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270961 WHITE - CITV CL K � PINK - FINAN COIlI1C11,i -(�j �BCLUE�T-� MAYOR MENT SAINT PAUL File 1\O. ^��`�' .:} . �.. � � . � ' � Z Ce Ordinance N 0. ' �� / Presented By Referred To ommittee: Date Out of Committee By Date An Ordinance amending Chapter 502 of the Saint Paul Legislative Code (Ord. 15742, as amended) , pertaining to the Steam Utility Franchise granted to Northern States Power Company, and approving a steam heat utility rate increase upon the petition of Northern States Power Company. - THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN: Section 1. That Appendix "A" of section 502. 06 of the Saint Paul Legis- lative Code, is deleted in full and said section 502. 06 is hereby further amended to read as follows: 502. 06. The rates contained in amended Appendix "A" , as further amended herein and made a part hereof are, effective on all bills based on meter readings on and after the effective ate o thrs Or inance. � �-ee�s�}- ��e -��e�}�-�a�es-�e� ��g�-a- ��a - e�e��a��e�-��* �ke-6��-6e��e��-e€-��e-E��g-e�-Sa��-Pa�t�-e€-�ke a�g��ea��er�-�e�-�a�e-}�e�ease-�}�e�-��-Ee�ga��*-w��k E}��-er�-P�e�ae�e�-��T-�9��T-��e�-See��e�-�-be�ew-a��. a�e-e€�ee�}�*e-e�-a��-��s-�ase�-e�-x�e�e�-�ead}�gs-e� a��-a��e�-Beeex�e�-��T-�3��T-s��ee�-�e-�e��.-e�-a�� e�eess-a�e��-w}�k-��e�es�-a�-6-ge�ee��-ge�-a�r�� e�ae�-�ke-�a�es-as-��a��-es�a��}ske�-��-�ke-�.e�e�}- �a�}e�-e€-�ke-E��-6e��e��: COUIVCILMEN Yeas Nays Requested by Department of: Butler Hozza [n Favor ' Hunt Roedler Against BY Sylvester Tedesco Form Approved y City Attorne Adopted by Council: Date Certified Passed by Council Secretary BY By Approved by Mayor: Date Approved by Mayo for Submission to Council By BY . 5 � �� '1 lJ .� ' �. ➢•� , �'�� ..�i NOTICE OF HF�ARING ON PROPOSED INCRF.ASE OF STEAM UTII,ITY RATES � NOTICE IS HEREBY GIVEN That a public hearing will be held on the 11TH day of Ma,y, 1978, at 10:00 A.M. in the Saint Paul City Council Chambers, 3RD Floor� City Hall and Glourt House, Saint Paul, Minnesota� the purpose of the public hearing being to consider approval of an ordinance increas�ing steam heating utility rates of the Northern States Power Compar�y steam utility within the City of Saint Paul. This notice is given pursuant to Section 16.03 and Section 16.05 of the Saint Paul City Charter, and any interested party may appeax and be heard before the City Council at the time and place recited above. Dated at Saint Paul, Minnesota, this 27TH day of April� 1978. ROSE MIX City Clerk (April 29, 1978� � WH17E - CITY CLERK COUCICll � PINK �� - fINANCE GITY OF SAINT PALTL -��'�� CANARV -DEPARTMENT � � BLUE - MAVQR File NO. �lt ;�T O rdin�nce ordinance �1�. ��v Presented By Referred To Committee: Date Out of Committee By � Date ° Section 2. The Company shall, within thirty days after the passage, approval and publication of this ordinance, file with the City Clerk of said City its written acceptance of this ordinance in form to be approved by the City Attorney, and therein shall agree to abide by, keep and perform all the terms, limitations, conditions and provisions of this ordinance. Section 3. This ordinance shall take effect and be in force after the public hearing prescribed by law and thirty (30) days . after its passage, approval and publication, and upon its acceptance as provided in Section 2 hereof. -2- COUIVCILMEN Yeas Nays Requested by Department of: / Butler Hozza � In Favor — Hunt �� u Against BY Roedler— A(3 sTR�►�( Sylvester Tedesco P y �5�, �a 1�� Form Approved by City Attorney Ado ted b Co i : Date Certifie assed b ounc' ecre'tary � BY B Appro b Mayor: Date r �A� � � �� Approved by Mayor for Submission to Council By BY ��tstt�a MAY � ? 1978 � .