CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Pass the Ordinance amending Title 8 (Public Utilities), Chapter 1 (Electricity), Article C (Electric Service Rates), Section 4 (Schedule of Rates), of the Municipal Code to allow for Primary and Transmission Standby Rates.
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DEPARTMENT: Electric Utility
SUBMITTED BY: Mark Curran, Electric Utility Director
BOARD/COMMISSION REVIEW:
Public Utilities Advisory Board (PUAB) recommends approval of Primary and Transmission Standby Rates. On September 5, 2017, City Council conducted the first reading of an ordinance allowing for Primary and Transmission Standby Rates.
BACKGROUND:
Nalco and BP are the only customers within the city that have cogeneration facilities on their respective campuses. Both facilities are Qualifying Facilities as defined in the federal Public Utility Regulatory Policies Act (PURPA) of 1978 and the Energy Policy Act of 2005. The legislation was passed to promote increased efficiency in the utilization of energy resources and authorized non-utility entities to enter the business of generating electricity. The thermal energy from the cogeneration plant is used for building heating and to drive chiller equipment. The city has been required to purchase electric energy generated above that required for the two facilities. Nalco has a 5MW facility served by a 12.47kV dedicated utility feeder line and is on Flat Primary Metering Rates, and BP has a 9MW facility that is served by two 34.5kV dedicated lines and is on Flat Transmission Metering Rates. The existing rate structure only allows collection of revenue when the customer is receiving energy from the utility.
DISCUSSION:
The current rates for both Nalco and BP are referred to as "flat" rates because each kilowatt-hour (kWh) of energy is charged at the same price no matter when it is used. The rates also include a kilowatt (KW) demand charge based on their peak usage when receiving power from the utility regardless of the time-of-day wh...
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