HomeMy WebLinkAboutA038 - Updates to Chapter 28, Electric Rate ModificationsITEM #:40
DATE:10-14-25
DEPT:ELEC
SUBJECT:CHANGES TO CHAPTER 28, ELECTRIC RATE MODIFICATIONS
COUNCIL ACTION FORM
BACKGROUND:
Electric utilities periodically conduct cost-of-service and rate design studies to help make long-
term financial plans, promote efficient use of resources, and provide fair and equitable rates
for customers.
Ames Electric Services completed a cost-of-service study in 2024. At the June 18, 2024, City
Council/EUORAB Workshop, Mark Beauchamp from Utility Financial Solutions presented
results from the cost-of-service study and recommended a series of 1.5% increase to Electric
rates across the board beginning in 2025.
The Electric Utility Operations Review and Advisory Board (EUORAB) met on June 20, 2024,
to discuss the cost-of-service study and rate increases at the direction of the City
Council. Based on the results of the study and EUORAB's review, EUORAB recommended
that a 1.5% rate increase be adopted to go into effect following the 2025 summer season.
This increase is to be applied to monthly customer service charges, demand rates if
applicable, and energy rates. In anticipation of the Council's approval, the revenue included in
the FY 2025/26 budget reflects the implementation of the 1.5% electric rate increase.
At the last City Council meeting, Council directed the City Attorney to create proposed
language changes to the municipal code as outlined below. In addition, several non-
material changes were made to other parts of the code to clarify interpretation. A red-
lined version of the changes to the Municipal Code is attached.
PROPOSED CHANGES TO THE CUSTOMER SERVICE CHARGE, DEMAND CHARGE,
AND ENERGY CHARGE:
T h e Customer Service Charge is a fixed monthly amount charged to each customer,
regardless of how much energy is used. The Customer Service Charge covers the cost of
customer class-specific infrastructure (such as service drops and meters), a portion of the
distribution system needed to serve the customer, meter reading, and billing. EUORAB has
recommended raising the Customer Service Charge for Residential, Small Commercial,
Commercial and Industrial customers by 1.5%.
The Demand Charge is a rate charged to Commercial & Industrial customers and is multiplied
by the 15 minute "peak" consumption by the customer in a given month. There is both a
summer season rate and a winter season rate. EUORAB has recommended raising the
Demand Charge for Commercial and Industrial customers by 1.5%.
The Energy Charge is a rate charged to all customers and is multiplied by the total electric
consumption in a given month. For Residential and Small Commercial customers there is both
1
a summer season rate and a winter season rate. Commercial and Industrial customers have a
constant year-long rate. EUORAB has recommended raising the Energy Charges for all
customers by 1.5%.
The table below describes the proposed changes.
Customer Class
EXISTING PROPOSED
Customer
Service
Charge
Winter/
Summer
Energy
Rate
$/kWh
Winter/Summer
Demand Rate
$/kVA
Customer
Service
Charge
Winter/
Energy
Rate
$/kWh
Winter/Summer
Demand Rate
$/kVA
Residential $ 14.25 $ 0.0893/
$ 0.1101 $ 14.46 $ 0.0906/
$ 0.1118
Small
Commercial $ 20.50 $ 0.0967/
$ 0.1175 $ 20.81 $ 0.0982/
$ 0.1193
Commercial $ 156.00 $ 0.0653 $ 8.01/$ 10.71 $ 158.34 $ 0.0663 $ 8.13/$ 10.87
Industrial $ 1,100.00 $ 0.0642 $ 7.80/$ 10.40 $ 1,116.50 $ 0.0652 $ 7.92/$ 10.56
At this time, staff is not requesting any changes to the new Time-of-Use energy rates created
at the end of 2024.
ALTERNATIVES:
1. Approve proposed changes to Chapter 28 of the Municipal Code, as described above,
on first reading.
2. Do not approve the changes to Chapter 28 of the Municipal Code and direct staff and/or
EUORAB to perform additional review.
CITY MANAGER'S RECOMMENDED ACTION:
Adopting the proposed changes will better align existing rates with the cost-of-service
study results which assumes additional revenue needs for new generation
infrastructure along with increasing renewable resources. Therefore, it is the
recommendation of the City Manager that the City Council adopt Alternative 1.
ATTACHMENT(S):
Ordinance (Electric Rates).PDF
2
ORDINANCE NO. _________
AN ORDINANCE TO AMEND THE MUNICIPAL CODE OF
THE CITY OF AMES, IOWA, BY AMENDING SECTIONS
28.103 THROUGH 28.109 THEREOF, FOR THE PURPOSE OF
AMENDING ELECTRIC RATES 1.5%, 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 Sections 28.103 through 28.109 as follows:
“Sec. 28.103. RESIDENTIAL ELECTRIC RATES.