° � ' 2�'��"� Northern States Power Company (Minnesota) Schedule A Steam Utility - City of St Paul ! i Proposed Steam Service Rate � �� `�� Effectiv.e In The City of St Paul Availability Available to cotmnercial and industrial customers for general use of steam service. Steam service furnished fram low pressure mains is available fram September 1 to May 31, inclusive; and steam service furnished from high pressure mains is available the entire year. Rate First 200 000 lbs of condensate per month @ $8.10 per 1000 lbs Next 300 000 " " " " " @ 7.35 " " " Next 500 000 " " " " " @ 6.48 " " " Next 2 000 000 " " " " " @ 5.89 " " " EXCeSS �� u n �d S.ZS n n n Prompt Payment Provision A charge of 5% will be added to net bil�., camputed at the Rate shown above, which charge shall constitute a discount from gross bill for payment within the discount period. Monthlv Minimum Charge $20.00 net per meter. Fuel Clause There shall be added to or deducted from the net monthly bill, 2.2� per thousand pounds of steam for the first whole one-half cent increase above or decrease below $1.048 per million Btu and for each whole cent change thereafter in the average cost of fuel used during the preceding twelve months by the Steam Production plant of Northern States Power Company supplying steam to its St Paul distribution system and shall include the costs in FPC Account 501 - Fuel for such Steam Production plant. Surcharge A surcharge of 8.7% will be included in the gross and net monthly bills camputed under this rate schedule. Appendix "A" F ,,'._ �'��'�. Northern States Power Company (Minnesota) Schedule B Steam Utility - City of St Paul Page 1 of 2 Proposed Interruptible Steam Servic e Rate Effective In The City of St Paul Availability Available on an interruptible basis to cammercial and industrial custamers that are located on portions of the Campany's steam distribution system having adequate capacity to serve customer's interruptible load without impairing service to other customers. Extensions or enlargement of the Campany's distribution facilities required to serve an interruptible load will be made in accordance with the Campany's General Rules and Regulati ons. The total capacity of all Interruptible customers shall be limited to the excess capacity of Camp any's Steam Production Plant after service requirements to its firm customers are met. Custamer will agree to (1) curtail his use of steam whenever requested to do so by the Comany; and (2) provide necessary energy requirements during curtailment fram another source. This rate will be in effect commencing with the meter reading of October and ending with the meter reading of May of the following year. During the meter reading months of June through September, steam service will be available under the Steam Service rate in effect at that time. Character of Service The delivery of steam hereunder shall be curtailed upon request of Campany. Such requests shall be made as far in advance as possible. Rate Per 1 000 lbs $3.74 Fuel Clause There shall be added to or deducted fram the net monthly bill, 2.2� per thousand pounds of steam for the first whole one-half cent increase above or decrease below $1.048 per million Btu and for each whole cent change thereafter in the average cost of fuel used during the preceding twelve months by the Steam Production plant of Northern States Power Campany supplying steam to its St Paul distribution system and shall include the costs in FPC Account 501 - Fuel for such Steam Production plant. Additional Charge for Use of Steam During Curtailment If cust aner fails to curtail his use of steam when requested to do so by Campany, he shall pay in addition to the above Rate an amount of $13.00 per thousand pounds of steam used in excess of the volume to which custamer was requested to curtail. Such payment, however, shall not preclude Campany from shutting off customer's supply of steam in the event of custamer's failure to curtail his use thereof when requested to do so. Appendix "A" _. I � i .f�� Northern States Power Company (Minnesota) Schedule B Steam Utility - City of St Paul Page 2 of 2 Proposed Interruptible Steam Service Rate Emergency Steam Service for Interruptible Steam Custamers Emergency Steam Service for Interruptible steam custamers during periods of curtailment may be available if Company's ability