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File #:
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24-0512
Version:
1
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Name:
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Type:
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Report
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Status:
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Agenda Ready
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On agenda:
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7/3/2024
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Final action:
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Title:
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UTILITY RATE STUDY UPDATE - COST OF SERVICE & RATE DESIGN
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REQUEST FOR CITY COUNCIL ACTION
DATE: 07/03/2024
TO: Honorable Mayor and City Council Members
FROM: Utilities Department
SUBJECT:
Title
UTILITY RATE STUDY UPDATE - COST OF SERVICE & RATE DESIGN
End
RECOMMENDED ACTION:
Recommended action
That the City Council provides direction on which sewer/water rate option to proceed with and confirms the proposed rate structures for recycled water and electric rates.
Body
ANALYSIS:
The city’s hired utility rate consultant, RDN, will present proposed rate changes for sewer, water, reclaimed water, and electricity to the city council, as shown below. The options provided are proposed, not adopted, nor finalized. Based on the feedback received from the City Council, final rates will be presented at a future City Council meeting.
Sewer Rates
Option 1: Operations and Maintenance and Debt Service (No Capital Investment)
|
|
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Revenue Adjustment |
5.0% |
4.0% |
3.0% |
3.0% |
3.0% |
|
|
Current Residential |
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Fixed |
$45.60 |
$43.40 |
$45.13 |
$46.49 |
$47.88 |
$49.32 |
|
Variable - non- residential only |
N/A |
$5.25 |
$5.46 |
$5.62 |
$5.79 |
$5.97 |
|
Residential Impact (Per Month) |
|
-$2.20 |
$1.73 |
$1.36 |
$1.39 |
$1.44 |
Option 2: Operations and Maintenance and Debt Service, w/ Capital Investment (Recommended)
|
|
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Revenue Adjustment |
10.0% |
10.0% |
10.0% |
10.0% |
10.0% |
|
Proposed Debt Issuance |
|
$45,000,000 |
|
|
|
|
|
Current Residential |
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Fixed |
$45.60 |
$45.46 |
$50.01 |
$55.01 |
$60.51 |
$66.56 |
|
Variable - non- residential only |
N/A |
$5.50 |
$6.05 |
$6.66 |
$7.32 |
$8.05 |
|
Residential Impact (Per Month) |
|
-$0.14 |
$4.55 |
$5.00 |
$5.50 |
$6.05 |
Water Rates
Option 1: Operations and Maintenance and Debt Service (No Capital Investment)
|
|
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Revenue Adjustment |
