Submitted By: Marie Brooks
Presentation By: Doug Peebles
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Department: Electric Utility
STAFF RECOMMENDATION (Motion Ready):
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Introduce Ordinance 2024-30 amending sections 70-582 and 70-584 concerning definitions and the establishment of service
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OCALA'S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable, Operational Excellence
PROOF OF PUBLICATION:
N/A
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BACKGROUND: Ocala Electric Utility is requesting to amend the code of ordinances by revising the definition of net revenue and the process to establish service. Net revenue refers to the portion of revenue obtained from retail electric power delivery and sales to customers, minus the associated costs of power generation and transmission incurred by the City. It serves as the basis for estimating the value generated from a new customer's electric connection within the initial 48 months. This value comparison includes the costs of new electric infrastructure and additional capacity required to meet the customer's demand, determining the need for a customer contribution towards construction expenses.
These guidelines primarily apply to commercial and industrial developments, offering clarity by distinguishing power costs and rate structures between municipal and investor-owned electric utilities.
FINDINGS AND CONCLUSIONS: Amending the definition of net revenues from "fuel cost" to "power cost" considers a wider range of expenses beyond just fuel. It includes all costs related to power generation and provides a more accurate calculation of utility expenses. This accuracy is crucial for making more informed decisions regarding return on investments and customer contributions. Staff recommends the adoption of this ordinance.
FISCAL IMPACT: The amendment from "fuel cost" to "power cost" enhances financial transparency, improves the accuracy of cost estimation, and facilitates better financial planning and decision-making regarding infrastructure investments and customer contributions.
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