HomeMy WebLinkAbout11 Power Point Reallocation of electricity purchasing funds
September 2, 2020 Electricity Purchasing FundsReallocation of ACTION ITEM #11
•BACKGROUND / HISTORYBACKGROUND / HISTORY Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds reservescapital lectric E•Vegetation management•for
beneficial use of these fundsidentified were areas Two •portfolioconditions in the UAMPS of lower than expected power purchase costs due to market esult R•anticipated purchase power
budgetthe (89%) of 5,724,370 $has spent the end of the first half of FY20, the District At
•BACKGROUND / HISTORYBACKGROUND / HISTORY Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds FY20for Contract amount of $1,000,000 •on December
4, 2019Tree Service, Inc. Wright to The Board awarded a contract for tree trimming services •yearwas revised and approved by the Board earlier this component of the District’s Wildfire
Mitigation Plan (WMP) which ritical C•customerseffective electric service to -goal of delivering safe, reliable and costManagement Program is an important part of the District's Vegetation
•BACKGROUND / HISTORYBACKGROUND / HISTORY Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds chartfollowing table and shown in the is the last 5
years budget for management egetation V
•NEW INFORMATIONNEW INFORMATION Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds 2019 Newsom on October 2, into law by Governor Fire Prevention,
signed Wildland–SB 247 trimming requirement(GO 95) General Order 95 California –Increasing regulationCaliforniain Wildfire management year on vegetation There are 3 principal reasons
why the District is spending more each
•NEW INFORMATIONNEW INFORMATION Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds Doubled cost of trimming by this single change alone•Requirement
changed from 6.5 to 12 feet•Time of trim requirement revised in December, 2017•Increasing regulation, specifically GO 95 changes•Result is upward pressure on costs for all utilities
including POUs •IOU’s have ramped up operations and increased demand for services•IOU’s have not performed well with devastating results•WMPa key component of any utility’s management
egetation V•yearshave devastated large portions of the State in recent Wildfires
•NEW INFORMATIONNEW INFORMATION Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds Estimate a budget of $1.5M is necessary in FY20 and future years•Exhaust
current budget by October without increase•Expended about 70% of $1M budget as of July 31, 2020•District tree trimming budget impact•of the law applying to the District was not anticipatedAlthough
some increase in cost was anticipated for FY20, the full effect •Bids received by POU’s including the District realized the full increase•Law only applies to IOU’s paying for tree trimming
services•Increased wages by about 50% •comparable to an apprentice electric linemanRequires the line clearance certified tree trimmers be paid wages •Fire PreventionWildland–247 SB
•FISCAL IMPACTFISCAL IMPACT Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds 2020$9,500,000 as of August 19, is balance urrent C•FundElectric
Department’s General $500,000 will be funded by the of proposed contract increase The •2020by October, the budget projects to completely expend Staff •of July 31, 2020 the District
has spent about $680,000 As •services$1,000,000 for tree trimming Department Operating Budget for FY20 included The Electric
•FISCAL IMPACTFISCAL IMPACT Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds Reserves will be fully funded, Electric Capital With proposed transfer•Reserves$55
2,133 to the Electric Capital Transfer •trimming servicesbudgeted tree $500,000 Increase •Operating Budget to accommodateAppears to be sufficient favorable results in the Electric Department
•resultsfavorable forecast annual $1,800,000 for These combine •over$1,000,000 -Revenues •$800,000 under-Expenses •date--expenses yearElectric Department is pacing favorable in both
revenue and
1.RECOMMENDATIONRECOMMENDATION Reallocation of Electricity Purchasing FundsReallocation of Electricity Purchasing Funds Transfer an additional $552,133 to electric capital reserves.2.not
to exceed $1,500,000; andincrease the contract amount for FY20 from $1,000,000 to an amount Trimming Contract with Wright Tree Service. This revision will necessary Documents, for
an additional $500,000 funding for the Tree Authorize the General Manager to execute an amendment, and all