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HomeMy WebLinkAboutStaff Report 186-09TO: FROM: ATTENTION: DATE: SUBJECT: BUDGET FY 2010 -FY 2011 HONORABLE CITY COUNCIL CITY MANAGER FINANCE COMMITTEE MARCH 31, 2009 DEPARTMENT: UTILITIES CMR: 186:09 Utilities Advisory Commission Recommendation that Finance Committee Recommend Council Adoption of a Resolution Adopting a Gas Rate Decrease and Amending Utilities Rate Schedules G-1, G-2, G- 3, G-4, G-6, G-10, G-11, and G-12 RECOMMENDATION Staff and the Utilities Advisory Commission (UAC) recommend that Finance Committee recommend that City Council adopt the attached resolution to: (a) Approve a 10 percent decrease to retail natural gas rates effective July 1, 2009, which will decrease annual revenues by $4.6 million; and (b) Approve the changes to the Gas Utility Rate Schedules G-1, G-2, G-3, G-4, G-6, G-10, G-11, and G-12, as attached. BACKGROUND During the budget processes for Fiscal Year (FY) 2009, a 7.1 percent natural gas revenue increase was approved by the City Council effective July 1, 2008. The Gas Fund's revenue requirement consists of a number of components including: supply purchase costs, distribution system operations, Capital Improvement Program (CIP) projects, funding of the Gas Supply Rate Stabilization Reserve (G-SRSR), Gas Distribution Rate Stabilization Reserve (G-DRSR), Emergency Plant Replacement Reserve, and debt service. Any change in one or more of these components, or a change in retail sales levels, can trigger the need for a rate adjustment. During the budget process, staff forecasts customer revenues and utility expenses in order to quantify the annual revenue requirement. DISCUSSION Revenues and Expenses Table 1 below shows the estimated revenues and expenses for the Gas Fund for FY 2010 and FY 2011, actual revenues and expenses for FY 2008, and the budgeted revenues and expenses for FY 2009. CMR: 186:09 Page 1 of 5 TABLE 1- Gas Fund Sources and Uses of Funds ($000 Fiscal Year A B C D E F G Actual 2008 Adopted 2009 Proposed 2010 Planned 2011 2012 2013 2014 1 a %CHANGE IN TOTAL SYSTEM RETAIL RATE 9.5% 7.1% -10.0% 15.0% 7.0% 0.0% 0.0% PROJECTED TOTAL SYSTEM AVERAGE RATE ($/Therm) $ 1.503 $ 1.610 $ 1.448 $ 1.666 $ 1.782 $ 1.774 $ 1.783 PROJECTED COMMODITY COST ($/Therm) $ 0.822 $ 0.861 $ 0.845 $ 0.864 $ 0.832 $ 0.838 $ 0.837 q., SALES IN THOUSAND THERMS 30,942 31,365 30,783 30,665 30,669 30,674 30,678 PROJECTED CHANGE IN RETAIL SALES REVENUE 5,137 3,436 (4,647) 6,622 3,475 - - 7 Utilities Retail Sales 47,965 50,347 44,531 50,756 54,374 54,261 54,565 $' I Service Connection Charges & Capacity Fees 827 660 615 633 652 672 692 Other Revenues 1 168 168 168 168 168 168 , Interest plus Gain or Loss on Investment 1,342 691 515 462 490 568 668 11 Total Sources of Funds 50,135 51,865 45,829 52,018 55,683 55,668 56,093 18 Purchases 27,220 27,894 26,859 27,356 26,332 26,525 26,501 Supply Operating Budget 666 1,330 1,384 1,439 1,497 1,556 1,619 1 ; Distribution Operating Budget 7,431 8,511 8,852 9,206 9,574 9,957 10,355 Debt Service Payments (Prin & Int) 949 949 947 947 948 948 948 1Y- Rent 161 205 211 217 223 230 236 Transfers to General Fund 3,044 3,135 5,304 4,931 5,641 5,935 6,285 #8"< Other Transfers Out 838 1,280 1,247 1,247 1,247 1,247 1,247 20 Capital Improvement Programs 6,945 7,407 2,493 7,882 7,605 7,977 5,181 Operating Encumbrances & Reconciliation (1,163) 0 0 0 0 0 0 .. 2. Total Uses of Funds 46,092 50,711 47,295 53,224 53,068 54,375 52,374 ,_ Into/ (Out of) Reserves 4,043 1,155 (1,467) (1,206) 2,615 1,293 3,719 Based on the five-year financial projections, staff projects total use of funds of $47.3 million in FY 2010 for the Gas Fund. This is driven predominantly by Purchase costs of $26.9 million and supply and distribution operating costs of $10.2 million. CIP costs are expected to be $2.5 million due to the deferral of one system infrastructure project and transfers to General Fund are expected to be $5.3 million according to the proposed revision to the equity transfer methodology. There is a companion report being heard by the Finance Committee (CMR: 190:09) on March 31, 2009, that provides more detail on the equity transfer methodology to the General Fund. Staff identified a total cost savings of $0.3 million in Supply and Distribution Operating costs mainly as a result of keeping salaries and benefits unchanged from FY 2009 levels, and targeting a five percent reduction in some controllable costs such as travel, meetings, office supplies and other general expenses. As staff is currently assessing these and other possible adjustments to the proposed FY 2010 operating budget, these adjustments have not been reflected in the figures presented in Table 1. They are reflected as part of the discussion in the section below on reserves. Reserves and Risk Assessment Table 2 below summarizes the end -of -year balances for the G-SRSR and the G-DRSR, the risk assessment level for reserves and the proposed reserve guidelines. The table reflects the proposed reductions to the Minimum and Maximum Reserve Guideline Levels for the G-SRSR and G-DRSR (CMR:180:09). The annual risk assessment of the Gas Fund is determined by assessing the short-term risks to the Gas Fund. A report on this assessment was reviewed by the Utilities Advisory Commission at its February 2009 meeting. The reserve guidelines were established to manage risks over the longer term. CMR: 186:09 Page 2 of 5 TABLE 2: Gas Reserve Balance, Guideline Levels and Risk Assessment Level ($M FY 2009 FY 2010 FY 2011 Gas Supply Rate Stabilization Reserve End of Year Balance 8.5 7.3 7.8 Risk Assessment Level 6.5 5.8 11.6 Minimum Guideline Level 9.8 6.7 6.8 Maximum Guideline Level 20.9 13.4 13.7 Gas Distribution Rate Stabilization