HomeMy WebLinkAboutA001 - Council Action Form dated February 27, 2024 ITEM#: 35
DATE: 02-27-24
DEPT: Electric
COUNCIL ACTION FORM
SUBJECT: MODIFICATIONS TO COMMERCIAL ELECTRIC VEHICLE CHARGING
RATE
BACKGROUND:
On January 10, 2023, the City Council adopted an ordinance to establish a Commercial Electric Vehicle
Charging Rate in the Ames Municipal Code (Sec. 28.106). Currently, one customer takes service under
this rate. Over time, staff anticipates more customers taking advantage of this rate in the future. The
purpose of the rate is to encourage the charging of commercial electric vehicles during off-peak
hours, when the cost for the utility to purchase electricity is low and the use is not expected to
contribute to setting a new utility-wide electrical consumption peak.
Under the current code language, the billing demand calculated for customers using this rate is the
greater of five measurements:
A) The peak 15-minute demand measured Monday-Friday from 9 am to 9 pm ("Premium Hours"),
B) 30% of the peak demand measured all other hours ("Economy Hours"),
C) 75% of the peak demand measured in the prior 11 summer months,
D) 60% of the peak demand measured in the prior 11 months (regardless of season), or
E) 40 WA(this serves as a minimum demand for this rate class)
These different measurements incentivize customers to use their charging infrastructure during
the non-peak "Economy Hours". Doing so allows the customer to qualify for Measurement B to be
used to calculate the demand charge. This is a substantial discount compared to the typical commercial
rate calculations. However, if a customer uses their charging infrastructure during peak hours for a
particular month, the effect will be that their bill for that month will be calculated using that peak
demand (Measurement A), and that new peak demand will impact future bills for at least the next 11
months (Measurement C or Measurement D). This results in substantial penalties for a customer
charging during a peak time.
After the first year of implementation, Electric staff analyzed customer usage to determine if the rate
accomplished what was intended and whether any adjustments are necessary. From the data analysis,
staff is recommending that the length of the "Premium Hours" should be reduced, thereby
increasing the discounted demand period. This change would greatly benefit the customer by giving
them more flexibility when charging and shrinks the peak demand change window. This change
benefits the Utility by placing more focus on the critical peak period of the day(3 pm to 8 pm)when the
Utility typically achieves a new peak.
Under the proposed code language, the billing demand would be the greater of A) the peak 15-
minute demand measured Monday-Friday from 3 pm to 8 pm or B) 30% of the peak demand
measures all other hours. This discount is to incentivize customers to charge outside of the
Utility's peak period. This change reduces the on-peak demand window from twelve hours to five
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hours. The remaining three measurements listed above (C, D, and E) will remain unchanged by
the proposed ordinance.
ALTERNATIVES:
1. Approve first passage of ordinance amending Chapter 28 Section 28.106 of Ames Municipal Code
approving Minor Changes to Commercial Electric Vehicle Charging Rate.
2. Refer this item to staff for further consideration.
CITY MANAGER'S RECOMMENDED ACTION:
This change to the City's Electric Vehicle charging rate directly benefits electric customers by
expanding the window when discounted rates can be applied. At the same time, standard rates are
applied if the charging contributes to the City's peak consumption. This is sound rate design containing
both incentives and disincentives. Therefore, it is the recommendation of the City Manager that the City
Council adopt Alternative No. 1, as described above.
ATTACHMENT(S):
Ordinance Electric Vehicle Chrg Rate.PDF
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ORDINANCE NO.
AN ORDINANCE TO AMEND THE MUNICIPAL CODE
OF THE CITY OF AMES, IOWA, BY AMENDING
SECTION 28.106 THEREOF, FOR THE PURPOSE OF
AMENDING COMMERICAL ELECTRIC VEHICLE
CHARGING RATE 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 28.106 as follows:
"Sec. 28.106. COMMERCIAL ELECTRIC VEHICLE CHARGING RATE.
(2) Intent: The cost to
deliver electricity is generally most expensive during hours of greatest demand. The utility benefits when
lafge electric users reduce their demand during these times. A time-of-day rate is a pricing strategy
whereby Electric Services may vary the price of electricity depending on the time-of-day it is delivered to
the customer.Energy pricing can encourage the customer to use electricity during times of low demand and
discourage use during the peak times of the day. Time-of-day pricing allows Electric Services to better
control costs and mitigate any negative system impacts related to times of peak demand. Additionally,
offering off-peak rates encourages broader adoption of electric vehicles by allowing low-cost, off-peak
energy for customer vehicle charging.
(3) Definitions:
(a) Premium Energy Hours: Monday through Friday between the hours of 9:00
am and 9:00 pm,excluding federally observed Holidays:
(b) Economy Ener Hours:All remaining hours
(c) Billing Demand:
The"billing demand"shall be the greater greatest of.
(i) The peak fifteen(15)minute demand measured between 3:00 p.m. and
8:00 p.m.,Monday through Friday diffing the premium houf of the current monthly billing period;
(ii) Thirty percent(30%)of the peak fifteen (15)minute demand measured
during all other the eeenemy hours of the current monthly billing period;
.•. 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 2024,
Renee Hall,City Clerk John A.Haila,Mayor
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