Submitted By: Lisa M. Crouthamel
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Presentation By: Doug Peebles
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Department: Electric Utility
STAFF RECOMMENDATION (Motion Ready):
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Approve the Territorial Agreement between the City of Ocala and Sumter Electric Cooperative, Inc.
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OCALA’S RELEVANT STRATEGIC GOALS:
Operational Excellence
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
On September 24, 2002, City Council approved a Territorial Agreement (the “2002 Territorial Agreement”) between the City of Ocala (the “City”) d/b/a Ocala Electric Utility (“OEU”) and Sumter Electric Cooperative, Inc. (“SECO”). By its terms, the 2002 Territorial Agreement expired in May of 2018. Since then, OEU and SECO have continued to operate under the terms of that agreement, pending the approval of a new territorial agreement (the “2023 Territorial Agreement”). The parties have negotiated terms and made adjustments to the geographical territory boundaries for the 2023 Territorial Agreement which will be effective for a term of 20 years from the date approved and recorded by the Florida Public Service Commission.
The 2023 Territorial Agreement identifies the terms under which OEU and SECO will handle the right to serve existing and new customers and defines the geographical boundaries for the service area. OEU maintains territorial agreements with SECO, Duke Energy Florida (DEF), and Clay Electric Cooperative (CEC).
As part of the 2023 Territorial Agreement, OEU and SECO have identified lists of customers that will be transferred based on geographical boundaries defined therein. OEU will be transferring 17-meter service locations to SECO. SECO will be transferring 52 existing meter service locations to OEU.
FINDINGS AND CONCLUSIONS:
The OEU-SECO 2023 Territorial Agreement will benefit both utilities with clearly defined boundaries and terms for providing ongoing reliable electric power to customers and the community.
FISCAL IMPACT:
No expense or revenue values are directly associated with the territory boundaries of the agreement. A 30-year depreciation basis and the application of the Handy-Whitman Index of Public Utility Construction Costs govern any expense or revenue associated with the transfer of electric infrastructure facilities between the utilities as part of customer or territory transfers.
PROCUREMENT REVIEW:
This Agreement has been reviewed by the Procurement and Contracting Officer in compliance with the City’s Procurement Policy.
LEGAL REVIEW:
This Agreement has been reviewed and approved for form and legality by City Attorney, William E. Sexton.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny