21-2632ORDINANCE NO. 21-2632
AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME -RULE MUNICIPAL
CORPORATION, AUTHORIZING A NEW LINE EXTENSION POLICY FOR DENTON
MUNICIPAL ELECTRIC (DME) TO GOVERN CUSTOMER AID -IN -CONSTRUCTION
CONTRIBUTIONS FOR NEW OR REVISED ELECTRIC SERVICE; AUTHORIZING THE
EXPENDITURE OF FUNDS; PROVIDING FOR A REPEALER; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City of Denton (the "City") owns and operates an electric utility which
provides electric energy and related services to all customers within Denton Municipal Electric's
(DME) Public Utilities Commission of Texas ( PUCT) certificated jurisdiction; and
WHEREAS, DME is authorized to provide electric and related services in areas solely
served by DME (Single Certified Areas) and in areas where DME competes for customers with
other electric providers as authorized under PUCT rules (Multi -Certified Areas); and
WHEREAS, in Single Certified Areas DME is obligated to provide electric and related
services to all customers; and
WHEREAS, in Multi -Certified Areas, DME is obligated to provide electric and related
services if the electric customer or developer selects DME as their electric provider; and
WHEREAS, in Multi -Certified Areas, DME competes with other jurisdictional electric
providers for the right to serve; and
WHEREAS, the costs associated with extending DME's distribution lines to new
customers and for improvements to existing customers must be recovered over a reasonable period
of time so as to not create cross subsides from existing customers to new customers; and
WHEREAS, the intent of this Line Extension Policy is to clearly define the standards,
expectations, and costs of requesting a line extension to ensure a fair and equitable process that
balances the financial wellbeing of DME, the cost to ratepayers, the nature of competition in the
applicable service territory, economic development opportunities, and the expenses for the
Customer requesting service.
WHEREAS, the City's Electric Service Standards have historically contained the Line
Extension Policy applicable to all DME customers and that such Line Extension Policy should be
separated from the City's Electric Service Standards; and
WHEREAS, the City Council further finds that the proposed Line Extension Policy is in
the best interest of DME customers; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The recitations contained in the preamble of this ordinance are incorporated
herein by reference as findings of the City Council.
SECTION 2. The City Council approves and adopts the Line Extension Policy attached
hereto to clearly define the standards, expectations, and costs of requesting a line extension to
ensure a fair and equitable process that balances the financial wellbeing of DME, the cost to
ratepayers, the nature of competition in the applicable service territory, economic development
opportunities, and the expenses for the Customer requesting service.
SECTION 3. The Electric Service Standards adopted by Ordinance 2014-086 are hereby
amended to remove Sections 7, 8, and 9 which relate to line extensions.
SECTION 4. The expenditure of funds as provided for in this ordinance is authorized.
SECTION 5. All ordinances or parts of ordinance in force when the provisions of this
ordinance become effective which are inconsistent, or in conflict with the terms or provisions
contained in this ordinance are hereby repealed to the extent of any such conflict.
SECTION 6. This ordinance shall become effective immediately upon its passage and
approval.
The motion to approve this ordinance was made by 7pmP �Y S and
seconded by Bc ; a fA e C, I , the ordinance was passed and approved by
the following vote [_2 - _Qj:
Ave Nay
Gerard Hudspeth, Mayor: _ Z
Vicki Byrd, District l: f
Brian Beck, District 2: 1/
Jesse Davis, District 3: _ V
Alison Maguire, District 4: J
Deb Armintor, At Large Place 5: 1'/—
Abstain
✓
Paul Meltzer, At Large Place 6:
Abstain Absent
PASSED AND APPROVED this theday of bece.m b 2 < 2021.
ATTEST:
ROSA RIOS, CITY SECRETARY
BY:� ��� ,
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
GERARD HUD PETH, MAYOR
Digi 11y signe,dCatherine❑ikon
DN: dcaom.d dc�adad,
1U-11"I"I
acDep-l—Usersand Groups,
ou1eneral Government. ou=Legal,
�N
crr-{atherine Clifton,
P
email=catherine.Clikon.ciryofdenton.mm
BY:
Date: -1.12.0914:4012-06'00'
GERARD HUD PETH, MAYOR
ETON
ELECTRIC
PREPARED BY
\ SCHHEIDER
""` ENGINEERING
,ENERGY. FOCUS. COMMITMENT.
