Approved by the Board:  September 26, 2006

MINUTES OF THE BOARD OF COMMISSIONERS’ SPECIAL MEETING

LANSING BOARD OF WATER AND LIGHT

_______________________________

Tuesday, August 15, 2006

________________________________

The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan.

Present:         Commissioners Gary Calkins, Ron Callen, Robert Cochran, Joseph Graves, Semone James (arrived at 5:45 p.m.) and Santiago Rios.

(Note:  2^nd Ward Vacancy exists.)

Absent:          Commissioner Robin Smith.

The Secretary declared a quorum present.

Vice Chair Rios asked all to rise for the Pledge of Allegiance to the Flag.

Vice Chair Rios called the Special Meeting to order at 5:35 p.m.

PUBLIC COMMENTS

Joseph Davis, Business Manager of IBEW Local 352 stated that he represents the employees of the BWL, CUC in Delta and Lansing Grand River.  Mr. Davis expressed his concern over the 65% steam rate increase proposal and the over simplification of the issue.  Mr. Davis went onto state that he attempted to estimate whether or not a 25% increase in employee premiums as suggested by management would cover the steam shortfall and he found that they did not.  Mr. Davis also stated that the Sunday editorial implied that if employee cost sharing had been implemented then the solution to this problem would have been simple.  However, Mr. Davis stated that the article did acknowledge that the BWL is the only city agency in which employees share in the cost of paying premiums.  Mr. Davis also stated that the City is experiencing an $11 million deficit and they are utilizing their rainy day fund and other avenues to address those issues.  He went onto state that during contract negotiations the union tries to work with BWL management to achieve an equitable plan for all parties involved.  Mr. Davis recommended that based on public meetings the Board should consider implementing a rate increase that would occur over the next 3 - 5 years to allow downtown businesses the opportunity to plan for such a change.

Hank Zurburg, First Presbyterian Church, finance committee member stated that their points of interest regarding the steam rate increase had already been expressed by others.  However, he wanted his concerns placed on the official record as they did not have opportunity to present something earlier.

COMMUNICATIONS

Letter dated August 14, 2006 from Tom Marlow, Manager of Delivery Services in support of the General Manager.

Received and placed on file.

Letter dated august 15, 2006 from Phyllis Mellon, Chief Deputy Director, State of Michigan in regards to the request for additional information regarding the proposed rate increase.

Received and placed on file.

Letter dated August 15, 2006 from former commissioner Tim Haggert in support of the General Manager.

Received and placed on file.

COMMITTEE REPORTS

Resolution-2006-8-4

COMMITTEE OF THE WHOLE REPORT

August 15, 2006

The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 3:00 p.m., Tuesday, August 15, 2006.

Commissioner Rios called the meeting to order and asked the secretary to call the roll.  The following members were present:  Commissioners Robert Cochran, Joseph Graves, Semone James, Santiago Rios and Robin Smith.

Absent:  Commissioners Gary Calkins and Ronald Callen

Public Comment

There were no public comments.

INTERVIEW FOR INTERIM INTERNAL AUDITOR POSITION

The first interview was conducted with Charles Moore of C.L. Moore & Associates, P.C. Mr. Moore presented his organization and a question/answer period followed the interview. 

The second session took place with Kirk Balcom and Mary McCune of Rehmann Robson.  Both individuals presented their organization and a question/answer period followed the interview.

Upon conclusion of the interviews the Commissioners discussed the presentations and qualifications of both candidates. After discussion, it was decided that the Committee of the Whole would bring forth a recommendation to the full Board for a vote on Tuesday, August 15, 2006 at 5:30 p.m. to award the RFP for the Interim Internal Auditor to C.L. Moore & Associates, P.C.

Respectfully submitted,

Santiago Rios, Chair Pro Tem

Committee of the Whole

As part of the report, Commissioner Rios stated that both Interim Internal Auditor candidates provided a comprehensive response to the Board’s request and both responded well to all of the interview questions. 

Motion by Commissioner Rios, seconded by Commissioner Graves to accept the report as presented.

Action:  Carried unanimously

UNFINISHED BUSINESS

RATE INCREASE DELIBERATIONS

General Manager, Sandy Novick reminded the Commissioners and the public that the BWL proposed the electric and steam rate changes on June 16, 2006 with a filing as appropriate with City Clerk in Lansing.  Mr. Novick also stated that notices were filed in the Lansing State Journal on July 10^th and published notices appeared in the City Pulse on July 12^th and July 26^th.  He also stated that information regarding the increases has been available to the public, including information that was printed in the “Connections” monthly bill insert that is sent to all BWL customers.  The public hearing occurred on August 1, 2006 in which three customers spoke to the Board regarding the electric rate change, two of which expressed concern while one encouraged the increase as a means to encourage conservation.  Mr. Novick went onto state that staff discussed the conservation issue and suggested that it maybe an issue that they discuss in the future; not raising rates for conservation but conservation in general. 

