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HomeMy WebLinkAboutORD 2025-33 - Amending Code Section 13.04.046 related to Very Large Commercial and Industrial Service RatesORDINANCE NO. 2-OZ5 '33 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, AMENDING SECTION 13.04.046 OF THE CODE OF ORDINANCES RELATED TO VERY LARGE COMMERCIAL AND INDUSTRIAL ELECTRIC SERVICE RATE; REPEALING CONFLICTING ORDINANCES AND RESOLUTIONS; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR PUBLICATION; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City of Georgetown periodically reviews and adjusts its electric service rates; and WHEREAS, the City Council previously established a Very Large Commercial and Industrial (VLC&I) electric service rate class to appropriately recover the cost of service associated with the City's VLC&I electric customers; and WHEREAS, the current VLC&I electric rate includes provisions requiring a binding energy forecast, which has proven difficult for VLC&I customers to comply with; and WHEREAS, the City Council desires to consider amendments to the VLC&I rate structure to enhance customer flexibility and reflect the true cost of providing electric service to VLC&I customers; and WHEREAS, the proposed amendment would repeal certain existing provisions related to the binding energy forecast, adds a demand ratchet, the option for customers to provide a parental guarantee as performance assurance, caps the rate class at 50 MW and would introduce a volumetric rate rider to be applied on top of the existing VLC&I rate; and WHEREAS, the proposed VLC&I Energy Rate Rider would be adjusted periodically to reflect the Electric Utility's net cost of hedging power supply for these customers; and WHEREAS, the rate rider may appear as an additional charge based on actual costs and market projections, ensuring the equitable recovery of power supply costs from VLC&I customers without impacting other electric rate classes; and WHEREAS, the City Council of the City of Georgetown finds that amending the very large load commercial and industrial electric service rate is in the best interest of the City. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, THAT: Section 1. The meeting at which this ordinance was approved was in all things conducted in compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 2. The facts and recitations contained in the preamble of this ordinance are hereby found and declared to be true and correct and are incorporated by reference herein and expressly made a part hereof, as if copied verbatim. Section 3. Section 13.04.046 of the Code of Ordinances is hereby amended and replaced as shown in Exhibit A. Section 4. If any provision of this ordinance or application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions, or application thereof, of this ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are hereby declared to be severable. Section 5 That all ordinances that are in conflict with the provisions of this ordinance be, and the same are hereby, repealed and all other ordinances of the City not in conflict with the provisions of this ordinance shall remain in full force and effect. Section 6. The Mayor is hereby authorized to sign this ordinance and the City Secretary to attest. This Ordinance shall become effective and be in full force and effect on July 1, 2025, in accordance with the provisions of the Charter of the City of Georgetown. PASSED AND APPROVED on First Reading on the jjjL'*"-day of S wy�L , 2025. PASSED AND APPROVED on Second Reading on the Z of ATTEST: THE CITY OF GEORGETOWN By: Robyn De more, City Secretary Josh Schroeder, Mayor APPROVED AS TO FORM: Skye Afasson, City Attorney EXHIBIT "A" Sec. 13.04.046. Very Large Commercial & Industrial (C&I) Service. A. Availability. Applicable to very large commercial and industrial customers whose Installed Capacity is greater than 10 MW but less than 51 MW. Service rendered under this rate is subject to the City's Rules and Regulations, provided that Section 13.04.230 shall not apply. All customers eligible for this rate schedule must also enter into an electric service agreement with the City ("Electric Service Agreement"). "Installed Capacity" means the maximum allowed distribution infrastructure capacity designed, installed, and allocated for a customer based on their specified load requirements, including peak demand and energy needs. This capacity ensures sufficient distribution infrastructure to meet peak demand under normal operating conditions. B. Energy Forecast. By the 1 Oth of each month prior to and after beginning service, Customer must submit to the City an energy forecast of its projected energy usage for the following 6 months. This energy forecast is a projection of the future forecasted energy consumption by Customer and shall be in the form of an hourly energy profile of expected energy consumption (kWh) for each hour of the following 6 months. C. Failure to Submit Energy Forecast. Any Customer who fails to submit an Energy Forecast when due shall be subject to interruption or termination of