TX REG. # F-1594
DECEMBER 2021
Contents
1. Purpose.................................................................................................................................................3
2. Scope.....................................................................................................................................................3
3. Intent ....................................................................................................................................................
3
4. Authorization........................................................................................................................................
3
5. Revision Process for the Standard........................................................................................................4
6. Application for Service..........................................................................................................................4
7. Definitions.............................................................................................................................................5
8. Connection and Service Run Charges...................................................................................................7
9. Line Extension Charges and Policies.....................................................................................................7
9.1 General Line Extension Requirements..........................................................................................7
9.1.1 Determination of Aid-in-Construction..................................................................................
8
9.2 Single -Certified Service Areas.......................................................................................................
8
9.2.1 Residential Connections........................................................................................................
8
9.2.2 Commercial and Industrial Connections...............................................................................9
9.3 Multi -Certified Service Areas........................................................................................................
9
9.3.1 Business Case Analysis..........................................................................................................9
9.3.2 Residential Connections........................................................................................................9
9.3.3 Commercial, Industrial, and Other Connections.................................................................10
APPENDIXA.................................................................................................................................................11
N
1. Purpose
It shall be the policy of Denton Municipal Electric (DME) to make extensions of new distribution lines,
make alterations to existing distribution lines, and provide service connections, meters, and other
necessary facilities to establish permanent electric service to all Customers within DME's service territory
that desire DME service. Such electric service will be provided to those whom DME can reasonably
accommodate such requests. This Policy establishes the basic conditions and requirements associated
with adding facilities to existing primary or secondary distribution lines to supply electricity to new or
modified service installations. In extending such electric service, DME must maintain its financial stability
by avoiding the construction of unnecessary facilities and by having sound procedure whereby revenue
from lines constructed by DME will amortize the cost of said lines over a reasonable period of time.
Therefore, this policy shall detail the requirements and specifications necessary for DME to accept an
application for service.
In accordance with the goals and objectives of DME and the City of Denton, DME is responsible for acting
in the best interests of all its ratepayers, its bondholders, and the City of Denton. This includes designing
systems that are safe, meet industry standards and regulations for the expected service type, and are
economically responsible. However, due to the engineering complexity associated with an integrated
electric system and with the dynamic nature of the electric industry, this Policy cannot cover in detail all
the line extension issues DME may encounter. DME shall determine, at its sole discretion and on a case-
by-case basis, whether the specific requirements, allowances, advances, and costs outlined in this Policy
are applicable.
2. Scope
This Policy shall provide detailed information regarding the standards, requirements, and fees associated
with line extensions within the Denton Municipal Electric system. The Policy sets out standards and
expectations for major service types and provides definitions of essential terminology to determine the
standards of each service type. In the case that DME determines that a request for service does not fall
within the requirements laid out in this Policy, it shall, at its sole discretion, determine the expectations
and related costs for the project in a manner that is determined to be equitable to both the ratepayers of
DME and the Customer requesting service. This policy shall apply to all customers of DME, both new and
existing, who request or require modifications or extensions to the existing electric power system in order
to meet the customer needs.
3. Intent
The intent of this Policy is to clearly define the standards, expectations, and costs of requesting a line
extension to ensure a fair and equitable process that balances the financial wellbeing of DME, the cost to
ratepayers, the nature of competition in the applicable service territory, economic development
opportunities, and the expenses for the Customer requesting service.
4. Authorization
The Line Extension Policy has been approved by the City of Denton's City Council at the recommendation
of Denton Municipal Electric's Staff. The policies, fees, and cost methodologies set herein have been
3 12/14/2021
established based on good utility practice and to appropriately identify and delineate the responsibilities
and obligations of Customers, DME, and other affected parties.
5. Revision Process for the Standard
The Electric Engineering Department of DME controls the issue and distribution of the Line Extension
Policy and the updates. Any requests for revision from any user of the document are to be initiated by a
written proposal forwarded to the Electric Engineering Department. Each request will be evaluated with
outcome communicated to requestor.
