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Home My WebLink About04152013 City Council Work Session Notes - Electric & Capital Fund A-ixe.., ; Ste.u.J4-5d I - — — I 1 WORK SESSION NOTES ONai(2.etY / 5, 2i 0 3 14 lii li 1._..---„,... . -. ,__ - -- --- - -----------L----- r-i Purpose: _ ei,CAI a j C40.14.4 hioe.-- ...--tet 01(.. -iresent:_ i/d g da 1 Council Me bers Present: _45Mackdo dyni......- , I 'Called y: Time , : dal ie II ate_ I *****************I**************: ******************* Elenv •- ePl‘d- 1 4.1 e! 2,6 1 5 Ct No Act-te 61cAtta A atAeL,th c( el, 201 t / CA421 v Sa.4,-c,t‘a,t eefv-imel4 c /c,i'c ie IATte, --17 ti-z,/ 2-1.- I At*P‘i AIN\- ----/"-i*, cfNAtva4j / bvefiet. áv tvit ir 2 rt-3 1tit4 r I 0 / C4 'OVIIV,t, 61,fAtt/fed -Fo a eltitvn A L.,05+Ihtttt 04,tatr:4) 7 i_E- bath. Asir" • ) . 3;11,o k)1.1k, VtA4 . -- - att. 1 •sALic et 06 a ge) wui 7i-3 ip• Al , . ,K.fictA,N wis itryNaAl 2.0 EN. 4610 I -yrvi ,47 rr. 7rniti //5 ,3 ups Electric Enterprise Fund • Electric related cash er;) • Electric Enterprise Fund cash = $ 1 . 9M 02/12> versus assets of $56. 7M HC ; $32M fully depreciated ❑ Electric MRRF = $460 , 018 ❑ Transmission Line = $566, 130 (ROW clearing) o Standby Generator Project = $34,226 ❑ Projected ending cash is $2 .3M (2013) , improved due to 2011 delays in capital outlay HC = historic cost • . • ilimmimmor Electric CashCF sipsip• p Electric Enterprise Fund - Cash Balance Balance at December 31, 20XX Electric Fund MRRF #months' Cash Cash Cash Total 2000 2,862,494 676,664 8.5 3,539,158 2001 2,729,835 920,884 5.1 3,650,719 2002 3,072,100 840,884 5.8 3,912,984 2003 3,825,039 840,884 7.7 4,665,923 2004 3,260,064 1,340,884 5.5 4,600,948 2005 3,647,834 645,080 5.9 4,292,914 2006 2,394,025 1,377,942 3.1 3,771,967 2007 2,706,708 1,317,765 4.1 4,024,473 2008 3,103,126 838,105 4.5 3,941,231 2009 1,334,884 874,234 1.5 2,209,118 2010 (233,894) 387,761 (0.3) 153,867 2011 639,624 460,018 0.7 1,099,642 2012 1,896,567 460,018 2,356,585 Electric ,145VP 5,000,000 - 4,000,000 — -- 3,000,000 I I ■MRRF 2,000,000 I H ■Electric 1,000,000 20p0 2001 3002 2003 2004 3005 2006 300" 2005 2009 2011 2013 (1,000,000) ■ Ammir Electric- related debt 2005 Refunding of 1995 transmission line bonds = $780K 2008 Replacement generators bond = $5.605M Total : $6.385 million ■ ••••••w Electric Highlights , p . 1 ■ No additional rate increase for 2014 and 2015 ■ CPI for 2014 (2 .6%) and 2015 (2 . 5% est. ) ■ Fuel costs directly passed from Chugach to customers based on kwh usage ■ City outage costs pass thru to customers based on kwh usage as part of fuel costs ■ Discussions with Chugach Electric about leveling fuel costs throughout the year Rate Increase Example Bills ( based on February 2013 Rates Fuel at $0 . 05621 and projected CPI increase) ■ Residential ( 600 kWh ) 2014: From $ 122 .49 To $ 124 . 80 = $2 . 31 /mo. 2015 : From $ 124 .80 To $ 127. 08 = $2 .28/mo . • Small General ( 1500 kWh ) 2014 : From $323 . 51 To $330. 70 = $7 . 19/mo . 2015 : From $330 .70 To $335 . 86 = $5 . 16/mo . ■ .mumomliw Electric Highlights , p . 2 ■ Budget includes loan repay from GF $ 111 K for previous contributions to SMIC debt ■ Term position mechanic/operator to replace retiring employee ; to be paid for two years (partially with generator grant) ■ Transformer testing in process , includes oil analysis , insulation resistance , confirm ancillary devices , and painting • Ammow Electric Highlights , p . 3 • Generator $4M project (status) • Current Special contracts with Icicle Seafoods and Sealife Center expire at the end of 2013 • .