HomeMy WebLinkAbout13 Electric rate structure Agenda Item # 13
Public Utility District
WORKSHOP
To: Board of Directors
From: Mary Chapman
Date: April 02, 2008
Subject: Discussion of Implementing a Tiered Electric Rate Structure.
1. WHY THIS MATTER IS BEFORE THE BOARD
The Board asked the staff to investigate implementing a tiered electric residential
rate structure that contains a benefit for low income rate payers and encourages
conservation.
2. HISTORY
The District has used a two tier residential rate structure since 1995. There is one
rate for permanent residents which is currently $.128 per kilowatt hour. The second
rate is for non-permanent residents which currently is $.147 per kilowatt hour.
3. NEW INFORMATION
In creating and evaluating an alternative rate structure, several goals were identified:
a) Be revenue neutral.
b) Provide for a low income rate or credit.
c) Encourage conservation.
d) Work in concert with a planned 3% rate increase scheduled for calendar
year 2009.
Several rate structure alternatives were evaluated along with rate structures from
PG&E and Sierra Pacific. Although these programs differed significantly, both
provided for a 20% - 28% low income benefit and a tier difference between 15% to
20% to encourage conservation.
In your discussion, the Board is asked to consider:
a) Length of the low income program:
• Should it be for winter months only?
• Should it be funded for one budget year at a time?
• Should it be permanently funded?
b) Low income qualifiers:
• Should we process the applications in house?
• Should we rely on whether a customer qualifies under another program
such as AT&T or Southwest Gas low income programs?
• Should we try to make arrangements with HEAP to process the
applications?
• How frequently should a customer have to apply for the program? Yearly?
c) Structure of tiers:
• Should customers qualifying for the low income rate receive a percentage
credit off of both tiers of usage?
• Should the low income customer receive the baseline rate for all whirs
used?
• What should the credit be 10%, 15%, 20%?
d) Structure of low income credit:
• Should the low income rate be reflected as a totally different rate?
• Should the low income rate be a monthly credit on the customer's bill?
• Should the low income customer receive a rebate at the end of the year?
4. FISCAL IMPACT
The new rate structure would be revenue neutral to the District.
5. RECOMMENDATION
Review this report and provide comments.
Mary Cha an, dministrative Services Michael D. Holley, General Manager
Manager