Resolution No. 4274
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RESOLUTION NO. 4274
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON CHANGING
THE FUEL COST ADJUSTMENT BILLING FACTOR CHARGED FOR ELECTRICAL
ENERGY DISTRIBUTED AND SUPPLIED TO ITS ELECTRICAL CONSUMERS
THE CITY COUNCIL OF THE CITY OF VERNON RESOLVES AS FOLLOWS:
WHEREAS, Ordinance No. 849 of the City of Vernon fixes
certain rates to be charged for electrical energy distributed
and supplied by said City of Vernon within its boundaries, and
WHEREAS, Ordinance No. 850 amends Ordinance No. 849 and
provides for a fuel clause adjustment billing factor and for
changes in such billing factor to be made from time to time by
resolutions of the City Council of the City of Vernon when, in
the City Council's opinion, such changes are necessary for the
sound financial position of the Light and Power Operating Funds,
and
WHEREAS, Edison has been authorized by the Federal Powe
Commission to increase the R-2 Wholesale Rate and to add a fuel
cost adjustment billing factor to the rate charged to the City of
Vernon for purchased power, and Edison will have increases in
such fuel clause adjustments which will greatly affect the cost
of power purchased by the City of Vernon from Edison, and
WHEREAS, the City Council of the City of Vernon deems
it necessary for the sound financial position of the Light and
Power Operating Funds to increase the Vernon fuel clause adjust-
ment,
NOW, THEREFORE, BE IT RESOLVED:
SECTION 1: That the City Council of the City of Vernon
does hereby adopt Fuel Clause Adjustment of 0.818 cents per kilo-
watt hour of electrical energy sold to its electrical consumers.
SECTION 2: That the effective date of said Fuel Clause
Adjustment shall be August 6, 1974, and shall continue until res-
cinded or amended by a Resolution of the City Council of the City
of Vernon.
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SECTION 3: The City Clerk of the City of Vernon shall
2 certify to the passage of this Resolution and thereupon and
3 thereafter the same shall be in full force and effect.
4 ADOPTED AND APPROVED this 6th day of August, 1974.
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ATTEST:
~itY Clerk
-2-
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
I, F. A. ZIEMER, City Clerk of the City of Vernon, do
hereby certify that the foregoing resolution, being Resolution
No. 4274, was duly adopted by the City Council of the City of
Vernon, and approved by the Mayor of said City, at a regular
meeting of the City Council held on
August 6, 1974
Clerk
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PAUL P. HE N D R I C K S
PHONE. 77EM626
CONSULTING ELECTRICAL ENGINEER
AREA CODE
2U'
SUITE 16
1626 CENTINELA AVENUE
INGLEWOOD
CALIFORNIA
90302
August 2, 1974
Vernon City Council
City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
AUG 6 1974
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Honorable Members:
By an order of the Federal Power Commission, Edison has been authorized an
increase in wholesale power charged to Vernon, effective August 4, 1974, of some
21% or $3,800,000 annually. Also, the Federal Power Commission authorized Edison
to add a fuel clause adjustment to the wholesale power purchased by Vernon, effec-
tive May 2, 1974, with adjustments to be made monthly dependent on the cost of
fuel for Edison's generation; and, Edison is forecasting a continued increase in
this fuel clause adjustment of some 24% or $5,400,000 annually to Vernon, during
the next three months period.
The City of Vernon has been a4vised by Edison's letter of July 31, 1974 of
an increase in Edison's retail fuel clause adjustment to 0.818~/Kwh, effective
August 1, 1974.
To partially offset these increased costs of purchased power to Vernon, it
is recommended that the fuel clause adjustment Vernon charges its customers be
increased from the present 0.308~/Kwh to 0.8l8~/RWh, effective August 6, 1974.
This increase will place Vernon's fuel clause adjustment at the same level as
Edison's retail fuel clause adjustment.
It is further recommended that the 5% discount remain in effect.
Edison has indicated changes in the fuel clause adjustment in the future and
Vernon will have to make similar changes from time to time to reflect the increased
cost of wholesale power to Vernon.
Yours very truly,
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/1fza~' /? /~t:~
Paul P. Hendricks
PPH:leb
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VERNON LImIT AND PCMER
REVENUE - COST OF PURCHASED PCMER
ANALYSIS
BASED ON EXISTING AND PENDING
EDISON RATE CHANGES
REVENUE FROM SALES
1. Forecasted 1974/75 Revenue
at Existing Vernon Rates, including
Existing .308~/K.h Fuel Clause
Adjustment,
Estimated Sales of 1,430,000,000 Kwhs
......
2. Adoption by Vernon of Ediso~
.8l8~/Kwh Fuel Clause,
Effective in Vernon 8/6/74,
Increase = (.818 - .308)
. 5l0~/Kwh
=
$ .00510 x 1,430,000,000
0........
Total
Annual Rate
Estimated
and Rounded
$ 27,000,000
7,300,000
$ 34,300,000
Page 1
8/2/74
Increase
27%
VERNON LIGlIT AND POOER
.'
REVENUE - COST OF PURCHASEDPOOER
ANALYSIS
BASED ON EXISTING AND PENDING
EDISON RATE CHANGES
COST OF PURCHASED Pa.1ER
1. Forecasted 1974/75 Cost of Power
@ Existing R-2 (F.P.C. 13-6) rate and
including .268~/Kwh Fuel Clause Charge
Estimated Purchase of 1,470,000,000 Kwhs
......
2. Increased Fuel Clause
Charged Vernon during (3) month
period 8/15/74 to 11/14/73,
Edison Forecasted Monthly Adjustment =
Average = .,437 + .682 + .78:3
3.,
Increase = (.634 - .268)
= $ .00366 x 1,470,,000,000
= . 634~ /Kwh
=. 366~/Kwh
.....
