HomeMy WebLinkAbout08012007 City Council Packet
Special City Council Meeting
August 1, 2007
City Council Chambers
Beginning at 5:30 p.m.
The City of Seward, Alaska
August I, 2007
Vanta Shafer
Mayor
Term Expires 2007
Willard Dunham
Council Member
Term Expires 2008
Robert Valdarta
Council Member
Term Expires 2007
Robert Thomas
Council Member
Term Expires 2007
Steve Schafer
Council Member
Term Expires 2007
Jean Bardarson
Council Member
Term Expires 2008
Linda Amberg
Council Member
Term Expires 2008
Phillip Oates
CIty Manager
Jean Lewis
City Clerk
Brad Meyen
Cheryl Brooking
City Attorney
8.
9.
10.
11.
Special City Council Meeting
5:30 p.m.
Council Chambers
1.
2.
3.
4.
Call to order
Pledge ofallegiance
Roll call
Citizens' comments on any subject except those items
scheduled for public hearing. [Those who have signed
in will be given the first opportunity to speak. Time is
limited to 2 minutes per speaker and 30 minutes total
time for this agenda item.]
5.
Approval of agenda
6.
New Business
A. Executive Sessions
1. Go into executive session to evaluate and discuss electric
utility rate increases that pertain to pending litigation.
A. Resolution 2007-078, Authorizing The City Manager
To Enter Into A Settlement Agreement With CEA In The
Matter Of The Tariff Revision Designated As TA 279-8 Filed
By Chugach Electric Association, Inc. For A Rate Increase And
Rate Redesign. ~ 3
2. Go into executive session to evaluate and discuss
subdivision agreements and flood issues in the north Forest
Acres area that could lead to litigation.
Council comment
Citizens' comments
Council and administration response to citizens' comments
Adjournment
City of Seward, Alaska
August 1, 2007
Council Agenda
CD
SEWARD CITY COUNCIL
NOTICE OF SPECIAL MEETING
August 1, 2007
NOTICE IS HEREBY GIVEN that the Seward City Council will
conduct a special meeting on the following items of business on
August 1, 2007.
Executive Sessions
1. Go into executive session to evaluate and discuss electric utility rate increases
that pertain to pending litigation.
A. Resolution 2007-078, Authorizing The City Manager To Enter Into A
Settlement Agreement With CEA In The Matter Of The Tariff Revision
Designated As TA 279-8 Filed By Chugach Electric Association, Inc. For A
Rate Increase And Rate Redesign
2. Go into executive session to evaluate and discuss subdivision agreements and
flood issues in the north Forest Acres area that could lead to litigation.
The special meeting will commence at 5:30 p.m. or as soon thereafter as business
permits, in the City Council Chambers, City Hall, 410 Adams Street, Seward. All
interested persons are invited to attend the meeting and participate in the discussion; or,
written comments may be sent to the City of Seward, c/o City Clerk, PO Box 167,
Seward, AK 99664, or e-mai1edtoc1erk@cityofseward.net.
POSTED: Tuesday, July 31,2007 at 12:00 p.m. (noon)
City Hall Bulletin Board
U.S. Post Office
Harbormaster's Office
Cablevision
(Z)
Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2007-078
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A
SETTLEMENT AGREEMENT WITH CEA IN THE MATTER OF THE
TARIFF REVISION DESIGNATED AS TA 279-8 FILED BY CHUGACH
ELECTRIC ASSOCIATION, INC. FOR A RATE INCREASE AND RATE
REDESIGN
WHEREAS, in September 2006, Chugach Electric filed for a rate increase of almost 24 %
over 2005 rates; and
WHEREAS, the City filed a petition to intervene, as did Homer Electric and Matanuska,
Electric and a notice of election to participate as a party was filed from the Attorney General, in the
RCA tariff filing by Chugach Electric Association, Inc.; and
WHEREAS, on July 27, 2007 Homer Electric and the Attorney General entered into a
settlement agreement with Chugach Electric; and
WHEREAS, the settlement terms would result in a Pro Forma total revenue increase of
3.4 %, based on 2005 revenues. The increase requested by Chugach Electric was a Pro Forma total
revenue increase of 8%; and
WHEREAS, it is in the City's best interest to agree to a settlement under these terms. A rate
increase that is less than 50% ofthe rate increase requested by Chugach Electric, and such that the
City will not have to spend additional attorney fees, at a cost that could exceed $30,000.00.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The City Manager is hereby authorized to join into a settlement agreement with
Chugach Electric Association, Inc., Homer Electric Association and the Alaska Attorney General's
office, in the form presented at this meeting.
