HomeMy WebLinkAbout2000-11-15 Agenda Packet - Board (12) Staff Report
To: Board of Directors
From Peter L. Holzmeister
Date: November 9, 2000
Budget Workshop
A budget workshop is scheduled for Wednesday evening. Please bring your budget document to the
meeting. I will use an overhead presentation to highlight what I believe are important elements of the
budget.
Electric Budget
The electric budget proposes to eliminate the 11% rate credit that has been in effect for two years.
The cost of wholesale power has increased during the past year. We will not experience the huge
cost increases as in other parts of California, but we are not completely immune from the impacts of
deregulation. The increase in wholesale power cost exceeds the amount of the 11% credit, so we
have absorbed the rest of the cost increase into the budget without further increasing our rates.
Electric industry deregulation has been a two-edged sword for us. On the one hand, the deregulation
trend has helped us gain access to transmission service. On the other hand, the industry was so ill-
prepared for deregulation that the market price of generation has increased radically.
The price we pay for generation has increased, but we are managing a potentially bad sduation very
well.
Water Budget
The water budget recommends an increase of approximately $2.06 per month, or about $24.72 per
year. This is caused in part by that increase in cost of electricity used to pump water and in part by
increasing demands for system maintenance and operation.
We are not proposing any change in the basic work program of the District. We are proposing to
enhance our use of technology to help us do our job better.
We look forward to a full discussion of the budget on Wednesday evening.
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