DISCLAIMER

 

05-0653R


RESOLUTION ESTABLISHING REVISED NATURAL GAS RATES EFFECTIVE WITH METER READINGS AFTER NOVEMBER 1, 2005, AND RESCINDING ALL PRIOR INCONSISTENT OR CONFLICTING RESOLUTIONS WITH RESPECT TO SUCH RATES.

BY COUNCILOR STOVER:

     RESOLVED, effective with the natural gas readings after November 1, 2005, all customers of the natural gas utility of the public works and utilities department of the city of Duluth, whose natural gas supply is measured by meter, shall be charged for such natural gas in accordance with the schedule of rates established by this resolution as follows:

CUSTOMER RATE SCHEDULE BASED UPON MONTHLY METERED VOLUME

 

Fixed monthly charge (no change) Effective November 1, 2005 rate

Per 100 cubic feet

Effective November 1, 2005, rate

Effective August 1, 2003 rate

Firm sales service

Residential

$6.00

$0.548

$0.538

Residential heating

N/A

N/A

N/A

Commercial/industrial heating

N/A

N/A

N/A

Commercial/industrial small volume

$25.00

$0.453

$0.443

Commercial/industrial large volume

$250.00

$0.395

$0.385

Interruptible sales service

Commercial/industrial small volume

$100.00

$0.330

$0.320

Commercial/industrial large volume

$275.00

$0.304

$0.294

Firm transport service

Commercial/industrial small volume

$50.00

$0.095

$0.095

Commercial/industrial large volume

$275.00

$0.057

$0.057

Interruptible transport service

Commercial/industrial small volume

$125.00

$0.060

$0.060

Commercial/industrial large volume

$300.00

$0.046

$0.046

Purchased gas adjustment (PGA)

If the wholesale price of gas purchased by the city of Duluth is increased or decreased as compared to 1995 base gas costs, and any such change results in an average unit cost of gas in excess, or less than the 1995 base gas costs, the unit commodity charge ($ per CCF) for gas sold under the applicable rate schedule shall be increased or decreased on the customer’s monthly bill in the same amount as the unit cost of gas has been increased or decreased.

     RESOLVED FURTHER that any prior rate resolutions inconsistent or conflicting with this resolution are hereby rescinded.


STATEMENT OF PURPOSE:  Approval of this resolution will increase the natural gas utility base (variable) rate by $0.01 per CCF. This increase is required to generate total revenue approximately equivalent to the 2006 calculated payment in lieu of taxes (PILOT) (seven percent gross revenue) attributed to the purchased gas adjustment (PGA) revenue increment. The 2006 PILOT to the general fund for the PGA revenue increment has been budgeted in an amount of $489,000 higher than the 2005 PILOT. The operating margin (revenues less natural gas costs) is insufficient to cover this increase. By design, the PGA calculation does not include the PILOT. The recommended rate adjustment will remedy the projected deficit.