Section 2. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 1 st day
of August, 2007.
G3J
Council Agenda Statement
Through:
Phillip Oates, City Manager ~
Tim Barnum, Electric Utility Manager ,jf:>
Meeting Date:
August 1, 2007
From:
Agenda Item:
Authorizing the City Manager to enter
into a Settlement Agreement with Chugach Electric
Association, Inc. in TA 279-8, Tariff Revision for Rate
Increase and Rate Redesign
BACKGROUND & JUSTIFICATION:
In September 2006, Chugach Electric Association, Inc. (CEA) filed its general rate case
with the Regulatory Commission of Alaska (RCA) asking for a rate increase of almost
24% and a rate redesign.
In October 2006, the City filed a petition to intervene, along with the other wholesale
power customers. The Attorney General filed a notice of election to participate as a party
to address T A 279-8.
Our current power sales agreement allows for rate changes imposed by the RCA. The
City and other Utilities intervened in the request to the RCA in an attempt to limit the
increase being sought by CEA.
On July 27, 2007, Homer Electric and the Attorney General negotiated a settlement
agreement with CEA with regard to how much of an increase would be appropriate and
justifiable. This negotiated rate increase is less than 50% of the increase sought by CEA.
The impact to the City would be an increase of 3.4% (based on 2005 revenues). This
proposed settlement, if approved by the RCA, would mean an increase of $] ]8,] 76.00
(based on 2005 revenues) verses a requested increase of $279,267.00. The City is
currently paying the same base rate that it paid in ] 998 (the base rate does not include the
fuel adjustment factor), so it is likely the RCA would rule that there is justification for
some level of rate increase for Seward. In the event the City does not negotiate a
settlement prior to the case going before the RCA, the City will be required to accept the
ruling of the RCA, and any rate increase they may approve.
CONSISTENCY CHECKLIST:
@
Where applicable, this resolution is consistent with the Seward City Code, Charter,
Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of
Procedures.
FISCAL NOTE:
The City of Seward will receive a payment from the State of Alaska for energy relief, in
the amount of $198,000 which could be used by the City to offset some of the cost
increases to customers in the coming year.
Approved by Finance Department: Jt~ '-"f:.u/~?~
RECOMMENDATION:
City Council approve Resolution 2007-0nauthorizing the City Manager to enter into a
settlement agreement with CEA under the ~ame terms and conditions as negotiated and
agreed by Homer Electric and Attorney General.
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SETTLEMENT AGREEMENT
BETWEEN CHUGACH AND CITY OF SEWARD
This settlement agreement ("Seward Settlement Agreement") is entered into by and
between Chugach Electric Association, Inc. ("Chugach") and the City of Seward, Seward Electric
Utilities Division ("Seward").
WHEREAS, on July 27, 2007, Chugach, Homer Electric Association, Inc. ("HEA") ,
and the Attorney General for the State of Alaska representin~ the Regulatory Affairs and Public
Advocacy Staff ("RAP A") entered into a Memorandum of Agreement ("HEAlRAP A Settlement
Agreement") to settle and resolve all issues among those parties in Docket U~06-134 of the Regulatory
Commission of Alaska ("RCA"). A copy of the HENRAPA Settlement Agreement is attached hereto
as Exhibit 1;
WHEREAS, Seward is a party to Docket U-06-134, but was not able to adequately
review the HEAJRAP A Settlement Agreement prior to its execution;
WHEREAS, Chugach and Seward desire to enter into a settlement agreement
incorporating the same terms and conditions as are set forth in the HEAlRAP A Settlement Agreement
as though Seward had been a party to the REA/RAP A Settlement Agreement;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Chugach and Seward agree as follows:
1. Chugach and Seward agree to resolve the issues between them in
Docket U-06-134 in accordance with the terms and conditions of the HEAIRAPA Settlement
Agreement as if Seward were a party to that agreement.
2. Specifically. Chugach and Seward agree that the rates for wholesale power paid
by Seward will be based on a revenue requirement for serving Seward that is calculated assuming the
adjustments and tenns set forth in the HENRAP A Settlement Agreement.
3. Nothing in this Seward Settlement Agreement Or the HEAlRAPA Settlement
Agreement shall be construed as an amendment, waiver, Or compromise of any provision of the
Chugach/Seward Power Sales Agreement.
4. This Seward Settlement Agreement is subject to ratification and approval by the
City Council of the City of Seward. It is expected that the City Council of the City of Seward will take
action regarding this Seward Settlement Agreement on August 1, 2007.