7.0% |
5.0% |
4.0% |
4.0% |
4.0% |
Proposed Fixed Rates
|
Meter Size |
Current Rate |
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
5/8" |
$27.09 |
$31.30 |
$32.86 |
$34.18 |
$35.55 |
$36.97 |
|
3/4" |
$36.46 |
$40.81 |
$42.85 |
$44.57 |
$46.35 |
$48.20 |
|
1" |
$55.18 |
$59.83 |
$62.82 |
$65.34 |
$67.95 |
$70.67 |
|
1 1/2" |
$101.98 |
$107.39 |
$112.76 |
$117.27 |
$121.96 |
$126.84 |
|
2" |
$158.13 |
$164.45 |
$172.68 |
$179.58 |
$186.77 |
$194.24 |
|
3" |
$335.95 |
$345.16 |
$362.42 |
$376.92 |
$391.99 |
$407.67 |
|
4" |
$598.02 |
$611.47 |
$642.04 |
$667.72 |
$694.43 |
$722.21 |
|
6" |
$1,505.89 |
$1,534.03 |
$1,610.74 |
$1,675.17 |
$1,742.17 |
$1,811.86 |
|
8" |
$2,629.02 |
$2,675.35 |
$2,809.12 |
$2,921.49 |
$3,038.34 |
$3,159.88 |
|
10" |
$3,939.33 |
$4,006.89 |
$4,207.23 |
$4,375.52 |
$4,550.54 |
$4,732.57 |
|
Private Fire |
|
|
|
|
|
|
|
5/8" |
$8.60 |
$12.41 |
$13.03 |
$13.55 |
$14.09 |
$14.66 |
|
3/4" |
$8.60 |
$12.41 |
$13.03 |
$13.55 |
$14.09 |
$14.66 |
|
1" |
$8.60 |
$12.41 |
$13.03 |
$13.55 |
$14.09 |
$14.66 |
|
1 1/2" |
$8.60 |
$13.09 |
$13.74 |
$14.29 |
$14.87 |
$15.46 |
|
2" |
$9.74 |
$14.64 |
$15.37 |
$15.98 |
$16.62 |
$17.29 |
|
3" |
$10.81 |
$17.30 |
$18.17 |
$18.90 |
$19.65 |
$20.44 |
|
4" |
$16.76 |
$26.88 |
$28.22 |
$29.35 |
$30.52 |
$31.74 |
|
6" |
$32.74 |
$43.39 |
$45.56 |
$47.38 |
$49.28 |
$51.25 |
|
8" |
$60.29 |
$68.23 |
$71.64 |
$74.50 |
$77.48 |
$80.58 |
|
10" |
$101.72 |
$102.65 |
$107.78 |
$112.09 |
$116.58 |
$121.24 |
Proposed Variable Rates
|
Tier |
Current Rate |
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Tier 1 |
1.93 |
$1.92 |
$2.02 |
$2.10 |
$2.18 |
$2.27 |
|
Tier 2 |
2.77 |
$3.25 |
$3.41 |
$3.54 |
$3.69 |
$3.83 |
|
Tier 3 |
5.48 |
$4.30 |
$4.51 |
$4.69 |
$4.88 |
$5.08 |
|
Tier 4 |
9.12 |
$5.12 |
$5.38 |
$5.59 |
$5.82 |
$6.05 |
|
Tier 5 |
13.59 |
|
|
|
|
|
Option 2: Operations and Maintenance and Debt Service, w/ Capital Investment (Recommended)
|
|
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Revenue Adjustment |
9.0% |
9.0% |
9.0% |
9.0% |
9.0% |
|
Proposed Debt Issuance |
|
$50,000,000 |
|
|
|
Proposed Fixed Rates
|
Meter Size |
Current Rate |
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
5/8" |
$27.09 |
$31.88 |
$34.75 |
$37.88 |
$41.29 |
$45.01 |
|
3/4" |
$36.46 |
$41.57 |
$45.32 |
$49.39 |
$53.84 |
$58.68 |
|
1" |
$55.18 |
$60.95 |
$66.44 |
$72.42 |
$78.93 |
$86.04 |
|
1 1/2" |
$101.98 |
$109.39 |
$119.24 |
$129.97 |
$141.67 |
$154.42 |
|
2" |
$158.13 |
$167.53 |
$182.60 |
$199.04 |
$216.95 |
$236.48 |
|
3" |
$335.95 |
$351.61 |
$383.26 |
$417.75 |
$455.35 |
$496.33 |
|
4" |
$598.02 |
$622.90 |
$678.96 |
$740.07 |
$806.67 |
$879.27 |
|
6" |
$1,505.89 |
$1,562.71 |
$1,703.35 |
$1,856.65 |
$2,023.75 |
$2,205.89 |
|
8" |
$2,629.02 |
$2,725.36 |
$2,970.64 |
$3,238.00 |
$3,529.42 |
$3,847.07 |
|
10" |
$3,939.33 |
$4,081.79 |
