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HomeMy WebLinkAbout7 Public Hearing Electric Utility Rate Increase PUBLIC HEARING #7Rates Increase for FY20 & FY2101 Electric Utility -Ordinance 2019Consideration of Adopting Rates Increase for FY20 & FY2101 Electric Utility -Ordinance 2019Consideration of Adopting March 6, 2019 Electric Utility Rate Increase 2016 Electric Utility limited rate structure design review •2015 Water Utility rate study update•2013 Water Utility rate study •2010 Electric Utility comprehensive rate structure design review •feesrates and and Water Utility Electric review the District’s cost of service and to provide rate design for in the past to Engineering, HDR District has contracted with The •The District works to make sure costs are fairly allocated•that objective is metstudies help ensure Rate •cost of serviceThe District strives to ensure rates are set adequately to cover the •BACKGROUND / HISTORY Electric Utility Rate Increase BACKGROUND / HISTORY Workshop presented to the Board-January 2019 •BoardContract with HDR Engineering approved by the -July 2018 ••replacement SCADA •AMI Project•in FY19and 3% FY18, in rate increases of 2% in FY17, 3% Utility maximum Electric 01 setting -2016the Board adopted Ordinance July of 2016 In •Electric Utility Rate IncreaseElectric Utility Rate Increase BACKGROUND / HISTORY Increasing legislative and regulatory costs•Changing operating environment•Allowing flexibility for cash reserves•Focusing on rate increases for FY20 & FY21•Identifying inflationary adjustments needed to cover costs•Preparing District for changes in technology and industry shifts•based rates -Developing equitable cost•2024)–Analyzing cost of service to determine revenue needed (2020 •The Study included the following services•Electric Utility Rate IncreaseElectric Utility Rate Increase BACKGROUND / HISTORY primary and secondary residentsrecommendation to maintain separate rate categories for residential the January 16, 2019 Workshop, the Board agreed with HDR’s At •Deferred liability fund•One year capital replacement•Six months cost of purchased power•Six months operating budget•The Study included updated cash reserve assumptions•Electric Utility Rate IncreaseElectric Utility Rate Increase © 2014 HDR, all rights reserved.March 6, 2019 Truckee Donner PUD Electric Rate StudySummary of the Comprehensive Purpose of the Presentation Recommend Rate ChangesReview Rate Alternativesand Cost of Service. Recap the Results of the Revenue Requirement Overview of the rate setting process 7 Development of Cost RatesProposed ResultsDraft Final Revenue Requirement AnalysisCost of Service AnalysisRate Design 8 Based Electric Rates- Targeted Outcomes of the Electric Rate Study resultstarget revenue from the revenue requirement Develop proposed rate designs to collect the methodologiesDevelop utilizing generally accepted (reserves, DSC, rate funded capital)Reflect prudent financial planning criteria customer class characteristics)based rates (reflect -Develop equitable and costmaintain the PUD’s electric infrastructureProvide sufficient revenue to operate and 9 Revenue AnalysisRequirement Summary of the Projected Revenue Requirements 2.7%2.7%2.7%3.0%2.7%Adjusted for Higher CostsAlternate Adjustment2.7%2.7%2.7%2.7%2.7%Needed to Meet ExpensesRevenue Adjustment FY 2024FY 20232022FYFY 2021FY 2020 11 Cost of Service Analysis •13 Conclusions on the Cost of Service Analysis Proposed rate adjustment across all classes of serviceNo significant cost of service issues in the 2020 test yearReview of customer classesLarge (more than 200 kW demand)•200 Kw demand)–Medium (50 •Small (under 50 Kw demand)•Commercial•Permanent Residents-•Permanent Residents Rate Design Present 15 Alternative 1 and 2Customer Charge Adjustment–Residential Rates Proposed $0.151$0.151$0.151Charge $/kWhEnergy$18.55$16.18$14.10Customer Charge $/Mo.Permanent Residents-Non$0.132$0.132$0.13 2Charge $/kWhEnergy$18.55$16.18$14.10Customer Charge $/Mo.Permanent Residents3.0%2.7%Proposed RatesAlt.$0.151$0.151$0.151Charge $/kWhEnergy$18.32$16.18$14.10Customer Charge $/Mo.Permanent Residents-Non$0.132$0.132$0.132Charge $/kWhEnergy$18.32$16.18$14.10Customer Charge $/Mo.Permanent Residents2.7%2.7%1, 2019Jan.FY 2021FY 2020Rates Proposed Commercial Rates $13.02$12.65$12.29Charge $/kWDemand$0.103$0.100$0.097Charge $/kWhEnergy$1,196.79$1,196.79$1,196.79Customer Charge $/Mo.Large Commercial$13.63$13.24$12.86Charge $/kWDemand$0.109$0.106$0.103Charge $/kWhEnergy$272.84$272.84$272.84Customer Charge $/Mo.Medium Commercial$0.169$0.164$0.159Charge $/kWhEnergy$27.32$27.32$27.32Customer Charge $/Mo.Small Commercial2.7%2.7%1, 2019Jan.FY 2021FY 2020RatesPresent 16 Energy and Demand Charge Adjustment– Present 17 Energy and Demand Charge Adjustment–Proposed Commercial Rates Alternative Proposed Rates$13.06$12.65$12.29Charge $/kWDemand$0.104$0.100$0.097Charge $/kWhEnergy$1,196.79$1,196.79$1,196.79Cu stomer Charge $/Mo.Large Commercial$13.67$13.24$12.86Charge $/kWDemand$0.110$0.106$0.103Charge $/kWhEnergy$272.84$272.84$272.84Customer Charge $/Mo.Medium Commercial$0.170$0.164$0.159Charge $/kWhEnergy$27.32$27.32$27.32Customer Charge $/Mo.Small Commercial3.0%2.7%1, 2019Jan.Proposed RatesAlt.FY 2021FY 2020Rates •18 Conclusions on the Rate Design 2.7% for 2020 and 3.0% for 2021.•2.7% for all 2020 and 2021.•Two funding approaches•practices and approachescontemporary and reflect industry Overall rate structures are •19 Next Steps Utility ratesAdopt 2020 and 2021 Electric Discussion 20 NEW INFORMATION ComparisonResidential Rate•IncreaseElectric Utility Rate IncreaseElectric Utility Rate NEW INFORMATION Recommend increase added to customer charge•Based on typical usage for rate class*Residential-Bill Comparisons •FY21% in 3.0•FY20% in 2.7•Residential and Commercial•average rate increaseRecommended •IncreaseElectric Utility Rate IncreaseElectric Utility Rate NEW INFORMATION Recommend increase added to energy and demand charges•Based on typical usage for rate class*Commercial–Bill Comparisons •IncreaseElectric Utility Rate IncreaseElectric Utility Rate FISCAL IMPACT FY21and will impact the District’s budget and financial decisions through A rate increase of 2.7% for FY20 and 3% for FY21 is recommended •IncreaseElectric Utility Rate IncreaseElectric Utility Rate RECOMMENDATION 2019 and will be implemented on January 1, 2020ordinance will take effect 30 days from tonight on April 6, This •years FY20 and FY2101 adopting new rates for the Electric Utility for -2) Adopt Ordinance 20191) Hold the Public Hearing on Rate Increases IncreaseElectric Utility Rate IncreaseElectric Utility Rate