6. Application for Service
Customers shall contact DME to initiate a request for service or a change in service. Application for
service can be made at the City of Denton's Customer Service office:
Main Office
601 East Hickory Street
Suite F
Denton, TX
or by phone at (940) 349-8700, during normal business hours (8a — 5p) -
All forms shall be completed and when required, additional information will be provided by the
Customer. Customers shall be required to follow and abide by all DME requirements.
4 12/14/2021
7. Definitions
Aid -in -Construction — A fee required to offset the cost of construction of facilities outside those normally
allowed for installation of electric service.
Certification Area — Denton Municipal Electric is authorized to provide electric service to customers within
the city limits and some nearby areas outside of the city limits. The Certification Map (see
Appendix A) shows the areas within DM E's service area that are Single, Double, or Triple Certified.
Single -Certified areas have only one authorized electric service provider (DME). Multi -Certified
areas have two or more authorized electric services providers (DME and others) competing to
serve customers within the area.
Customer — Any entity who is applicant for or who is receiving the benefit of electric service at a specified
Point of Delivery from DME.
Demand Load, or Demand — The maximum load in kilowatts during any specified time interval. The
maximum demand will be determined by appropriate DME personnel and will be used to
determine the size and rating of all equipment used in the DME service installation. Demand load
may be expressed in terms of amperes, watts, or volt-amperes.
Developer— Developer is the entity responsible for developing properties that request electric service. A
developer may or may not be the customer (e.g. residential development has separate developer
and customers).
Dual Feed — Where more than one alternative source for providing service is provided to a customer for
the purpose of providing back-up or redundant power in case the primary source fails.
Energy, Electric — Electrical power (kilowatts) consumed over a given amount of time. The unit of energy
as used herein shall be the kilowatt-hour (a Kilowatt-hour is 1000 watt-hours).
Point of Delivery — The point where the electric energy first leaves the conductors or devices owned by
DME and enters the service entrance, other conductors, or devices owned by customer.
(1) Single Family Residential homes (attached or detached): the Point of Delivery is located at the
meter base for Underground (UG) installations and at the weatherhead for Overhead (OH).
(2) Multi -Family Residential homes: the Point of Delivery is located at the secondary terminals of
the transformer, pedestal, or secondary connection cabinet for UG installations. It is at the
weatherhead for OH installations.
(3) Commercial or Industrial Customers: the Point of Delivery is located at the secondary
terminals of the transformer, pedestal, or secondary connection cabinet for UG installations.
It is at the weatherhead for OH installations.
(4) Primary -voltage Service, Overhead: the Point of Delivery is located at the line -side terminals
of the DME primary metering equipment.
(5) Primary -voltage Service, Underground: the Point of Delivery is located in a metering
compartment within the primary metering cabinet or in a separate primary meter enclosure.
5 12/14/2021
Power Purchase Agreement — A bilateral agreement between DME as seller and customer as buyer
detailing all applicable terms and conditions associated with the provision of electric service and
any other consideration between the parties.
Rate Book — City of Denton Ordinance, establishing the rates for electrical services and herein referred to
as the "Rate Book."
Residential, Multi -family — A permanent building designed with separate units for multiple, non -transient
occupancy on a common lot, with a shared exterior wall and roof between the units.
Residence, Non -Permanent — A structure for which its intended use qualifies for service as defined in the
Residential Service of the DME Rate Book but does not qualify as a Permanent Residence. Non -
Permanent residences include trailers, recreational vehicles, or similar facilities and prefabricated
homes or mobile homes for which the axles have not been removed.
Residence, Permanent — A structure for which its intended use qualifies for service as defined in the
Residential Service of the DME Rate Book and can reasonably be determined to have service for
an extended period. Permanent residences do not include self-propelled and non -self-propelled
vehicles or similar facilities that have no foundation other than wheels, hacks, or skirting, but can
include, at the discretion of DME, a prefabricated home or mobile home, so long as the axles have
been removed.
Residential, Single -Family — Any building that is a permanent, individual private dwelling on an individual
lot, with no shared walls or structures with any other building. If located within a residential
development, the developer must comply with standards for residential development. A Single
Family Residence may be detached such as a stand alone home, or Attached such as a town home.
