HomeMy WebLinkAbout10 Recession Electric Revenues Agenda Item # 10
-UCKEE .
Public Utility District 1
WORKSHOP
To: Board of Directors
From: Stephen Hollabaugh
Date: April 15, 2009
Subject: Discussion of the Economic Impact of Recession on District
Electric Revenues
1. WHY THIS MATTER IS BEFORE THE BOARD
The Board requested a workshop concerning this subject.
2. HISTORY
The Board was given a news release from SMUD concerning their proposed rate
increase. Within that news release, SMUD stated that the economic recession has
greatly impacted electricity revenue, while turmoil in the credit markets has caused
borrowing costs to rise and interest earnings to plunge.
There were other factors that have adversely affected SMUD's budget such as
reduced reserve funds, increased costs for securing contracts for more renewable
energy, needed upgrades to aging infrastructure, and increased replacement costs for
natural gas contracts executed in 2008. These factors are not common to Truckee
Donner PUD's situation.
3. NEW INFORMATION
The District receives 45% of its revenues from commercial customers and 55% from
residential customers. The economic impact of the current recession on commercial
electric usage has not negatively affected the Districts' revenues. The District's
commercial customers fall into three rate categories, small, medium and large
commercial. The three commercial rate categories are defined as:
Small Commercial Electric: (under 50 KW demand)
Medium Commercial Electric: (50 - 200 KW demand)
Large Commercial Electric: (more than 200 KW demand)
The 2007 and 2008 commercial customer counts and KWH sales are listed in the
table below:
2008 KWH Summary Dec 31 Customer Count
All Small Commercial Electric 28,390,007 1381
All Medium Commercial Electric 14,840,954 65
All Large Commercial Electric 28,771,721 18
Totals 72,002,721 1464
2007 KWH Summary Dec 31 Customer Count
All Small Commercial Electric 39,065,591 1377
All Medium Commercial Electric 11,551,175 49
All Large Commercial Electric 21,408,800 10
Totals 72,025,566 1436
As can be seen, the number of commercial customers has not declined over the past
two years and the KWH sold is relatively the same. The main variables concerning
commercial customer KWH sales within the District are weather and temperature.
The five largest electric customers by load are:
Type of Business KWH Sold 12 Month Elec Billings
Water Utility 10,536,252 $1,499,238
Sewer Plant 7,898,715 $ 927,115
Hospital 5,482,731 $ 680,122
Education 3,206,405 $ 413,931
Private Sector 2,146,500 $ 347,849
As can be seen, the five largest customers are not at a high risk to leave the system.
Residential customer counts and KWH sales are 11,402 and 74,009,589 for 2007 and
11,550 and 75,000,000 for 2008, respectively. Residential statistics follow a similar
pattern to the commercial data with only a slight increase to the number of customers
and approximately equal KWH sales. In addition to weather factors, the main variable
for residential sales is usage by second home owners during weekends and holidays.
From a cost of services perspective, the District has a diversified electric purchase
power portfolio that tries to balance risk that may include resources, cost and load
needs. Electric conservation and energy efficiency improvements to customer loads
will continue to have lower their costs and energy needs.
4. FISCAL IMPACT
This is an informational item and does not have any fiscal impact.
5. RECOMMENDATION
Receive and co jnent on this rPoort.
Stephen Hollabaugh Michael .o ley
Assistant General Manager General Manager