electric service, and any other remedies available to City under its Rules and Regulations. In addition, the City shall have the right to forecast Customer's projected energy load for the Energy Forecast term, subject to other provisions in this Section 13.04.046. D. Invoices. Invoices are due and payable immediately upon receipt and considered late if not paid within 7 days after receipt. The City can immediately apply any cash Prepayment Amount (defined below) or draw on any letter of credit provided by Customer for any late or unpaid amounts owed to the City by the Customer, or take any other action provided for under the City's Rules and Regulations. E. Prepayment Amount. Prior to activation of electric service, Customer shall provide to the City a minimum cash prepayment amount ("Prepayment Amount") equal to three (3) months of the highest projected total cost of energy deliveries pursuant to the Electric Service Agreement and this rate schedule, including the Customer Charge, Energy Charge, Billed Demand, Power Cost Adjustment, Energy Rate Rider, Transmission Delivery Cost Adjustment, and any other authorized charges. The Billed Demand shall be calculated pursuant to Section O below, the applicable Billed Demand multiplied by three (3) months or such additional period of time as the City may require ("Prepayment Term"). The City shall apply the Prepayment Amount monthly to Customer's invoice for electric service, and Customer shall pay any amounts owed to City in addition to the Prepayment Amount and replenish the Prepayment Amount each month equal to the amount of the then -current Prepayment Amount for the then -current Prepayment Term. The City reserves the right to require additional amounts above the Prepayment Amount based on the creditworthiness of the Customer, energy market volatility, previous payment defaults, or business history of the Customer, each as determined by the City in its sole discretion. Any Prepayment Amounts under this Section 13.04.046 (Very Large Commercial & Industrial Service) shall not bear interest and shall be applied to each invoice and replenished by Customer in accordance with this subsection (E). The Prepayment Amount shall remain in place until December 31" of the year following the year of the termination date, and Customer's payment in full to City of verifiably documented charges attributable to providing the Service prior to termination of this Agreement, including but not limited to demand charges assessed by ERCOT for usage during peak demand periods. . F. Credit Support. In addition to the Prepayment amount in Section E, Customer shall also provide Performance Assurance pursuant to Section G herein in an amount equal to or greater than 3 months of the projected revenues to City based on the highest three months of Customer's Energy Forecast. The Performance Assurance shall remain in place until December 31s` of the year following the year of the termination date, and Customer's payment in full to City of verifiably documented charges attributable to providing the Service prior to termination of this Agreement, including but not limited to demand charges assessed by ERCOT for usage during peak demand periods. G. Performance Assurance. Customer shall provide to the City either an unconditional irrevocable letter of credit ("Letter of Credit") or a form of guarantee approved by City ("Parental Guarantee") Letter of Credit and Parental Guarantee are collectively referred to as "Performance Assurance.". Both the Letter of Credit and the Parental Guarantee must: (1) be made payable to the City; (2) require at least 60 days written notice to the City upon non -renewal or termination; and (3) allow for immediate draw by the City for the non- payment of any invoice by the due date or any other payment default by Customer. In the event the City applies all or part of the Performance Assurance related to any late payment or non-payment by Customer, or any other payment default by the Customer, the City may immediately request additional Performance Assurance from Customer in order for the continuance of electric service by the City. The Letter of Credit shall comply with Texas Business and Commerce Code §5.106 issued by a bank or financial institution with a minimal credit rating of A- from either S&P or Fitch, or a minimal rating of A3 from Moody, and that has a physical location or address in the United States in which the Letter of Credit can be drawn, and that is otherwise acceptable to the City in its sole discretion. The City reserves the right in its sole discretion to require an increase in the amount of the Letter of Credit, including but not limited to an increase based on market volatility, creditworthiness of the Customer, previous payment defaults, or business history of the Customer. ii. A Customer may only provide a Parental Guarantee if the corporate, or other entity, providing such guarantee has an investment grade rating at least one notch above Baa3 by Moody's, BBB- by S&P Global or BBB- by Fitch Ratings. In the event that the entity proving the Parental