HomeMy WebLinkAbout8 Electric Utility Rates AGENDA ITEM #8
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Public Utility District
MEETING DATE: November 1, 2023
TO: Board of Directors
FROM: Jared Carpenter, Electric Utility Director
SUBJECT: Conduct Public Hearing Regarding Adoption of Proposed Changes
to Electric Utility Rates and Consideration of Ordinance 2023-01
Setting Electric Rates, Time of Use Rates, and Power Cost
Adjustment for FY24 and FY25.
APPROVED BY:
Brian C. Wright, General Manager
RECOMMENDATION:
A) Conduct a Public Hearing for the purpose of receiving input on the adoption of
proposed Electric Rates and Power Cost Adjustment; and
B) Approve Ordinance 2023-01 setting Electric Rates, and Power Cost Adjustment for
FY24 and FY25, taking effect 30 days from adoption and implemented with the first bill
printed after January 1 st of each year beginning in 2024, as applicable.
BACKGROUND:
The District's electric retail rates are set by the Board of Directors and adopted by
Ordinance. In 2021 adopted Ordinance 2021-03 set rates for FY22-23. Recent
historical average electric rate increases by year are summarized in the following table:
FY 17 FY 18 FY 19 FY 20 :'r �1 FY 22 FY 23
2.00% 3.00% 3.00% 1 2.70% 1 3.00°f. 8.50%. 6.50%
The electric rate increases for FY22-23 were based on a Cost of Service Analysis
(COSA) completed in fall 2021. Since then, there have been significant changes in
energy markets due in part to the impacts of western drought, high volatility in natural
gas prices, high inflation, changes in the financial power markets, and growing
consumer demand. Additionally, the District is currently evaluating its future power
resource portfolio and developing an Integrated Resource Plan (IRP).
In advance of the efforts to prepare the FY24-25 budget, staff anticipated the need for
consultant services to support the District's consideration for next cost of service
justified electric rates starting in FY24. The Board, at its March 1, 2023 meeting,
approved a contract with HDR, Inc. (HDR) to prepare a comprehensive Electric Utility
COSA and retail rate design update. HDR has extensive experience in providing
financial consulting services, including COSA and rate design services for many
Publicly Owned Utilities (POUs), including POUs of similar size to the District, across
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California and other Western States.
The purpose of the COSA and Rate Study is the adoption of cost-based and equitable
electric rates that provide adequate funding for the District's operation and maintenance
(O&M), capital expenditure, and reserve requirement needs over the long-term. The
COSA and Rate Study process will determine the District's total revenue requirement
and how the revenue requirement may best be allocated to rates over the next two
years. There are three interrelated steps to the process: determining the revenue
requirement, or total cost of service; allocate the revenue requirement among customer
classes; and design rates to recover costs. HDR's Proposal included the following key
services to accomplish this effort:
• Meet with District staff to discuss study goals and collect financial information;
• Develop a projected five-year revenue requirement;
• Review rate classes and identifying potential changes;
• Develop cost-based rate design alternatives for each rate category;
• Develop three alternative Time-of-Use (TOU) rates;
• Develop a proposed method for establishing a Power Cost Adjustment (PCA) factor
for retail rates to mitigate the impact to the District when the cost of market energy
exceeds a threshold amount; and
• Present the Cost of Service and Rate Study to the Board.
While many electric utilities incorporate a TOU into their rate structures, they were not
considered to be well aligned with the energy demand characteristics of the District and
the metering infrastructure was not in place. Historically, the District did not have
significant demand charges (based on time of day, day of the week, or season) due to
the fact that the District is a winter, weekend, and holiday peaking utility and has
relatively flat transmission charges.
However, the 2023 `heat dome' and December freeze have demonstrated that the
District is more exposed to overall western electric markets when using electricity
during peak times which can have significant cost impacts. These, combined with a
developing summer peak, are changing the District's costs with increased demand
charges likely. TOU rates are one way to match the costs during peak usage times to
the rates charged to the customer. TOU rates can also be a powerful tool to send a
price signal so customers can choose to modify their usage patterns and save money.
HDR has extensive experience in establishing cost-based electric rates and is highly
qualified to perform this work for the District. Their project team specializes in rate and
cost of service analyses full-time and has successfully completed rate studies for
electric utilities nationwide, including the District. The COSA and Rate Study results is
an integral component of the proposed FY24-25 Budget.
At the District's regularly scheduled board meeting on October 18, 2023, HDR
presented the draft Electric Cost of Service Analysis and Rate Study. Important
highlights of the rate study include:
• Analyzes rate design for FY24 and FY25;
• Analyzes fixed infrastructure maintenance and operation costs proportionate to rates;
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• Evaluates rate increase applied to the customer charge;
• Analyzes each rate category individually and collectively to ensure adequate cost
recovery;
• Establish rates for residential TOU;
• Discuss a Clean Energy Rate; and
• Create a policy as to how the PCA will be used.
Furthermore, the District Board took action and scheduled a Public Hearing regarding
the proposed Electric Rate increases, Time of Use Rate, and Power Cost Adjustment
the District's regularly scheduled Board meeting on November 1, 2023 at 6.00 PM, or
as soon thereafter. The Public Hearing notice was placed in the Sierra Sun on October
20, 2023 and October 27, 2023.
ANALYSIS AND BODY:
Table 1 below shows the proposed electric rates for 2024-2028. Changes include:
• Base rate — Increases to each class.
• Time of Use Rate — An optional choice for residential customers that includes
three classes based on the time of day.
• Power Cost Adjustment (PCA) — Customer energy charges will be evaluated in
comparison with actual energy costs on a quarterly basis. The PCA will be used
to reconcile the forecasted energy costs (billed customer energy rate) to actual
energy costs with either a rate increase or customer credit. If District energy
charges have a quarterly surplus then customers will receive a credit in the
following quarter. If actual energy costs exceed forecasted energy costs a PCA
rate increase will be applied. To mitigate the impact of potential spikes in market
energy costs, the District will establish a 15% cap on PCA rate increases. In
circumstances where the 15% cap is exceeded, staff will propose for Board
consideration authorization of energy rate reserve fund transfers. See
Attachment 2 for further details.
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FY 23 FY 24 FY 25 FY 26 FY 27 FY 28
Proposed Rate Adjustment Current 12% 12% 4% 4% 3%
Customer Charge$/Mo. $ 24,53 $ 27.47 $ 30.77 $ 32.00 $ 33.29 $ 34.28
Permanent Residents EnergyCharge$/kWh $ 0.149 $ 0.166 $ 0.196 $ 0.194 $ 0.2D2 $ 0.208
Non-Permanent Customer Charge$/Mo. $ 24.53 $ 27.47 $ 30.77 $ 32.00 $ 33.28 $ 34.29
Residents EnergyCharge$/kWh $ 0.169 $ 0.189 $ 0.212 $ 0.220 $ 0.229 $ 0.236
Customer Charge$/Mo. $ 33.06 $ 37.03 $ 41.47 $ 43.13 $ 44.85 $ 46.20
Small Commercial EnergyCharge$/kWh $ 0.1$8 $ 0.211 $ 0.236 $ 0.246 $ 0.256 $ 0.263
Customer Charge$/Mo. $ 272.84 $ 305.58 $ 342.25 $ 355.94 $ 370.18 $ 381.28
Medium Commercial EnergyCharge$/kWh $ 0.126 $ 0.141 $ 0.158 $ 0.164 $ 0.171 $ 0.176
Demand Charge$/kW $ 14.93 $ 16.72 $ 18.73 $ 19.48 $ 20.26 $ 20.86
Customer Charge$/Mo. $ 1,196.79 $1,34a40 $1,501.25 $1,561.30 $1,623.76 $1,672.47
Large Commercial EnergyCharge$/kWh $ 0.134 $ 0.M $ 0.168 $ 0.175 $ 0.182 $ 0.188
Demand Charge$JkW $ 1440 $ 16.13 $ 18.06 $ 18.79 $ 19.54 $ 20.12
Power Cost
Adjustment(PCA)-
AII Rates**** $/kWh NA $ - $ - $ - $ - $
Customer Charge$/Mo. $ 24.53 $ 2E17 $ 29.31 $ 30.48 $ 31.70 $ 32.65
Time of Use Pilot- All Hours $ 0.1486 NA NA NA NA NA
Permanent Residents Peak*EnergyCharge$/kWh NA $ 0.2202 $ 0.2466 $ 0.2565 $ 0.2668 $ 0.2748
-OPTION 1 P a rt-Pe ak**En e rgy Ch arge$/kW h NA $ 0.1468 $ 0.1644 $ 0.1710 $ 0.1778 $ 0.1832
Off-Peak***Energy Charge$JkWh NA $ 0.1468 $ 0.1644 $ 0.1710 $ 0.1778 $ 0.1832
Customer Charge$/Mo. $ 24.53 $ 26.17 $ 29.31 $ 30.48 $ 31.70 $ 32.65
Time of Use Pilot- All Hours $ 0.1690 NA NA NA NA NA
Non-Permanent Peak*Energy Charge$/kWh NA $ 0.2505 $ 0.2805 $ 0.2917 $ 0.3034 $ 0.3125
Residents-OPTIONI Part-Peak**EnergyCharge$/kWh NA $ 0.1670 $ 0.1970 $ 0.1945 $ 0.2023 $ 0.2093
Off-Peak***Energy Charge$JkWh NA $ 0.1670 $ 0.1870 $ 0.1945 $ 0.2023 $ 0.2093
Customer Charge$/Mo. $ 24.53 $ 26.17 $ 29.31 $ 30.48 $ 31.70 $ 32.65
Time of Use Pilot- All Hours $ 0.1486 NA NA NA NA NA
Permanent Residents Peak*EnergyCharge$/kWh NA $ 0.2605 $ 0.2918 $ 0.3035 $ 0.3156 $ 0.3251
-OPTION 2 P a rt-Pe ak**En e rgy Ch a rge$/kW h NA $ 0.1320 $ 0.1478 $ 0.1538 $ 0.1599 $ 0.1647
Off-Peak***Energy Charge$/kWh NA $ 0.1320 $ 0.1478 $ 0.1538 $ 0.1599 $ 0.1647
Customer Charge$/Mo. $ 24.53 $ 26.17 $ 29.31 $ 30.48 $ 31.70 $ 32.65
Time of Use Pilot- All Hours $ 0.1690 NA NA NA NA NA
Non-Permanent Peak*Energy Charge$/kWh NA $ 0.2963 $ 0.3318 $ 0.3451 $ 0.3599 $ 0.3697
Residents-OPTION 2 P art-Pe ak**En e rgy Ch arge$/kW h NA $ 0.1501 $ 0.1691 $ 0.1748 $ 0.1819 $ 0.1973
Off-Peak***Energy Charge$JkWh NA 1 $ 0.1501 $ 0.1681 $ 0.1748 $ 0.1819 $ 0.1873
* Peak 4:01PMto9PM
** Part-Peak 11:01 AM to 4 PM,9:01 PM to 11 PM
*** Off-Peak 11:01 PM to 11AM
****Subject to quarterly change
GOALS AND OBJECTIVES:
District Code 1.05.020 Objectives:
1. Responsibly serve the public.
2. Provide a healthy and safe work environment for all District employees.
3. Provide reliable and high quality water supply and distribution system to meet
current and future needs.
4. Provide reliable and high quality electric supply and distribution system to meet
current and future needs.
5. Manage the District in an environmentally sound manner.
6. Manage the District in an effective, efficient and fiscally responsible manner.
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District Code 1.05.030 Goals:
1. Manage for Financial Stability and Resiliency
2. Environmental Stewardship: Create a sustainable resilient environment for all our
communities.
3. Engage with our customers and communities in a welcoming and transparent way to
identify opportunities.
4. Take the best of private sector thinking to modernize the utility and add value to our
communities.
5. Developing an inclusive culture drives organizational integration and success.
FISCAL IMPACT:
This public hearing includes a recommendation for the Board's consideration to adopt
and set Electric Rates, optional pilot Time of Use, and Power Cost Adjustment for FY24
and FY25. An overall effective electric rate increase of 12% for FY24 and 12% for FY25
is recommended. The approved electric rates will have a direct impact on annual
electric utility rate generated revenues and budgeted expenditures for electric utility
operations and capital improvements over the next 2 years. The 2024 overall increase
of 12% generates an incremental $3.95M in revenue which is required to meet the
revenue requirement for 2024 Budget. The 2025 overall increase of 12% generates an
incremental $4.45M which is required to meet the revenue requirement for 2025
Budget, and is also dependent on the 2024 overall increase as recommended.
ATTACHMENTS:
1. Ordinance No. 2023-01 Electric Energy Rates FY2024-25
2. Attachement 2 - Power Cost Adjustment (PCA)
3. Attachement 3 - TDPUD Electric Rate Study 11.01.23 Draft
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TRUCKEE DONNM '
�.Public Utility District
Ordinance No. 2023 - 01
SETTING ELECTRIC UTILITY Standard Rates and Power Cost
Adjustment FOR FY24 AND FY25
WHEREAS, the District retained HDR Engineering to conduct a Cost of Service Analysis
(COSA) electric retail rate design update; and
WHEREAS, the District also tasked HDR Engineering with developing a pilot Time of Use
(TOU) Rate and Power Cost Adjustment (PCA); and
WHEREAS, HDR Engineering completed the COSA including an electric retail rate study and
recommended an option to fairly allocate the cost of service to the District's customers
through increased rates; and
WHEREAS, HDR Engineering completed the rate design for an optional pilot TOU Rate and
PCA; and
WHEREAS, a public workshop was held on October 18, 2023 to receive comments and
review the proposed electric rate increases, optional TOU Rate, and PCA; and
WHEREAS, a notice of a public hearing for the proposed electric utility rate increases,
optional TOU Rate, and PCA was publicly advertised on October 20t" and October 27t", 2023;
and
WHEREAS, a public hearing was held on November 1, 2023 to receive public comments on
the proposed electric rate increases, optional TOU Rate, and PCA; and
NOW, THEREFORE, BE IT ENACTED, by the Board of Directors of the Truckee Donner Public
Utility District as follows:
Ordinance No. 2023—01
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Section 1. If no protest is made pursuant to Public Utilities Code Section 16078, then the
terms of this ordinance shall be effective 30 days after adoption by the Board of Directors of
the District. Effective December 1, 2023, the following monthly electric rates shall be
implemented with the first bills after January 1, 2024, as applicable.
