Loading...
HomeMy WebLinkAboutAgenda Packet 10/14/2008 Utility Advisory Committee Special Meeting Public Works Conference Room Port Angeles, W A 98362 October 14, 2008 1 :00 P.M. AGENDA I. Call To Order II. Roll Call III. Approval Of Minutes For September 30, 2008 IV. Late Items V. Discussion Items A. Bonneville Power Administration Power Sales Agreement B. Medic 1 Utility Cost Of Service Update C. Solid Waste Utility Rates D. Request For Proposals - Network Needs Assessment And Wireless Technology Plan VI. Next Meeting Date: November 11, 1008 (Holiday - Date To Be Determined) VII. Adjournment UTILITY ADVISORY COMMITTEE , IO~ GUEST SIGN UP SHEET PRINT NAME ORGANIZATION N: \PWKS \LIGHT\ CONS \ CATE \ SIGNUP. wpd Utility Advisory Committee Special Meeting Public Works Conference Room Port Angeles, W A 98362 September 30, 2008 11 :00 a.m. <>~ ~~ L Call To Order Chairman Reed called the meeting to order at 11 :00 a.m. IL Roll Call Members Present: Chairman Reed, Betsy Wharton, Dan Di Guilio, Karen Rogers (11: 1 0), Orville Campbell Members Absent: None Staff Present: Jerry Osterman, Bill Bloor, Yvonne Ziomkowski, Mike Puntenney, Steve Sperr, Larry Dunbar, Phil Lusk, Tom McCabe, Cate Rinehart Others Present: None IlL Approval of Minutes: Chairman Reed asked if there were any corrections to the minutes of September 30, 2008. Orville Campbell moved to approve the minutes. Councilman Di Guilio seconded the motion, which carried unanimously. IV Late Items None J;: Discussion Items: A. Solid Waste Utility Cost Of Service Study Larry Dunbar, Deputy Director of Power Systems, distributed a handout. Angie Sanchez, FCS Group, gave a presentation by phone based upon that information. The discussion included an overview ofthe rate study process, transfer station operations, closure and post-closure reserves, collection operations, and the time frame for public hearings. There was a lengthy discussion. Councilmember Wharton moved to recommend City Council proceed with a public hearing on the cost of service studies for the Solid Waste Collection and Transfer Station Utilities. Councilmember Rogers seconded the motion, which carried unanimously. UTILITY ADVISORY COMMITTEE September 30, 2008 B. Electric Utility Rates And Fees Larry Dunbar, Deputy Director of Power Systems, distributed a handout, reviewed the August 12th presentation, and noted the changes that had occurred since that meeting. Staff determined that with new information received from Bonneville current rates are sufficient through 2009 and no rate adjustment was needed. Staff confirmed that the previously discussed changed to electrical works permit fees and ordinance housekeeping amendments are recommended. There was a lengthy discussion. Councilman Di Guilio moved to recommend City Council proceed with the fee adjustments and ordinance housekeeping amendments for the Electric Utility. Councilmember Rogers seconded the motion, which carried unanimously. VI. Next Meeting Date: October 14, 2008 - Special Meeting (1 :00 p.m. to 5 p.m.) VII. Adjournment: The meeting was adjourned at 1: 10 p.m. Chairman Reed Cate Rinehart, Admin Spec II N :\PWKS\L1GHTlCONS\CA TE\sept30meet. wpd Date: To: From: Subject: n,o/ 'Rr iT' " A IN'' eG" iE' ;iLl E' is'' i 1:::: " ..~, rin., i )'!.' i.' 'r) WAS H I N G TON, U. S. A. Utility Advisory Committee Memo October 14,2008 Utility Advisory Committee Larry Dunbar, Deputy Director of Power Systems Bonneville Power Administration Power Sales Agreement Summary: Ms. Shannon Greene, BP A Account Executive, and City staff will present an overview of the new Power Sales Agreement and Tiered Rates Methodology to the Utility Advisory Committee. Recommendation: For information only, no action requested. Background/Analysis: The City's Electric Utility currently has a Power Sales Agreement and a Transmission Service Agreement with the Bonneville Power Administration (BP A). The Power Sales Agreement is in effect through September 2011. The Transmission Service Agreement is in effect through September 30,2036. A new Power Sales Agreement has been offered to the City by the BP A, which must be accepted by the City no later than December 1, 2008. The new Power Sales Agreement would commence on October 1,2011 and conclude on September 30, 2028. The primary change in the new Power Sales Agreement is a shift from average embedded rates to a complex Tiered Rates Methodology (TRM). Power purchases under the new tier 1 rate are anticipated to be similar to current costs. The new tier 2 rate will reflect the marginal cost of new power resources and is anticipated to be significantly higher than the tier 1 rate. The preliminary tier 2 annual cost estimate ranges from $530,000 to $680,000 beginning October 1,2011, and would continue to climb in future years based on the City's load growth. The City's future decisions on tier 2 power resources are anticipated to be the largest issue the Electric Utility will face over the