$4,449.15 |
$4,849.57 |
$5,286.03 |
$5,761.77 |
|
Private Fire |
|
|
|
|
|
|
|
5/8" |
$8.60 |
$12.64 |
$13.78 |
$15.02 |
$16.37 |
$17.84 |
|
3/4" |
$8.60 |
$12.64 |
$13.78 |
$15.02 |
$16.37 |
$17.84 |
|
1" |
$8.60 |
$12.64 |
$13.78 |
$15.02 |
$16.37 |
$17.84 |
|
1 1/2" |
$8.60 |
$13.33 |
$14.53 |
$15.84 |
$17.27 |
$18.82 |
|
2" |
$9.74 |
$14.91 |
$16.25 |
$17.71 |
$19.31 |
$21.05 |
|
3" |
$10.81 |
$17.63 |
$19.21 |
$20.94 |
$22.83 |
$24.88 |
|
4" |
$16.76 |
$27.38 |
$29.84 |
$32.53 |
$35.46 |
$38.65 |
|
6" |
$32.74 |
$44.20 |
$48.18 |
$52.51 |
$57.24 |
$62.39 |
|
8" |
$60.29 |
$69.50 |
$75.76 |
$82.57 |
$90.01 |
$98.11 |
|
10" |
$101.72 |
$104.57 |
$113.98 |
$124.24 |
$135.42 |
$147.61 |
Proposed Variable Rates
|
Tier |
Current Rate |
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Tier 1 |
$1.93 |
$1.96 |
$2.13 |
$2.32 |
$2.53 |
$2.76 |
|
Tier 2 |
$2.77 |
$3.31 |
$3.60 |
$3.93 |
$4.28 |
$4.67 |
|
Tier 3 |
$5.48 |
$4.38 |
$4.77 |
$5.20 |
$5.67 |
$6.18 |
|
Tier 4 |
$9.12 |
$5.22 |
$5.69 |
$6.20 |
$6.76 |
$7.36 |
|
Tier 5 |
$13.59 |
|
|
|
|
|
Reclaimed Water Rates
|
|
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Revenue Adjustment |
4.0% |
4.0% |
4.0% |
4.0% |
4.0% |
|
Proposed Interfund Loan |
$8,000,000 |
$5,000,000 |
|
|
|
Proposed Fixed Rates
|
Meter Size |
Current Rate |
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
5/8" |
$23.52 |
$26.64 |
$27.70 |
$28.81 |
$29.96 |
$31.16 |
|
3/4" |
$30.81 |
$35.95 |
$37.38 |
$38.88 |
$40.43 |
$42.05 |
|
1" |
$45.39 |
$54.57 |
$56.75 |
$59.02 |
$61.38 |
$63.84 |
|
1 1/2" |
$81.84 |
$101.12 |
$105.16 |
$109.37 |
$113.75 |
$118.30 |
|
2" |
$125.59 |
$156.98 |
$163.26 |
$169.79 |
$176.58 |
$183.65 |
|
3" |
$264.13 |
$333.88 |
$347.24 |
$361.13 |
$375.57 |
$390.60 |
|
4" |
$468.28 |
$594.58 |
$618.36 |
$643.10 |
$668.82 |
$695.57 |
|
6" |
$1,175.53 |
$1,497.70 |
$1,557.61 |
$1,619.91 |
$1,684.71 |
$1,752.10 |
|
8" |
$2,050.48 |
$2,614.96 |
$2,719.56 |
$2,828.34 |
$2,941.48 |
$3,059.14 |
|
10" |
$3,071.25 |
$3,918.44 |
$4,075.17 |
$4,238.18 |
$4,407.71 |
$4,584.02 |
Proposed Variable Rates
|
Tier |
Current Rate |
FY 2025 |
FY 2026 |
FY 2027 |
FY 2028 |
FY 2029 |
|
Tier 1 |
$2.14 |
$2.37 |
$2.46 |
$2.56 |
$2.66 |
$2.77 |
|
Tier 2 |
$3.21 |
$2.60 |
$2.71 |
$2.82 |
$2.93 |
$3.05 |
|
Tier 3 |
$4.27 |
|
|
|
|
|
|
Tier 4 |
$6.41 |
|
|
|
|
|
Electric Rates
Residential
Rate Adjustment
|
|
Cost of Service Unit Costs |
Current Rates |
FY 2025 Proposed |
|
Fixed Charge, $/month |
$15.90 |
Single Family: $0.88 Multi-Family: $0.67 |
Single Family: $15.90 Multi-Family: $15.76 |
|
Energy, $/kWh |
$0.1273 |
|
|
|
Tier 1 Baseline |
|
$0.11808 |
$0.10100 |
|
Tier 2 101-130% Baseline |
|
$0.13741 |
$0.11100 |
|
Tier 3 131-200% Baseline |
|
$0.22696 |
$0.21000 |
|
Tier 4 over 200% Baseline |
|
$0.32337 |
|
|
Public Benefits Charge $/kWh |
|
|
$0.00378 |