Furthermore, Mr. Novick also stated that staff is continuing to review operating expenses and the impact of GM’s decrease on all the utilities is still being felt which was incorporated in the recommendation regarding increased environmental expenditures on north Lansing landfill.  Mr. Novick stated that it was evident of their attempt to catch up on the overhauls from the BWL’s generating equipment.  He also stated that there is $1.2 million exposure on Eckert unit #5 and as a result they are still reviewing that information and taking into account the statements made at the public hearing.  Mr. Novick further stated that staff would still recommend to the Commissioners a 1.5% increase for the electric as was initially proposed.

Commissioner Rios stated that for clarity purposes each rate increase should be dealt with separately.  He went onto propose an electric rate increase recommendation from management with respect to the rate increase.  Please see the Electric and Steam Rate Increase section under Resolutions for the actual wording of the resolution and further details.

Commissioner Calkins stated the BWL received a minimal number of people opposing the electric rate increase.  He went onto state that with the evaluation he still thinks that is an appropriate figure and therefore continues to recommend it.

Mr. Novick stated that twelve customers came and spoke in regards to the steam rate increase, one also came this evening and eight letters were received from downtown businesses expressing their concerns.  Mr. Novick went onto state that the beauty of public power is the public hearing process and the opportunity for customers to be heard.  He stated that oftentimes, if you go through the public service commission and Consumers Energy wants to have a rate increase and you live in North Michigan then it is not as easy to be heard.  Mr. Novick also stated that the beauty of public power is that we are a part of the community, in the community and people came and expressed their concerns.

Commissioner Callen stated that you do not need an attorney to come here for this process.

Mr. Novick then said that he agreed and also stated that the public comments were clear and consistent.  Based on the comments, Mr. Novick stated that staff divided them into two categories; one is clearly that the customers want a transition time for the rate adjustments to be spread out over a period of time at smaller increments than initially proposed.  Mr. Novick stated that the second category involved a long-term strategic plan that gives a sense of direction regarding the steam system, associated costs, and the resulting rates based on those costs.  He went onto state that staff has been working on that very thing, with the completion of the integrated resource plan, management will soon come before the Commissioners with a series of policy discussions that can be used to develop long range plans.      

Mr. Novick also stated that they would do whatever they could to be creative in searching for additional cost savings in the near term and being responsive to the community in spreading out the impact.  He also stated that they recognize the value of the steam system to the downtown development and it is definitely a plus to all the utilities for the downtown area to revitalize itself.  Mr. Novick went onto state that they have tried to move toward a financially independent utility and there are some other benefits in keeping steam alive.  He also stated that they have heard from the community and they provided some great insight and management will be responsive to whatever the Commissioners decide to do.

Commissioner Rios passed the Chair to Commissioner Cochran at 5:54 p.m.

Commissioner Rios asked to be recognized by the Chair in order to bring forth a motion at that time.  He then went onto state that from his perspective Mr. Novick accurately described what he thought was very honest and open public input.  Commissioner Rios also stated that they have a responsibility to hear and respond to the utility and the public in a responsible manner and he thought that Mr. Novick’s comments spoke to that fact.  As such, Commissioner Rios introduced the following motion:

Resolution-2006-8-5

Motion by Commissioner Rios, seconded by Commissioner Calkins to accept the three-part motion in regards to steam rate increase as follows:

1.  That the proposed steam rate increase be adjusted down to a 35% increase.

2.  That management be directed to develop a strategic plan/process for the BWL's steam    business to minimally include:

a.      comprehensive 3-5 year business plan for the BWL's steam business which incorporates:  response to cost of study issues raised by the State of Michigan, appropriate elements of the integrated resource plan, collection from GM for early termination of contract, a plan to further reduce costs, a plan to develop additional efficiencies in the operation including scaling back, analysis and plan for business growth potential, and considers the option of getting out of the steam business entirely; and

b.    rate increase strategy over the next 3-5 years that makes the steam business                                 

                   financially independent and this plan be completed within the next 90 days.