CHUGACH ELECTRIC
ASSOCIATION, me.
CITY OF SEWARD, SEWARD
ELECTRIC UTILITIES DMSION
William R. Stewart
Chief Execlltive Officer
Date:
;
,I-
.une II"",
.... Se:I1/",
Phillip Oa es .;:> c}~ ...;.;po..... ~..() '10"
City Manager /-" /" ",/ "'(,0"" Iii';'" 'Q ~
Date: ~7/,S'/-b;t~ __ ~.... ':
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'rhis :A.g.reeDf~t'E'Altered :jUW '"tbis ~tb .day of~l:l!y.,.:l007,.fl,lnWl,g H\!lmerEkctric .
A-sso.cia:t1on, InC/('\HEA"), .C'hqga~mectLic A,s~o~tiOI)., IUc:.{'IOh-q-gaoh".?,.andilie Attorney
. ':ee.o,er.al for .theState of AlIlSlea r~enti~:tb~ 'R.e~atary A:erail'S..lUl.Q'Pub~ie :l.:dvoGacy staff
.. ".. ".." . . - -:('rm).":'l'11e~liames.-afe:iriv(11:l/ecnn:OOc'.kefNp':-U;:015=1'3';f~Ule"'D'9&tcit")'.OefCire'th-e'7' 'd.' ....
. Rr;:gliIatow .Comm:isSion af AlaSka ('ICommissi,on''). They lwveagteea'to .l.'esal-ve tlleissmlS in
'fue.:])ocket.~'"S~forth;b,elCJW. 'subject to^the' approval.0fthel'Op:m:ti:rl~BiQ.1). .
, .
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Wlt1J..res.peotto theDoakef;,theparlies agrs!" to resolve,the,.iB~Il~s :t!:wrein:l>y .,aflreeing'fuat the rate
,~fur whol,5Sa1e.,P,e:Wer!p~ 'byHE:A '?liU hebase~ on. a rev:en~:te.~ui:r~t. oa.lctil~ed ~uming
'fhe foUewiug adju.stm.ents, Aocordingly the pa~es AgJ.'eetothe'fdUowitlg.adju.<;tznetits and
-,tenns.
1. . ,6S%.GetTl.32% pistribUtion s1looation ofinte:rest.oulOIlg term 'debt and f(lI" the
ca!o$uon ofTJER.
. 2. Accq:ltpr~pOS.a1$ in,Section l'ofC'..hu~a~bls-lerter'ofltU~r-i.7.20q7 as:follows;
0,
G&;r.TlER:at 1..1..0. ,
,+wdui:;1.i~:~Q e;p~~* lev.~ls,;.lA R~v~~9R~~en~'
i. ,. . '.Ap 'aefeJ;tw~9:rg.e propOSalS. '...
~. ' ., 'R~oed~'U!lle.xpens~ lev~l:refidCting -AG~p6saL
'D~ciati~n :~1hPense ' .. :". ',. . ' ,
i..' 'N'ooblm.ge.to~G:~T'1'J.et,sal~gerl1tes4Pproved inip',04~102.
ii. CPOJi:~ b~'~.o~ar !,~,aip1rrg:1ife.(20~7 -retlrem~t:aate)
liL ~~1-qga UI!il;,~ ;201-7 ?-'etireim~ d&t~ .
iv. Iii:'it~tion; see Item S;'bal.ew'rQgaidiM~Beluga Unit'S.
a:
. :h.. '
3. Amortize;;eel:uga oompression.oo$ over 10 yesrs,
4. ~t BEN oS r!lC~datiol\ on the North. m.:it~tuarine c.able field. or, in 'Oth~ wOl-dS,
no M;mge in present life. No change to '40.S~ survivor ourve forNorth sUbmarine cable.field.
5. RtWiew the Beluga Unit 8 refurbisl!1nentlretirement issu,e o11Oe more infonn.ation is ,
'known ~erChugach's next Depreciation Study in 2008. ThiS'Ieview will probabfy.tal..:.e place'in ,
2009. Subject to the realiz;ation of Chugach's current plans :for unit retirenrenf. the Beluga Unit 8
life of 2014 will be provis:lonally a.coepted until the neJ.rt Depreciation Study.
6. 1v!ake an adjustment1'eclassifying G&T and O&M expenses in aoooriiance,with Olle-helf
the impact of JAM-6.