next twenty years. Ms. Shannon Greene, BPA Account Executive, and City staff will present an overview of the new Power Sales Agreement and TRM to the Utility Advisory Committee. Depending on the committee's interest in the TRM, a special meeting may need to be scheduled before next month's meeting. Staff will request a recommendation from the Utility Advisory Committee on the new Power Sales Agreement at the November meeting, which would be considered by City Council at their November 18, 2008 meeting. BP A produced the attached factsheet and background information that committee members are encouraged to read before the meeting. Attachment: Factsheet, A Roadmap To The Provisions Of Regional Dialogue Contracts And Tiered Rates N:\UAC\DepDir\BPA Power Sales Agreement.doc BON N E V L L E POW E R fac ADM N S T RAT o N August 2008 A roadmap to the provisions of Regional Dialogue contracts and tiered rates BPA's current power sales contracts expire Sept. 30, 2011. After years of collaborative discussions with customers and other parties and much hard work on all sides, BPA is offering new contracts to its customers. 'rhese contracts will work in tandem with a new Tiered Rate Methodology BPA has proposed ft)r the Priority Firm Power (PF) rate. These Regional Dialogue contracts and the tiered PF rate form the foundation of the business relationship BPA is offering for the next 20 years. This fact sheet summarizes the provisions of the new Regional Dialogue power contracts and Tiered Rate Methodology. As a summary, it provides a guide for basic understanding of the ne\v contracts and Tiered Rate Methodology and should not be relied on as an authoritative interpretation of those documents. New long-term contracts The new power sales contracts will cover fiscal years 2012-2028. Customers will have until Dec. 1,2008, to consider and sign their new contracts. BPA is offering contracts ahead of when the current contracts expire so that BPA and its customers will know well in advance who has the responsibility to develop new resources to mect load growth starting in FY 2012. Having this certainty in advancc will help ensure that new resources arc in place when tbey are needed. Also, by signing these contracts, customcrs will secure the benefits of a defined amount of low cost- bascd power from the federal system for another 20 years. Another reason to sign the new contracts this year is that BPA has spent considerable time helping the current administration in Washington, D.C., understand thc nced for new long-teml contracts. If the contracts are not signed by the Dec. 1 deadlinc, the region faccs thc risk of delay as a ncw administration is brought up to speed. Therc also is the possibility of significant and unpredictable changes to thc contracts or rates. In many important rcspects, the new power sales contracts will be similar to the CUlTcnt Subscription Key dates Contracts: Aug. 18, 2008 - Final Regional Dialogue Load Following and Block contract templates provided to customers Aug. 29, 2008 - Final Regional Dialogue Slice contract template provided to customers Dec. 1, 2008 - Deadline for signing Regional Dialogue contracts Tiered Rate Methoc:lplogy: Oct. 6, 2008 - Final TRM Record of Decision andFinal TRM filedwith FERC V' contracts. For example, customers will have a choice of power products much like in the current contracts m Load Following, Block and Slice/Block. In general, the new Load FoIlowing product is similar to the Load Following products sold under the current Subscription contracts where BPA is responsible for serving the customer's entire load, minus what is served by the customer's own resources. However, the new Regional Dialogue Load FoIlowing product gives customers more opportunities for applying new non-federal resources to serve their own load over time than was allowed under the Subscription contracts. The new Block products also are similar to those provided under the Subscription contracts. Each customer is responsible for serving its own load except that which is served by its defined BPA Block purchase amounts. The Flat Block product (which provides equal amounts in all hours of the year) is the same as the product under the Subscription contracts. Under the Shaped Block product, the allowable shape for the Tier 1 portion (see the next section for an explanation of Tier 1 and Tier 2) is based on the shape of the customer's monthly net requirement. The portion of Block served at Tier 2 rates is flat across Renewable Energy Credits Renewable Energy Gredits (REGs) come with the power purchased under the High Water Mark contracts, and there is no extra charge for them. Each utility's power purchases at Tier 1 rates will Include REGs in an amount proportional to the amount of power purchased compared with the total amount of Tier 1 system resources. Power purchased at Tier 2 rates may include REGs, depending on the resource(s) whose costs are the basis for