88-1513 WHITE - C�TV CLERK
PINK - FINANCE G I TY OF SA I NT PAU L Council
CANARV - DEPAI7TMENT
BIUE - MAVOR File NO• ���� -
Council Resolution '��
C3�
Presented By
��y.��..�� -
Referred To - Committee: Date
Out of Committee By Date
WHEREAS, the City of Saint Paul has granted, in Ordinance No.
16947, as amended, a franchise to use the public streets and ways to
deliver hot water within Saint Paul to District Heating Development
Company ( DHDC) , doing business as District Energy St. Paul , Inc. , a
Minnesota non-profit corporation; and
WHEREAS, on July 18, 1988, District Energy filed with the City
Clerk a notice of its intent to amend hot water rates which will go
into effect on October 1, 1988; and
WHEREAS, such rates are thereby effective pending City Council
approval , which approval requires a public hearing; and
WHEREAS, evidence has been presented to the City Council that:
1. District Energy proposes the following changes:
a. The demand charge changes from $3. 14 per kilowatt of
contract demand per month to $3. 29/kw/month, a rate increase
of about 4. 8� ;
b. The energy charge changes from $10. 46 per megawatt hour to
$10. 22/MWh, a decrease of about 2. 3�;
c. The single rate changes from $0. 0326 per kilowatt hour, to
$0. 0334 per kilowatt hour, an effective increase of about
2. 5�.
d. District Energy proposes to establish service charges for
the following specific services: ( see Attachment 1 of the
rate filing ) :
( 1 ) service shutoff and/or reinstatement, (2) damage to
system equipment, (3 ) consumption of system water, and (4 )
service calls for problems not related to District Energy
equ ipme nt.
COUNCIL MEMBERS Requested by Department of:
Yeas Nays
Dimond
i.ong [n Favor
Goswitz
Rettman
Scheibel A gai n s t BY -
�
Sonnen
Wilson
Form Approved by City torney
Adopted by Council: Date ,
Certified Yassed by Counc.il Secretary BY ��
By.
Approved by 1+lavor: Date _ Approved by Mayor for Submission to Council
By BY
, . ���.si�
2. District Energy' s projected budget indicates that normal
inflationary increases in operating costs and provision for debt
repayment are the main reasons for the increase in the demand
charge of 4. 8�.
3. The primary reason for the decrease of 2. 3$ in the energy charge
rate is lower fuel costs.
4 . The proposed single rate increase of 2. 5� is the same level as
the combined demand charge and energy charge rates, given the
budgeted assumptions for energy consumption.
5. A comparison of rates is as follows :
Actual Budget Forecast Proposed
FY 87 FY 88 FY 88 FY 89
------ ------ -------- --------
Demand charge
rate ( $/kw/mo ) $ 3. 05 $ 3. 14 $ 3. 14 $ 3 . 29
revenue 5, 234, 204 5, 140, 004 5, 110, 000 5,449, 030
Energy charge
rate ( $/MWH ) 10 . 68 10. 46 10 . 46 10 . 22
revenue 1 , 970, 487 2, 458, 793 2, 410, 000 2, 482, 076
----------------------------------------------------------------
Average cost/
MMBtu 9 . 44 9 . 56 9 . 56 9 . 80
6. The average interest rate projected for payments on Series A
bonds is 5. 2$ for this budget year. The average for the past
twelve months has been 5. 5$ and it is the review staff ' s opinion
that the projected rate is reasonable . Similar methods and
sources were used in estimating the interest rate last year.
Last year ' s estimate was very close to actual experience .
� 7. District Energy has experienced a savings in insurance cost
through savings of an improved insurance market. These savings ,
along with any interest savings, or additional interest costs on
the projected interest payments will be redirected to a
Supplemental Debt Service Reserve Fund. The balance of this
account is limited by the Board of Directors . This reserve fund
and other reserves will be used to cushion future rate increases
needed to repay debt . The review staff supports the
establishment of this fund and designation of savings for the
following reasons :
a. Reduces risk of unforeseen short-term changes in these
costs.
b. Provides assurance future customers will not experience rate
shock.
c. Provides a dedication of savings to be applied to debt
rather than be otherwise spent.
