2003-187RESOLUTION NO. 2003R- 187
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM AMENDING RATES,
RULES, AND REGULATIONS FOR THE SALE
AND DISTRIBUTION OF ELECTRICITY
AS ADOPTED BY RESOLUTION NO. 71-478
AND MOST RECENTLY AMENDED BY
RESOLUTION NO. 2003R- 135
WHEREAS, the City of Anaheim (Anaheim) maintains an electric
generation and distribution system for the furnishing of electricity to residents and
inhabitants of the City of Anaheim and has adopted Electric Rates, Rules and Regulations
for the sale and distribution of electricity; and
WHEREAS, the Anaheim Municipal Code authorizes the City Council to approve
reasonable Rates, Rules and Regulations governing electric services and fees and charges
for providing electric services; and
WHEREAS, on September 22, 2003, notice of the public hearing on revisions to
Schedule PCA of the Electric Rates, Rules and Regulations was published in the Orange
County Register and proof thereof is on file with the Secretary of the Public Utilities
Board; and
WHEREAS, the Public Utilities Board held a public hearing on October 2, 2003,
and evidence was presented in support of the proposed revisions to Schedule PCA of the
Electric Rates, Rules and Regulations; and
WHEREAS, the Public Utilities Board considered the proposal of the Public
Utilities Department and has considered the evidence presented at the public hearing; and
WHEREAS, the Public Utilities Board has made the following findings with
respect to the need for revisions to the Electric Rates, Rules, and Regulations:
Section 1221 of the City Charter provides that utility rates charged to a class of
customers shall be uniform within the class and shall be based on the cost of service
revenue requirement for the class.
Section 1221 of the City Charter also provides that the City Council shall
periodically review rates to insure that financial goals are being accomplished.
3. In setting rates, it is reasonable and appropriate to recognize the benefits
that Anaheim Public Utilities customers will realize through having rates for non-
domestic customers remain competitive with those of Southern California Edison.
4. It is reasonable and appropriate to revise the Schedule PCA Power Cost
Adjustment to provide the ability for the Utility to meet specified financial performance
indicators and goals, including maintenance of a ratio of revenues available to pay debt
service to debt service of no less than 1.5 times, a rate stabilization account equal to
approximately $50 million, and the recovery of expenses associated with the production
and purchase of energy delivered to Anaheim.
5. The proposed revisions to Schedule PCA Power Cost Adjustment are
based on the cost to provide electric services to non-domestic customers and are
necessary to meet the financial goals of the Anaheim Public Utilities Department.
WHEREAS, the Public Utilities Board considered the requirements of the
California Environmental Quality Act and found that matters covered above come within
Section 21080 (b) (8) of the Public Resources Code of the State of California. Thus, the
establishment of these rates is statutorily exempt from the California Environmental
Quality Act; and
WHEREAS, based on the findings hereinabove made, the Public Utilities Board
of the City of Anaheim recommended to the City Council that the Council adopt the
findings of the Public Utilities Board with respect to the matters contained herein and
adopt the changes to the Electric Rates, Rules, and Regulations as shown in Attachment
A; and
WHEREAS, based on the finding hereinabove made, the Public Utilities Board of
the City of Anaheim recommended to the City Council that the Council, by Motion,
certify that the adoption of the Electric Rates, Rules and Regulations is statutorily exempt
under the California Environmental Quality Act, Public Resource Code, Section 21080
(b) (8), in accordance with Title 14 of the California Administrative Code, Section 15273
(a); and
WHEREAS, the City Council has considered the evidence and concurs with the
findings of the Public Utilities Board as set forth hereinabove.
NOW, THEREFORE BE 1T RESOLVED that:
The findings of the Public Utilities Board as set forth herein are thereby adopted
by the City Council of the City of Anaheim.
The changes to the Electric Rates, Rules, and Regulations as shown in
Attachment A are hereby adopted by the City Council of the City of Anaheim and will
become effective January 1, 2004.
The Public Utilities General Manager is hereby authorized and directed to
prepare, promulgate, publish and implement changes to the Electric Rates, Rules and
Regulations as set forth herein.
THE FOREGOING RESOLUTION is approved and adopted by the City Council
of the City of Anaheim this 14th ?~Oc~ , 2003.