Reserve End of Year Balance 5.1 4.8 3.1 Risk Assessment Level 3.4 3.8 4.2 Minimum Guideline Level 4.1 2.7 3.3 Maximum Guideline Level 10.2 5.4 6.6 After the proposed ten percent rate decrease, the G-SRSR balance is forecast to be $7.3 million and the G-DRSR balance is forecast to be $4.8 million at the end of FY 2010, both of which are above the proposed revised minimum guideline levels as well as the risk assessment levels. With the additional budget savings of $0.3 million identified in Supply and Distribution Operating budgets, expected year end balances could be higher than these estimates. Allocation of Proposed Revenue Increase Due to the billing system migration project, staff is not proposing any structural changes to the current rate schedules for FY 2010. The proposed gas revenue decrease of 10 percent, or $4.6 million, is applied to the supply and distribution funds as $2.4 million and $2.2 million, respectively. The allocation of the supply and distribution rate decreases are proposed to be applied equally to the rates for all customer classes and to non -market based rate schedules on an equal cents per therm basis. However, individual customers may see different percentage decreases, depending on their monthly usage patterns. Staff does not propose adjusting the customer charges at this time. Table 3 below shows the impact of the proposed rate decrease on customer bills. TABLE 3: Impact of Proposed Rate Decrease on Customer Bills Customer Usage per Month (Therms) Current Monthly Bill ($) Proposed Monthly Bill ($) Proposed Monthly Bill Decrease (8) Proposed Monthly Bill Decrease (%) Residential/Winter 100 $ 163.33 $ 146.26 $ 17.07 -10.4% Residential/Summer 30 58.10 52.59 5.51 -9.5% Commercial G-2 500 792.75 712.05 80.70 -10.2% Industrial G-2 10,000 15,190.00 13,576.00 1,614.00 -10.6% Contract / Market rate Customers 60,000 51,097.28 - - - CMR: 186:09 Page 3 of 5 Bill Comparison A recent bill comparison with PG&E showed that, during the first four months of the winter of FY 2009, Palo Alto's average residential customer (using 100 therms per month) had gas costs 37.9 percent above PG&E's average customer's gas costs for the same period ($163.32 vs. $118.35, a $44.97 per month difference). In prior years, however, average winter residential bills for Palo Alto customers have been between 26.9 to 31.5 percent lower than for PG&E customers, and annual residential bills have been lower by roughly 25 percent. Palo Alto's "laddered" purchasing strategy, which involves purchasing gas over a three-year period prior to delivery, provides stable rates to Palo Alto customers. By contrast, the PG&E strategy, based mostly on shorter term market purchases, results in rates which fluctuate monthly. As a result, it is impossible to determine with any certainty whether Palo Alto customer bills will be above or below those of PG&E customers at a given future date. Table 4 below shows residential customer gas bills using Palo Alto's and PG&E's rates since FY 2005. TABLE 4: Palo Alto Customer Gas Bill Comparison with PG&E Historical Residential Gas Bills FY 2005 FY 2006 FY 2007 FY 2008 FY 2009* Winter Usage (100 therms/month) Palo Alto average $ 83.27 $ 103.54 $ 135.78 $ 149.97 $ 163.32 PG&E average $ 113.88 $ 151.07 $128.17 $133.84 $118.35 Summer Usage (30 therms/month) Palo Alto average $ 27.59 $ 35.98 $ 46.16 $54.09 $58.09 PG&E average $ 30.97 $ 38.91 $ 37.12 $60.74 $50.13 PA Annual bills $ 665.16 $ 837.10 $ 1,091.64 $ 1,22437 $ 885.67 PG&E Annual bills $ 869.06 $ 1,139.84 $ 991.71 $ 1,094.43 $ 672.20 * FY 2009 data taken through February 2009 For large customers, Palo Alto's distribution rates are higher than PG&E's distribution rates due to a different customer mix and differences in budgeting and accounting for funding of CIP projects. In Palo Alto, the funding for the normal maintenance of the system and for regular CIP work (not including major projects) is done primarily through rates on a "pay-as-you-go" basis, rather than through issuance of long-term debt. ALTERNATIVES Staff evaluated the impact of a zero percent rate adjustment for FY 2010. Under this scenario, RSR levels would be well above guideline levels and future rate adjustments could be significantly lower than projected in order to collect the required revenues. This scenario would result in steadier rates, but staff determined that rate relief was in order for FY 2010 due to falling commodity costs and the current overall economic environment. A larger rate decrease for FY 2010 could be accommodated if RSR levels were allowed to decline even further. However, a larger rate decrease in FY 2010 may necessitate a more substantial rate increase for FY 2011. COMMISSION REVIEW AND RECOMMENDATIONS On March 4, 2009, the UAC considered staff's proposed gas rate adjustment. The UAC discussed how a rate reduction in FY 2010 could lead to a rate increase in FY 2011. One CMR: 186:09 Page 4 of 5 commissioner noted that the rate decrease could be even more (or future rate increase could be less) if the equity transfer wasn't increased so significantly in FY 2010 from what it was for the Gas Fund in FY 2009. The notes from the UAC meeting are provided as Attachment D. By a vote of 3-2, the UAC voted to recommend that the City Council: (a) Approve a 10 percent decrease to retail natural gas rates effective July 1, 2009, which will decrease annual revenues by $4.6 million; and (b) Approve the changes to the Gas Utility Rate Schedules G-1, G-2, G-3, G-4, G-6, G-10, G-11, and G-12, as attached. Commissioners Keller and Melton opposed the motion on the grounds that the proposed rate decrease would require a rate increase in the following year according to the five-year financial projections. They