But Madrid revealed he doesn’t understand the new calculation.
At the Dec. 16 Public Utility Advisory Board meeting, Madrid said, “I got a little bit lost in that discussion,” adding that City Commissioner George Szigeti came up with the new formula on his own.
PUAB Member Ron Pacourek said he too did not understand the new calculation and PUAB Chairman Jeff Dornbusch remarked, “Remember all those charts he [George Szigeti] presented?” indicating he too was not clear on how the electric bill will be calculated.
The Sierra County Sun reported how it will be done last month, which can be read here: “Truth or Consequences City Commission Changes how ‘energy cost adjustment’ is calculated”.
It’s not complicated. Twice a year, in May and October, the City will take its average wholesale rate. Its wholesalers are Sierra Electric Cooperative, WAPA, TriState, and the solar farm company SSA#4. Szigeti said the wholesale rate has averaged 7-cents a kilowatt hour for many years. Subtract 3 cents, and voila, that is the energy-cost-adjustment rate for each kilowatt the customer uses—about 4 cents a kilowatt hour.
The energy-cost-adjustment fee is supposed to cover the City’s costs to run its numerous boom trucks and other equipment, including fuel use. It accounts for about one-third of the customer’s bill.
The rest of the bill is the city’s 13-cents-a-kilowatt-hour charge, which is nearly a 100-percent mark-up of the wholesale rate. The state average is a little over 11 cents. In addition there is an $8.00-a-month “customer charge.”
Szigeti did not base his energy cost adjustment calculation on real costs. For many years the energy cost adjustment has been a little over 4 cents a kilowatt hour, also arbitrarily set by past-City Manager Jaime Aguilera. Szigeti based his calculation on Aguiler’s, stating he wanted the revenue from the charge to remain nearly the same.
Pacourek said an ordinance should be passed making it mandatory the rate be calculated twice a year. In an interview last month Pacourek admitted he didn’t know if Szigeti’s calculation was based on real costs, he just wanted it done regularly.
Dornbusch told Pacourek, during the Dec. 16 PUAB meeting, “how it’s calculated is what is important.” Pacourek did not reply.
Madrid moved the discussion behind closed doors. He said an ordinance will not be passed, “but let’s sit down and we’ll discuss where it should be referenced,” he told Pacourek.