HomeMy WebLinkAbout0606.093December 9, 1993
THE HONO~~LE CITY COUNCIL
Palo Alto, California
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IpplamentatiOA ot Ele~tric customer Refund
Hembers of the Council:
This is an informational report on the Electric customer refund and
progress made in implementing it. rt is intended to keep Council
informed on th~ status of this majo~ electric refund and to clarify
circumstances whereby a check is issued to eliminate a credit
balance being carried forward to the next month ~ill.
Bac:lI:groun ~
In accordance with the -Fiscal Year 1993-94 Electric CUstomer
Refund Plan" (CMR: ~€4~93J, adopted May 10, 1993, the City began
imple~entation of a $36.7 million refund on November 5, 1993. On
the.ir November Utilities bills, all current 27 f 287 qualifyinq
electric ratepayers re.ceived the one-time credit. Di-sbursement of
the ref~nd in this manner will continue to apply except ~hen checks
are to be issued as noted in this report.
A review of last mon·th's refund activity indicates that
approximately $10 million of the $36.7 million was distributea and
a large Z>!ajority of ratepayers ..... 111 be <::arryinq a bill credit
for-lIIIard into Ooecember. with se.asonally high heating-bills in
December, most single.-family residents .. 'ill exhaust their credit
and be-;in making full utilities payments in January. On the other
hand, many multi-family residents and businesses will experience
credit balances through March or la~er, because electricity
accounts fer a large percentage of their overall utilities bill.
An important objective for implementation of this re:fund is to
complete the ref~~d this fiscal yCdr.
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To clear a customer's refuno credit balance. staff is issuing a
check if one o£ four-circumstances apply. The City Attorney' a
Office has indicated that the issuance of checks in these
circumstances does not violate the adopted refund plan. In all
cases, the decision to issue checks as described herein is made
t~kinq into account sta£f .orkload and cash flow consioerationa.
The four circumstances under which staff will approve issuance of
a check to clear a refund credit balance are;
1. C\.1sto:meC"s have changed their residence or location closing
their account in Novembe:-1993 or a subsequent month, and left
a credit balance:
2 ~ Former Palo Alto customers who qualify for-a refund and
complete the designated authorization fOr7ll:-
3. Requests t'or a check initiated. by current customers ..... il1 be
honored... if their refund credits are projected to carry
forward beyond Karch 31, 1994~ Generally. such customer
initiated requests will be processed after February 1, 1994.
However, if most of a customer's refund is nct projected to be
credited before Karch 31 ... 1993, ~~stomer requests for issuance
of a check will be processed prior ~o February 1, 1994. For
example, the Hyatt Cab.ana Hotel's credit is quite large
relative to their current utilities usaqll!/bill, since the
hotel is now vacant. Therefore ... they qua1ify for a check to
be issued prior to February 1. Also, to avoid carrying refund
credits into Fiscal Year 1994-95, the city will issue checks
Quring the fourth quarter of Fiscal Year 1993-$14, to any
remaining accourots with a residual credit:-and
4~ CustoIlle!;s who request issuance of a check, due to hardship or
extenuating circumstances, will be evaluated on a case by case
basis and approved by the Director of Utilities and the City
Manager. For example, residents who qualify for the
Residential Rate Assistance Program (RAP) may have a
legitimate financial need for "cash in hand" via a check.
In accordance. with council notification policies, the tot,al refund
and remaining credit to be carried forward for each customer was
statec on the NoveFDer hill. Due to space limitations on the bill
statement, further information regaroinq the refund was provided by
means of a bill insert to all customers~ The city;s efforts to
reach fermer customers will be undertaken by a limited one-time
mailing to their former Palo Alto address (or fOnlarding address.
if such 1s provided) and by p·.lblication of notic.es in two local
newspapers.
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Finally .. a number of steps !lave been instituted to accomplish the
effective iMplementation of this r-:!!fund. Some, such as the
desl(Jnated authorization form and the fol.'1t.'arding of mail are
mentioned above, while others include printinq the words POO NOT
PAY" on the bi.ll 6tate~ent, and not enclosing payment return
envelopes. Overall .. the implementation .af the refund is proceeding
well through close coor4ination be~ween the Fin~nce, utilities, an~
Information Resources Departments. Upon completion of the refund,
a subsequent informational ~eport on the refunQ will be prepared
for the Council.
Respectfully submitted,
W. RANDY BALDS CHU>!
Assistant Director of utilities,
Administrative services
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EDWARD J. MRI UK
Director of Utilities
city Manager
CMR.:6G6i:93
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