to furnish such emergency service will not, in Company's judgment, compromise Company's ability to provide firm steam service to its firm steam custamers. Emergency Steam Service to curtailed Interruptible steam customers will be approved by Company provided: (1) Emergency Steam Service is requested by customer and such request is confirmed in writing no later than 48 hours after th e initial request. If the initial request is in writing, the 48 hour provision is fulfilled. (Z) The emergency is in the nature of a breakdown of standby equipment which could not reasonable have been foreseen by customer. The rate for Emergency Steam Servic e shall be $9.00 per 1 000 pounds of steam used during the emergency period. The emergency period shall end when customer's standby equipment is repaired and custamer has notified Company or the end of the curtailment during which the Emergency Steam Service was requested. Prompt Payment Provision A charge of 5% will be added to the net bill, computed at the Rates shown above, which shall constitute a discount from gross bill for payment within the discount period. Monthlv Minimum Charge The minimum bill for service rendered hereunder shall be $20.00 per meter, the amount prorated for curtailment periods. Surcharge A surcharge of 8.7% will be included in the gross and net monthly bills computed under this rate schedule. Term of Agreement Interruptible Steam Service Agreement shall be for a term of not less than one year. Upon expiration of the tern►, Agreement remains in effect until terminated by at least thirty days' notice by either party. Appendix "A" A; ..,.�� •.'� .. � . . • � . � � Northern States Power Company (Minnesota) Steam Utility � City of St. Paul OPER.ATING �tEVENUES, OPERA.TING EXPENSES, TOTAL AVAILABLE FOR RETURN, RETURN ON NET OPERATING INVESTMENT WITH PRESENT AND INTERIM RATES (Dollars in Thousands) � � � a��``'�'".- _— � --` 1977 Actual 1 77 With �' (Normalized) Interim Rates Revenues $ 2 690 $ 3 003 Expenses . 2 645 2 777 Tota1 Availahle for Return 45 226 � Average Net Operating Investment 3 478 3 478 Rate of Return on Average Net Operating Investment 1.29% 6.5%0 Return on Common Equity 6.17% "Exhibit A° . . ' �. , Northern States Power Company (Minnesota) Steam Utility - City of St. Paul INCOME STATEMEhTT (Dollars in Thousands) I977 Actual Proposed 1977 at (Normalized) Increase Interim Rates Operating Revenue i�ietered Sa1es Firm $ 2 327 $ 2$8 $ Z 615 Interruptible �43 ��3 � Forfeited Discounts 5 5 Gross Earnings Tax 215 25 240 Total 2 690 313 3 003 Operating E�epenses � Production Fuel 1 oi9 i oi9 Other Than Fue1 676 67�✓' Distribution 100 • 100 Customer Accounting g $ Administrative and General 206 206✓ Taxes: � Real Estate & Personal Property 126 126 Gross Earnings 215 25 240 Social Security & Other 36 36"� Fe�3era1 and State Income 0 I07 107 Deferred Income 38 38 Provi.sion for Depreciation 2zi 221 Total Operating Expenses . 2 645 2 77� 11'et Operating Income 45 226 Percent Increase on Firm Sales 12.4% "Exhibit A" . .NORTiIERN STATES POWER COMPANY Steam Utility-City of Saint Paul 1977 Actual Proposed 1977 with Operating Revenue (Normalized) Increase rate increase Metered Sales - Firm $2,327 402 $2,729 Interruptible 143 143 Forfeited Discounts 5 5 Total $2 ,475 402 2,877 Proposed Operating Expenses (Decrease) Production Increase Fuel 1,019 1,019 Other than fuel 676 676 Distribution _ 100 100 Customer Accounting 8 g Administrative/General 206 (19) 187 Taxes: Real Estate/Personal Prop. 126 126 Social Security & Other 36 36 Federal/State Income 0 179 179 Deferred Income 38 38 Provision for Depreciation 221 221 Total operating expenses: $2,430 $2,59U Net Operating Income 45 287 Percent Increase on Firm Sales 17.3� � Rate of Return on Net Investment 8, 25 : Apri� 25 , 1978 "EXHIBIT g" � _ r 'fl:.. � -�:,' � ' � . . ' . • . . ' . �� . Northern States Power Company (Minnesota) Steam Utility - City of St, Paul � OPERA.TING REVENUES, OPERATING EXPENSES, TOTAL AVAILABLE FOR RETURN, RETURN ON NET OPERATING . INVESTMENT WITH PRESENT AND INTERIM RATES � (Dollars in Thousands) 1977 Actual 1977 With (Normalized) Proposed Rates Revenues $ 2 690 $ 3 148 Expenses 2 645 2 861 Total Available for Return [�,5 287 � 6iverage Net Operating Investment 3 478 3 478 Rate of Return on Average Net Operating Invesement 1.29% 8.25% Return on Common Equity 1p,�2% . ��EXEiI BIT B" . � _ . l � �' � � , . . • � �R� �,� �' y 5.