Apartments are not considered Single -Family Residences.
Residential Development — A set of two (2) or more contiguous lots scheduled for immediate
development, platted as a residential subdivision to be used primarily for permanent single or
multi -family residential dwelling units.
Service Installation —The service drops or laterals and meter, together with auxiliary devices and poles, if
any, owned and installed by DME used to connect the DME electric supply lines to Customer's
installation.
Shall, or Must, or Will — These terms signify mandatory compliance with the Articles in the DME Electric
Service Standards.
Temporary Connection —A connection for a period of less than or equal to 2 years. Temporary connections
exceeding the connection period will be reassessed as a standard connection and credited or
debited, as necessary, the difference between a standard and temporary connection charges.
Temporary service is to be used for construction, addition or remodeling of multifamily residence,
commercial buildings, temporary offices, signs, and seasonal services such as snow cone stands,
food stands, Christmas tree lots, festivals, exhibitions, or firework stands, etc.
Weatherhead —An enclosure designed to allow for weather resistant entry of cable or conductors to an
electrical enclosure.
6 12/14/2021
8. Connection and Service Run Charges
All Customer charges must be paid in full, and have met the DME's credit requirements (if applicable)
prior to service being rendered.
Costs for connections and reconnections along with fees for delinquent accounts, tampering, and damage
are described in the Rate Book. The most recent version will be used to determine charges.
9. Line Extension Charges and Policies
Technical requirements and responsibilities are described in the Electric Service Standards. The Electric
Service Standards delineates by customer classification (reside ntial/comniercia1), and connection type
(overhead/underground) as well as provides information on requesting service and available nominal
voltages and connections. Other information such as easement and customer load requirements are
outlined and should be consulted as part of the process.
9.1 General Line Extension Requirements
DME will extend its primary and secondary voltage distribution facilities to Customers in accordance with
the following line extension provisions. A Customer will be required to make a contribution as Aid -in -
Construction for the extension of primary voltage distribution facilities as defined by customer
classification/connection and service territory (e.g. single vs. multi -certified areas).
Regardless of authorization to serve customers within the service area, service may or may not be readily
available depending on factors such as existing distribution facilities, overhead vs. underground service,
number of phases, voltages and configurations (Wye vs. Delta), etc. The cost to serve the customer may
vary based upon these factors.
Any required contribution will not include costs for facilities that are normally provided by DME, such as
meters. All expenses associated with engineering, transformers, materials, labor, easements, easement
clearing, permits, and any other fees that are associated with the extensions will be based upon DME's
cost at the time of construction and/or contract agreement. Laboi costs may be based upon contract
labor cost, and contractor use will be at the discretion and approval of DME only.
All applicable fees must be paid before construction can start on any line extension along with all required
documentation to include drawings showing wiring diagrams, wired loading requirements, voltage
requirements, and easements. Fees for Aid -in -Construction shall be determined according to the
provisions of §9.1 through §9.3 herein.
Based on the demand and energy usage of some customers, a Power Purchase Agreement may be
required for service.
Customers requesting Dual -Feeds shall be responsible for the full cost of the additional feed extensions
and any associated costs that apply or are due solely to the additional feed extension.
Customers requiring transmission level service (e.g. greater than 60,000 volts and/or power demands
greater than 20 MW) will be responsible for the engineering, materials and installation of transmission -
7 12/14/2021
level service equipment including substations, transmission lines, and any associated studies and
contractor costs.
All line extensions shall be built along existing or planned easements and Right of Ways to allow access to
DME owned equipment and material where applicable.
9.1.1 Determination of Aid -in -Construction
Determination of a Customer's classification involves an evaluation of the nature of competition in the
applicable service territory, economic development opportunities, the type of installation and its use.
DME shall determine at its sole discretion the Customer's classification in accordance with the
provisions set forth in the Rate Book and this Policy. In the event that the classification assigned by DME
is incorrect based upon the Customer's subsequent actual use of the installation, DME may alter the
Customer's classification and apply the correct line extension classification, making appropriate
adiustments to the Customer's account or billing.
The Utility reserves the right to recalculate the actual cost of the line extension if more than 60 days
elapse from the time the most recent Aid -in -Construction requirement is presented to the Customer.
