers with electric rate. DISCUSSION/ANALYSIS includes Rate Schedule CS which entitles commercial and a peak demand in excess of 150 kiloWatts to negotiate their Jon -Lin, 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 Jon-Lin's most recent twelve months of service with the City. The results of this study indicated that the allocated share of the electric system's revenue requirement lowered the Jon -Lin payments based on their size and load characteristics. This would have reduced their annual payment to the utility by approximately $72,000. 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 for the customer. FISCAL IMPACT Under the current usage used to develop the electric rate, the revenues received from Jon -Lin would reduce by approximately $72,000 annually. This number will change if the customer alters