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Home My WebLink About09112017 City Council Work Session Notes - ElectricUtilityRate WORK SESSION NOTES ON & tnC 1 jtvly Purpose: Present: +loft, f- iTer) rinnp,//� Council Membeerrrss/Pr^s ent: pan, I, Frkl �t�, lv J P (l l�'t-c AlAurnat Called by: Cat no'I Time: (q',30e-n Date: 7—//---/ ****************************************************** NI i o 1 zrd G'f' ipoo ,9? Railbelt Rate Comparison `) 4A3 I Based on GVEA Average Residential User(600 kWh) !.le S I I r �N Seward Electric Association As of 9/7/2017 Chugach Electric Association As of 9/7/2017 Base Rate($/kWh) 0.13526 Customer Charge($/month) 8.00 Summer Charge(S/kWh) 0.19524 Energy Charge($/kWh) 0.11482 Winter Charge(S/kWh) 0.081 Fuel Charge($/kWh) 0.05335 Monthly Operations and Infrastructure(Dollars) 21.06 Purchased Power Charge($/kWh) 0.01140 Effective Rate($/kWh) 0.19879 Fire Island Wind Energy Adjustment($/kWh) 0.0017 Residential User of 600 kWh(Dollars) $140.33 RCC($/kWh) 0.000899 Gross Revenue Tax($/kWh) 0.0005 Homer Electric Association As of 9/7/2017 Effective Rate($/kWh) 0.182669 Customer Charge($/month) 20.00 Residential User of 600 kWh(Dollars) $117.60 System Delivery Charge(dollars)* 22.30 Energy Charge($/kWh) 0.14866 Copper Valley Electric Association(Valdez) As of 9/7/2017 COPA($/kWh) 0.07205 Customer Charge($/month) 12.00 RCC($/kWh) 0.000899 Energy Charge($/kWh) 0.0558 Effective Rate($/kWh) 0.221609 Fuel Charge($/kWh) 0.0044 Residential User of 600 kWh(Dollars) $152.97 G&T Charge($/kWh) 0.1153 Heat Revenue Credit($/kWh) - Golden Valley Electric Association As of 9/7/2017 Effective Rate($/kWh) 0.1755 Customer Charge($/month) 17.50 Residential User of 600 kWh(Dollars) $117.30 Utility Charge($/kWh) 0.11631 F&PP($/kWh) 0.09385 Municipal Light&Power As of 9/7/2017 RCC($/kWh) 0.000899 Customer Charge($/month) 6.56 Effective Rate($/kWh) 0.211059 Energy Charge($/kWh) 0.14738 Residential User of 600 kWh(Dollars) $144.14 COPA($/kWh) 0.03279 RCC($/kWh) 0.000899 MOA Underground Surcharge(2%on all charges/rates Copper Valley Electric Association(Copper Basin) As of 9/7/2017 0.1348034 except RCC) Customer Charge($/month) 12.00 Effective Rate($/kWh) 0.181069 Energy Charge($/kWh) 0.0700 Residential User of 600 kWh(Dollars) $115.34 Fuel Charge($/kWh) 0.0044 G&T Charge($/kWh) 0.1153 Heat Revenue Credit($/kWh) - Effective Rate($/kWh) 0.1897 Residential User of 600 kWh(Dollars) $125.82 Matanuska Electric Association As of 9/7/2017 Facility Charge($/month) 13.00 Seasonal Charge($/year) 156.00 Energy Charge(S/kWh)•• 0.11640 COPA($/kWh) 0.06980 RCC($/kWh) 0.000899 Effective Rate($/kWh) 0.18710 Residential User of 600 kWh(Dollars) $125.26 •Homer Electric's System Delivery Charge does not apply to those who meet or exceed 150 kWh within the billing period. **Matanuska Electric uses a step rate approach for the Energy Charge.The rate represented is for the first 1300 kWh of energy. Residential Customer Monthly Fuel Charge (avg 600 kWh hour) $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 tih tih� 1y tih y5 tih �� y5 1y yy tih by yk yco ti`o tib tib tib ( tib tiCa ti( tib 'o (o tiA yA tiA 1 tiA til A til yA lac Qee a� ,?.9c' �a� 1Jc �J\ pJQO I O& o° peo tiJ qac I `3`ac QQ� �a� \JC �J� QQ� c) O�` ao� pec tic lac deb' mac QQ� �aJ AJC �J' PJQo 9/11/2017 City of Seward Electric Utility Rate Support Documents Recent Electric capital accomplishments Camelot UG ($100K) - critical Transformer renovation - critical Meter relay and view screen - critical SMIC UG (approx. 