HomeMy WebLinkAboutA001 - Council Action Form dated June 9, 1987 ITEM #
DATE: June 9, 1987
COUNCIL ACTION FORM
SUBJECT: Electric Rate Revision
BACKGROUND:
Ordinance No. 2975 was approved on its third reading on May 19, 1987. The
purpose of the ordinance was to make an across-the-board reduction in rates of
the Ames Municipal Electric Utility, eliminate the special rate, and establish
an effecitve date. The effective date was established as July 1, 1987.
The across-the-board reduction in the base rate amounted to $0.005/KWH because
of lower delivered coal price to begin in July 1987. Coal supply contracts
have been signed and will go into effect in July. The revenue projection
adopted in the FY 1987/88 budget was based on the new lower rates being
applied to all electric consumption after July 1, 1987. However, due to an
oversight, Ordinance No. 2975 will apply to all bills mailed after July 1,
1987 which will be energy consumed during June 1987.
For electric rate billing to be consistent with lower coal prices, the new
lower rates should be applied to all bills mailed after August 1, 1987.
ALTERNATIVES:
1. Let Ordinance No. 2975 stand as passed. This will result in confusion for
the customer because bills mailed in July under Ordinance 2975 would still
reflect fuel prices for the old fuel contract and would show a fuel
adjustment cost of 1/20 per KWH and effectively show an increase in the
total cost of electricity instead of the decrease that the customers are
expecting.
2. Approve an Ordinance to amend the appropriate sections of the municipal
code to charge for energy consumption during billing periods for bills
mailed on or after August 1, 1987.
MANAGER'S RECOMMENDED ACTION:
The City Manager recommends that the Council adopt Alternative No. 2.
It is requested that the Council pass the Ordinance on all three readings at
this time.
COUNCIL ACTION: