EWEB Resolution - street lights w 843 Procedure applicable to City of Eugene

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373 Following is a breakdown of lights and revenue by agency: Mercury Non -Mere Total Mercury Vapor Non -Mere Vapor Agency Vapor Revenue Vapor Revenue Annual Fixtures Annual Fixtures Annual Revenue City of Eugene 4,540 $314,931 153 $38,672 $353,603 Oregon State Hwy. 20 1,550 116 32,889 34,439 Lane County 20 2,301 90 23,114 25,415 River Road WD 376 19,899 19.899 Rainbow WD 48 3.315 3,315 Glenwood WD 54 3,486 3,486 U of O 51 2,987 2,987 School District 52 5 409 409 City of Springfield 1 82 82 Santa Clara WD 534 33,244 _ 33,244 5,649 $382,204 359 $94,675 $476,879 Grand Total Fixtures = 6,008 — Grand Total Revenue = $476,879 "TODAY'S COSTS Street lighting capital and operation and maintenance costs are increasing at a rapid rate. Since 1974, average costs for the installation and ongoing upkeep of a typical mercury vapor light has increased in excess of 100 percent. As a result. EWEB, because it provides financing on a long-term basis, has begun to find itself short of funds to invest in street lighting hardware. Thus, EWEB is being forced to impose delays on agencies who are requesting additional lighting installations and modi- fications. While EWEB feels an obligation to provide lighting service to its agency- customers, it also feels a need to avoid a cross - agency subsidy of lighting costs, which are presently intended to be funded from various agencies' tax bases - -not from the electric rate base. "IMPACT OF RETAINING PRESENT FINANCE /MAINTENANCE APPROACH To show an analysis of impact, the two major rate components, composed of (a) capital costs and (b) operation and maintenance costs, must be separated. The separation is necessary because those lights, which are already installed and on an amortization schedule, should not be subject to an increase to the capital portion of the rate. The operation and maintenance portion, however, is subject to an in- crease. Further, all lights not yet installed would be subject to both capital and operation and maintenance increases. Following is an example of potential impact to the City of Eugene if full costs were recovered from their two major classes of mercury vapor lighting: Existing Installations New Installations 1974 1981 1974 1981 Number Annual Annual Percent Per Fixture Per Fixture Percent Lights O & M O &M Increase Ca ital Capital Increase 4468 $11.77 24.13 105 157.25 $349.84 122% "AN ALTERNATIVE EWEB staff has reviewed closely the financing arrangement in effect since 1960. On a system -wide basis, staff finds that, as of 1981, the street lighting system has reached full payout. In other words, agencies have, over time, paid costs adequate to indicate that the installed capital portion of the system, as of now, is owned by them. Staff feels that this situation offers a unique opportunity to embark on a new approach to providing lighting services which would give much more flexibility and control, not only to its lighting customers, but to EWEB as well. "PROPOSAL Effective November 1, 1981, EWEB's agency lighting customers become sole owners of their existing lighting systems and of any new lighting they may contract with EWEB to install. For Existing Lighting System, EWEB will: ...provide to the agency existing maps of their lighting system; ...make modifications to such maps if EWEB is contracted to maintain the agency system; ...reduce monthly lighting charges. Provide a separate, monthly billing for energy costs, which shall include a four percent factor for overhead and a six percent factor for in- lieu of tax payment to the City of Eugene; ...provide, under contract with interested agencies, globe washing and relamping services on an actual cost basis; ...under contract, and upon receipt of a written request from the agency, perform general maintenance and repair of the agency -owned street lighting system including, but not limited to, removals, replacements, repairs and relocations. Charges by EWEB for such maintenance and repair shall be based upon actual cost;