1/3 done) ($105K) - critical Inventory software — high-risk Fort Raymond Power Plant/Generator Integration — critical ($5.9M) Fort Raymond controls upgrade ($450K) - moderate risk 9/11/2017 City of Seward Electric Utility Rate Support Documents Recent Electric p capital accomplishments p Switch at Nash Road - moderate risk Lawing/Victor Creek pole replacement - moderate risk Questa Woods work (approx. 1/2 done) - moderate risk AVTEC UG ($15K) —moderate risk Lagoon ($45OK) — moved utilities underground Snow River emergency watershed protection - — critical risk ($1.48 million) 9/11/2017 City of Seward Electric Utility Rate Support Documents cts, Pending Electric capital projects Jesse Lee UG ($30K) —critical risk Sectionalized pole replacement ($1.7M) —critical risk Old Mill #3 ($120K) — high risk Gateway (Upper) ($90K) — high risk Gateway (Lower) ($80K) — high risk Woodland Hills ($120K) — high risk Downtown Alley (2nd and 3rd) ($1.0M) — high risk Downtown Alley (3rd and 4th) ($2.0M) — high risk Downtown Alley (4th and 5th) ($2.0M) — high risk Substation security upgrades ($130K) — high risk Southwest boat launch ramp ($33K) —high risk Automated meter reading 9/11/2017 City of Seward Electric Utility Rate Support Documents of Sfw u9 J rA Pending Electric projectsca ital p Purchase 9 mega-watts of Bradley Lake Power ($1 . 1M) Update sectionalizing study and purchase oil circuit reclosure ($132K) Install 25kV underground across Snow River ($450K) Convert T-Line to 115 kV ($12 million) Extend 12.5 kV distribution line on Nash Road ($165K) 9/11/2017 City of Seward Electric Utility Rate Support Documents Electric Rate Overview Introduction : September 11, 2017 Follow-Up: September 25, 2017 the Financial Engineering Company Tonight's Agenda • Adequacy of rates and need for January CPI adjustment • Are Seasonal rates working? • Comparison to other rates Adequacy of Rates What are Sales Doing ? Annual Sales Sales Thru June (millions of kWh) (millions of kWh) 60 30 50 25 40 20 30 15 20 10 10 5 2012 2013 2011 2015 2016 2012 2013 2014 2015 2016 2017 4 High - Level Assumptions • Sales based on 2017 normalized to a full year (52,388,000 kWh) • Purchases from CEA • Based on 11.8% losses (average through June 2017) • Current rates • Energy Charge: $.013015/kWh • Demand Charge: $13.07/kW-month • Fuel Cost Adjustment (FCA) is excluded from analysis • 2017 Budget (adjusted for assumed purchases from CEA • Current rates (before January 2018 CPI increase) Adequacyof Revenues • Income Approach • Cash Approach Revenues from Sales at Existing Rates $ 8,359,591 Cash Flow from Operations Other