HomeMy WebLinkAboutA001 - Council Action Form dated November 28, 2023 ITEM#: 26
DATE: 11-28-23
DEPT: Electric
Services
COUNCIL ACTION FORM
SUBJECT: MODIFICATIONS TO TIME-OF-USE ELECTRIC RATE FOR LARGE
CUSTOMERS
BACKGROUND:
The Industrial Time-of-Use Electric Rate is a voluntary option for large electric customers whose
metered demand at any time exceeds 2,500 kVA. This rate offers two mechanisms to help reduce the
utility's overall annual peak. One provides an optional time-of-use rate to encourage large customers to
shift their peak energy usage outside the window of 3 p.m. to 8 p.m., which is the time when the utility's
electric demand is highest. The second option for eligible customers is to elect a partial interruptible
load agreement where the utility may call on the customer to reduce load during times of peak demand.
The 2,500 kVA eligibility threshold is a high limit. Currently, only six of the electric utility's
customers are eligible for the time-of-use rate. Staff recommends lowering the demand threshold
from 2,500 kVA to 500 kVA. This modification has several advantages to both customers and the
utility. First, it substantially increases the number of customers that may participate in the rate,
thereby reducing their costs as a customer. In addition, it incentivizes more customers to shift
their energy consumption to off-peak hours. Off-peak electric consumption is less costly for the
utility to provide, and reduces the potential for a new electric peak demand to be reached. New
electric peaks require the utility to invest in costly infrastructure.
Staff has prepared an ordinance making the modification to the demand threshold for this rate. In
addition, the ordinance renames the rate to the "Large Customer Time of Use Rate" to reflect that not
all customers who elect the rate will be "industrial" customers. The proposed amendments were
supported by the Electric Utility Operations Review and Advisory Board(EUORAB) on November 9.
ALTERNATIVES:
1. Approve first reading of the attached ordinance modifying Municipal Code, Chapter 28 to reduce the
demand threshold for large electric time-of-use rates.
2. Refer this item back to staff for modifications.
3. Do not approve the attached ordinance.
CITY MANAGER'S RECOMMENDED ACTION:
Lowering the required demand threshold will increase the number of customers that can
participate in the Time-of-Use electric rate. This will help the utility minimize the potential for
new electric peaks, utilize energy at the times that are least costly, and take advantage of capacity
in the electric system that is available during these off-peak hours of the day. Therefore, it is the
recommendation of the City Manager that the City Council adopt Alternative No. 1, as noted
above.
ATTACHMENT(S):
Ordinance Industrial Time-Of-Use Electric Rate.PDF
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ORDINANCE NO.
AN ORDINANCE TO AMEND THE MUNICIPAL CODE OF
THE CITY OF AMES, IOWA, BY AMENDING SECTION
28.108 THEREOF, FOR THE PURPOSE OF RENAMING
THE SECTION LARGE CUSTOMER TIME-OF-USE
ELECTRIC RATE AND CHARGES AND LOWERING THE
RATE FOR CUSTOMER PARTICIPATION, REPEALING
ANY AND ALL ORDINANCES OR PARTS OF
ORDINANCES IN CONFLICT TO THE EXTENT OF SUCH
CONFLICT;AND ESTABLISHING AN EFFECTIVE DATE.
BE IT ENACTED,by the City Council for the City of Ames,Iowa,that:
Section One. The Municipal Code of the City of Ames,Iowa shall be and the same is hereby
amended by amending Section 28.108 as follows:
"Sec.28.108.CIA LARGE CUSTOMER TIME-OF-USE ELECTRIC RATE AND CHARGES.
(1) Availability: The trial Large Customer Time-of-Use Electric Rate shall be voluntary for any
customer whose metered demand at any time exceeds 2-,500 kVA. Service under this rate schedule is billed
on a Time-of-Use basis as provided under these rules. The�l Large Customer Time-of-Use Electric
Rate is an alternative to Section 28.105 or Section 28.107 (1) Availability, at the customer's discretion.
Customers opting for inclusion on-kidu4Fia4 Large Customer Time-of-Use Electric Rate are required to
remain on the rate for a period no less than twelve(12)consecutive calendar months."
Section Two. All ordinances,or parts of ordinances,in conflict herewith are hereby repealed to
the extent of such conflict,if any.
Section Three. This ordinance shall be in full force and effect from and after its passage and
publication as required by law.
Passed this day of ,2023.
Renee Hall,City Clerk John A.Haila,Mayor
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