Estimated Bill Impact Per Month
|
Customer |
Current Bill |
Proposed Bill |
$ Change |
|
Example Solar Customer with 0 kWh |
$0.88 |
$15.90 |
$15.02 |
|
Average Monthly Summer Bill |
$62.44 |
$53.08 |
-$9.36 |
|
Average Monthly Winter Bill |
$54.48 |
$61.23 |
$6.75 |
Small Commercial (GS-1)
Rate Adjustment
|
|
Cost of Service Unit Costs |
Current Rates |
FY 2025 Proposed |
|
Fixed Charge, $/month |
$20.97 |
Single Phase: $12.99 Three Phase: $3.16 |
Single Phase: $20.97 Three Phase: $3.16 |
|
Demand, $/kW |
$27.82 |
|
|
|
Energy, $/kWh |
$0.058 |
|
|
|
Summer |
|
$0.17280 |
$0.15500 |
|
Winter |
|
$0.16872 |
$0.15500 |
|
Public Benefits Charge, $/kWh |
|
|
$0.00378 |
|
Total Variable Rate |
|
|
$0.15878 |
Estimated Bill Impact
|
Customer |
Current Bill |
Proposed Bill |
$ Change |
|
1,100 kWh Summer |
$203.10 |
$191.53 |
-$11.57 |
|
700 kWh Winter |
$131.14 |
$129.53 |
-$1.60 |
|
Dental Office 400 kWh Winter |
$80.51 |
$83.03 |
$2.52 |
|
Construction Retailer 3,280 kWh Summer |
$579.81 |
$529.43 |
-$50.35 |
§ Summer June-Sept and Winter Oct-May
§ Examples: Small office, small-medium retail, restaurant
Medium Commercial (GS-2)
Proposed Rate Adjustment
|
|
Cost of Service Unit Costs |
Current Rates |
FY 2025 Proposed |
|
Fixed Charge, $/month |
$35.13 |
$71.50 |
$35.13 |
|
Demand, $/kW |
|
|
|
|
Power Supply |
$8.27 |
Summer Peak: $20.67 |
Peak: $8.27 |
|
Distribution |
$15.74 |
Facilities: $7.35 |
Facilities: $15.74 |
|
Energy, $/kWh |
$0.057 |
|
|
|
Summer |
|
$0.09648 |
$0.05905 |
|
Winter |
|
$0.08738 |
$0.05905 |
|
Public Benefits Charge |
|
|
$0.00378 |
|
Total Variable Rate |
|
|
$0.06283 |
Bill Impacts
|
|
kWh |
kW |
Current |
FY 2025 |
Difference |
|
Summer |
|
|
|
|
|
|
Medium/Large Retail |
10,510 |
35.3 |
$1,930.56 |
$1,479.08 |
-$451.48 |
|
Hotel |
58,800 |
197.6 |
$10,800.83 |
$8,274.94 |
-$2,525.89 |
|
Bank |
6,700 |
23.7 |
$1,261.46 |
$970.36 |
-$291.10 |
|
Winter |
|
|
|
|
|
|
Medium/Large Retail |
7,100 |
23.9 |
$795.75 |
$999.19 |
$203.43 |
|
Hotel |
54,000 |
181.5 |
$6,052.19 |
$7,599.44 |
$1,547.25 |
|
Bank |
4,800 |
18.4 |
$554.91 |
$728.92 |
$174.01 |
§ Examples: Old Navy, TGI Fridays, Starbucks, Target
Large Commercial (TOU-GS-3)
Proposed Rate Adjustment
|
|
Cost of Service Unit Costs |
Current Rates |
FY 2025 Proposed |
|
Fixed Charge, $/month |
$49.30 |
$277.25 |
$49.30 |
|
Demand, $/kW |
|
|
|
|
Power Supply |
$8.29 |
Summer Peak: $18.16 Summer Mid-Peak: $6.23 |
Peak: $8.29 |
|
Distribution |
$17.51 |
Facilities: $7.62 |
Facilities: $17.51 |
|
Energy, $/kWh |
$0.057 |
|
|
|
Summer On-Peak |
|
$0.13561 |
$0.09620 |
|
Summer Mid-Peak |
|
$0.11027 |
$0.07280 |
|
Summer Off-Peak |
|
$0.07706 |
$0.05200 |
|
Winter Mid-Peak |
|
$0.11282 |
$0.07986 |
|
Winter Off-Peak |
|
$0.08052 |
$0.05200 |
|
Public Benefits Charge, $/kWh |
|
|
$0.00378 |
Bill Impacts
|
Customer A |
kWh |
kW |
Current |
FY 2025 |