the Tier 2 rate(s). If customers wish to have REGs included with their Tier 2 purchases, BPA will seek to acquire Tier 2 resources that provide REGs. the year. As is the case with the Subscription contracts, Shaping Capacity can be added to the Block product. The Slice portion of the Slice/Block product is generally similar to the Slice product under the Subscription contracts. However, the new Slice product is required to come initially with an amount of Block product. The Block portion of the Slice/ Block product can be flat or shaped. "High Water Marks" and tiered rates By far the biggest change the new contracts will bring is that each customer \vill have a contract-defined right to purchase an aUlOunt of power at "Tier 1" rates, which represents the cost of BPA's existing system. That amount of power is called the High Water Mark, or HWM. Utilities will still have the right to have BPA meet their net requirement load (the utility's load minus its own resources), but BPA will meet net requirement load above the HWM at "Tier 2" rates. Tier 2 rates will be set to cover the full cost of the additional power BPA buys to meet those additional loads. Giving each customer anHWM and tiering the Priority Finn Power rate has significant benefits to customers and to the region as a whole: tt HWMs define the portion ofload that will be served at Tier 1 rates; this will be the bulk of most customers' load for the foreseeable future. Limiting the resources to the existing federal system and a minimum amount of augmentation purchases whose costs will be recovered through Tier 1 rates keeps those rates lower and more stable. Many utilities want a choice between buying from BPA or developing their own resources to meet load growth. BPA's current practice of meeting all net requirements at one melded rate makes choosing to develop non-BPA resources uneconomical because the melded rate blends the costs of existing federal resources with market 2 purchases, resulting in lower rates than new resource costs. HWMs and tiered rates give utilities a real choice about how to meet their load growth. The tiered rate design will give customers the full economic value of their decisions to conserve, manage their load shapes and add new resources in beneficial shapes without imposing costs on other customers. BPA's continued funding for fish recovery and other public purposes will dearly be a Tier 1 obligation and will provide stable funding for these purposes. There are several types of High Water Marks that BPA will calculate at different times and for different purposes. Most important is the Contract HWM or CHWM. BPA will calculate Contract HWMs in FY 2011 based on each customer's FY 2010 measured load, adjusted for unusual occurrences in that year, such as abnormal weather, minus customers' existing resource amounts in FY 20 I 0 as those resource amounts were defined on Sept. 30,2006 (with some limited exceptions). BPA also will adjust each utility's HWM to provide credit for conservation savings achieved by that utility. (The conservation adjustment redistributes the Contract HWM amounts among customers but does not change the total Contract H\VM amount for all utilities as a group.) The total HWMs will be limited to the expected FY 2012-2013 firm output of the federal generation system, plus up to 300 aMW of "augmentation" purchases. Current forecasts suggest that most customers' HWMs will be slightly higher than needed to cover the difference between their FY 2010 loads and their FY 2010 resources. But this is not certain, since there is wlcertainty about both load growth and the output of the federal system. BPA will calculate the Rate Period High Water Mark (or RHWM) for each customer prior to each rate case. .~.. The RHWM is the same as the CHWM except for some adjustments for changes in the output of the existing BPA generation system. Because the output ofBPA resources does not stay constant from year to year, BPA will calculate the RHWM before each rate case to reflect the latest forecast of firm resource output. To calculate RHWM, BPA will divide each utility's Contract HWM by the sum of all customers' Contract HWMs, and then multiply by the forecast output of BPA's resources averaged for that rate period. The Rate Period IIWM defines the maximum planned amount of power a customer is eligible to purchase at Tier 1 rates for a particular rate period. In FY 2009, BPA will calculate the Transition Period High Water Mark. It has a limited purpose, which is to define how much power (if any) each customer will need to either buy from BPA at the Tier 2 rate or acquire from other sources for at least FY 2012-2013. History leading up to contract offers The Regional Dialogue process began in April 2002 when a group of BPA's customers submitted a "joint customer proposal" to BPA that addressed near- and long-term contract and rate issues. Since then, BPA and customers and other interested parties have worked to resolve the numerous issues necessary to put new 20-year contracts into place. BPA laid out its policy guidance on these issues in its Long-Term Regional Dialogue Final Policy in July 2007. Intensive collaborative regional effort continued, and in October 2007 BPA released the draft of the master contract template for the first time. After more months of dialogue, on April 7, 2008, BPA again released the contract templates to the region for review and comment. More drafts and detailed negotiations ensued, leading to the final templates in August 2008. 