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HomeMy WebLinkAboutAgenda Packet 08/27/2019City Of PortAngelesElectric COSA Model MethodologyPrepared by: MarySue French – Cost / Capital Sr AccountantGlen Goodworth – SeniorAccountantShailesh Shere – Deputy Director Power SystemsGregg King – Power Resource ManagerAugust 27, 2019 Introduction2August 27, 2019Electric MethodologyCOSA review process & methodology approval started in February 2019 with joint meetings of the City Council and UAC through May 2019May 14, 2019 CC/UAC joint meeting –Review of Water, WasteWater, Stormwater, Solid Waste Collections & Transfer Station and Electric COSA’s.   UAC recommendation to CC to approval all but the Electric COSA that still needed more review.May 21, 2019 Council action on All COSA but Electric methodology1stReading and Resolution / Approve Resolution Introduction3August 27, 2019Electric MethodologyElectric COSAMay 8, 2019 Joint CC/UAC meeting –1streview of Electric COSAMay 14, 2019 CC/UAC joint meeting –2ndreview of Electric COSAAugust 13, 2019 UAC meeting –3rdreview of Electric COSA and favorable recommendation to Council for acceptance of methodologyAugust 27, 2019 Council work session on Electric COSA methodology Traditional Rate Setting Principles4August 27, 2019Electric MethodologyFinancial Principles:Meet revenue requirementsProvide revenue stability to the utilityBe easy to administerCustomer Requirements:Provide rate stability to the customerBe "just, reasonable, fair and equitable“ –"not unduly discriminatory or preferential"Be easy to understandBe competitive/affordable Traditional Rate Setting Principles5August 27, 2019Electric MethodologyOther:Conform to generally accepted rate setting techniquesBe cost based ‐COSAEncourage Economic Development/Conservation etc. Process6August 27, 2019Electric Methodology69 kV12.47 kV13.8 kVPower DistributionResidentialCustomersCommercial CustomersCommercial Demand CustomersSubstations(seven)Bonneville PowerIT SubstationIndustrialCustomerCity OwnedPolesLinesUnder‐groundTrans‐formersMetersIT OwnedPolesLinesTransformersMeters Method7August 27, 2019Electric MethodologyCOSA calculates Cost that must be recovered Electrical Permits AMI Transfer ‐ from reserveRates are calculated by Class Investment / Delinquent Interest Construction ContributionService & Hookup fees, Plan checking fees Pole Contract RentalsSale of Scrap & Junk Road/Street Maint ServicesCosts are allocated by Categories Distribution includesCustomer Lines 67.0%Energy Substations 5.0%Demand Metering 2.0%Distribution Transformers 5.0%Other Services 19.0%Street Lights 2.0%100.0%PowerDistributionRate Revenue Non Rate RevenueAllocations of Costs Glossary8August 27, 2019Electric MethodologyBPA Bonneville Power AuthorityRate setting period is every 2 years, Oct‐SeptNew Rate Setting Period is Oct 2019‐Sept 2021Fiscal years 2020‐2021Rates are fixed and VariableVariable rates are different for each monthThe BPA bills a flat charge every month to all their customers. This is based on their customers average prior to 2011 (start of new contract)Can be updated as conditions change for the customerupon request to the BPA.IT Industrial Transmission CustomerMcKinley PaperRates are same as BPA rates to City, but we earn tax revenueIT Customer owns infrastructureIT Customer pays City to maintain Poles, Lines, Tree Trimming Glossary Continued9August 27, 2019Electric Methodology15.57%Labor splitCustomer In terms of exhibits in the COSACustomer Facing support, includingOperations ‐ Service connect and disconnectInspections/PermitsOther Operating installations per customer requests and ordinancesCustomer Service (Billing, Cash Receiving, Meter Reading)7.46%Labor splitEnergy Electric Utility ManagementFixed Portion of BPA BillDemand Portion of BPA Bill (Variable) ‐ Any incremental power the City is using when the Region Peaks71.49%Labor splitDistribution Substations, lines, meters, transformers, services, street lights5.48%Labor splitOther Admin/warehouse support, GIS supportWorkers Comp, HRAAdministrative Includes City Council, City Manager, Human Resources, Clerks Office, Finance AdministrationAccounting, Customer Service, Reprographics, Legal, Planning, Facility Maintenance Glossary Continued10August 27, 2019Electric MethodologyDistributionSubstations Seven Substations that Transmit power throughout our usersConduit from Main Power Station to the TransformersLines Both overhead and underground ‐ transmits powerMeters Various sizes to support users based on their usageTransformers Various sizes to support users based on their usageOne transformer can serve multiple customersServices Operations ‐ Service connect and disconnectInspections/PermitsOther Operating installations per customer requests and ordinancesCustomer Service (Billing, Cash Receiving, Meter Reading) Glossary Continued11August 27, 