Submitted By: Marie Brooks
presenter
Presentation By: Doug Peebles
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Department: Electric Utility
STAFF RECOMMENDATION (Motion Ready):
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Adopt Resolution 2024-10 to amend the Electric Rates - Schedule A, under section 70-641, City Code of Ordinances, to be effective March 1, 2024
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable, Operational Excellence
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
The City of Ocala Electric Utility (Electric) customer base rates have been in effect since October 1, 2020. Electric retained the services of an independent rate consultant, Leidos, Inc. to evaluate the utility’s financial feasibility through a comprehensive rate study. The study developed a financial forecast to determine sufficient revenue requirements to support system-wide operations, maintenance, and capital improvement needs. The Utility Advisory Board (the Board) was provided updates from Leidos during meetings on September 27, 2023, and November 29, 2023.
FINDINGS AND CONCLUSIONS:
Leidos assessed revenue adequacy and identified the need to modify electric customer rates in response to inflationary pressures, including heightened operational costs, supply chain challenges, requirements for ongoing maintenance, capital improvements, and the preservation of service reliability.
On January 24, 2024, Leidos presented the Rate Study findings to the Board with the recommendation for a rate adjustment to support the revenue requirements of the Electric Utility system. The Board members unanimously recommended approval of the rate adjustments presented and as attached to this agenda item.
FISCAL IMPACT:
Existing electric customer rates are insufficient to fund bulk power purchases, ongoing operations, maintenance, and capital improvement costs for the system. The proposed rate adjustment is forecasted to support those needs through fiscal year 2028.
PROCUREMENT REVIEW:
N/A
LEGAL REVIEW:
N/A
ALTERNATIVE:
• Approve with amendments
• Deny
• Table
RESOLUTION 2024-10
A RESOLUTION ADOPTING A NEW ELECTRIC UTILITY RATE SCHEDULE AS AUTHORIZED UNDER THE CODE OF ORDINANCES CITY OF OCALA, FLORIDA SECTION 70-641,
EFFECTIVE MARCH 1, 2024
WHEREAS, Section 70-641 was amended on August 21, 2007, to provide for periodic changes to the rate schedule by the adoption of resolutions by the City Council where the revised rate schedule would be set forth as Schedule A to Section 70-641 of the Code of Ordinances; and
WHEREAS, the City of Ocala Electric Utility retained the services of Leidos, Inc. to perform a rate study and provide financial projections for the fiscal years ending September 30, 2024, through 2028; and
WHEREAS, based on the results of the study and analyses summarized in the final report, existing base rates produce revenues that under-recover the projected revenue requirements in the fiscal years 2024 through 2028; and
WHEREAS, the adjusted rate Schedule A for Electric Utility Rates is being amended herein to fund Electric operations (including bulk power purchase), capital improvements and reserves; and
WHEREAS, the attached Schedule A sets forth the Electric Utility Rates Effective March 1, 2024.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OCALA, FLORIDA, that Schedule A referenced in Ordinance 70-641 adopted August 21, 2007, is hereby amended by the attached revised Schedule A as the new Electric Utility Rate Schedule effective March 1, 2024.
This resolution adopted this ______ day of ______________________, 2024.
ATTEST: CITY OF OCALA
By: By:
Angel B. Jacobs Barry Mansfield
City Clerk President, Ocala City Council
Approved as to form and legality:
By: _________________________________
William E. Sexton
City Attorney