3 The RHWM, not the Transition Period HWM, will define actual rights to buy power at the Tier 1 rate for those transitional years. But since the RI-IWM wiII not be determined until 2011, the Transition Period HWM is needed so that responsibilities for meeting above-HWM load can be defined far enough in advance to allow BPA and utilities to line up the necessary power sources. That's a lot of High Water Marks. Customers will have a chance to review and comment on BPA's calculations of CHWMs and RHWMs before they become final. It bears repeating: the CHWM and the RHWM do not limit the amount of power customers can buy from BPA. The HWMs set maximum planned amounts of power customers can purchase at Tier 1 rates. Under the new contracts, as now, customers wiII continue to have the right to buy enough power to meet their full net requirements from BPA. The change is that some of the net requirement purchase will be at Tier 1 rates, and some will be at Tier 2 rates. The 20-year Tiered Rate Methodology Rates under these new contracts will be very different from current and previous rates. Our customers said, and BPA agreed, that BPA should establish a long- term rate method that will provide certainty about how those rates will be constmcted during the term of the contracts. The Tiered Rate Methodology (TRM) provides this certainty. After much collaborative work with customers, BPA has proposed a long-tenn tiered PF rate methodology in a rate case that is scheduled to conclude in the fall of 2008, in time to be useful for the decision to sign the new contracts. Although the Tiered Rate Methodology will not be final for at least a few months and sales under the new contracts will not commence until FY 2012, the following summary is written as though this new business relationship is a reality, simply for ease of presentation. UncleI' the tiered PF rate, rates will be structured differently but will remain cost-based. In simple terms, the Tier 1 rate will be based on the cost of the existing system, although Tier 1 costs will include the cost of a relatively small amount of power purchased by BPA as "augmentation" of the existing federal system. The Tier 1 cost pools cover all of BPA's power costs except costs of resources added to meet load beyond what existing resources plus the limited allowable augmentation can meet. As described belm\!, portions of the rate arc based on forecast market prices, but in total the rate will recover only the costs of the existing system and the small amount of augmentation. Currently, most of each non-Slice customer's bill is made up of heavy load hour and light load hour energy charges per kilowatt-hour. Afler FY 2011, there will be many fewer per-kilowatt-hour charges. Instead, most of the bill will be based on percentages of "pools" of Tier 1 costs - not per-kilowatt-hour charges. The percentage a customer pays of each pool is called the TOCA ("Tier I Cost AUocator"). Using a TOCA makes the calculation of charges for all customcrs -- Slice and Non-Slice - similar and reduces the potential for any appearance of inequity between Slice and non-Slice customers. By far the biggest pool of Tier 1 costs, which covers the bulk of BP1\'s power costs, is called the "composite" pool. There are some smaller cost pools - the Slice pool for costs that apply only to the Slice product and the non-Slice pool for costs that apply only to the Block or Load FoUowing products. The demand charge under the Tiered Rate Methodology is velY different from the current demand charge. The CUlTent demand charge is a relatively low charge that applies to all demand purchased. Under tiered rates, the demand charge will be much higher, because it is based on the cost of new capacity. But it will apply to only a small percentage of total demand purchased, at least in the initial years of the new contracts, depending on peak load growth. Another change in the demand charge is that it will be based on the utility's own peak load instead of being 4 measured at the time of BPA's peak load. This change gives utilities more ability to predict and control their peak loads. These changes will allow utilities that find ways to manage their peaks to reap the reward of doing so, while keeping the overall rate cost-based and avoiding cost shifts to other customers. There is also a Load Shaping charge. This charge covers the