�a�.. P� ��i CiTY °, CITY OF SAINT PAUL oa� '.� OFFICE OF THE CITY ATTORNEY r° ,I ^� HARRIET LANSING, CITY ATTORNEY ... George Latimer Ciry Hall,Saint Paul,Minnesota 55702 612-298-5121 Mayor April 27, 1978 President and Members of the City Council Northern States Power Company (hereafter referred to as "Company") , filed a request with the City Council on November 18, 1978, asking that the Council grant an 18. 1� increase in its rates for steam heating. The Council authorized an interim rate increase of 12. 4� effective December 18, 1978, on condition that the Company make refunds in the event the rate increase is denied. The Council further directed that the City Attorney's office investigate the rate increase request and subm�,t a report and recommendation to the Council. In its application, the Company estimated that it would earn 3.37� return on its investments based on nine months actual earnings and expenses, and three months estimated earnings and expenses, and based on its existing rates. Subsequent to the November 18th fil- ing, the actual earnings and expenses have been made available for the calendar year 1977, and the Company suffered an operating loss of $245,000. The Company explains this loss as caused by abnormally warm weather conditions during that twelve month period. Further investigation discloses that utilizing 1977 actual operations but substituting normal sales levels and fuel expenses to produce these sales, the 1977 operations would produce a 1. 29� rate of return and the applicata.on o� the interim rates would have produced a 6. 17$ rate of return in the event such interim rates had been in effect dura.ng the entire year. (See attached "Exhibit A") . I am of the opa.nion that actual earnings and expenses �or the test year should be used, rather than estimated earnings and expenses. 2 also agree that these items should be normalized, that is, the figures should be adjusted to equal what t$iey would be in a normal season. This adaustment has been computed by the Company and is reflected in the exhibits. �* �� President and Members of the City Council Page Two April 27, 1978 I have reviewed the Company' s filings, and have obtained additional information concerning the accounts maintained by the Company. I am satisfied that the accounts maintained by the Company are complete for the purpose of explaining all items of expense charged to the steam facility. With the exception of administrative utility, I have accepted all the earnings and expense items presented by the Company. Concerning administrative and general expense allocations of the Saint Paul division and the general offices of the main division, I have applied a farmula different than that applied by the Company. The Company' s allocation formula is based upon revenues and invest- ments of the divisions in comparison to the steam utility. I have used a formula applying these relative figures as well as the relationship of the number of customers, and by doing so have reduced the administrative and general expense allocation to the Saint Paul steam heating utility by the sum of $17,000. The rate of return on average net operating investment of the Company requested in the original filings was 9. 50� based on an 18. 1� increase in rates. I recommend that the Council grant a rate increase equal to 17. 3� , an amount that would generate 8. 