Revenues Net Income 42,906 Amort of CIA-General 1,029,996 Plus Amort of Bond Premium 1,140 Depreciation-Admin 1,774,032 Other 153,696 Depreciation-Admin Engr 3,204 Total Revenues $ 9,544,423 Less Expenses Amort of CIA (1,029,996) Standby Generation 142,522 Amort of Bond Premium (1,140) Substation 327,767 Principal on Debt (150,000) Transmission Ops 215,033 Cash Flow Before Capital Outlays 639,006 Distribution O&M 83,541 Capital Outlays Wholesale Power Costs 2,117,563 Distribution O&M (9,996) Work Orders - Work Orders (80,379) Standby 96,729 System Improvements (120,000) Meter Services 275,276 General (365,004) System Improvements 3,745 Admin Engineering (9,996) General Depreciation $ 1,774,032 $ 53,631 Admin Fee 909,864 PILT 953,004 Other 1,485,530 5,122,430 Admin Engineering Depreciation $ 3,204 Other 867,688 870,892 Interest on Debt 246,019 Net Income 42,906 6 Summary • Very tight margins • Based on 2017 budget • Operating costs (exclusive of CEA costs, PILT, depreciation) totals approximately $4.4 million • Inflationary pressures on operating costs would erase the minimal margins resulting in losses • CPI increase should be implemented to all rate classes in January Seasonal Rates - Residential Average Energy Use/Customer 900 800 • Preliminary indication is that lower winter rate 700 " -•w does not increase usage 600 -•••%k during winter 500 • Not in effect long enough 400 to determine with certainty 300 200 100 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec —2012 ---2013 . 2014 2015 —2016 —2017 On average, customer outside of City Limits uses more energy per month 2016 Monthly Usage (kWh) 80C 600 400 • 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec —Inside City Limits —Outside City Limits io Comparison of Monthly Power Bills Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual Inside City Usage(kWh) 609 547 531 551 584 486 431 468 511 459 509 598 6,283 Power Bill(Without FCA) Seasonal Rate $ 70.40 $ 65.39 $ 64.06 S 65.67 S 134.99 $ 115.94 $ 105.25 $ 112.39 $ 120.80 5 110.66 $ 62.27 S 69.50 $ 1,097 Year-Round Rate $ 102.68 $ 94.39 $ 92.20 $ 94.86 S 99.25 $ 86.18 $ 78.84 $ 83.74 $ 89.51 $ 82.55 $ 89.23 $ 101.19 $ 1,095 Outside City Usage(kWh) 758 671 624 644 673 529 578 913 381 571 628 710 $ 7,679 Power Bill(Without FCA) Seasonal Rate $ 82.46 S 75.43 $ 71.57 $ 73.20 $ 152.38 $ 124.27 $ 133.83 $ 199.34 S 95.54 $ 132.59 5 71.92 5 78.58 $ 1,291 Year-Round Rate $ 122.63 $ 111.00 5 104.61 $ 107.31 $ 111.18 $ 91.89 $ 98.46 $ 143.42 $ 72.18 $ 97.60 $ 105.19 $ 116.21 $ 1,282 11 Seasonal Rates - Small General Service 12 Average EnergyUse/Customer 1,500 k.^ 1,000 .