3.  That management immediately begin to monitor and make recommendations to this Board on a monthly basis, on necessary adjustments to the BWL budget to make up the approximately $1.8 million difference in the projected revenue from the steam rate increase, which will include reductions in costs, increased efficiencies, utilization of reserves and/or credits, and any other reasonable measure to protect the integrity of the budget. And within the next 90 days present a financial plan/process and recommendations for the balance of the year base on actual financial performance to date, which can also serve as the foundation for planning next year's budget.

Discussion:  Commissioner Callen stated that some of Commissioner Rios suggestions are extremely complex.  He also stated that he could not fathom the total impact of what was being said but some things did come to mind, 1) some of what Commissioner Rios is asking for will appear in the IRP, 2) there is inconsistency between lowering the steam rate increase to 35% and the proposal since they have discussed making the steam utility independent and 3)  he is interested in a stepwise rate increase similar to what the General Manager mentioned and the public proposed.  Commissioner Callen went onto state that he was not sure if that was in Commissioner Rios proposal or not, therefore, he stated that he did not feel prepared to vote on something that complex.

Commissioner Rios stated that as an attorney he stated his motion a little different than Mr. Novick but he believes that it is relatively the same.  The only difference is that he placed parameters on his proposal.

Commissioner Calkins asked staff to respond to the 90-day timeframe mentioned in the motion.

Mr. Novick stated that he believed the aforementioned timeframe is close to the time staff would come before the Board as normal course for long-range financial plans.  He went onto state that he would certainly feel very comfortable coming to the Board on a monthly basis with year-to-date information to see where we are and what is going to happen in order to make adjustments in a timely fashion.  Mr. Novick also stated that the timeframe is inline with the overall plan for the steam system, which is a process that they are already starting to plan.

Commissioner Rios stated that he did say within 90-days but some of the work is already done such as the HR plan and he knows that Mr. Novick has already looked at some of the other questions.

Mr. Novick stated they can make good progress and the IRP has a customer advisory group, which they will want to include.  He also stated that he did not know if they could provide a definitive plan in 90-days but that he thought they could certainly commit to do their best to move forward.

Commissioner Rios stated that he called it a plan/process because part of it is a process while the plan is developing the outline and determining what we are going to do and how are we going to do it.

The motion carried by the following vote:

Voting Aye:  Calkins, Cochran, Graves, James, Rios

Voting Nay:  Callen

Absent:  Smith

Further Discussion After the Vote:

Commissioner Callen stated that he wanted to explain his vote and further stated that he was still unclear as to the extent and penetration of the motion just read.  He went onto state that the 35% rate increase may make sense but it does seem to be consistent with trying to make the utility independent but perhaps in the motion Commissioner Rios was referring to intent rather than a guarantee.

Mr. Novick addressed Commissioner Callen by stating that that has been the Boards policy for some time now but we assume that you recognize that it is a slow process and will certainly be so for steam and chilled water as opposed to the others.  He went onto state that they may reach those goals in a year and then the next year there maybe some slippage.  However, Mr. Novick stated that we should continue to strive for the goal even if it is not achieved in the short term of this proposal, which would not be any different than what they have been doing all along.

Commissioner Callen stated that he had another question in which he asked, where do we stand in terms of responding to public concern over what he calls a ‘stepwise’ introduction of the steam rate increase.

Commissioner Calkins stated that he believed Commissioner Rios’ motion discussed the fact that if we progress we would look at progression rate increases.

Commissioner Callen then asked if the progression would be through the 35% steam rate increase.

Commissioner Rios responded by stating that the 35% steam rate increase has been approved, effective September 1, 2006.  He then went onto state that they have asked management to develop a 3-5 year amortization plan of reaching independence as part of their objective and goal.

Commissioner Callen then stated that he now felt comfortable with the plan.

Commissioner Cochran returned the Chair back to Commissioner Rios at 6:04 p.m.

RESOLUTIONS

Resolution-2006-8-6

PROPOSED RESOLUTION

INTERIM INTERNAL AUDITOR SELECTION

WHEREAS, the Committee of the Whole of the Board of Commissioners of the Board of Water and Light met and interviewed each candidate for the Interim Internal Auditor position on August 15, 2006; and

WHEREAS, the Committee of the Whole of the Board of Commissioners of the Board of Water and Light met and discussed each candidate’s presentation and credentials after the interviews on August 15, 2006.

RESOLVED, That the Committee of the Whole recommends that the Request for Proposal (RFP) award for the Interim Internal Auditor be granted to C.L. Moore & Associates, P.C. 