both expressed a preference for stable, rather than zigzagging, rates. RESOURCE IMPACT Approval of these recommended revenue decreases will lower the Gas Fund sales revenues by $4.6 million for FY 2010. POLICY IMPLICATIONS This recommendation does not represent a change to current City policies. ENVIRONMENTAL REVIEW The City is decreasing Gas Utility rates due to deferral of some Capital Improvement Program related expenses, and lower than expected gas supply costs. A decrease in natural gas rates in response to decreasing operating expenses and financial reserve needs is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Section 21080(b)(8) and Title 14 of the California Code of Regulations Section 15273(a)(1) and (3). ATTACHMENTS A. Resolution B. Gas Fund FY 2010 Rate Adjustment Financial Projections C. Gas Rate Schedules: G-1, G-2, G-3, G-4, G-6, G-10, G-11, and G-12 D. Draft Notes from the March 4, 2009 UAC meeting c/ PREPARED BY: IPEK CONNOLLY, Utilities, Sr. Resource Planner JANE O. RATCHYE, Utilities Assistant Director, Resource Manageme DEPARTMENT APPROVAL: CITY MANAGER APPROVAL: VALERIE Off FO Director of Utilities JAM ENE City ► a . ger CMR: 186:09 Page 5 of 5 ATTACHMENT A NOT YET APPROVED Resolution No. Resolution of the Council of the City of Palo Alto Adopting A Natural Gas Rate Increase and Amending Utility Rate Schedules G-1, G-2, G-3, G-4, G-6, G-10, G-11 and G-12 WHEREAS, pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services and the fees and charges therefore; and WHEREAS, the Council has considered the need for an adjustment in natural gas retail rates to maintain the Gas Supply and Distribution Rate Stabilization Reserves above the annual risk assessment levels. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-1 (Residential Gas Service) is hereby amended to read in accordance with sheets G-1-1 and G-1-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2009. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-2 (Commercial Gas Service) is hereby amended to read in accordance with sheet G-2-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2009. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended to read in accordance with sheet G-3-1 and G-3-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2009. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-4 (Large Commercial Gas Transportation Service) is hereby amended to read in accordance with sheet G-4-1 and G-4-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2009. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-6 (Municipal Gas Service) is hereby amended to read in accordance with sheets G-6-1 and G-6-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2009. SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-10 (Compressed Natural Gas Service) is hereby amended to read in accordance with sheet G-10-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2009. 1 090324 syn 6050699 NOT YET APPROVED SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-11 (Large Commercial Fixed Term Gas Service) is hereby amended to read in accordance with sheet G-11-1 and G-11-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2009. SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-12 (Large Commercial Custom Commodity Gas Service) is hereby amended to read in accordance with sheet G-12-1 and G-12-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2009. SECTION 9. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 10. The Council finds that a decrease in natural gas rates in response to decreasing operating expenses and financial reserve needs is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a)(1) and (3). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Deputy City Attorney City Manager Director of Utilities Director of Administrative Services 2 090324 syn 6050699 ATTACHMENT B N R E s E R E s Actual I Adopted j Proposed! Planned Fiscal Year 2008 2009 2010 / CHANGE. IN TOTAL SYSTEM RETAIL RATE TOTAL SYSTEM AVG RATE ($/ THERM) SALES UNITS (THERMS) 4 GAS UTILITY REVENUE BASE SALES REVENUE: 6` ' COMMODITY SALES DISTRIBUTION SALES 8 SUB -TOTAL BASE SALES REVENUE RATE ADJUSTMENT: COMMODITY DISTRIBUTION 12 TOTAL RATE ADJUSTMENT 13 PRORATION IMPACT 4 SUB -TOTAL ADJUSTED S&D SALES 22 47 48 49 50 51 DISCOUNTS/UN COLLECTABL ES NET ADJUSTED SALES REVENUE INTEREST OTHER REVENUE/RECONCILE TO SAP/COBUG FROM RESERVES DISTRIBUTION RSR SUPPLY RSR 9.5% 1.50 31,020 27,379 15,807 43,186 0 5,137 5,137 (214) 7.1% 1.61 31,468 26,817 20,379 47,196 3,436 0 3,436 (143) -10.0% 1.45 30,886 29,126 20,001 49,126 2011 2012 2013 2014 15.0%u ' 7.0%u 1.67 1.78 30,768 30,772 26,820 29,123 17,732 22,062 44,552 51,186 (2,447) 2,295 (2,200) 4,327 (4;647) 6,622 194 (276) 48,109 1 50,489 I 44,673 (144) 47,965 1,342 1,991 0 0 (142) 50,347 691 828 0 0 1,183 0 3,475 3,475 (145) 50,898 1 54,516 (142) (142) 44,531 50,756 515 462 783 801 284 1,694 0 (142) 54,374 490 820 0 0 0.0% 1.77 30,776 28,862 25,541 54,403 0 0 0 0 54,403 (142) 54,261 568 839 0 0 0.0% 1.78 30,781 29,163 25,544 54,707 0 0 0 0 54,707 (142) 54,565 668 859 0 0 TOTAL FINANCIAL RESOURCES OPERATING EXPENSES SUPPLY: PURCHASES OPERATIONS & MAINT., OTHER ADMIN. ALLOCATED CHARGES: COST PLAN CHARGES & OTHER UTILITIES ADMINISTRATION SUB -TOTAL SUPPLY DISTRIBUTION: CUSTOMER DESIGN & CONN. (CIP) SYSTEM IMPROVEMENT (CIP) OPERATIONS & MAINT., OTHER ADMIN. ALLOCATED CHARGES: COST PLAN CHARGES & OTHER UTILITIES ADMINISTRATION SUB -TOTAL DISTRIBUTION 51,298 51,865 47,295 53,713 55,683. 