Domestic Electric Rates: Permanent Residents
Rates P 10, P 12
Customer Charge: per month $27.47
Energy Charge per kilowatt-hour $0.1664
Domestic Electric Rates: Non-Permanent Residents
Rates S10, S12, G10
Customer Charge: per month $27.47
Energy Charge per kilowatt-hour $0.1893
Domestic Electric Rates: Permanent Residents-Time of Use (optional, 1 change peryear)
Rates P 10X, P 12X
Customer Charge: per month $27.47
Energy Charge per kilowatt-hour, 4:01 pm-9:00pm $0.2202 Peak
Energy Charge per kilowatt-hour, 11:01 am-4:00pm $0.1468 Mid-Peak
Energy Charge per kilowatt-hour, 9:01 pm-11:00am $0.1468 Off-Peak
Domestic Electric Rates: Non-Permanent Residents-Time of Use (optional, 1 change per year)
Rates S 10X, S 12X, G 10X
Customer Charge: per month $27.47
Energy Charge per kilowatt-hour, 4:01 pm-9:00pm $0.2505 Peak
Energy Charge per kilowatt-hour, 11:01 am-4:00pm $0.1670 Mid-Peak
Energy Charge per kilowatt-hour, 9:01 pm-11:00am $0.1670 Off-Peak
Small Commercial Rates
Rates 15, E, 15X, 16, G 16, 17
Customer Charge: per month $37.03
Energy Charge per kilowatt-hour $0.2110
Medium Commercial Rates
Rates 20, 21, 23
Customer Charge: per month $305.58
Energy Charge per kilowatt-hour $0.1408
Demand Charge per kilowatt of demand $16.72
Ordinance No. 2023—01
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Large Commercial Rates
Rates 25, 26, 27
Customer Charge: per month $1,340.40
Energy Charge per kilowatt-hour $0.1504
Demand Charge per kilowatt of demand $16.13
Temporary Power
Rate 13
Customer Charge: per month $28.65
Energy Charge per kilowatt-hour $0.2324
Security Lights
Rate 01
Customer Charge: per light per month $22.40
Section 2. Effective December 1, 2023, the following monthly electric rates shall be
implemented January 1, 2025.
Domestic Electric Rates: Permanent Residents
Rates P10, P12
Customer Charge: per month $30.77
Energy Charge per kilowatt-hour $0.1864
Domestic Electric Rates: Non-Permanent Residents
Rates S 10, S 12, G 10
Customer Charge: per month $30.77
Energy Charge per kilowatt-hour $0.2120
Domestic Electric Rates: Permanent Residents—Time of Use (optional, 1 change peryear)
Rates P10X, P12X
Customer Charge: per month $30.77
Energy Charge per kilowatt-hour, 4:01 pm-9:00pm $0.2466 Peak
Energy Charge per kilowatt-hour, 11:01 am-4:00pm $0.1644 Mid-Peak
Energy Charge per kilowatt-hour, 9:01 pm-11:00am $0.1644 Off-Peak
Domestic Electric Rates: Non-Permanent Residents—Time of Use (optional, 1 change per year)
Ordinance No. 2023—01
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Rates S 10X, S 12X, G 10X
Customer Charge: per month $30.77
Energy Charge per kilowatt-hour, 4:01 pm-9:00pm $0.2805 Peak
Energy Charge per kilowatt-hour, 11:01 am-4:00pm $0.1870 Mid-Peak
Energy Charge per kilowatt-hour, 9:01 pm-11:00am $0.1870 Off-Peak
Small Commercial Rates
Rates 15, E, 15X, 16, G16, 17
Customer Charge: per month $41.47
Energy Charge per kilowatt-hour $0.2363
Medium Commercial Rates
Rates 20, 21, 23
Customer Charge: per month $342.25
Energy Charge per kilowatt-hour $0.1577
Demand Charge per kilowatt of demand $18.73
Large Commercial Rates
Rates 25, 26, 27
Customer Charge: per month $1,501.25
Energy Charge per kilowatt-hour $0.1684
Demand Charge per kilowatt of demand $18.07
Temporary Power
Rate 13
Customer Charge: per month $32.09
Energy Charge per kilowatt-hour $0.2603
Security Lights
Rate 01
Customer Charge: per light per month $25.09
Section 3. Power Cost Adjustment
Applicable to all Rates classes with an Energy Charge per kilowatt-hour, a Power Cost
Adjustment (PCA) will take effect for wholesale electricity power costs (Cost) which vary
up to 15% (above or below) to the approved Budget Cost. The District's rate reserve
funds will be considered for variances in excess of 15%. Effective 1/1/2024 the initial PCA
is $0.0000, and calculated and adjusted quarterly per the following schedule:
Ordinance No. 2023—01
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PSA Calculation Quarter Resulting PCA Applied Billing Months
Q1 — January February March May June Jul
Q2 —April May June August September October
Q3 — July August September November December January
Q4 — October November December February March April
Section 4, The Clerk of the District shall immediately cause a copy of this ordinance to be
published in a newspaper of general circulation and posted in three places within the District.
Section 5. The provisions of other Ordinances shall remain if effect to the extent that they do
not conflict with this ordinance.
PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District
at a meeting duly called and held within the District on the first day of November 2023 by the
following roll call vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
By
Jeff Bender, President of the Board
ATTEST:
Brian Wright, General Manager
Ordinance No. 2023—01
Page 25 of 143
TDPUD-Electric Utility
Power Cost Adjustment
Annual PCA TIMING- (inaugural list four months Qan-apr)-PCA on bills,at$0.0000)
14,760 Budget 2024 Average#of Accounts Q1 calc--completed by Apr 30t applied to monthly billings in May/Jun/Jul
174,000 Budget 2024 MHh purchased Q2 calc--completed by Jul 30tt applied to monthly billings in Aug/Sep/Oct
Q3 calc--completed by Oct 30t applied to monthly billings in Nov/Dec/Jan
$ 85.77 Budget 2024 cost per MW H Q4 calc--completed by Jan 30t applied to monthly billings in Feb/Mar/Apr
this annual figure has monthly/quarterly variability.
for 2018 to 2022,UAMPS,cost spread to annual avg.is
Q1-8% Q2-5% Q3+9% Q4+6%
The MW volume mix by quarter is Q1 29% Q2 22% Q3 23% Q4 26% THE ACTUAL IMPACT ON BILLS COULD BE HIGHER OR LOWER
ex. High PCA amount,applied to upcoming quarter's low kwh quarter
Greater than 15%cost variances;the Rate Reserve Fund will apply.... would have a greater$impact on customer's bills.
if>15%-draw from rate reserve fund or transfer to rate reerve fund The inverse applies as well.
For up to 15%cost per MWh variances,the below PCA calculation scenarios are presented....
Budget
Cost MWh PCA Calculation PCA Billing 2024 Budget-All Accounts 2024 Budget-Residential-Primary(P10)-
for Quarter Quarter Quarter Combined-Average per Month Average per Month
MWh for Quarter $ 78.91 Q1 50,500 Q1 1 38,300 Q2 $185.95 Average bill $ 155.29 Average bill(@ 2024(+12%option))
Estimated 982 Average kWh 770 Average kWh(3yr Avg)
Q1 Scenarios Cost $Impact of the PCA for Monthly Bill Impact Monthly Bill Impact
Budget$/MWh $ 78.91 Variance Cost Variance the Quarter Amount Pctg. Amount Pctg.
-15% $ 67.07 $ (11.84) $ (597,731) $(0.0156) $ (15.33) -8.2% $ (12.02) -7.7%
-14% $ 67.86 $ (11.05) $ (557,882) $(0.0146) $ (14.31) -7.7% $ (11.22) -7.2%
-13% $ 68.65 $ (10.26) $ (518,034) $(0.0135) $ (13.29) -7.1% $ (10.41) -6.7%
-12% $ 69.44 $ (9.47) $ (478,185) $(0.0125) $ (12.27) -6.6% $ (9.61) -6.2%
-11% $ 70.23 $ (8.68) $ (438,336) $(0.0114) $ (11.24) -6.0% $ (8.81) -5.7%
-10% $ 71.02 $ (7.89) $ (398,487) $(0.0104) $ (10.22) -5.5% $ (8.01) -5.2%
-9% $ 71.81 $ (7.10) $ (358,639) $(0.0094) $ (9.20) -4.9% $ (7.21) -4.6%
-8% $ 72.60 $ (6.31) $ (318,790) $(0.0083) $ (8.18) -4.4% $ (6.41) -4.1%
-7% $ 73.38 $ (5.52) $ (278,941) $(0.0073) $ (7.15) -3.8% $ (5.61) -3.6%
-6% $ 74.17 $ (4.73) $ (239,092) $(0.0062) $ (6.13) -3.3% $ (4.81) -3.1%
-5% $ 74.96 $ (3.95) $ (199,244) $(0.0052) $ (5.11) -2.7% $ (4.01) -2.6%
-4% $ 75.75 $ (3.16) $ (159,395) $(0.0042) $ (4.09) -2.2% $ (3.20) -2.1%
-3% $ 76.54 $ (2.37) $ (119,546) $(0.0031) $ (3.07) -1.6% $ (2.40) -1.5%
-2% $ 77.33 $ (1.58) $ (79,697) $(0.0021) $ (2.04) -1.1% $ (1.60) -1.0%
-1% $ 78.12 $ (0.79) $ (39,849) $(0.0010) $ (1.02) -0.5% $ (0.80) -0.5%
0% $ 78.91 $ - $ - $ - $ - 0.0% $ - 0.0%
1% $ 79.70 $ 0.79 $ 39,849 $ 0.0010 $ 1.02 0.5% $ 0.80 0.5%
2% $ 80.49 $ 1.58 $ 79,697 $ 0.0021 $ 2.04 1.1% $ 1.60 1.0%
3% $ 81.28 $ 2.37 $ 119,546 $ 0.0031 $ 3.07 1.6% $ 2.40 1.5%
4% $ 82.06 $ 3.16 $ 159,395 $ 0.0042 $ 4.09 2.2% $ 3.20 2.1%
5% $ 82.85 $ 3.95 $ 199,244 $ 0.0052 $ 5.11 2.7% $ 4.01 2.6%
6% $ 83.64 $ 4.73 $ 239,092 $ 0.0062 $ 6.13 3.3% $ 4.81 3.1%
7% $ 84.43 $ 5.52 $ 278,941 $ 0.0073 $ 7.15 3.8% $ 5.61 3.6%
8% $ 85.22 $ 6.31 $ 318,790 $ 0.0083 $ 8.18 4.4% $ 6.41 4.1%
9% $ 86.01 $ 7.10 $ 358,639 $ 0.0094 $ 9.20 4.9% $ 7.21 4.6%
10% $ 86.80 $ 7.89 $ 398,487 $ 0.0104 $ 10.22 5.5% $ 8.01 5.2%
11% $ 87.59 $ 8.68 $ 438,336 $ 0.0114 $ 11.24 6.0% $ 8.81 5.7%
12% $ 88.38 $ 9.47 $ 478,185 $ 0.0125 $ 12.27 6.6% $ 9.61 6.2%
13% $ 89.17 $ 10.26 $ 518,034 $ 0.0135 $ 13.29 7.1% $ 10.41 6.7%
14% $ 89.96 $ 11.05 $ 557,882 $ 0.0146 $ 14.31 7.7% $ 11.22 7.2%
15% $ 90.74 $ 11.84 $ 597,731 $ 0.0156 $ 15.33 8.2% $ 12.02 7.7%
Page 26 of 143
4°b
Truckee Donner PUD
Electric Rate Study
November 1, 2023
Previous Board Discussion
(October 18 , 2023)
• Presented summary rate study results for Board
discussion , consideration , and input.