MAYO~ OF THE CrfY OF'ANAHEIM
ATTEST: ~
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c~F Ci. ER~OF T~ crr¥ OF ANAHEm
51510
Attachment A
POWER COST ADJUSTMENT/RATE STABILIZATION ACCOUNT (PCRSA)
APPLICABILITY: This schedule is applicable to all areas served by the Utility and to all
kilowatt-hours billed under all rate schedules (except domestic lifeline) as defined under the
special conditions of the rate schedules.
PURPOSE: This factor provides a mechanism to return overcollection of funds when costs
decrease and allows for the recovery of power supply and other relevant operational costs based
on actual 12 month rolling data from the accounting system and forecasted data to provide the
ability for the Utility to meet specified financial performance indicators and goals. These goals
include the maintenance of debt service coverage ratios no less than 1.5 times, rate stabilization
account equal to approximately $50 million, and the recovery of expenses associated with the
production and purchase of energy delivered to Anaheim.
APPLICATION: Each quarter, the Utility will recalculate the PCRSA to be subtracted or
added to energy service charges. The PCRSA shall be calculated as follows:
Commencing January 1, 2006, the Utility will calculate a PCRSA billing factor that recovers
costs relating to the procurement and generation of energy, including but not limited to power
production costs, purchased power costs, regulatory compliance costs, debt service and any other
costs involved in delivering energy to the Utility's local receiving point(s). There is no limit on
the Utility's ability to decrease the PCRSA rate. In order to avoid material rate fluctuations,
increases to the PCRSA billing factor shall be limited to no more than a V2¢ per kWh during any
12 month period.
Power production costs include the sum of costs for the generation of electric energy at facilities
owned and operated by the Utility or by a facility manager. Purchased power costs include the
sum of costs of energy, transmission and ancillary services.
Wholesale revenues received from the sale of excess power and the use of the Utility's
transmission lines will be used to reduce the costs that are recovered through the PCRSA.
The Utility will establish a regulatory credit account, funded by PCRSA collections, that
maintains a cash reserve balance equal to approximately $50 million to be used by management
to mitigate material fluctuations in the cost of energy, loss of revenues or unbudgeted costs
including the unexpected long-term loss of a generating facility, unplanned limits on the ability
to transmit energy to Anaheim, or disasters (e.g. earthquakes, et al.) that can otherwise
negatively affect customer bills.
In order to mitigate the impact on customer bills, this regulatory credit account may be drawn
down below the $50 million, at management's discretion.
With respect to any PCRSA adjustment, the Utility shall first consider the result on customer
bills with a goal of maintaining competitive or lower total electric bills as compared to other
Cities in the region. Any change indicated by the PCRSA calculation will be reviewed against
other known long-term factors prior to any automatic implementation of any increase/decrease in
the rate. This allows the Utility to blend forecasted increases or decreases in the projected power
supply or operational costs to meet the financial requirements of the Utility and mitigate future
swings in electrical costs to customers.
All accounting procedures under this rule will be in compliance with Financial Accounting
Standard # 71.
Power Cost Adjustment Billing Factor (per kilowatt hour)
Date Implemented
April 1,2001
January 1, 2004
Domestic Domestic Lifeline Non-Domestic
$0.0049 $0.0000 $0.0049
$0.0049 $0.0000 $0.0040
IMPLEMENTATION: The PCRSA amount for all rate schedules shall be adjusted within
limits as prescribed above, as necessary, by the Public Utilities General Manager to reflect the
cost per kWh of electricity or energy costs described herein.
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF ANAHEIM )
I, SHERYLL SCHROEDER, City Clerk of the City of Anaheim, do hereby certify that the foregoing
Resolution No. 2003R-187 was introduced and adopted at a regular meeting provided by law, of
the Anaheim City Council held on the 14th day of October 2003, by the following vote of the
members thereof:
AYES:
MAYOR/COUNCIL MEMBERS:
Pringle, Tait, Chavez, Hernandez, McCracken
NOES: MAYOR/COUNCIL MEMBERS: None
ABSTAINED: MAYOR/COUNCIL MEMBERS:
None
ABSENT: MAYOR/COUNCIL MEMBERS: None
~ITY CLERt('OF TI--I'E CITY OF ANAHEIM
(SEAL)