cost of reshaping the output of the federal system to match the shape of each utility's actual load. The Load Shaping charge applies to Block and Load Following purchases. For some customers this "charge" can actually be a credit, because their load shape is relatively easy to meet. Even though it will not be large for most customers, the Load Shaping charge plays a key role. It lets customers that invest in load management, conservation or new resources in beneficial shapes realize the full benefit of their investment through reductions in their BPA power bill. It does this without departing tl'cml the fundamental principle of cost-based rates. The new long-term contracts and the new Tiered Rate Methodology work in tandem. Neither works without the other. The Tiered Rate Methodology defines a method for setting the tiered PF rate but not the levels of the Tier I and Tier 2 rates. The rate levels will be set in future rate cases that will oceur every two years. The first rate. case that will set rates under the Tiered Rate Methodology will set the rates for the first two years of the new contracts,FY 2012-2013. Choices for meeting load growth Customers have several choices for meeting load above their High Water Marks, which generally will be load resulting from load growth but may also be due to reductions in output from the existing federal system. They have until November 2009 to make this choice tor at least the Transition Period (FY 2012- 2014). Customers can meet all or paJi of their load growth with purehases fl'om another supplier or develop a new power resource, either on their own or in partnership with other utilities. BPA can provide the services needed to shape the output of such resources to load, or the customer can purchase those services from other suppliers. For Load Following customers, these non-BPA resources can be added in a variety of shapes. As necessary, BPA will reshape its deliveries at the Tier I rate to meet the customer's remaining load. Or the customer can ask BPA to meet aU or part of its load growth. If a customer wants BPA to do this, there will be periodic deadlines to notify BPA so it can acquire the necessary power by the time it is needed. BPA will avoid passing to Tier I rates the costs and.. risks of meeting above-HWM load by keeping those costs and risks withinTier 2 to the maximum extent possible. Power will be priced as a flat block in all Tiel: 2 rate alternatives. All load fluctuations and peak demands above this flat block will be covered in the Tier 1 service with the load shaping charge accounting for the differences in the cost to serve different shapes of load growth. Customers will have several choices to make by November 2009: 5 The customer may want BPA to serve its load growth during just FY 2012-2014 (the transition period). If a customer makes this choice, the customer wiII be charged the Tier 2 Short-Term rate, and it will have another chance inFY 2011 to either continue buying from BPA or buy from another supplier from FY 2015 to 2019. For Load Following customers, the customer may want BPA to meet its load beyond what is available at Tier 1 rates for the duration of the new contracts. If a customer chooses BPA, it will buy such power at the Tier 2 Load Growth rate. BPA wiII provide power at Tier 2 rates for all customers who sign up to purchase at the Load Growth rate. l!I BPA expects to offer a "vintaged" Tier 2 rate or rates in 2009. If a Cllstomer chooses a vintage Tier 2 rate, it wiII sign up to pay the actual costs of a patticular resource or group of resources. If a utility is a Load Following customer and commits to meet load beyond that served at the Tier 1 rates at the Tier 2 load growth rate, it can join the Shared Rate Plan. The Shared Rate Plan adds all the participants' Tier 2 charges and Tier 1 customer charges and spreads the total over all the participants so that all participants pay the same cost per kilowatt-hour. Participants will pay their own individual demand charges. Initial sales for the pool of purchasers in the Shared Rate Plan are limited to 700 aMW because selling too much at these melded rates would undermine the regional benefits of tiering rates. Other customers wiII see no cost shift due to BPA's offer of the Shared Rate Plan. Low Density Discount The low density discount (LDD) wiII be available, but not for above-High Water Mark purchases. The LDD will be based on total retail load (minus resources) so, if a utility has load growth, it will receive an LDD equivalent to what it would have received under the cUlTent melded rates. The LDD will be applied to all Tier 1 charges - the customer charges, the load shaping charge and the demand charge. Irrigation Rate Mitigation Loads eligible for irrigation rate mitigation (IRM) will be shown in each customer's new power sales contract and \viIl not increase during the term of the contract. IRM will be a percentage discount on the Tier 1 