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HomeMy WebLinkAboutRes2021-073 Sponsored by: Bower Public Hearing: July 12,2021 CITY OF SEWARD,ALASKA RESOLUTION 2021-073 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA,AMENDING THE ELECTRIC RATES AND CHARGES TARIFF BY UPDATING THE LANGUAGE FOR ALTERNATIVE POWER REBATE, CREATING A SECTION FOR ALTERNATIVE POWER EXCESS CREDIT, AND CLARIFYING THE CALCULATION USED WHEN AN ALTERNATIVE POWER SOURCE GENERATES MORE POWER THAN SUPPLIED BY THE CITY OF SEWARD WHEREAS,the City's current Electric Tariff contains a section that addresses Alternative Power Rebate; and WHEREAS, that portion of the tariff should be separated into two sections, since there are two separate calculations by which a customer operating an alternative power source may realize a cost benefit on his/her bill; and WHEREAS, the two new sections of the Alternative Power Rebate will be: Alternative Power Rebate and Alternative Power Excess Credit, and will improve a customer's understanding of the ways he/she may benefit from operating an alternative power source; and WHEREAS, the calculation used in the Alternative Power Rebate will remain the same, but the calculation used for the Alternative Power Excess Credit will be updated to better reflect the Electric Department's "non-firm avoided cost"by including line losses so that the customer's potential cost savings are better accounted for; and WHEREAS, the calculation currently used as it relates to a customer's excess energy is based upon the non-firm avoided cost of Seward's wholesale power supplier, Chugach Electric Association, and does not accurately reflect the non-firm avoided cost of Seward's Electric Department; and WHEREAS,the Electric Department consulted with Chugach Electric Association(CEA) and Homer Electric Association (HEA), and also worked with consultant Mike Hubbard of the Financial Engineering Company, to develop an updated calculation that more accurately reflects Seward's non-firm avoided cost; and WHEREAS,the updated calculation for the Electric Department's non-firm avoided cost rate is the sum of Seward's variable cost of purchased power and the energy rate charged by CEA, a sum then adjusted upward by X percent to account for line losses; and WHEREAS,the line loss percent will be updated annually based upon the previous year's line losses and rounded to the nearest half percent; and CITY OF SEWARD, ALASKA RESOLUTION 2021-073 wool WHEREAS, the new calculation will be used by Seward to determine the excess energy credit for a customer generating more power than being supplied. NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The Seward City Council hereby approves amending the Electric Rates & Charges tariff as attached herein and will: • Separate the Alternative Power Rebate into two sections to improve customer understanding and make a distinction between Alternative Power Rebate and Alternative Power Excess Credit; and • Update the language and calculation used to determine a customer's credit when that customer's alternative power source generates more power/kWh than supplied by the City of Seward. Section 2. This resolution shall be implemented on July 15, 2021, and is subsequently incorporated into Resolution 2021-064. Section 3. This resolution shall take effect immediately upon adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 12th day of July, 2021. TH IT OF S WARD, A A risty Terry, ayor AYES: Seese, Baclaan, Casaganda, McClure, DeMoss, Terry NOES: None ABSENT: Osenga ABSTAIN: None sssrrarire111 •.•4 OF SE °°°ATTEST: ° • • 2. •�'•• • SEAL • Brenda J. al o MMC = --•— City Clerk (Csit j e 1, 43- •..*z OF gt-Ik Agenda Statement " Meeting Date: July 12, 2021 To: City Council Through: City Manager Janette Bower From: Rob Montgomery, Electric Department Director Agenda item: Amending language in the Electric Rates and Charges tariff relating to the Alternative Energy Rebate. The first recommendation is to separate the Alternative Power Rebate into two sections, with one remaining the Alternative Power Rebate and the other being the Alternative Power Excess Credit, since these are two separate calculations for customers who operate alternative power sources. The second recommendation is to update the language and calculation related to the Alternative Power Excess Credit to accurately reflect Seward's "non- firm avoided cost"rate used in