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HomeMy WebLinkAbout2017-0320 Electric Rate Design Presentation CITY OF ASHL.AND ■ City of -Ashland ■ ■ Electr lc Rate Design Hometown Connections Partner Utility Financial Solutions, LLC Y t~ 1 1 1~ }e, F Dawn Lund Vice-Presid Utility Financial SoWtiqn~!~~l 1 1 1 0 Utility Financial Solutions, LAC • International consulting firm providing cost of service and financial plans and services to utilities across the country, Canada, Guam and the Caribbean • Instructors for cost of service and financial planning for APPA, speakers for organizations across the country. • APPNs Hometown Connection preferred vendor for cost of service and financial planning Hometown ~ Connections- Partner Utility Financial Solutions, LLC Why is Cost of Service Irr'portant? 1' ► 0 Cost of service is: 1 A method to equitably allocate the revenue requirements of the utility among the various customer classes of service s As rate making gets more ~ complicated in the industry, important to have a document based on fair and defendable methodologies. Hometown ' • Connections F''} partner- Utility Financial Solutions, LLC COS Process Three Studies [Done • [Done • MIP • Rate design - COS is a base. Then add the Board /Council /Community social and political objectives to development the rate design. Move ~ slowly toward goals. Hometown Connections~ 1 --Parfner 4 4 Utility Financial Solutions, LLC Today's Obj'ect'ives ~ Brief re view of Cost of Service results ~ Review Electric Department Proposed Rate Design Hometown Connections lIGL Utility Financial Solutions, LLC Power Supply Changes . Power Supply Change Bonneville Power zoos - 6% 20M) - 1% 202-3% 2021 - 3% ► Transmission Change 2018-4% 2016- 1% 2020 - 3% 2021 - 3% Hometown / V I V Connections-Partnei-- Utility Financial Solutions, L Summary • without Projected Adjusted Target Fiscal Rate Projected Projected Operating Operating Projected Cash Recommended Year Adjustments Expenses Revenues Income Income Balances Minimum Cash 2018 0.00% $15,884,175 $ 15,022,996 $ (861,179) $ 514,397 $ 162,810 $ 31037,822 2019 0.00% 16,058,053 15,066,327 (991,725) 5341255 (11125,360) 31080,294 2020 0.00% 16,404,398 15,1081884 (11295,515) 554,100 (21693,862) 3,1371714 2021 0.00% 16,915,239 15,145,297 (11769,941) 5731946 (4,7121519) 31215,368 2022 0.00% 171108,497 15,1811862 (11926,635) 593,807 (61863,598) 3,232,382 ` Hometown Connections-partner- 7 z Utility Financial Solutions, LLC Summary with Recommended Rate Track Projected Adjusted Target Fiscal Rate Projected Projected Operating Operating Projected Cash Recommended Year Adjustments Expenses Revenues Income Income Balances Minimum Cash 2018 6.90% $15,983,993 $ 16,021,174 $ 37,181 $ 514,397 $ 11061,170 $ 3,0501128 2019 2.75% 16,200,713 16,496,007 295,294 534,255 11064,512 3,0971882 2020 2.75% 16,591,249 16,983,654 392,404 5541100 11189,252 31160,751 2021 2.75% 17,147,575 171478,199 330,623 573,946 11277,106 3,244,012 2022 2.75% 17,387,713 171986,935 599,222 593,807 11658,269 3,266,806 Rate track mirroring power supply increases City Increased Technology and other charges $220k since last presentation; so 4.3% and 2.9% Hometown Connections~ Utility AJFS Financial Solutions, LLC Service Electr"Ic Results Projected Customer Class Cost of Service Revenues % Change Residential Single-Phase $ 8,343,058 $ 71410,275 12.6% Seasonal Residential Single 751378 601785 24.0% Telecommunications 73,981 68,342 8.3% Commercial Service Single Phase 119071280 11720,561 10.9% Commercial Service Three Phase 31#3331918 311681263 5.2% Governmental Service Single Phase 1321089 1001297 31.7% Governmental Service Three Phase 4751225 4381354 8.4% Municipal Service Single Phase 151,481 1221475 23.7% Municipal Service Three Phase 4401310 4791332 -8.1% Governmental Large Service 8901057 8771970 1.4% Total $ 15,841,934 $ 14,466,358 9.5% a. Hometown Connections arfr2ea 9 .'Utility Financial Solutions, LLC COS Rates ■ (Used as a Guide Design Rates) Current Average COS Customer Customer Class Customer Charge Charge Demand Energy Residential Single-Phase $ 9.62 $ 14.09 $ - $ 0.0765 Seasonal Residential Single 9.62 16.50 - 0.0909 Telecommunications 17.23 19.45 - 0.0834 Commercial Service Single Phase 20.29 43.46 14.25 0.0393 Commercial Service Three Phase 49.95 103.90 12.86 0.0394 Governmental Service Single Phase 17.23 51.68 13.30 0.0394 Governmental Service Three Phase 101.01 155.98 14.58 0.0394 Municipal Service Single Phase 18.79 58.97 16.04 0.0392 Municipal Service Three Phase 54.72 127.75 14.02 0.0394 Governmental Large Service 21639.36 11635.79 13.96 0.0385 Hometown Connections s partner 10 . Utility Financial Solutions, LLC -Ax Review Proposee d Rate Design Hometown Connections, S~-Farther Utility Financial Solutions, LLC 4 ~SP. 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City of Ashland Rate Design 3/14/2017 Utility Financial Solutions, LLC 185 Sun Meadow Court Holland, MI USA 49424 (616) 393-9722 Fax (616) 393-9721 Email: mbeauchamp@ufsweb.com Submitted Respectfully by: Mark Beauchamp, CPA, CMA, MBA President, Utility Financial Solutions es I51i1=h' Fint :AA 1-haiimG I.r C City of Ashland Rate Design Table of Contents Page Rate Design Summary 3 Proposed Residential Single-Phase Rates 4 Proposed Seasonal Residential Single Rates 6 Proposed Commercial Single/Telecomm Rates 7 Proposed Outdoor Lighting Rates S Proposed Commercial Service Three Phase Rates 9 Proposed Govt/Muni Single Phase Rates 10 Proposed Govt/Muni Three Phase Rates 11 Proposed Governmental Large Service Rates 12 2 ~S City of Ashland Rate Design Rate Design Summary Projected Projected Projected Projected Revenues Under Revenues Under Revenues Under Revenues Under Proposed Rates Proposed Rates Proposed Rates Change Change Change Customer Class Current Rates Year 1 Year 2 Year 3 Year 1 % Year 2 % Year 3 % Residentia Single-Phase $ 7,410,275 $ 7,967,778 $ 8,329,088 $ 8,597,320 7.52% 4.53% 3.22% Seasonal Residential Single 60,785 66,195 69,196 71,425 8.90% 4.53% 3.22% Commercial Single/Telecomm 1,788,904 1,914,127 1,996,434 2,051,336 7.00% 4.30% 2.75% Outdoor Lighting 19,703 21,061 21,848 22,489 6.90% 3.75% 2.90% Commercial Service Three Phase 3,168,263 3,358,358 3,492,693 3,580,010 6.00% 4.00% 2.50% Govt/Muni Single Phase 222,773 242,597 257,883 267,940 8.90% 6.30% 3.90% Govt/Muni Three Phase 917,686 968,159 1,004,465 1,027,D65 5.50% 3.75% 2.25% Governmental Large Service 878,093 926,259 960,993 982,616 5.50% 3.75% 2.25% Totals $ 14,466,481 $ 15,464,534 $ 16,132,599 $ 16,600,201 6.90% 4.32% 2.90% Electric Rate Design 3 of 12 WS City of Ashland Rate Design Residential Single-Phase Rates Current Year 1 Year 2 Year 3 Monthly Facilities Charge: All