2019Electric MethodologyBill Components Power Fixed and a small portion is variable 89% of BillTransmission All Variable 11% of BillTOCA Tier 1 Cost AllocatorHLH High load hours (6am to 10pm)LLH Low load hours (10pm to 6am) and all day Sunday and Select holidaysEnergy measure kW Kilowatt ‐ a unit of electric power = 1000 WattsEnergy is a measure of how much fuel is contained within something, or used by something over a specific period of time.Power measure kWh Kilowatt hour ‐ unit of power ‐ used to bill customers of electric utilitiesPower is the rate at which energy is generated or usedCustomer Classes ResidentialNon Profit Phase 1Phase 3General Service Phase 1Phase 3General Service Demand Phase 1Phase 3General Service Demand PrimaryStreet LightsGovernment Phase 1Phase 3Government Demand Phase 1Phase 3Municipal Phase 1Phase 3Municipal Demand Phase 1Phase 3 Types of Cost12August 27, 2019Electric Methodology2019 BudgetMillions16.533    66.5%BPA/PUD Purchased Power2.950       11.9%Electric Utility Labor and Benefits1.159       4.7%Administration allocations & Professional Services1.090       4.4%Capital0.810       3.3%Financial Expenses (Bond Principle, Debt Service, Interest Expense, Bad debt expense0.317       1.3%Repairs & Maintenance, small tools, minor equipment, tree trimming, pole testing0.450       1.8%Transformers, poles, lines, other inventory partsContractual services0.475       1.9%IT Charges, Communication Expenses, Network Services, Software/Hardware Maint0.312       1.3%Equipment Services Replacements and Operating Charges, fuel0.261       1.1%Public Works Administrative allocation0.139       0.6%Insurance, Utilities Epxenses0.063       0.3%Operating Rentals/Leases0.051       0.2%Travel,Training, Advertising, legal0.120       0.5%Conservation incentives0.103       0.4%Operating/Office Supplies, building & maintenance supplies, dues/subscriptions, misc0.013       0.1%Interdepartmental24.84522.21689.4%Fixed2.62910.6%Variable 2018 Calendar Year BPA Bills $000’s13August 27, 2019Electric MethodologyTRANSMISSION TOTALLoadSystem Load Shaping SpillCharge Shaping True up Demand Surcharge TOTAL Transmission TOTALFixedKWHKWHKWKWHPOWERKW/KWHBILLJanuary 809         250             ‐           ‐           ‐          1,059      142                    1,201      February 809         312             ‐           ‐           ‐          1,121      160                    1,281      March 809         166             ‐           ‐           ‐          976         138                    1,114      April 809         52               (12)           ‐           ‐          849         129                    978         May 809         (170)            ‐           ‐           ‐          640         70                      710         June 809         (96)              ‐           ‐          17           730         85                      815         July 809         (92)              ‐           ‐          15           732         66                      798         August 809         (158)            ‐           ‐          16           668         69                      737         September 809         (95)              ‐           ‐          15           729         66                      795         October 811         35               145          ‐           ‐          992         89                      1,081      November 811         (11)              ‐           ‐           ‐          800         88                      888         December 811         135             ‐          36            ‐          982         169                    1,151      Total 2018 9,718      328            133         36           62           10,277    1,271                 11,548    9,718      10,277    1,830                 11,548    Fixed vs Variable 84.1% 15.9% 100.0%By Component 84.1% 2.8% 1.2% 0.3% 0.5% 89.0% 11.0% 100.0%POWER 2018 Calendar Year BPA Rates & Residential Consumption by Month14August 27, 2019Final FinalMonth HLH LLH consumptionJanuary $29.30 $23.94 31.323132February $28.54 $23.94 31.223122March $23.75 $20.80 31.863186April $19.67 $17.54 21.722172May $16.63 $11.25 15.551555June $17.71 $9.31 12.861286July $24.66 $19.05 9.01901August $28.11 $22.61 8.93893September $27.94 $22.19 10.151015October $26.74 $22.49 11.111111November $27.27 $24.74 16.351635December $30.28 $26.60 31.583158$24.03 $18.96 231.66$0.00$5.00$10.00$15.00$20.00$25.00$30.00$35.002018 BPA Rates by Month & ConsumptionAverage residential customer usageHLHLLHconsumption Process Fixed and Variable15August 27, 2019Electric Methodology69 kVFixed 13,904,000 84.1%Variable 2,628,900    15.9%Fixed 9,396,000      12.47 kVVariable 1,776,633      Fixed 2,727,000      Variable 515,599          Fixed 5,876,000      13.8 kVFixed 2,896,000 84.1%Variable 1,110,999      Variable 547,069     15.9%DistributionSplitPowerResidentialCustomersCommercial