the calculation. These recommendations are being made to improve customer understanding and more accurately credit customers producing excess energy. BACKGROUND & JUSTIFICATION: While the calculation for the Alternative Power Rebate will remain the same, we are recommending an update to the language to improve customer understanding. For the Alternative Power Excess Credit, we are recommending an update to the language to improve customer understanding,and also to update the calculation used to determine the Electric Department's non- firm avoided cost rate—a rate used to credit customers for excess energy produced by their alternative energy source. The existing non-firm avoided cost rate used by Seward in calculating a customer's excess energy credit is the same used by Seward's wholesale power supplier, Chugach EIectric Association (CEA). However, Seward's non-firm avoided cost rate should be adjusted upward to account for line losses, which benefits the customer. The updated language for the two calculations is below: Alternative Power Rebate: Calculated by subtracting kWh generated by an alternative power source from the kWh supplied to the customer from the City of Seward during the billing cycle. The difference is multiplied by the City's utility%energy charge and the Cast of Power Adjustment (COPA), which are itemized and shown on the bill. Alternative Power Excess Credit.If a customer's alternative power source generates more kWh than supplied from the City of Seward during the billing cycle, the difference is credited to the customer's account at the non-firm avoided cost rate (dollars per kilowatt-hour) of the City's Electric Department. The non-firm avoided cost rate for Seward is defined as those expenses equal to the variable cost per kilowatt-hour for purchased power during the billing cycle adjusted upward by X percent*to account for line losses. Credits are not provided for capacity. The variable cost of purchased power for Seward is equal to the sum of the base energy rate (BER) and the purchased power &fuel (PP&F) cost as set by Seward's wholesale power supplier. *Tlte percentage used for line losses will be updated annually based on the previous year's line loss rate and rounded to lire nearest half percentage point. Example (based on Seward's May 2021 bill from CEA): 0.01451 (BER) + 0.04623 (PP&F)--' .915 (8.5% line losses) .06638 or 6.638 cents (Seward's "avoided cost"rate) Alternative Power Excess Credit is calculated by multiplying excess kWh from the alternative power source by Seward's avoided cost rate. INTENT: To modify the Electric Rates &Charges tariff with Resolution 2021- relating to the Alternative Energy Rebate by separating into two sections (Alternative Power Rebate and Alternative Power Excess Credit), updating the language to improve customer understanding,and updating the "non-firm avoided cost" rate used to calculate the Alternative Power Excess Credit to more accurately credit customers for excess energy produced by their alternative energy resource. CONSISTENCY CHECKLIST: Yes No N/A Comprehensive Plan (1. 3, 3. 7. 3. 1, 3. 7. 3. 2) Continue to upgrade 1. and expand utilities to meet existing needs and encourage future X development. 2 Strategic Plan:The mission of the City of Seward government is to X provide quality leadership and.economic wellbeing of its citizens 3. Other (list): X FISCAL NOTE: Minimal expense based on current customers that are eligible. Approved by Finance Departmen -- ATTORNEY REVIEW: Yes No RECOMMENDATION: For Council to approve Resolution 2021- , amending the Electric Rates & Charges tariff relating to the existing Alternative Energy Rebate to improve customer understanding and better account for a customer's potential cost savings. Electric Rates & Charges 2021 ELECTRIC RATES& CHARGES RATES FOR ELECTRICAL POWER BY CLASS OF SERVICE Class of Service Seward Utility Charge Demand Charge Customer Charge /kWh /kW Residential Base rate: $.0964 Summer- $0.1186 N/A $22.10 Winter-41 $0.0820 N/A Small General Service (Less than 25 kW) Base rate: $.1103 Summer- $0.1269 N/A $42.22 Winter- $0.0927 N/A Boat Harbor(Less than 25 kW) $0.1103/kWh N/A $42.22 Large General Service $0.0761 (1" 200kWh/kW) $26 93 $44.23 $0.0264(Additional kWh) $9.94(175 watts) $14.75(250watts) Yard Lights N/A N/A $28.09(400 watts) $70.21 (1000 watts) LED equivalent- (1/2 of cost Metered Street Lights $0.1464 N/A $44.23 