WORK SESSION COMMISSIONERS OF PUBLIC WORKS April 12, 2005 A work session of the Board of Commissioners of Public Works was held on Tuesday, April 12, 2005, at 2:15 p.m., in the Boardroom of the Greenwood Commissioners of Public Works at 121 Court Avenue. In attendance: Gene P. Hancock, Steve D. Reeves, Jr., Denise Giannetti-Walsh I. Chairman Monaghan called the meeting to order and Commissioner Hancock gave the invocation. II. Chairman Monaghan gave the statement of compliance with the notification provision of the Freedom of Information Act. III. Discussion Items: A. Mr. Reeves explained the request for uniform replacement for administrative employees. Mr. Reeves stated that we are at the point where a number of employees need to have their uniforms replaced. He reminded the Commissioners that we originally purchased seven long-sleeve shirts, seven-short sleeve shirts, and seven pairs of slacks for the men and seven pairs of slacks and/or skirts for the ladies. He then recommended that we no longer purchase the pants and skirts for anyone because of numerous problems encountered with fitting them for these items. These problems have not occurred with the shirts. He also recommended going to a little better quality shirt but would direct all employees to wear either khaki or black pants or skirts. He stated that he did not budget to buy pants and skirts, just shirts. Chairman Monaghan stated that the lease from the water tank is paying for these items. The Commissioners felt that the entire uniform should be furnished, including the pants and skirts, to those who want them, but if the employee chooses to purchase them, they will not be reimbursed for those items. Mr. Reeves added that those who choose to purchase their own items will still have to meet the guidelines determined with the original purchase, in particular with length of the skirts and the colors. Mr. Reeves noted that the first time uniforms were purchased the cost was around $28,000. He noted that since these are replacement items, he would not anticipate replacing everything at once. Mr. Reeves stated that all items come through him for replacement. B. Mr. Reeves asked the Commissioners if they wanted to discuss the Grace Street Property. He reminded the Commissioners that he had talked with each Commissioner individually. He then called the Parks people and told them that the individual views of the Board were that we were not making any arrangements for splitting of any net monies from any sales of properties, and it would be considered once that time came around. He added that he had heard nothing more. C. Mr. Reeves informed the Commissioners of bids coming up in May for the projects at the water treatment plant. He stated they would like to have a pre-bid meeting at the plant sometime early in May preceding those bids to go through the specs with the contractors. Commissioner Watts also noted that he had not yet been to the water plant. Mr. Reeves gave the Commissioner the choice of May 3 or 4 at around 10:00. After discussion, the Commissioners decided on May 3 at 10:00 a.m. D. Mr. Reeves reminded the Commissioners of previous discussions on health insurance but added that no decision was made. He stated that during discussion, the possibility of increasing the deductibles was mentioned; increasing employee contributions on prescription drug cards; and increasing the monthly fee paid by employees for family coverage. Mr. Reeves asked for guidance from the Commissioners and suggested that staff could put together a proposal and include a recommendation. Chairman Monaghan asked whether this should wait until the budget is completed. Mr. Reeves stated that although the budget has not been voted on, it is finished other than the revenue side with the rate increases. Chairman Monaghan stated that insurance would be the last thing he would want to cut back on, and he would rather look at wages before cutting back on insurance. Commissioner Hancock stated he wanted to know the bottom line and what CPW contributes before deciding. Commissioner Watts stated he would like to see a proposal. Mr. Reeves stated that a proposal would be provided and they would go from there. E. Mr. Reeves informed the Commissioners that Mr. Lemon had been working on the gas supply asset management agreement with SEMI that will go through June 30, 2006. Mr. Lemon stated SEMI has been providing gas and asset management since October 2004 when the contract with Williams ran out. Currently, this contract has been reviewed by both outside counsels, Mr. Bill Patrick and Mr. Jim Byrd, and they have made some modifications. He stated they would like to start negotiations with SEMI to finalize this contract. Mr. Lemon stated they took the last draft and marked it up in house. Mr. Barnett added that they have talked with SEMI about everything except three or four items that are final changes; this is given to the Commissioners because it is as close to a final document as can be provided at this time. The plan