Guarantee drops below investment grade, Customer must replace the Parental Guarantee with a Letter of Credit within two (2) business days. The City reserves the right in its sole discretion to require an increase in the amount of the Parental Guarantee, including but not limited to an increase based on market volatility, creditworthiness of the Customer, previous payment defaults, or business history of the Customer. H. Equipment. Customers under this Rate Ordinance shall also be responsible for all the costs including but not limited to the cost of any and all additional equipment that the City's City Manager, City's General Manager of Electric Utilities ("General Manager") or each of their respective designees, determines is needed, including but not limited to advanced metering equipment, to manage the Customer's energy load and usage to ensure reliable energy service to all customers of the City. I. Curtailment Events. Customer understands and agrees that it has no guarantee of an uninterrupted supply of power. City shall have the right to curtail or interrupt delivery of energy to Customer (i) in response to curtailment instructions from ERCOT as a result of imminent system reliability need; (ii) during periods of Force Majeure (defined herein); (iii) during unplanned outages, including failure of transmission or distribution facilities or other equipment, partial or complete forced outage, breakage of or damage to machinery or equipment, or (iv) during planned outages as agreed by City and Customer ("Curtailment Event"). "Force Majeure" means an event or circumstance which (i) prevents a party from performing its obligations under this Rate Ordinance, (ii) which event or circumstance is beyond the reasonable control of such party, (iii) was not reasonably foreseeable by such party, or if reasonably foreseeable could not have been overcome with the exercise of due diligence, (iv) is not the result of such Parry's negligence or fault, and (v) which by the exercise of due diligence, such Party is unable to overcome or avoid or cause to be avoided. If Customer is notified of a Curtailment Event and fails to comply with the Curtailment Event directives received from City, Customer shall be liable to City for any uplift charges, securitization charges, penalties, fines or any other ERCOT charges related to a Curtailment Event imposed on City (directly or indirectly) as a result of Customer's failure to comply with the Curtailment Event notice, which is in addition to any and all costs and fees for the provision of electric service during the Curtailment Event under this Rate Ordinance and —any and all related ERCOT fees, settlement costs, sub-QSE fees, ERCOT load ratio share charges, ERCOT administration fees, Electric Reliability Organization fees, ERCOT uplifts to Load, ERCOT miscellaneous invoices (collectively, "ERGOT Settlement Amounts"), and any other charges, fees and costs assessed or implemented by any Governmental Authority. "Governmental Authority" means (i) any federal, state, local, municipal, or other government or (ii) any other governmental, quasi -governmental, regulatory or administrative agency, commission, or other authority (including the Texas Attorney General, PUCT, ERCOT, Federal Energy Regulatory Commission, NERC, or Texas Reliability Entity) lawfully exercising or entitled to exercise any administrative, executive, judicial, legislative, police, policy, regulatory, or taxing authority or power. "PUCT" means the Public Utility Commission of Texas. City shall have the right, but not the obligation, to disconnect the electricity supply to Customer to force compliance with the Curtailment Event directives, subject to any shutdown requirements designed to protect the Customer Facilities or the ERCOT grid. Subject to the aforementioned notice and shutdown requirements, City shall have no liability for exercising such right, nor shall Customer be excused from any damages that may arise in the case that City fails to do so. For purposes of clarity, all customers served by City are subject to Curtailment Events. J. Very Large Load Account Set -Up Fee. Prior to the commencement of service, Customer shall pay a non-refundable account set-up fee in the amount of $25,645, which may be updated from time to time by the City, for installation of ERCOT EPS meter(s) and any other initiation, installation, or other fees levied by ERCOT or otherwise incurred by the City as a result of providing energy service to the Customer. K. Monthly Rate. 1. Customer Charge: $5,500 per month 2. Energy Charge: $0.05317 per kWh 3. Demand Charge: $19.25 per kW per month subject to Billed Demand as outlined in Section O below. L. Power Cost Aduustment. The power cost adjustment charge under the above rate schedule shall be increased or decreased to reflect the application of a power cost adjustment per kWh of energy used, calculated in accordance with Section 13.04.075. M. Energy Rate Rider. In addition to the charges identified in K and L, Customers shall pay the Energy Rate Rider ($/kWh) ("ERR") for all energy consumed. The