• Developed alternative rate transition plans to
meet O&M and capital needs over the projected
time period
p f
Board discussion resulted in two final rate
transition plans for consideration
• 12%1 12%, 4%, 4%5 3%
• 10.5%1 10.5%, 5%5 5%5 3%
• New rates for discussion : TOU , EV, Clean
Energy, PCA
• TOU rates are being recommended as a pilot program
• EV and Clean Energy rate will continue to be evaluated
and brought forward at a later time
Page 28 of 143
R A - - r _ - - - -I III_ 1 1_ - - - - I - - - - - ' - ' ' - - - r _ r\r\ n
Purpose of the Presentation
Overview of the Study
Preliminary Study Results and Recommendations
�,. Next Steps and Board Discussion
3 Page 29 of 143
Purpose of the Presentation
Overview of the rate setting process
Present the study results and
recommendations
Receive final Board input on the study
recommendations
Hold Public Hearing on proposed rates
4 Page 30 of 143
Development of Cost=Based Rates
Revenue Requirement Analysis
Cost of Service Analysis
Rate Design
Page of 4
Revenue
Requirement
Analysis
Page 32 of 143
Summary of the Projected Revenue Requirements
$60,000,000
$50,000,000
$40,000,000 , . • -
10
$30,000,000
$20,000,000
$10,000,000
$0
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Annual 0&M Purchased Power Debt Service Rate Funded Capital
Reserve Funding — - - Current Revenue — - - Revenue After Adjustment
Revenue Adjustment Needed to � o 0 0 0 0 0 0 0
0.0% 12.0% 12.0% 4.0% 4.0% 3.0% 3.0% 3.0% 3.0%
7 Meet Expenses Page 33 of 143
Summary of the Projected Revenue Requirements
$60,000,000
$50,000,000
$40,000,000 . • '
$30,000,000
$20,000,000
$10,000,000
$0
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Annual 0&M Purchased Power Debt Service Rate Funded Capital
Reserve Funding — - - Current Revenue — - - Revenue After Adjustment
Revenue Adjustment Needed to � o 0 0 0 0 0 0 0
0.0% 10.5% 10.5% 5.0% 5.0% 3.0% 3.0% 3.0% 3.0%
8 Meet Expenses Page 34 of 143
Alternative Rate Comparison
$240 Alternative Scenarios
$220
$200
$180
m
$160
o -
2t $140
$120
100
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Original, 12%, 12%, 4%, 4% ❑ Alternative 1, 10.5%, 10.5%, 5%, 5%
Page 35 of 143
Operating
Target Reserve = Capital Rate Reserve = Unfunded
Target is 180 Replacement = Target is 180 Liability Reserve
excluding
reserve Days of excluding
Target is Annual Days Purchased = Target is $2
eve Is purchased Depreciation Power million
Dower
Ending Reserve Fund Balances versus Total Target Fund Balance
(in millions of dollars)
Rate Adjustments -
YJ 12%, 12%3 4%3 4%
$30
$25
N
$20
$15
$10
$5
$0
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
�Operating Reserve Fund �Rate Reserve Vehicle Reserve Capital Replacement Fund
�Facility Fee Fund �Unfunded Liability Reserve — — Target Balance
10 Page 36 of 143
Operating
Target Reserve = Capital Rate Reserve = Unfunded
Target is 180 Replacement = Target is 180 Liability Reserve
reserve Days of O&M Target is Annual Days Purchased = Target is $2
excluding Depreciation Power million
levels purchased
power
Ending Reserve Fund Balances versus Total Target Fund Balance
$40 (in millions of dollars)
Rate Adjustments
$35 — 10.5%1 10.M
$30 5%, 5%
$25
0
$20 - -
$15
$10
$5
$0
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
�Operating Reserve Fund �Rate Reserve Vehicle Reserve Capital Replacement Fund
�Facility Fee Fund �Unfunded Liability Reserve — — Target Balance
11 Page 37 of 143
Cost of Service
Analysis
..- 38 .