is to have the rest of the items ironed out and to have a final document for the next Board meeting. Mr. Reeves stated the document is provided for the Commissioners’ review and unless they have disagreement with the contents, the final draft will be ready for consideration at the Board meeting. F. Mr. Reeves provided copies of the 2005 Cost of Service Analysis produced by Sheree Brown with Utility Advisor’s Network. Chairman Monaghan asked if everything was included that is now known about the budget and Mr. Reeves stated that she received the latest version of the budget reviewed by the Board. Mr. Reeves reminded Chairman Monaghan that Solutia money was not included in the rates and this was previously discussed and decided upon by consensus of the Board. Chairman Monaghan asked if that was in the minutes because he did not remember it. Mr. Reeves responded that including this in the rates would hurt in future years, it would help this year, but next year we would have to replace that $400,000 with rates that are not going to be included this year. Chairman Monaghan stated that he still had a problem with why we did not increase the rates last year when we knew that the electrical rates were going to raise. Mr. Reeves responded to Chairman Monaghan that he would probably not like his answer, but it was because the Commissioners did not want to because of the high unemployment in Greenwood and a bad economic situation. Chairman Monaghan stated that he did not think so, and Mr. Reeves stated that was the reason it was postponed. Chairman Monaghan asked if that was in the minutes someplace and Mr. Reeves stated that he was not sure whether that discussion was included in minutes. He added that it may have occurred during a work session or during an Executive Session. Mr. Reeves stated that the request was that we not include it all. He went on to say that an electric rate increase was done in 2003 and we did not include all of the cost at that time either. Mr. Reeves then referred to page 2 of the Cost of Service Analysis. Chairman Monaghan stated he would like to see those minutes if there are any. Mr. Reeves stated he did not have the minutes now but would search in the minutes, and added that we did not necessarily do them with that kind detail. He then reminded Chairman Monaghan that this issue came up several times. Mr. Reeves then stated that it seemed that Chairman Monaghan was insinuating he was making this up. Chairman Monaghan replied that he was making no insinuation and he would tell Mr. Reeves outright if he thought he was making this up. Mr. Reeves then assured him that this was discussed and the thought was raised at that time of postponing those costs because of high unemployment in Greenwood. Chairman Monaghan again stated he wanted to see the minutes and Mr. Reeves stated he did not know if they could be produced. Commissioner Hancock stated that he remembered it being discussed during a work session across the hall. Mr. Reeves stated that he follows his instruction from this Board to the letter. He again referred the Commissioners to page 2 which covers combined cost for all three utilities, with column one showing existing rate revenues, column two showing revenue requirements based on budget numbers, column three showing deficiency, and then the percent required in each utility to cover those costs. He went on to say that this represents a recommended increase in electric rates of 14.64 %; gas rates of 0.57%; and water of 19.51%. Mr. Reeves stated that based on these numbers, he would like to move ahead to page 17 which starts with gas, since gas and water are not nearly as complicated as the electric. He added that there may not be time to get into gas and water if they start with electric. Page 17 is a gas cost of service results assuming no additional margin; this is to cover cost only. The bottom line shows that the recommendation here is basically a 0% change, probably not worth making a change if you do not want to include any margin. Mr. Reeves explained that last year in our gas rates we had in excess of our needs, $1.5 million margin. Chairman Monaghan stated that we should retain that and Commissioner Hancock agreed. Mr. Reeves stated that $1.5 million margin has basically been absorbed into our cost due to high payroll costs, higher insurance cost, higher gasoline cost, and others. Page 17 shows it as no margin. Page 18 is not going to the $1.5 million margin but at least a $500,000 margin. Even at $500,000 it is going to take a 6.7% increase. If you look at it, it varies between the classes, but it will require a 6.7% increase just to meet the $500,000 margin. Mr. Reeves asked for direction from the Board as to whether we are to produce rates for a zero margin, a $500,000 margin, or if would they like to see a higher margin. He noted that zero margin is basically a 0% increase; a $500,000 margin is a 6.7% increase. Mr. Reeves added they did not run the numbers at a $1 million or $1.5 million margin, but they