WHITE /- CITV CLERK
PINK - FINANCE G I TY O F SA I NT PA U L Council /��/� A
CO;i.IARV - DEPARTMENT � �//�../�//�
SIUE - MAVOR File �0• �)e � `� -
Council Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS , the City Council has taken into account those matters
required by Section 6 of Ordinance No. 16947, and by C.F. No. 85-919,
and finds that District Energy has met all procedural and substantive
requirements for approval of a rate change; now therefore, be it
RESOLVED, that the District Energy rate schedule which sets the
"demand rate" for its customers is hereby revised to increase the
"demand rate" from $3. 14 per kilowatt per month to $3. 29 per kilowatt
per month; and be it
FURTHER RESOLVED, that the District Energy rate schedule which
sets the "energy rate" for its customers is hereby revised to decrease
the "energy rate" from $10 . 46 per megawatt hour to $10. 22 per megawatt
hour; and be it
FURTHER RESOLVED, that the District Energy rate schedule which
sets the "single rate" for customers with demands of 100kilowatts or
less is hereby revised to increase the "single rate" from $0. 326 per
kilowatt hour to $0. 0334 per kilowatt hour; and be it
FURTHER RESOLVED, that all other rates , changes, and other
provisions of the District Energy hot water franchise remain in force
and are unchanged; and be it
FINALLY RESOLVED, that the attached revised Schedule A and
Attachment 1 to rate schedule is approved and supersedes any previous
Schedule A, and is incorporated by reference into Ordinance No. 16947
as amended.
COUNCIL MEMBERS Requested by Department of:
Yeas Nays
Dimond
L.ong [n Favor
ca�c� � ,-
Rettman
�he1�� _ Against BY ,
Sonnen
Wilson
�CT �. �' �gs� Form A roved by City Attorney
Adopted by Council: Date
Certified Pass d nci S cre r By ��� �
By
Appro by �Vlavor. D �ti! � � '�R� Approved by Mayor for Submission to Council
g By
���}� 0 C T � � 1988
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ara�a�t,nn o��e�u►,�c o�,�c�r�e,� n
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Jame6 Sn der .��� j �a�aar se�ES o�op 3 «rr a:�rc _
. Ncr rFa�wo. ' 110UTING euooEr apECroR'
Fiaance � t S v. 9�43:18 e�EA: —2 «rv�,�ow�x � �{ _ �, ' .
Re�view and apprvval of District Energy .proposed rate changes. S�F � �g�8
OFFICE OF THE DIRECTOR
DERARTMENT OF FMANCE
APtD MANAGEMENT SERVICES
I�CbINA�7t0116:(APV�(�)a:Re�sd(R)) COUWC�L RES�ARCN REPORT:
� PLANidO 00�1N8�ION � .� CMl S�IVK�CO�MAISSION OATE IN - DAIE�OtlT ANALYBT _ . . � . �RJONE N0. � . .. � ..
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Mrll�'11M�NIOKiM,MM�E.OpPOltTtll!!Y l�o+MM�eu.NRMn.NhMr.1NhY): . :
Annual review and approval of District Energy rate proposal in accordance with
Ordinance Aio. i6947. �
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_,. .�+ra►�ceo.ne.n.a,�dv.m.�.►i.s�,r.):. _ , :
Compliance wi�h existir�g ordinance.
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Attachment 1
to rate
schedule
DISTRICT ENERGY ST. PAUL, INC.
Service Charges Eff ective October 1, 1988
Pursuant to Section 8 .5 of the Hot Water Delivery Agreement as
amended, the following rates are established for performance of
specific services more properly charged to an individual Customer
than to all Customers as a whole. Service charges are payable
within 30 days of billing and are in addition to Demand Charges
and Energy Charges.
1 . Restoration of service after shutoff bv District Enerc�v:
Customer demand under 100 kW: $15. 00
Customer demand 100 kW or over: $50. 00
2 . DamaQe to District Ener v svstem ectuipment:
Actual cost of repair or replacement as determined by District
Energy plus service charge of 530 . 00 .
3 . Unauthorized drainaQe of District Enerc7v svstem water:
The sum of the following:
(a) Estimated quantity of water lost times combined water and
sewage rate paid by District Energy during period of drainage;
(b) Estimated heat value of water lost times applicable Energy
Rate; and
(c) Service charge of $30. 00.
Note: Drainage of system water creates an unsafe condition and
is cause for suspension of service until corrected.
4. Service calls made at Customer 's reauest by District Enercrv
ersonnel for problems found to be in Customer' s and not District
Enerqv' s eQUipment: -
Between 8 : 00 a.m. and 3 :30 p.m. on Monday through Friday
(excluding holidays observed by District Energy) $30 . 00
All other times $50. 00
----------------------------------
-------------
svcchgs. rab
• . ��`-�5�3
SCHEDULE A (AMENDED)
to
HOT WATER FRANCHISE
granted to
District Heating Development Co. d.b. a.
DISTRICT ENERGY ST. PAUL, INC.
by th e
CITY OF ST. PAUL
(Ordinance No. 16947 , adopted July 20, 1982, as amended)
RATES: The following rates shall be effective beginning with
the billing month of October 1988 and shall remain in effect
until superseded:
Single rate: $0.0334 per kilowatt-hour
Two part rate:
Demand: $ 3 .29 per kilowatt per month
Energy: $ 10 .22 per megawatt-hour
PROMPT PAYMENT PROVISION: A charge of 5 (five) percent will be
added to the net bill computed at the rate shown above, which
charge shall constitute a discount from the gross bill for payment
within the discount period, all as more specifically provided in
the Hot Water Delivery Agreement.
FUEL ADJUSTMENT: In the event that the energy refund
(assessment) per megawatt-hour accrued pursuant to the Hot Water
Delivery Agreement as of March 31 of any year is greater than
five percent of the energy rate then in effect, District Energy
shall refund (may assess) an amount, equal to that portion of the
difference which exceeds one percent of the energy rate, not
later than May 31 of the same year. The amount refunded
(assessed) shall be deducted when the overall refund (assessment)
for the year is computed.
SURCHARGE: A City fee surcharge of 8 .7 percent will be included
in the gross and net monthly bills computed un�er *his rat�
schedule except as otherwise pr wided by law.
SERVICE CHARGES: District Energy intends to establish service
charges for specific services more properly charged to an
individual customer than to all customers as a whole, consistent
with the First Uniform Amendment to the Hot Water Delivery
Agreement, as approved by customers without opposition. Such
charges may include without limitation: ( 1) service shutoff
and/or reinstatement, (2) damage to system equipmen"
(3 ) consumption of system water, and ( 4 ) sezvice call s f or
problems not related to �istrict Energ}• equipment.
scheda. rab
7/18;8R
� . � �����.�
DI��F�y ST.PAUL�INC.
76 West Kellogg Boulevard RECEIVED
St.Paul,MN 55102-1611
(612)297-8955
SEP 19 �9as
CITY CLERK
September 19, 1988
Albert L. Olson
City Clerk
City of St. Paul
Third Floor City Hall
St. Paul, MN 55102
Re: District Heating Rates
Dear Mr. Olson:
Pursuant to the hot water district heating franchise and previous
notice filed July 18, 1988, District Energy St. Paul, Inc. hereby
files its amended Schedule A. The rates therein will be used on
all bills for hot water service beginning with the billing month
of October 1988 and will remain in effect until superseded.
This is a routine annual rate adjustment as envisioned by the
franchise and the Hot Water Delivery Agreement.
Please contact me at 297-8955 if there are any questions
regarding this matter.
Sincerely,
udy nol on
Vice sident, Finance
Attachments : Schedule A
Affidavit of compliance with
Council Resolution 85-919
. - . � �����`3
SCHEDULE A (AMENDED)
to
HOT WATER FR.ANCHISE
granted to
District Heating Development Co. d.b.a.
DISTRICT ENERGY ST. PAUL, INC.
by the
CITY OF ST. PAUL
(Ordinance No. 16947 , adopted July 20, 1982 , as amended)
RATES: The following rates shall be effective beginning with
the billing month of October 1988 and shall remain in effect
until superseded:
Single rate: $0. 0334 per kilowatt-hour
Two part rate:
Demand: $ 3.29 per kilowatt per month
Energy: S 10.22 per megawatt-hour
PROMPT PAYMENT PROVISION: A charge of 5 (five) percent will be
added to the net bill computed at the rate shown above, which
charge shall constitute a discount from the gross bill for payment
within the discount period, all as more specifically provided in
the Hot Water Delivery Agreement.
FUEL ADJUSTMENT: In the event that the energy refund
(assessment) per megawatt-hour accrued pursuant to the Hot Water
Delivery Agreement as of March 31 of any year is greater than
five percent of the energy rate then in effect, District Energy
shall refund (may assess) an amount, equal to that portion of the
diff erence which exceeds one percent of the energy rate, not
later than May 31 of the same year. The amount refunded
(assessed) shall be deducted when the overall refund (assessment)
for the year is computed.
SURCHARGE: A City fee surcharge of 8.7 percent will be included
in the gross and net monthly bills computed under this rate
schedule except as otherwise provided by law.
SERVICE CHARGES: Attachment 1 lists service charges for specific
services more properly charged to an individual customer tha.n to
all customers as a whole, consistent with the First Uniform
Amendment to the Hot Water Delivery Agreement.
scheda.rab
9/19/88
. - . /��-�.5'/3
Attachment 1
to Schedule A
DISTRICT ENERGY ST. PAUL, INC.