- 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 --2013 :- * 2014 2015 —2016 —2017 13 Different Types of Small General Service Customers 2016 Monthly Usage (kWh) 2,000 1,800 Non- government/ 1,600 non-City accounts 4 1,400 4101Palthoughtrack eacha ccounother accounts within the City limits • 1200 use more energy per month 1,000 • 800 600 400 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct —Commercial-Inside City Limits —Commercial-Outside City Limits Government-Inside Gty Limits —Government-Outside Gty Limits—Municipal-Inside Gty Limits 14 Comparison of MonthlyPower Bills Inside City Usage(kWh) 1,228 1,222 1,152 1,389 1,326 1,559 1,902 1,583 1,483 1,062 1,059 1,118 16,081 Power Bill(Without FCA) Seasonal Rate $ 192.20 $ 191.54 5 182.81 S 212.24 $ 264.45 S 303.89 $ 361.92 $ 307.97 S 291.11 $ 219.86 $ 171.27 $ 178.63 $ 2,878 Year-Round Rate $ 220.86 $ 220.08 $ 209.70 $ 244.68 $ 235.28 $ 269.60 $ 320.07 $ 273.14 $ 258.47 $ 196.49 $ 195.99 $ 204.73 S 2,849 Outside City Usage(kWh) 1,012 913 890 1,015 782 1,158 1,101 1,254 1,183 737 736 885 11,666 Power Bill(Without FCA) Seasonal Rate 5 165.51 $ 153.20 $ 150.40 $ 165.92 $ 172.53 $ 236.08 $ 226.42 $ 252.34 $ 240.40 $ 164.90 $ 131.34 $ 149.77 $ 2,209 Year-Round Rate $ 189.13 $ 174.50 $ 171.17 $ 189.63 $ 155.32 $ 210.61 $ 202.20 $ 224.75 $ 214.36 $ 148.69 $ 148.52 $ 170.42 $ 2,199 Government Inside City Usage(kWh) 1,741 1,722 1,505 1,461 1,317 1,265 1,352 1,196 1,646 1,332 1,471 1,747 17,756 Power Bill(Without FCA) Seasonal Rate $ 255.77 $ 253.44 S 226.52 S 221.09 $ 263.02 $ 254.28 $ 268.96 5 242.48 $ 318.66 $ 265.57 $ 222.36 $ 256.56 $ 3,049 Year-Round Rate $ 296.42 $ 293.65 5 261.65 5 255.19 $ 234.04 5 226.44 5 239.21 5 216.17 $ 282.45 $ 236.26 $ 256.70 $ 297.36 5 3,096 Outside City Usage(kWh) 680 588 559 726 507 509 456 546 587 578 719 607 7,061 Power Bill(Without FCA) Seasonal Rate $ 124.42 $ 112.97 $ 109.37 5 130.16 $ 125.90 5 126.37 $ 117.37 $ 132.55 $ 139.58 $ 137.97 $ 129.18 $ 115.36 $ 1,501 Year-Round Rate $ 140.30 $ 126.69 $ 122.41 $ 147.12 $ 114.76 $ 115.16 $ 107.34 $ 120.54 $ 126.66 S 125.25 $ 145.96 $ 129.53 $ 1,522 Municipal Usage(kWh) 948 896 796 773 630 549 694 508 604 420 768 849 8,436 Power Bill(Without FCA) Seasonal Rate 5 157.59 $ 151.19 S 138.82 $ 135.94 $ 146.84 $ 133.05 $ 157.65 $ 126.20 $ 142.31 5 111.24 $ 135.35 $ 145.29 $ 1,681 Year-Round Rate $ 179.72 $ 172.12 5 157.41 $ 153.99 $ 132.97 5 120.97 $ 142.38 $ 115.02 $ 129.03 5 102.00 $ 153.28 $ 165.11 $ 1,724 15 A Comparison of Rates SES Homer Kodiak Cordova Chugach ML&P MEA Winter Summer Winter Summer Residential 200 Amp 400 Amp Customer 21.06 21.06 42.30 7.50 12.50 15.00 28.00 8.00 6.56 13.00 Energy 0.08100 0.19524 0.14866 0.13800 0.13800 0-500 0.27140 0.29620 0.11482 0.14738 0-1,300 0.11640 >500 0.21150 0.23090 >1,300 0.10465 SGS Customer 40.22 40.22 43.21 15.00 23.50 17.00 12.88 Energy 0.12381 0.16916 0.15473 0-300 0.1498 0-500 0.2593 0.0822 0.14161 >300 0.13 >500 0.22 LGS Customer 42.14 50.00 50.00000 60.00 55.00 44.15/159.55 30.00 Energy <200 kWh/kw 0.11454 0.09723 0-20,000 0.127 0-5,000 0.2046 0.0406/0.04219 0.0663/.06244 0.07979 >200 kWh/kW 0.06713 >20,000 0.1138 5,000-25,000 0.1816 >25,000 0.1584 Demand 23.45 20.00 5.67 837 18.67/19.32 23.29/26.18 7.20 Processor Customer 50.00 120.00 120.00 Energy 0.1323 0-20,000 0.1736 0.194 20,000-40,000 0.1542 0.1616 40,000-400,000 0.1432 0.1616 >400,000 0.1122 0.1122 Demand 13.18 13.18 Includes approximately 50.02446/kWh Secondary/Primary Secondary/Primary of fuel costs in energy rates