could. Chairman Monaghan asked about the recommendations on the other utilities. Mr. Reeves stated that they would get to those later, but that water recommendation is for break even; the electric recommendation is also break even. He added that gas is the only place we could produce a margin right now. Commissioner Watts asked what a 6.7% increase would mean to the average consumer. Mr. Reeves did not know and asked Ms. Giannetti-Walsh who then responded that she did not know either, but most of the increase is hitting the non-residential. Mr. Barnett added that most of the increase is hitting firm industrial. Mr. Reeves stated that according to this, you could actually reduce residential by 1.7% and the biggest increase hits the others. Mr. Barnett stated that the biggest implication would be in looking at the cost of service, allocating out your cost including capacity cost, firm industrial is not picking up their share of those allocated costs. Right now, residential is picking up the brunt of everything based on allocating out the cost. Commissioner Hancock stated that residential is overpaying and in the past industrial had subsidized the residential, but now it has reversed, and he noted that the gas is not too far out of line. Mr. Reeves stated that if the Commissioners would like to do the $500,000 margin, they could probably get with Ms. Brown to produce rates to show either a straight across the board, or based true on cost of service, giving two alternatives, both with the 6.7% increase. Commissioner Hancock stated concern competitive wise on firm industrial and interruptible and what we will lose. Mr. Barnett stated that with competitiveness, the closest way we can look at it is that we can see what it would do to the rate, take that rate and look at usage for a couple, try it on a BTU basis, and see what it would be if it were an electric rate. Mr. Meredith added that with the firm industrial, although this is a substantial increase, it is not likely they will go through and retool their plant or business with an all-electric type system, because the capital expense would be so great that it would not make good business sense. Even with the 50% they might break even, looking at what they would be offered on an electric wholesale interruptible type rate. Chairman Monaghan stated his belief that it is dangerous not to have a margin, and Mr. Reeves agreed that it should at least be the $500,000 margin. Mr. Reeves added that in just a little over a year, we saw the $1.5 million margin disappear, and if we don’t build something now, we could start snowballing the deficit. Mr. Reeves stated they would put together two rate alternatives for their review with the margin. They discussed excess capacity and Mr. Barnett explained some of the differences with the old Williams contract and the current contract. Commissioner Hancock inquired about the figure for propane air and Mr. Barnett stated he did not have a figure yet. Mr. Barnett then explained the rate design options and considerations from page 19. Using Fuji as an example of an interruptible customer, he stated that whether they choose to use their alternate fuel or not, we still have facilities there that we must service. Part of the rate design we are looking at is basically having a service charge for that facility that has nothing to do with consumption, but simply recognizes the fact that a facility is there that has to be maintained, whether they decide to use it or not. That is part of what will go into the new rate design; to increase the blocks of consumption, increasing the first block a little to recognize that in those first blocks is where you want to recover the majority of your fixed cost. Then as they use more, it is more of a variable charge. Part of the design change is to put in basic facilities service charges and raise the first block. Just as in the last rate design, to recognize the impact the interruptible does have on our demand charges, without allocating as much as you would to firm customers, take a portion of the demand charge and still put that in the rates because they truly do get the benefit 98% of the year. One of the things that has been done is to verify the cost that is put in versus what they could do on their own if they went and got their own capacity. Mr. Barnett stated that page 20 deals with PGC and the feeling is that this should be kept on a monthly basis because it works much better than a three or six-month basis. He stated they feel they should move the firm industrial into the monthly purchased gas cost like all other firm PGC because it is difficult to manage on a monthly basis as it is now. An annual true-up can be done if there is a need. Chairman Monaghan asked if this would be part of the monthly reconciliation and Mr. Barnett responded that it would. Mr. Barnett stated that we have been asked about having a straight transportation-only rate. This is being evaluated so we have more tools when we talk with industrial customers to