City Manager, General Manager or their respective designees are responsible for making periodic adjustments to the ERR, which will be based upon two (2) months of actual power supply costs and six (6) months of forecasted future costs to serve the customers in the Very Large Commercial and Industrial Service class and the cumulative ERR account balance. Changes to the ERR shall have the objective of maintaining a positive cumulative ERR account balance. The Energy Rate Rider shall be calculated pursuant to the following equation: FERR = ([(EC + ERR) x TL]-HG/L - FHC — SM —FLH - AS)+(TAB-AAB))/TL Where: FERR = Future Energy Rate Rider rounded to the nearest $.0001 /kWh. In no event shall the FERR be less than zero ($0) EC = Energy Charge for VLC&I class (Currently at $0.05317/kWh) — subject to revision by rate ordinance ERR = Energy Rate Rider in effect for the historical load period TL = Total Load = yn 1 Aggregate VLC&I Energy in kWh adjusted for distribution and transmisson losses. Where n = the number of hours in the eight (8) month calculation period. HG/L = Historical hedge gains or losses = Ei=,(HPi * HVi) + (HVi * (HPi — RTPi )) Where HPi = Hedge price for hour i AU = Actual load for the class for hour i HVi = Hedge volume for hour i RTPi = Real Time Price for the ERCOT South Load Zone FHC = Future Hedge Cost =Y-i= 1 FHVi * FHPi Where: FHVi = Hedged volume in hour i FHPi = Hedge price in hour i SMP = Spot Market Purchases (historic and future) _ i SMP' * LMPi Where: SMPi = spot market purchases in hour i (can be real-time LMP or day -ahead LMP) LMPi = LMP for the ERCOT South Load Zone in hour I LMP means the Locational Marginal Price FLH = Future Load Hedges = En i FLHi * FPi Where:. FLHi = Future forecasted load to be hedged in hour i FPi = Future Price in hour i (for future prices the imputed real-time LMP will be used) FLH and SMP are mathematically the same if there are no future hedge volumes to be traded. AS = Ancillary Service Costs = En 1 ASi * TLi Where: ASi = Historical Ancillary Service Costs in hour i and the forecasted Ancillary Service costs for hour i for future load. TLi = Total Load served, or to be served in hour is TAB = Target Account Balance — the targeted Energy Rate Rider account balance established by the City Manager, General Manager or their respective designees to stabilize the cost of wholesale power to the VLC&I rate class. AAB = Actual Account Balance — the net revenues from the collection of the Energy Rate Rider The ERR (and the FERR above) may not be less than zero. The City Manager, General Manager or their respective designees are responsible for making periodic adjustments to the ERR. N. Ratcheted Demand. In the event that the actual monthly peak demand of the Customer exceeds (i) 80% of the Installed Capacity or (ii) the minimum demand as defined in the Electric Service Agreement, such new higher peak demand shall be used to determine the Billed Demand and shall be applicable for a period of 12 consecutive months from the month in which the highest peak demand is measured ("Demand Ratchet"). O. Billed Demand. The Billed Demand shall be the greater of: i.The measured maximum 15-minute (or 30-minute, as applicable) demand in kilowatts (kW) recorded during the billing period, or ii.The contract minimum demand, if applicable, or iii.The Demand Ratchet, if specified in Section N of this rate schedule. Billed Demand may be adjusted for power factor if the actual power factor falls below the threshold specified in this tariff. P. Transmission Delivery Cost Adjustment. The transmission delivery cost adjustment charge under this rate schedule shall be increased or decreased to reflect the application of a transmission delivery cost adjustment per kWh of energy used, calculated in accordance with Section 13.04.080. Q. Minimum Demand. The Minimum Demand shall be 80% of the Installed Capacity, or as otherwise provided in the Electric Service Agreement between Customer and City. R. Power Factor. If the Customer's power factor during a billing cycle is less than 0.95 lagging, the City may adjust the Billed Demand (kW) by applying a multiplier. This multiplier is calculated by dividing the target power factor (0.95) by the Customer's actual power factor (which is less than 0.95). -The resulting ratio will be multiplied by the Billed Demand for that billing cycle. S. Primary Voltage Discount. Applicability. Applicable to large commercial and industrial customers taking service at primary distribution voltage ("Primary Voltage Customers"). 2. Monthly Demand Discount Rate. Primary Voltage Customers demand rate will be reduced (credited) by $2.11/kW. T. Minimum Bill. The monthly minimum bill amount related to any Customer whose load capacity is between 10 MW and less than 51 MW shall be an amount equal to the sum of the Customer Charge, Energy Charge, Demand Charge, Power Cost Adjustment, Energy Rate Rider, Transmission Delivery Cost Adjustment, and any other authorized charges. U. Sales Taxes. Sales taxes, where applicable, will be charged to Customer in addition to the above rates.