08/14/2001 Ordinances 8687
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ORDINANCE NO. 8687
An ordinance to relating to the schedule of rates for the sale of natural gas in the
City of Grand Island, Nebraska; to repeal any ordinance or parts of ordinances in conflict
herewith; and to provide for publication in pamphlet form and the effective date of this
ordinance.
WHEREAS, NorthWestern Public Service ("NorthWestern"), a division of
NorthWestern Corporation, a Delaware corporation doing business in the State of Nebraska as a
domesticated corporation, is a utility as defined by 19-4602(16) of the Municipal Natural Gas
Regulation Act (the "Act"), maintaining and operating natural gas distribution systems in the
Cities of Grand Island, Kearney and North Platte and in the Village of AIda, all in the State of
Nebraska (the "Cities").
WHEREAS, on April 30, 2001, pursuant to a November 2, 1999 Settlement
Agreement (the "1999 Settlement") among NorthWestern and the Cities, NorthWestern filed
information related to an annual rate of return on common equity realignment mechanism ("ROE
Realignment"), approved in such 1999 Settlement, which filing requested an annual increase in
its retail rates for natural gas of $637,027 or 1.20%, in order to meet the calculated revenue
requirement.
WHEREAS, effective with a filing date of May 1, 2001, NorthWestern presented
to the Cities copies of present and proposed rate schedules and information supporting the ROE
Realignment, as required by the 1999 Settlement and provided notice of its proposed rate
increase, pursuant to 19-4615 of the Act.
WHEREAS, representatives of NorthWestern and the Cities have met and
discussed the rate filing, have exchanged information and have engaged III settlement
Approved as to Form T ~
August 7, 2001 .a. City Attorney
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ORDINANCE NO. 8687 (Cont.)
discussions. Following such settlement discussions, NorthWestern filed an amendment to its
filing. Such discussions, and the amended filing made by NorthWestern, have culminated in a
proposed Settlement Agreement, which was presented at the rate hearing held on August 2,
2001.
WHEREAS, under the terms of the Settlement Agreement, NorthWestern will
receive an increase in annual revenues of$40l,378.
WHEREAS, the Settlement Agreement and adoption of the proposed rate
ordinance will result in just and reasonable rates for NorthWestern's customers in the Cities, and
such Settlement Agreement is consistent with the terms and conditions of the 1999 Settlement,
the ROE Realignment mechanism, and Nebraska law.
Based on these findings, the City Council of the City of Grand Island, Nebraska, hereby
concludes as a matter of law:
(1) NorthWestern has followed all of the statutory mandates of the Act in presenting its
request for a change in rates to the Cities, through a realignment of the annual rate of return on
common equity.
(2) The proposed settlement and the proposed rate ordinance will result in just and
reasonable rates for NorthWestern's customers in the Cities, and the proposed rate ordinance
should be adopted by the Cities.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL
OF THE CITY OF GRAND ISLAND, NEBRASKA:
SECTION 1. Rates. The rates charged by NorthWestern for natural gas supplied
to customers in the City of Grand Island, Nebraska, unless otherwise approved by the Mayor and
City Council, shall not exceed the following, effective August 1, 2001:
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Approved as to Form T ~
August 7, 2001 .... City Attorney
I ORDINANCE NO. 8687 (Cont.)
Customer Charge per Month
Residential Service Rate No. 91 $5.00 per Meter
General Service Rate No. 92 $6.00 per Meter
Commercial & Industrial Rate No. 94 $80.00 per Meter
Usage Charge - Rate No. 91 Non-Gas Gas
First 30 Therms per month $0.26356 $0.70271 per Therm
Over 30 Therms per month $0.09513 $0.70271 per Therm
Usage Charge - Rate No. 92
First 400 Therms per month $0.12101 $0.70271 per Therm
Next 1,600 Therms per month $0.05343 $0.70271 per Therm
Over 2,000 Therms per month $0.03243 $0.70271 per Therm
Usage Charge - Rate No. 94
All Therms per month $0.04530 $0.47232 per Therm
Demand Charge - Rate No. 94
Standard Service (all Therms) $0.21910 $1.20470 per Therm
Extended Service
I First 500 Therms/day $0.24590 $0.33330 per Therm
Over 500 Therms/day $0.00000 $0.33330 per Therm
Minimum Monthly Charge:
Shall equal the customer charge for Rate Nos. 91 and 92.
Shall equal the amount of therms of demand billed and
the customer charge for Rate No. 94.
Stand-by Capacity Charge
For Rate 91 and 92 customers that use natural gas as a back-up to an alternative fueled
heating system, NorthWestern shall charge, in addition to the charges stated above, the
following stand-by fee during the months of December through March:
Rate 91
Rate 92
$12.00 per Meter
$37.00 per Meter
Bills will be rendered at monthly intervals.
SECTION 2. Gas Cost Adjustment. The foregoing rates for gas supplied in the
period covered by any bill shall be increased or decreased from the foregoing schedule of rates as
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follows:
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Approved as to Form T
August 7, 2001 ... Ci y Attorney
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ORDINANCE NO. 8687 (Cont.)
(a) If at any time or from time to time, the rate authorized to be charged NorthWestern
for any natural gas purchased by it on a firm supply basis for resale in Nebraska shall be
increased or decreased (whether or not charged under bond) resulting in an average cost per
therm to NorthWestern in excess of or less than the average cost per therm prior to application of
such increase or decrease, the charge per therm, including the amount that is included in the
minimum bill, for gas supplied in each subsequent billing period (beginning not earlier than the
effective date of such increase or decrease) may be increased or shall be decreased accordingly.
In addition, gas cost variances resulting from the purchase of non-traditional supplies will be
added or deducted from charges set forth in filed rates included herein.
(b) For the purposes hereof, the amount of any refund, including interest thereon, if any,
received by NorthWestern from its supplier of charges paid and applicable to natural gas
purchased on a firm basis in Nebraska shall be refunded to the customer as a reduction in billings
over the succeeding twelve month period or other period determined appropriate.
(c) Variances in actual gas cost incurred and gas cost recovered through unit sales rates
will be measured monthly. Gas supply related costs collected from NorthWestern's Agency
Sales Service will be credited to actual gas cost incurred. Resulting under or over cost recoveries
will be spread to gas cost component of rates over the succeeding twelve month period following
the filing of any gas cost adjustment. All accrued over or under variances shall be assessed a
carrying charge which shall be the overall rate of return allowed by the Rate Area in
NorthWestern's last general rate filing.
(d) Any increase or decrease III rates because of gas cost adjustment hereinbefore
provided for shall become effective immediately upon the filing with the city clerk of the City of
Grand Island of amended rates reflecting such increase or decrease.
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Approved as to Form T ~
August 7, 2001 ... City Attorney
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ORDINANCE NO. 8687 (Cont.)
SECTION 3. Rate of Return Realignment Mechanism. The rates charged under
this Ordinance will include an annual rate of return on common equity realignment mechanism
("ROE Realignment") which shall be subject to review by the City. Under such mechanism,
NorthWestern will file information with the City on or before April 30th based upon calendar
year 2001 (that calendar year and each succeeding calendar year being a "Test Year") and on
each anniversary of such date, which information is based upon the immediately preceding
calendar year and will be filed in compliance with the following guidelines:
(a) The filing will be made in a manner consistent with normal ratemaking practices,
except as required by law or to provide filing information in a manner consistent with changes in
similar filings required by the South Dakota Public Utilities Commission for NorthWestern's
filings in that State;
(b) The filing will update NorthWestern's cost of servIce, showing increases and
decreases by cost of service category and the rate of return on common equity earned by
North Western. Further, NorthWestern will file supporting workpapers that detail the significant
drivers of cost changes from the immediately preceding filing.
(c) The Weighted Cost of Capital, used in calculating the revenue requirement, shall be
calculated based upon data as of March 31 st immediately following the Test Year;
(d) Late Payment Charge revenue shall reflect a three-year average for the three years
ended as of December 31st of the Test Year; and
(e) The economic development contribution and recovery of $86,000 per year to the City
will be calculated through a true-up mechanism to ensure that the amounts recovered from and
after October 1, 1999 equal to the amounts allowed in cost of service pursuant to the 1999
Settlement.
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Approved as to Form ,. (;(J(J"
August 7, 2001 .. City Attorney
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ORDINANCE NO. 8687 (Cont.)
SECTION 4. Ordinances governing natural gas rates for NorthWestern and all
other ordinances and parts of ordinances in conflict with this ordinance are hereby repealed.
SECTION 5. When any municipality or other taxing authority imposes a
franchise, occupation, business, sales, service, license, excise, privilege or similar tax of any kind
on NorthWestern, the amounts thereof, or insofar as practical, shall be charged on a pro rata
basis to all applicable customers receiving gas service from NorthWestern within the
municipality. This charge, in all cases, will be in addition to the regular charges for gas service.
Where such tax is levied on a percentage of gross receipts, from customers or a class of
customers, that percentage will be applied to each affected customer's bill, and the amount so
computed will be added to such bill. The amount of the tax charged to each affected customer in
each billing period may be shown as a separate item on the customer's bill and identified as such.
SECTION 6. This ordinance shall be in force and take effect from and after its
passage and publication in pamphlet form, within fifteen days in one issue of the Grand Island
Independent as provided by law.
Enacted: August 14, 2001.
Attest:
Qf\CQ CC~Qlu~
RaNae Edwards, City Clerk
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Approved as to Form T C-P"
August 7, 2001 ... City Attorney