55,668; 56,093 TOTAL MAJOR ACTIVITIES 27,220 507 97 62 27,886 580 6,365 4,604 1,746 1,081 14,376 42,262 27,894 1,151 126 54 29,224 660 6,747 5,591 1,677 1,243 15,918 45,143 26,859 1,197 131 56 28,242 615 1,878 5,815 27,356 1,245 136 58 28,795 633 7,249 6,047 26,332 1,295 141 60 27,829 652 6,953 6,289 1,744 1,814 1,886 1,293 1,345 1,399 11,345 17,088 17,179 39,587 45,883 45,008 26,525 1,347 147 63 28,082 672 7,305 6,541 1,962 1,455 17,934 46,016 26,501 1,401 153 65 28,120 692 4,489 6,802 2,040 1,513 15,536 43,657 DEBT SERVICE TRANSFERS: GENERAL FUND TRANSFER RENT OTHER TRANSFER SUB -TOTAL TRANSFER 949 3,044 161 838 4,044 949 3,135 205 1,280 4,619 947 5,304 211 1,247 6,761 947 4,931 217 1,247 6,395 948 5,641 223 1,247 7,112 948 5,935 230 1,247 7,411 948 6,285 236 1,247 7,769 RESERVE FUNDING: PLANT REPLACEMENT DISTRIBUTION RSR SUPPLY RSR SUB -TOTAL RESERVE FUNDING 318 2,996 729 4,043 (328) 369 1,114 1,155 0 0 0 0 0 489 489 0 1,016 1,600 2,615 0 154 1,139 1,293 0 2,267 1,453 3,719 52 TOTAL REVENUE REQUIREMENT 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 51,298 1 51,865 47,295 j 53,713 55,683 55,668 56,093 RESERVES BALANCES PLANT REPLACEMENT DISTRIBUTION RSR SUPPLY RSR DEBT SERVICE RESERVE TOTAL RESERVES BALANCES 1,328 4,734 7,399 952 1,000 5,103 8,513 952 1,000 4,820 7,330 952 4101- 12 1,000 3,125 7,819 952 1,000 4,141 9,418 952 5,511 1,000 4,295 10,557 952 16,804' 20;524 1,000 6,562 12,010 952 Short Term Risk Assessment Value -Supply RSR Short Term Risk Assessment Value- Distribution RSR Long Term Rate Stabilization Guidelines Supply RSR Minimum Supply RSR Maximum Distribution RSR Minimum Distribution RSR Maximum 14,413 .15,56; 3,700 3,300 , 3,390 6,500 5,800 11,600 3,7591 4,168 9,527 9,763 6,715 1 6,839 6,583 6,631 6,625 20,415 20,920 13,429 13,678 13,166 13,263 13,251 4,146 4,076 2,684 3,282 3,809 10,365 10,190 5,368 6,564 7,618 3,831 7,662 3,832 7,663 2009 2010 2011 ATTACHMENT C RESIDENTIAL GAS SERVICE UTILITY RATE SCHEDULE G-1 A. APPLICABILITY: This schedule applies to separately metered single-family residential dwellings receiving natural gas service from the City of Palo Alto Utilities. -This schedule also applies to separately metered residential services in a multi -family complex. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Monthly Customer Charge: Commodity Rate: (To be added to Customer Charge) Tier 1 Rates: Per Service $5.25 Per Therm 1. Commodity Charge $0.389.7095 2. Administrative Fee $0.0227 3. PG&E Local Transportation $0.0212 4. Palo Alto Local Distribution $0.72276338 Tier 1 Rate Total $1. 1.3872 Tier 2 Rates: (All usage over 100% of Tier 1) 1. Commodity Charge $1.4052815 2. Administrative Fee $0.0227 3. PG&E Local Transportation $0.0212 4. Palo Alto Local Distribution $0.72276338 Tier 2 Rate Total $2.17211.9592 CITY OF PALO ALTO UTILITIES Issued by the City Council ,',/'Me Effective -1-1-7 1 2-0082009 Sheet No G-1-1 Supersedes Sheet No G-1-1 dated 711-1-2008 CITY OF PALO ALTO UTILITIES RESIDENTIAL GAS SERVICE UTILITY RATE SCHEDULE G-1 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer's bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. PG&E Local transportation charge is equal to the cost of transporting gas from the PG&E's City Gate to the Palo Alto City Gate. 2. Seasonal Rate Changes: The Summer period is effective May 1 to October 31 and the Winter period is effective from November 1 to April 30. When the billing period includes use in both the Summer and the Winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Calculation of Usage Tiers Tier 1 natural gas usage shall be calculated and billed based upon a level of 0.667 therms per day during the Summer Period and 3.2 therms per day during the Winter Period, rounded to the nearest whole therm, based on meter reading days of service. As an example, for a 30 day bill, the Tier 1 level would be 20 therms during the Summer Period months and 96 therms during the Winter Period months. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 4. Special Conditions Service under this schedule is subject to discontinuance in whole or in part, for operational reasons or if the City experiences supply or capacity shortages. The City will exercise CITY OF PALO ALTO UTILITIES Issued by the City Council //� Effective 447-1-200&2009 Sheet No G-1-2 Supersedes Sheet No G-1-2 dated .711-1-2008 CITY OF PALO ALTO UTILITIES RESIDENTIAL GAS SERVICE UTILITY RATE SCHEDULE G-1 reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service, if the interruption of service is caused by an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City's control. {End} CITY OF PALO ALTO UTILITIES Issued by the City Council Effective ? -1-20082009 Sheet No G-1-3 Supersedes Sheet No G-1-3 dated -711-1-2008 CITY OF PALO ALTO UTILITIES COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-2 A. APPLICABILITY: This schedule applies to non-residential customers who use less than 250,000 therms per year at a single address. This schedule may include service to master -metered multi -family facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Per Service Monthly Customer Charge: $35.00 Commodity Rate: (To be added to Customer Charge) All year-round delivered commodity: Per Therm 1. Commodity Charge $0.9 18321 2. Administrative Fee $0.0227 3. PG&E Local Transportation $0.0212 4. Palo Alto Local Distribution $051951781 Total per therm $1.51553541 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer's bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. PG&E Local transportation charge is equal to the cost of transporting gas from the PG&E's City Gate to the Palo Alto City Gate. CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 4-1-7-1-2-0082009 Sheet No G-2-1 Supersedes Sheet No G-2-1 dated 711-1-2008 CITY OF PALO ALTO UTILITIES COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-2 2. Special Conditions Service under this schedule is subject to discontinuance in whole or in part, for operational reasons or if the City experiences