SPECIAL UTILITY COMMITTEE

A Special Utility Committee Meeting was held on September 11, 2003, at 10:30 a.m. with Chairman Ruane presiding. Members present were Mr. Carey, Mr. Farling, and Mr. Lambert. Mr. Ritter was absent. Others present were Mr. Pitts and Mr. Salters.

Agenda Additions/Deletions

Mr. Carey moved for approval of the agenda, seconded by Mr. Lambert and unanimously carried.

Discussion - Proposed Staff Implementation Plan for Electric Rate Study

As a result of the Special Utility Committee Meeting of August 26, 2003, staff was requested to develop a specific time table of events for implementing the proposed electric rate adjustments. The Electric Rate Study Implementation Team (Paul Gallagher and Mark Callan, IT Department, Terry Tieman, Administrative Services, Les Blakeman, Electric Director, and Marie Dee, Metering Supervisor) developed the following objectives for members to review:

►           Competitive Rates – The Study found that the City’s basic rates across the board are competitive with neighboring utilities. The only deficiency is that the Study did not consider the power cost adjustment. The implementation plan calls for this to be corrected.

►           Provide Proper Economic Signals – The Study found that the City’s current rates are not detracting economic development in the City of Dover.

►           Fair and Non-Discriminatory Rates - The Cost-of-Service Study found that other than three (3) small and specific rate classes (Street Lighting, Tilcon, NRG), there were no gross variations in allocated revenue versus the revenue from existing rates. Small commercial customers had the highest with an 11.5% variance; all the rest were below 10% variation. The City’s largest residential class was only 2% out of alignment.

►           Promote Revenue Stability – The Study found that the City’s current rates, as long as they are adjusted for increased power costs, will provide revenue stability.

►           Easily Understood – While the Study found that the City had an unusually high number of rate classes, there was no indication from the Study or our customers that the rates were not easily understood.

►           Revenues to Recover Costs – The Study found that our current rate structure covers costs.

Mr. DePrima indicted that the Implementation Plan (Attachment #1) provides a methodical approach to implementing recommendations of the Electric Rate Study in a way that would insure that the City’s objectives are met. He reminded members that staff has actively participated in a rate study implementation or major rate changes and stressed the importance of being accurate throughout the process.

Mr. DePrima informed members that along with the changes in electric rates comes changes to the City’s AS400 computer software and stated that there is a possibility of having to bring in an outside HTE programmer for assistance.

COUNCIL COMMITTEE MEETING OF SEPTEMBER 11, 2003                             PAGE 2

In an effort to keep members of Council updated on staff’s progress, Mr. Ruane requested that the agenda item Update - Electric Rate Study Implementation Plan, be placed on all future Utility Committee Agendas.

Mr. Farling suggested that Mr. DePrima add target dates for each of the seven (7) steps to the Implementation Plan. Mr. Ruane requested Mr. DePrima to also provide a gant chart, depicting the time period and staff allotted for each step.

Mr. Ruane moved for adjournment, seconded by Mr. Carey and unanimously carried.

Meeting Adjourned at 11:56 A.M.

                                                                                    Respectfully submitted,

                                                                                    Eugene B. Ruane

                                                                                    Chairman

EBR/lcg

S:ClerksOfficeAgendas&MinutesCommittee-Minutes20038-26-2003-Special-Utility.wpd

Attachment

Attachment #1 - Electric Study Implementation Plan (Dated September 11, 2003)