Motion by Commissioner Rios, seconded by Commissioner Calkins to accept the recommendation of the Committee of the Whole to hire C.L. Moore & Associates, P.C. as the Interim Internal Auditor.

Action:  Carried unanimously

Resolution-2006-8-7

ELECTRIC AND STEAM RATE INCREASES

WHEREAS, the staff of the BWL, in the course of its financial planning process, has determined that the electric and steam utilities will experience significant revenue shortfalls in Fiscal Year 2007 and beyond; and

WHEREAS, such revenue shortfalls are caused primarily by the combination of very modest revenue growth over the last four years, rising costs due to higher labor, health care, maintenance and environmental costs as well as overall inflation, and reduced steam consumption due to GM plant closings; and

WHEREAS, the last general rate increase in the electric utility occurred in July 2005 and the last general rate increase in the steam utility occurred in January 2003; and

WHEREAS, the staff of the BWL has proposed a general increase of 1.5% for the electric utility effective September 1, 2006, and an increase of 65% for the steam utility effective September 1, 2006; and

WHEREAS, notice of the proposed increases were communicated to all customers by mail on July 13, 2006, public notice was made on June 16, 2006, and a public hearing was held on August 1, 2006, to receive comments on the proposed increases; and

WHEREAS, the Board of Commissioners has considered the comments of the public as well as the recommendations made by BWL and concluded that a 35% for industrial and commercial steam was appropriate.

RESOLVED, That the electric and steam rate schedules listed below and detailed in the attached rate schedules be adopted and made effective for electric and steam consumption on or after September 1, 2006.

ELECTRIC: (Attachment A)
            Residential Service - Rate 1

General Service - Rate 3
Large General Srvice - Rate 4
Primary Service - Rate 5
Municipal Water Pumping Service - Rate 7
Large Capacity Service - Rate 8
Outdoor Lighting Service - Rate 9
Traffic Light Service - Rate 11
Space Conditioning and Electric Water Heating Service - Rate 12
Residential Senior Citizen - Rate 21
Street Lighting Service - Rate 31
Street Lighting Service - Rate 32

STEAM: (Attachment B)

General Service - Rate 1

Industrial Service - Rate 2

General Service - Rate 3

Residential Service - Rate 5

Fuel Cost Adjustment

Motion by Commissioner Rios, seconded by Commissioner Graves to accept the resolution as presented with modification to the steam rate to reflect a 35% increase.

Action:  Carried unanimously

ATTACHMENT A

RESIDENTIAL ELECTRIC SERVICE

RATE NO. 1

Availability - This rate is available to any single-family or multifamily dwelling of 4 units or less when the entire electric requirements are supplied at one point of delivery through one meter.  Service to appurtenant buildings may be taken through the same meter.

Service under this rate is not available to any single-family or multifamily dwelling unit of 4 units or less when a portion of the dwelling unit is used for commercial, industrial, or resale purposes unless the wiring is so arranged that service for residential and non-residential purposes are metered separately.

Nature of Service - The service is alternating current, 60 hertz, single phase, 120/240 nominal volts.

Monthly Rate  -  Shall be computed in accordance with the following charges:

Minimum Bill - The minimum bill is the basic service charge included in the monthly rate.

Energy Cost Adjustment - This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference.

Tax Adjustment - Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees, franchise fees, or any other charges against the Board of Water and Light (BWL) property, or its operation, or the production and/or sale of electric energy, to offset any such cost and thereby prevent other customers from being compelled to share such local increases.

Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance, excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date.

Application Charge - A $7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL.

Auxiliary Power Provision - Domestic customers desiring electric service as an auxiliary source of power to wind or solar powered generating equipment may take service under this rate schedule under special agreement with the BWL.  The customer shall pay the charges set forth above.  A customer taking auxiliary power under this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper operation of the customer's generating equipment in parallel with the BWL system.  A customer may elect to sell energy to the BWL at the rate of $.022/kWh delivered.  Customers selling energy to the BWL shall pay a charge of $6.40 per month or part thereof instead of the above  Basic Service Charge.

Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference.

GENERAL ELECTRIC SERVICE

 RATE NO. 3

Availability - This rate is available to any customer desiring secondary voltage service for any purpose when supplied at one point of delivery through one meter.  The limitation to secondary-voltage service may be waived in instances where the character of the electric load at the premises served has changed substantially.  This rate is not available for emergency or standby service.

Nature of Service - The service is alternating current, 60 hertz, single phase or three phase.  The secondary voltage is determined by the Board of Water and Light (BWL).