Overview of a Cost of Service Analysis
What is cost of service?
• Analysis to equitably allocate the revenue requirement to the various customer classes of
service
Why cost of service?
• Generally accepted as "fair and equitable"
• Avoids subsidies
• Revenues track costs
• Can provide an accurate price signal
Objectives of Costof Service
• Determine if subsidies exist
• Develop average unit costs
Page 39 of 143
Summary of the Cost of Service Analysis
I � Review of customer classes
• Permanent Residents
- • Non-Permanent Residents
• Commercial
• Small (under 50 Kw demand)
• Medium (50 — 200 Kw demand)
• Large (more than 200 kW demand)
No significant cost of service issues in the 2024
Ltest vPar - — -
Propose equai rate a bus men s across airciasses
of service
Page 40 of 143
I
Rate Design
Page 41 of 143
Present and Proposed Residential Rates
Present Rates FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Proposed Rate Adj. Ian 1, 2023 1 .0 016, 1 .0 016 4.0 016, 4.0 016 9.0
Permanent Residents
Customer Charge $lMo. $ 4.53 $ 7.47 $30.77 $3 .00 $33.28 $34.28
Energy Charge $IkW r $0.149 $0,166 $0.1 6 $0.194 $0.202 $0. 0
Non-Permanent Residents
Customer Charge $lMo. $ 4.53 $ 7.47 $30.77 $3 .00 $33.28 $34.28
Energy Charge 1kWh $0.169 $0.1 9 $0.212 $0. 0 $0. 9 $0. 36
Page 42 of 143
Present and Proposed Residential Rates = Alternative
Present Rates FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Proposed Rate Adj. Ian 1, 2023 10.5 10.5 5.0 5.0 9.0
Permanent Residents
Customer Charge , o. $ 4.5.3 $ 7.11 $ 9.95 $.31.45 $33.02 $34.01
Energy Charge $IkWh $0.149 $0.164 $0,1 1 $0.191 $0. 00 $0, 06
Non-Permanent Residents
Customer Charge $lMo. $ 4.5.3 $ 7.11 $ 9.95 $ 1.45 $33.02 $34.01
Energy Charge 1kWh $0.169 $0.1 7 $0. 06 $0. 17 $0.228 $0. 34
Page 43 of 143
Other Ag Rate Comparison
Rate Comparison
800 kWh
$350
$300
$250
$200
Average ••
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$150 - Ln
- ••
N • '• •
I-� .•
$100tw
ao
$50
u u
$0
Current Year 1 Year 1 Roseville Lodi Electric PSREC* Liberty PG&E
Original Alternative Electric Utility
TDPUD Other Utilities
*Plumas-Sierra Rural Electric COOP
Page 44 of 143
Present and Proposed Commercial Rates
Present Rates FY 2024 FY 2025 FY 2025 FY 2027 FY 2028
Proposed Rate Adj. Jan 1, 2023 12.0% 12.0% 4.0% 4.0% 3.0%
Small Commercial
Customer Charge$lMo. $33.06 $37.03 $41.47 $43.13 $44.85 $46.20
Energy Charge$ kWh $0.188 $0.211 $0.236 $0.246 $0.256 $0.263
Medium Commercial
Customer Charge$lMo. 272.84 $305.58 $342.25 $355.94 $370.18 $381.28
Energy charge$ kWh $0.1257 $0.1408 $0.1577 $0.1640 $0.1705 $0.1757
Demand Charge, kW $14.93 $16.72 $18.73 $19.48 $20.26 $20.86
Large Commercial
Customer Charge$lMo. $1J96.79 $11340.40 $1,501.25 $115 1.30 $11623.76 $11672.47
Energy Charge ' kWh $0.134 $0.150 $0.168 $0.175 $0.182 $0.188
Demand Charge 'fkW $14.40 $16.13 $18.06 $18.79 $19.54 $20.12
19 Page 45 of 143
Present and Proposed Commercial Rates - Alternative
Present Rates FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Proposed Rate Adj. Jan 1, 2023 10.5% 10.5% 5.0% 5.0% 3.0%
Small Commercial
Customer Charge '/Mo. $33.06 $36.53 $40.37 $42.39 $44.50 $45.84
Energy Charge$ kWh $0.188 $0.208 $0.230 $0.242 $0.254 $0.261
Medium Commercial
Customer Charge lo. 272.84 $301.49 $3.33.14 $349.80 $367.29 $378.31
Energy Charge$ kWh $0.1257 $0.1389 $0.1535 $0.1612 $0.1692 $0.1743
Demand Charge, kW $14.93 $16.50 $18.23 $19.14 $20.10 $20.70
Large Commercial
Customer Charge /Mo. $1J96.79 $11322.45 $1A61.31 $11534.38 $11611.09 $11659.43
Energy Charge ' kWh $0.134 $0.148 $0.164 $0.172 $0.181 $0.186
Demand Charge 'fkW $14.40 $15.91 $17.58 $18.46 $19.38 $19.97
20 Page 46 of 143
Other Agencies Rate Comparison (Small/General Service)
Rate Comparison
11600 kWh
$600
$500 — •
$400 Average
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -
. N •
$300
r-I \ Ln •
M \ .�
M
$100 "N,�'IN,IS1%1\1 u
�\� �\� I\� ��� I\� �R��\ �� �
4\i\14\1N\1 it Ir,
i�N J'J'J'J'J'1`J'J'J'J`J' 1'J'J'J`J'XJ'J`J'J'JJ.
