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TO: Mayor Thomas J. Weisner
FROM: Daryl Devick, Public Works
DATE: April 21, 2016
SUBJECT:
A Resolution Approving and Requiring Commonwealth Edison to Install Underground Improvements along the south side of East New York Street from Eola Road to approximately Asbury Drive In Accordance with Rider LGC as approved by the Illinois Commerce Commission.
PURPOSE:
To require Commonwealth Edison (ComEd) to install underground facilities along the south side of New York Street from Eola Road to the existing ComEd poles approximately 580 feet East of Asbury Drive, which requires allowing ComEd to recover the costs of such project.
BACKGROUND:
When ComEd has to make distribution "improvements", they are required by the ICC to install the least cost option which typically means the installation of overhead lines connected to wooden power poles. If the "improvements" are required in areas where power poles do not exist the permit submittal to the City typically proposes the installation of new power poles. At which point, the City has a one-time opportunity to authorize the installation of underground "improvements" in lieu of overhead and have the rate payers pay the differential cost between the overhead and underground option. This type of issue has come up twice in the last three years. The first occurrence was the Bilter Road corridor from Eola Road to the Illinois Priarie Path. Since the proposed "improvements" directly benefited TIF 8, the City was able to require the undergrounding of the proposed improvements and used TIF funds to pay the differential. The second occurrence is a current request to install poles along the south side of East New York Street from Eola Road to the existing poles located approximately 580 feet east of Asbury Drive. This improvement will improve capacity for a large segment of the City and will not benefit a specific TIF. The attached Resolution would require the installation of underground "improvements" in lieu of a project that would install overhead lines where they currently do not exist on New York Street. This Resolution would allow ComEd to recover the premium cost per the requirements of Rider Local Government Compliance Adjustment (Rider LGC).
Rider LGC, by its very terms, allows ComEd to raise the electric rate of all electricity customers located in the City’s boundaries as opposed to only those directly benefiting from the project. The costs of providing such service, or installing, removing, replacing, modifying or maintaining such facilities, are recovered from the Company's retail customers located within the boundaries of our Local Government Unit in accordance with the provisions of the Adjustment Computation and Application section of Rider LGC.
Under the terms of Rider LGC, the funds must be collected over the time the construction bills are being paid by ComEd. Specifically, the per kWh rate, which represents the LGC Adjustment, for customers over the billing period is calculated by subtracting the costs incurred by ComEd to provide the service minus the amount equal to the revenues received minus the revenues billed. This amount is divided by the total kWh hours charged to the customers within the City for the applicable month. The rate is rounded to the thousandths of a cent and applied to each kWh provided during the monthly billing period to each retail customer. This rate will be separately stated on each customer’s bill. Therefore, the duration of the cost shift is dependent on the actual costs of the services incurred by ComEd each month. Presumably, the rate increase may have a one-three month lag depending on the scope of the project. Below is the detailed formula, which has been approved by the ICC and that ComEd will apply:
LGC Adjustment = A - P 100 ₵
___ x _____
E $ 1
A = Local Government Compliance Account Amount in $, equal to the net balance of the cumulative Costs (i.e. expenditures incurred by ComEd in undertaking a project, including the entire amount as recorded on ComEd’s books of account. Such costs may be estimated, subject to adjustment to actual costs as they become available) attributable to the City less Revenues (i.e. cumulative amounts charged to retail customers located within the boundaries of the City for a project under the rider, less cumulative amounts credited to such retail customers for such project) from retail customers located within the boundaries of the City through the end of the Determination Month (the calendar month through which Costs and Revenues are accumulated and balanced in the LGC Account. The Determination Motion is the month two (2) months prior to the monthly billing period for which the LGC is computed.)
P = Pending Revenues, in $, equal to the estimated amount of revenues charged or credited in accordance with the provisions of this rider to retail customers located within the boundaries of the City for the monthly billing period immediately prior to the monthly billing period for which the LGC is computed.
E = Energy, in kWh, equal to the sum of the kWh's estimated to be provided during the monthly billing period for which the LGC is computed to retail customers located within the boundaries of the City for which the LGC is computed.
Rates will return to normal once the costs have been covered, provided however, when the service has been completed for three months and the calculation of the Local Government Compliance Adjustment results in a charge or credit of less than 0.001¢/kWh for three consecutive monthly billing periods, then the cost shift must conclude. The Rider requires ComEd to credit any excess amounts charged to the customers.
DISCUSSION:
For this particular "improvement" on New York Street, current estimates prepared by ComEd, suggest a cost of approximately $233,000.00. As an example, a $250,000 "improvement" would add approximately $0.72 each month for three months for the average (1,000 kwh) residential ComEd customer. A lighter electrical user, i.e. two-person household that may only use 400 to 500 kwh monthly, and would see an increase of just $0.36 per month for the three months
IMPACT STATEMENT:
There will be a small increase in cost to all ComEd customers within the corporate boundaries for a period of approximately three months, with the benefit being to prevent the further proliferation of power poles in the City along the vital New York Street corridor.
RECOMMENDATIONS:
Please forward to the Finance Committee for their review and recommendation for approval
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Approving and Requiring Commonwealth Edison to Install underground Improvements in accordance with Rider LGC as approved by the Illinois Commerce Commission at East New York Street from Eola Road to Asbury Drive.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, under Rider Local Government Compliance Adjustment (LGC) as approved by the Illinois Commerce Commission, Commonwealth Edison is permitted to recover the cost of complying with non-standard requirements imposed by units of local government by billing all of Commonwealth Edison’s customers within the local government’s boundaries; and
WHEREAS, the corporate authorities of the City desire to require Commonwealth Edison to install underground facilities in the area of the south side of East New York Street from Eola Road to the existing poles approximately 580 feet East of Asbury
Drive, and further agree that Commonwealth Edison may recover the cost of installing such underground facilities only as permitted under Rider LGC (Local Government Compliance Adjustment) and as approved by the Illinois Commerce Commission for this location (enter additional text here. You can enter additional:)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows:
Section 1: The preambles set forth above are incorporated herein and made a part hereof.
Section 2: That Commonwealth Edison shall be and hereby is required to install underground facilities along the south side of East New York Street from Eola Road and connect same to the existing aboveground poles approximately 580 feet East of Asbury Drive in Aurora, Illinois, and that Commonwealth Edison shall recover the cost thereof only as permitted under Rider LGC (Local Government Compliance Adjustment) as approved by the Illinois Commerce Commission.
Section 3: That this Resolution shall take effect from and after its adoption and approval as required by law.
PASSED AND APPROVED by the City Council of the City of Aurora on_______________________.
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Aldermen Aldermen
AYES________NAYS________ABSENT________
ATTEST:
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City Clerk Mayor
City of Aurora
Law Department
44 East Downer Place
Aurora, Illinois 60507
(630) 256-3060