=milimiw Electric Capital Improvement Plan ■ Summary of All Capital Improvement 'eli? Needs Why focus on capital needs and rates? ■Critical Risk - $ 1 ,485 , 000 ■ $340K done in 2012 ■ Estimated $810K scheduled in 2013 ■ High Risk - $ 5 , 605 , 000 ($OK done in 2012) ■ Moderate Risk - $ 1 , 018 , 000 ($OK done in 2012) Note: Recent flooding/outages located in areas identified here as critical/high risk/moderate risk capital need areas • Amming- Critical Capital Needs 2013- 441: 2018 Likely to Fail in the Next 5 years, must be accomplished Camelot - $200K > k Ioo ki (2012 approx $ 100K, Construction scheduled 2013) ❑ Exhaust Stack and Roof Gen 3 - $60K (Exhaust stack done, Roof scheduled this year) ❑ Lake Drive (Stony Creek) - $ 150K (Construction scheduled 2013) CI Transformer Renovation - $380K (oil sampling done, testing scheduled this summer) 12 • immonoc Critical Capital Needs 2013 - 2018 CI Right of Way clearing - $ 150K (Continue yearly clearing 2013) ❑ Meter Relay and View Screen - $20K ❑ SMIC underground - $ 105K CI Jesse Lee - $30K ❑ Lagoon - $450K ■ mmissisw, Continued repair and replacem - T of Critical Items Prevents : Multiple failures and/or running generators more frequently ® Long outage times for residents and businesses ® Risks of freezing and damage to out-of-town personal water infrastructure (wells and septics) ® Higher fuel costs to our residents and businesses for running the backup generators ® Higher repair and replacement costs for emergency rates 14 ■ Critical Needs Last Year and .4 This Year ■ 2012 ■ 2013 a Camelot $100,000 Camelot $100,000 a Gen 3 Silencer $ 30,000 Gen 3 Roof $ 30,000 RI ROW Clearing $115,000 Stoney Crk $150,000 � Gen Upgrades $ 55,000 ROW Cont. $150,000 v Flood Related $ 40,000 Transformers $380,000 $340,000 $810,000 • High Risk Capital Needs 2018 -2023 Likely to fail within 5-10 years ■ Old Mill #3 - $ 120 , 000 ■ Gateway ( Upper) - $ 180 , 000 ■ Gateway ( Lower) - $80 , 000 ■ Woodland Hills - $ 120 , 000 ■ Lost Lake Underground - $55 , 000 ■ Software for inventory - $50 , 000 • sammuwf High Risk Capital Needs 47: 2018 -2023 Likely to fail within 5-10 years ■ Downtown Alley 2nd and 3rd install underground - $ 1 ,000,000 (install overhead - $500,000) ■ Downtown Alley 3rd and 4th install underground - $2 ,000 , 000 (install overhead - $ 1 ,000,000) ■ Downtown Alley 4th and 5th install underground - $2 ,000,000 (install overhead - $ 1 ,000,000) • AlmimiwY Moderate Risk Needs 2013 -2023 Nearing or Past Previously Estimated Life Expectancy ■ Lawing - $25 , 000 ■ Victor Creek - $ 110 , 000 ■ Questa Woods - $80 , 000 ■ AVTEC Underground - $ 15 , 000 ■ Southwest Boat Ramp - $33 , 000 ■ Lawing to Victor Creek Overhead - $75 , 000 • Moderate Risk Needs 6c,:` 2013-2023 Nearing or Past Previously Estimated Life Expectancy • Update Fort Raymond Controls - $450 , 000 • Security Upgrades to Substations - $ 130 , 000 • Switch at Nash Road - $ 100 , 000 19 • mimmiffr Summary of ARCTEC $4M a ` grant PT phase protection o Generator 3 silencer and roof • Move generator 4 into the new building (Scheduled 2013) • Move generator 5 into the new building • Update and modernize controls • Warehouse (Scheduled Construction 2013) 20 m amismilw � Projects Requiring Funding to Complete ■ Complete Transmission Line Into Substation $ 1 , 500 , 000 Sixteen structures to complete (past life expectancy) Potentially funded through ARCTEC When substation ready will give us the ability to receive 115kV 21 ■ Benefits of Yearly Right of Way Clearing ■ Less outages equals less cost to rate payers ■ Unscheduled power outages that required backup generation 1 last winter season (September for 8 .5hrs) 2 total in 2012 (Sept and May for 4hrs) ■ $50 , 000 budgeted and not used for emergency generation 22 Ill iiIMINIMIIV . 4of St* Issues with ROW clearing .... 4i.Aso,. ,• ., . .. . t....t.,. : 1 -t....... 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''' ' \ \ \ 4t'•.. •1** i I .... . , ' •••140A. , * ' ' Ammiri Recapping Recent Achievements ■ Increased Cash in Reserves from $639,000 to $ 1 ,896,000 ■ Spent $50,000 less in Diesel fuel costs due to limited number of outages ■ Approximately ten miles of transmission line cleared out of forty miles ■ Camelot no major outages this winter ■ No downed tree outages causing generation events ■ Lowell Point continues to receive reliable service ■ Acquired a four million dollar grant to continue the generator upgrades . ice. QDA 8:11 The End