HomeMy WebLinkAboutA001 - Council Action Form dated April 25, 2017 ITEM # 51
DATE: 04-25-17
COUNCIL ACTION FORM
SUBJECT: FIRST PASSAGE OF ORDINANCE CHANGING
ELECTRIC NET METERING
BACKGROUND:
On March 1, 2017, Section 28.109 in the Municipal Code for the City of Ames, Iowa
went into effect. This section is titled "Renewable Energy Buyback Rates" and outlines
the rates a customer will receive if excess energy is produced by the customer's solar
panel; this is known as Net Metering.
Net metering applies to a customer-owned generating system that primarily offsets
part or all of the customer's electric service energy requirements provided by the
City's Electric Services. Net Metering is available to any retail customer receiving
electric service under a City of Ames Electric Services rate schedule who owns and
operates an approved on-site generating system powered by a renewable resource
capable of producing not more than 500 kW of power, and who interconnects with the
City's electric system.
Following the mailing of the first electric bills to customers with Section 28.109 in
effect, staff identified an error in the original Municipal Code language. The
Residential Service rate for non-summer months was correctly written as:
40% of$0.0966 per kWh, plus $0.025
However, the answer to the formula was incorrectly stated as:
40% of$0.0966 per kWh, plus $0.025 = $0.0525
Whereas the correct answer is:
40% of$0.0966 per kWh, plus $0.025 = $0.0636
As a result of this error, participating residential customers were under-credited for the
excess energy they produced by using the $0.0525/kilowatt-hour instead of
$0.0636/kilowatt-hour. Based on calculations by the Finance Department, the
underpayments to date total less than $300.
Council is being asked to approve three recommendations.
1. Approve the attached ordinance to change the Municipal Code to correct this
mathematical mistake.
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2. Make the correction retroactive to March 1, 2017 billing so that the Finance
Department may refund the underpayment for this energy to the customers.
3. Waive the second and third readings so that we can prevent continued delay in
correctly paying the City's Net Metering customers for excess energy
produced.
ALTERNATIVES:
1.
a. Approve first passage of the attached ordinance to change Chapter 28 of
the City of Ames Municipal Code pertaining to Net Metering as outlined
above.
b. Approve the effective date of the correction to March 1, 2017 and
authorize the refund of any underpayment.
c. Waive the second and third readings and adopt the code change
immediately.
2. Retain the existing language regarding Net Metering.
MANAGER'S RECOMMENDED ACTION:
The proposed code changes implemented on March 1, 2017 reflected the direction
Council gave to staff on November 15, 2016. However, a mathematical mistake has
caused the City to under pay residential Net Metering customers for excess energy.
This change corrects that error back to the start of the program.
Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative #1.
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