The Aid -in -Construction required of the Customer will be determined based on the following criteria:
(9) DME shall estimate the cost for the line extension based on the most recent data available
for unit material and labor costs for the same type of construction. The cost will be the total
cost of all construction and all other costs directly attributable to the extension.
(2) DME will determine the Certification Area based on the location of the customer in DME's
service territory (single -certified vs. multi -certified territory, see Appendix A). For single -
Certified Areas, the requirements of section 9.2 shall apply. For multi -Certified Areas the
requirements of section 9.3 shall apply. Any applicable credits will be applied to the Aid -in -
Construction requirements.
(3) If more than one Customer is requesting service from the same extension, it shall be the
responsibility of said Customers to agree on the division of the total required Aid -in -
Construction. DME shall not be responsible for collecting Aid -in -Construction payments from
individual Customers.
9.2Single-Certified Service Areas
9.2.1 Residential Connections
For all residential line extensions (whether developments or individual lots), the customer/developer shall
be responsible for the costs of the line extension including engineering, materials, labor, right of way
clearing, secondary services, permits, and any other cost that is associated with the extension.
Non -permanent residences (as defined in section 7) will be required to pay the cost of removal of
equipment if the service falls into the Temporary Service class.
Customer/developer shall be required to pay all of the estimated costs as aid -in -construction prior to the
start of DME work.
8 12/14/2021
9.2.2 Commercial and Industrial Connections
For all commercial, industrial, or other non-residential line extensions the customer/developer shall be
responsible for the costs ofthe line extension including engineering, materials, labor, right of way clearing,
secondary services, permits, and any other cost that is associated with the extension.
Non -permanent line extensions (as defined in section 7) will be required to pay the cost of removal of
equipment if the service falls into the Temporary Service class.
Customer/developer shall be required to pay all of the costs as Aid -in -Construction. Payment of the
estimated Aid -in -Construction is due prior to the start construction.
9.3 Multi -Certified Service Areas
9.3.1 Business Case Analysis
Aid -in -Construction requirements in multi -certified service territory will be based on a business case
analysis (BCA) projecting the return on investment to DME in a competitive service territory. Projects that
exceed DME's hurdle rate, which will be adjusted from time to time based upon prevailing interest rates
among other things, may have their Aid -in -Construction requirements adjusted or waived, provided that
DME is the selected service provider. The developer will be required to provide the number and types of
structures, the projected annual energy consumption of each, the phased construction plan, and other
data as requested with sufficient detail for DME to perform the business case analysis. For line extensions
that do not meet DME's hurdle rate, DME will determine the amount of the costs for such line extension
that would achieve the hurdle rate and such amounts will be waived from the required Aid in Construction
with the remaining line extension cost being the responsibility of the requesting customer. Payment of
the estimated aid -in -construction is due prior to the start of construction.
9.3.2 Residential Connections
For Permanent, Single Family Residential projects DME will build up to $1,400 of primary electric line per
Single Family Residence without any customer contribution. Any cost exceeding $1,400 per home
associated with the extension, including engineering, materials, labor, right of way clearing, secondary
services, permits, and any other cost that is associated with the extension will be charged to the
Customer/Developer. If DME determines that the expected return on investment exceeds the hurdle rate,
DME reserves the right to provide a higher credit per home based on the business case analysis of section
9.3.1.
Non -permanent residences (as defined in section 7) will not receive any credit for line extensions and will
be required to pay the cost of removal of equipment if the service falls into the Temporary Service class.
Customer/Developer shall be required to pay all of the estimated costs minus the applied credits as aid -
in -construction prior to the start of DME work.
12/14/2021
9.3.3 Commercial, Industrial, and Other Connections
A business case analysis shall be performed per paragraph 9.3.1 based on the planning documents
submitted by the developer. The results of the BCA will determine the amount of credit, up to the full
amount of the extension costs, that shall be applied to the aid -in -construction.
Customer/Developer shall be required to pay all of the costs minus the applied credits as aid -in -
construction. Payment of the estimated aid -in -construction is due prior to the start of construction.
10 12/14/2021
N
O
N
c -I
N
c -I
r -I
r-1