Customers $ 9.62 $ 11.00 $ 12.50 $ 14.00 Energy Charge: Block 1 (0 - 500 kWh) $ 0.06563 $ 0.07011 $ 0.07216 $ 0.07313 Block 2 (501 - 5,000 kWh) $ 0.08073 $ 0.08521 $ 0.08726 $ 0.08823 Block 3 (Excess) $ 0.08073 $ 0.12000 $ 0.12500 $ 0.12750 Revenue from Rate $ 7,410,275 $ 7,967,778 $ 8,329,088 $ 8,597,320 Change from Previous 7.5% 4.5% 3.2% Change by Monthly kWh Usage 12.0 10.0 8.0% 6.0 4.0% 2.0% 0.0% 250 500 750 1000 1250 1500 1750 2000 2250 2500 -Year l -Year 2 - - -,Year 3 Change by Monthly kWh Usage $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.OD 250 500 750 1000 1250 1500 1750 2000 2250 2500 Year l Year 2 Year 3 Electric Rate Design 4 of 12 City of Ashland Rate Design Residential Single-Phase Rate Change Effect by Usage Usage Year 1 Year 2 Year 3 250 9.6% 7.0% 5.7% S00 8.5% 5.5% 4.1% 750 7.6% 4.5% 3.2% 1000 7.1% 4.0% 2.7% 1250 6.8% 3.7% 2.4% 1500 6.6% 3.5% 2.2% 1750 6.4% 3.3% 2.0% 2000 6.3% 3.2% 1.9% 2250 6.2% 3.1% 1.8% 2500 6.2% 3.1% 1.8% Rate Change Effect by Usage Usage Year 1 Year 2 Year 3 250 $ 2.50 $ 2.01 $ 1.74 500 $ 3.62 $ 2.52 $ 1.98 750 $ 4.74 $ 3.03 $ 2.23 1000 $ 5.86 $ 3.54 $ 2.47 1250 $ 6.99 $ 4.05 $ 2.71 1500 $ 8.11 $ 4.57 $ 2.95 1750 $ 9.23 $ 5.08 $ 3.19 2000 $ 10.35 $ 5.59 $ 3.43 2250 $ 11.47 $ 6.10 $ 3.68 2500 $ 12.59 $ 6.61 $ 3.92 Electric Rate Design 5 of 12 City of Ashland Rate Design Seasonal Residential Single Rates Current Year 1 Year 2 Year 3 Monthly Facilities Charge: All Customers $ 9.62 $ 11.00 $ 12.50 $ 14.00 Energy Charge: Block '1 (0 - 600 kWh) $ 0.07293 $ 0.07927 $ 0.08209 $ 0.08381 Block 2 (601- 5,000 kWh) $ 0.08062 $ 0.08696 $ 0.08978 $ 0.09150 Block ,3 (Excess) $ 0.08062 $ 0.12000 $ 0.12500 $ 0.12750 Revenue from Rate $ 60,785 $ 66,195 $ 69,196 $ 71,425 Change from Previous 8.9% 4.5% 3.2% Change by Monthly kWh Usage 12.0% 10.0% f,4~~ 8.0% 6.0% 4.0% 2.0% _ 0.0% 250 500 750 1000 1250 1500 1750 2000 2250 2500 -Year l -Year 2 ~r Year 3 Change by Monthly kWh Usage $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.OD $4.OD $2.00 250 500 750 1000 1250 1500 1750 2000 2250 2500 Year 1 Year 2 Year 3 Electric Rate Design 6 of 12 ; bfi~,Fin1 r. ALA.Iju6i'u5.LLC City of Ashland Rate Design Commercial Single/lelecomm Rates Current Year 1 Year 2 Year 3 Monthly Facilities Charge: 30kw or Less/Power Supply $ 17.23 $ 18.50 $ 21.00 $ 23.00 Over 30kW $ 64.67 $ 64.67 $ 64.67 $ 64.67 Energy Charge: Block 1 (0 - 3,000 kWh) $ 0.07804 $ 0.08340 $ 0.08550 $ 0.08648 Block 2 (3001 - 20,000 kWh) $ 0.07829 $ 0.08365 $ 0.08575 $ 0.08673 Block 3 (Excess) $ 0.07866 $ 0.08402 $ 0.08612 $ 0.08710 Demand Charge Block 1 (0 - 15 kW) $ - $ - $ - $ - Block 2 (Excess) $ 4.12 $ 4.75 $ 5.50 $ 6.25 Power Gust Adjustment: All Energy $ - $ - $ - $ - Revenue from Rate $ 1,788,904 $ 1,914,127 $ 1,996,434 $ 2,051,336 Change from Previous 7.0% 4.3% 2.8% Change by Monthly kWh Usage 9.0% 8.0% 7.0% 6.0% 5.D% 4.0% 3.0% 2.0% 0.0% 250 750 1250 1750 2250 2750 3250 3750 4250 4750 Year 1 Year 2 Year 3 Change by Monthly kWh Usage $30.OC $25.00 $20.00 $15.00 $10.00 $5.00 - 250 750 1250 1750 2250 2750 3250 3750 4250 4750 Year 1 Year 2 - Year 3 Electric Rate Design 7 of 12 City of Ashland Rate Design Outdoor Lighting Current Rates Current Year 1 Year 2 Year 3 Monthly Light Charge: Lamp HPS 5800 Non Res $ 21.69 $ 23.15 $ 23.80 $ 24.50 HPS 22000 Non Res $ 31.31 $ 33.40 $ 34.65 $ 35.65 HPS 50000 Non Res $ 50.08 $ 