HomeMy WebLinkAbout15 Electric and Water Utility Rate and Fee Design
ACTION ITEM # 15Water Utility Water Hauler Fee Electric Utility Rate Design and Water Utility Water Hauler Fee Electric Utility Rate Design and June 1, 2016
Electric and Water Utility Rate / Fee Design 2015 Water Utility rate study update •2013 Water Utility rate study •2010 Electric Utility rate structure design review •rate design for
Electric and Water Utility rates and feesseveral times to review the District’s cost of service and to provide The District has contracted with Shawn Koorn, of HDR Engineering, •BACKGROUND
/ HISTORY Electric and Water Utility Rate / Fee Design
Electric and Water Utility Rate / Fee Design Which provided over 45% carbon free sourcing at FY15 •Well structured long term power purchase agreements •Electric Utility rates have not
changed since FY09•SCADA replacement •Pipeline replacement •Drought compliance •annually through FY20Water Utility rates by 6% in FY16, 5% in FY17, and 3% maximum 01 increasing -In
August of 2015 the Board adopted Ordinance 2015•BACKGROUND / HISTORY Electric and Water Utility Rate / Fee Design
Electric and Water Utility Rate / Fee Design starting FY17 to reduce annual financial impact to customersBoard directed staff to study a less than inflationary rate increase •and 3%
annually thereafter through 2025FMP assumed no rate increase for FY17, then 4% for FY18 and FY19, •Increase reserves to meet District goals by FY24 •Electric meter replacement program•Planned
capital improvements •Increased cost of service requirements•Identified need to consider an Electric Utility rate increase •Financial Master Plan (FMP)During the FY16/17 budget process
the Board reviewed the 10 year •BACKGROUND / HISTORY Electric and Water Utility Rate / Fee Design
NEW INFORMATION Not subject to Proposition 218 •up service)Water Utility fee design for water hauler service (potable water truck fill •Subject to Proposition 218•only service -suppression-Water
Utility rate design for a fire•Electric Utility rate design to accomplish the District’s goals •review and present a summary of:In March 2016, the District contracted with HDR Engineering
to •Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
NEW INFORMATION only service-suppression-There are less than 10 customers with fire•218 far exceeds the annual revenue received for such serviceThe cost to administer a process in a
manner compliant with Proposition •abeyance until the next complete water rate study suppression rate update in -Staff recommendation is to hold the fire•Electric and Water Utility
Rate / Fee Design Electric and Water Utility Rate / Fee Design
NEW INFORMATION commercial small, medium, and large rate structurerequirements, ensure fixed cost recovery, and better align the Recommendation of rate design required to achieve revenue
•ate design:rtility uElectric •to fill customer owned and operated water transportation equipmenttemporarily connect to an existing District connection (fire hydrant) Development of
a water fee for customers who require the ability to •Water hauler fee: •Utility rate study recommendationsand Electric auler feehTonight, Shawn Koorn will present the water •Electric
and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
8 8 Board discussion•ratesOverview and review of the proposed water hauler •Review of the proposed electric rates•Focus on domestic and commercial rates•Overview of the restructuring
of the electric rates•Overview of the Presentation
9 hour (kWh)-$/kilowatt-Energy Charges •(Medium & Large Commercial)•$/kilowatt (kW) –Demand Charges •$/month–Customer Charges •Rate Components•Large Commercial (> 200 kW)•Medium Commercial
(> 50 kW)•Small Commercial (< 50 kW)•Domestic (Primary and Secondary)•Current Classes of Service (Rate Schedules)•Review of the Present Electric Rates
10 increase the revenue stability of the current ratesProposed rates meet the target level of revenues and •revenue levelsprimarily to meet target the customer charge Adjusted •was adjustedMaintained
the current rate structure, only the level of rates •Proposed rate design •Recover a greater portion of the system fixed costs•Enhance revenue stability•and objectivesrate design alternatives
to reflect District goals Developed •%33%, and %, 2•FY19–Developed proposed rates for FY17 •Key Assumptions
11. .Domestic Rate Design
12 Note: PG & E based on a minimum bill as there is not a customer charge. Comparison of Residential Fixed Charges
13. . . Domestic Primary Bill Comparison ($/Month)
14. . . Domestic Secondary Bill Comparison ($/Month)
15. .. . Commercial Rate Design
16. . . Small Commercial Bill Comparison ($/Month)
17. . .. . ($/Month)Bill Comparison Medium Comm.
18. .. . ($/Month)Comparison Large Comm. Bill
19 process for the proposed electric ratesRecommend moving forward with the rate adoption •reflect customer relationships and costsRevised the medium commercial kWh charge to better
•target/rate adjustmentPrimarily adjusted the customer charge to meet revenue •Proposed rates have been developed for each year•on 2%, 3%, and 3% respectivelyProposed adjustments in
FY17, FY18 and FY19 based •Summary of the Proposed Electric Rates
20 Recovers variable costs on the system•Simple to administer•Recommend maintain the current construction fee approach•with/without commodity chargeKey card access with rental fee and/or
access fee and •Installation fee, weekly rental fee, commodity charge•Most structures were based on actual metered use•Reviewed other water hauler rate structures•Reviewed alternative
approaches to develop fee•This fee would be for potable water use•day based existing construction water fee schedulepotable water is $10 per truck per -Current approach for non•Potable
Water Hauler Fee
21 21 Discussion
NEW INFORMATION of each year st after January 1Same as above, except rates would be effective the first bill printed •Electric Utility rate design: •Rates would be effective 60 days
after Board approval•July 20, 2016–Subject to public hearing, approve proposed rates •July 20, 2016–Hold a public hearing •June 1, 2016 (tonight)–Schedule a public hearing ••Implementation
schedule•Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
FISCAL IMPACT Planconsistent with the Board’s direction regarding the Financial Master the District’s revenue and spending for the next three years and is This action is part of the
overall rate design process that may affect •Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
RECOMMENDATION for the proposed addition of the Water Utility water hauler feeReceive this report and schedule a public hearing on July 20, 2016 2.for the proposed changes to the Electric
Utility rates; and Receive this report and schedule a public hearing on July 20, 2016 1.Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
BACKUP SLIDES Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
Backup Slides Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
Backup Slides:Original FMP Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
Backup Slides:With proposed rate updates Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
Backup Slides Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
Backup Slides(in thousands)Comparison of FY16 Budget to FY15 Budget Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
Backup Slides(in thousands)Comparison of FY16 Budget to FY17 Budget•Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design
Backup Slides 17 An engineer is expected to be added in FY-An electrician is expected to be added in FY16-Labor increase of 5% for FY16 and 3% for FY17-Labor•A maximum increase of 5%
in FY17-Annual increase of 6% in FY16-Water rates-No planned electric rate increase in FY16 & FY17-No new debt-Inflation is expected to be 3% for FY17-On September 2, staff presented
the following assumptions•Background / History Electric and Water Utility Rate / Fee Design Electric and Water Utility Rate / Fee Design