CustomersCommercial Demand CustomersSubstations(seven)Bonneville PowerIT SubstationIndustrialCustomerCity OwnedPolesLinesUnder‐groundTrans‐formersMetersIT OwnedPolesLinesTransformersMeters Summary of Customer Classes & Consumption16August 27, 2019Electric MethodologyCustomers KWH Customers KWHResidentialRegular 8,637                  116,506,392 25% Discount 77                        1,038,670     35% Discount 284                      3,830,938     8,998                  121,376,000 General Service NonprofitSingle Phase 911                      19,637,844   Single Phase 35                    972,617         Three Phase 194                      7,825,156     Three Phase 20                    2,084,383     Government Single Phase 65                        1,003,724     55                    3,057,000     Government Three Phase 22                        991,276         Municipal Single Phase 59                        813,679         Municpal Water PumpingMunicipal Three Phase 19                        347,321         Regular 2                      2,482,000     Municipal Traffic Signal 9                           70,000           Municipal Street Light 20                        921,000         Primary Service1,299                  31,610,000   Customer OwnedGeneral Service DemandSingle PhaseSingle Phase 38                        2,830,309     Three Phase 4                      7,826,000     Three Phase 140                      41,325,691   4                      7,826,000     Government Single Phase 3                           1,953,122     City OwnedGovernment Three Phase 31                        5,922,878     Three Phase 4                      28,829,000   Municipal Single Phase 3                           336,821         4                      28,829,000   Municipal Three Phase 12                        4,611,179     Total 10,592           252,160,000 Municipal Emergency Management 1                           Municipal Unmetered Security 2                           230                      56,980,000    Allocators17August 27, 2019Electric MethodologyTotal Customer Substation Customer MeterCustomer Class Energy Demand Weighting Weighting SecondaryServices CostsResidential 46.5% 74.3% 82.5% 82.6% 74.8% 56.8%Residential ‐ Disc 35% 1.0% 1.6% 1.8% 1.8% 1.6% 1.2%Residential ‐ Disc 25% 0.3% 0.5% 0.6% 0.6% 0.5% 0.4%Non Profit 1.2% 0.7% 0.5% 0.5% 0.7% 1.5%General Service 12.2% 16.4% 12.1% 12.2% 16.5% 27.4%Street Lighting 0.4% 0.0% 0.2% 0.2% 0.0% 0.1%General Service Demand 22.7% 67.0% 5.9% 2.2% 2.2% 5.9% 12.1%GS Demand Primary 14.6% 29.6% 0.7% 0.1% 0.0% 0.0% 0.4%Water Pump 1.0% 3.4% 0.0% 0.0% 0.0% 0.0% 0.1%Traffic Signals 0.0% 0.0% 0.1% 0.0% 0.0% 0.0%Other 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Allocating Factors Definitions18August 27, 2019Electric MethodologyTotal EnergyEnergy at input voltage by classResidential Discount classes prorated down by their discountPercentages based on the new total with discounts prorated to 100%DemandDemand customer usage in kvA (kilovolt‐amp) Electrical power unit of measureCustomer Weighting Classes have various ratesWeighted based on amount of time to read a meter, Residential is baseline at 1Discounts are .65 and .75 times 1Number of customers by class times the factor of reading meterPercentages based on the new totals prorated to 100% Allocating Factors Definitions19August 27, 2019Electric MethodologySubstation Weighting All classes start at 1 for 1Same as Customer Weighting Secondary, adding classes ofGS Demand Primary,  Water Pumps and Traffic SignalsCustomer Weighting Secondary All classes start at 1 for 1Number of customers by classDiscounts are .65 and .75 times 1Residential Discount classes prorated down by their discountThose factors multiplied by the unit of measure, such as KwHPercentages based on the new total with discounts prorated to 100%Excludes GS Demand Primary,  Water Pumps and Traffic SignalsServicesSame was Customer Weighting, subtracting classes ofGS Demand Primary,  Water Pumps and Traffic SignalsMeter CostsBased on meter install cost by classDiscounts are .65 and .75 of residentialMeter rates by class x prorated customer count (for discounts)Percentages based on the new total with discounts prorated to 100% Costs by Class, net of non rate revenue20August 27, 2019Electric MethodologyTotal Residential Residential Non General Street GS GS Demand Water Traffic IndustrialPurchased Power Alloc Dollars Residential 35% Disc 25% Disc Profit Service Lighting Demand Primary Pump Signals Transmission Other TotalEnergy Total Energy 11,681,478        5,431,711         116,093      36,318         142,522     1,427,506  42,938    2,656,497  1,708,914    115,715 3,264       ‐          11,681,478  Industrial Trans Industrial 3,443,069          3,443,069       3,443,069    Power Distr Total Energy 1,532,320          712,506            