08-27-2003 Council Agenda - Laserfiche WebLink

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their priorities with some minor revisions. The debt service terms are set at 5/10/15 years. Keep in mind, the recommendation has not been reviewed by the Parks & Recreation Commission. Method of Fee Calculation We looked again at Xcel's flat fee proposals. The flat fee calculation method for the electric franchise fee that Xcel is proposing is as follows: First apply a percentage charge is applied to overall revenues to determine total fees. Then the total fees by class are divided by the number of accounts included in each particular class. Therefore, each class pays the same proportionate fee but within the class there are disproportionate charges due to usage. Attachment C reflects the annual charges based on usage versus flat fee. This schedule reflects a range of usage that we assume to be representative of low to high use -by- class. The variance between the flat fee and usage fees for residential without space heaters is not dramatic on an annual basis. The variance becomes greater with residential accounts with space heating. The greatest variance occurs in the large commercial and industrial demand users. Alternatively for gas, Xcel's flat fee proposal for gas is not based on an initial percentage of revenue. Xcel is proposing a straight meter fee. The original meter fee schedule (Attachment D) proposed had a higher monthly fee for large commercial customers than Xcel's current suggested fee (Attachment E). If Xcel were to use the same method in calculating the flat fee for gas as it used for electric, the flat fees would land between Xcel's first and last proposal (Attachment F). The different revenues by class for these three would be as follows: (D) (E) (F) Xcel lst Xcel 2nd % Based Residential 30,480 30,480 54,412 Comm. N/C 28,152 23,460 17,189 Comm. D 43,200 4,320 26,934 SMLInterruptible 13,500 540 9,121 Xcel's proposals of flat fees for gas are not based on the same rate for each customer, therefore, class differentials exist.. Also, the proposal to apply the same fee irrespective of usage creates variances similar to the electric charges, see Attaclunents D, E, and F for these ranges. Xcel is strongly recommending flat fees despite the apparent inequities in application of these fees even after the City Council's stated desire for a percentage fee schedule with caps. ltnplementation Date Collette Jurek informed us that we could meet the October lst implementation if we adopted our ordinances at our first meeting in August (1311'). Given the unresolved issues still outstanding, we would recommend that approach. The range in residential flat fees are not dramatic to the point that a flat fee use would be unreasonable, the inequities are immaterial. However, this is not the case in commercial. Therefore, staff is still recommending percentage fees based on usage for both electric and gas. cc: Collette Jurek -3