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GAS ADJUSTMENTS EFFECTIVE MARCH 2010CLEARWATER GAS SYSTEM RECEIVED Interoffice Correspondence Sheet MAR 0 2 2010 T0: William B. Horne II, City Manager a ITICIAL RECORDS AND LE .31SLATIVE SRVCS DEPT FROM: Chuck Warrington, Managing Director COPIES: Rod Irwin, Assistant City Manager; Cyndie Goudeau, City Clerk, CGS & CCS Management Teams; Janet Dorrough, Sr. Accountant/CGS; Tom Madley, Sr. Accountant/CCS; Laura Damico, Sr. Accountant/CCS SUBJECT: GAS ADJUSTMENTS EFFECTIVE MARCH 2010 DATE: February 26, 2010 World Natural Gas supply markets have been fairly stable but have risen somewhat into the winter peak demand season, and Propane supply markets continued to rise tracking the increases in oil and gasoline prices. Therefore, we are recommending that we increase our Natural Gas Purchased Gas Adjustments (PGA) by 4¢/therm, and we are recommending that we increase our LP PGA by 7¢/gallon in March. We are -not recommending any change in our Energy Conservation Adjustment (ECA), our Regulatory Imposition Adjustment (RIA), nor our Usage & Inflation Adjustment (UTA) at this time. The overall effect of these recommended changes is a 40therm (+2.7%) increase in our typical Residential Natural Gas customer's rate and a 701gallon (+2.5%) increase in our typical Residential LP customer's rate. Therefore, we are recommending your approval of the following rates to become effective for billings rendered on and after March 1, 2010: Natural Gas Firm Standard Rate Schedule PGA ....... Natural Gas Interruptible and Contract (Non-Standard) Rate Schedule PGA ............ $0.92 per therm (up 4¢/therm) $0.84 per therm (up 4¢/therm) Propane (LP) Gas Rate Schedule PGA ................... Energy Conservation Adjustment (ECA) ............... Regulatory Imposition Adjustment (EIA) ................ $1.76 per gallon (up 7¢/gallon) $0.11 per therm or gallon (no change) $0.01 per therm or gallon (no change) Usage & Inflation Adjustment (WNA) .................... $0.00 per therm or gallon (no change) William B. Horne II, City Manager February 26, 2010 Page 2 Attachment #1 shows the current and projected status of our adjustment clauses. As of the end of January, we are overall under collected by $1.9 Million, which together with the anticipated increases in commodity costs is a key reason for the increases in PGA this month. The adjustment rates are designed to bring us back into balance by FYE, which is important to our financials. Attachments #2 and #3 show our annual projections for Natural Gas and LP supply costs, respectively. Attachments #4 and #5 show the impact of these adjustment clause changes on our overall Natural and LP Gas rates, respectively. Attachment #6 shows our rate history over the past 5+ years and shows our relationship to current electric prices. Please note that the last Page of this analysis shows that over the past 8 ears our residential natural as rates have risen aust 3.7% as compared to a 57% increase for Progress Energy Florida residential rates. That's an average annual increase of 0.5%/ ear for natural as vs. 7.1%/ ear for electric --- a remarkable difference! I should point out that the overall effect is that our typical Residential customer rates are now approximately 61% lower than electric for Natural Gas and LP is now about 18% lower than electric. It should be pointed out that Progress Energy Florida recently secured FPSC approval of a small rate increase (they were turned down for most of the large increase that they had requested). This does not reflect this recent increase, which will make us even more competitive. These competitive positions vs. electric are a result of their sizable increases over the past year, while we our rates have overall declined & been much more stable. Additionally, TECO Peoples Gas received approval to increase their natural gas rates, so we are now below their pricing for a typical residential customer. We will continue to track these balances monthly, make ongoing projections of these factors based on market conditions, and let you know if any of these get significantly out of balance. Bill, I would appreciate your approval of these revised adjustment rates so we can get this information to CCS in order to make the appropriate adjustments in the billing formulas in time for the March 1 st billings. If you have any questions on this, please call me. CSW/csw Attachments Approved: ?. William B. Horne II, City Manager U:\My Documents\MSOFFICE\WINWORD\GASRATES\Gas Adjustments for March 2010.doc M O C d m Q1 v d R a W M! to 0) a W H a a W J U I I i ? , I ?, I ? 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O LL _ cd Z co w Z 12 , fC Q CL C r_ 4) cm C m _ ! c r a U Co 00 H Q z z W H a O 0 _ z m ° w D 1- z U o CSW:0 2/2 612 0 1 0 Attachment #6 - I Page 1 of 2 Residential Rate History By Components Clearwater Gas System _. ,..... Total Rate _ _ - .. .. ?i- - ... _I _. ..... . .. -._ ......Adius.. .t......!_....._._... /thTot LPloallon " - . _. _. mentslTher Contract A# PGA PGA PGA/gallon h NG _ Mont .. .30...0 - . _._...._..... Y1 ... ..... ............. '.. $ 0.140 ECA $ EIA/RIA# WNA/UI ...I .. $ . 1.270 Oct - -------- - ..- ?----- $ 1.190 -08 8 $ 11=.990 3.990 3 $ 2.260 -! . _.... { ... ....... 2,. _ ----.300 $ 0.140 _ .760 _...--Dc-08 $ 1.940 $ an-09 $ 1750 $ # ; $ 1-270 $ 1190 $ E.ie- - .._._.. .._.... _._..__.... 2 2.770 , $ 0.140_ $ $ ------- _ ?' $ 1.220 ? .?... 1.100 I $ 1.200 1.140 $ 130 -- ---.. ..__.. i . 2.290 . ' 0.090 r - $ 1.180_. r _._... _..._... $ 0.090..:. $ $ 80 ............ 