HomeMy WebLinkAboutRes2013-106 Sponsored by: Hunt
CITY OF SEWARD, ALASKA
RESOLUTION 2013-106
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A
SPECIAL CONTRACT WITH ICICLE SEAFOODS,INC.FOR ADJUSTED
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,
WHEREAS, 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 recommended that the City Council approve the special
contract with Seward Fisheries based on current financial hardship resulting from growing
competition from offshore fish processor.
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 stated above are incorporated herein by reference as findings of the
City Council.
Section 3. This resolution shall be effective immediately. The contract shall be effective
January 1, 2014.
PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 9th day of
December, 2013.
CITY OF SEWARD, ALASKA
RESOLUTION 2013-106
THE CITY OF SEWARD, ALASKA
' IL) 424/4/41j-e,
.ean Bardarson, Mayor
AYES: Keil, Shafer, Casagranda, Terry, Squires, Bardarson
NOES: None
ABSENT: Butts
ABSTAIN: None
ATTEST:
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Jol anna Kinney, IF C
Cit, Clerk
(City Seal)
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Council Agenda Statement
Meeting Date: December 9, 2013
e 4 of sess4
To: City Council
4,174
44150"2.
Through: James Hunt, 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 industrial rate, as of January 1, 2010, was abolished. 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 as well as a potential loss of revenue to small local businesses.
INTENT:
To sign a special contract with Icicle Seafoods, Inc. for Seward Fisheries for a special electric rate
lasting two years.
CONSISTENCY CHECKLIST: Yes No N/A
1. Comprehensive Plan (1.3, 3.7.3.1, 3.7.3.2): X
2. Strategic Plan (document source here): X
3. Other (list): X
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 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. In January 2012 Seward Fisheries started with an electric
12-
rate of$0.00891 and a demand rate of$12.86. The proposed rates are based on the special contract
which expires in December 2013. The following suggested rates are calculated by charging an
estimated Consumer Price Index (CPI) of 2.6% above the amount for December 2013 and an
additional estimated CPI of 2.6% above the December 2014 amount.
The suggested rate in energy and demand for Seward Fisheries is $0.01159/kWh and $16,79/kW
respectively for 2014 and$0.011895/kWh and$17.22/kW for 2015. Any other charges or rates that
may be applicable will follow the Large General Service rate class. The following table shows the
2013 rate as a basis per month, followed by the approximate amounts Seward Fisheries will pay in
2014 under the Large General Service or by Special Contract. Also included is the percentage over
the 2013 rate.
Signing Icicle Seafoods to a special contract will increase their electric bill by approximately 1.16%
and an approximate dollar amount of$461.77 per month and $5,540.52 per year. If Icicle Seafoods
pays the Large General Service rate the percentage increase would be 60.9% and an increase to
annual revenue of$291,006.84.
ICICLE SEAFOODS
Note: July was the highest month
and the lowest month(207 kW and Current Large General 2014 Special Contract 2014
82,800 kWh)was January for usage Oct-13 Estimated
Monthly Bill
Electric
Operations& Infrastructure Fee $38.21 $39.20 $39.20
Energy charge(rate) $0.01130 $0.09836 $0.01159
Avg.oust kWh 304,200 182,520 * 304,200
$3,437.46 $17,953.15 $3,526.83
$0.05906
121,680 *
$7,186.00
Energy charge $3,437.46 $25,139.15 $3,526.83
Fuel Charge(rate—$0.072536 rd 10/13) $0.072536 $22,065.45 $22,065.45 $22,065.45
Demand Charge(per kW) $16,36 $19.28 $16.79
Avg.Cust kW 873 873 873
$14,282.28 $16,830.17 $14,653.62
Total Electric per month $39,823.40 $64,073,97 $40,285.11
Increase per month: $24,250.57 $461.71
Percentage overall increase: 60,90% 1,16%,
* based on average split:actual may vary
NINO
Approved by Finance Department: 4.41
"41
GP
ATTORNEY REVIEW: Yes No X
RECOMMENDATION:
0 • '
The City Council pass resolution 2013- , giving the City Manager authorization to enter into a
special contract with Icicle Seafoods for special electric rates for the Seward Fisheries location.
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