Minutes 04/20/1981 - Laserfiche WebLink

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MONDAY APRIL 20, 1981 .- As the date of the initial FERC hearing approached, new efforts to negotiate a mutually satisfactory settlement began. A meeting with APCo was had on April 10, and it seemed that settlement might be reached based on the idea of phasing in the total increases over a period of one year. In a follow-up meeting on April 15, 1 tentative settlement was reached, subject to approval by the respective governing bodies. ~roposed Settlement , The current rate, as increased by 19.2%, is estimated to extract from the electric cities about $8.0 million more during the twelve months which began February 2, 1981, than the year before. It is proposed to scale down the rate of increase, as follows: For the Period: % Increase , Cost to Cities , 2-02-81 to 9-15-81 9-16-81 to 2-01-82 2-02-82 10.6% 15.2% 19.2% $2,625,000 2,399,999 Total Cost of Phase-In $5,024,999 The first phase of increase if 52~% of the originally requested 19.2% increase. The second phase of increase is 80% of the originally requested 19.2% increase. The resulting aggregate saving to the electric cities is approximately $3,000,000 ($8,000,000 less $5,024,999), Effect of Settlement on Proposed Budget The financial benefit of this settlement is a little complicated to express, since it does not coincide with our fiscal year and since the reduced rates will take two forms--a sizeable refund after July 1 and an effect on purchased power costs. In general, however, it will improve the financial picture in our proposed Electric Fund budget by about $320,000. Adjustments to the proposed budget would be as follows: (a) Revenues would be increased by $325,000 as a refund from APCo. (b) Purchased power costs would be increased $25,000. The reason for this is complex and has to do with the fact that our budget estimate was already considering the FERC top sheets. (c) Estimated expenses for Engineering and Legal services would be decreased by $5,000 and $15,000 respectively, since we will be avoiding an expensive rate fight. The $320,000 estimated benefit to the proposed FY 1981-82 Electric Fund budget could be utilized by the Council in one of four ways, or a combina- tion thereof, as follows: (a) Increase the projected year-end surplus. (b) Eliminate the proposed transfer of $180,000 from the Ridgeway Hydro Project Reserve. (c) Increase the proposed $100,000 transfer to the Reserve for Depreciation. (d) Increase the proposed $550,000 transfer to the General Fund.