0...$ $ 2.290 I ? i - - - _ _1.20D _ $ . _ Mar-09 $ 1.580 0-070 $ $ 1. 0 : _2.200 ..... $ 0.040 .,.. $ $ - $..0.890 . $..... 0_81.0 $ 1.160 -- 09 - $ 0.040 t $ - $ I. - 0.890 $ 0.810 1 $ 1.160 1.410 $._. 2.200 _... _Y._ 410 .....$ 2.200 $ 0.040 $ $........._.. I . $ 0.890 . $..... 0 81.0 ... $ 1.160 --Aug 0 $ 1..3 50 350 $ $ 2.490 - $ 00.040 .040 $ $ $ $0 _.. _.. _0 _ 0. _ ....750 $ -.. $ - - --- --- ---- --- _._.....----- ... _.. - --------.... ! . ------- ..._-_ ._ ? $ 0.83830 . $.... 0.750 1.290 - - .09 - $ 1.450 Sep-09 $ 1.390 $ 2.650 $ 0.070 $ 0.010 1 $ - $ 0.830 $ 0.750 $ 1.570 FY 08109 Avg. $ 1.610 $ 2.524 $ 0.078 $ 0.001 $ - $ 1.026 $ 0.946 $ 1.470 2008 Avg. $ 1.965 $ 3.186 1 $ 0.136 $ - $ 0.013 1 $1.237 $ 1.157 1 $ 2.138 ........ ...... ... $. 0.070 $ 0.010 0 2.670 1 - 0.070y' .$..._ 0.010 .830 No-v--09-1- 1.390...,. $........ 2.670. _ . $ - _ ... 1. $ 0 $ - 0.750.. $ .. .. _. -D_ec_-091 $ ------ - ------ -._.... $.......0.070 _._.__.... _ $ 0.01-0 $ 0.830 OJ50.._$...._...._-__ 1590 ---9D.. 1.390 . $ ........_..2.750 $ 0.070 I 0.010 - $0.830 1.670 1,670 Jan-10 .. $ $ ... .. $. ..... - -$- 1 .... $ 0.750 :800-I _$... _...1-690 --- 0 $ 1 1 .480 .390 - -- 2.750.. -- ?.. a.--.._ ..0.010 $ - $0.880 ...•..$.. .0 . $ 0.110 $ $ Mar-1 2.810 I ..I ...0..._ . . $ 0.11 D $ 0.010 $ - $ 0-920 $ - 0.840 $ 1.760 0 - ..._..... _ r - $ - 1.520 1 $ . _ 2.880 L .................. ._- 10 -- .-Jun-10 i.. Jul-10 46- I 9.10 Sep-10 1 FY 09110 Avg. $ 1.427 $ 2.755 1 $ 0.083 i $ 0.010 1 $ - $ 0.853 1 $ 0.773 $ 1.662 20(39 Ava_ S 1.464 S 2.418 1 1 $ 0.061 1 $ 0.003 1 $ - $ 0.920 1 $ 0.840 $ 1.353 'r CSW:08/19/2008 Attachment #6 Page 2 of 2 Residential Rate History By Components Clearwater Gas System LP Contract I Total Rate Comoonents/Therm _........j.__. NGlt... ..h LP/gallon EIA WNA' PGA PGA PGA/ alto _ .. ... ... ..... ._. .__ ECA__I _ _ _ I Month 0 $ 2.030 1.130 1. 71 Oct 04 $ - - 1. =04 $ 0960 $ $ 1.030 Nov-04 1.130 2.100 71 0 $ .030 $ $ ... ..... _._..........__. 0 $ ... - - $ 1.190 _ $ $ $.070 Dec-04 $ 17 $....._.. 2.090 $ 0.100 1 ._.. .... • .•.........__.._.__ ....._....._._....__.._ .....:....... - - - - L $ $ 1.070 $ 1.000 1.190 .100 $ $ 0 Jan-05 $ 1,750 2.090 $ - ..... _ ...... $ 1.110 $ 1.040 $ 1.210 .01 2•150 ? $ 0.130 ? $ $ 00 ? $ i - - - - ----M-ar---05 -- $ - 1.86 1,110 L $ 1-040 $ 1.210 $ 0130 $ O.On $ 0 $ 2.1801 020... 0 .. -- _ ...-- $ : _ _.._...--._._ .110 $ 0020 1 1301 $ 0.020 $ 1.040 040 $--....._..._.. 1.._210 r 05 $ 1.860 $ 2.280 $ 0. , I ........... -- 0-990--$ 1.140 5 $ 1.790 $ 2.190 0.130 $ 0.020 $ 1.060 $ _ . - ..._ ..... ? 0 ! _ _ $ _ _ _ -- ---- - un-05------ - -- - 1.140 $ 0.1 30 $0.020 $ $ 1.060 $ 0.990 .790 $ 2.1 90 1 J -........ _........__ ...... $ ..