rates that is determined in each rate case. A true-up process at the end of the irrigation season will ensure that each utility had the full amount of irrigation load stated in its contract. Stability and durability of contracts BPA intends the new business relationship it is offering to be predictable and durable. Both BPA and its customers arc seeking long-term certainty and stability. Some customers will be nlaking long-term financial commitments to new resources and need to know that the underlying deal with BPA carmot change except under specific extraordinary circumstances and through specific processes. Similarly, BPA must meet its customers' net requirements in a reliable and cost-effective way. The Tiered Rate Methodology lays out the rules for making changes in the TRM. The protections laid out in the Tiered Rate Methodology will be secured by the contract, ensuring that changes can be made only under the narrowest of circumstances. Consequences of not signing contracts by Dec. 1 As noted earlier, BPA will be offering contracts soon and would like all customers to sign the new contracts by the Dec. 1 deadline because that would be best for each customer and for the region generally. BPA has worked with customers to resolve concerns in hopes that each customer wiII be comfortable signing. Customers are not required to sign a contract that includes a High Water Mark in order for BPA to meet their net requirement load. BPA expects that customers wiII sign the contracts by Dec. 1. In the unlikely event a customer doesn't, BPA will otfer a different contract before the current Subscription power sales contract expires. BPA has not yet defined 6 what that alternative contract would look like and will not be able to focus on developing that alternative contract this year. cases. BPA does not currently intend to tier the 1P rate, but the TRM does not mle it out. Public residential exchange and billing credits Most customers have said that Tier I rates should not include any costs or risks of any resources that BPA acquires to meet load growth. That is BPA's intent, and the Tiered Rate Methodology includes mles to ensure that the costs of such new resources will be included in the Tier 2 cost pools. Likewise, there is broad agreement that the costs of new non-BPA resources acquired by customers should not appear in the Tier 1 rate. Thus, the new contracts and TRM include provisions to ensure that costs of resources acquired by BPA or customers to meet load growth do not find their way into the Tier 1 rate through public utilities' taking part in the residential exchange or through billing credits. An exception is for resources customers already had in place in 2006, because these resources were in place before the Tiered Rate Methodology was created and because they reduce customers' High Water Marks. OSI service BPA has not yet decided about service to the direct- service industrial customers (D51s). BPA has been exploring various means of providing service benefits to tbe D5Is, including a financial mechanism similar to their current contract, which provides the region with known, capped costs. BPA also is considering actual power deliveries, which would be priced at the Industrial Firm Power (IP) rate, as developed in rate !lONNEVILLI' POWER ADMINISTRATION DOE/BP-3911 . AUGUST 2008 7 Regional Dialogue - Benefits ~ Secure the low cost power of the Federal based system for the ratepayers and consumers of the Pacific Northwest. ~ Twenty-year contracts with a 17- year implementation period. ~ Utilities have a choice of how to meet their future load growth. Slid~~"'" 1 Current Contractual Relationship between Port Angeles and BP A ~ Contractual right to lowest priority fmn rate > Melded rate of dle Federal based system and market purchases. :>- Rates periods have varied during current contract. Slid~ Regional Dialogue Contractual Relationship ~ Load Following Power Sales Agreement > BP A continues to follow Port Angeles' load. .. Take or Pay arrangement for first tier of power and committed second tier power. >- Port Angeles can add resources to meet second tier power. Slid~~' 3 '" Regional Dialogue Contracts Signature Deadline: December 1, 2008 Slid~~' RD Power Product Options ~ Load-Following :> Provides load-following service from BPA for metered load less non-Federal resources applied to load. ~ Block >- Provides an anlOunt of power to meet a customer's planned cmnual net requirement; can be flat or shaped; can be paired with shaping capacity. ~ Slice/Block :> Provides for the combined sale of two distinct power services for service to a preference customer's planned net requirement: the Slice Service and the Block Service. Slide~" 5 Slice/Block Product ~ How does it work? >- The Slice service provides power in the shape of BP A's generation from the Federal system resources over the year. :> Provides finn power on a planned monthly basis (the Block portion) in addition