the hoisington utility bill -...

A Presentation to the Utility Task Force

The Hoisington Utility Bill

Hoisington Utility Bill 9/11/

2012

Today’s Presentation Will Provide the Following:

1. A brief overview of a City of Hoisington Utility Bill

2. An explanation of what the base electric rate goes toward

3. An explanation of what the rolling average goes toward

4. An explanation of how the rolling average is calculated

5. An effort to create

Hoisington Utility Bill Overview of a Residential Bill:

A Resident’s Utility Bill Includes the Following :

1. Water

2. Water Fee

3. Sewer

4. City Electric

5. Electric Rolling Average

6. Sanitation

7. Franchise Fee

8. County Tax

9. City Tax

10. Pool Fee

9/11/

2012

Hoisington Utility Bill Bill Overview: Water

The Water Line of The Bill Includes the Following :

1. The Meter ID (Defines the Meter Installed on the Premise)

2. The Previous Reading

3. The Current Reading

4. The Amount Consumed (Current Read-Previous Read)

5. The Multiplier

6. The Base Charge (This is the Minimum and Includes the First Two

Thousand Gallons of Water)

7. The Bill Amount: Base Charge of $16.05 plus (Amount Consumed

In Excess of Two Thousand Gallons x $6.15)

9/11/

2012

Hoisington Utility Bill Bill Overview: Water Fee

The Water Fee Line of The Bill Includes the Following :

1. The Water Fee is billed based on consumption as required in KSA

82a-954(The State of Kansas Water Protection Fee is $0.032 per

thousand gallons consumed)

9/11/

2012

Hoisington Utility Bill Bill Overview: Sewer

The Sewer Line of The Bill Includes the Following :

1. The Billing Determinant is based on the three month average for

consumption that is established during the winter months

(December, January and February) unless you are a new customer.

2. The Base Rate is $6.20 and does not include any consumption

3. The Per Unit Charge is $2.45 per thousand gallons consumed

4. The Bill Amount is the Base Charge of $6.20 plus (Amount of

Water Consumed x $2.45)

9/11/

2012

Hoisington Utility Bill Bill Overview: City Electric

The City Electric Line Includes the Following :

1. The Meter ID (Defines the Meter Installed on the Premise)

2. The Previous Reading

3. The Current Reading

4. The Amount Consumed (Current Read-Previous Read)

5. The Multiplier

6. The Base Charge is $12.50 (This is the Minimum and Does Not

Include Any Consumption)

7. The Bill Amount: Base Charge of $12.50 plus (Amount Consumed

x $0.072)

9/11/

2012

Hoisington Utility Bill Bill Overview: Rolling Average

The Rolling Average Line Includes the Following :

1. The Amount Consumed/Billing Determinant (Identical to

Consumption of City Electric):

As an Example This Customer Used 1,115 kWh so the Rolling

Average Charge is Multiplied by 1,115 kWh

2. The Multiplier

3. The Rolling Average Charge is calculated based on the rolling

average of fees and charges from KMEA, GRDA and other

production cost

4. The Bill Amount: Amount Consumed x Rolling Average Charge

9/11/

2012

Hoisington Utility Bill Bill Overview: Sanitation

The Sanitation Line Includes the Following :

1. The Monthly Charge for sanitation based on your consumption

($14.25 is the base rate for two poly carts once a week)

2. The Bill Amount: Monthly Charge Plus Any Additional Services

(Extra Pickups, Etc.)

9/11/

2012

Hoisington Utility Bill Bill Overview: Franchise Fee

The Franchise Fee Line Includes the Following :

1. The Bill Amount is based on the total utility portion of the bill times

five percent

2. Formula for The Bill Amount: (Total of City Electric, Electric

Rolling Average, Water, Sewer & Sanitation Charges) x Five

Percent

9/11/

2012

Hoisington Utility Bill Bill Overview: County Tax

The County Tax Line Includes the Following :

1. The Bill Amount is based on the total taxable portion of the bill

multiplied by the County Sales Tax Rate

2. Formula for The Bill Amount: (Total of City Electric & Electric

Rolling Average) x One Percent

9/11/

2012

Hoisington Utility Bill Bill Overview: City Tax

The City Tax Line Includes the Following :

1. The Bill Amount is based on the total taxable portion of the bill

multiplied by the City Sales Tax Rate

2. Formula for The Bill Amount: (Total of City Electric & Electric

Rolling Average) x One-Half Percent

9/11/

2012

Hoisington Utility Bill Bill Overview: Pool Fee

The Pool Fee Line Includes the Following :

1. The Pool Maintenance Fee is a $1.00 charge to help fund the

maintenance of the swimming pool

2. The Bill Amount: $1.00 per residential living unit

9/11/

2012

Hoisington Utility Bill The Electric Base Rate

The Electric Base Rate Funds the Following :

1. Administration: A shared portion of the billing expenses

(equipment, postage, staff, etc.)