-- - -- _ .. -- --' 1.140 $ 0.1 30 $ 1.0 60 $ 0.990 - $ 0 .020 $ $ Jul-05i $ 1.790 $ 2190 ........._...... .. ..._.. - - .. _.......... .... ... - - --- .-- _-- - 0 -080 0 1.820 2.223 $ 0,140 $ 0.020 .... 1. 1 .$ $ . .. . $ - 11970 $ ... 2.300..1.........._...... $ 0.140 $ 0.020 $._.._. $ .._.... Sep-05 ?- 60 1.240 i $ FY 04105 Avg. $ 1.803 $ 2.162 $ 0.122 0.012 $ 0.004 1.085 1.015 .174 2004 Avg. ! $ 1.652 $ 1.968 $ 0.123 $ - $ - 0.949 $ 0.879 $ 1.046 Oct-05 ---- --------- 2.190 $ .$.... 2.530 $ 0. 120 _----_-- $ 0. $ $ 1.470 1.390 1.490 - t Nov-OS _ $ 2.190 $ 2.530 --...._. ? -- $ 0.120 .... $0.020 .. $ $ 1,470 $ 1.390 $ 1.490 Dec-05 _ ..... 2-260 - 2.490 - - -- ---- - --._ ..--- ----- - . ---- - - $ 0.1 ..... 020 - $ 1.540 $.._._1.460-- ..; - - 1.450 -- - - 2.490 $ 0.120 $ 0.020 1 - I $ 1.540 4 60 $ -- Feb-06 2.220 $ 2.460 $ ..... .$...0.160 $.0.010... ...8.. $-1.470 -$ -1_390 . 0 1.390 _$.__..._.. - Mar-06 ... .._.._ $ 2.220 _.._... $ 2.460 $ 0.160 $ 0.010 $ - $ 1.47 $---1 1.390 $ 1.390 Apr-06 $ .__...2.110 --- $ 2.320 $ 0.170 $ 0.010 $ - $ 1.350 1 $ 1.270 $ 1.240 -- ----...... _ _ JM...----ay-06 - -- $ 1 .960 --.. --.._ $ 2.360 $ ...._ $ 1.120 I $ 1.28 0 un-06 1..9- $ 2 0 ... 2,420 $ _......._... - $ ...0.180 - $_0.010 70 .$ - ? $._1.150 $ 1.0 . ----- 1.33 . $ _0. Jul-06 1; 910 $ 2.500 $ $ 0. 200 $ 0.010_- $ - I $ 1.120 _$ _ 1 _040. $_.. 1.390 Aug-06 _ _ $ 1-.860 1 -......_ . $._..__2.600 $ 0.200 i $ 0:010 $ $ 1.070 $ 0.990 wo $ 1.490 Sep-06 $ 1.860 $ 2.600 $ 0.200 $ 0.010 $ 0.990 $ $ t $ 1.490 FY 05/06 Avg. 1 $ 2.080 $ 2.480 $ 0.160 $ 0.013 $ - $ 1.327 $ 1.247 $ 1.407 2005 Avg. $ 1.925 1 $ 2.278 $ 0.127 $ 0.017 $ 0.004 1 $ 1.198 1 $ 1.125 $ 1.256 940. -- ....._._. 2 600 $ 0.180 ? $ ' __.. 1.170 1 090 --- - --- -------- $ 1.510 Nov- _ ........ . ..... . ..._600.. 2 ._ _0.180 $0.1-80- -- $-0.010 ? $ ..-.__ - _$.1.170 - $--1,666 ... $ 1.51 0 _ ---- --- Dec-0 6 7 $ 1-940 .600 2. $ ..._.....-- .. . ......................-----._ 0.180 ?_....-------- $ 0.010 - - ._..... $ - _..... $ 1.170 ........ - 1 $ 1.090 ? 1.510 $ -- 1 510 Jan 0 $ 1.940 0 $ ! 0.180 $ $ 0.01Q $ $ 1.170 1 .090 $ . -- - - -Feb-07 - ----------- - - - ----- $ .. 1 94 0 .. _.. - . . ....._.. 2.600 - - -._...... -- ........................................_..__ . __0.180 _ $ 0.010 I $ ... 1.17 .... . - - - 090 . 1. I -..__......_ .. _$ ---- 1.-510 $ 1.940 2.600 $ $ -...._...._..........._. 0.180 $ 1 $0,010 .. .$ -$ 0 90 $ 1.510 . -..... ----- ----... __ .. r 7 - AP .$.. 940- 1 • - ---- 2.800 I 180 6 0.030 1.150 _..._..._ ... $ 1 .070 . ..- ---.._.... 1-490 ._ ......... May-07 -- 1 $ 1,940 .. -- - .740. .._..2 $ t----------------- I ? 0.180 $ - ----- $ - #..... .... U30 $ ... - - $ 1.150 1... _...... $ 1:70.. 1.630 ._$ _..-------._.. -07 9 _ 1. 