supply or capacity shortages. The City will exercise reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service, if the interruption of service is caused by an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City's control. [End) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 4-1.7 1 20082009 Sheet No G-2-2 Supersedes Sheet No G-2-2 dated -711-1-2008 CITY OF PALO ALTO UTILITIES LARGE COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-3 A. APPLICABILITY: This schedule applies to service for large commercial customers who use at least 250,000 therms per year at one site and have retained gas direct access eligibility. This schedule also applies to City owned generation facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Per Service Monthly Customer Charge: $311.00 Commodity Rate: (To be added to Customer Charge) Per Therm Supply Charges: 1. Commodity Charge (Monthly Market Based) $0.10-$2.00 2. Administrative Fee $0.0227 3. PG&E Local Transportation $0.0212 Distribution Charge: 1. Palo Alto Local Distribution $0. 002884 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer's bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. (A) Commodity Charges CITY OF PALO ALTO UTILITIES Issued by the City Council Effective -1-1-7-1-2-0-0g2009 Sheet No G-3-1 Supersedes Sheet No G-3-1 dated 711 1 20072008 CITY OF PALO ALTO UTILITIES LARGE COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-3 The commodity charge is equal to the City's weighted average cost of gas calculated at the PG&E City Gate for gas purchased by the City at first of the month and daily market prices for that month. The commodity charge will fall within the minimum/maximum range set forth in Section C and include the cost of transporting the gas to the PG&E City Gate. (B) Administrative fee The Administrative fee is equal to the allocable administrative and overhead costs incurred by the City in providing the gas service. (C) PG&E Local Transportation PG&E Local transportation charge is equal to the cost of transporting gas from the PG&E's City Gate to the Palo Alto City Gate. 2. Special Conditions Service under this schedule is subject to discontinuance in whole or in part, for operational reasons, or if the City experiences supply or capacity shortages. The City will exercise reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service, if the interruption of service is caused by an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City's control. 3. Request for Service A qualifying customer may request service under this schedule for more than one account or meter if the accounts are located on one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right -of- ways (e.g. streets) and have a common billing address. 4. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable City of Palo Alto full -service rate schedule. Customers served under this rate schedule may elect Gas Direct Access at any time. [End] CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 447 1 20082009 Sheet No G-3-2 Supersedes Sheet No G-3-2 dated -711-1 20072008 CITY OF PALO ALTO UTILITIES LARGE COMMERCIAL GAS TRANSPORTATION SERVICE UTILITY RATE SCHEDULE G-4 A. APPLICABILITY: This schedule applies to gas transportation service for large commercial customers who use at least 250,000 therms per year, have retained gas direct access eligibility, and who utilize a Gas Service Provider to procure natural gas. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Monthly Customer Charge: Per Therm Charges (To be added to Customer Charge Supply Charge: PG&E Local Transportation Distribution Charge: Palo Alto Local Distribution D. SPECIAL NOTES: 1. Specific terms and conditions shall be covered by separate agreement between the City and Gas Service Provider. Per Service $311.00 Per Therm $0.0212 $0.33002884 2. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer's bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. (A) PG&E Local Transportation PG&E Local transportation charge is equal to the cost of transporting gas from the PG&E's City Gate to the Palo Alto City Gate. CITY OF PALO ALTO UTILITIES Issued by the City Council Effective -147 1 20082009 Sheet No G-4-1 Supersedes Sheet No G-4-1 dated 711-1-20072008 CITY OF PALO ALTO UTILITIES LARGE COMMERCIAL GAS TRANSPORTATION SERVICE UTILITY RATE SCHEDULE G-4 3. Request for Service (A) Qualifying customers may request service under this schedule for more than one account or meter if every account meets the minimum usage requirement of 250,000 therms per year. (B) Qualifying customers may request service under this schedule for more than one account or meter if the accounts are located on one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right-of-ways (e.g. streets) and have a common billing address. 4. Changing Rate Schedules Qualifying customers may request a rate schedule change at any time during the year to any applicable full service rate schedule. {End) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 447 1 20082009 Sheet No G-4-2 Supersedes Sheet No G-4-2 dated -711-1-20072008 CITY OF PALO ALTO UTILITIES MUNICIPAL GAS SERVICE UTILITY RATE SCHEDULE G-6 A. APPLICABILITY: This schedule applies to service buildings and facilities owned and/or operated by the City of Palo Alto and not currently served under G-11 or G-12. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Monthly Customer Charge: Per Therm Charges (To be added to Customer Charge Per Service $55.25 Per Therm Supply Charges: 1. Commodity Charge $0. 18321 2. Administrative Fee $0.0227 3. PG&E Local Transportation $0.0212 Total Supply Charges $0. 