25� rate of return on the Company's net investment. This increase in rates would generate $402,000 additional revenue, and is illustrated on the attached "Exhibit B" . This compares with the Company' s reauest for an additional $458,000 of revenue. During my investigation I met with representatives of the Building Owners and Managers Association, they expressed concern that the Company may not be operating the steam utility in the most efficient manner. In particular they felt that steam could be used by more buildings for cooling during the summer, and that this would have the effect of reducing the fixed costs on the heating customers. I did not explore this question during my investigation of the Company's filing, and would suggest that the Energ_y and Utility Committee of the Council may wish to treat this matter separately at future meetings. I wish to call the attention of the Council to the fact that of all expense items of the steam utility, administrative and general expenses and fuel costs have risen more so than others. Fuel costs in 1975 were $654,000 and in 1977 they were $1,006,000. Adminis- trative and general expenses increased from $142 ,000 in 1975 to $206, 000 in 1977. I suggest that the Company be required to submit President and Members of the City Council Page Three April, 27, 1978 explanations in the future as to how it can maintain these costs at a level consistent with the fact that it is not adding addition- al capacity to its system. (See attached "Exhibit C") . The Public Service Commission recently granted an increase to the Company for its electric utility equal to 12. 66� return on common equity, or about 9� return on average net operating investment. This compares with my recommendation for an 8. 25o rate of return. If the 1977 test year operations for steam were to produce financial results equal to the return on equity capital granted by the State Public Service Commission, the rate increase would have to be $520 ,000 additional revenue or an increase of 20. 5$ over present steam heating rates. (See attached "EXHIBIT D") . I would like to call your attention to the fact that at the present time the franchise fee or surcharge is about 8. 7$ of the earnings of the Company. 2 would like to recommend that the Council favorably consider amending the franchise ordinance so as to estab- lish the fee at a straight 8g. This reduction in fee would not reduce the amount of fee received by the City from the steam utility franchise because of the inereased rates granted. It would, however, have the effect of reducing the rates actually paid by the consumer. The Company proposes to change their present method of handling of the surcharge by separately itemizing it on their statements. Therefore, the proposed rates attached to the recommended ordinance shows the surcharge as an item separate from the rates. I recom- mend that the Council approve this method as it will clearly identify the charges made by the City and show as a separate item the rates charged by the Company. I recommend that the Council adopt the attached ordinance allow- ing an increase of rates for steam utility services as shown on the Attachment A of the ordinance, and that the Council schedule a hearing on these rates for Thursday, May 11, 1978, after giving the required 10 day published notice of the hearing. Res' ctful y s bmi ted, J. Assi tant Ci y A t rney JJS: g , ' , .- ' ;��q�� Northern States Power Company (Minnesota) Schedule C Steam tr�i�ity - city of St. Paul COMPARISON OF PRESENT AND pROPOSED RATES Test Year 1977 Rate Prior TQ Proposed ].2/18/77� Rate�-� FIRM SERVICE Monthly Minimum Charge $20.00 $20.00 First 200 M Lbs, per M Lb per Month 7.51 g�Zp Next 300 " " 6.81 7.35 Next 500 " " 6.01 6.48 Next 2 000 " " 5.46 5.89 Excess " " 4.86 5.25 . INTERRUPTIBLE SERVICE Monthly Minimum Charge $20.00 $20.00 All Use, per M Lb per Month 4.06 3.74 Fuel Adjustment Included in Above Rates: $ 0,660 $ Q.000 * Including 8.7% Gross Earnings Fee �* Subject to Gross Earnings Fee "EXFiIBIT D° . , : , - _ � � : . � � � � � � �. . � . . .. . / . �� I r . - �� . �� / �. . � � . . . - � . , . ! �� . .. , � � . . . � . . . . . . � . \ ' � � . . � . . � � � � � � � , . . . . � � ., ---- .. t . , � . . , � . . . � " . . - .. . . . . . . . . . � - . , . . . . . � .... � . • . . - . . . � �� . , � . ' . � „ . /. � .