CITY MANAGER AUTHORITY PROCUREMENT AWARDS
ACTION REQUESTED:
title
Waive the application provisions of the Naperville Procurement Code and award Procurement 24-052, Comprehensive Electric Utility Cost-of-Service Rate Study, to Utility Financial Solutions for an amount not to exceed $97,700 and for a three-year term.
body
DEPARTMENT: Electric Utility
SUBMITTED BY: Brian Groth, Director
BACKGROUND:
In 2021, the City contracted with Utility Financial Solutions (UFS) to perform an Electric Utility Cost of service study. This rate study was the third completed for the Utility by UFS (2015, 2018, 2021) and they have been an excellent partner of the Utility through these years.
The 2021 study completed by UFS was utilized by City staff and council in setting rates for the Electric Utility through the end of 2024. UFS completed the rate study with the following financial goals:
1. Restore the Capital Maintenance Program to an appropriate level for three years.
2. Restore Electric Utility cash reserves to an appropriate level.
The Electric Utility rate design, which included the following items, was approved by the City's Public Utility Advisory Board (PUAB) and ultimately by Naperville City Council on March 02, 2021:
1. Incorporated an increase of 0.50% for all customer classes in 2022, 2023, and 2024 and no issuance of debt.
2. Implement a gradual cost of service shift beginning in 2022 to align costs and revenues in each utility customer class with the long-term goal of ensuring that each rate class (Residential, Small Commercial, Large Commercial, etc.) is paying their fair share of utility costs.
3. Begin shifting basic costs of service from the energy charge to the fixed meter charge to ensure capital maintenance programs are funded by a stable revenue source.
The rates set by council allowed the Utility to complete required capital projects while maintaining the City's competitive rate position with highly reliable service.
Expense projections from th...
Click here for full text