08760 Distribution Charge: 1. Palo Alto Local Distribution D. SPECIAL NOTES: 1. Calculation of Cost Components $0.56291897 The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. -On a customer's bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. PG&E Local transportation charge is equal to the cost of transporting gas from the PG&E's City Gate to the Palo Alto City Gate. CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 447-1-20082009 Sheet No G-6-1 Supersedes Sheet No G-6-1 dated 711-1-2008 CITY OF PALO ALTO UTILITIES MUNICIPAL GAS SERVICE UTILITY RATE SCHEDULE G-6 2. Special Conditions Service under this schedule is subject to discontinuance in whole or in part, for operational reasons or if the City experiences supply or capacity shortages. The City will exercise reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service, if the interruption of service is caused by an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City's control. 3. Changing Rate Schedules Customers served under this rate schedule are not eligible for gas direct access and cannot request a rate schedule change to any full -service rate applicable to customers who are eligible for gas direct access (i.e. G-3, G-11, or G-12). {End] CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 447-1-20082009 Sheet No G-6-2 Supersedes Sheet No G-6-2 dated 711-1-2008 CITY OF PALO ALTO UTILITIES COMPRESSED NATURAL GAS SERVICE UTILITY RATE SCHEDULE G-10 A. APPLICABILITY: This schedule applies to the sale of compressed natural gas (CNG) at the City -owned natural gas fueling stations to customer who use CNG for fueling CNG vehicles. B. TERRITORY: Applies to locations within the service area of the City of Palo Alto. C. RATES: Per Gasoline Per Therm Gallon Equivalent Commodity Charge $1.4-708 $1. 25 For billing purposes, the number of gallons will be complied from a Summary of Transactions recorded by the dispensing unit for the customer during the month. D. SPECIAL CONDITIONS 1. Service under this schedule is subject to discontinuance in whole or in part in case of actual or anticipated shortage of natural gas resulting from insufficient supply, inadequate transmission or delivery capacity of facilities. 2. Service under this schedule is provided only from a designated City fueling station which will deliver CNG at approximately 3,000 pounds per square inch (PSI). 3. Individuals responsible for fueling a Natural Gas Vehicle shall be required to complete training sessions to be certified to fuel a vehicle. Each individual must sign and date the Certificate of Instruction for Fueling Natural Gas Vehicle. 4. Customers requesting to take service under this rate schedule are required to sign a Compressed Natural Gas Agreement before commencing service. 5. If required by local or federal law, assessed applicable taxes shall be added to charges shown in this rate schedule. [End) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-2008 Sheet No.G-10-1 Supersedes Sheet No. G-10-1 dated 7-1-2007 CITY OF PALO ALTO UTILITIES LARGE COMMERCIAL FIXED -TERM COMMODITY GAS SERVICE UTILITY RATE SCHEDULE G-11 A. APPLICABILITY: This schedule applies to large commercial customers who use at least 250,000 therms per year at one site and have retained gas direct access eligibility. B. TERRITORY: Within the service area of the City of Palo Alto and on land owned or leased by the City. C. RATES: Per Service Monthly Customer Charge: $311.00 Per Therm Charges (To be added to Customer Charge Per Therm Supply Charges: 1. Commodity Charge $0.20-$2.00 2. Administrative Fee $0.0227 3. PG&E Local Transportation $0.0212 Distribution Charge: 1. Palo Alto Local Distribution $03-3-002884 D. TERM: 12 Months or 24 Months E. SPECIAL CONDITIONS: 1. Service under this schedule is subject to discontinuance in whole or in part, for operational reasons, or if the City experiences supply or capacity shortages. -The City will exercise reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service, if the interruption of service is caused by an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City's control. 2. Qualifying customers who choose to be charged under this rate schedule are required to sign a letter with CPAU committing to a price and term and to adhere to rules and regulations set forth in CPAU Rule and Regulation No. 5 (Contracts). The letter shall indicate the estimated gas consumption over the term of the contract rate. This consumption shall be served solely by CPAU. CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20072009 Sheet No. G-11-1 Supersedes Sheet No. G-11-1 dated 7-1-20062007 CITY OF PALO ALTO UTILITIES LARGE COMMERCIAL FIXED -TERM COMMODITY GAS SERVICE UTILITY RATE SCHEDULE G-11 (Continued) 3. The Commodity Charge shall be fixed for a 12 or 24 -month term. The other components of the rate: Administrative Fees, Transportation Charges, Distribution Charges and Monthly Customer Charges may be modified periodically with the Council's approval. 4. The Commodity Charge component of this rate and the term will be set at the time when the customer signs a letter acknowledging the term and price agreed upon with CPAU. The Commodity Charge shall be based upon the customer class average load shape, a risk premium, and market prices. The Commodity Charge will fall within the range set in Section C, Part 1 of this Schedule and will be for gas delivered to PG&E City Gate. 5. The Administrative Fee is equal to the allocable administrative and overhead costs incurred by the City in providing the gas service. 6. PG&E Local transportation charge is equal to the cost of transporting gas from PG&E City Gate to the Palo Alto City Gate. 6. Total monthly charge = therms used during the month X (Commodity Charge + Administrative Fee + PG&E Local Transportation Charge + Palo Alto Local Distribution Charge) + Monthly Customer Charge. 