� . . . . . . . . , ♦. .. . . . . . . � . � . ' , - . . . , . . . . . . , IJOVeID�7@�r' 22� 19�7 - . , Gon�cilman Patriak Rqedles, Chai�aan , �aesgg, L'ti1lt��s and 8nvirantaent Co�nitt� . � �oo� 713, City Hal� _ , SC. Pau3., l�iinuesoL�s D�ar Couaa3lr.� Rosrller: . . .Ttte City. Council referred ta ttte_EnerF;y, IILf13t:Les and -3�avl.rcxime�t t',otmatttee �or consideration aad reoomm�ndatioc� a'Ietter of ^iorthern 3tate,s l�o�rer Cam�a�� , petitioning .the, cit3� ta reviCew tt�c co�panys steam ut3lit�r=�ope�'s�ion aad� to . p�saribe new a�nd reaeonable rates for servj.c�� n �nd �.i?ter �Jec�nber I8, 1977. ; � Veryr trulp qours, � , . C3ty C1erk ' , \ . . _ ABO:dar , � � ; � , ` � "- � . � q 1 . , � � • 1 � • � rTsp N O R T H E R N 5 TA T E 5 P O W E R C O M P A N Y 360 WABASHA STREET • THIRD FLOOR SAINT PAUL, MINNESOTA 55102 BRUCE A. RICHARD (��7 VICE PRESIDENT AND REGIONAI. MANAGER November 1H� 17 / 7 The Honorable Mayor and Council of the City of St . Paul City Hall and Court House St . Paul , Minnesota 55102 Gentlemen: Northern States Power Company, in providing steam heat utility service in the City of St. Paul , finds that it must file for an increase in rates . Our efforts to control expenses have been offset by the increasing costs of labor , materials and supplies , interest and other operating expenses , and the return on our investment has dropped to an unreasonably low level. NSP , pursuant to Section 7 of Ordinance No . 15742 , petitions the Council of the City of St. Paul to review the Company ' s steam utility operation and to prescribe new and reasonable rates which the Company may charge for service for bills based on meter readings on or after December 18 , 1977 . Attached is our proposed schedule of rates which inc.rease our revenues about $458 ,000 per year based on 1977 sales . Also attached are sche- dules which support the operating revenues and expenses and the in- vestment in plant in service for the steam heating utility in 1977 . All schedules enclosed herein reflect a 1977 test year based on nine months ' actual data and three months ' budget data. We would appreciate your earliest consideration of this application enabling us to continue providing quality steam heating service to our customers . Respectfully submitted, • �--� Vice President and Regional Manager BARichard/dm enclosures • . . ' . , • , Northern States Power Company (Minnesota) Schedule 1 , Steam Utility - City of St Paul Proposed Steam Service Rate Effective In The City of St Paul Availability Available to commercial and industrial custamers for general us.e of steam service. Steam service furnished fram low pressure mains is available from September 1 tb May 31, inclusive; and steam service furnished from high pressure mains is available the entire year. Rate First 200 000 lbs of condensate per month @ $8.87 per 1000 lbs Next 300 000 " " " " " @ 8.04 " " " Next 500 000 " " " " " @ 7.10 " " " Next 2 000 000 " " " " " @ 6.45 " " " Excess " " " " " @ 5.74 " " " Prompt Payment Provision A charge of 5% will be added to net bill, computed at the Rate shown above, which charge shall constitute a discount fram gross bill for payment within the discount period. Monthly Minimum Charge $20.00 net per meter. Fuel Clause There shall be added to or deducted fram the net monthly bill, 2.2G per thousand pounds of steam for the first whole one-half cent increase above or decrease below $1.048 per million Btu and for each whole cent change thereafter in the average cost of fuel used during the preceding twelve months by the Steam Production plant of Northern States Power Campany supplying steam to its St Paul distribution system and shall include the costs in FPC Account 501 - Fuel for such Steam Production plant. . . • . Northern States Power Company (Minnesota) Schedule 2 , Steam Utility - City of St Paul Page 1 of 2 Proposed Interruptible Steam Service Rate Effective In The City of St Paul Availability Available on an interruptible basis to commercial and