to an cilllOunt of energy based on Federal system energy which can include over- generation, such that this product also includes an advanced sale of surplus energy. >- A customer purchasing Slice will be responsible for following their own hourly load Slide'1~~' Tiered Rate Methodology ~ What is the Tiered Rate Methodology? > The TRM preserves the value of the Federal based system for the consumers of the Northwest. > The TRM establishes a predictable and durable means by which to tier BP A's priority firnl power rate starting in October 2011. Slide:~' 7 i of, Contracts G Standardized contract template for each product offering. o Released fIrst draft for comment in early April. <) September - November 2008 contracts are issued for signing. o December 1, 2008 is the deadline to sign contracts. o There is no alternative contract developed at this time for utilities who do not sign this contract. Slide'1~' .. May 2008 - Forecast above Tier 1 Determination .. October 2008 - Tiered Rate Methodology rate case concludes .. December 1, 2008: Contract signing deadline . Prior to Nov. 2009 - Initial commitment for serving above Tier 1 loads for FY 2012 - 2014 .. Early FY 2011 - Initial Rate Case st.'lrts .. Mid FY 2011 - Contract above Tier 1 calculated ... Mid FY 2011 - Rate Period above Tier 1 calculated ... Late FY 2011 - Initial Rate Case ends .. FY 2012 - Power delivery begins ... Prior to Oct 2011 - Subsequent commitment for serving above Tier 1 for FY 2015 - 2019 Slide'1iV' 9 "' . Power Sales Agreement Tiered Rate Methodology -=:::~.. ~ --.. ~ Preliminary ObseIVations October 14, 2008 Power Sales Agreement ~ Selection of load following service ~ Waiving certain rights + Billing credits + Residential exchange + Average embedded rates ~ Elwha River Ecosystem and Fisheries Restoration Act ~ Morse creek operation? .. WP AG & PPC representation ~ December 1, 2008 acceptance deadline .' .. Tier 2 ~ TRM & rates not finalized ~ BP A rates higher than Tier 1 ~ Anticipated take/don't take but pay ..;. Significant notices & commitments ~ Other tier 2 service options .... Operating reserve needs further increase ~ New capital & operating risks likely .... Conservation rate signal? ~ Economic development Tier 2 - Continued ~ Planning & UAC workshop needed .Conservation potential assessment . Local power resource options . Energy Northwest & other power resource options . Renewable resource portfolio options . BP A short teml, load growth, vintage product options . Risk mitigation .2009 COSA & retail rate design options ..;. November 1, 2009 Tier 2 decisions 3 Date: To: From: Subject: ~..!.i.. JrlOr ,iR:) T'PJ.'...,.....i.i............N........... rGr ~ELE,Si 'j , .....--.,. -..",,', .,,'. ......- .... ", ....,., ' .....,-.-. """""'" "..........,: ......",..."' ....,p i ;: 1 ;' WAS H I N G TON, U. S. A. Utility Advisory Committee Memo October 14, 2008 Utility Advisory Committee Dan McKeen, Fire Chief Yvonne Ziomkowski, Finance Director Medic 1 Utility Cost of Service Study Update Summary: Staff recently updated the 2007 cost of service study for the Medic 1 Utility. This year's update will be presented to the Utility Advisory Committee including the recommended rate adjustments. It will be necessary to adjust retail 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 update to the cost of service study for the Medic 1 Utility. Background/Analysis: The City of Port Angeles' Medic 1 program is structured as a utility - supported through an enterprise fund using transport charges, a monthly utility charge, and a General Fund contribution. The enterprise fund is based upon a cost of service approach, with the last cost of service study completed in 2007. Following a presentation by staff, the Utility Advisory Committee will be asked for their recommendation to City Council to proceed with a public hearing on this year's update to the cost of service study for the Medic 1 Utility. The proposed City Council public hearing is November 4,2008 for a presentation of the update to the study and to allow public input to the process after the presentation. The public hearing would be continued to November 18, 2008 at which time the public hearing will be closed. Staff will return to the Utility Advisory Committee on November 12,2008 requesting a recommendation to City Council to adopt rate ordinance amendments. The proposed rate adjustments would be effective January 1, 2009. N:\UAC\DepDir\Medic 1 Cost of Service Study.doc ~~J ORDINANCE NO. AN ORDINANCE of the City of Port Angeles, Washington, revising Chapter 13.73 of the POltAngeles Mtmicipal Code relating to Medic 1 Charges. THE CITY COUNCIL OF THE CITY OF PORT ANGELES DO HEREBY ORDAIN AS FOLLOWS: Section 1. Ordinance 3215, as amended, and Chapter 13.73 of the Port Angeles Municipal Code are hereby amended by amending subpmts 13.73.400 and Exhibit A P AMC to read as follows: 13.73.400. Charges Established, In accordance with the rate study