HomeMy WebLinkAboutRes2009-135 Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2009 -135
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
..r SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO
ENTER INTO A SPECIAL CONTRACT WITII ICICLE SEAFOODS,
INC. FOR DISCOUNTED ELECTRIC RATES FOR SEWARD
FISHERIES
WHEREAS, Icicle Seafoods operates Seward Fisheries year -round and provides full -time
employment in the City; and,
WHEREAS, job creation, job retention, and promotion of fishing and fish processing are
important to residents and the City of Seward; and,
WHEREAS, economic stability of operations of Seward Fisheries is necessary to the region
and residents of Seward; and,
WHEREAS, except during a peak season in the summer, the actual demand for electric
power is lower than 750 kW; and,
WIIEREAS, the Utilities Manager is authorized to negotiate a special contract, subject to
approval by the City Council, for customers who have a demand in excess of 750kW or that have
unique power requirements that cannot be reasonably addressed by the Large General service tariff;
•— and,
WHEREAS, the Utilities Manager has recommended that the City Council recognize the
unique power requirements of Seward Fisheries.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. The City Manager is authorized to enter into a Special Contract for Electric Rates
( "Contract ") in substantially the form presented at this meeting.
Section 2. The Recitals staled above are incorporated herein by reference as findings of the City
Council. We find, in accordance with the City of Seward Electric Tariffs and for the reasons stated
above that Seward Fisheries has unique power requirements that cannot be reasonable addressed by
the large general service tariff.
Section 3. This resolution shall be effective immediately. The contract shall be effective January 1,
2010.
PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 14 day of
December, 2009.
CITY OF SEWARD, ALASKA
RESOLUTION 2009 -135
.�
THE CITY OF SEWARD, ALASKA
Amor-
Willard E. Dunham, Mayor
AYES: Valdatta, Bardarson, Keil, Shafer, Amberg, Dunham
NOES: None
ABSENT: Smith
ABSTAIN: None
ATTEST:
L ,
.Iu i n Lewis _„•
City Clerk
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(City Seal) L° fib, �'
® SEAS.,
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1P olosast ass-4
Council Agenda Statement
Meeting Date: December 14, 2009 a � v o f sp
, 9
1'0: City Council a` o
Through: Phillip Oates, City Manager <.-
From: John Foutz, Electric Utility Manager
Agenda Item: Special Contract with Icicle Seafoods, Inc. for Discounted Electrical Rates for
Seward Fisheries
BACKGROUND & JUSTIFICATION:
The electric tariff, as of January 1, 2010, will no longer have an industrial rate. There are three
customers that are at the industrial rate when the tariff changes will go into effect. Asking these
customers to increase from the industrial rate to the large general service rate in one year would be
financially damaging for these businesses. The electric tariff allows, "special contracts to be
negotiated by the utilities manager with a customer that have demand in excess of 750 kilowatts
(kW) or that have unique power requirements that cannot be reasonably addressed by the large
general service tariff."
Seward Fisheries' unique requirements include; year round employment for Seward residents,
economic influx to the Seward area, seasonal demand in excess of 750 kW, and the importance of
retaining a business in the community. Seward Fisheries claims that if they pay the large `general
service' rate they will not be able to maintain their facility profitably and would be forced to close it.
If that were to happen the impact on Seward would be negative with the loss of jobs, tax revenue
and revenue to the city owned utilities.
INTENT:
To sign a special contract with Icicle Seafoods, Inc. for Seward Fisheries for a special electric rate
lasting two years.
CONSISTENCY CHECKLIST:
Where applicable, this agenda statement is consistent with the Seward City Code, Charter,
Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures or Other
Plans or Policies: Yes X (List Below) No
Electric Rates & Charges: Page 2 -2: 3. Special Contracts: Special contracts may be negotiated by
the Utilities Manager with customers that have a demand in excess of 750 kW or that have a unique
power requirements that cannot be reasonably addressed by the large general service tariff. Special
contracts may include, but are not limited to, provisions for instantaneous demand charges, time of
service, interruptible power, minimum and maximum demand, adjustment of demand level,
ownership and payment of new distribution facilities, termination charges and power factor. Special
contracts must be approved by the City Council.
FISCAL NOTE:
In 2009 Seward Fisheries was charged a rate of $0.00574 per Kilowatt-hour for an energy charge and
$10.25 per Kilowatt for a demand charge. The proposed rates are based on the previous industrial
rate schedule in the 2009 tariff. This rate was calculated by charging 25% above our wholesale cost
from Chugach Electric. The city council added a five percent increase effective January 1, 2010.
The suggested rate in energy and demand for Seward Fisheries is $0.0081 /kWh and $11.69/kW
respectively. Any other charges or rates that may be applicable will follow the Large General
Service rate class. The following table shows the 2009 rate as a basis per month, followed by the
approximate amounts Seward Fisheries will pay in 2010 under the Large General Service or by
Special Contract. Also included is the percentage over the 2009 rate.
Signing Icicle Seafoods to a special contract will increase the electric department's revenues by
approximately 8.18% and an approximate dollar amount of $2,154.59 per month and $25,855.08 per
year. If Icicle Seafoods pays the Large General Service rate the percentage increase would be 72.84%
and an increase to annual revenue of $230,307.43.
ICICLE
SEAFOODS
Current Special
2009 Large General Service 2010 Contract
Average
Monthly Bill
Electric
Operations & Infrastructure S31.50
Fee $30.00
413 $0.0081
Energy charge (rate) $0.00503 $0.07 288900
Avg. cust kWh 288900 173340
1,451.72 12,849.69 2,343.56
$0.04263
115560
4,926.32
Energy charge 1,451.72 17,776.02
Fuel Charge (rate = $0.057298 16,553.39
@ 9/09) 16,553.39
$13.65 $11.69 $13.
Demand Charge (per kW) $10.15 819
Avg. Cust kW 819 819
8,312.85 11,179.35
Total Electric per month 26,347.96 45,540.26
Increase per month: $19,192.29
72.84%
Percentage overall increase:
c1 c,, I
Approved by Finance Department: S l , �: L c 1 Z.
ATTORNEY REVIEW: Yes X No
RECOMMENDATION:
The City Council pass resolution 2009 - i ?if , giving the City Manager authorization to enter into a
special contract with Icicle Seafoods for special electric rates for the Seward Fisheries location.
ICICLE =
SEAFOODS
Current
Special
2009 Large General Service 2010 Contract 2010
Average
Monthly Bill
Electric
Operations & Infrastructure
Fee $30.00 $31.50 $31.50
Energy charge (rate) $0.00503 $0.07413 $0.0081
Avg. cust kWh 288900 173340 288900
1,451.72 12,849.69 2,343.56
$0.04263
115560
4,926.32
Energy charge 1,451.72 17,776.02 2,343.56
Fuel Charge (rate = $0.057298
@ 9/09) 16,553.39 16,553.39 16,553.39
Demand Charge (per kW) $10.15 $13.65 $11.69
Avg. Cust kW 819 819 819
8,312.85 11,179.35 9,574.11
Total Electric per month 26,347.96 45,540.26 28,502.56
Increase per month: $19,192.29 $2,154.59
Percentage overall increase: 72.84% 8.18%