CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Conduct the first reading of an ordinance amending Title 8 (Public Utilities) Chapter 1 (Electricity) Article C (Electric Service Rates) of the Naperville Municipal Code
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DEPARTMENT: Electric Utility
SUBMITTED BY: Brian Groth - Electric Director
BACKGROUND:
Naperville's Electric Utility ("Utility") provides high-quality, reliable electric service to more than 60,000 customers. Over the last 50 years, the Utility has purchased power through a variety of sources including ComEd, J. Aron/Goldman Sachs, and currently through an agreement with the Illinois Municipal Electric Agency (IMEA).
The last Electric Utility rate study was conducted in 2018 to help plan for financial needs through 2021. The City Council approved a 2% yearly rate decrease for each customer class. No cost-of-service shifts were recommended in this study.
At this time, the Utility's cash balance has followed very closely with the 2018 rate study design and is expected to be at $30 million at the end of 2021.
The Utility is in the third and last year of the 2018 rate study. In preparation for the next three years, staff contracted with Utility Financial Solutions (UFS) to perform the rate study providing a financial plan through 2024.
DISCUSSION:
Study Recommendations
The Electric Utility has developed the following four recommendations for the next three years. Many factors influenced their development, including compliance with City financial principles and policies, limiting debt, fully funding capital through rates, finding the appropriate level of capital funding to ensure high reliability, and competitiveness in the residential and commercial marketplace.
1. Approve staff recommended rate increases in various customer classes
The attached schedule of rates and charges will provide sufficient revenues in the study years to address anticipated operating expenses and the staff-recommended capital program. The rate study calls for...
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