County of Los Alamos - File #: CO0660-23-b

• File #: CO0660-23-b
• Version: 1
• Type: Code Ordinance
• Status: Public Hearing
• File created: 1/5/2023
• In control: Board of Public Utilities
• On agenda: 2/15/2023
• Final action: 2/15/2023
• Title: Incorporated County of Los Alamos Code Ordinance No. 02-340; an Ordinance Amending Chapter 40, Article III, Sections 40-151, and 40-152 of the Code of the Incorporated County of Los Alamos Pertaining to Gas Service Rates
• Presenters: Heather Garcia
• Indexes (Council Goals): * 2022 Council Goal - Investing in Infrastructure, DPU FY2022 - 1.0 Provide Safe and Reliable Utility Services, DPU FY2022 - 2.0 Achieve and Maintain Excellence in Financial Performance
• Related files: CO0660-23b

Title
Incorporated County of Los Alamos Code Ordinance No. 02-340; an Ordinance Amending Chapter 40, Article III, Sections 40-151, and 40-152 of the Code of the Incorporated County of Los Alamos Pertaining to Gas Service Rates

Recommended Action
I move that the Board of Public Utilities approve Incorporated County of Los Alamos Code Ordinance No. 02-340; an Ordinance Amending Chapter 40, Article III, Sections 40-151, and 40-152 of the Code of the Incorporated County of Los Alamos Pertaining to Gas Service Rate Schedule, and forward to Council for adoption.

Utilities Manager's Recommendation
The Utilities Manager recommends that the Board approve this code ordinance as presented.

Body
In August of 2022, Ordinance No. 02-329 was approved, amending fixed gas rates and meter service charges by 5%, which was discussed in the FY2023 budget cycle. At that time no changes to the variable rate were proposed. The variable cost of gas is estimated monthly based on the San Juan Index price. This price is measured in metric million British thermal units (MMBTU) which converts to approximately 10 therms. Before December 2022, the highest price per million metric British thermal unit (MMBTU) was $8.75 in September 2022. December prices closed at $10.29 per MMBTU and January closed at $32.97.

Budgets for FY2023 costs of gas were based on estimates provided by Conoco Phillips, and was set at $5.39 per MMBTU, or approximately $4.3 million for the year. As of today, the average San Juan Index price for FY2023 is $11.08, with the months of December and January estimated to cost $7.3 million alone. Budget revision 2023-26 is also being presented to BPU and council to increase FY2023 budgets for gas purchases by $10.7 million. Fluctuations in the gas market are created by changes in demand due to weather events, increased reliance on power generation from natural gas, and more recently war in Europe.

DPU does have a fixed volume deal with the NMEAA, which provides 80%...