* * *
(2)Rate per billing period.For each monthly billing period a Residential Rate customer:
(a)shall be charged a customer service charge of fourteen dollars and twenty-five
cents ($14.25) fourteen dollars and forty-six cents (14.46), and
(b)shall be charged for energy consumption during the billing period as follows:
(i)for bills mailed on or between July 1 and October 31 (summer period):
$0.1101 per kWh $0.1118 per kWh, or
(ii)for bills mailed on or between November 1 and June 30 (winter
period):
$0.0893 per kWh $0.0906 per kWh
(c)All charges above shall also be subject to the Energy Cost Adjustment (ECA)
per Sec. 28.102.
* * *
Sec. 28.104. SMALL COMMERCIAL RATE.
(1)Availability: Electrical energy and service shall be available at the "Small Commercial
Rate" to all customers except those that qualify for another rate schedule, for all single-phase or three-
phase, single-metered usage, where the metered demand does not exceed 55 kVA.
(2)Rate per billing period:For each monthly billing period a Small Commercial
Rate customer:
(a) shall be charged a customer service charge of twenty dollars and fifty cents ($20.50)
twenty dollars and eighty-one cents ($20.81); and,
(b) shall be charged for energy consumption during the billing period as follows:
(i) for bills mailed on or between July 1 and October 31(summer period):
$0.1175 per kWh $0.1193 per kWh
(ii) for bills mailed on or between November 1 and June 30 (winter period):
$0.0967 per kWh $0.0982 per kWh
* * *
Sec. 28.105. COMMERCIAL RATE.
(2)Rate per Billing Period:For each monthly billing period, a Commercial Rate customer:
(a) shall be charged one hundred fifty-six dollars ($156.00) one hundred fifty-eight dollars
and thirty-four cents ($158.34) as a customer service charge, and
(b) shall be charged for demand and energy consumption during the
billing period as follows:
3
(i)for bills mailed on or between July 1 and October 31 (summer period) a customer shall be
charged a demand of:
$10.71 per kVA $10.87 per kVA and an energy charge of:
$0.0653 per kWh $0.0663 per kWh
(ii)for bills mailed on or between November 1 and June 30 (winter period) a
customer shall be charged a demand charge of:
$8.01 per kVA $8.13 per kVA and an energy charge of:
$0.0653 per kWh $0.0663 per kWh
* * *
Sec. 28.106. COMMERCIAL ELECTRIC VEHICLE CHARGING RATE.
* * *
(4)Rate Per Billing Period:For each monthly billing period, a customer participating in the
Commercial Electric Vehicle Charging Rate shall be charged:
(a)the Service Charge of two hundred fifty dollars ($250.00).
(b)the Demand Charge and the Energy Charge for the billing period as follows:
(i)for bills mailed on or between July 1 and October 31 (summer period),
a customer shall be charged a demand charge of $10.71 per kVA $10.87 per kVA of billing demand
(ii)for bills mailed on or between November 1 and June 30 (winter period),
a customer shall be charged a demand charge of $8.01 per kVA $8.13 per kVA of billing demand
* * *
Sec. 28.107. INDUSTRIAL RATE.
* * *
(2)Rate Per Billing Period:For each monthly billing period, an Industrial Rate customer
(a)shall be charged one thousand one hundred ($1,100.00) one thousand one
hundred sixteen dollars and fifty cents ($1,116.50) as a customer service charge, and
(b) shall be charged for demand and energy consumption during the
billing period as follows:
(i) for bills mailed on or between July 1 and October 31 (summer period) a
customer shall be charged a demand charge of $10.40 per kVA $10.56 per kVA of billing demand, and an
energy charge of:
$0.0642 per kWh $0.0652 per kWh
(ii) for bills mailed on or between November 1 and June 30 (winter period) a
customer shall be charged a demand charge of:
$7.80 per kVA $7.92 per kVA of billing demand, and an energy charge
of:
$0.0642 per kWh $0.0652 per kWh
* * *
Sec. 28.108. LARGE CUSTOMER TIME-OF-USE ELECTRIC RATE AND CHARGES.
(1)Availability: The Large Customer Time-of-Use Electric Rate shall be voluntary for any
customer whose metered demand at any time exceeds 500 kVA. Service under this rate schedule is billed
on a time-of-use basis as provided under these rules. The Large Customer Time-of-Use Electric Rate is an
alternative to Section 28.105 or Section 28.107 at the customer’s discretion. Customers opting for inclusion
on 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.
(2)Definitions:
* * *
(f)Off-Peak Time-of-Use Energy: Electricity, measured in kilowatt hours (kWh),
used Monday through Friday between the hours of 8:00 pm and 8:00 am, and all-day Saturday, Sunday,
and Holidays, in excess of the numerical value of the established monthly Billing Demand (kVA).
4
* * *
(3)Rate Per Billing Period:For each monthly billing period, a customer participating in the
Large Customer Time-of-Use Electric Rate shall be charged:
* * *
(4) Interruptible Option-Availability:Service under this rate shall be available for customers
with monthly demands of 500 kilovolt-amps (kVA) or greater. Service under this rate schedule is
interruptible and customers must agree to interrupt electric service as provided under these interruptible
rate rules.