These rates are based, in part, on the cost of energy and demand from Chugach Electric Association (CEA) and will change when there is an adjustment to CEA rates charged to the City of Seward. • Summer is defined to mean the period from April 15 through October 15 with Winter defined as the remainder of the year. ** Demand Charges will be based on the maximum demand recorded over a 15-minute period. Effective January 1, 2012 and each January 1 thereafter, rates will he adjusted based on a five year average of the cost of living as stated in the consumer price index, all items, 1982-84—100 for urban wage earners and clerical workers, Anchorage,Alaska area, as published by the U.S. Department of Labor, Bureau of Labor Statistics. (NOTE: 11112014 utilities CPIDatafrom2007-2011). 99 A Small General Service customer may elect to be billed under the Large General Service schedule. However, the election to change the billing rate from one customer group to another may not be made more often than once every 12 months. Definitions and Miscellaneous Charges System delivery charge: A system delivery Charge (SOC) of$28.75 will be applied to any service that uses less than 150 kVAVmonth, whether or not electric service is used. This replaces the Seward Utility energy charge and the Cost of Power Adjustment and is subject to proration. SOC under this schedule is an addition to the customer charge and is based on a monthly usage of 150 kWh times the energy rate and the COPA. Absent an active customer,the registered property owner will be billed this monthly minimum charge. Cost of Power Adjustment(COPA): The Cost of Power adjustment charge from the Power Provider is a direct pass-through of the monthly total Power bill,including fuel costs,energy charges,customer charges, demand charges,and other miscellaneous adjustments,prorated according to the number of kilowatt hours the Seward Electrical Utility customers consumed during the billing period. The monthly rate for COPA may be modified as frequently as monthly, or through the use of a balancing account intended to reduce rate fluctuations. Seward Fuel Adjustment: The Seward Fuel Adjustment cost may be included in the COPA in the event The City operates the standby generation plant, including fuel, labor, maintenance and repair when the cost exceeds the amount budgeted.The cost will be prorated according to the number of kWh the customers consumed during the billing period. Special Contracts: Special contracts may be negotiated by the Utilities Manager with customers that have a demand in excess of 750 kW or that have unique power requirements that cannot be reasonably addressed by the large general service tariff. Special contracts may include, but are not limited to, provisions for instantaneous demand charges, time of service, interruptible power, minimum and maximum demand, adjustment of demand level,ownership and payment of new distribution facilities,termination charges and power factor. Special contracts must be approved by the City Council. VAR Change (Power Factor Adjustment): All schedules requiring demand metering will be subject to the following power factor adjustment provisions: (1) Demand-metered customer should attempt to maintain a unity power factor. If the power factor falls below ninety percent lagging, the customer will take corrective steps to return the power factor to ninety percent or higher. Also, the following charge for billed kilowatts will apply: Monthly Billing Demand=Maximum Demand x 90% Actual Power Factor (2) All power factor adjustment equipment installed by the customer must be approved by the city. Power factor can be determined by permanently installed monitoring equipment or by periodic testing at reasonable intervals,at the discretion of the City. Standby Generation:The cost of operating the standby generation plant to meet a specific customer's need will be charged directly to that customer. Such cost will be the total cost of operating the plant, 100 including fuel,labor, overtime, maintenance, repair and overhead, less the value of energy generated in excess of customer's need. Other Miscellaneous Fees and Charges: Fees and charges for existing facilities can be found on the following pages,as well as engineering service fees and charges for new facilities.Fees are listed according to service zones as follows: ZONE I Inside City Limits (excluding the Small Boat