2. Distribution: The cost of installing and maintaining the distribution

network (equipment, staff, materials, etc.)

3. Generation: The cost of staffing and maintaining the power plant

(equipment, staff, materials, etc.)

4. Non-Operating: Expenses such as fund transfers and the cost of

servicing debt for infrastructure (cooling tower and loop project)

9/11/

2012


The Electric Base Rate and Meter Charge Accounted for the Following Percentage of Electric Revenues:

1. 2009: 44 Percent

2. 2010: 48 Percent (Driven Up By Capital Outlay Expenditures)

3. 2011: 51 Percent (Driven Up By Significant Capital Outlay

Expenditures)

4. 2012 (Estimate): 43 Percent (Reduced By a Reduction in Admin

Personnel, Plant Personnel, Increasing PPA costs and Capital

Outlay Expenditures)

9/11/

2012


In 2009, Base Rate Expenditures Broke Down as Follows:

9/11/

2012



9/11/

2012


Any Questions?

9/11/

2012

Hoisington Utility Bill The Electric Rolling Average

The Electric Rolling Average Funds the Following :

1. PPA Costs: Cost of Energy Purchased Through Power Purchase

Agreements (Including Demand, Transmission, Spot Market, City-

to-City, Energy Purchases and Ancillary Costs) This includes our

GRDA, JEC and Load Following Contracts and KMEA expenses

2. Fuel: The cost of purchasing fuel for generation (Diesel Fuel)

3. Gas and Transportation Expenses: The cost of purchasing

natural gas and having it delivered to the plant to meet generation

needs

9/11/

2012


The Electric Rolling Average Accounted for the Following Percentage of Electric Revenues:

1. 2009: 56 Percent

2. 2010: 52 Percent (Rising Capital Outlay Expenditures Reduced

This Percentage)

3. 2011: 49 Percent (Driven Down By Significant Capital Outlay

Expenditures)

4. 2012 (Estimate): 57 Percent (Increased By Reduced Operating

Cost for Admin Personnel, Plant Personnel, Increasing PPA costs

and Reduced Capital Outlay Expenditures)

9/11/

2012


Any Questions?

9/11/

2012

Hoisington Utility Bill Calculating The Rolling Average

The Electric Rolling Average Is Derived as Follows:

1. Cost of PPA’s, Energy Costs, Generation Expenses and KMEA

fees: These costs of purchasing delivered energy and producing

power is totaled each month

2. Number of kWh’s Sold: Our total units consumed are considered

3. Monthly Fuel Adjustment: The total cost of purchasing delivered

energy and producing power is totaled and divided by the number

of units sold (i.e. Total Cost is $125,000 and we sold 1,000,000

kWh of energy then the Fuel Adjustment would be $125,000

÷1,000,000 = $0.125)

9/11/

2012

Hoisington Utility Bill Calculating The Rolling Average

(Continued)

4. Stability: In an effort to reduce the volatility of the monthly fuel

adjustment, the fuel adjustment was averaged over a rolling 12

month period

5. Rolling Average: The average cost of purchasing and generating

energy over a 12 month period is derived by taking the total cost for

energy purchase/generation over a 12 month period and dividing it

by the number of kWh sold in the same 12 month period.

9/11/

2012

Hoisington Utility Bill Defining The Rolling Average

Rolling Average: The Average Cost of Power Purchased

or Generated Over a Rolling 12-Month Period

9/11/

2012


Any Questions?

9/11/

2012


An Example w/ No City Generation

9/11/

2012

Hoisington Utility Bill Rolling Average for May 2012

In May of 2012, the following expenses and consumption helped to form the Monthly Fuel

Adjustment and Rolling Average

1. KMEA Invoice: Total Cost From KMEA is $94,391.81

2. GRDA Invoice: Total Cost From GRDA is $20,278.74

3. Total kWh Consumed: 1,413,547 (Pulled From KMEA Delivered

Cost Sheet)

4. Monthly Fuel Adjustment Formula: Figured by Adding KMEA

Invoice to GRDA invoice ($94,391.81 + $20,278.74= $114,670.55)

and Dividing This Cost by Total kWh Consumed (1,413,547)

9/11/

2012


In May of 2012, the following expenses and consumption helped to form the Monthly Fuel Adjustment and Rolling Average (Continued)

