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Home My WebLink AboutAgenda Packet 08/14/2007 Utility Advisory Committee Public Works Conference Room Port Angeles, W A 98362 August 14, 2007 3:00 P.M. I. Call To Order II. Roll Call ill. Approval Of Minutes For July 10, 2007 IV. Late Items V. Discussion Items A. Beyond Waste B. Long Term Regional Dialogue (Verbal Update) C. Auto Hulk Removal Project D. Stormwater Rates E. Electric Rates F. Renewable Energy Generation Project Grant Update (Verbal) G. Change A Light H. Conservation Loans I. Transportation Benefit Districts VI. Next Meeting Date: September 11, 2007 VII. Adjomment N :\UAC\Final\081407. wpd UTILITY ADVISORY COMMITTEE GUEST SIGN UP SHEET PRINT NAME N: \PWKS \LIGHT\ CONS \ CATE \ SIGNUP. wpd ORGANIZATION c; LD. Utility Advisory Committee Public Works Conference Room Port Angeles, W A 98362 July 10, 2007 3:00 P.M. /) ~4p ,. L Call To Order Vice Chairman Rogers called the meeting to order at 3:00 p.m. IL Roll Call Members Present: Vice Chairman Rogers, Grant Munro, Betsy Wharton, Orville Campbell Members Absent: Dean Reed Staff Present: Mark Madsen, Bill Bloor, Glenn Cutler, Scott McLain, Larry Dunbar, Steve Sperr, Bob Kajfasz, Amanda Roberts, Ernie Klimek Others Present: Don Cramer - Climate Crisis Coalition Bill Roberds - Capacity Provisioning, Inc. Craig Johnson - Capacity Provisioning, Inc. Brian Gawley - Daily News IlL Approval of Minutes: Vice Chairman Rogers asked ifthere were any corrections to the minutes of June 12,2007. Councilman Munro moved to approve the minutes. Councilmember Wharton seconded the motion, which carried unanimously. IV. Late Items: SWAC V. Discussion Items: A. Leak Detection Results - 2007 Ernie Klimek, W aterlW astewater Collection Division Superintendent, noted that the City had used leak detection companies for the past seventeen years to detect leaks in the water distribution system. Approximately fifteen miles were surveyed with a total of fourteen leaks found. Staff will consider concentrating on older lines next year rather than specific areas. Information only. No action taken. UTILITY ADVISORY COMMITTEE July 10, 2007 B. CPI Telecommunications Right-Of-Way License Agreement Renewal Larry Dunbar, Power Resources Manager, explained that the license to Capacity Provisioning, Inc. for its telecommunications system within the City expires September 9,2007 and needs to be renewed. Due to the likelihood of technological changes staff does not recommend the term of the renewal exceed five years. There was a brief discussion. Councilmember Wharton moved to recommend City Council authorize the Public Works and Utilities Director to renew the Telecommunicatons Right-Of-Way License with Capacity Provisioning, Inc. for a five-year term. Orville Campbell seconded the motion, Which carried unanimously. C. Renewable Energy Generation Project Grant Applications Larry Dunbar, Power Resources Manager, distributed a handout and reviewed the contents with regard to background, benefits, costs, and economics. A summary of the risks, disadvantages, and advantages was given. There was a lengthy discussion. Councilmember Wharton moved recommend staff proceed with grant applications. Orville Campbell second the motion which carried unanimously with Vice Chairman Rogers in opposition. D. EnergySmart Grocer Program Agreement Larry Dunbar, Power Resources Manager, reviewed the information in the packet, resonded to questions, and provided clarification. An agreement to partner with the Portland Energy Conservation, Inc. has been offered where they would to energy audits, identify eligible energy conservation measures, and verify acceptable work. There was a brief discussion. Councilman Munro moved to recommend City Council authorize the Public Works and Utilities Director to sign an EnergySmart Grocer Program Agreement. Councilmember Wharton seconded the motion, which carried unanimously. E. Renewable Energy System Incentives Larry Dunbar, Power Resources Manager, advised that Washington State law now provides incentives for non-commercial renewable energy systems installed by electric customers. Eligible systems include photovoltaics, anaerobic digesters to treat livestock manure, and wind systems that generate electricity. A discussion followed. Councilman Munro moved to recommend City Council participate in the Washington State renewable energy system incentives program including City incentive payments. Orville Campbell seconded the motion, which carried unanimously. UTILITY ADVISORY COMMITTEE July 10, 2007 F. Storm water Utility Rates Steve Sperr, City Engineer, summarized the packet information going over the rate adjustment options and preliminary budget. Future elements to be developed are a rebate program, public education, expanded water quality testing, enforcement, low impact development standards, and applying for grants and loans, and managing them. There was a short discussion. Councilman Munro moved to recommend City Council adjust Stormwater Utility rates as recommended by staff. Orville Campbell seconded the motion which carried unanimously with Councilmember Wharton opposed. G. Transportation Benefit Districts Continued to the next meeting. H. Counci1member Wharton mentioned in passing SW AC interest in the county litter problem and the possibility of mandatory garbage pickup. VI. . Next Meeting Date: August 14, 2007 VII. A djornmen t: The meeting was adjourned at 4:56 p.m. Vice Chairman Rogers Cate Rinehart, Admin Spec II ~ORTANGELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo Date: August 14,2007 To: Utility Advisory Committee From: Tom McCabe, Superintendent, Solid Waste Division Subject: Beyond Waste Plan Summary: The Washington Beyond Waste Plan issued by the Department of Ecology in November 2004, is a long-term strategy for systematically eliminating most wastes and the use of toxic substances within 30 years. Cheryl Smith, Beyond Waste Project Manager, will present a brief overview of the plan, how it affects local municipalities and governments, and what they can do to support the Beyond Waste Phm. Recommendation: Information only Background/Analysis: . The Beyond Waste Plan is designed around a 30-year vision to greatly reduce and, where possible, eliminate waste and the use of toxic materials. It focuses on building the partnerships and infrastructure to make changes in an orderly, effective, and economically viable manner. The Beyond Waste Plan contains 5-year actions that focus primarily on the following five areas or initiatives: 1. Reducing threats from industries 2. Reducing threats from small volume hazardous materials and wastes (household hazardous waste, for example) 3. Increasing recycling of organic materials 4. Increasing green building practices 5. Measuring progress toward the Beyond Waste vision The Beyond Waste Plan complies with state laws requiring hazardous waste and solid waste statewide plans. The plan's recommendations (64 actions to take in the first 5 years), are consistent with existing state law. N :\UAC\Final\Beyond Waste. doc " ' Regional Dialogue Policy Implementation Meetings (pbI/contracts) Regional Dialogue Policy Implementation Workshops Page 1 of 1 ~~'lJ.m~:-_~~~~~~'niM~~~~~~_~~~~_~~il-1;f.l1W"''''4>l.a.:.;''''J..J.tl..I!I~ All meetings are located in the SPA Rates Hearing Room, at 905 NE 11th Ave., Portland, Ore. To participate by phone, please call (503) 230-4297. August . July 31 and Aug. 1 Clarification sessions: o Ag~l1Qi! o Rs:giQII,11j)j'1IQgt!(LS.c:l}~QI,!I~ . Aug. 1 Residential Exchange Public Meeting o Presentation o Draft approach to re-determination of Residential Exchange benefits . Aug. 7 Topic: Framework Overview - Service to Publics (9 a.m. - 4 p.m.) o ~9rk~I1S!!LS.c:.l1cd yl~_:,--,l~,QLA_llg~!~Lk2.QQ] o ~~!xic:.~J<2.R~IQH~s.:,fmm",~QrtQ'Lt:IY~_\\!-=-A.lJgg,'itLfQ.Ql . Aug. 8 Topics: A.M. 5(b)9(c) & High Water Marks P.M. Tier 2 rate alternatives (9 a.m. - 4 p.m.) o HigJl_W~tt::L,M~rkJ2~J-"'-rmillit!iQIJ,iQr.Ii<;LQQ,::.R[l!QM-",-tb.mlQ1QgL:_AJlglJ~LB.,1(lQ2 o PJ~Q12Q.s_QQjLQ).2(c:Lr.Qlic:LCI1<l.ng~.s_lJngQLtl1~JU2P...QIjc:y_:_A_llgbl,,-L~,lDQ] o BPA Tier 2 - August 8. 2007 . Aug. 14 Topic: Tier 1 rate design (11 a.m. - 4 p.m.) o Ag~119_'l o Agency Load Forecasting and Analysis (9 a.m. - II a.m.) . Aug. 15 Topic: Clarification on Transfer Service issues (10 a.m. - 12 p.m.) o Ag~Jl~lli . Aug. 21 Residential Exchange Program Workshop (9 a.m. - 4 p.m.) . Aug. 22 Topic: A.M. 5(b)9(c) P.M. Hold for REP if needed. (9 a.m. - 4 p.m.) . Aug. 28 Load Following and Block products (9 a.m. - 4 p.m.) . Aug. 29 Slice/Block and Resource Support Services (9 a.m. - 4 p.m.) September . Sept. 10 Residential Exchange Program Workshop (9 a.m. - 4 p.m.) . Sept. 12 Topic: TBD (9 a.m. - 4 p.m.) . Sept. 13 Topic: TBD (9 a.m. - 4 p.m.) . Sept. 17 Residential Exchange Program Workshop (9 a.m. - 4 p.m.) . Sept. 18 Topic: TBD (9 a.m. - 4 p.m.) . Sept. 19 Topic: TBD (9 a.m. - 4 p.m.) . Sept. 25 Residential Exchange Program Workshop (9 a.m. - 4 p.m.) . Sept. 26 Topic: TBD (9 a.m. - 4 p.m.) "'Up:/ /www.bpa. gOY /power/pl/regionaldialogue/implementation/meetings/ 8/14/2007 Regional Dialogue Policy Implementation: Workshop Schedule - As of August 3, 2007 August 2007 ,,,, ',S[JNIJt\1L',',,;,~, 0:: < MONDAY,," , TUESDAY .,[',,' WEQNESDJ)'1Z,:",:~ ,;;zcmI'!l!JRSDAM :~-:-'::"~:'r:~'::FRIDAM" ~~;:,::,:::;"',::8~;r!'rRDI~}ut:",:"j:'; ~ , 1 ~ _~, _ _ _ ~_~ Notes: 1 2 3 4 RDPIW - Regional Dialogue Policy Implementation Workshop Regional Dialogue Unless otherwise noted all RDPIW and REP meetings will be held in clarification session the BPA Rates Hearing Room, S 6 7 8 9 10 11 RDPIW (9 - 4) RDPIW (9 - 4) FERC Order 890 Topic: Framework Topics: Meeting Overview - Service to A.M. 5 (b) 9 (c) & High Publics Water Marks P.M. Tier 2 rate alternatives 12 13 14 15 16 17 18 RDPIW (9 - 4) RDPIW (10 -12) Topic: Topic: Tier 1 rate design Clarification on Transfer Service Issues Transmission RD Issues (1 - 5) 19 20 21 22 23 24 25 Residential Exchange RDPIW ( 9 - 4) FERC Order 890 Program Workshop Topic: Meeting (9 - 4) A.M. 5(b)9(c) P.M. Hold for REP if needed. 26 27 28 29 30 31 RDPIW (9 - 4) RDPIW (9 - 4) Topic: Topic: Load Following and Slice/Block and Block products Resource Support Services Bonneville Power Administration, Draft Schedule Issued: August 3, 2007 Regional Dialogue Policy Implementation: Workshop Schedule - As of August 3, 2007 September 2007 ":';1 :~>'SliNB'NY, ">"; ;. 'C; . "MONDM:::.: '.:" '. : .c'mJESDA:v::;o'>". 2 ';'(WEIDNESIDAY " '''''''':':;!f_.<FffuR'SDAM."~.Fj:'' ~:. :.cAtRIDLXY,;, _~,.: ;'.-;;';;,:'-::';>:SA:r:fJRDL:\'$1!~~:~' ~" \ , , ' ~ t; , - ~ - ,-~ ~ ~ '" _ ~ ~ ~~ _ ~ . ~~. _ -.; ~ ,.~ ';' ~ "',.. " '" ~, _ ~ r ~,,', , ~ '"\: "" ~~ ..... ~" 1 2 3 4 S 6 7 8 Holiday FERC Order 890 Meeting 9 10 11 12 13 14 lS Residential Exchange RDPIW (9 - 4) IillPIW (9 - 4) Program Workshop Topic: TBD Topic: TBD (9 - 4) 16 17 18 19 20 21 22 Residential Exchange RDPIW (9 - 4) RDPIW (9 - 4) FERC Order 890 Program Workshop Topic: TBD Topic: TBD Meeting (9 - 4) 23- 24 2S 26 27 28 29 Residential Exchange RDPIW (9 - 4) Program Workshop Topic: TBD (9 - 4) 30 Bonneville Power Administration, Draft Schedule Issued: August 3, 2007 Regional Dialogue Policy Implementation: Workshop Schedule - As of August 3,2007 October 2007 2 RDPIW Topic: TBD 7 8 Holiday 9 14 15 16 Residential Exchange Program Workshop (9 - 4) 21 22 23 Residential Exchange Program Workshop (9 - 4) 28 29 RDPIW (9 - 4) Topic: TBD 30 Residential Exchange Program Workshop (9 - 4) Bonneville Power Admjnistration, Draft Schedule Issued: August 3, 2007 3 RDPIW Topic: TBD 10 17 RDPIW (9 - 4) Topic: TBD 24 RDPIW (9 - 4) Topic: THD 31 RDPIW (9 - 4) Topic: TBD 4 FERC Order 890 Meeting 5 6 11 12 13 18 FERC Order 890 Meeting 19 20 25 26 27 Regional Dialogue Policy Implementation: Workshop Schedule - As of August 3, 2007 November 2007 I,,' c" :;l!StTNiDi\Y;"'~/i~l,.