3. Increased R-2 (F.P.C. 13-7) Base Rate
Charged Vernon
Effective 8/4/74
Increase = 20.7% x 18,400,000
............
NET INCOME
Revenue - Cost of Power =
$ 34,300,000 - $31,500,000
$ 2,800,000
Page.2
8/2/74
Annual Rate
Estimated
and Rounded
$ 22,300,000
5,400,000
27,700,000
3,800,000
$ 31,500,000
%
Increase
24%
17%
.
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N. A. STEWART
DISTFlICT IlIANAGER
Southern California Edison Company
2323 E. VERNON AVENUE
VERNON. CALIFORNIA 90058
June 5, 1974
D. S. McDERMID
DiSTRICT SUPERINTENDfNT
City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
PAUL P. HENDRICKS
CONSULTiNG ENGINEER
JUN 7 - 1974
Attention: Mr. Paul P. Hendricks
Consulting Engineer
Gentlemen:
Subject: RESALE FUEL COST ADJUSTMENT BILLING FACTOR
The subject billing factors for the following months
have been re-estimated and reforecast as follows:
Month Fuel Burned
May, 1974
June, 1974
July, 1974
August, 1974
September, 1974
October, 1974
November, 1974
December, 1974
NAS:ck
Applicable Billing Period
6/15/74 - 7/14/74
7/15/74 - 8/14/74
8/15/74 - 9/14/74
9/15/74 - 10/14/74
10/15/74 - 11/14/74
11/15/74 - 12/14/74
12/15/74 - 1/14/75
1/15/75 - 2/14/75
Billing Factor
. 238UkWH
. 356ct/kWH
. 437ct/kWH
. 682ct/kWH
. 783ct/ kWH
1. 017ct/kWH
. 884ct/kWH
. 897ct/kWH
Very truly yours,
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N. A. STEWART
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PAUL P. HENDR;I~
CONSULTING EN~iINJ~
Southern California Edison Company
AUG 2 .. 1974
2323 E. VERNON AVENUE
VERNON, CALIFORNIA 90058
N. A. STEWART
July 31,1974
D.'S. McDERMID
DISTRICT MANAGER
DISTRICT SUPERINTENDENT
City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
Attention: Mr. Paul P. Hendricks
Consulting Engineer
Gentlemen:
Subject: EDISON RETAIL FUEL COST ADJUSTMENT
EFFECTIVE AUGUST 1, 1974
The California Public Utilities Commission,
by Resolution No. E-1402, authorized a change in the
fuel cost adjustment billing factor from 0.707~/kWH
to 0.818~/kWH, effective August 1, 1974 (modifying
the 0.941~/kWH factor requested in Advice No. 394-E,
dated July 2, 1974). A copy of the press release is
attached for your information.
Very truly yours,
N. A. STEWART
NAS : ck
Attach.
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From
Southern California
Edison Company
FOR IMMEDIATE RELEASE
CPUC AUTHORIZES FUEL
COST ADJUSTMENT
INCREASE FOR EDISON
ROSEMEAD, July 31--Southern California Edison Company
reported today that a fuel cost adjustment increase authorized
by the California Public Utilities Commission will raise the
bill of a typical residential customer using 500 kilowatt-hours
monthly by about 2 cents a day effective Aug. 1.
The average bills of typical customer groups will increase
as follows: Residential, 2.9%; commercial, 3.6%, and industrial,
4.9%.
The latest authorized increase, which goes to pay higher
fuel costs, will amount to approximately $53.1 million on an
annual basis. Edison had filed for an increase of about $ll3
million to offset rising prices for low-sulfur fuel oil required
for local power generation.
"The amount authorized by the PUC is less than we requested
for two principal reasons," Edward A. Myers, Jr., SCE vice president,
said. "One reason is that the Commission staff estimated that
both sales and fuel costs would be lower than Edison estimated.
Another factor in the lower fuel cost adjustment was the action
of the PUC in delaying for separate consideration the method of
handling the carrying charges of high-cost fuel oil inventories."
-SCE-
D245 073174
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(RECOMMENDED WORDING)
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NOTICE OF ELECTRIC RATE ADJUSTMENT
Vernon I S retail rates are maintained at competitive levels to other utilities serving
the area. Vernon has been able to charge a considerably lower fuel clause adjustment dur-
ing the past several months than other utilities in the area. Vernon has not placed
in effect, a utility tax as have several other municipalities and Vernon has for
several years given a discount adjustment on applicable Edison rates adopted by Vernon.
Effective May 2, 1974, the Southern California Edison Company started charging Vernon a
fuel clause adjustment billing factor which is in addition to the base rate charged
Vernon for all energy purchased from the Edison Company. Edison is forecasting increases
in this fuel clause adjustment during the next thme months resulting in an increase in the
cost of pOtver purchased by Vernon of some 24 % or some $ 5.400.000 annually.
On August 4, 1974, the base rate charged Vernon for pOWer purchased from Edison Company
was increased an additional 21% or some $3,800,000 an,nu,a11y~
To offset these increased costs of purchased power ,to VerJ1on, the Vernon City Council
has authorized an increase in the Vernon fuel clause, effective August 6, 1974, from
the present 0.308c;:/Kwh to 0.818c;:/Kwh. This is an average increase of some 27 %
with a range of increase up to 34 % to individual customers.
The ,present discount of 5% on all electric bills rendered to Vernon electric customers,
based on applicable Edison retail rates, as adopted by Vernon, will remain in effect.
The fuel clause adjustment billing factor will be changed from time to time to reflect
changes made by Edison in charges to Vernon for wholesale power.