offer them what they want and still cover our cost. Mr. Reeves referred the Commissioners to page 21 and stated that the recommendation is to increase water by 19.5%. He stated that before we found out that National Textiles was closing, we were looking at about a 10% increase. He added that we have not changed water rates since 1998, and he felt good about a less than 1.5% per year increase; which is a 10% increase for a seven-year period. We are losing over $500,000 in annual revenue as a result of National Textiles closing. There is not much cost we can shed as a result of this closing; we are saving a minimal amount on chemicals and pumping costs. Mr. Reeves stated that with this increase, it may be a little higher than it was in the early 90’s. Mr. Barnett stated that there is no easy way to talk about increases. We can say we will move things around and juggle them, but the bottom line still ends up the same. Mr. Reeves stated there is no margin here, it is break even, but if somebody goes into the National Textiles plant and starts using the same volume of water, you’ve got built in margin, you could either decrease the rates or say that will be our margin in water. Mr. Reeves referred to page 22 showing water rate design issues. He mentioned the second item, which is declining block structure and added that they would not want to eliminate that because you are hurting the industrial customers who are the big water users. He stated that he did not recommend changing the 80% outside city differential and stated there is legislation already in Columbia to eliminate that which basically says that you charge the same thing inside and outside the city. If that passes you will hit your inside residentials with a big increase. We are looking at implementing impact fees, but that will not affect the rates, that money will go toward future capacity. Mr. Reeves referred to page 23 where we have the option of an across-the-board 19.5% increase or making some of these other changes. We will probably look at implementing customer charges and volume charges for the first 400 cf, but not eliminating volume discounts because that hurts industrials and efforts for economic development. Mr. Reeves stated we will bring back a rate proposal. Mr. Reeves then returned to page 3 and electric service. The present rate revenues and total revenue requirements are shown with a little over $2 million short. He noted that a couple of things contributed to this. They knew the base wholesale rates from SCE&G were going up this year; what they did not expect was the amount of increase that SCE&G has seen in their fuel costs. Their natural gas costs have gone up, particularly the cost of coal has increased dramatically that they did not foresee. Mr. Reeves referred to page 4 showing the electric cost of service results. He added this is a pure based cost of service base allocation. Across the board the total increase is 18.89% in residential down to a total system increase of 14.64%. Mr. Reeves then proposed an option that would help the Board by separating a fuel adjustment clause so that as these costs of coal and natural gas go up for electric generation, the customer pays the extra on that month’s bill. As prices go down, they also get the credit. He then recommended less of a base rate increase and putting some of the actual fuel charges in a fuel adjustment clause not to be shown as a line item on the bill. Chairman Monaghan added that there was a lot of hassle with gas. Commissioner Hancock stated he did not believe that electric would have the amount of swing as with gas. Mr. Barnett added that he did not think it would be as volatile as gas. Mr. Reeves stated we would keep the records separate like with gas so that if someone asks, we can provide the breakdown. Mr. Meredith stated that instead of having an across-the-board increase so that everyone sees a huge increase that stays there, if we can let it flow with the fuel charges, then we can give the customer a break if we get a break and don’t have to keep coming back and adjusting rates up and down. Mr. Reeves referred to page 4 that calls for an 11.6% increase on base rates for residential, which included a fuel component. He then referred to page 5 showing the residential rate dropping to 9% from 11.6%. Ms. Brown has shown that we could subsidize residential enough to get under a double digit increase; it just makes the others subsidize the difference on the base rates. Mr. Reeves then referred the Commissioners to page 6 showing base rate increases for residential of 9.4%; commercial non-demand 13.4%; commercial demand customers a decrease of -7.42%; large power an increase of 0.55%, and negligible with security lighting. Mr. Barnett explained that the base rate does include some fuel based on what the initial contract with SCE&G had in it, the other fuel charge is the swing variable. Mr. Meredith started on page 7 and then addressed whether we will lose residential customers with that high an