HomeMy WebLinkAboutA002 - Council Action Form dated May 15, 1984 ITEM NO. ,9
DATE: May 15, 1984
COUNCIL ACTION FORM
SUBJECT: Mandatory Ruling from Iowa Commerce Commission regarding Energy
Adjustment Clause
BACKGROUND:
The 1983 Iowa Legislature passed H.F. 312 last year and an unnoticed require-
ment of that legislation was a section requiring all Iowa electric utilities
(both public and investor owned) to integrate all of their energy cost adjust-
ment charges for electric customers into their base rate for bills sent after
July 1 each year. (The monthly energy adjustment charges on customer's bills
would continue, but the amount of the energy cost adjustment would be lower
because of the July 1 "roll in. ")
In order to comply with this legislation and the mandatory order by the Iowa
Commission that was received April 25, City staff filed the attached letter
as required by the May 1 Iowa Commerce Commission deadline, serving them
notice of our schedule to have the first reading of the electric rate ordin-
ance on May 15 and the second and third reading on May 22.
The proposed electric rate ordinance has no other changes other than the
requirement by the Iowa Commerce Commission that 1 .1¢ per KwH is added to
all KwH energy charges in the base rate. All customers will pay the exact
same bottom line dollars including energy cost adjustment as they pay under
existing rates .
The proposed electric rate ordinance does not respond in any way to consider-
ations under study and review by EUORAB ano tthe City Council for changing
the electric rates .
The City staff has been unsuccessful in finding out the legislature's purpose
in the law. A purpose that staff speculates as most likely is :
Confusion often results when people compare electric rates between
utilities because the comparisons don't always include fuel and energy
cost adjustment. The comparisons of base rates complying with the
legislation should be more comparable.
ALTERNATIVES:
1 . Pass on first reading the proposed ordinance as drafted integrating 1 .1�
into Kw11 base rate for bills sent after July 1 , 1984.
2. Retain the present rates .
CITY MANAGER' S RECOMMENDATION:
In order to comply with the Iowa Law and Iowa Commerce Commission order, it
is recommended that City Council pass on first reading the proposed ordin-
ance as drafted integrating 1 .1� into the KwH base rate for bills sent after
July 1 , 1984.