Current Year 1 Year 1 Roseville Lodi Electric PSREC* Liberty PG&E
Original Alternative Electric Utility
TDPUD Other Utilities
*Plumas-Sierra Rural Electric COOP
Page 47 of 143
Developed alternative rate designs and approaches
for Board consideration
All new or changed rates require changes to the
meter reading and billing systems. If adopted, they
will become available during 2024.
Alternative Rate Rates for discussion include :
Designs Pilot Time Of Use (TOU ) Rate for residential customers
Power Cost Adjustment for all customers
22 Page 48 of 143
Pilot Time of Use Rates for Residential
= Original
Allows residential customers to save money by adjusting behavior
Recommendation for Permanent Residents 2024:
Customer Charge: $26.17
Off Peak Charge: $.1468/kWh
Peak Charge: $.2202/kWh Present Rates FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Proposed Rate Adj. Jan 1, 2023 12.0% 12.0% 4.0% 4.0% 3.0%
Permanent Residents
Customer Charge$/Mo. $24.53 $26.17 $29.31 $30.48 $31.70 $32.65
Energy Charge$'/kWh
All Hours $0.1486 NA NA NA NA NA
Peak 4 PM to 9 PM NA 0.2202 0.2466 0.2565 0.2668 0.2748
Part Peak 11 AM to 4 PM 0.1468 0.1644 0.1710 0.1778 0.1832
Off Peak Ail Other Hours NA 0.1468 0.1644 0.1710 0.1778 0.1832
Nan-Permanent Residents
Customer Charge$/Mo. $24.53 $26.17 $29.31 $30.48 $31.70 $32.65
Energy Charge$/kWh
All Hours $0.1690 NA NA NA NA NA
Peak 4 PM to 9 PM NA 0.2505 0.2805 0.2917 0.3034 0.3125
Part Peak 11 AM to 4 PM 0.1670 0.1870 0.1945 0.2023 0.2083
Off Peak All Other Hours NA 0.1670 0.1870 0.1945 0.2023
Pilot Time of Use Rates for Residential
Larger Differential
Allows residential customers to save money by adjusting behavior
Recommendation for Permanent Residents 2024:
Customer Charge: $26.17
Off Peak Charge: $.1320/kWh
Peak Charge: $.2605/kWh Present Rates FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Proposed Rate Adj. Jan 1, 2023 12.0% 12.0% 4.0% 4.0% 3.0%
Permanent Residents
Customer Charge$/Mo. $24.53 $26.17 $29.31 $30.48 $31.70 $32.65
Energy Charge$/kWh
All Hours $0.1486 NA NA NA NA NA
Peak 4 PM to 9 PM NA 0.2605 0.2918 0.3035 0.3156 0.3251
Part Peak 11 AM to 4 PM NA 0.1320 0.1478 0.1537 0.1599 0.1647
Off Peak All Other Hours NA 0.1320 0.1478 0.1537 0.1599 0.1647
Non-Permanent Residents
Customer Charge$/Mo. $24.53 $26.17 $29.31 $30.48 $31.70 $32.65
Energy Charge$/kWh
All Hours $0.1690 NA NA NA NA NA
Peak 4 PM to 9 PM NA 0.2963 0.3318 0.3451 0.3589 0.3697
Part Peak 11 AM to 4 PM NA 0.1501 0.1681 0.1748 0.1818 0.1873
Off Peak All Other Hours NA 0.1501 0.1681 0.1748 0.1818
Power Cost Adjustment (PCA)
• Purpose, to pass through energy cost increases or decreases to customers
o Example 1 : Wildfire smoke reduces the output of a solar generator causing the PUD
to buy more expensive power resulting in the need for ashort-term power purchase
funded by a short-term increase to the PCA
o Example 2: A battery storage projects avoids high demand expense during peak
months resulting in the option to credit customers through the PCA
• Protects the District from adverse financial impact due to unforeseen changes
in energy costs
• Adjusts the energy rate ($/kWh) up or down to reflect the current wholesale
energy costs
• PCA could be adjusted monthly, quarterly or annually
• Does not require estimating future energy costs during uncertain times
• Recommendation : Adopt a PCA approach
0 2024 would start at $0.00/kWh
Page 51 of 143
Gain final input from the Board
Hold Public Hearing
Adopt proposed rates as determined by the Board
Finalize written report
Next Steps
26 Page 52 of 143
Thank You
and Discussion