15,228         4,764           18,695        187,253     5,632      348,466     224,167       15,179    428         1,532,320    Demand Demand (TCP) 404,666              270,930     119,944       13,792     ‐          404,666        Total 17,061,532        6,144,217         131,321      41,082         161,218     1,614,759  48,571    3,275,893  2,053,025    144,686 3,692      3,443,069        ‐          17,061,532  Distribution SystemLinesDemand Demand (NCP Max)410,291              274,696     121,611       13,984     ‐          410,291        Customer Weighted Cust 3,425,160          2,543,284         54,358         17,005         24,293        560,954     589         200,530     23,557         589          ‐           ‐          3,425,160    3,835,450          2,543,284         54,358         17,005         24,293        560,954     589         475,226     145,168       14,573     ‐           ‐          3,835,450    SubstationsDemand Demand (NCP Substation)150,318              100,640     44,555         5,123       ‐          150,318        Customer Substation Weighting 138,755              114,427            2,446           765              729             16,825        265         3,007          106              26           119         40           138,755        289,073              114,427            2,446           765              729             16,825        265         103,648     44,661         5,150      119         40           289,073        MeteringDemand Demand (Meters) 26,393                17,670        7,823           900         26,393          Customer Meter Costs 223,654              127,020            2,715           849              3,359          61,267        128         27,140        956              160         58           223,654        250,046              127,020            2,715           849              3,359          61,267        128         44,811        8,779           1,060      58            ‐                   ‐          250,046        Street Lighting Street Lighting 102,615              102,615 102,615        TransformerDemand Demand (NCP Sec)199,487              133,560     59,128         6,799       ‐           ‐          199,487        Customer Cust Sec 403,448              333,410            7,126           2,229           2,123          49,025        772         8,763           ‐                ‐           ‐           ‐          403,448        602,935              333,410            7,126           2,229           2,123          49,025        772         142,322     59,128         6,799       ‐           ‐          602,935        ServicesDemand Demand (NCP Sec) 40,802                27,317        12,094         1,391       ‐           ‐          40,802          Customer Services 61,203                45,768              978              306              437             10,095        11           3,609           ‐                ‐           ‐           ‐          61,203          102,005              45,768              978              306              437             10,095        11           30,926        12,094         1,391       ‐           ‐          102,005        Total 5,182,125          3,163,908         67,623         21,155         30,942        698,166     104,380 796,932     269,831       28,972    177          ‐                  40           5,182,125    Customer ServicesMeter Reading Meter Reading 361,924              268,785            5,745           1,797           2,567          59,284         ‐          21,193        2,490           62            ‐           ‐          361,924        Billing Billing 140,748              116,426            2,488           778              741             17,119         ‐          3,060          108              27            ‐           ‐          140,748        Customer Services CS 502,672              373,249            7,978           2,496           3,565          82,325        86           29,429        3,457           86            ‐           ‐          502,672        Total 1,005,343          758,460            16,211         5,071           6,874          158,728     86           53,682        6,055           176          ‐           ‐          1,005,343    Grand Total 23,249,000        10,066,584      215,155      67,309         199,033     2,471,653  153,037 4,126,508  2,328,910    173,833 3,869      3,443,069       40           23,249,000   2019 COSA rates vs 2019 Budget rates Comparison21August 27, 2019Electric MethodologyBase Demand Energy Base Demand EnergyResidential 20.10      0.0809   37.84       0.0629   Residential 35% Disc 13.07      0.0526   24.60       0.0409   Residential 25% Disc 15.08      0.0607   28.38       0.0472   Non Profit 1 Phase 24.90      0.0798   40.75       0.0629   Non Profit 3 Phase 62.23      0.0798   86.25       0.0629   General Service 1 Phase 