~;~--,. -; ;. :'MdNDJ\Y:: ":.,;: ,';f1:JESDAY ;.:J""%'~'''~'':WEDNESr;jJ\Y' :;c'/;"'~lnrWRS])W~;~:"-f~31":f~"" ',f" , FR'rD:A'~~k'~w:f:.;i;~;'?';sAmt1kDAi:Yc~;l:~" ,.' ~ ~,,. '.' ~ "r - ~ "'~~""'._~l ,- ~ ~ ~;: ~ ~;< ~ , ~ 1; 1 - .~"""" -e.,""'''''v~~''''''' ";' _ )~~"" 1 2 3 FERC Order 890 Meeting 4 5 6 7 8 9 10 Residential Exchange Program Workshop (9 - 4) 11 12 13 14 15 16 17 Holiday RDPIW (9 - 4) Topic: TBD 18 19 20 21 22 23 24 Holiday 25 26 27 28 29 30 Bonneville Power Administration, Draft Schedule Issued: August 3, 2007 Version Date 8/1 012008 Summary Table Forecast Adj Load Contract Adj Load Name Product 2010 HWM 2012 Load Following LF 4,030 4,025 4,180 Non-Load Following NLF 3,271 3,271 3,364 TOTAL Projected Sales 7,301 7,296 7,544 Available-FBS (2 year average) --LaRIS Study 44* 7,025 7,/36 7,/36 AUGMENTATION for Tier I 161 161 Total Federal Resources 7,025 7,296 7,296 Total Maximum Projected Tier 2 248 Total Maximum Projected BPA Purchases (Tl & T2) 409 Load Following Tier 2 Purchases 155 * 2004 BiOp w/Adj;Four Mile Hill incl; no WNP3 Settlement return Cusno Conservation Norm_ Adj. Adj. (no (Centralia, PR, Forecast TRL* Total Load Resources estimates yet) Wan, etc.) Adj Load Contract Adj Load FY2006 2010 2010 2010 2010 2010 HWM 2012 80.21 83.46 0 0 0 83.46 83.46 85.14 Name CITY OF PORT ANGELES Product ~~11'f~i~;~~~~:~1:2Q} LF CD ::J Cf) 3: 0) u -~ 0==>"- _ ..c ~ 0 CO:JQ)O (5 0.0 C\J o ~ _+.J~"- COQ)~+.J C U 0 en -- 3: :J .Q c Q) 0> O)Q)E:::.'i (])(J)~<( a: U:: c o :;:: ctS ... +-' .!:!2 '" .~ 0 E 0 "'0 C\J <( cr) ... +-' Q) CI) 3: ::l o Ol a.. ::l Q) <( = c .:; 0 Q) "'0 C Q) C ::l o CI) a:l ~ Framework Overview Bonneville Power Administration . Issued on August 3, 2007 The Business Construct for Regional Dialogue Objective - This Presentation lays out the framework for Regional Dialogue Products and Rates. . Key Concept - To reduce complexity, the construct is based where appropriate on existing approaches to rates, contracts and products. Products Similar - Customers that like their existing business relationship will find something similar in Regional Dialogue. Maintains Product and Power Rate Unbundling - The Marketing plan of 1994- 1995 unbundled BP A products. Customers that cnoose to take additional services from BP A pay for those services. The Regional Dialogue products reaffirm this concept. Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 3 Business Construct continued... Establishes Cost Pools - Under the proposed pricing construct the group of customers that chooses a particular product will bear lhe aggregate cost of the services that need to be added to the Federal Base System (FBS) based on 1937 water to provide their product. · Examples: (1 )Since the load following product allows loads to vary from forecast, this customer .9.roup will bear the costs of providing this service through a load variance charge. (2)Thls presentation also shows three other potential cost pools for the block product: shaped to critical water, flat annual, shaped to customer net requirement. Specific Rate Design - How costs will be allocated within the cost pool will be the subject of discussion in future rate cases and potentially the Tiered Rates Methodology (TRM). · Examples: (1 )Continuing the load variance example - A given rate case could decide to estabfish load variance at an equal amount per kWh or to nave load variance vary by month. (2)Shapin~ costs for the block product could be a single mill/kWh charge in the W The ::~ o~:::~:~:n ~i::i:o;t_C::S:i:n~xisting business relationships BP A adds a specific Tiered Rate construct using a High Water Mark (HWM) which establishes a customer's access to power at the Tier 1 rate and then creates choices for loads beyond this amount. Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 4 BP A Product Offerings · Starts with shape of the FBS under critical water · Public utility customers Tier 1 service provided from this resource · A customer's product choice can be viewed as a decision on the additional services offered by BP A to shape and convert the FBS into energy deliveries that meet the customer's net requirement Average Shape of the FBS 12000 9000 6000 3000 o Oct Jan Apr July Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 5 What Products will SPA Offer? . BP A will work collaboratively with customers and interested parties and make a good faith effort to offer usable products . BP A intends to offer contracts for three general products: · Slice - Provides power based on the actual generation shape of the Federal system. · Block - Provides a predefined amount of power to meet a customer's net requirement load. · Load Following - Provides all power needed to meet a customer's actual load minus declared resource amounts. Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 6 Slice . ~ . BP A will continue to offer a Slice product as firm power for a customer's net requirements load and an advanced sale of surplus energy based on the generation shape of the Federal system Slice will be available to serve net requirement load below a customer's HWM, on a planning basis Aggregate Slice amounts will be limited to 250/0 of the Federal system Compared to the current product, the post FY11 Slice will have modest reductions in operational flexibility and/or clarification of capacity rights and flexibility Slice must be paired with a Tier 1 Block product to fill in up to the remainder of what the HWM provides · Whether SPA will require this Tier 1 block to be flat, or allow other shapes (at a different price), is yet to be determined Tier 2 will be available for load beyond the HWM in the shape of a flat block . . . For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 7 Slice continued... · Slice provides a specific amount of power based on the actual generation shape of the Federal system · A customer purchasing Slice will be responsible for following their own hourly load Shape of the FBS resources provided through Slice Oct Apr July Jan Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 8 Block - Flat and Shaped · Provides a predefined amount of power to meet a customer's net requirement load · Energy and demand shaping charges for the Block product will reflect the projected cost to convert the shape of the critical FBS into the predefined block shape The shape of the blocks will have limitations that have not yet been established · Amounts served at a Tier 1 rate will include credits for the value of the secondary energy Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 9 Block continued... Block shaped like critical water · A shaped block that closely resembles the shape of critical water would incur only basic shaping charges included in all block products. · Like a Slice customer, a Block customer is responsible for meeting their hourly load shape Shaping Critical FBS Into a Shaped Block Block Amount Oct Jan Apr July Bonneville Power Administration Issued 01) August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 10 Block continued... Flat shaped block · Charges to convert from the shape of the FBS to a flat block will reflect the difference in value between the flat block and the shape of the FBS · A flat block would likely incur more shaping charges than a critical- water-like shaped block. .. Shaping CriticalFBS Into a Flat Block Block Amount Oct Jan Apr July For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 11 Block continued... Block shaped to a winter-peaking customer's load · A shaped block that more closely resembles a winter-peaking customer's load, and does not resemble critical water,would likely peak in higher value months and incur larger shaping charges. Shaping Critical FBS Into a Shaped Block Block Amount Oct Jan Apr July For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007. Slide 12 Load Following w . Would provide all power needed to meet a customer's hourly load minus customer's non-Federal resource amounts Load Following will include: · Reshaping of the FBS to the forecasted monthly shape of the customer's load, minus committed non-Federal resources (same as a shaped Block) · Additional load variance charges to cover costs associated with: · Customer loads being greater and/or less than forecast during the rate period · Serving the hourly variation of customer load Amounts served at a Tier 1 rate will include credits for the value of the secondary energy Upon notice, a customer may commit new non-Federal resources to serve its load, and like today, BP A will establish rules for these resources. Additional charges or credits will apply to meet the "no material cross- subsidization" principle. . . . For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 13 "'''.' ;'. -'; "'-\'''~'':;-::' ''''''''-'f;i' " "'j:~%>:,-,: ":',,:'-.'1".~'.:;~,.:~..'i.',:..:.-~.. , :'.~' Load Following continued... Shaping Critical FBS to Load Following Product · The Load Following Product includes load variance charges, in addition to the shaping charges incurred by the block product · BPA is responsible for meeting the customer's hourly load shape Shaping Critical FBS to Load Following Product Oct Jan Apr July For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 14 Load Followin.g - Non-Federal Resources . BPA has worked with customers to develo~ principles for a load following Rroduct that accommodates non-Federal resources (see appendix for principles). BPA will continue to work collaboratively with customers during product development. What follows is an attempt to describe an approach for implementing those principles. Load Following customers may apply non-Federal resources to meet part of their load . Because resources could affect BPA's Load Following obligation, these resources will be tracked and additional charges or credits may apply The Load Following Product will be structured to accommodate the following resource lypes: · Metered - A resource located within a customer's service territory (i.e. behind the customer's meter) and is not dispatchable . · Scheduled - A resource located outside of a customer's service territory and can be applied to load in a pre-established, scheduled amount, and is not dispatchable . · Dispatchable - A resource with adjustable output . . . For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 15 Load Following - Non-Federal Resources continued.. . Metered Resource · If metered resources produce less than established output limits per resource and per utility in total {currently 3 MW per resource, 6 MW total, based on nameplate rating), then no charges are required and their operation simply reduces load BPA must serve · Different limits may apply for different resource types · When metered resources exceed the output limits, BP A would apply a resource support charge for this additional service to compensate SPA for absorbing the output and to make BP A's other customers whole. There may be a cap on the amount of resources for which a customer could use this service (for example 15 MW per resource, 50 MW total, based on nameplate rating). Scheduled Resource · The customer will commit annually to hourly schedules to its load · Except within specified rules, these scheduled amounts will not be allowed to change within a year (Le. resource must be non-dispatchable) · Any changes outside of a year will be subject to notice provisions Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 16 Load Following - Non-Federal Resources continued.. . Dispatchable · Customers with dispatchable resources retain flexibility and control for how they operate their resources · Additional service will need to be purchased from BPA if customer wishes to alter the schedules of its non-federal resource more frequently than annually, as doing so alters BPA's load serving obligation and may create a monetary impact on BP A's other customers · During Subscription this service took the form of "factoring" · Another concept that will be explored would be to have customers commit hourly scheduled amounts of power to serve their load on an annual basis. Beyond providing this scheduled hourly amount, customers could operate their resources as they desire-selfing hourly excess power into the market and meeting hourly power deficits with marKet purchases · There may be other ways to accommodate dispatchable resources. Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 17 Support Services for Customer Resources . BP A currently offers its customers a variety of services to support their resources and BPA will continue to do so in the future Wind firming / shaping - BP A has decided to offer wind integration services to customers committing fhese resources to serve their requirements load · Pricing for this service will account for the costs associated with short notice demands on the federal system, much like costs attributed to load following customers, and will be determined in a comparable manner to how BP A calculates the pricing for services needed to support wind projects that meet federal load · The specifics of what this service will entail will be informed by the Wind Integration Action Plan follow-on studies · For customers acquiring new renewable resources to serve requirements load, that resource must be firmea and shaped BPA may decide to offer its preference customers additional Resource Support Services for resources committed to serve requirements load. SPA would offer these services comparable to how BPA would acqUire and support new Federal resources. Apart from BPA Transmission ancillary services, additional Power services could include: · Forced outage reserves · Planned outage reserves · Transmission curtailment reserves · Service and Exchange Agreements . ??? . . . Shorter term non-requirements products may be available from SPA's Trading Floor at a market based rate .' For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 18 Unauthorized Increase Charge (UAI Charge) · If a customer does not purchase these types of resource support services from BP A or from non-federal sources, and/or the customer does not follow through on its contractual commitments to resources and takes an amount of power from BP A in excess of what is contractually allowed, that amount will be subject to the UAI Charge for energy and demand, or in dire circumstances, curtailment. . · Current UAI charges are designed as penalty rates, and as conditions change, BP A will need to reexamine how it calculates its UAI Charge so that no incentive exists to lean on the system (BP A will need to consider new resource adequacy standards in this light). · Current UAI charges for demand are computed based on the GREATER of: a) the sum of hourly CA1SO HlR Spinning Reserve Capacity prices at COB in the month, b) the sum of hourly CAISO HLH Spinning Reserve Capacity prices at NOB in the month, or, c) 3 x SPA's applicable monthly demand charge · Current UAI charges for enerqy are computed based on the GREATER of: a) highest hourly California rso Supplemental Energy price (NP15) for the month, b) highest diurnal OJ Mid-C Index pnce for the month, or, c) 100 mIlls/kWh) ~ March 2007 UAI charges: Demand = $5.25/ kW, Energy = $338 / MWh Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 19 How do Tiered Rates Work? ~ . Tiered rates add a new dimension to a customer's business relationship with BP A, providing options for service beyond lowest cost FBS power BP A will establish a HWM that will be the dividing line between the lowest cost Tier 1 rates and Tier 2 rates Power sold at the Tier 2 rates will be in the shape of a flat annual block of energy. Therefore, BPA is not constructing Tier 2 to precisely match the shape of a customer's load growth. Pricing of power provided ata Tier 2 rate will be based on the marginal cost of new BP A purchases and resource acquisitions to supply above HWM customer load The Tiered Rates construct is designed to position BP A as a neutral provider of power needed to meet utility load above their HWM At contract signing customers will commit to how load above their HWM will be served througl1 at least 2016 . After 2016, customers will be able to change how their load above the HWM is served as long as they have not otherwise committed to a longer-term Tier 2 rate. This abinty to change how load above the HWM is served will be subject to notice provisions and minimum commitment terms that reflect the principle that BP A must be able to acquire power to meet resource adequacy standards in an efficient and effective manner. . . . . . For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 20 Two Key HWM Concepts ~ Contract HWM · Established in 2011 (6 step process) and based on metered 2010 load and 2010 resources as currently declared in Subscription Contracts (with adjustments as noted in Policy); a more detailed calculation process will be established ,in the TRM · Will be incorporated into a customer's contract and does not change over time, except for annexation · Will not be calculated until a few months prior to deliveries (customers will have a "forecast" HWM available prior to contract signing) Rate Period HWM · Calculated prior to each rate period · Establishes the amount of Tier 1 priced power available to a customer during a rate period (limited by their net requirement) · Based on an approach established in the TRM and reflects forecast critical FBS, including augmentation, for upcoming rate period Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 21 How Existing FBS Value is Preserved in Tier 1 Rates for Tier 1 are based on the costs associated with the current FBS plus: · Costs of limited augmentation (300 MW, total FBS not to exceed 7,400 MW) · Costs of services necessary to provide load shaping and load variance How FBS capacity value is preserved: · Slice: Value is directly included in the product · Block and Load Following: Value is provided through revenue from the marketing of surplus energy · There is a tradeoff between managing capacity to create value for secondary marketing, and using capacity to serve load and/or to offer resource support services to serve load · The equity issues associated with this tradeoff will be further discussed in the contracts, products, and TRM process and subsequent rate cases Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 22 Condition Forecast at Start-up in FY 2012 · Current Forecast of 2012 Rate Period HWM and Load: · 2012 Rate Period HWM: 7300 aMW · 2012 Net Requirements Load: 7550 aMW · Deficit: 250 aMW . Note: Given these assumptions, headroom is no longer projected in FY 2012, meaning almost all customers will be above their HWM at start-up. As load and FBS forecasts change, the forecast load above the HWMs will also change. Based on 2006 when customers purchasing the Load Following product consisted of 490/0 of BP A load, BP A anticipates that 1/3 to 1/2 of load above the HWM will initially purchase Tier 2 from BP A · Anticipated Tier 2 Service: 80-125 aMW · There is also likely to be an impact on how BP A meets the capacity needs for Block and Load Following customers which would be reflected in Tier 1 rates. . Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 23 :"".:.>Ef .: .~,,",., :.:" ;,.t'_,t :....;- .... Commitments for Service Beyond the HWM w- · BPA's Intended Tier 2 Business Strategy · Neither to compete aggressively to serve its customers' load growth, nor to push customers towara non-federal sources · Do an excellent job of meeting customers' requests for service at the Tier 2 rate, but without using Tier 1 to subsidize Tier 2 sales to the maximum extent possible · Maintain a level playing field so that BP A Tier 2 power is not positioned with advantages over non-Federal options, and in dOing so, offer resource support services for non-Federal resources that are comparable to the services BP A must use to support comparable Federal resources used to meet Tier 2 loads · Maintain a reasonable set of Tier 2 rate alternatives to keep implementation costs at a low level · Commitments to Supplier · When the Customer signs its RD Contract in FY 2008 the customer will establish how its load 6eyond its HWM will be served through FY 2016. It will have 3 supplier options: A. BP A at a Tier 2 rate priced at the marginal cost of supplying the power B. Non-BP A supply or resource C. Defined combination of A or B. (e.g. First 5 aMW from A, all other B) Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 24 Commitments for Service Beyond the HWM W When Commitments are Made for Tier 2 Amounts . Load Following Customers - Responsibility for providing service above the HWM will be known at contract signing (likely 2008), but precise amounts of power at Tier 2 rates or customer resources needed will be finalized each rate case based on a customer's Rate Period HWM, supplier commitment, and Net Requirement forecast. Amounts for FY 2012 and 2013 will not be precisely known until late FY 2011. Based on forecasts at contract signing, BPA and customers may decide to begin acquiring power before precise Tier 2 amounts are known. . Slice or Block Customers - At signing, customer commits to an amount of Tier 2 it will bUr during each year of the commitment period (initially through FY 2016 consistent with its net requirement. To the extent a Block or Slice/Block customer's net requirement is lower than the amount projected for the rate period, "unused" Tier 2 amounts will be remarketed and credits or charges will apply. For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 25 Commitments for Service Above the HWM W When Purchasing Power at BP A's Tier 2 Rates · Priced at cost of new BPA purchases and resource acquisitions. To the extent power is provided from the current FBS, it will be priced at the marginal cost of providing the service. · The only shape offered by BP A is a flat annual block. This is significant for ease of implementation and relies on product and rate design to link rates and cost causation. · For each rate period, amounts of Tier 2 will be established by forecast of net requirement · Take-or-pay · Power sold at Tier 2 rates would be take-or-pay for the duration of the commitment period · In the event of customer load loss, SPA will remarket the excess power purchased at the Tier 2 rate and the value will be credited back to the customer Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 26 Tier 2 Example - Load Following 18 16 14 12 3: 10 :E 8 III 6 4 2 0 Jan 25 20 15 3: ~ 10 Tier 2 Purchase with Load Following Forecast Net Req. High Water Mark . Load Variance paid for Actual Load and Forecast Net Req. difference. . Tier 2 Purchase equals Forecast Net Req. minus High Water Mark. . Energy beyond Tier 2 amounts provided at Tier 1 Rates. Feb Mar Apr May Jun Jul Aug Sep @ Nov Dec / October 2011 Actual Hourly Loads Customer's Demand at GSP equals 20 MW -------------- -------- ---------------------~ 5 o 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 . In the example October 2011 power bill below, the customer's total demand as of BPA's Generation System Peak equals 20,000 kW. Of that, 17,000 kW is priced at a Tier 1 rate and the remaining 3,000 kW is included in the Tier 2 rate. The charges for load shaping from critical water are currently reflected in the Tier 1 HLH Energy and Demand rates. In the future they may be applied on a separate rate schedule. . POWER BILL Purchaser: f'ublic Utility #1 Billing Period: October 2011 Period Ending: October 31, 2011 Invoice Number: OCTI2-EXAMPLE November 12,2011 Service Desc Amount Unit Rate Revenue Energy HLH 5,000,000 kWh@ 0.02970 $148,500 Energy LLH 2,700,000 kWh@ 0.02176 $58,752 Load Variance 9,932,000 kWh@ 0.00047 $4,668 Demand 17,000 kW @ 1. 