HomeMy Public PortalAbout003-2004 - Revises RatesRESOLUTION 3 - 2004
A RESOLUTION OF THE BOARD OF DIRECTORS
OF RICHMOND POWER & LIGHT
RECOMMENDING THE ESTABLISHMENT
OF REVISED RATES AND CHARGES FOR THE USE OF
AND SERVICES PROVIDED BY RICHMOND POWER & LIGHT
WHEREAS, the Board of Directors ("Board") of Richmond Power & Light (the
"Utility") desires to continue to provide adequate and efficient electric service for the
protection of the health, well being and property of the City of Richmond and its electric
customers; and
WHEREAS, the Board has engaged the services of The Prime Group LLC, CPAs and
Consultants to perform a financial study of the revenue requirements of the Utility for the test
year ending March 31, 2004, as well as a cost-of-service study, based upon the Utility's pro
forma revenues, expenses and net original cost plant in service for such test year; and
WHEREAS, the existing rates and charges for electric services provided by the Utility
were placed into effect following approval by the Indiana 'Utility Regulatory Commission (the
"Commission") in Cause No. 40434, Order dated March 19, 1997 and the level of operating
revenues was last revised in Cause No. 39465, Order dated December 30, 1992; and
WHEREAS, the Board and its advisors believe (i) the Council should adopt a Rate
Ordinance approving a new schedule of rates and charges for services provided by the Utility
that replace existing rates, that increase test year electric operating revenues by approximately
8.7%, and more accurately reflect cost-of-service and reduce subsidy excess revenues
between customer classes; (ii) the proposed rates and charges should be designed so that they
are nondiscriminatory "reasonable and just charges" for electric service within the meaning of
IC 8-1.5~3-8, and follow more closely cost-of-service by customer class; and (iii) the
Common Council should include in such Rate Ordinance an election permitting Richmond
Power & Light to earn a reasonable return on its net plant; and
WHEREAS, the Board and its advisors believe a reasonable rate of return on the net
plant of Richmond Power & Light is approximately 5.89%; and
WHEREAS, the Board and Management have developed revised schedules of rates
and charges for electric service based upon the assistance and advice of The Prime Group,
LLC, CPAs and Consultants; and
WHEREAS, the Board has the fiduciary responsibility of making recommendations to
the Common Council relative to the need for the adoption of revised electric rates and
charges;
NOW, THEREFORE, BE IT RESOLVED that the attached schedule of rates and
charges should be approved by the Common Council by Rate Ordinance.
BE IT FURTHER RESOLVED that the necessary and appropriate officials of the
Utility should be authorized to file with the Commission a verified petition seeking approval
of a new schedule of electric rates and charges, as well as testimony and exhibits in support
thereof, subject to Common Council approval of such revised rates and charges by the
adoption of an Ordinance.
PASSED AND ADOPTED BY THE BOARD OF DIRECTORS OF RICHMOND
POWER & LIGHT THIS ,/~, DAY OF AUGUST, 2004
BOARD OF DIRECTORS OF
RICHMOND POWER & LIGHT
By: K~arl S~hal ~
rp, RP&L Chairperson
By:
I~I~,dr~ 'J~C~E~tr(~
Etta Lundy
By:
Diana Pappin
By:
By: