HomeMy WebLinkAboutMinutes 06/28/1993UTILITY ADVISORY COMMITTEE
Port Angeles, Washington
June 28, 1993
II.
III.
Call to Order:
Mayor Hallett called the meeting to order at 4:30 p.m.
Roll Call:
Members Present: Gary Braun, Jim Hallett, Thomas Hunt, Joe Michalczik, and Richard
Wight.
Members Absent: None.
Staff Present: J. Pomeranz, C. Knutson, B. Titus, S. McLain, G. Leaf, S. Hursh, and
C. Hagar.
Discussion Items
A. Terry Esvelt, BPA Puget Sound Area Manager
Director Titus introduced Terry Esvelt, the BPA Area Manager. Mr. Esvelt explained
to the Committee that there have only been two rate hikes since 1983; a 7% raise in 1987
and a 2% raise in 1991. Rates are set for a two year period.
The initial rate proposal, which was made last January, called for an 11.6% rate increase.
The major components that drove the initial rate up were as follows: 1. Fish & Wildlife
which went up 4-5% due to the endangered species listing of three species of salmon;
2. Resource Acquisition went up 3-4% due to the closing of the Trojan nuclear power
plant; 3. Drought and Aluminum prices up 3% due to the drought of 1992 and the slump
in aluminum prices; 4. other costs have gone up 1%.
Unfortunately, the drought got worse, with February being the driest February ever and
January being the fourth driest January on record. With the back-to-back combination
killing our hydro-base system. BPA had to go out and buy replacement power; this
caused an additional rate impact of 8%. The impact of the endangered species listings
have become more clear, and it added an additional impact of 2 %. Aluminum prices
continue to sag adding 2-3% impact, for a total of an additional 12%.
Mr. Esvelt explained to the Committee that 75 % of Bonneville's annual expenses are not
controllable expenditures. Thirty-nine percent of the remaining 25 % is used for power
purchase, again this is not a controllable expense. However, the BPA is making a half
billion dollars worth of budget cuts.
The budget cuts will consist of things such as a hiring freeze, decreasing the number of
contractor employees and no pay raises this year. Overtime pay has been restricted and
the BPA has increased its risk by lowering the treasury repayment probability to less than
95%.
-1-
Utility Advisory Committee
June 28, 1993
The rate increase, which will be announced on Friday, will be lower than 20% according
to Mr. Esvelt.
There followed a brief question and answer period regarding the budget cuts.
Mr. Esvelt also said that he believes beyond 1995 there will be a fundamental
restructuring of the electric utility industry. The type of restructuring changes that
happened in the telecommunication and airline industry are the kinds of things that are
going to happen to the electric utility industry in the 90's. He felt that in the future there
will be choices and competition in the market place which will provide a much changed
environment and lower utility prices.
B. Suggested Non-Monetary Rate Schedule Issues
Rate schedules also contain provisions of service which prescribe what type of service a
particular rate schedule applies to and any responsibilities of the customer. City Light
is suggesting six changes to the rate schedule. They are as follows: 1.) new method to
determine commercial demand accounts; 2.) elimination of time-of-day metering option;
3.) elimination of multiple meters for primary service customers; 4.) substitute
coincidental demand for computed peak demand for IT customers; 5.) move from 90%
to 95% power factor requirements for IT customers; and 6.) changes to area lighting
options. City Light Director Titus explained each of these changes and what they entailed
to the Committee. The Committee agreed with ail six of the changes.
Director Titus then went on to explain the rate comparison charts for residential and large
industrial users. These charts show that both the residents and IT users of Port Angeles
pay significantly less than most counties for their electric service.
IV. Next Meeting:
The next meeting of the Utility Advisory Committee will be held on Monday, July 12,
1993, at 4:30 p.m.
VI. Adjournment:
The meeting was adjourned at 6:00 p.m.
Deputy City Clerk
-2-