HomeMy WebLinkAbout1998-0318 Study Session PACKET A
awl-
Ay� Ti/ Oct
Cost-of-Service and Rate Design Study
City Council Presentation
SL p7iv-..
r .y
4
City of Ashland
" Department of Electric Utilities
=; March 18, 1998
i mew
"■ Summarize study objectives
=A Discuss issues facing electric utility
`., .M Describe cost-of-service study and rate
design process
■ Present preliminary results
■ Discuss rate design considerations
e Study Objectives
F
=■ are for competitive environment
Develop rates that.
!N 7 '' • send appropriate price signals to customers
• ensure sufficient flexibility to allow offering of
additional products and services in the future
x • eliminate problem of cross subsidies
• Provide cost-of-service model for utility
• Identify longer-term rate design issues
I
Issues Facing Electric Utility
t ■ Competition
k Service and rate unbundling
■ Need for marginal cost data
■ Funding for General Fund
IA
�i
MI5
x
akdown of Revenue Uses
S ph
8; S6s1,721 NSO,F7i
L 3%
fFM.3F1
F,n IM
10%
"W737
; Carsmtlon FuM
� � Ebt4k mrfn FOOF
� �:?Y:'y xl �+ 13.F mIYbnro GFnFnI
4i
TOW 1888-97 R�S: f0.313,9W
2
t-of-Service and Rate Design
r cess
■ Typical electric system
■ Purpose of cost-of-service analysis
Overview of ratemaking process
■ Review current rates
■ Comparison with other utilities
Tay, ical Electric System
PRODUCTION
TRANSMISSION
I Ind4qustrial
Commercial
DISTRIBUTION
Wholesale,_
Service S� u,
.. Residential
•ii DWI
Direct Service
Customers
3
P _ Poses of a Cost-of-Service Analysis
�N.
• Financial stability: Revenues sufficient to
F meet costs for projected
u t period
• Equitability: Fair charges for electric
service
• Efficiency. Encourage appropriate
cost-based usage
(conservation)
rview of Electric Ratemaking Process
Utility Information
is Customer and sales projections
■ Operating budgets and CIP
i .� ■ Other assumptions
IN Revenuerequiramenb
'? Check adequacy
of rates CosFOf-service analysis
Rate design
Rate Recommeodstion
4
v
Review Current Rates
Y
■ Residential
�t■ Commercial
Institutional
■ Time-of-Use
s
1=,r
R idential Rates - Schedules 4 and 10
Residential Seasonal
(Sch.4) (Sch.10)
---., Basic Charge $ 4.90 $ 5.45
Energy Charge(cents/kWh)
up to 300 kWh 3.953 4.714
over 300 kWh 4.395 4.934
Ste;
5
C mmercial Rates - Schedule 25
Y' Single-phase Three-phase
ry Basic Charge
1 uptol5kW $ 6.40 $ 11.00
16.100 kW 6.40 11.00
101.300 kW 6.40 11.00
over 100 kW 20.01
24.57
Basic Incremental Charge(cents/kW)
"i uptol5kW - -
d 16•100 kW 63.80 63.80
101.300 kW 54.60 54.60
3] over 300 kW 50.05 50.05
Demand Charge($mW)
uptol5kW S $ -
over 15 kW 1.85 1.85
Energy Charge(cents/kWh)
up to 1,000 kWh' 5.728 5.728
1,000.20,000 kWh 4.104 4.100
over 20,000 kWh 3.847 3.847
Energy charge for usage up to 3,000 kWh drops to 5.22 cmftAdNh during the
`:- eta summer MnIhs stay-October.
t
In' titutional Rates - Schedule 30
Single-phase Three-phase
_ Basic Charge
uptol5kW 5 8.00 S 11.65
16.100 kW 8.00 13.65
101.100 kW 8.00 13.65
over 300 kW 25.03 30.73
Basic Incremental Charge(centslkW)
uptol5kW
1.100 kW 79.70 79.70
-300 kW 68.30 68.30
over 100 kW 62.60 62.60
°� Demand Charge(SIkW)
'- uptol5kW $ $
over 15 kW 2.06 2.36
Energy Charge(centalkWh)
-�� up to 1,000 kWh' 7.160 7.160
Yi 3,000.20,000 kWh 5.130 5.130
over 20,000 kWh 4.809 4.809
•y:p„( ' Energy charge for wage up to 3,000 kWh drops to 6.525 cents/kWh during
the six summer months May.October.
6
Time-of--Use Rates - Schedules 48 and 50
Large
fyy LL' General General
s v �
Service Service
(Sch.48) (Sch.50)
Basic Charge $ 81.00 6 78.00
.............