1. . 'P_ant and. sUbject to .the terms and cQ11ilitions o'ftb:eSett1ement .Agreement and MUtual
Rel~ dated June 13,2007 between ('''l:mgacli and MatanuskaB1ecl:ricAssociatlon, Inc.,
Chu~clJ.lWe@s t9t1se the phrase "Temp~a.ry Intracompany Non I1rterest Bearing Balance"
instead of "Due 10 Distribution from G&T" and ''Due from G&T to Pistrlbuti.on" to reW to
o;ffsetting intra-company accounts reflected OIl atIY future publication of Chugach's l.~bund1ed
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EXHIBIT 4
Poae / ~
v V c, L I, L V V I ) . ) L J IVI
'VILIUL't7J
IW. J~~ r,13
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balance'.sheet. ChtfgllC!1 f11:rthe.r ~ees to include 1hs followi:ng e;tphmatory note when \1Sing .tb,e
term "Temporary In.tra.comPaI1:Y Non Inter~st Beari:\1g :B!I1ance":
''Temporm:Y IntraOOlnpaIlYNon Jnte:rest:Be~g :Balance" does not.reprose.rrt a UGbt or
_....".."P,'l:f~~l.~~~~.~r.;~r..Ch.~w.wh.~~t?J:Iler. '.. ,.......... _. ", '"_'__''''''''' ..........
REA does not agiee with Chu~ 'I> unbunCling methodology, but will \l-ocept the a11ocafion of
longieIm inte:nest-expe.nse atmc;tec1 in Item'l above.
8. Aocept Chligach l s new 1abol:" allocators and present cost allocation until the next rate
C'.EI!!e.
9. EEA and C~ugach lJ,gree to meet and confer in advance of proposing any changes to the .
Cost Al:location Man:uaL
10.' In the event',Chugachfiles arate case bas.ep on,a 20(}7 or 2008 TY. beth parties agree thst .
the'68% G&1'/32% Distribution, allocation ofjntarest on loti@; ter.m debt fOI'the c::a1cq],ation of
TWR will 'he aplmeiHo ~ REA revenue reqUirement 'Regardless ofthi~ lJ,gre,e,ment, the
. GOinmission ietairis,the.d1.Bcrelionto:dctermirie ajilst, ~, 1i:od,reasonable'a1locatorror loog_
mtel-est eipense,'i31ld.t1ie Attorn6Y~era1l'eta.i1?-S' the discretion tOaSs~r-t any position de6r.o"ed by
'the ::t.ttomey,OJ:tierm to 'bo stlPpDrted'bY'~'evldence' ~consistellt-with tIie",public interest.
1 L .fi;EA:s ap.d the Attomey GeneralIs prefiled.testimony Will be filed with the COrntnisSioll
fa-r l'pe sole ~f'J of supporting the liIettle>>::lI'll.l:t"roa&ed herein, and for nO oth~ P"DIP<>se. .
12. Nothmg in this 'agrlilement is deemed to constitute an amendment to the I-IEA Power: Sales.
Agreement . '
13. The P2J..ti~,eD.tm' into thi~ A.gr:eemMt ;fur the sole purpose of resol~ all issues in ~
rate case. Subjeot to the forgoing specifio restrlctians l'~ating to the interest expense allocator,
this -Agreem.ent d?1lS :not prevent. the parties ~ presenting or ar.guin,g their respeoti:ve positions
on the same ors:!n:lila:r issues in ib!:ure oases.' This A~ement is binding on the Parties for the
pwposes of this docket only lIOd w1'U have no binding or precedemtial effect. '
Dated t1rls 2~ day of July, 2007., , .
CHUGACH ELECTRIC ASSOCIATION,
INC.
:.'
..... ",\..
TALIS J. COLBERG
:~&G
Steve Devries
Assistant Attorney Gener.U
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IAIJ 7L : (, I A A 7 'I 7 'l 0 ^
August 2007
Monthly Planner
12:00 PM PACAB
Meeting
5;30 PM Special
C rty Council
Meeting
6:30 PM HP
Meeting
5
6
7
8
9
10
11
7:30 PM P & 2
Meeting
12 13 14 15 16 17 18
6:00 PM CC Work 6:30 PM CC Work 12:00 PM PACAS 9:00 AM -1:00 PM
Session Levee Session Generator WS Social Security Rep
Replacement &
Public Works & 6:30 PM Historic
7:30 PM Crty Electrical Shops Preservation
Council Meeting Meeting
6:30 PM P & Z
Special Meeting
19 20 21 22 23 24 25
6:30 PM P &2
Work Session
26
27
28
29
30
31
7:30 PM Crty
Council Meeting