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Review and Discussion of Upcoming Major Financial Issues for the Department of Public Utilities
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During the Council's budget process, several questions arose regarding the Utility Department's proposed budget that initiated discussions on a variety of topics, including sunset clauses in rate ordinances, planning for capital expenditures, appropriate fund balances, upcoming rate increases, general policy guidance/oversight, and communications between Council and BPU. In order to address these issues, a $25,000 placeholder was approved within the County budget to facilitate an independent review of these issues and the provision of any suggested remedies, however these funds do not become available until July 1. With the anticipated introduction of two rate related ordinances during the month of June, it was decided that holding a joint meeting between the members of Council and BPU would be appropriate at this time.
Although the range of topics that may be discussed during this joint meeting is broad, there is some specific information provided within this packet that is related to certain issues that have been previously discussed. The first such topic is that of a sunset clause for the gas rate ordinance. On November 5, 2013 Council adopted a gas rate ordinance that included a pass-through cost of gas adjustment factor. In discussions between the Utilities Board and the Council leading up to this decision, Council expressed uneasiness with the new rate model and requested that the DPU present an annual report on the effects of the rate, and also include a sunset clause in the ordinance whereby the rate would expire three years from its adoption. When the three year sunset was coming up, the Board considered the pass through gas cost factor and recommended a renewal of the existing gas rate structure. The new ordinance contained a decrease in the fixed cost portion of the rate to begin to draw down the large reserves that had been necessary whe...
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