7. The customer must remain on this term rate for the term indicated on the Confirmation Schedule, providing the customer continues to receive distribution services from the City. The confirmation Schedule shall indicate the Customer's approximate gas usage (load) over the term of the contract. This load shall be served solely by CPAU. 8. Qualifying customers may request service under this schedule for more than one account or meter if the accounts are located on one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right -of- ways (e.g. streets) and have a common billing address. 9. A customer may renew service under this rate schedule with a 30 -day advance notice. The Commodity Charge for the renewed term of service will be based on the published fixed - term commodity charge at the time service is renewed. Customers electing not to renew service under this rate schedule will be returned to an applicable full -service gas rate schedule of their choice. If no choice is made, the customer will be placed on G-3. [End) CITY OF PALO ALTO UTILITIES Issued by the City Council EIP" Effective 7-1-2-00-72009 Sheet No. G-11-2 Supersedes Sheet No. G-11-2 dated 87-1 20012007 CITY OF PALO ALTO UTILITIES LARGE COMMERCIAL CUSTOM COMMODITY GAS SERVICE UTILITY RATE SCHEDULE G-12 A. APPLICABILITY: This schedule applies to large commercial customers who use at least 250,000 therms per year at one site and have retained gas direct access eligibility. B. TERRITORY: Within the service area of the City of Palo Alto and on land owned or leased by the City. C. RATES: Per Service Monthly Customer Charge: $311.00 Per Therm Charges (To be added to Customer Charge Per Therm Supply Charges: 1. Commodity Charge $0.20-$2.00 2. Administrative Fee $0.0227 3. PG&E Local Transportation $0.0212 Distribution Charge: 1. Palo Alto Local Distribution $0.34002884 D. TERM: Up to 5 years E. SPECIAL CONDITIONS: 1. Service under this schedule is subject to discontinuance in whole or in part, for operational reasons, or if the City experiences supply or capacity shortages. The City will exercise reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service, if the interruption of service is caused by an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City's control. 2. Qualifying customers who choose to be charged under this rate schedule are required to sign a contract and confirmation schedule with CPAU and adhere to rules and regulations set forth in CPAU Rule and Regulation No. 5 (Contracts). 3. The Commodity Charge shall be based upon the customer load shape and size, term, and market prices. The other components of the rate: Administrative Fees, Transportation Charges, Distribution Charges and Monthly Customer Charge may be modified periodically with the Council's approval. CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7 1 20072009 Sheet No. G-12-1 Supersedes Sheet No. G-12-1 dated 7-1-20062007 CITY OF PALO ALTO UTILITIES LARGE COMMERCIAL CUSTOM COMMODITY GAS SERVICE UTILITY RATE SCHEDULE G-12 (Continued) 4. The Commodity Charge component of this rate and the term will be set at the time when the customer signs the Contract. Rate options available under Contract may include, but are not limited to, commodity rate caps, collars, forward strips, and trigger rates. Pricing for such products, including any necessary fees, will fall within the Commodity Charge range set forth in Section C, Part 1 of this Schedule. A rate cap is defined as a floating rate with a guaranteed maximum price. A rate collar is defined as a floating rate with maximum and minimum rate levels. Forward strips are defined as a set rate for a set term calculated by taking the average rate over a specified period of time. A rate trigger is a mechanism wherein the customer could set a specific rate level and if the market rate reaches that level, the customer rate is automatically set at that level. 5. The Administrative Fee is equal to the allocable administrative and overhead costs incurred by the City in providing the gas service. 6. PG&E Local transportation charge is equal to the cost of transporting gas from PG&E City Gate to the Palo Alto City Gate. 7. Total monthly charge = therms used during the month X (Commodity Charge + Administrative Fee + PG&E Local Transportation Charge + Palo Alto Local Distribution Charge) + Monthly Customer Charge. 8. The customer must remain on this term rate for the term indicated on the Confirmation Schedule, providing the customer continues to receive distribution services from the City. The confirmation Schedule shall indicate the Customer's approximate gas usage (load) over the term of the contract. This load shall be served solely by CPAU. 9. Qualifying customers may request service under this schedule for more than one account or meter if the accounts are located on one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right -of- ways (e.g. streets) and have a common billing address. 