HomeMy WebLinkAbout#14 Q2 Power Cost Adjustment AGENDA ITEM #14
Public Utility District m
MEETING DATE: August 7, 2024
TO: Board of Directors
FROM: Michael Salmon, Chief Financial Officer
SUBJECT: Consideration of Approval of a 2024 Q2 Power Cost Adjustment
(PCA) of $0.0012 charge per kWh Billed in August, September and
October 2024
APPROVED BY:
Brian C. Wright, General Manager
RECOMMENDATION:
Approve Power Cost Adjustment for 2024 Q2 of $0.0012 charge per kWh billed in
August, September and October 2024
BACKGROUND:
Electric Rate Ordinance 2023-01 established a Power Cost Adjustment (PCA) to be
reviewed and calculated quarterly. The PCA is calculated by comparing the budget
versus actual wholesale costs of purchased power. To the extent the cost difference is
less than budget, a credit PCA is applied to customer billings. To the extent the cost
difference is greater than budget, a PCA charge is applied to customer billings. If the
cost difference is more than 15%, the rate reserve fund will be included in the
assessment of PCA determination.
ANALYSIS AND BODY:
Staff analyzed actual wholesale purchased power costs for Quarter 2 (Q2) of 2024 as it
compares to budget expectations.
Further, staff factored in Q2 items that were estimated in the Q1 PCA calculation.
The detailed analysis is provided as Attachment 1 to this report.
Results of the Q2 2024 analysis can be summarized as follows:
$81.42 cost per MWh, Budget
84.88 cost per MWh, Actual
$ 3.46 cost per MWh variance (4.2%)
x 38,092.740 MWh volume purchased
_ $131,801 cost variance impact Q2, unfavorable/over-budget
(87,417) credit offset for estimates in Q1 PCA
_ $ 44,384 net Q2 PCA
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The $44,384 Q2 PCA amount and 37,864,320 kWh estimate (August through
October billing cycles) results in PCA customer charge of$0.0012 per kWh PCA
for Q2 2024. This PCA charge will be applied to customers' August, September
and October 2024 billing cycles.
For the 2024 Q2 billings, the District customers' effective average retail cost per
kWh was $0.2252.
The PCA for Q2 equates to a bill charge of 0.5% ($0.0012 / $0.2252) and $0.2264
post-charge cost per kWh.
The 0.5% charge increases the average residential monthly bill for next quarter by
$0.52 (432 kWh average).
The unfavorable 4.2% cost per MHh variance for Q2 was driven primarily by
transmission and energy imbalance market (EIM) costs in the month of
June. District staff is researching these two cost items with NV Energy staff for
further understanding.
The favorable credit offset of$87,417 for Q1 PCA calculation estimates is due to two
factors. First, $5,339 for a 1.6% variance in kWh billing volume for the Q1 recovery
period (May-Jul). Second, $82,078 or 2.0% over estimate of Q1 power costs due to
timing of EIM and transmission invoices. The PCA calculation each quarter will have
esimates, some quarters more so than others. These estimates are reconciled in the
subsequent quarter's PCA calculation.
PCA History:
2024 Q1 - ($.0088) Credit
2024 Q2 - $.0012 Charge
GOALS AND OBJECTIVES:
District Code 1 .05.020 Objectives:
1. Responsibly serve the public.
6. Manage the District in an effective, efficient and fiscally responsible manner.
District Code 1 .05.030 Goals:
1. Manage for Financial Stability and Resiliency
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.
FISCAL IMPACT:
The net effect of the PCA charge of $44,384 for Q2 is to equalize the purchase power
cost per MWh fluctuation. The extent to which MWh volume varies, purchase power
cost will continue to vary to budget.
ATTACHMENTS:
1. PCA 2024Q2
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TDPUD
POWER COST ADJUSTMENT (PCA)
2024 Q2
713112024
BUDGET ACTUAL
Total Energy Requirements 13,267.000 12,675.000 12,643.060 38,585.000 13,608.654 12,273.086 12,211.000 38,092.740
Total Costs By Vendor- Apr-24 May-24 Jun-24 Q2 2024 Apr-24 May-24 Jun-24 Q2 2024
Energy Supply-UAMPS(533)(00584) $ 966,000 $ 822,800 $ 865,800 $ 2,654,600 $ 1,001,363 $ 860,192 $ 922,122 $ 2,783,677
Energy Supply-TCID(536) (0183) 31,100 22,200 37,900 91,200 0 0 0 0
Energy Supply-STAMPEDE(539) (v71, 61,000 65,700 70,400 197,100 76,220 37,577 54,949 168,745
Transmission -NVEnergy(534) (v6402) 50,600 35,500 47,500 133,600 48,313 49,612 78,939 176,864
EIM -NVEnergy(534) (v6403) 22,400 15,700 21,000 59,100 7,629 816 93,003 101,447
Enviro Compli/Regulty Other(588) 2,000 2,000 2,000 6,000 1,250 1,250 27 2,527
Total Power Costs $ 1,133,100 $ 963,900 $ 1,044,600 $ 3,141,600 $ 1,134,774 $ 949,446 $ 1,149,040 $ 3,233,261
Total Power Cost$/MWh $85.41 $76.05 $82.62 $81.42 $83.39 $77.36 $94.10 $84.88
account1..555 $ 1,085,700 $ 963,900 $ 1,044,600 $ 3,094,200 $ 1,134,774 $ 949,446 $ 1,149,040 $ 3,233,261
account 1.4.908.05.768 $ 47,400 $ - $ - $ 47,400 $ - $ - $ - $ -
VARIANCE
Total Energy Requirements 341.654 (401.914) (432.000) (492.260) -1.3%
Total Costs By Vendor- Apr-24 May-24 Jun-24 Q2 2024 39,442 Budget months Q3.2024 KWh
Energy Supply-UAMPS(533) 35,363 37,392 56,322 129,077 5% 96% retail factor
Energy Supply-TCID(536) (31,100) (22,200) (37,900) (91,200) -100% 37,864.3 MWh billed for Q3.2024 Budget
Energy Supply-STAMPEDE(539) 15,220 (28,123) (15,451) (28,355) -14% B 37,864,320 in KWh,billed estimate
Transmission -NVEnergy(534) (2,287) 14,112 31,439 43,264 32%
EIM -NVEnergy(534) (14,771) (14,884) 72,003 42,347 72% Q2 $ 131,801 Q2 PCA
Enviro Compli/Regulty Other(588) (750) (750) (1,973) (3,473) -58% Q1TU (87,417) Q1 PCA true-up
Total Power Costs $ 1,674 $ (14,454) $ 104,440 $ 91,661 3% A 44,384 Q2 PCA Amount
Total Power Cost$/MWh ($2.02) $1.31 $11.48 $3.46 4.2% A/B $ 0.0012 PCA per KWh Q2 2024 to be
applied to Aug Sep Oct billings
Q1 PCA Estimate True-up items:
Budget Cost per Actual Cost per
Billed KWh variance of 1.6% (5,339) at Actual Vol. at Actual Vol.
ansmission/EIM March estimate over actual, $ 81.42 $ 84.88 per MWh Cost -Budget/Actual
cost estimate for Q1 over actual by 2.0% (82,078) 38,092.740 38,092.740 Actual Purchased MWh Q2.2024
$ 3,101,511 $ 3,233,312 PP Cost-B$/@A Volume/A$/@A Volurr
Q1 PCA true-up (Q1TU) $ (87,417) $ 131,801 (Q2) PCA Adjustment Amount
next quarter's PCA will true-up for estimate(s)
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