* * *
(k)In addition to the participation credit, a customer will be given a compliance
credit of two dollars and twenty cents ($2.20) per elected kVA for successfully lowering its demand by at
least the amount of the elected interruptible demand. The amount of participation credit applied to the
billing demand is based upon the largest interruption response of the billing period. Failure to curtail the
full elected amount will result in no compliance credit.
(l)In the event a participating customer is unable to interrupt load, a non-
compliance penalty will be charged to the billing period’s demand in the amount of $12.00 per kVA for
each kVA short of the elected amount. The amount of noncompliance charge applied to the billing demand
is based upon the largest noncompliance of the billing period. The Interruptible Option Adjustment is equal
to the Compliance Credit is equal to the elected participation minus the amount of the Noncompliance
Charge. Such The Noncompliance Charge shall be in addition to any charges otherwise payable to City of
Ames Electric Services for electric service under this rate schedule. The payment of this noncompliance
penalty shall not be considered a substitute for any other remedy available to Electric Services including,
but not limited to, reduction of service.
Sec. 28.109. STREET AND SECURITY LIGHTING RATE & INCIDENTAL UNMETERED
ENERGY.
* * *
(2)Rate per Billing Period.For each monthly billing period the lighting customer:
(a) shall be charged for service per lamp:
Monthly Lamp Charge
Monthly
Consumption
(kWh per
Lamp)
400 Watt -Mercury Vapor 16.38 16.63 153
400 Watt -Mercury Vapor-Ornamental 18.82 19.11 153
250 Watt -Mercury Vapor 11.34 11.51 96
250 Watt -Mercury Vapor-Ornamental 15.39 15.62 96
175 Watt -Mercury Vapor 8.94 9.08 67
175 Watt -Mercury Vapor-Ornamental 11.34 11.51 67
400 Watt -High Pressure Sodium 17.32 17.58 153
400 Watt -High Pressure Sodium-Ornamental 18.82 19.11 153
250 Watt -High Pressure Sodium 12.12 12.31 96
250 Watt -High Pressure Sodium-Ornamental 15.86 16.10 96
200 Watt -High Pressure Sodium 11.18 11.35 77
200 Watt -High Pressure Sodium-Ornamental 15.24 15.47 77
150 Watt -High Pressure Sodium 9.46 9.61 60
150 Watt -High Pressure Sodium-Ornamental 11.91 12.09 60
100 Watt -High Pressure Sodium 7.33 7.44 38
100 Watt -High Pressure Sodium-Ornamental 9.52 9.67 38
5
Monthly Lamp Charge
Monthly
Consumption
(kWh per
Lamp)
70 Watt -High Pressure Sodium 6.19 6.29 27
70 Watt -High Pressure Sodium-Ornamental 8.48 8.61 27
400-LED 13.81 14.02 69
400-LED-Ornamental 18.81 19.10 69
250-LED 10.77 10.94 36
250-LED-Ornamental 15.77 16.01 36
150-LED 8.39 8.52 24
150-LED-Ornamental 11.89 12.07 24
70-LED 5.45 5.54 13
70-LED-Ornamental 8.45 8.58 13
Ornamental fixtures are units on poles other than standard round-wood poles.
* * *
(4)Incidental Unmetered Energy For Customer-Owned Lighting, Signs And Other
Constant-Wattage Loads
(a) Where a customer owns lighting, signs, or similar constant-wattage single-phase loads
no greater than 2 kVA (2,000 volt-amperes) per point of connection and where it is not practicable to meter
the energy through the customer’s normal metering location, service may be provided under a contract for
incidental unmetered energy. To qualify, the customer must provide verification that their electric loads
have a constant-wattage, or calculable monthly kWh. The basis for monthly kWh to be billed shall be
included in the service contract. Calculated monthly energy will be billed at a rate of $.12021 $.1221 per
kilowatt-hour plus the applicable energy cost adjustment. Once placed in service, changes to loads served
by an unmetered service may only be made following review and approval by the Electric Services
Department with an approved amendment to the service contract. A Standard Unmetered Service includes
150’ of overhead service wire from an existing transformer or service connection point; additional costs
above what is included in a Standard Unmetered Service are the customer’s responsibility.
* * * ”
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 , 2025.
_____________________________________________________________________________
John A. Haila, Mayor
6
First Reading:
Second Reading:
Third Reading:
Passed on:
I, Renee Hall, City Clerk of the City of Ames, Iowa, hereby certify that the above and
foregoing is a true copy of Ordinance No. ______________, passed by the City Council of said City at the
meeting held on ______________________and signed by the Mayor on ___________________________,
and published in the Ames Tribune on ___________________________.
___________________________________________
Renee Hall, City Clerk
7