Difference |
|
Summer |
58,953 |
181 |
$12,126.56 |
$9,165.12 |
-$2,961.44 |
|
Winter |
41,967 |
96 |
$4,998.16 |
$5,392.00 |
$393.84 |
Industrial (TOU-8)
Proposed Rate Adjustment
|
|
COSA Unit Costs |
Current Rates |
FY 2025 Proposed |
|
Fixed Charge, $/month |
$76.97 |
$346 |
$76.97 |
|
Demand, $/kW |
|
|
|
|
Power Supply |
$8.31 |
Summer Peak: $16.91 Summer Mid-Peak: $5.71 |
Peak: $8.31 |
|
Distribution |
$15.06 |
Facilities: $8.31 |
Facilities: $15.06 |
|
Energy, $/kWh |
$0.056 |
|
|
|
Summer On-Peak |
|
$0.12675 |
$0.09630 |
|
Summer Mid-Peak |
|
$0.10299 |
$0.07319 |
|
Summer Off-Peak |
|
$0.07184 |
$0.05200 |
|
Winter Mid-Peak |
|
$0.10538 |
$0.07986 |
|
Winter Off-Peak |
|
$0.07509 |
$0.05200 |
|
Public Benefits Charge, $/kWh |
|
|
$0.00378 |
Bill Impacts
|
Customer B |
kWh |
kW |
Current |
FY 2025 |
Difference |
|
Summer |
101,087 |
343 |
$19,889.12 |
$15,154.10 |
-$4,735.02 |
|
Winter |
91,675 |
225 |
$9,986.80 |
$11,265.28 |
$1,278.48 |
Pumping and Agriculture
Proposed Rate Adjustment
|
|
COSA Unit Costs |
Current Rates |
January 2025 Proposed |
July 2025 Proposed |
January 2026 Proposed |
|
Fixed Charge, $/month |
$19.14 |
$63.25 |
$19.14 |
$19.14 |
$20.86 |
|
Demand, $/kW |
|
|
|
|
|
|
Power Supply |
$12.54 |
Summer Peak: $10.85 |
Peak: $6.00 |
Peak: $12.00 |
Peak: $12.98 |
|
Distribution |
$19.53 |
Facilities: $3.85 |
Facilities: $8.00 |
Facilities: $10.00 |
Facilities: $21.55 |
|
Energy, $/kWh |
$0.057 |
|
|
|
|
|
Summer On-Peak |
|
$0.13064 |
$0.10361 |
$0.10361 |
$0.09444 |
|
Summer Mid-Peak |
|
$0.10929 |
$0.07874 |
$0.07874 |
$0.07178 |
|
Summer Off-Peak |
|
$0.05226 |
$0.05595 |
$0.05595 |
$0.05100 |
|
Winter Mid-Peak |
|
$0.12255 |
$0.08592 |
$0.08592 |
$0.07832 |
|
Winter Off-Peak |
|
$0.05226 |
$0.05595 |
$0.05595 |
$0.05100 |
|
Public Benefits Charge $/kWh |
|
|
$0.00378 |
$0.00378 |
$0.00405 |
Lighting Areas (AL-2, LS-3, TC-1) Proposed Rate Adjustments
|
|
Current Rates |
Proposed FY 2025 |
|
Outdoor Area Lighting (AL-2) |
|
|
|
Energy Charge, $/kWh |
$0.08224 |
$0.12056 |
|
Customer Charge, $/month |
$7.00 |
$10.26 |
|
|
|
|
|
Street Lighting (LS-3) |
|
|
|
Energy Charge, $/kWh |
$0.08224 |
$0.12056 |
|
Customer Charge, $/month |
$7.00 |
$10.26 |
|
Series Service, $/month |
$548.03 |
$803.41 |
|
|
|
|
|
Traffic Control (TC-1) |
|
|
|
Energy Charge, $/kWh |
$0.11407 |
$0.16723 |
|
Customer Charge, $/day |
$0.312 |
$0.4574 |
|
Three Phase, $/day |
$0.104 |
$0.1525 |
|
|
|
|
|
Rate Adjustment |
|
46.6% |
Proposed Commercial Electric Vehicle Rate
|
|
Proposed |
|
Fixed Charge, $/month |
$76.97 |
|
Demand, $/kW |
$15.06 |
|
Energy, $/kWh |
|
|
On-Peak 4-9pm |
$0.19710 |
|
Off-Peak All Other Hours |
$0.06570 |
|
|
|
|
Public Benefits Charge $/kWh |
$0.00378 |
Attachments:
1. Exhibit 1: Staff Presentation
2. Exhibit 2: Cost of Service Analysis and Rate Structure Options Presentation
|