industrial custamers that are located on portions of the Campany's steam distribution � system having adequate capacity to serve custamer's interruptible load without impairingserviceto other customers. Extensions or enlargement of the Company's distribution facilities required to serve an interruptible load will be made in_ accordance with the Company's General Rules and Regulations. The total capacity of all Interruptible custamers shall be limited to the excess capacity of Campany's Steam Production Plant after s,ervice requirements to its firm customers are met. Customer will agree to (1) curtail his use of steam whenever requested to do so by the Campany; and (2) provide necessary energy requirements during curtailment from another source. This rate will be in effect cammencing with the meter reading of October and ending with the meter reading of May of the following year. During the meter reading months of June through September, steam service will be available under the Steam Service rate in effect at that time. Character of Service The delivery of steam hereunder shall be curtailed upon request of Campany. Such requests shall be made as far in advance as possible. Rate Per 1 000 lbs $4.06 Fuel Clause There shall be added to or deducted fram the net monthly bill, 2.2� per thousand pounds of steam for the first whole one-half cent increase above or decrease below $1,048 per million Btu and for each whole cent change thereafter in the average cost of fuel used during the preceding twelve months by the Steam Production plant of Northern States Power Company supplying steam to its St Paul distribution system and shall include the costs in FPC Account 501 - Fuel for such Steam Production plant. Additional Charge for Use of Steam During Curtailment If customer fails to curtail his use of steam when requested to do so by Company, he shall pay in addition to' the above Rate an amount of $13.00 per thousand pounds of steam used in excess of the volume to which custamer was requested to curtail. Such payment, however, shall not preclude Company from shutting off customer's supply of steam in the event of customer's failure to curtail his use thereof when requested to do so. Northern States Power Campany (Minnesota) Schedule 2 . Steam Utility - City of St Paul Page 2 of 2 Proposed Interruptible Steam Service Rate Emergency Steam Service for Interruptible Steam Customers Emergency Steam Service for Interruptible steam custamers during periods of curtailment may be available if Campany's ability to furnish such emergency service will not, in Campany's judgment, compromise Company's ability to provide firm steam service. to its firm steam custamers. Emergency Steam Service to curtailed Interruptible steam customers will be approved hy Company provided: (1) Emergency Steam Service is requested by customer and such request is confinned in writing no later than 48 hours after the initial request. If the initial request is in writing, the 48 hour provision is fulfilled. (2) The emergency is in the nature of a breakdown of standby equipment which could not reasonably have been foreseen by custamer. The rate for Emergency Steam Service shall be $9.00 per 1 000 pounds of steam used auring the emergency period. The emergency period shall end when customer's standby equipment is repaired and customer has notified Campany or the end of the curtailment during which the Emergency Steam Service was requested. Prompt Payment Provision A charge of 5% will be added to the net bill, camputed at the Rates shown above, which shall constitute a discount fram gross bill for payment within the discount period. Manthly Minimum Charge The minimum bill for service rendered hereunder shall be $20.00 per meter, the amount prorated for curtailment pe riods. Term of Agreement Interruptible Steam Service Agreement shall be for a tenn of not less than one year. Upon expiration of the tern►, Agreement remains in effect until terminated by at least thirty days' notice by either party. . . : . Northern States Power