Title
Introduction of Incorporated County of Los Alamos Code Ordinance No. 02-359; An Ordinance Amending Chapter 40, Article III, Sections 40-151 and 40-152 of the Code of the Incorporated County of Los Alamos Relating to Gas Rate Schedules
Body
The FY2025 adopted budget and FY2026 projection each included a 5.5% blended rate increase for gas. The Board and Council previously approved a 3% increase for FY2025 (effective Sept 2024) and a 2% increase for FY2026 (effective Sept 2025). In determining projected rate increases, the ten-year projection takes into consideration expenditures and fulfilling the reserve target requirements within the required ten-year horizon. Since DPU's budget preparation, New Mexico Gas Company (NMGC) and Conoco Phillips have notified the County of increases in their transportation rates on both a per meter and variable basis.
NMGC has also applied for a rate increase for their retail customers that would take effect in October if approved by the Public Regulation Commission (PRC). According to NMGC’s website “for customers who are not signed up for budget billing, the summer bill average impact would be an increase of 6.3% while the winter bill average impact would be an increase of 7.3%.”
The current DPU gas rate is made up of the following components:
Current Fixed Service Charge:
Small meter (<=250 CFH) = $11.08/month
Large meter (>250 CFH) = $33.24/month
Current Commodity Rate:
Varies monthly. Minimum allowable variable cost-of-gas rate = $0.11/therm
Fixed consumption charge = $0.27/therm
The rate analysis attached excludes the variable cost of gas rate because it is a pass-through rate that is calculated each month based on the projected cost of gas for the billing month plus an adjustment for any prior over or under collection for gas purchases and or gas transportation costs, provided, however that the variable cost of gas rate shall not be lower than $0.11 per therm per month. We looked at alternatives to the proposed rate increase, but it resulted in a short fall of over $719k.
The purpose of tonight's presentation is to discuss the draft ordinance and associated rate increases ahead of bring the ordinance for consideration.
Proposed Ordinance Schedule:
BPU Public Hearing: June 26, 2024
Council Introduction: July 9, 2024
Council Public Hearing: July 30, 2024
Attachments
A - Code Ordinance 02-359_Gas Rates
B - Gas Rate Calculation