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Home My WebLink About7 Public Hearing Electric Rate and Water Hauler FeesAgenda Item # 7 ; TRUCKEE DONNER :/ Public Utility District , --------------- PUBLIC HEARING To: From: Date: Subject: Board of Directors Jeremy Popov July 20, 2016 Hold a Public Hearing Regarding Electric Rate Increase and Water Utility Water Hauler Fee 1. WHY THIS MATTER IS BEFORE TH E BOARD This item concerns holding a public hearing and consideration of adopting Ordinance 2016-02 to adopt new electric rates and to establish a water hauler fee. 2. HISTORY On June 1st, 2016 staff presented a workshop item during which Shawn Koorn of HOR Engineering provided recommendations for Electric .Utility rates and proposed the addition of a Water Utility water hauler fee. The Board took action to schedule a public hearing for July 20th, 2016. Important highlights of the June 1st, 2016 workshop included: • Electric Utility: An emphasis for the rate design is to prepare the District for upcoming technological advancement and the associated changes for industry. Distributed generation , renewable energy, and demand side storage advancements are a few examples of promising technologies that also present challenges to distribution utilities. Specifically the need to ensure that fixed infrastructure operations and maintenance costs are adequately covered even in the scenario of decreased energy demand . The District intends to pro- actively prepare and ensure rate structure mitigates these challenges using an approach that provides the least annual financial impact to customers. To accomplish this, the majority of the rate increase proposed is an increase to the customer charge (fixed amount) rather than an adjustment to energy charge per kilowatt hour. A sample of the customer base, including low income, senior housing, and general averages were evaluated to ensure that the proposed increases did not disproportionately affect any particular segment of the population. The medium commercial rate was evaluated and adjusted further in order to better align the small, medium, and large commercial rates. There are 69 current medium commercial customers. 1 of 6 • Water Utility water hauler fee: Development of a cost based water rate or fee for customers who require the ability to temporarily connect to an existing District connection (such as a fire hydrant) to fill customer owned and operated water transportation equipment. Because this rate is not an incident of real property and is not a mandatory fee (as customers may chose an alternative supplier), and because the rate is intended to be for temporary use, this fee is not subject to Proposition 218. Electric Utility rates have not changed since FY09. Staff has been successful in mitigating rate increases through well structured long term power purchase agreements. During this time, staff has also been able to increase the percentage of carbon free power sources, achieving over 45% carbon free sourcing as of fiscal year end 2015. During the FY16/17 budget adoption process, staff presented the 10-year Financial Master Plan (FMP) which informed the Board of the need to consider an Electric Utility rate increase in order to address increased cost of service requirements, to fund capital projects including the electric meter replacement program (currently in pilot phase), and to increase reserves to meet District targets. As explained during the June 1st, 2016 workshop, reserve replenishments are necessary following increased emphasis in capital improvements that began in FY15 and will continue through the FY17 budget cycle . The District's planned utilization of reserves included the Donner Lake substation rebuild, SCADA continuation, and procurement of a spare Truckee substation transformer. For FY16 through FY17 the District is also investing in the electric meter replacement project. The electric meter infrastructure, including both hardware and software, is nearing end of useful life. The electric meter replacement project scope includes new meter installations throughout the service territory and electronic data collection and transmission units. The new meter technology offers exciting customer service enhancements as well as improved outage management capabilities. The FMP as reviewed during the budget process did not assume a rate change until FY18, at which point a 4% rate increase was assumed for FY18 and FY19 and 3% increase for each year thereafter. The Board directed staff to evaluate an alternative of starting the rate increase one year earlier in order to minimize overall impact to customers by instead providing an (estimated) less than inflationary annual rate increase. A nominal rate increase as proposed for FY17 allows the District to meet reserve goals a year sooner (by FY24) while also reducing the annual percentage increase thereafter. 3. NEW INFORMATION A public hearing regarding the Electric Utility rate increase and Water Utility water hauler fee was advertised on July 1, 2016. If the Board adopts new rates for future years the following schedule would be implemented: 2 of 6 Water Utility water hauler rate update: • Schedule a public hearing for the proposed rates -June 1, 2016 (complete); • Hold a public hearing regarding proposed rates -July 20, 2016 (tonight); • Subject to public hearing, approve proposed rates -July 20, 2016 (tonight); and • Rates would be effective 60 days after Board approval. Electric Utility rate update: • Schedule a public hearing for the proposed rates -June 1, 2016 (complete); • Hold a public hearing regarding proposed rates -July 20, 2016 (tonight); • Subject to public hearing, approve proposed rates -July 20, 2016 (tonight); and • Rates would be effective the first bill printed after January 1st of each year. 4. FISCAL IMPACT This action is part of the overall rate design process that may affect the District's spending for the next three years. 