53.55 $ 55.55 $ 57.15 HPS 5800 Res $ 16.68 $ 17.85 $ 18.60 $ 19.15 HPS 22000 Res $ 24.09 $ 25.70 $ 26.50 $ 27.25 HPS 50000 Res $ 38.53 $ 41.20 $ 42.75 $ 44.00 Wood Pole $ 1.89 $ 2.00 $ 2.10 $ 2.15 Revenues from Current Rates $ 19,703 $ 21,061 $ 21,848 $ 22,489 Change from Previous 6.89% 3.74% 2.93% Electric Rate Design 8 of 12 Utility Financial Solution, LLC City of Ashland Rate Design Commercial Service Three Phase Rates Current Year 1 Year 2 Year 3 Monthly Facilities Charge: 30kw or Less $ 34.47 $ 37.00 $ 40.00 $ 45.00 Over 30kW $ 112.10 $ 112.10 $ 112.10 $ 112.10 Energy Charge: Block 1 (0 - 3,000 kWh) $ 0.07145 $ 0.07514 $ 0.07706 $ 0.07754 Block' (3001 - 17,000 kWh) $ 0.07193 $ 0.07562 $ 0.07754 $ 0.07802 Block 3 (Excess) $ 0.07212 $ 0.07581 $ 0.07773 $ 0.07821 Demand Charge Block 1 (0 - 15 kW) $ - $ - $ - $ - Block 2 (Excess) $ 4.12 $ 4.75 $ 5.50 $ 6.25 Power Cost Adjustment: All Energy $ - $ - $ - $ - Revenue from Rate $ 3,168,263 $ 3,358,358 $ 3,492,693 $ 3,580,010 Change from Previous 6.0% 4.0% 2.5% Change by Load Factor 27.5kW Demand 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% Year 1 Year 2 Year 3 Electric Rate Design 9 of 12 'vrili+Fn.vn.1 Wkawn. LLi City of Ashland Rate Design GovtlMuni Single Phase Rates Current Year 1 Year 2 Year 3 Monthly Facilities Charge: 30kw or Less/Power Supply $ 17.23 $ 18.50 $ 21.00 $ 23.00 Over 30kW $ 64.67 $ 64.67 $ 64.67 $ 64.67 Energy Charge: Block 1 (0 - 3,000 kWh) $ 0.09437 $ 0.09371 $ 0.09562 $ 0.09538 Block 2 (3001 - 20,000 kWh) $ 0.07077 $ 0.08871 $ 0.09562 $ 0.10038 Block 3 (Excess) $ 0.06632 $ 0.08871 $ 0.09562 $ 0.10038 Demand Charge Block 1 (0 - 15 kW) $ - $ - $ - $ - Block 2 (Excess) $ 4.19 $ 4.75 $ 5.50 $ 6.25 Revenue from Rate $ 222,773 $ 242,597 $ 257,883 $ 267,940 Change from Previous 8.9% 6.3% 3.9% Change by Monthly kWh Usage 12.0% 10.0 8.0% 6.0% 4.0% 2.0% 0.0% 250 600 950 1300 1650 2000 2350 2700 3050 3400 Year 1 Year 2 Year 3 Electric Rate Design 10 of 12 City of Ashland Rate Design Govt/Muni Three Phase Rates Current Year 1 Year 2 Year 3 Monthly Facilities Charge: 30kw or Less $ 34.47 $ 37.00 $ 40.00 $ 45.00 Over 30kW $ 112.10 $ 112.10 $ 112.10 $ 112.10 Energy Charge: Block 1 (0 - 3,000 kWh) $ 0.10082 $ 0.10433 $ 0.10433 $ 0.10433 Block 2 (3001- 20,000 kWh) $ 0.07645 $ 0.07996 $ 0.07996 $ 0.07996 Block 3 (Excess) $ 0.07166 $ 0.07517 $ 0.07803 $ 0.07837 Demand Charge Block '1 (0 - 15 kW) $ - $ - $ - $ - Block 2 (Excess) $ 4.19 $ 4.75 $ 5.50 $ 6.25 Power Cost Adjustment: All Energy $ - $ - $ - $ - Revenue from Rate $ 917,686 $ 968,159 $ 1,004,465 $ 1,027,065 Change from Previous 5.50% 3.75% 2.25% Change by Load Factor 27.5kW Demand 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1;5% 20% 25% 30% 35% 40% 45% 50% 55% 60% Year 1 -Year 2 Year 3 Electric Rate Design 11 of 12 City of Ashland Rate Design Governmental Large Service Rates Current Year 1 Year 2 Year 3 Monthly Facilities Charge: Monthly Charge $ 2,639.36 $ 2,639.36 $ 2,639.36 $ 2,639.36 Energy Charge: All Energy $ 0.05766 $ 0.05912 $ 0.05963 $ 0.05902 Demand Charge All Demand $ 4.92 $ 6.00 $ 7.00 $ 8.00 Power Cost Adjustment: All Energy $ - $ - $ - $ Revenue from Rate $ 878,093 $ 926,259 $ 960,993 $ 982,616 Change from Previous 5.49% 3.75% 2.25% Change by Load Factor 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% Year 1 Year 2 - Year 3 Electric Rate Design 12 of 12