25.84      0.0764   46.27       0.0629   General Service 3 Phase 64.61      0.0764   100.06     0.0629   GS Municipal 1 Phase 25.84      0.0764   46.27       0.0589   GS Municipal 3 Phase 64.61      0.0764   100.06     0.0589   GS Demand 1 Phase 54.34      4.62 0.0541   60.09       3.74        0.0627   GS Demand 3 Phase 135.91   4.62 0.0541   120.67     3.74        0.0627   GS Dem Municipal 1 Phase 54.34      4.62 0.0541   60.09       3.74        0.0608   GS Dem Municipal 3 Phase 135.91   4.62 0.0541   120.67     3.74        0.0608   General Service Primary 331.49   5.2 varies 319.52     3.74        0.0629   2019 COSA Rate Comparison COSA to budget, PUD’s22August 27, 2019Electric MethodologyResidential GS Phase 1GS Phase 3GS Demand 1GS Demand 3GS PrimaryBase 20.10              25.84              64.61              54.34              135.91            331.49            Demand‐                    ‐                    ‐                   4.62                 4.62                 5.20                 Energy 0.0809            0.0764            0.0764            0.0541            0.0541            0.0496            Base 37.84              41.07              87.06              54.19              105.92            277.67            Demand‐                    ‐                    ‐                   5.63                 5.63                 5.63                 Energy 0.0629            0.0629            0.0629            0.0627            0.0627            0.0629            Base 33.14              36.45              72.91              70.00              184.89            Demand‐                    ‐                    ‐                   3.32                 5.16                 Energy 0.0740            0.0736            0.0736            0.0590            0.0479            Base 18.50              18.50              34.00              60.00              contractDemand 5.50                 Energy 0.0882            0.1007            0.1007            0.0852            Base 28.00              30.00              53.00              57.00              115.00            115.83            Demand 6.30                 6.30                 6.00                 Energy 0.0737            0.0731            0.0731            0.0524            0.0524            0.0515            Clallam Co PUDJefferson PUDCity of EllensburgPA ‐ BudgetPA ‐ COSA Rate Comparison by Select Customers23August 27, 2019Electric MethodologyResidential GS Phase 1GS Phase 3GS Demand 3Base 20.10              25.84              64.61              135.91            Demand‐                    ‐                    ‐                   1,907.14         Energy 71.60              41.71              1,314.08         14,736.84       91.70              67.55              1,378.69         16,779.89       Base 37.84              41.07              87.06              105.92            Demand‐                    ‐                    ‐                   2,324.06         Energy 55.67              34.34              1,081.88         17,079.48       93.51              75.41              1,168.94         19,509.46       Base 33.14              36.45              72.91              n/aDemand‐                    ‐                    ‐                   n/aEnergy 65.49              40.19              1,265.92         n/a98.63              76.64              1,338.83          ‐                   Base 18.50              18.50              34.00              n/aDemand‐                    ‐                    ‐                   n/aEnergy 78.06              54.98              1,732.04         n/a96.56              73.48              1,766.04          ‐                   Base 28.00              30.00              53.00              115.00            Demand‐                    ‐                    ‐                   2,600.64         Energy 65.22              39.91              1,257.32         14,273.76       93.22              69.91              1,310.32         16,989.40       Jefferson PUDCity of EllensburgPA ‐ BudgetPA ‐ COSAClallam Co PUD Next Steps24August 27, 2019Electric MethodologySeptember 3, 2019 Council action on Electric rate methodology 1stReading and Resolution / Approve ResolutionSeptember 10, 2019 ‐UAC rates review & recommendationAll rates, recommendations will be for 1, 2 and 3 year rates depending on Utility September 17, 2019 – Proposed Amendments to 2020 Utility RatesOpen Public Hearing/Conduct 1stReading/Continue to October 1October 1, 2019 – Proposed Amendments to 2020 Utility RatesContinue and close Public Hearing/Conduct 2ndReading/Adopt Ordinance Housekeeping25August 27, 2019Electric MethodologyTaxes Allocations – between fixed & variable Non Taxable Rates Rate setting discussionDiscounts –other utilities phase in of discountsTimingStormwater – phase in of cap on ERU from 10 to ??? 26August 27, 2019Electric MethodologyQUESTIONS & DISCUSSION