Basic Incremental Charge(cents&W)'
up to 1,000 kW 15.1 56.0
.ia:f over 1,000 kW 41.0 50.0
Demand-
($/kW peak period demand) $ 218 $ 2.75
Energy Charge(cenblkWh) 2.985 5.610
'For bask charge calculation,kW load she b the average of the two greatest
{{ nonasru monthly demands during the 12month period ending with the
current billing month.
'Pak period Is Monday tloough Friday,6:00 am.to 10:00 p.m.
..A
C parison With Other Utilities
Small large
Wlity Residential Commercial Commercial
Ashland-wtihoutusertax 6 41.05 S 255.96 S 7,310.11
Ashland•with user tax $1.31 517.15 9,175A1
Pacific Power 6 Light W28 28731 7,110.10
Portland General Electric 5135 260.36 8,360.95
- i Eugene Waleri ElectrlcBard 3931 215.86 7,168.17
,p::......-.. Springfield Utilities Bard 38.61 155,50 6,719.20
Emerald People's U6gty Dlsbkt 28ae 2WLW 8,110.70
Clatskanie People's Utility District 22.81 111.07 5,156.29
Central Lincoln People's Utility District am 27131 7,999.40
_. Umatilla Electric Cooperathm 16.56 230.00 7,509.00
Central Electric CooperaUa,Inc. 51.58 277.00 8,12250
.] Avenge(wlMUSerta) $ 43M S 21231 S 7,633.17
Y„
Key Assumptlom: Monthly Usage Monthly Demand
k°. Residential 860 kWh
Small Commrcial 1,000 kWh 32 kW
fa=t large Commercial 111,000 kWh 730 kW
7
P liminary Results
q , _ .
t
■ Key input assumptions
■ Historical and projected operating results
Potential overall rate decrease
■ Preliminary cost-of-service results
Input Assumptions
Rate design time horizon: 3 years
=: Continued regulation
■ Hydroelectric facility start-up in June 1998
■ Growth rate: 1.5% per year
■ Reduced conservation funding
■ Power supply unit rates continue at
current level
w
8
1
Fiffil tor ical and Projected Operating
sults
&
RbbH.1 n8 9w31"N OPnUb$Rn.m
ate %S+5� tfASePeo
=Y.'A i.Afe.wa
i� H.MO.MO
' i)AOU.oaO
��'� 31Aw.000
]9157 Ini I1f] 1991 1911 I000 ]WI loa] pee)
Iffl I1f] If11 n nr
I- Y-Rm���•M�Rt.�y-Mn BtM���
Pr posed Overall Rate Decrease
R0p01.0OwN RW O.v..f.01).Sy
,h
PmI nin6l)Resub
Fwl V.. 1997-98 199699 199940 2 l 200142 200243
+rF�
R.F..
R.W. f),6b,0 0(71110 3A91,U1 $6,009.66 NM U251.995
P tb U 0 (5 ,118) (55 ) 16 ,182) (M.53) (6!90
)
Cb.ph lln Wt E.nBp 9147 0.615
14,181 58,693 N.M
1 Orir R...nuw )16.000 U90M 651.070 168.000 159014 118.000
MFUb6 R.wnwt feA78,aM 57)M0l 0,759.175 57,681vs 67(92.7" se.1M.141
.}
B. UAU277 0593.265 57,67$18 $7.912.OM U.061,672 $0.172.?M
N1Y.6nnb b Plb Chv 118,3121 159.1141 160.0911 (wan) 161,6901
X.I EpO.nwi 98.181277 S7 18,63 $),612,]29 $9,8U,011 $),9U,69] 68,110,&0
B ABUNBe(Nw O206A7) 3199.67$ 3116.815 ($670) $12.07 (U1n)
FI B.bnw
SW ,Y"p SIA92,6U 91,]18,38] $IAU,MS 12,13;90 $2,IU,231 0,1",318
iY Sltw.w lD.aw"1 (MUM $1996)8 $119815 (3679) $12,07 (U,2P)
YUp $1}18,367 $1,9U,M5 (2,132,910 $2,132X31 $2,111,30 $2,110,081
9
Impact on General Fund
-m Impact on
a, n General Fund at
Maximum Potential
Rate Decease
Franchise Fee ($58,312)
User tax(251/6) (126,831)
Total ($185,143)
�1
e Design Considerations
Size of rate decrease
mApply rate decrease
• equally to all customer classes
• based on cost-of-service results
f` ■ Move towards cost-of-service
■ Tariff complexity
■ Alternative scenarios to be provided
x.•Y
10