§ 13.04.075. Long-term contracts.

A.

For the purposes of this section, certain terms used herein are defined as follows:

"Energy bill" means the bill for energy and energy-related products and services provided by the department.

"Energy and energy-related products and services" means only the energy, products and services provided by the department.

"Equity adjustment" means any and all rate reductions offered pursuant to this section and as limited under this section, calculated against the electric rates in existence as of September 14, 1998. The equity adjustment shall apply only to that portion of the rate which constitutes the generation, transmission and distribution portion of the rates and will not affect the collection of the stranded investment surcharge, the public benefit charge, or any applicable taxes, fees or other similar assessments required by local, state or federal law.

"Long-term contract" means a contract between the department and any eligible P class customer receiving a voltage discount or any other eligible P class customer, for energy needs for a minimum term of five years or a contract between the department and any eligible G2 class customer served at 100 kW or higher for a minimum term of four years, which provides an equity adjustment in return for remaining a customer of the department with a minimum load and load factor, pursuant to this section.

"Total equity adjustment" means all equity adjustments for which a customer's meter or meters may qualify under each subsection of this section, and in accordance with the provisions of this section.

B.

Notwithstanding any other provision of this code, the general manager of the department may enter into long-term contracts, in accordance with the provisions of this section, this code and the City Charter, for energy and energy related products and services with those customers having qualifying meters as specified in subsection C of this section. The equity adjustment program will be offered to customers in the following order, beginning with those customers having the highest load factor within each class: (i) PV class, (ii) P class, (iii) G2 class served at 100 kW or higher.

C.

Qualifying Customer Meters and Equity Adjustment Amounts.

1.

To be eligible for a long-term contract, a customer meter must meet one of the following requirements: (i) P class customer meters qualifying for the voltage discount ("PV class") having an average annual load factor equal to or in excess of 35%; (ii) P class customer meters having an average annual load factor equal to or in excess of 35%; or (iii) G2 customer meters served at a 100 kW or greater having an average annual load factor in excess of 45%. All qualifying customer meters shall maintain a minimum load and a minimum load factor during the term of the long-term contract.

2.

Every PV class and P class customer eligible for a long-term contract, as provided above, that has signed a long-term contract, as defined, may receive a seven percent (7%) equity adjustment for the qualifying meter or meters, from the ordinance rates in effect as of the date of the ordinance codified in this section. For each additional year in the term of the contract, customer may receive an additional two percent (2%) equity adjustment for the qualifying meter or meters. Customer meters with an average annual load factor as determined by the department, which maintain that minimum load factor may receive an additional equity adjustment as follows:

a.

PV Class.

i.

At least a 40% minimum load factor, one percent (1%) additional equity adjustment.

ii.

At least a 45% minimum load factor, two percent (2%) additional equity adjustment.

iii.

At least a 50% minimum load factor, three percent (3%) additional equity adjustment.

b.

P Class.

i.

At least a 40% minimum load factor, one percent (1%) additional equity adjustment.

ii.

At least a 50% minimum load factor, two percent (2%) additional equity adjustment.

iii.

At least a 60% minimum load factor, three percent (3%) additional equity adjustment.

3.

Every G2 class customer eligible for a long-term contract, as provided above, that has signed a long-term contract, as defined, may receive a five percent (5%) equity adjustment for the qualifying meter or meters, from the ordinance rates in effect as of the date of the ordinance codified in this section. For each additional year in the term of the contract, the customer meter may receive an additional two percent (2%) equity adjustment. Customer meters with an average annual load factor as determined by the department, which maintain that minimum load factor shall receive an additional equity adjustment as follows:

a.

At least a 50% minimum load factor, two percent (2%) additional equity adjustment.

b.

At least a 55% minimum load factor, three percent (3%) additional equity adjustment.

c.

At least a 60% minimum load factor, four percent (4%) additional equity adjustment.

4.

Every customer signing a contract pursuant to this section shall also be eligible to receive an additional equity adjustment as follows:

a.

Purchase of additional energy and any energy-related products and services provided by the department in an amount equal to or greater than ten percent (10%) of the customer's twelve (12) month energy bill during a period preceding the agreement shall qualify for an equity adjustment in the amount of one-half percent (1/2%) for each ten percent (10%) increment.

b.

Load factor improvement over the base year at the following rate: two percent (2%) equity adjustment for each five percent (5%) load factor improvement.

c.

Aggregation of Meters. The department may aggregate any meters, provided that each meter is served at a minimum 100 kW demand level. Customer bill savings may result from demand diversity from aggregation and may vary among customers. However, the savings shall be limited to a maximum of two percent (2%), as determined by the department. This benefit shall be considered to be an equity adjustment of two percent (2%).

D.

Maximum Equity Adjustment.

1.

The total equity adjustment available for any customer meter, pursuant to this section, shall be limited to the amount of the customer meter's inequity. In no instance shall the total equity adjustment exceed the amount of inequity as determined by an individual analysis performed by the department.

2.

The total equity adjustment available for any customer meter shall not exceed ten percent (10%) until such time that additional revenue may be identified and designated for disbursement on an equitable basis. Provided, however, that customers qualifying at the time of contract execution for an adjustment in excess of ten percent (10%), may receive the equity adjustment in excess of ten percent (10%), or part thereof, when additional funds designated for the equity adjustment become available, in accordance with this section.

3.

The equity adjustment shall apply to those portions of the rate as described in this section and shall be available for the applicable customer meter.

4.

The department may identify, through a written policy signed by the general manager, additional energy-related products and services similar to those identified above which shall be offered to all eligible customers in exchange for an additional equity adjustment not to exceed two percent (2%) for each energy-related product or service offered, in accordance with the provisions of this section.

E.

The city council shall approve all long-term contracts, pursuant to this section, in excess of $75,000. The following contracts are deemed approved by the city council without respect to amount: contracts for energy and energy-related products and services which conform substantially to standard terms and conditions set forth in a resolution of the city council which is adopted and which may be reconfirmed from time to time, and which also conform substantially to the rates for contract sales of department products; commodities and services as set forth in Resolution No. 7531-1 of the city council.

F.

All long-term contracts shall specify that at the time that the city enacts a comprehensive rate restructuring which affects the customer (the "restructured rate"), the equity adjustment, as defined, shall continue to apply, if the department determines that the equity adjustment would result in a rate lower than the restructured rate as calculated for a given period. Where the department determines that the restructured rate results in a lower rate for the customer, the restructured rate will take effect immediately and the prior equity adjustment shall no longer apply. At regular intervals, the department will review the effect of the restructured rate on the bill for services of each customer which continues to receive an equity adjustment to determine whether the restructured rate will result in a lower service bill to the customer. As soon as the department determines that the restructured rate will result in a lower service bill to the customer, the restructured rate shall apply immediately and the equity adjustment under this section shall cease. All other terms of the long-term contract shall remain in full legal force and effect.

G.

Effective July 1, 2002, concurrent with the enactment of the comprehensive rate restructuring referred to in Section F, references in this section to former rate schedules G-2, P and PV which are no longer in effect shall be deemed to refer to Schedule M-1, Schedule M-2, Schedule L-1 or Schedule L-2 as appropriate.

(Ord. 6901 § 11, 2002; Ord. 6765 § 1 (part), 1998)