Monthly Rate - Shall be computed in accordance with the following charges.

Minimum Bill - The minimum bill is the basic service charge included in the monthly rate.

Energy Cost Adjustment - This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference.

Tax Adjustment - Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees, franchise fees, or any other charges against the BWL property, or its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other customers from being compelled to share such local increases.

Metering - Where the BWL elects to measure the service on the primary side of the transformers, the metered kWh thus measured will be reduced by 3% for billing purposes to adjust for transformer losses.  Where the customer receives service through more than one meter, the consumption as registered by the different meters will not be combined for billing purposes, but will be computed and billed separately.

Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance, excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date.

Application Charge - A $7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL.

Auxiliary Power Provision - Customers desiring electric service as an auxiliary source of power to wind or solar powered generating equipment may take service under this rate schedule under special agreement with the BWL.  The customer shall pay the charges set forth above.  A customer taking auxiliary power under this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper operation of the customer's generating equipment in parallel with the BWL system.  A customer may elect to sell energy to the BWL at the rate of $.022/kWh delivered.  Customers selling energy to the BWL shall pay a charge of $25.00 per month or part thereof instead of the above Basic Service Charge.

Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference.

LARGE GENERAL ELECTRIC SERVICE

 RATE NO. 4

Availability - This rate is available to any customer desiring secondary voltage for any purpose when the electrical requirements are supplied at one point of delivery through one metering installation and the billing demand is 15 kW or more.  The limitation to secondary-voltage service may be waived in instances where the character of the electric load at the premises served has changed substantially.  This rate is not available for standby or emergency services.

Nature of Service - The service is alternating current, 60 hertz, single phase or three phase.  The secondary voltage is determined by the Board of Water and Light (BWL).

Monthly Rate - Shall be computed in accordance with the following charges.

The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour (kvarh) metering installed in accordance with BWL Rules and Regulations regarding power factor.

Minimum Bill - The minimum bill is the basic service charge included in the monthly rate.

Energy Cost Adjustment - This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference.

Tax Adjustment - Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees, franchise fees, or any other charges against the BWL property, or its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other customers from being compelled to share such local increases.

Billing Demand - The billing demand shall be the kW supplied during the 15-minute period of maximum use during the month.

Metering - Where the BWL elects to measure the service on the primary side of the transformer, the metered kW and kWh quantities thus measured will be reduced by 3% for billing purposes to adjust for transformer losses.  Where the customer receives service through more than one metering installation, the consumption as registered by the different metering installations will not be combined for billing purposes, but will be computed and billed separately.

Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance, excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date.

Application Charge - A $7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL.

Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference.

PRIMARY ELECTRIC SERVICE

 RATE NO. 5

Availability - This rate is available to any customer desiring primary voltage service when the electrical requirements are supplied at one point of delivery through one metering installation (except as provided below for Multiple Delivery Point Aggregation) and the billing demand is 100 kW or more.  This rate is not available for standby or emergency service.

Nature of Service - The service is alternating current, 60 hertz, three phase.  The primary voltage is determined by the Board of Water and Light (BWL).

Monthly Rate - Shall be computed in accordance with the following charges: 

The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour (kvarh) metering installed in accordance with BWL Rules and Regulations regarding power factor.

Minimum Bill - The minimum bill is the basic service charge included in the monthly rate.

Energy Cost Adjustment - This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference.

Tax Adjustment - Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees, franchise fees, or any other charges against the Board's property, or its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other customers from being compelled to share such local increases.

Billing Demand

On-Peak Billing Demand:  The On-Peak Billing Demand shall be the kW supplied during the 15-minute period of maximum use during the On-Peak Period during the month.

Maximum Demand:  The Maximum Demand shall be the kW supplied during the 15-minute period of maximum use during the month whether on-peak or off-peak.

Schedule of on-peak and off-peak periods - The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m., Monday through Friday.  All other hours shall comprise the Off-Peak Period.

PRIMARY ELECTRIC SERVICE

 RATE NO. 5

Multiple Delivery Point Aggregation - The 15-minute period demands of multiple delivery points of a customer may be summed for determination of the total On-Peak Billing Demand under the following conditions:  (a) the Maximum Demand at each delivery point must equal or exceed 100 kW; (b) the total On-Peak Billing Demand shall not be less than 4,000 kW; and (c) the customer shall agree to a service contract with the BWL for the customer's full electrical service requirements at the aggregated delivery points for a period of not less than five (5) years.  Aggregation shall be applicable for determination of the On-Peak Billing Demand only.  All other charges, including the Basic Service Charge and Maximum Demand, shall apply to each delivery point independently.