5. Monthly Fuel Adjustment: $114,670.55 ÷ 1,413,547=$0.08112

6. Rolling Average: This Number is Plugged Into a Spread Sheet that

totals costs from June 2011 to May 2012 along with kWh Sold

during the Same Period

9/11/

2012


Here is What the Spreadsheet Looked Like:

9/11/

2012


An Example w/ City Generation

9/11/

2012

Hoisington Utility Bill Rolling Average for June 2012

In June of 2012, the following expenses and consumption helped to form the Monthly Fuel

Adjustment and Rolling Average

1. KMEA Invoice: Total Cost From KMEA is $46,397.81

2. GRDA Invoice: Total Cost From GRDA is $20,734.17

3. Diesel Fuel Cost: Total Costs for Diesel is $15,615.60

4. KMGA Gas: Total Cost for Gas is $16,862.72

5. KGS Transportation: Total Cost for Transportation is $14,179.35

6. Total kWh Consumed: 1,227,773 (Pulled From KMEA Delivered

Cost Sheet)

7. Monthly Fuel Adjustment Formula: ($46,397.81+$20,734.17+$15,615.60

+$16,862.72+$14,179.35 = $113,789.65) Divided by Total kWh Consumed (1,227,773)

9/11/

2012

Hoisington Utility Bill Rolling Average for June 2012

In June of 2012, the following expenses and consumption helped to form the Monthly Fuel Adjustment and Rolling Average (Continued)

8. Monthly Fuel Adjustment: $113,789.65 ÷ 1,227,773=$0.09268

9. Rolling Average: This Number is Plugged Into a Spread Sheet that

totals costs from July 2011 to June 2012 along with kWh Sold

during the Same Period

9/11/

2012


Here is What the Spreadsheet Looked Like:

9/11/

2012


Any Questions?

9/11/

2012

Hoisington Electric Utility

Addressing Some Frequently Asked

Questions About the Electric Utility.

9/11/

2012

Q: Does the City just make up the rolling average to pad their pockets? A: They Do Not Pull This Number Out of Mid Air. It is Tied Directly to Units Consumed and Energy Purchase or Production Cost.

Hoisington Electric Utility Addressing Some Frequently Asked

Questions:

9/11/

2012

Q: Does the rolling average pay for benches and park improvements? A: No. The Rolling Average Pays For Electric Purchases and Electric Generation Costs.


Questions:

9/11/

2012

Q: Why Do City Employees Get Free Utilities? A: They Don’t. They Pay The Same as Any Other Hoisington Utility Customer.


Questions:

9/11/

2012

Q: Did We Fund The Construction of the Pharmacy From the Electric Fund? A: The Pharmacy Construction Was Funded Through General Obligation Bonds That Are Serviced Annually From Capital Improvement Dollars for Economic Development Projects


Questions:

9/11/

2012

Q: Did We Fund The Hotel or Mule Barn With Revenues From the Electric Fund? A: No.


Questions:

9/11/

2012

Q: Has Anyone Been Given Discounted Utilities Since the Pharmacy Was Put In? A: No.


Questions:

9/11/

2012

Q: Is the City Providing Utility Abatements to the Pharmacy? Is This Unusual? A: Yes. The City is Providing Free Utilities to the Pharmacy for Five Years (Through June of 2015. Other Entities Have Received This in The Past Including Country Place Senior Living, Country Place Home Plus and the Hospital.


Questions:

9/11/

2012

Q: Will The City Offer Utility Abatements in the Future? A: The Governing Body Could Authorize These Abatements In The Future but I Would Recommend Against It. Such Incentives Impact Everyone’s Rates in the Long Run.


Questions:

9/11/

2012

Q: Why Can’t Our Rates Be As Low as The Communities Around Us? A: It Could be Argued They Are. The Electric Utility Helps to Pay For a Number of Services The City Would Have to Fund Through Tax Levy if They Were Not Built Into Rates.


Questions:

9/11/

2012

Your Rates Also Provide for the Following: Street Lights $40,000 to 50,000/Year

Christmas Lights

Admin. and Billing Expenses $215,000/Year

Distribution Service and Line Maintenance

Power Plant

Lighting of Ball Parks

Power for City Facilities

Electric Inspector

Debt Service on Infrastructure

Responsiveness

Hoisington Electric Utility What Does Our Electric Rate Cover?

9/11/

2012

Hoisington Utility Bill Utility Task Force Presentation

Any Other Questions?

9/11/

2012


The Hoisington Utility Bill

The Hoisington Utility Task

Force

Other Topics For Future Meetings?


The Hoisington Utility Task Force

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