94000 $32,980 ~232,0~ kWh@ 0.05500 $122,760 $367,660 I Sched Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 27 Issue Date: Tier 1 Tier 1 Tier 1 Tier 1 I Total BP A Tier 2 Alternatives ~ . Tier 2 rate alternatives will require different commitment periods and will be priced based on the cost of the resources used to meet the load. If the rate is based on the output of resources that are not already purchased as a flat annual block, the costs of shaping and/or firming the resource to a flat block will be included In tne Tier 2 rate. Four options currently proposed for Tier 2: - Short-term: Rate alternative based on the costs of market purchases and/or resource acquisitions, and requiring a shorter-term commitment than other Tier 2 alternatives but sufficiently long enough to meet resource adequacy standards. - Renewables Rate: A contract-term rate alternative offered at contract signing and based on the costs of renewable resources. - Load-Growth Rate: Rate alternative offered at contract signing for Load Following customers who sign up for the term of the contract to nave their above-HWM load served by BP A. - Specific Vintaged Rates: Periodically offered rate alternatives based on the costs of a specific resource or groups of resources. . Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 28 Practical Considerations for Tier 2 ~ · Load Following - Purchasing Tier 2 from BP A does not change the fundamental premise of the load following business relationship that BP A will meet a customer's hourly load. · The load variance charge will be designed to cover the risks inherent in this service · Tier 2 purchases are predefined hourly amounts established each year and are not affected by changes in the customer's load · Power needed beyond predefined Tier 2 amounts will be priced at Tier 1 rates · If a customer's load growth occurs in a more expensive shape than a flat block, SPA may incur additional shaping costs that would be recovered in the customer's load following rate. Depending on rate design, these additional shaping costs may be recovered broadlyor directed at specific shapes. · BI~c~ or Slice - .The customer is responsible for meeting all load and lo~d vanatlon beyond Its HWM and the flat annual blocks of Tier 2 they commit to purchase. Its choice on how to serve load beyond its HWM has no effect on the power priced at the Tier 1 rate. . Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 29 Serving Load Above theHWM with Non-Federal Resources ~ · Customer Choice - Customers may choose to meet load beyond their HWM with non-federal resources. Annual energy amounts required will be the same whether the amount is a Tier 2 purchase or a non-federal resource. · Block and Slice Considerations - These customers will contractually agree to meet any load above their Rate Period HWM and their Tier 2 purchases. Their resource choices for load beyond their HWM will not affect the amounts or shape of the power they purchase from SPA. Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 30 Serving Load Above theHWM with Non-Federal Resources W · Load Following - Because BP A meets the hourly load of this type of customer the shape of any nonfederal resources applied to meet load beyond its HWM could have an impact on the costs to other customers. To avoid this BP A has established a benchmark shape for non-federal purchases. . The Benchmark Shape for Load Following Customers - The flat annual block required for purchases at the Tier 2 rate is used to establish the value BP A will require from any resources a customer uses to meet its load beyond its HWM. Customer resources that are not scheduled to its load in the benchmark shape will receive a Resource Shaping Adjustment. · Resource Shaping Adjustment for load Following Customers - Each rate case BPA will assess Hie value of a customer's resource compared to the benchmark shape to assess what additional charges or credits might apply. Some resource shapes may not be allowed, and the rate design for this may change over time. Generic Example: If a customer chooses to serve its load with an intermittent light load hour resource it would have a significant Resource Shaping Adjustment because BPA would charge firming costs plus tfle differential between a flat annual power and LLH power. NOTE: numeric examples available too. . Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 31 Serving Load Above the HWM with a Combination of Non-Federal Resources and Tier 2 w . Any customer can elect to combine power from non-federal resources with power from BP A at Tier 2 rates, in a pre-established megawatt amount. . Load Following customers that choose a combination may fix either the amount of power from a non-federal resource and have BP A meet the additional above-HWM load or fix the amount of power served at Tier 2 rates and meet the additional above-HWM load with non-federal resources. . Block amounts determined by the level of purchase commitment to Tier 2 they make. Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 32 Process Timeline Example - Tier 2 and Load Following · A Load Following customer may elect to have its entire loae served by BP A (at Tier 1 and Tier 2 rates). · Each rate case: . BP A will forecast the amount of power charged at Tier 2 rates, by comparing the customer's net requirement forecasts for the rate Reriod to its rate period HWM (Steps 1 and 2) The amount forecast for each fiscal year becomes the customer's established Tier 2 take-or-pay obligations for the rate penod (Step 3) For certain Tier 2 rate treatments, SPA may require a customer to commit to a specific amount of power charged at that Tier 2 rate for longer than the rate period Step 2: RatePeriod HWM Cal'd Rate Case Step 5: Net Req for yr2 Re-determined Tore-assess Above HWM load Rate Period Step 3: Calculate above-HWM Load for yr1 & yrz . . Step 4: Net Req for yr1 Re-determined Tore-assess Above HWM load For Regional Dialogue Discussion Purposes Only -- Pre-decisional Bonneville Power Administration Issued on August 3, 2007 Slide 33 Process Timeline for Tier 2 and Load Following continued... Prior to each year of the rate period (Steps 4 and 5): - BP A will update the customer's net requirement forecast for the next year If the forecast net requirement is greater than the forecast in the rate case, the Tier 2 purchase remains unchanged. If the forecast net requirement is less than the forecast in the rate case, the Tier 2 purchase obligation remains uncflanged. · BPA will remarket an amount of Tier 2 power equal to the difference in the annual net requirement forecasts and pass through the difference In value to the customer. This could result in a charge or a credit. Step 2: Rate Period HWM Cal'd Rate Case Step 5: Net Req for yr 2 Re-determined Tore-assess Above HWM load Rate Period Step 3: Calculate above-HWM Load for f1 & yr2 Step 4: Net Req for yr1 Re-determined Tore-assess Above HWM load Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 34 Timeline - Customer Choice FY 2008 (late) - TRM 7(i) Concludes (HWM calculation methodology set) FY 2009 - Contract signing FY 2011 (early) - Initial Rate Case Starts FY 2011 (mid) - Contract HWM Calculated (is equal to first Rate Period HWM) FY 2011 (late) - Initial Rate Case Ends FY 2012 - Power delivery begins Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 35 ~~:,j:C<:~"~;~ :\,)~;i.i;'/::;;~' 'V'",, '..'Co}" "",. .....',....\ .,',",.'_...'........,.,'o"."~' ."',,,.,,' -..~ ',' .. APPENDIX: Load Following Principles We are seeking a load following product that: · Makes it feasible and practical for customers to develop their own resources to meet their load. · Leaves operational control of customer-owned resources with customers, not SPA. · Does not create material cross-subsidization among classes of SPA customers. . Is reasonably simple to implement. Gives SPA and customers a reasonable amount of certainty and predictability about their rights and obligations in operating their systems. Ensures SPA and customers meet their commitments to provide planned firm energy and capacity. Facilitates, with appropriate notice to SPA, transition by a utility among the services offered under this product to accommodate cflanges In the utility's resource portfolio. Provides any needed resource services (as might be required for resources such as wind) on a comparable economic basis whether such resource is a tier 2 purchase, or utility developed. . . . . Bonneville Power Administration Issued on August 3, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 36 Transmission Issues { Power Issues Internal SPA Processes July-Sept 2007 Regional Dialogue Schedule (assumes contracts signed 12/1/08) April-June 2008 Oct-Dee 2007 Jan-March 2008 Revised 7/27/07 Oct-Dee 2008 Transmission Services resolves issues that affect Regional Dialogue contracts (890 issues, other issues, revised tariff) Service to IOUs: REP negotiations and pre-7i process (8/1 - 12/17108) 4.5 mo 'Formal 71 for 7b2 methodology and look back Issues 'Formal ASC Methodology Reconsultation post 2008 12118/07 - 7/31/08 5.5 mo Service to OSls: If BPA decides to provide benefits to OSls, negotiate and develop OSI contract template (8/1107 - 1/31108 6 mo Service to Publics: Develop Load Following, Block, and Slice products 1. Finalize product descriptions 2. Methodology for HWM determinations 3. Transparent net requirements process 4. Adjustments to 5b/9c policy (8/1/07 - 11130/07) 4 mo 5b/9c comment period, decisions, & ROD 10/15- 11/30/07 1.5 mo Negotiate and draft product- and rate- related contract provisions for Slice, Block and Load following templates 4b 12/1107 -1/31/08 2mos Finalize the DRAFT IOU, OSI, and Public contract templates, Including dispute , resolution provisions 2/1-3/31/08) 2mo 4a Tiered rates methodology development (pre 71 phase) (8/1/07 - 1/31/08) 6 mo 2b Public Review of DRAFT IOU,OSI, and Public, templates (4/1/08 - 5/14/08) 1.5 mos Finalize all contract templates, including final negotiations, decisions, and supplemental ROD for IOU, OSI, and other issues, if any . /15/08 - 7/31/08) , 2.5 mos Window for Contract Offer and Signature (8/1/08 - 12/1/08) 4 mos ormal 71 for tiered rates methodology (FRN published 2/1/08) (211/08 - 10/1/08) 8 mos Draft master contract template (standard contract provisions for Public, IOU, and OSI contract templates) 8/1/07 - 1/31/08) 6 mo Identify unique customer Issues and minimize the need for non-standard contrects by creating standardized options (9/1/07 - 7/31/08 (11 mos) Develop quality controls, systems, and supporting processes for the contract offer window (to manage risk and ensure Regional Dialogue Policy Interests are met) 1/1/08 -7/31/08 (7 mos) Contracts signed I B Regional Dialogue High Water Mark Determination for Tiered-Rate Methodology August 8, 2007 Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 1 High Water Marks Overview · Goal: This presentation will outline the process for determining High Water Marks under Regional Dialogue as described in the Policy. Additional details will be developed in the tiered-rate methodology (TRM) rate case that will occur in FY 2008. · Background: High Water Marks will set the maximum amount of lowest-cost Federal power that a SPA customer can purchase, limited by its net requirement. Assuming medium load growth, SPA currently projects that most customers' FY 2012 loads will be higher than their Contract HWM. Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 2 / High Water Marks ~verview (cant.) / · SPA is ei~tablishing a tiered-rate methodology (TRM) that will create t~o rate groups for the power that BPA sells. , - Tie~' 1. Tier 1 rates apply to the cost-based power generated from the available Federal Base System (FBS), including pre~efined limited augmentation, as will be determined in the TRM rate case. The amount available to each utility is de~lned by the utility's High Water Mark; Ti~r 2. Tier 2 rates apply to power sold to meet load above a ut(lity's High Water Mark, if the utility chooses to have SPA serve that load. · HWM:f: Net Requirements. The calculation of the HWM is a rate construct and is not the same as Net Requirements. Net Requirements will be a separate annual calculation and may be greater or less than a utility's High Water Mark. Bonneville Power Administration Issued on August 6,2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 3 Context - High Water Marks Under Regional Dialogue and TRM · There are three variations of High Water Marks (HWM) that evolve chronologically: - The Forecasted Contract HWM will be determined prior to contract signing in FY 2008. This forecast is a preliminary estimate based on available data. Parties should create flexible resource plans to meet estimated load in excess of their HWM in FY 2012, since the actual HWM amounts are determined later. The Contract HWM will be used to establish the amount of FBS energy available to the customer during the contract period. The Contract HWM is based on FY 2010 load data and, therefore, will be calculated in FY 2011. The method of calculation will be addressed in following slides. The Contract HWM stays the same throughout the contract and/would only be changed for rare events, such as an annexation of s,ervice territory by a public utility. The Rate-Period HWM w,ii, determine the maximum amount of Tier 1-priced energy avail/able to the utility during a given rate period. It is calculated prior to each rate period and reflects any changes in the firm ene~gy available from the FBS resources and limited augmentation amounts defined for Tier 1 rates in the TRM. Bonneville Power Administration Issued on August 6, 2007 / for Regional Dialogue Discussion / Purposes Only -- Pre-decisional / / Slide 4 Getting to Contract HWMs (Steps 1-3 in the Policy) · Step 1 - Methodology established: Detailed methodology for the calculation of HWMs will be developed during the TRM rate case in FY 2008. · Step 2 - Forecasting HWMs: Before BPA and the Publics execute Regional Dialogue contracts in FY 2008, BPA will forecast Contract HWMs for each public utility, using a forecasted FY 2010 load and the non-federal resources for FY 2010 from their Subscription (or Pre-subscription) contracts. · Step 3 - Calculating loads for the preliminary HWM: The load data for the Forecast HWM will be replaced in FY 2011 with adjusted actual FY 2010 load data and reduced by the resource amounts established in the Subscription contract for FY 2010 as of Sept. 30, 2006. This will provide the load amount for a utility's preliminary HWM. The summed preliminary HWMs for all utilities is also calculated. Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 5 The Load Calculation for the Preliminary High Water Mark (Step 3 of the Policy) Example for Step 2: Determining the Forecast Contract HWM · 2007 Forecast of 2010 loads · Minus 2010 resources · Forecast Contract HWM = 150 aMW 20 aMW 130 aMW Example for Step 3: Determining the Preliminary HWM · Actual adjusted 2010 loads · Minus 2010 resources · Load for the Preliminary HWM = 140 aMW 20 aMW 120 aMW Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 6 A Closer Look at Step 3 Calculating Loads and Resources for the Preliminary HWM · Load Data: Certain adjustments will be made to utilities' actual FY 2010 load data. The detailed methodologies will be developed in the TRM rate case. SPA invites public input and comments to assist in fully developing these adjustments: - Weather Normalization - Force Majeure - Other Adjustments (i.e. for data quality, methodology, load anomalies, etc.) · New Large Single Loads will be deducted from a utility's total retail load for HWM purposes. Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 7 Step 3: Calculating Loads and Resources for the Preliminary HWM (can't.) · Resources: The FY 2010 customer resources in the amounts currently established by the Subscription contracts (in the FY 2007 Exhibit C) will be subject to the following adjustments: - Renewable resources (about 3 aMW) - the output of new renewable resources added during the term of the Subscription contracts will not be included Centralia (250 aMW) - the output of the Centralia plant will be removed for the calculation of HWMs for Seattle, Tacoma, Snohomish PUD, and Grays Harbor PUD with no (9c) decrement to their retail loads Grant PUD (about 100 aMW) - Grant will be recalling hydro power from the Priest Rapids and Wanapum dams resulting in a redistribution of resources for Grant and the affected public utilities for HWM purposes Raft River annexation (about 6 aMW) - the unspecified resources associated with Raft River's service territory annexation will not be included for HWM purposes PURPA resources (less than 10 aMW) - will not be included for HWM purposes since the utilities have no control over the application or removal of the resources Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only.... Pre..decisional Slide 8 Establishing FBS Amounts for Preliminary HWMs (Step 4 of the Policy) · Step 4 - Determine Total FBS Available for HWMs: To establish each utility's Contract HWM BPA will also determine the amount of power available from the FBS based on critical water year, including limited augmentation. The detailed methodology for determining this FBS amount will be established in the TRM rate case. · Limited Augmentation of the FBS: If the projected FY 2012 FBS is not sufficient to meet the sum of the preliminary HWMs, BPA will augment the existing federal system by up to 300 aMW toward meeting the sum of the preliminary HWMs. However, the FBS will not be augmented to greater than 7400 aMW, except as explained on the following slide. Bonneville Power Administration Issued on August 6,2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 9 Specifics for Augmentation Limits · The augmentation amount calculated in FY 2011 (300 aMW or less) would be available to meet loads eligible for Tier 1 rates, when needed, throughout the Regional Dialogue contract term. · The method to determine the power available from the federal system and future adjustments will be established through the TRM rate case conducted during FY 2008. · Additional augmentation - beyond that calculated in 2011 for Tier 1 loads, will be allowed for Tier-1 load growth due to new public utilities and specific load additions at the DOE Richland facility. This augmentation will not be limited by the 300 aMW and 7400 aMW caps. · Contract-period augmentation for DOE Richland is limited to 70 aMW. · Contract-period augmentation for new publics, including new tribal utilities, is limited to a total of 250 aMW. · Augmentation for new publics is limited to a total of 50 aMW per rate period. Bonneville Power Administration Issued on August 6,2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 10 Determining the Preliminary HWM Adjusting for Available FBS (Step 5 in the Policy) · Step 5 - Adjustment of the Preliminary HWM for Available FBS: The individual preliminary Contract HWMs will be adjusted proportionately relative to the size of the Federal system with limited allowed augmentation. · Example (continued from Slide 6): Available FBS greater than total HWMs Sum of preliminary HWM loads = 7000 aMW Available FBS = 7100 aMW HWMs increased by 7100 / 7000 = 1.014 or 1.40/0 Preliminary HWM = 120X 1.014 = 121.7 aMW.. Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 11 Adjusting for Available FBS (cant.) Example: Available FBS less than total HWMs · Sum of preliminary HWM loads = 7600 aMW · Available FBS = 7100 aMW · System augmentation capped at: 300 aMW · Existing system wI augmentation = 7400 aMW · HWMs decreased by 7400 I 7600 = 0.973 or 2.70/0 · Preliminary HWM = 120 X 0.973 =1,16.8 aMW Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Rebalancing Preliminary HWMs for Conservation to Get Contract HWMs (Step 6 in the Policy) · Step 6 - Adjusting Preliminary HWMs for Conservation: BPA will further adjust the individual preliminary HWMs to account for the effect of each utility's conservation achievements from FY 2007 through FY 2010 on FY 2010 loads. - A utility's preliminary HWM will be increased by 1 aMW for each aMW of FY 2007 - 2010 savings through self-funded programs and .75 aMW for each aMW of FY 2007 - 2010 savings through SPA funding. · A utility's conservation-adjusted preliminary HWM will be calculated as % of the total conservation-adjusted preliminary HWMs. · Then the above % will be applied to the available FBS (wi augmentation as established in Step 4) to get a utility's Contract HWM. ~ This will have the practical effect of increasing the HWM for utilities that achieve more conservation than average and reducing the HWM for the others. Bonneville Power Administration Issued on August 6,2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 13 Determining Contract HWMs (cont.) Example: Conservation Adjustment to Get Contract HWM Available FBS calculated in Step 4 = 30 aMW Unadjusted HWM Utility A 10aMW Utility B Utility C 10aMW 10aMW Conservation Achieved 2007-2010 3aMW 1aMW OaMW (1.33 avg) Cons.-Adjusted HWM 13aMW 11aMW 10aMW 34aMW Rebalancing Factor = Cons-Adi HWM L Cons-Adj HWMs 13/34 11/34 1 0/34 Rebalancing Factor x 30aMW (the available FBS) = Contract HWM 11.5aMW 9.7aMW 8.8aMW 30aMW Results: Each utility receives a HWM adjustment based on how its conservation achieved compares to the average conservation amount. Utility A's HWM is adjusted upward and Utilities B & C's are adjusted downward. The sum of the HWMs does not change. Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 14 The Contract HWM - Post-Calculation · The customer's Contract HWM becomes part of its contract and will not change over the life of the contract, except for: Annexation of service territory from other public utilities · The Contract HWM of both utilities will be adjusted in proportion to the amount of load transferred with the annexation. · The Contract HWM is also part of the calculation of the Rate- Period HWM, as shown on the following slide. · The issues of transparency of the HWM process and tie-ins to Net Requirements and available FBS determination will be addressed in later workshops and developed in the TRM rate case. Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional The Rate-Period HWM · The Rate-Period HWM is a tool for proportionally changing a customer's Contract HWM to reflect any changes in energy available from the FBS system from one rate period to the next (Le. changes in fish-flow requirements or turbine efficiency) - Rate-Period HWM = Contract HWM X FBS L Contract HWMs - The Rate-Period HWM is calculated for each rate period. For the initial rate period, the Contract HWM and the Rate-Period HWM will be the same. · New Publics - The creation of new public utilities, including tribal utilities, will cause an increase in the sum of the Contract HWMs. However, since the FBS will be augmented in the amount of their HWM load (see Slide 10), the effect on Rate-Period HWMs will be negligible. - Load growth for Tier-1priced power, due to the creation of new public utilities, will be capped at 50 aMW for a rate period and 250 aMW for the contract period. - Tier-1 load growth for new tribal utilities will be capped at 40 aMW aggregate, and is not subject to the rate-period limit of 50 aMW. Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 16 Example - Rate-Period HWM · Reduced Federal System · Original of summed HWMs = 7400 aMW · Federal System reduced by 740 aMWs (100/0) in FY 2014 · A customer with a Contract HWM of 120 aMW goes from 120 to 108 aMWs (100/0 reduction) Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 17 FY 2010 Load Data Adjustments Developing the Details Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 18 Process Details - 2010 Load Data · Step 3 of the Contract HWM calculation uses a utility's measured 2010 load data, as adjusted for several factors. · The following slides will explore some of the necessary details that SPA will explore and work out for inclusion in the TRM rate case. · SPA's goal in the TRM rate case is to establish process certainty. Some key areas to develop process details for adjusting the 2010 load data are: Weather normalization - Force Majeure adjustments, and; - Adjustments for anomalous data Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 19 FY 2010 Load Data Adj. (cont.) Weather Normalization · Adjust for anomalous weather-related effects on average demand in FY 2010. - Difficult to standardize because of differing climate zones in the Region and possibly within a utility's territory. · A standard methodology will be developed in the TRM rate case. - The calculation methodology is somewhat standardized within the industry, however weighting the effect of weather on load data is more subjective. Consider special approach for irrigation loads. · Methodology used by utility consultants will need to match established methods. Making process & methodology public will be considered for purposes of transparency. Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 20 FY 2010 Load Data Adj. (cont.) Force Majeure Adjustment · Load may be adjusted for force majeure-like events, those anomalous events beyond the control of a utility that affected its FY 2010 load to the point that the load data should be adjusted. - This is a separate concept from the contract provisions relating to Force Majeure events that effect the performance of the contract. · There will be a high threshold. Little-to-no use of this adjustment is expected. · Criteria and process for notification, claim, determination and adjustment will be developed in the TRM rate case, Bonneville Power Administration Issued on August 6, 2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 21 FY 201 0 Load Data Adj. (cant.) "Other" data adjustment · If necessary, adjustments may be made to address anomalous increases in load. · Need to determine criteria for notification, claim, determination and adjustment. · Awareness of unforecasted load increases and unusual power consumption through FY 2010 will help ensure equitable HWMs. ~ Examples: Irrigation load not matching weather patterns; unusual retail pricing to high-load customers; overall load growth in excess of projections, etc. Bonneville Power Administration , Issued on August 6,2007 For Regional Dialogue Discussion Purposes Only -- Pre-decisional Slide 22 Date: To: From: Subject: FORTAN ELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo August 14,2007 Utility Advisory Committee Glenn A. Cutler, Director Public Works and Utilities Processing Junk Vehicles at the Port Angeles Landfill Summary: There are an abundance of junk vehicles located throughout the County as well as in the City. The County has approached the City to enter into a cooperative venture to significantly reduce the number of junk vehicles from City and County rights of way as well as from private property at little or no cost to individuals. Recommendation: Forward a favorable recommendation to City Council that it (1) enter into an interlocal agreement to utilize a portion of the Port Angeles Transfer Station property on a trial basis for the disposal operations of junk vehicles, (2) authorize the Mayor to sign an agreement, and (3) authorize the Public Works and Utilities Director to evaluate the operation and return to Council with a recommendation for continuing operations after the initial event. Back2round/ Analvsis: Clallam County has been actively working with property owners to remove junk vehicles throughout the County. So far, approximately 1,200 vehicles have been crushed and transported out of the County for recycling. Because of the relatively high prices for scrap metal, the towing and crushing has been conducted at no cost to the County or the landowner. A major obstacle has been encountered in finding a suitable location for the crushing operation. Most potential sites are neither zoned nor have the proper environmental controls for this activity. Approximately a half acre of space, with access suitable for a semi truck and trailer, is needed. It has been proposed to use the former metal recycling area (see attached map) at the City of Port Angeles landfill to stockpile, crush, stage, and load junk vehicles for transport. Vehicles would be cleaned of any garbage or refuse, towed, and stockpiled at the site for a few weeks, crushed by a portable crusher, and loaded for transport by a private contractor. The operation is designed to contain all fluids from the vehicles, and the site will be cleaned of any incidental leaks or metal scrap. Car Crushing Proposal August 14, 2007 Page 2 It is proposed to conduct an initial event on a trial basis to ensure that the operation can be conducted without interfering with the other ongoing uses the City has for the site. If the event is successful it would be desirable to consider utilizing the area for an extended period of time. To significantly reduce the junk car population from the City of Port Angeles and the surrounding area (approximately the area between Lake Crescent to MacDonald Creek), it is estimated that it would require events to take place 4 or 5 times a year for approximately 2 years. After the initial intensive effort is complete, the remaining demand could be handled at existing junkyards. Each event would be structured such that approximately 200 - 300 junk vehicles would be stockpiled over a 4-6 week period, then would be crushed and removed. The County has been using a licensed hulk vehicle crusher operator. The Code Compliance Officers for the City and the County would screen vehicles for title. These vehicles would be towed by a private operator and stored prior to the crushing operations over a four-week period immediately prior to the arrival ofthe mobile crusher. Once the crusher arrives, the vehicles will be drained of fuel, crushed, and stacked for loading and removal. Drained fuel, oil, coolant, brake fluid, etc. will be contained in the crusher. Any remaining small amounts of fluids that may drain from the vehicles prior to loading will be contained and removed from the site. The crushing and removal phase will take about one week. A spill cleanup kit will be maintained on the site during the crushing operation, and any inadvertent spills or leaks will be cleaned up as (or if) they occur. After all the vehicles have been crushed and removed, the site will be cleaned of any remaining small scraps of metal, and the site returned to original condition. Throughout the operation, the travel lanes to and from the transfer station, as well as to and from the proposed site, will be kept open. It is desired to commence operations in September prior to the anticipated fall and winter rains, as some of the vehicles are located in areas that will make it extremely difficult to remove once the ground becomes saturated. Both Clallam County Environmental Health Division and the Washington State Department of Ecology have been consulted regarding any permitting issues, and both agencies agree that existing site permits for the transfer station adequately cover the proposed operation. Nevertheless, the original SEP A determination will be updated and re-advertised to recognize that junk vehicle processing will be conducted on the site. It is planned that the City and the County will enter into an interlocal agreement to conduct the operation. The County will enter into contractual obligations with the operators for towing and crushing operations. It will be the County's responsibility to ensure that the operators have sufficient liability insurance, are good stewards of the environment, and comply with all permitting requirements. The City will have input into the contract documents that will be reviewed by the City Attorney. Car Crushing Proposal August 14,2007 Page 3 This cooperative effort with the County will provide an avenue for the City to dispose of junk vehicles in the City right of way and will also offer residents a no or low cost method for disposal of junk vehicles. It is proposed that the Solid Waste Utility collect a fee of $1 0 per vehicle to cover coordination, site preparation and oversight costs of the operations. This would be paid either by the contracted operator or the agency sponsoring the disposal of the vehicle. It is recommended that the UAC forward a favorable recommendation to City Council that it (1) enter into an interlocal agreement to utilize a portion of the Port Angeles Transfer Station Property on a trial basis for the disposal operations of junk vehicles; (2) authorize the Mayor to sign an agreement for the activity; and (3) authorize the Public Works and Utilities Director to evaluate the operation and return to Council with a recommendation for continuing the operations after the initial event. Attachment: Map of Port Angeles Transfer Station This map is not intended to be used as a legal description This map/drawing is prrxiuced by the City of Port Angeles for its own use and purfXJses. Any other use qf this map/drawing shall not be the resfXJnsibility of the City. s: l,Qrci~ro\swaste\Transftr Station Z-waii storage work area map.mxd Vertical Datum = NA V/J 88 Horizontal Datum = NAD 83191 ~ N 200 Feet City of Port Angeles Landfill area map Date: To: From: Subject: FORTAN ELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo August 14, 2007 Utility Advisory Committee Stephen Sperr, P.E., Deputy Director of Public Works/City Engineer Continuation of Stormwater Utility Rates Discussion Summary: A public hearing on Stormwater Rates was held by City Council at its August 7, 2007 meeting. Staff was directed to return to the UAC to continue discussing issues that were presented during the public hearing. Recommendation: After discussing various alternatives, fon~rard a favorable recommendation to adjust the method of assessing Stormwater Rates. Background/Analysis: The issue of adjusting rates for the Stormwater Utility generated discussions regarding the equivalent residential unit (ERU) definition of 4,000 square feet, the cap of 10 ERUs for commercial customers, and rebate incentives. Additional information will be provided or available at the UAC meeting, including a spreadsheet that shows how changes in the rate, ERU coverage