CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Waive the applicable provisions of the Naperville Procurement Code and award Procurement 21-097, 2021 Comprehensive Electric Utility Cost-of-Service Rate Study, to Utility Financial Solutions, LLC for an amount not to exceed $68,090
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DEPARTMENT: Electric Utility
SUBMITTED BY: Brian Groth, Director
BOARD/COMMISSION REVIEW:
The Public Utility Advisory Board (PUAB) concurred with staff to waive the applicable provisions and proceed with a recommendation to City Council to award the 2021 Comprehensive Electric Utility Cost-of-Service Rate Study to Utility Financial Solutions.
BACKGROUND:
In 2018, the City contracted with Utility Financial Solutions (UFS) to perform a rate study. The study was a guide for the City in making appropriate financial decisions for the Electric Utility through 2021. UFS completed the rate study with the following financial goals:
1. Restore the "Capital" Maintenance Program to an appropriate level; and
2. Restore cash reserves to an appropriate level.
The rate design, based on the following items, was approved by the City Council on February 20, 2018:
1. Implement a "Capital" Maintenance Budget ($14 million, $14 million, $14 million) over the next three years;
2. Complete a rate design that incorporates rate decrease of -2.0% for all customer classes in 2019, 2020 and 2021 and no issuance of debt. This option restores the cash balance of the Electric Utility to a projected $31.5 million by the end of 2021;
3. Implement a gradual cost of service shift beginning in 2022 to align costs and revenues in each utility customer class with a goal of bringing costs into sync in a 5-7year timeframe. Residential, small commercial, and transmission classes are currently not covering their cost of service and are being subsidized by larger commercial; and shift part of customers' energy costs to the customer charge portion of utility bills each year to provide a stable ...
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