Harbor). ZONE II City limits to Mile 12, Seward Highway, and all roads connecting to thehighway within this area. ZONE III Mile 12 to Lawing. APUC Regulatory Cost Charge. A special surcharge of 50.000626/kWh imposed on electrical utilities by the Regulatory Commission of Alaska(RCA)in response to the state's intent to assess user fees to support activities of the RCA and departments. This charge was recommended by the RCA as a pass-through charge to retail utilities customers. supplied by the City of Seward distribution system on a per month basis. Any excess energy placed onto the City's distr4bution system will be condited at the non fifm avoided cost rate estabhshed by the- Regulatory Commission of Alaska.(Resolution 2014 047 Efft etAy June 7 20 14) Alternative Power Rebate: Calculated by subtracting kWh generated by an alternative power source from the kWh supplied to the customer from the City of Seward during the billing cycle. The difference is multiplied by the City's utility/ener,-y char,-e and the Cost of"PowerAdjustment(COPA),which are itemized and shown on the bill. Alternative Power Excess Credit:If"a customer's alternative power source generates more kWh than supplied from the City of Seward during the billing cycle,the difference is credited to the customer's account at the non-firm avoided cost rate(dollars per kilowatt-hour)of"the City's Electric Department. The non-firm avoided cost rate for Seward is defined as those expenses equal to the variable cost per kilowatt-hour for purchased power during the billing cycle—adjusted upward by X percent*to account for line losses. Credits are not provided for capacity. The variable cost of purchased power for Seward is equal to the sum of"the base ener,-y rate(BER)and the purchased power&fuel(PP&F)cost as set by Seward's wholesale power supplier. *The percentage used for line losses will be updated annually based on the previous year's line loss rate and rounded to the nearest half"percentage point 101 EXISTING FACILITIES SCHEDULE OF FEES AND CHARGES Service Zone I Zone II Zone III Meter Testing,per test,when results determined 75.75 106.06 136.33 meter is accurate Reconnection to approved existing meter installation 30.30 37.88 45.46 Reconnection to approved existing meter installation 212.11 257.52 302.98 outside regular business hours New connection fee 221.14 221.14 221.14 Minimum Deposit- Residential Account 121.54 121.54 121.54 Minimum Deposit-Commercial or Industrial 243.09 243.09 243.09 Account The larger of The larger of The larger of twice the twice the twice the Deposit-Interruptible,Off-Peak Account estimated estimated estimated monthly bill or monthly bill or monthly bill or $243.09 $243.09 $243.09 Tampering with or unauthorized breaking of meter $737.06 737.06 737.06 seal Per Annum interest on delinquent account 10.5% 10.5% 10.5% Door Hanger Fee 35.10 35.10 35.10 Monthly late fee on delinquent account 6.33 6.33 6.33 Dishonored check fee 39.59 39.59 39.59 Seasonal Turn-On Fee and Seasonal Turn-Off Fee S156.50 Tum- $156.50 Turn- $172.17 Turn- (excludes brand new service;includes new account On On On name or same account name;waived if<2 months $156.50 Turn- $156.50 Turn- $172.17 Tum- between tum-off and turn-on) Off Off Off Reconnection during regular business hours following $57.32 $71.69 $86.03 disconnection of delinquent account Reconnection outside regular business hours following $200.74 243.72 287.79 disconnection of delinquent account Transmission Rate $7.84/kW-per $7.84/kW- $7.84/kW- Month per Month per Month 102 NEW FACILITIES-ENGINEERING SERVICE CHARGES SCHEDULE OF FEES AND CHARGES Service Zone I Zone II Zone III Temporary secondary service $73.71 88.46 103.20 Primary Overhead Extensions(Residence) 73.71 88.46 103.20 Primary Underground Extensions (Residence) 73.71 88.46 103.20 Secondary service 73.71 88.46 103.20 Primary Overhead extensions(Subdivision,Mobile 147.41 176.95 206.40 Home Park,Multi-Residence) Primary Overhead Extensions (Commercial & 294.83 353.80 383.28 Industrial) Primary Underground Extensions(Commercial& 294.83 353.80 383.28 Industrial) Modifications of Existing Facilities 147.41 176.95 206.40 Street Lighting Systems and Yard Lights 73.71 88.46 103.20 NOTE: The Zone Fee or Charge is non-refundable until the service is connected. If the service is constructed and connected, the charge will be adjusted to the actual cost of engineering services. 103