20 .. $..... - 2.990 .._----------- $ 0.180 I - . $.........._. $ 0.0 30 I .._... $ 1.130 1 0 0 0 1.880 1 91 0 $ Jul-07 -- --- 1 .840 _ $ ' $ 2.990 ....- - '$ ....2 - _... _.. - $ 0.160 0 180 ' ._....---..__.._. $ $ .... $..1.080 1 080 t . $ ... . 00 0 $ 1 . $.. 1 91 0 $ u -07 4 1.840 $ ,84 990 ? . $ $ $ .... . - {..... . . ... . . . -- ... - Sep-07 $ 1.890 2.990 .. $ . .. ........ ... --- -- - _ $ 0.1$0.. ..$ - 8 ` 1.130. 8 1.050 $ 1 .910 FY 06/07 Avg. 1 $ 1.918 $ 2.742 1 $ 0.180 $ 0.005 $ 0.008 $ 1.145 $ 1.065 $ 1.649 2006 Avg. 1 $ 2.012 $ 2.501 1 1 $ 0.175 1 $ 0.011 1 - $ 1.246 1 $ 1.166 1 $ 1.415 Oct-07 I........ - $ 1.840 $ 2.990- ---.....- -.._.. -- - ?_..... _ 80 $0.1 ...._... ... I ... _ - L_ $ $ -+ -- ... -- - --- ................... ... $ _ 1.910 Nov-07 $ 1.840 $ 3.170 -....._ $ 0.180 . f - . _ .... $ - .... $ 1.080 1 $ 1.000 i $ 2.090 Dec-07 170 $ 1.840 $ 3 . $ 0.180 - $ $ $ $ 1.080 $ 1.000 $ ......2.090 - -- - - n $ 0.180 $ $ . ._...._... - $ 1.080 $ 1-.000 -.2.090 ; $ 90 Feb-08 _ .......... .._-3 -- - 1 840 $ .170 $ i I 0.180 $ ? $ 1.000 $ 1.080 $ 2.090 .... Mar-08 . ........ $ - 3.120 . 1 .810 $ 1 ............. ... _ } ..._.. - ......{ ... I I _ .. I $ 0.150 f $ - I $ 0.030 l 1.05d I $ 240 .0 . _ A . - ---- 1 $ $ 3 1 ...........1 810 ,-.120 ... -----..._...... . ....... .............. ........ _..... - --- - ...... ._ . _ ....... .. ..... { ..0 $ _ 0.030 $ $ _ $ 1.050 $ 0 970 {..- - 2 04 0 2 _ $ pr-08 May - N $ 3.120 .8 1 8 0 -._. .. $ 0.09 0 0 .030 $ $... 1.180 $ 1.100 0 . $ 0 . n - J $. 3.150 { _$. _......1.990 - - 0 $ 0.07 $. .. $ 0.030 .. I $ 1.310_ $.._...1 23 . 6 $ 2.150 uI -08 - - . 2. 250 1 $ 3.230 $.._.._ _ - ------- - .0.150 i- ._._.._.. - } $ $0.030 41 0 1 1.490 -•----------- i $ .150 $ Aug-08 ---- --- T 1 $--- 2.120 $ 3.440. { ......... .... $ 0.120 I $ $ $ 1.420 $ 1 .340 , - -_ _ _ _2.420 $ ep-08 r$ 2.120 $ 3.340 1 $ 0.120 I $ $ - $ 1.420 1.340 $ $ 2.320 FY 07108 Avg. $ 1.932 $ 3.183 $ 0.146 1 - $ 0.013 1 $ 1.193 $ 1.113 $ 2.124 2007 Avg. 1.893 $ 2.869 $ 0.180 $ 0.003 1 $ 0.008 $ 1.123 1 $ 1.043 $ 1.779 ----- --------.._ Note: Customer Charge increased b $21month for both NG & LP on 4/112005 a ' CSW:9/29/2009 Competitive History of NG vs. Electric Rates_ Month-Year NG Therm Cost September 2001 $ 1.34 $ September 2002 $ 1.36 $ September 2003 $ 1.56 $ September 2004 $ 1.69 $ September 2005 $ 1.97 $ September 2006 $ 1.89 $ September 2007 $ 1.86 $ September 2008 $ 2.12 $ September 2009 $ 1.39 $ $ Increase over Last 8 Years $ 0.05 $ % Increase over Last 8 Years 3.7% Avg. Annual Inc. 0.5% Over Last 8 Yrs. NG Equivalent KWH Cost 0.046 $ 0.046 $ 0.053 $ 0.058 $ 0.067 $ 0.065 $ 0.063 $ 0.072 $ 0.047 $ 0.00 $ 3.7% 0.5% Progress Energy KWH Cost 0.084 0.074 0.084 0.089 0.097 0.119 0.120 0.120 0.132 0.05 57% 7.1% NG vs. Electric -46% -37% -37% -35% -31% -46% -47% -40% -64%