Metering - When the BWL elects to measure the service on the secondary side of the transformers, the metered kW and kWh quantities thus measured will be increased by 3% for billing purposes to adjust for transformer losses.  Where the customer receives service through more than one meter installation, consumption as registered by the different meter installations will not be combined for billing purposes, but will be billed and computed separately except as provided for in Multiple Delivery Point Aggregation.

Equipment Supplied by Customer - The customer shall be responsible for furnishing, installing and maintaining all necessary transforming, controlling and protective equipment required for service beyond the BWL primary-voltage delivery point.  At the sole option of the BWL, a customer may lease such transformers or other equipment from the BWL under terms established by the BWL.

Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance, excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date.

Application Charge - A $7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL.

Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference.

MUNICIPAL WATER PUMPING ELECTRIC SERVICE

 RATE NO. 7

Availability - This rate is available to any political subdivision or agency of the State of Michigan desiring service for potable water pumping and associated potable water production equipment when the entire electrical requirements are supplied at one point of delivery through one meter.  This rate is not available for emergency, standby, or auxiliary service.

Nature of Service - The service is alternating current, 60 hertz, three phase.  The secondary or primary voltage is determined by the BWL.

Monthly Rate - Shall be computed in accordance with the following charges.

Minimum Bill - The minimum bill is the basic service charge included in the monthly rate.

Energy Cost Adjustment - This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference.

Tax Adjustment - Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees, franchise fees, or any other charges against the BWL property, or its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other customers from being compelled to share such local increases.

Metering - Where the BWL elects to measure the service on the primary side of the transformers serving the customer, the metered kWh thus measured will be reduced 3% for billing purposes to adjust for transformer losses.

Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance, excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date.

Application Charge - A $7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL.

Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference.

LARGE CAPACITY ELECTRIC SERVICE

 RATE NO. 8

Availability - This rate is available to any customer desiring primary voltage service when: (a) the electrical requirements are supplied at one or more points of delivery as provided below for Multiple Delivery Point Aggregation; (b) where the total On-Peak Billing Demand is 25,000 kW or more; and (c) the customer agrees to a service contract with the BWL for the customer's full electrical service requirements at the applicable delivery points for a period of not less than ten (10) years.    This rate is not available for standby or emergency service.

Nature of Service - The service is alternating current, 60 hertz, three phase.  The primary voltage is determined by the Board of Water and Light (BWL).

Monthly Rate - Shall be computed in accordance with the following charges: 

Minimum Bill - The minimum bill is the basic service charge included in the monthly rate.

Energy Cost Adjustment - This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference.

Tax Adjustment - Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees, franchise fees, or any other charges against the Board's property, or its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other customers from being compelled to share such local increases.

Billing Demand

On-Peak Billing Demand:  The On-Peak Billing Demand shall be the total kW supplied to all applicable delivery points during the 15-minute period of maximum use during the On-Peak Period during the month.  (See Multiple Delivery Point Aggregation.)

Maximum Demand:  The Maximum Demand for each delivery point shall be the kW supplied during the 15-minute period of maximum use during the month whether on-peak or off-peak.

LARGE CAPACITY ELECTRIC SERVICE

 RATE NO. 8

Schedule of on-peak and off-peak periods - The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m., Monday through Friday.  All other hours shall comprise the Off-Peak Period.

Multiple Delivery Point Aggregation - The 15-minute period demands of multiple delivery points of a customer shall be summed for determination of the total On-Peak Billing Demand under the following conditions:  (a) the Maximum Demand determined at each delivery point must equal or exceed 1,000 kW; and (b) the total On-Peak Billing Demand shall not be less than 25,000 kW.  Aggregation shall be applicable for determination of the On-Peak Billing Demand only.  All other charges, including the Basic Service Charge and Maximum Demand, shall apply to each delivery point independently.

Metering - When the BWL elects to measure the service on the secondary side of the transformers, the metered kW and kWh quantities thus measured will be increased by 3% for billing purposes to adjust for transformer losses.  Where the customer receives service through more than one meter installation, consumption as registered by the different meter installations will not be combined for billing purposes, but will be billed and computed separately except as provided for Multiple Delivery Point Aggregation.

Equipment Supplied by Customer - The customer shall be responsible for furnishing, installing and maintaining all necessary transforming, controlling and protective equipment required for service beyond the BWL primary-voltage delivery point.  At the sole option