Service Charges Effective October 1, 1988
Pursuant to Section 8.5 of the Hot Water Delivery Agreement as
amended, the following rates are established for performance of
specific services more properly charged to an individual Customer
than to all Customers as a whole. Service charges are payable
within 30 days of billing and are in addition to Demand Charges
and Energy Charges.
1. Restoration of service after shutoff by District Energy:
Customer demand under 100 kW: $15. 00
Customer demand 100 kW or over: $50. 00
2. Damage to District Energy system equipment:
Actual cost of repair or replacement as determined by District
Energy plus service charge of $30.00.
3. Unauthorized drainage of District Energy system water:
The sum of the following:
(a) Estimated quantity of water lost times combined water and
sewage rate paid by District Energy during period of drainage;
(b) Estimated heat value of water lost times applicable Energy
Rate; and
(c) Service charge of $30.00.
Note: Drainage of system water creates an unsafe condition and
is cause for suspension of service until corrected.
4. Service calls made at Customer's request by District Energy
personnel for problems found to be in Customer 's and not District
Energy 's equipment:
Between 8:00 a.m. and 3 :30 p.m. on Monday through Friday
(excluding holidays observed by District Energy) $30.00
All other times $50. 00
9/19/88
• � � .. ���/�/J
DISTRICT ENERGY ST. PAUL, INC.
AFFIDAVIT OF COMPLIANCE WITH COUNCIL RESOLUTION 85-919
Pursuant to Section 2 of City Council Resolution 85-919,
District Energy St. Paul, Inc. states the following facts
regarding its compliance with Section 1 of that Resolution:
1. District Energy gave notice of its intent to file a new or
amended Schedule A in a letter dated July 18, 1988, filed with
the City Clerk on that date.
2. District Energy sent a notice of its rate filing and the
related customer meeting to all signed hot water customers
between August 10 and 15, 1988. The notice included the new
rates sought by District Energy; the time, date, and place of the
customer meeting; and the Notice of Customer Rights constituting
Exhibit 1 of the Resolution. A copy of the notice was provided
to the Executive Director of the St. Paul Building Owners and
Managers Association (BOMA) . The same information was sent to
all Mount Airy residents with notice of a special meeting as
described below.
3 . District Energy held the required customer meeting on
September 8, 1988, at 2:00 p.m. in the conference room of the
District Energy offices, 76 West Kellogg Boulevard, St. Paul .
Approximately 20 persons representing District Energy customers
attended, along with a member of the City's rate review staff.
A second meeting was held with interested residents of the Mount
Airy homes on August 29, 1988, at 7 : 00 p.m. at the Mount Airy
Community Center. Approximately 30 residents attended, along
with a member of the City's rate review staff.
Copies of District Energy's notice filing with the City, the
proposed new Schedule A, and the hot water franchise (Ordinance
No. 16947 as amended) were made available to meeting attendees.
At each meeting, the new rates were explained, customers were
advised that the City Council must approve the new rates before
they become finally effective, and customers were allowed a
reasonable opportunity to comment on the proposed rates both
formally and informally.
Rudy B ol on
Vice side t, Finance
�'� 1 'QQ
Date
����"�.3
N�C`B:�F�PIJBLIC HEAAING ON THE B$QUEST OF •
��'!`�CT.HEATiNG DEVF.LUPli'lENT COMPAN7�. �` ,. : •
F03L AN INGR�ASE IN'BATES
�otice."is.hereby g€�Ven tf�at t�ie.City Eqvacil of �he.Citg of Saf,ti� 1�u�,
Miaaesota;will meet in the Couucii Cham}�ers,Third Flaor uf tlie City��.p�d
Court�Inus,e' Citg o#Saint Paul,Minnesotaat 9:OU a.m.(�SI'j oti�0������
1988 t t$�, uest oi�istrict fleatin Devetopaxent !�'bin an
uurease omera:
A copy t�e rate request is available ior publ�c ins���pec E_iq�t fro�n$�s{�i.�o:
4:3d p sn.:��►Y't3�'st�Frlday,at t�e O�li�e o�the C'�'tyCT�rk,AsaGrn 3�1f�C ,�a11 �
and Court�e ia�t�av2.M�rin�s�t�:At i�e��nne aAt]g�'. �or�lic- �
n�
Hearing�1�q`fai►it�cil of t3�e•�itq a#�1i�YE'P$�i=�. -a�.�����,���:
; appear at the hearing an apportunity to express th�ei�vieta�t ;
P�P�`�9�t . , . � �` .�s
Dated'l�+eptembtr 2�„2988. �� '�'��� �
ALBERT B. OLSUN,City Clerk �° ��` ��'''"�`"`�,�'����°.�'
� (October 1, I988)