Company (Minnesota) Schedule 3 . Steam Utility - City of St Paul � COMI'ARISON OF PRESENT AND PROPOSED RATES Test Year 1977 Present Proposed FIRM SERVICE Monthly Minimum Charge $20.00 . $20.00 First 200 M Lbs, per M Lb per Month 7.51 8.87 Next 300 " " 6.81 8.04 Next 500 " " 6.01 7.10 Next 2 000 " " 5.46 6.45 Excess " " 4.86 5.74 INTERRUPTIBLE SERVICE Monthly Minimum Charge $20.00 $20.00 All Use, per M Lb per Month 4.06 4.06 Fuel Adjustment Included in Above Rates: $ 0.660 $ 0.000 Northern States Power Company (Minnesota) Schedule 4 Steam Utility - City of St. Paul COMI'ARISON OF MONTHLY BILZ ON PROPOSED VS. P'RESENT RATES Teat YB�r 1977 � Monthly Monthly Billing Use Present Proposed Increase Firm Steam Service M Lbs Rate Rate Amount Percent 10 $ 75.10 $ 88.70 $ 13.60 18.1 50 375.50 443.50 68.00 18.1 100 751.00 887.00 136.00 18.1 200 1 502.00 1 774.00 272.00 18.1 300 2 183.00 2 578.00 395.00 18.1 500 3 545.00 4 186.00 641.00 18.1 1 �000 6 550.00 7 736.00 1 186.00 18.1 � 2 000 12 010.00 14 186.00 2 176.00 18.1 3 000 17 470.00 20 636.00 3 166.00 18.1 4 000 22 330.00 26 376.00 4 046.00 18.1 5 000 27 190.00 32 116.00 4 926.00 18.1 7 500 39 340.00 46 466.00 7 126.00 18.1 Fuel Adjustment � Included in Rates: $/MLb 0.660 0,000 RVM 11-15-77 • Northern States Power Company (Minnesota) Schedu.le 5 Steam Utility - City of St. Paul OPERATING REVENUES, OPERATING EXPENSES, TOTAL AVAILABLE FOR RETURN, RETURN ON,NET OPERATING INVFSTMENT i�FITH PRESENT AND PROPOSED RATES (Dollars in Thousands) ` 1977 With 1977 With Present Rates Proposed Rates Revenues $ 2 690 $ 3 148 Expenses 2 572 2 815 Total Available for lteturn 118 333 Average Net Operating Investment 3 504 3 504 Rate of Return on Average Net Operating Investment 3.37% 9.50% Note: 1977 is based on 9 months actual and 3 months budget. � Northern States Power Company (Minnesota) Schedule 6 Steam Utility - City of St. Paul INCOME STATEMENT (Dollars in Thousands) . 1977 at Proposed 1977 at Present Rates Increase Proposed Rates Operating Revenue Metered Sales Firm $ 2 327 $ 421 $ 2 748 Interruptible 143 143 Forfeited Discounts 5 5 Gross Earnings Tax 215 37 252 Total 2 690 458 3 148 Operating Expenses Production Fuel 1 Oi9 1 019 Other Than Fuel 631 631 Distribution 101 101 Customer Accounting 7 7 Administrative and General 176 176 Taxes: Real Estate & Personal Property 136 136 Gross Earnings 215 37 252 Social Security & Other 21 21 Federal and State Income 0 206 206 Deferred Income 44 44 Provision for Aepreciation 222 222 Total Operating Expenses 2 572 2 815 Net Operating Income 118 333 Percent Increase on Firm Sales 18.1% Note: 1977 is based on 9 months actual and 3 months budget. . , �- . Northern States Power Company (Minnesota) Schedule 7 Steam Utility - City of St. Paul NET OPERATING INVESTMENT (Dol2ars in Thousands) Average Year 1977 Plant in Service Production $ 5 661 � Distribution 1 201 General 9 Total 6 871 Reserve for Depreciation Production 2 205 Distribution 454 General .5 Total 2 664 Net Plant in Service 4 207 Deduct: Accumulated Deferred Income Taxes 703 Net Operating Investment 3 504 Note: 1977. is based on 9 montlis actual and 3 months budget. Z ? o9b � rTsp NORTHBRN STATES POWER COMPANY MINNEAPOLIB, MINNESOTA SS401 June 2, 1978 To the Honorable Mayor and Members of the City Cou�cil Saint Paul, Minnesota Gentlemen: The undersigned, Northern States Power Company, does hereby accept and agree to abide by, keep and perform all of the terms, limitations, conditions and provisions of Council File No. 270961, being Ordinance No. 16440, amending NSP' s steam utility franchise which was adopted by the Council on May 18, 1978, and approved by the Mayor on May 19, 1978. NORTHERN STATES POWER COMPANY � 3 By '�'��k:.�c.c-t�.-� �- r General Manager St. Paul Division APPROVED AS TO FORM: And �! Assi tan Secretary City A ey , ` � � � ist � 2nd �/�/ 3rd s Adopted _—�j � . Yeas Nays BUTLER HOZZA t � �-- HUNT ��F• � � � � �� ! � - ROEDLER.__ �{ �3 S � � TEDESCO � PRESIDENT (SYLVESTER) � x . 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