10. A customer may request a renewal of this rate with a 30 -day advance written notice. The commodity charge for the renewed period will be based on the market prices and other pricing factors that exist at the time the rate is renewed. Customers electing not to renew the Contract will be returned to an applicable full -service gas rate schedule of their choice. If no choice is made, the customer will be placed on G-3. [End) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7 1 72009 Sheet No. G-12-2 Supersedes Sheet No. G-12-2 dated B7-1 20012007 CITY OF PALO ALTO UTILITIES ATTACHMENT D EXCERPTS from Draft Minutes of UAC Meeting of March 4th, 2009 ITEM 5: ACTION ITEM: Rates Proposals for Fiscal Year 2010 Senior Resource Planner Ipek Connolly reviewed where we are in the budget process. In February, the UAC reviewed the long-term financial projections and this month, it will review the proposed rate adjustments for FY 2010. The rate proposals will be considered by the Council Finance Committee on March 31. The budget will be considered by the UAC in May and by the Finance Committee on May 19. Council adoption of the budget is scheduled for June 8. Connolly listed the assumptions used to prepare the financial projections used to develop the rate projections. The assumptions that have changed since the UAC saw the financial projections in February include the proposed changes in the equity transfer method (Item #4 discussed tonight), and additional savings identified in supply and distribution operating budgets. Savings estimates for operating budgets total $354,000. In addition, although labor negotiations are not complete for FY 2010, if there were no cost increases for salaries and benefits for FY 2010 compared to FY 2009, then savings would total $1,326,000. These savings are not incorporated into the cost projections at this time, but can be considered. Chair Dawes asked Director Fong if she had looked closely at headcount. Fong responded that she has looked closely, but that there are many regulatory compliance and reporting requirements that require staff to complete. These include the Department of Transportation, the Federal Energy Regulatory Commission, the California Energy Commission, State and County Department of Health, Regional Water Quality Control Board, and the California Public Utilities Commission. In addition, she scrutinizes the justification to fill any vacancy and noted that there is a rigorous city-wide process that any vacancy must go through before filling. Commissioner Waldfogel felt that the director should look at all programs and cut the lowest value projects and programs. Connolly presented the impact on the average residential total bill for gas, water, electricity and wastewater if the proposed rate adjustments were adopted by Council. Although water, wastewater, and electric rates are proposed to be increased, the proposed gas rate decrease cancels almost all the other rate increases so that, on an annual basis, the average residential bill will increase only 7 cents per month. Chair Dawes asked if staff had done any benchmarking or examination of best practices for utilities. He asked if NCPA has started a study to help the member agencies institute best management practices. Fong said that this much coordination between agencies, including the evaluation of pooled resources where feasible and bulk buying of supplies with other agencies. Commissioner Waldfogel said that across the board, there is a need to acknowledge the state of the economy with salary cuts, layoffs, drop in the value of homes and investments. He advised that Utilities must ensure that all the fat is cut off and that we need to proceed to cut into the bone at this point. 5c. Gas: Senior Resource Planner Ipek Connolly presented the Gas Fund costs and revenue projections and staff's recommended gas rate decrease for FY 2010 of 10%. After the proposed rate decrease, the Gas Fund Supply and Distribution Rate Stabilization Reserves would be between the minimum and maximum guideline levels and above the risk assessment level. However, if the five-year cost projections hold, then a rate increase of 15% in FY 2011 would result in reserve levels moving to minimum levels. She noted that the recommended gas rate increase would be applied on an equal amount per therm basis for all customer groups. Commissioner Rosenbaum noted that a rate reduction of 14% would be possible if the equity transfer to the General Fund did not increase so dramatically from FY 2009 to FY 2010. Commissioner Melton said that the five-year financial plans show that if there is a 10% rate reduction in FY 2010, there would have to be a 15% increase in FY 2011. This is counter to the goal to stabilize rates. If, instead, a 5% reduction were implemented, then the FY 2011 increase would only have to be 9%. He advised against a plan that contains double-digit increases in the future. Chair Dawes had the same reaction as Melton originally, but he thought that FY 2011 costs would be less than the budget projections. Staff agreed that cost projections have declined since the budget projections were prepared, but that there is no guarantee that natural gas costs would stay low. Commissioner Rosenbaum noted that if the equity transfer increased only 5%, then the rate reduction could easily be the proposed 10%. Commissioner Keller stated that she did not like rates to "ping-pong" down and up since it leads to customers feeling that they have no control over their costs. Referring to recent complaints about high bills in December and January, Keller recommended that the City offer free energy audits to those with high usage. She said that if there were no rate reduction, then the money could be used to encourage more efficiency improvements. She advised that people are more likely to invest in efficiency improvements if they can rely on stable rates. Commissioner Melton said that if he had a high degree of certainty that there would not be a 15% decrease in FY 2011, he would be comfortable with a 10% decrease in FY 2010. ACTION: Commissioner Rosenbaum moved the staff recommendation to recommend that Council: 1) approve a 10 percent decrease to natural gas retail rates effective July 1, 2009, which will reduce annual revenues by $4.6 million; and 2) approve the changes to the Gas Utility Rate Schedules G-1, G-2, G-3, G- 4, G-6, G-10, G-11, and G-12. Chair Dawes seconded the motion. The UAC voted to approve the motion by a 3-2 vote with Keller and Melton voting no.