and cap impact rates. The current recommended option is outlined in the table below. Current Rate Recommended Description Structure Option Monthly Rate per ERU $3 $6 Impervious Area per ERU, 4,000 4,000 square feet ERU Cap for Commercial 10 10 Net Revenue $328,000 $656,000 The recommendation made by the UAC will be forwarded to City Council for its consideration during the continuation of the public hearing on August 21. August 14, 2007 UAC Meeting Stormwater Rate Adjustment Options Current Description Rate "No cap" Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 7 Monthly Rate per ERU $3 $4 $6 $6 $6 I mpervious Area per 4,000 3,500 4,000 3,500 2,500 ERU, square feet ERU Cap for Commercial 10 556 10 100 10 25 100 10 100 Residential % of 66% 51% 66% 57% 64% 59% 54% 59% 47% Revenue [38%] Commercial % of 34% 49% 34% 43% 36% 41% 46% 41% 53% Revenue r62% 1 Number of Commercial 89 0 89 3 103 35 6 152 10 Properties Over Cap Maximum $/year, for a $360 $26,640 $720 $7,200 $720 $1,800 $7,200 $720 $7,200 Commercial Net Revenue $328,000 $560,000 $656,000 $759,000 $675,000 $733,000 $799,000 $735,000 $925,000 FORTAN ELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo Date: August 14,2007 To: Utility Advisory Committee From: Larry Dunbar, Power Resources Manager Subject: Electric Rate Adjustments Summary: HDR Engineering, Inc. and City staff completed a comprehensive rate study in 2005 for the Electric Utility. The study has been updated and will be presented to the Utility Advisory Committee including the recommended retail rate adjustments. It will be necessary to adjust retail' electric rates at this time to maintain the fund in a financially prudent position. Recommendation: Forward a favorable recommendation to City Council to proceed with a, public hearing on the updated rate study and proposed rate adjustments. ' Background/Analysis: In 2005, the City contracted with HDR Engineering, Inc. to assist staff. with a comprehensive rate study for the Electric Utility. As a result of the 2005 rate study, on .... September 20, 2005 the City Council adopted a 6.5% retail rate adjustments to: discontinue use of rate stabilization reserves after 2006 which were significantly depleted due to the 2001 west coast energy crisis; cover increased labor expenses; cover increases to Bonneville Power Administration (BP A) wholesale power and transmission costs; and to cover inflation and increased debt service. As a result oflast year's rate study, retail rate adjustments were not recommended in 2006. Based on this year's rate study a retail rate adjustment is necessary beginning October 1,2007. A retail rate adjustment is needed for the following main reasons: budgeted residential rate revenues are not being realized mainly due to a warm winter; rebuilding financial reserves is necessary; additional capital costs are being incurred for extending services to new customers; new operating lease expenses will be incurred for light operations; increases are anticipated in personnel expenses (cost ofliving adjustments, retirement system contributions, medical/dental); and to cover inflation of other expenses. It will be necessary to adjust retail electric rates at this time to maintain the fund in a financially prudent position. Staffwill provide a presentation on the need for the proposed rate adjustments and the proposed ordinance amendments at the meeting. N:\UAC\Final\Electric Rate Adjustments.doc Electric Rate Adjustments August 14, 2007 Page 2 The BP A will announce in September whether a wholesale power rate increase will be made during their next fiscal year (October 2007 through September 2008). Preliminary indications are that a wholesale power rate increase may not be needed, which was assumed in the rate study update. There are no BP A wholesale transmission rate increases anticipated. In addition, no reductions in wholesale power costs were assumed in anticipation of favorable settlement of the ongoing residential exchange program litigation. The City Council set a public hearing date on August 21, 2007 for a presentation ofthe study and to allow public input to the process after the presentation. The public hearing will be continued to September 4, 2007 at which time the public hearing will be closed. City Council will be requested to consider adoption of a new rate ordinance at the Sept. 4, 2007 City Council meeting, once final BP A wholesale power rates are known. Staff recommends the Utility Advisory Committee forward a favorable recommendation to City Council to proceed with a public hearing on the rate study and the proposed rate adjustments. !-: City of Port Angeles Electric Rate Study Update Utility Advisory Committee . August 14, 2007 Larry Dunbar Power Resources Manager Looking Back · Rate study completed in 2005 · Prior rate adjustments: - 2002 -- 00/0 .,...2003 - 5.7% + - 2004 - 00,10 - 2005 - 6.5% - 2006 - 00/0 2 Rate Adjustment Needs · Residential revenue shortfall · Rebuilding reserves · Additional purchased power costs · New lease expenses · Personnel expense increases · Inflation since October 2005 3 1 Rate Study Update · 2008 Revenues - Rate revenues based on 2007 revised budget . ..;, Growth residential 1 %, commercial 1 %, industrial (3%) - Pole attachment fees - Similar fees, hookup charges, miscellaneous revenues 4 ." ..' '. .' Rate Study 'Update · 2008 Operation & M,aintenance '- Utilized 2007 revised budget to develop baseline expenditures - Escalation factors range from 3% to 17% per year - $436K Contribution to rate mitigation reserve · 2008 Purchased Power - Additional distribution system costs - Discontinued Load Based Cost Recovery Clause True-Up (LBCRAC) 5 2 Rate Study Update · 2008 Debt Service - Existing bonds · 2008 Taxes & Transfers - State & City Utility Taxes - Departmental Transfers . Conservation . Return on Investment · CFP & NICE · WUGA Debt Service . Economic Development 6 ..... . ... - -. ... -: . .-.. ..-. CFP Projects ($000'5) . Capital Facilities Plan 2007 2008 Charges & Services - 5 Acquisition of Airport PUD Electric Service toO - Feeder Tie Highway 101, Cherry to Pine - - Downtown Upgrades 60 - Light Operations Building Modifications 250 - Upgrade College Substation - 110 Remote Monitoring - 70 Replace Cable @ Canyon EdGe - 50 Total 410 235 Capital Facilities Plan Fundina Sources 2007 2008 CFP Cash 40 . CashlRate Financed Contribution 370 235 Total 410 235 7 3 Revenue Requirement ($000'5) Without Rate Adjustments en w ::l Z w > w 0:: Desaiption 2007 2008 Distribution System 16,564 16.728 Industrial Transmission 12.694 12,839 Pennit & Construction Related 505 455 Miscellaneous 276 263 Conbibution from Ught Operations Sale 250 - FEMA 173 - Pole Rental 56 59 Total Revenues 30.518 30.344 O&M 4,875 5.667 Purchased Power 20.563 20.867 Taxes 2.887 2,907 Transfer Payments 959 800 Debt Service 427 425 Materials. Job Cost 650 570 Total Expenses 30.361 31,236 Revenues Less Exaenses 157 (892 en w en z w a. x w 8 Ending Fund Balances ($OOO's) Without Rate Adjustments Type of Reserve 2007 2008 Target Operating 1,632 1,176 2,000 Rate Stabilization 500 500 1,500 CFP - - - Total Reserves 2,132 1,676 3,500 9 4 Revenue Requirement ($000'5) With 5.90/0 Rate Adjustment en w :J Z W > W 0:: Descliotion 2007 2008 Distribution System 16.564 17.717 Industrial Transmission 12,694 12.839 Permit & Construction Related 505 455 Miscellaneous 276 263 Contribution from Light Operations Sale 250 . FEMA 173 . Pole Rental 56 59 Total Revenues 30.518 31.333 O&M 4.875 5.667 Purchased Power 20.563 20.867 Taxes 2.887 3.004 Transfer Payments 959 800 Debt Service 427 425 Materials. Job Cost 650 570 Total EXDenses 30.361 31.333 RiveritlisiL:essiEXDenses};~I;Jg~~;~~ ';:;;i~;;t57i ~~~(Ol en w en z w a. x w 10 .. Ending Fund Balances ($000'5) With 5.90ib Rate Adjustment Type of Reserve 2007 2008 Target Operating 1,632 1,632 2,000 Rate Stabilization 500 936 1,500 CFP - - - Total Reserves 2,132 2,568 3,500 11 5 Rate Adjustment Recommendations · Current rates are not sufficient after October 2007 · Reserves are not sufficient to fund 2008 deficiency · Rate adjustments should be across-the- board (except Industrial Transmission) · Current rate structures should be maintained · 5.9% overall adjustment recommended beginning 10/1/2007 12 Rate Adjustment Recommendations "'- Residential · No change to monthly base charge · Proposed $0.0039 per kWh energy consumption charge increase - new rate $0.05840 · $5.85 estimated average monthly increase (assumes 1,500 kWh) - General Service · No change to monthly base charge · Proposed $0.0039 per kWh energy consumption charge increase - new rate $0.05870 · $9.20 estimated average monthly increase (assumes 2,350 kWh) 13 6 Rate Adjustment Recommendations - General Service Demand · No change to monthly base & demand charges · Proposed $0.0026 per kWh energy consumption charge increase -- new rate $0.03880 .. $65.00 estimated average monthly increase (assumes 25,000 kWh) ..;..:. Primary · No change to monthly base & demand charges · Proposed $0.0026 (Winter) $0.0016 (Summer) per kWh energy consumption charge lhcre.ase · $1,575.00 estimated average monthly increase (assumes 750,000 kWh) 14 .. Rate Adjustment Recommendations - Yard/Area Lighting Lighting City Owned Current Proposed Increase 100 Watt $ 8.10 $ 8.70 $ 0.60 150 Watt 11.80 12.65 0.85 200 Watt 13.10 14.05 0.95 Above 200 Watt 15.20 16.30 1.10 lighting Customer Owned Current Proposed Increase 100 Watt 6.10 6.55 0.45 150 Watt 6.75 7.25 0.50 200 Watt 7.45 8.00 0.55 Above 200 Watt 10.45 11.20 0.75 15 7 Proposed Ordinance Amendments .. Rate Schedules · HOlJsekeepingAmendments - Billing demand change$ .,.. MuniCipal emergency management system ~ Washington Administrative Code reference 16 Actual Cost & CPI Comparison City of Port Angeles Residential Electric Rates $1,400 $1,200 $1,000 - II> a $800 u 10 ::l C $600 C c( $400 $200 $1,248 $0 ~~~~~~~~~~~~~~&~~~~~~~ "OJ "OJ "OJ "OJ ,,OJ ,,OJ ,,'ll- "q? ,,OJ ,,'ll- ,,OJ ,,OJ ,,OJ "q? <J5l 'j,1;J" ~- <J5l <J5l <J5l 'j,&' 'j,1;J" -Averge Ailnu,;1 Customer Cost Based on Rates In Effect -Annual Cost Based on CPI Adjustment 17 8 Electric Monthly Bill Comparison - City of Port Angeles - Present $92.75 City of Port Angeles - , Proposed [:'P?s.~;y~~..:t;;!t,,~~~~":~;~&':~1i!''t'?.i$-:~~~Yfl~{.t4z4:!~;:&.1$t: $98.60 Mason County pun #3 $99.50 Clallam County pun #1 $102.49 Puget Sound Energy 1$136.77 $108.85 , Grays Harbor pun Snohomish CountyPUD 1$117.85 Tacoma Public UtilitieS $98.59 Seattie City Ught $109.23 Average Charges .2'~:t;2t:-t0:;:;:~;;;$:0!f;::M:;S'.t.>;s7-f,'?:i:.};"1a%'~~,*"'.I?