increase. Chairman Monaghan expressed concern with losing commercial customers when trying to get them to come into the city. Mr. Meredith stated that on the residential side, the last couple of developments they have tried to get into the city have been all-electric developments, so he has had to compete against Duke’s all-electric rate. At the current rates, we can do that; with this rate increase, we can still be competitive, but will not be cheaper than Duke, we will be 5-6% above Duke on an all-electric basis. He added that we do have a way to try and make that differential come down some at a later time. Mr. Meredith then referred to pages 16 & 17. He stated that they are not suggesting a pure all-electric rate for residential because that would essentially put gas and electric competing for the same customers. He added that he knew the Board’s desire to market gas as much as possible and that is kind of talking out of both sides of your mouth if you try to market electricity and gas against each other. Commissioner Hancock stated that if it is in the city, it makes no difference really because it will flip flop over time anyway. Mr. Meredith stated that we actually pay more in the summer for capacity and energy than in winter. Ms. Brown has developed what she calls a summer/winter rate on residential which mimic that same philosophy. In the summer, we plan on our all-electric customers that we have are actually winter people and use more energy in the winter because of heat strips and heat pumps that have to run more. In the summer, they found that the gas users peak in the summer, but the all-electric users do not, so they are paying the higher cost in the summer to supply electricity to their mixed use customers. In order for them to pick up a little more, essentially we are designing a rate for the mixed use electric customer to pick up more of the share of the capacity charges on the purchase power contract. The last column on page 16 shows a % difference from Duke. The first row shows everything rolled in, mixed use included. Mr. Reeves stated that if we only did it just as it is today with no difference in summer and winter, you are looking at a -7.33% difference from Duke, compared to Duke’s general service rate. The residential summer/winter rate for mixed-use customer (someone with gas heat, gas water) those particular customers would see an 11.93% base increase, but we would still be -6.08% under Duke’s rate. He then referred to residential all-electric for customer with everything electric; they would still see a rate increase and on average we would be 6.37% higher than Duke’s all-electric rate. Chairman Monaghan asked how interested the developer is in the all-electric rate, and whether they are not more interested in our incentive than our rate. Mr. Meredith stated that our incentive is what the rate is and we can typically show them that by coming in the city, the reduced cost on the water, the reduced electric cost, typically offset the taxes that would have to be paid. Although the developers are interested in the incentives, this is what helps them market and sell the houses they build. Mr. Meredith stated that if you compare residential to the general service rate, we are about 17 – 18% lower than Duke. Chairman Monaghan asked about the impact of these rates. Mr. Meredith stated that we have always competed for the commercial customers and they are always looking at the bottom line; however, rate comparisons have been done for the last several residential developments. Mr. Reeves stated that in those cases, typically you are working with a developer who is interested in the incentives. Mr. Meredith stated that we are not really saving the developer money on the electric side, but we are able to help him market his properties when we can show that the savings on water and electric by living in the city will pay their city taxes. You don’t have to design two different rates to still be able to compete with Duke. Duke has a general service and an all-electric rate and we have one rate for everyone, we don’t care if you use gas or electricity. If you happen to use electricity, it will be cheaper for you than Duke. Chairman Monaghan asked how long we are locked in to our electrical wholesale agreement and whether we anticipate that would turn into a cheaper rate than what Duke will have, what do they forecast. Mr. Meredith responded we are in the current agreement until 2009 and Mr. Reeves added that we have been anticipating Duke having a wholesale rate increase for the last couple of years, which they have not done yet. Mr. Barnett stated that will depend a lot on where fuel cost goes because right now Duke is in the driver’s seat because they have a larger portion (about 70%) of their generation is nuclear and five years from now that could go back the other way. Mr. Reeves stated that Duke has not announced a formal retail rate increase for a long time. Mr. Meredith stated that he has gone to their website and found different