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HomeMy WebLinkAbout16 Firm for Electric Rate Study Agenda Item # 16 Public Utility District I WORKSHOP To: Board of Directors From: Mary Chapman Date: February 03, 2010 Subject: Discussion of Selection of a Firm to Perform an Electric Rate-Study 1. WHY THIS MATTER IS BEFORE THE BOARD This item is informational regarding the planned retention of a consultant to perform an electric rate-study. 2. HISTORY During 2009, the Board awarded a contract to a consultant to perform a water rate- study to assist the District in transitioning to metered water rates as required by AB2572. Increasing/changing of water rates is subject to the requirements of California Proposition 218. The Board held twelve separate public meetings to review various aspects of the new water rate structure and increased rates. Since the completion of the water rate-study, the Board has directed staff to begin planning for an electric rate-study to be performed during FY10. Under the current rate structure, residential customers (permanent residents and non-permanent residents) and commercial customers (small, medium and large) all pay a flat kilowatt- hour charge (different for each group) and a separate customer charge based on the size of their service. Additionally, our medium and large commercial customers pay a demand charge based on their highest energy demand during the month. In 1994, the District hired a rate consultant to perform an electric rate-study which became effective in February, 1995. The basic rate structure adopted at that time still remains in effect, except for periodic rate increases to cover increased District costs. Attachment 1 is a copy of the current electric rate structure. 3. NEW INFORMATION In considering the selection of a rate consultant, the Board would want to consider minimum qualifications, past electric rate design experience in rural resort communities and look for a project manager that is articulate in both Board presentations and interaction with community members. Attached is a Proposed Electric Rate Study Calendar (Attachment 2) to illustrate the process needed to complete an electric rate-study which could result in a different rate structure. Unlike water rates, electric rates within the State of California are not subject to the requirements of Proposition 218. 4. FISCAL IMPACT There is no direct fiscal impact associated with this workshop item. However, the cost of hiring an electric rate consultant is estimated to be between $60,000 and $90,000. 5. RECOMMENDATION Review this report and provide staff direction relating to how the Board would like to proceed. Mary ChaQn`an0 Michael D. Holley Administrative Services Manager General Manager ATTACHMENT 1 TRUCKEE - Ordinance No. 2007 - 03 AMENDING THE ELECTRIC RETAIL RATES AND ESTABLISHING THE CALIFORNIA SOLAR INITIATIVE CUSTOMER CHARGE WHEREAS District staff has prepared a budget for District operation for 2008; and WHEREAS, on November 7 and 19, 2007 a public hearing was held to receive comments from the public concerning the 2008 budget; and WHEREAS, the budget for 2008 recommends that electric retail rates be increased by 7% for the year 2008 and 3% for the year 2009 to cover increases in the costs of providing District services; and WHEREAS, on November 7 and 19, 2007 a public hearing was held to receive public comments on proposed electric rate increase; WHEREAS, the state of California has enacted The California Solar Initiative, through the signing of SB-1; and WHEREAS, the California Solar Initiative requires that electric utility companies must raise, through customer charges, a specified amount of money to fund the required solar rebate program; and WHEREAS, the Truckee Donner Public Utility District must raise $177,400 annually for the solar rebate program. NOW, THEREFORE, BE IT ENACTED by the Board of Directors of the Truckee Donner Public Utility District as follows: Section 1. Effective January 1, 2008, the following monthly electric rates shall be effective. Domestic Electric Rates: Permanent Residents Rate P 10 Customer Charge: per month $6.56 Energy Charge per kilowatt-hour $0.128 Domestic Electric Rates: Non-Permanent Residents Rate S 10 Customer Charge: per month $6.56 Energy Charge per kilowatt-hour $0.147 Small Commercial Rates Rate 15 Customer Charge: per month $12.72 Energy Charge per kilowatt-hour $0.154 Ordinance 2007-03 1 Medium Commercial Rates Rate 20 Customer Charge: per month $127.00 Energy Charge per kilowatt-hour $0.091 Demand Charge per kilowatt of demand $12.49 Large Commercial Rates Rate 25 Customer Charge: per month $557.06 Energy Charge per kilowatt-hour $0.094 Demand Charge per kilowatt of demand $11.93 Section 2. Effective January 1, 2009, the following monthly electric rates shall be effective. Domestic Electric Rates: Permanent Residents Rate P 10 Customer Charge: per month $6.76 Energy Charge per kilowatt-hour $0.132 Domestic Electric Rates: Non-Permanent Residents Rate S 10 Customer Charge: per month $6.76 Energy Charge per kilowatt-hour $0.151 Small Commercial Rates Rate 15 Customer Charge: per month $13.10 Energy Charge per kilowatt-hour $0.159 Medium Commercial Rates Rate 20 Customer Charge: per month $130.81 Energy Charge per kilowatt-hour $0.094 Demand Charge per kilowatt of demand $12.86 Large Commercial Rates Rate 25 Customer Charge: per month $573.78 Energy Charge per kilowatt-hour $0.097 Demand Charge per kilowatt of demand $12.29 Section 3: Effective January 1, 2008, the following monthly solar initiative customer charge shall be effective. Domestic (both permanent and non- permanent) $0.60 Small Commercial $5.00 Medium Commercial $10.00 Large Commercial $15.00 Ordinance 2007-03 2 Section 4. If no protest is made pursuant to Public Utilities Code Section 16078, then this ordinance shall be effective January 1, 2008 and January 1, 2009. Section 5. 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 6. 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 nineteenth day of November 2007 by the following roll call vote: AYES: Directors Aguera, Hemig, Sutton and Taylor NOES: Director Thomason ABSTAIN: None ABSENT: None TRUCKEE DONNER PUBLIC UTILITY DISTRICT By Tim F. Taylor, PrTSident/of the Board ATTEST: John f4r-ich, Cler of tlae card Ordinance 2007-03 3 ATTACHMENT 2 PROPOSED ELECTRIC RATE STUDY CALENDAR: February 3, 2010 Workshop to discuss how the Board wishes to proceed with an Electric Rate Study February, 2010 Seek proposals from consultants to perform an Electric Rate Study March, 2010 Board of Directors awards a contract to a consulting firm to perform the Electric Rate Study April, 2010 Workshop with the Board and consultant to discuss electric rate structure alternatives April, 2010 Public outreach of Electric Rate Study May, 2010 Workshop to discuss electric rate structure alternatives June, 2010 Discussion of the preliminary Electric Rate Study report July, 2010 Consideration of the final Electric Rate Study report and proposed electric rates July, 2010 Public hearing on proposed electric rates July, 2010 Consideration of an Ordinance to adopt electric rates