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Frequently Asked Questions
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Q 1 What will happen to City Light rates on March 1, 2002?
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A 1 Rates will increase for a limited number of rate classes:
- Medium Network General Service (Schedule MDD)
- Large Network General Service (Schedule LGD)
- Floodlights (Schedule F)
- Streetlights (Schedule T)
- Duct, Pole and Vault Rentals
In percentage terms, the increase for the Medium Network class will average 4.1%.
Large Network customers will see an average increase of 3.8%. Average floodlight
and streetlight rates will increase by about 9%. The increase for duct, pole and vault
rentals will average 3.6%.
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Q 2 Why are rates increasing for network customers?
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A 2
During the review of City Light's electric rates and charges in
1999 a great deal of attention was devoted to the level of service provided in the downtown
network and the cost of providing that service. Data on outages indicated that reliability
was considerably higher than average in the downtown network. Cost of service analysis showed
that the cost of network service was also far above the average cost of providing service outside
the network area, since network service involves the installation of additional equipment
components to enhance reliability. The City Council therefore decided that it was appropriate
to establish a separate, higher rate for Medium and Large General Service customers
in the downtown network that reflected the higher cost and higher reliability of
service in the network area.
The ordinance which adopted rates for the 1999-2002 period (Ordinance 119747)
set rates for network customers that were intended to recognize one-half of the
differential between the cost of network service and the cost of service outside
the network over the three-year rate period. The rates that took effect on
December 24, 1999 recognized one-quarter of the differential. The ordinance also
called for a second rate adjustment effective March 1, 2002 to take the next step
in bringing network rates closer to the true cost of service. The provision for
a second network rate adjustment on March 1, 2002 has been included in the three
rate ordinances implementing power cost adjustments in 2001.
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Q 3 Why are rates increasing for floodlights, streetlights and rental
of poles, ducts and vaults?
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A 3
The rate ordinance passed by the Council in November 1999
provided for two increases in rates for streetlights, floodlights and pole, duct
and vault rentals to reflect increases in the cost of service. The first increase
took effect on December 24, 1999. Rates for these classes have not changed since
that date, in spite of the fact that rates for all other rate classes have increased
substantially as a result of the power cost adjustments that were implemented in
2001. The second increase in rates for streetlights, floodlights and pole, duct
and vault rentals will take place as scheduled on March 1, 2002.
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Q 4
What is happening to the rates of the other customer classes?
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A 4
Aside from the increases for the rate classes discussed above, the City Council
has not taken any further action to change rates from their current levels. City
Light will brief the Council in March 2002 on its current financial status and the
outlook for the next three years. Decisions on future rate adjustments, if any are
required, will follow that review.
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