-{~~~~&W'~?:;flf~W $107.18 . $0 $20 $40 $60 $80 $100 $120 $140 $160 18 . ,,' . , " Concluding Comments · 5.90/0 rate adjustment needed · Maintain current rate structures · Subject to no SPA wholesale power rate adjustment · Housekeeping amendments · Perform annual review in 2008 19 9 ~ORTAN ELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo Date: August 14,2007 To: Utility Advisory Committee From: Larry Dunbar, Power Resources Manager Subject: CFL Markdown Promotion Agreement Revision Summary: The City was offered a revision to the "Change a Light, Change the World" specialty compact fluorescent lamp markdown promotion agreement by Portland Energy Conservation, Inc. All City expenses under the agreement are eligible for reimbursement under the Bonneville Power Administration's Conservation Rate Credit program. Recommendation: Forward a favorable recommendation to City Council to authorize the Public Works and Utilities Director to sign the revision to the CFL Markdown Promotion Agreement. Background/Analysis: The City participated in the 2007 "Change a Light, Change the World" Compact Fluorescent Lamp (CFL) Markdown Promotion. City utility customers purchased an estimated 3,400 CFLs during the 2007 "Change a Light, Change the World" promotion that ended June 30, 2007. Portland Energy Conservation, Inc. recently offered the City a revision to the "Change a Light, Change the World" Markdown Promotion Agreement. The proposed revision offers the City participation in a 2007-2008 "Change a Light, Change the World" specialty CFL markdown promotion at local retail outlets. The term ofthe proposed agreement revision is eight months and is anticipated to result in City payment of up to $10,000 to Portland Energy Conservation, Inc. City payments to Portland Energy Conservation, Inc. will be used to markdown prices at local retailers, which will ultimately reduce the cost of specialty compact fluorescent lamps purchased by Port Angeles electric utility customers. All City expenses under the proposed agreement revision are eligible for reimbursement under the Bonnevilie Power Administration's Conservation Rate Credit program. Staff requests that the Utility Advisory Committee forward a favorable recommendation to City Council to authorize the Public Works and Utilities Director to sign the Compact Fluorescent Lamp Markdown Promotion Agreement Revision. N:\UAC\Final\Change A Light Program.doc Date: To: From: Subject: FORTAN ELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo August 14, 2007 Utility Advisory Committee Larry Dunbar, Power Resources Manager Energy Conservation Loans Summary: At the June meeting, the Utility Advisory Committee supported a staff recommendation to offer energy conservation loans. Staff drafted an ordinance amendment to establish a separate conservation fund including loan terms and conditions. Recommendation: Forward a favorable recommendation to City Council to adopt the proposed ordinance establishing a conservation fund including loan terms and conditions. Background/Analysis: On June 12,2007, staff provided a report to the Utility Advisory Committee about participation in the Bonneville Power Administration's new Conservation Rate Credit program. At that meeting the Utility Advisory Committee supported a staff recommendation to offer our industrial, primary, and largest commercial customers loans to fully fund approved energy conservation projects. The City has offered two other loan programs since the 1980's. Compared to rebates, loans provide a more sustainable approach to financing energy conservation programs. Funding for energy conservation loans is available through the electric utility's conservation fund, which has accumulated a surplus over the years. The current conservation fund would be converted to a separate fund as part of the ordinance amendment. Energy conservation loans would be based on the difference between total project costs less the conservation rate credit. Loans would be billed through an existing HTE loan module. The proposed ordinance amendment would establish a separate conservation fund and allow its surplus to be used for energy conservation loans. A loan fee is proposed which is based on an interest rate of3% and servicing fees to ensure that the value of the fund will be maintained taking into account inflation. The existing fees for credit checks and notary public and the actual cost of title reports and deed processing will apply. N:\UAC\Final\Conservation Loans.doc Date: To: From: Subject: FORTAN ELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo August 14,2007 Utility Advisory Committee Stephen Sperr, P.E., Deputy Director of Public Works/City Engineer Transportation Benefit Districts Summary: On May 4, 2007 the Governor signed ESHB 1858 modifying the current authority for Transportation Benefit Districts. The TBD is another tool in the toolbox for communities to consider when funding transportation/street projects. Recommendation: For Discussion Only. Background/Analysis: Attached is a memo developed by the City Attorney discussing the recent signing ofESHB 1858 modifying the current authority for Transportation Benefit Districts. The most notable change is the ability for cities to impose a vehicle registration fee of up to $20 per vehicle. There are specific steps to follow including waiting times before it may be implemented. The topic of funding street improvements through a Street Utility was previously discussed with the UAC in August 2003. Staffwas directed to return to the UAC when there was a change to legislation. It is recommended that after a short staff presentation that the UAC conduct a general discussion on the merits of a Transportation Benefit District and provide direction, if any, to staff. N:\UAC\Final\Transportation Benefit Districts.doc LEGAL DEPARTMENT William E. Bloor City Attorney [453]] Dennis Dickson Sr. Assistant City Attorney [4532] Rick Petersen Assistant Ci1y Attorney [4562] Candace Kathol Legal Assistant [4536] Diana Lusby Legal Administrative Assistant [4530] Jeanie DeFrang Legal Administrative Assistant [4530] Randi Felton Legal Records Specialist [4576] ~~ .5>~ / ,----.-.........-......-.....--... }?ORTANGEL.ES WAS H I N G TON, U. S. A. DATE: May 11,2007 To: Mark E. Madsen, City Manager Glenn A. Cutler, Director of Public Works & Utilities FROM: William. E. Bloor, City Attorney RE: Transportation Benefit Districts The ability to create transportation benefit districts (TBD) has been in existence since 1987. However, due to limitations imposed on districts themselves and on funding, they were rarely used. In fact, prior to 2005 only 2 had been formed in the state. On May 4th, the Governor signed ESHB 1858 which becomes effective on July 22. The bill makes several modifications to the current authority. Notably, the changes allow cities to impose a vehicle registration fee of up to $20 per vehicle. It is expected that with these changes in the law, TBDs will be widely adopted by , cities now to assist in funding street, road, and transportation projects. Background: Cities may establish transportation benefit districts to fund capital improvement of city streets and roads. The improvements must be consistent with (1) local and regional transportation plans, (2) required for economic development, and (3) partially funded by local governments or private sources. Creation of the district requires a public hearing and a finding of public interest for formation. The procedure to create a TBD is simple. The City Council must conduct a hearing, and of course give prior notice of the hearing. At the conclusion of the hearing, the City Council may establish a TBD simply by adopting an ordinance. Transportation benefit districts are quasi-municipal co:rporatibns with independent taxing authority, including authority to impose taxes and impact fees for construction purposes. The transportation benefit district must include the entire area within each participating jurisdiction. That is, if a transportation benefit district is formed here, it must include all territory within the city limits. The governing body ofthe TBD is the local legislative authority. In our case the City Council would be the governing authority of the TBD. TBDs may fund projects that are of state-wide or r"egional significance contained in a state or regional transportation plan. A TED may spend up to 40% of its revenue on local street improvements. May 11,2007 Re: Transportation Benefit Districts Page 2 2007 Legislation: The legislation adopted this year specifically grants to TBDs, once formed, the ability to impose a vehicle registration fee up to $20 per vehicle. That may be imposed without a vote of the people. With a vote of the people, the fee may be increased to $100 per vehicle. The Department of Licensing administers and collects the fees. In the alternative, the TBD may impose an impact fee on the construction or reconstruction of commercial or industrial buildings, or the development or subdivision ofland for commercial purposes. Gfthe two alternatives, most commentators believe that the vehicle registration fee is most likely to be used. There are limitations. Some of the limitations do not apply to Port Angeles but others do. First, we are not allowed to impose any fees or charges within 180 days of the effective date of this Act, July 22, tUlless the County by resolution declares that it will not impose those fees. In addition to the $20 vehicle registration fee, which can be imposed without a vote of the people, TBDs may also obtain funding through general obligation bonds, LIDs, development fees, and voter approved levies. The County has the first right to impose the fees authorized by the 2007 legislation. If so, then the money collected by the County is distributed in accordance with an interlocal agreement that must be negotiated between the county and cities within the county, The interlocal agreement is effective when it is approved by the county, and 60% of the cities representing 75% of the population of the cities within the county. The weakness in this is that there is no default position for distribution of the money in the event entities are unable to negotiate an interlocal agreement. In that case, the legislation provides that the TBD may still collect up to the $20 fee, but there is no aut9matic distribution to cities. What proiects are eligible for funding: First, the ordinance that establishes a TBD must specify the functions to be performed by that district, and they must be in accordance with the general requirements of TBDs. In general, this means that the money must be used for a "transportation improvement." The statute defines that term to mean a project which is identified in both alocal transportation plan and a regional transportation plan. If that condition is met, however, the scope is fairly broad and may include investment iI+ new or existing art~rials of regional significance, high capacity transportation, and other projects of regional or state-wide significance including transportation demand management. Projects may also include the operation, preservation, and maintenance of those facilities. . c May 11, 2007 Re: Transportation Benefit Districts Page 3 The TBD, as originally contemplated, was designed to carry out a single project and some elements of that remain. One section of the statute requires that the district terminate day-to-day operations within 30 days after completion of the "construction of the transportation improvement or series of improvements authorized by a district." Another section pr.ovides that ''the ordinance establishing a district shall specify the functions and transportation improvements ... to be exercised or funded ... and that the functions or transportation improvements proposed to be provided or funded by the district may not be expanded beyond those specified in the notice of hearing unless additional notices are made ...." These provisions do place constraints on TBDs. However, there remains enough flexibility to give each TBD a wide scope, and there is nothing to prohibit a city from creating a series of TBDs over time. This memo is intended simply to layout the basic criteria and some of the . limitations relating to TBDs. I expect that some of the information contained herein could be used as the basis later for a presentation to the UAC and/or to the City Council. In addition, the information in this memo may spark other questions. Irithatevent I would be happy to discuss this with you or provide additional information. . !!J k" /. ( / I~~) William E. Bloor, City Attorney WEB:dl G:ILEGALIMEMOS.2007IMadsenCUder.TransportaUoo Beocfil DistricL051 007.wpd