5. RECOMMENDATION 1) Hold a public hearing for the proposed changes to the Electric Utility rates and the addition of the Water Utility water hauler fee; and 2) Adopt Ordinance 2016-02 to adopt new electric rates and to establish a water hauler fee. Jeremy Popov Administrative Services Manager Michael D. Holley General Manager 3 of 6 Ordinance No. 2016 -02 TRUCKEE DONNER Publ i c Uti lity Di st r ict -- - ------------ AMENDING THE ELECTRIC RETAIL RATES AND ESTABLISHING A WATER UTILITY WATER HAULER FEE WHEREAS District staff retained HOR Engineering to conduct an electric retail rate study and to recommend a Water Utility water hauler fee; and WHEREAS HOR Engineering completed the electric retail rate study and recommended an option to fairly allocate the cost of service to the District's customers through increased rates; and WHEREAS HOR Engineering also completed a Water Utility water hauler fee study and recommended a fee to fairly recover cost of service; and WHEREAS a public workshop was held June 1, 2016 to receive comments from the public concerning a proposal to adopt such rate increases and fee addition; and WHEREAS notice of a public hearing for the proposed electric utility rate increase and addition of a Water Utility water hauler fee was advertised on July 1, 2016; and WHEREAS a public hearing was held on July 20, 2016 to receive public comments on the proposed electric rate increase and addition of a Water Utility water hauler fee; and NOW, THEREFORE, BE IT ENACTED by the Board of Directors of the Truckee Donner Public Utility District as follows: Section 1. Effective January 1, 2017, the following monthly electric rates shall be effective. Domestic Electric Rates: Permanent Residents Rate P10 Customer Charge: per month Energy Charge per kilowatt-hour $8.60 $0 .132 Domestic Electric Rates: Non-Permanent Residents Rate S10 Customer Charge: per month Energy Charge per kilowatt-hour Small Commercial Rates Rate 15 Customer Charge: per month Energy Charge per kilowatt-hour Medium Commercial Rates Rate 20 Customer Charge: per month Energy Charge per kilowatt-hour Demand Charge per kilowatt of demand Ordinance 2016-02 $8.60 $0.151 $16.67 $0.159 $166.42 $0.097 $12.86 1 4 of 6 Large Commercial Rates Rate 25 Customer Charge: per month Energy Charge per kilowatt-hour Demand Charge per kilowatt of demand $729.96 $0.097 $12 .29 Section 2 . Effective January 1, 2018, the following monthly electric rates shall be effective. Domestic Electric Rates: Permanent Residents Rate P10 Customer Charge: per month Energy Charge per kilowatt-hour $11.35 $0.132 Domestic Electric Rates: Non-Permanent Residents Rate S10 Customer Charge : per month Energy Charge per kilowatt-hour Small Commercial Rates Rate 15 Customer Charge: per month Energy Charge per kilowatt-hour Medium Commercial Rates Rate 20 Customer Charge: per month Energy Charge per kilowatt-hour Demand Charge per kilowatt of demand Large Commercial Rates Rate 25 Customer Charge : per month Energy Charge per kilowatt-hour Demand Charge per kilowatt of demand $11.35 $0 .151 $21.99 $0.159 $219.63 $0.100 $12.86 $963.37 $0.097 $12.29 Section 3. Effective January 1, 2019 , the following monthly electric rates shall be effective . Domestic Electric Rates: Permanent Residents Rate P10 Customer Charge: per month Energy Charge per kilowatt-hour $14.10 $0.132 Domestic Electric Rates: Non-Permanent Residents Rate S10 Customer Charge : per month Energy Charge per kilowatt-hour Small Commercial Rates Rate 15 Customer Charge : per month Energy Charge per kilowatt-hour Ordinance 2016-02 $14.10 $0 .151 $27.32 $0.159 2 5 of 6 Medium Commercial Rates Rate 20 Customer Charge : per month Energy Charge per kilowatt-hour Demand Charge per kilowatt of demand Large Commercial Rates Rate 25 $272.84 $0.103 $12.86 Customer Charge: per month $1, 196. 79 Energy Charge per kilowatt-hour $0.097 Demand Charge per kilowatt of demand $12.29 Section 4: Effective 60 days after adoption by the Board of Director of the District, the following Water Utility fee shall be effective. Water Hauler fee, per each truck fill $10 .00 Section 5. If no protest is made pursuant to Public Utilities Code Section 16078, then the terms of this ordinance shall be effective 60 days after adoption by the Board of Directors of the District. Section 6. The Clerk of the District shall immediately cause a copy of this ordinance to be published in a newspaper of general circulation and posted in three places within the District. Section 7. The provisions of other Ordinances shall remain if effect to the extent that they do not conflict with this ordinance. PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District at a meeting duly called and held within the District on the twentieth day of July, 2016 by the following roll call vote: AYES: Directors Bender, Ellis, Laliotis, Warmerdam and President Aguera NOES: None · ABST Al N: None ABSENT: None TRUCKEE DONNER PUBLIC UTILITY DISTRICT By~~~~~~~~~~~~~~~~ Joe Aguera, President of the Board ATTEST: Michael D. Holley, Clerk of the Board Ordinance 2016-02 3 6 of 6