charges for energy. Mr. Barnett stated that Duke also has a fuel component that they change twice a year. As consumers, we don’t hear about a rate increase, but you got one. Mr. Reeves stated his belief that the other side of what they have been doing is cutting cost so dramatically to keep from having rate increases so that they are on the verge now of having to go back the other way. Mr. Barnett stated that we see the difference getting better in our favor sometime in the next one to two years; Duke is going to have to go back to the Public Service Commission at some point. Mr. Meredith stated that the last rate increase we had Duke could not really compete with us, the only time we would lose to Duke was when they would go in and modify their rate tariffs doing a separate contract with the customer, separate from their published rate tariffs to give additional incentives. Chairman Monaghan inquired as to whether CPW can do that and Mr. Meredith responded that we could if we get the Commissioners to agree to a rate structure for a particular customer but he would not suggest it. Mr. Meredith stated that with residential from a competitive standpoint with Duke, it appears we will need to go to a summer/winter type rate structure with it costing more in the summer. Chairman Monaghan asked if you can come up with a rate that recognizes in the rate structure the increased cost of summer, have more of a margin in the winter than summer. Mr. Reeves responded that is how we are now. Mr. Meredith stated you under-recover in the summer and over-recover in the winter, so there are a few months that CPW will carry the deficit, but we make it up overall annualized. Mr. Reeves stated that from the Commissioners standpoint, they would rather see the 9.4%. Mr. Meredith stated that if we just go across the board and don’t do the summer/winter rate, it may impact what we can annex, then when you have an all-electric community come in, we would not be just a little above Duke, but a lot above Duke. Chairman Monaghan inquired about what Duke will do if the City passes the franchise fee. Mr. Meredith stated that he had heard that Duke will try to fight for being the electric provider for the City if they have to pay a fee, and to have access to any City street just like we do. Mr. Reeves pointed out that is their opinion and the City does not have to yield to any of that, it depends on how strong the backbones of City Council would be. He added that Duke does not have to operate within the City, they can choose not to serve that customer and avoid that franchise fee. Mr. Meredith stated he did not think that would impact Duke’s rates. Mr. Reeves stated they will charge it, but will probably show it as a separate line item on their bill because they don’t want the consumer to think it’s them, they want them to think it’s a city tax. Chairman Monaghan noted that we could do the same thing and Mr. Reeves stated that could be done. You could take the transfer and show them as a separate line item as a city operating fee and lower the rates. Mr. Meredith then noted that on the commercial side, commercial no-demand on page 6, they are recommending a 13.4% base rate increase; a 22% total increase. This particular rate is about 50% less than Duke’s comparable rate. We have a fairly significant amount of revenue from it. Chairman Monaghan stated his belief that when these rate increases are presented, we should show these comparisons with other municipalities versus Duke. Mr. Reeves stated that Sheree Brown will come in with a spreadsheet on each showing the comparisons to others. Mr. Meredith stated that typically with rate increases, we show it with Duke mainly because that is the only other service in Greenwood they could get. Mr. Reeves stated that in the past, in particular with residential, she has shown comparisons with other municipalities. Mr. Meredith stated he did not believe she was planning to do that on this one unless we direct her otherwise. Mr. Reeves stated that would be easy to do with the SCAMPS survey. Commissioner Hancock stated his belief that we should also show that when we raised rates last time, what the cost of living was, and this rate is the same as it was ten years ago. Mr. Reeves stated that when we had the increase in 2003, the rates then were actually the same or lower than they were back in 1992. Chairman Monaghan stated that in future years, he hoped inflation would be considered and added that it isn’t always good to be the lowest. He added that Charles Schulze pointed that out to us when he said that we brag about being the lowest cost provider, but maybe we shouldn’t be the lowest cost provider if you fear you are not covering your own costs. Mr. Reeves stated that fortunately over the past number of years we have been able to cover our costs and had a margin that helped lower rates, but it is to a point now where we are not doing that. The Commissioners stated the need to build capital. Mr. Meredith stated that on the commercial demand, we are actually showing a base rate decrease of -7.42%, but when the fuel is added back in, it is 1.55% increase. This is not the rate tariff that he competes with Duke on, if you were trying to limit the increases on some of the others, this may be an area you could look at. He stated the one we actually compete with Duke on is the large power. We are only asking for 0.55% increase on the base rate, but it’s a 12.24% increase overall after fuel. This is the area that will be harder to compete on a commercial area. Chairman Monaghan inquired about the reasons why Ruby Tuesday’s did not go with CPW. Mr. Meredith responded that he knew the electrical consultant recommended us, but he had heard there were some city issues; it wasn’t anything to do with us or our rates. Mr. Reeves stated we have run into the same thing with Howard Corley’s property across from Lowe’s. We think we may have that worked out; we have been able to show him during a joint meeting with Steve Brown that with the incentives coming later when he has to put in a road and extend sewer and water, if he is outside, he has to do all of that on his own. If he pays the taxes out of his pocket and gets the incentives, he comes out cheaper. Mr. Reeves stated that Mr. Corley was pretty interested when he left and Mr. Brown is putting together some numbers for him. Mr. Reeves stated that we actually are attractive to businesses; it’s when you throw the city in that it becomes unattractive. Mr. Meredith stated that with large power, we are still competitive with Duke’s general rate, we’re just a little under as shown on page 16, but we are not competitive with their OPT rate at all. He added that in order to combat that for annexations, is to design for an economic development incentive that would be a structured four-to-five year incentive that you would get most in the beginning years and would phase out over a certain amount of time. Duke does a five year incentive where they give a 20% break on power the first year, and it goes down in 5% increments until the end of the contract. Typically, Duke makes them sign a ten-year contract so that they are recovering all those costs. Mr. Reeves stated that SCE&G is willing to work with us on that. Mr. Meredith stated we have started some negotiations with them. Chairman Monaghan asked if we can partner with them. Mr. Reeves stated that is what we are doing, they will put language in an amendment to our contract that basically says “up to certain load each year can be offered at this rate and we will give you protection for it”. Mr. Reeves added that as part of our discussions with SCE&G, they realize that every customer lost to us is lost to them; every customer gained by us is gained by them. They are willing to work with us on every customer no matter how large. Mr. Meredith stated the need to establish a cap so that we don’t have to go back to them on every new customer. Mr. Meredith stated that even if we don’t get everything exactly the way we want from SCE& G, he would still like to see us do an economic development rate, even if we have to eat the cost during that timeframe. Chairman Monaghan stated as long as we do a cost benefit analysis and we are going to get the payback. Mr. Reeves recapped the discussion and stated that everyone is in agreement with electric that we do the 9.4% residential and the economic development riders and those issues; and a couple of rate scenarios including the $500,000 margin will be developed in gas. Chairman Monaghan stated that with fuel adjustment, anything that is variable for us, we should have variable in the rate structure. If we are subject to a risk and a variation that should be in our structure in some way so we are not penalized. Mr. Reeves asked for guidance from the Commissioners and asked whether they wanted Sheree Brown to present the rates to them alone before a public hearing. Chairman Monaghan stated that if everything if finalized, they could present them to the Commissioners and have Sheree present them at the public hearing. They discussed dates for a public hearing and decided to look at three weeks out, which should give Sheree Brown time to develop the rates. They discussed May 3 for the public hearing and noted there is a pre-bid conference at the water plant on that day, and a County Council meeting at 5:30. Mr. Reeves noted that typically the time is at 5:00 or 5:30. After discussion, the Commissioners decided on May 4 for the public hearing. Mr. Reeves added that the hearing will be held to allow public comments; they would then adjourn the public hearing and go into a formal Board meeting to approve the rate, with an effective date of probably June 1 or July 1. Commissioner Hancock asked for graphs and handouts at the public hearing showing comparisons. IV. Executive Session: A motion was made by Commissioner Watts, seconded by Commissioner Hancock and unanimously approved to go into Executive Session. V. With no further business, the meeting was adjourned. |