presented to the City Council, the base rates and fees for the Utility shall be as follows: User Classification Residential Adult family homes* Assisted living facilities* classifi cation 24-Hour nursing facilities* classification Group homes* classification Jail faciliti es * classification Schools* classifi cation Commercial/B usiness City public areas classification Rate $49-:-tT 52.12 per year, per unit $63-&.00 667.80 per yem', per classification $10,8J9.00 11.489.34 per year, per $2;4-54:00 2.601.24 per year, per $5tB-B 53.74 per year, per unit $15,402.00 16.326.12 per year, per * Rates fOT individual facilities vary based upon their percentage afuse within that cIassifi cation. For individual facility rates, see Exhibit A. -1- Seetion2 - Severabilitv. If any provisions of this Ordimince or its applications to any person or circumstances is held to be invalid, the remainder of the Ordinance or applicatioll of the provisions of the Ordinance to other persons or circumstances is not affected. Section 3 - Corrections. The City Clerk and the codifiers of this ordu1ance are authorized to make necessary corrections to this ordinance including, but not limited to, the con-ection of the scrivener' s/clerical en"ors, references, ordinance Dumbering, section/subsection numbers and any references thereto. Section 4 - Effective Date. This ordinance, being an exercise of a power specifically delegated to the City legislative body, is Dot subject to referendum. This ordinance shall take effect January 1,2009. PASSED by the City Council oftlle City of Port Angeles at a regular meeting of said Council held 011 the_ day of October, 2008. MAYOR ATTEST: Becky 1. Upton, City Clerk APPROVED AS TO FORM: William E. Bloor, City Attomey PUBLISHED: October . 2008 By Summary G:\Leg.l_ B.,lmp\oRDINANCES&.RESOLUTIONSIORDLNANCES.200H\41 - Medi, I Rales.IOOHOS. wpd -2- J\ledic I Utility 2008 Annual Fees Exhibit A Facility Base Rate Utilization Amount % of Exemption Annual Fee Availability Final 0/0 BeFore Exelll ption Amount After Adjustment Annual Fee Exemption Exemption 24-Hour Nursing Facilities Crestwood $ -T,3-3-2 37% $ 2,Tt3- 53% $t;4-3-& $f;Tt5- $1 $+7% 1116 E Lauridsen Blvd 1,772 2,876 1,524 1,352 1,353 rOt t Angeles CMe Center ~ 6-3% $4,619 24.4:3% $1, 128 ~ $-1- ~ ' , 825 "Cast 5th I Group Homes 2nd Street House $ t-;9-3-7 18% $3-8 72.6% $2R- $S6 $1 $-8T 138 W 2nd 1,841 331 240 91 92 Clallam County Hostelries $+;-1-37 7% $tzt 100% $1-2+ $0 N/A $0 1132 Hazel 1.841 129 129 Serenity House $ t;--'B'r 75% $+;3-83- 47% $6+2: $69+ $1 $69Z 2321 W 18th 1.841 1,381 649 732 1"" ;);) Adult Family Homes Home Away From I-lome $63-8 71% $449- 40% $+7-9 $%S $1 $%9 13 19 W 16th 668 474 190 284 285 Olympic RN Adult Family $63-8 25% $-:158 61.25% $99- $6t $1 $62: I-lome, 1725 W 11 th 668 167 102 65 66 -3- Facility Base Rate Utilization AmOllnt % of Exemption Annual Fee A vailn bilily Final % Bero re Exemption Amount After Adjustment Annual Fee Exemption Exemption The Good Shepherds $63B 4% $2:5 25% $6 $+9 $1 $W Haven, Inc 668 27 1 20 21 2314 S Lincoln I Assisted Laving Laurel Park $tfT;fB9 40% $4-;3-3-6 38.72% $+,6-1-9 $Z;65-7 $1 $L;-65-lY 1133 East Park Avenue 11.489 4,596 1.780 2.816 2.817 Park View Villa $~ 21% $2;2-% 0% $0 $2-;-2-T6 $1 $277-T 1435 & 1445 Park View 11 .489 2,413 2.413 2.414 Lane Peninsula Manor $~9 3% $3-25 60% $ -1-95 $-Be $1 $-H-t 1017W17th 11.489 345 207 138 139 St. Andrews Place $10,839 36% $3;962: 56% $7:;-l-8-5 I $ -t-;--9'+t $1 $ -t;-9-Ht 520 East Park A venue 11.489 4.136 2.31.Q I 1.820 1.821 Jail Facilities Clallam County Adult $t;t92 81% $96{j N/A N/A $%6 $1 $96t 223 East 4th 1.264 1.024 1.024 1.025 ClaUam County Juvenile $+;+92 19% $226 N/A N/A $226 $1 $2TT 1912 West 18th 1,264 240 240 241 -4- Facility Base Rate Utilization Amount % of Exemption Annufll Fee Availability Final % BefOI'e Exemption Amollnt After" Adjustment Annual Fee Exemption Exemption Schools Lincoln School $2:;4-54 2% $4-9 N/A N/A $4-9 $1 $5&:7e 924 West 9th 2.601 52 52 53.74 I Franklin Middle School $2:;4-54 8% $-l-96 N/A N/A $-l-96 $1 $+:9-1 2505 S Washington 2.601 208 208 209 Hamilton Middle School $Z;4-S4 0% $0 N/A N/A $0 $1 $:5B:Te 1822 West 7th 2,601 53.74 I Jefferson Middle School $2:;4-54 4% $98 N/A N/A $9-& $1 $99 218 East 12th 2.601 104 104 105 . Peninsula College $2-;4-54 8% $+96 N/A N/A $+96 $1 $t9T 1502 E Lauridsen 2,601 208 208 209 POli Angeles High School $2-;-454 69% $ f-;tr93- N/A N/A $-r,693- $1 $+-;694 304 East Park Ave 2,601 1,795 1.795 1,796 Queen Of Angels $7:;454 4% $98 N/A N/A $% $1 $99 209 West 11 th 2,601 104 104 105 Stevens Middle School $Z;454 4% $9-& N/A N/A $9-8 $1 $99 1139West 14th 2,601 104 104 105 ) High demand llser classifications that do not qualify for all exemption cannot have a per-unit fee less than that of the cOlTUnercialJbusiness classification -5- Date: To: From: Subject: ~ORTANGELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo October 14, 2008 Utility Advisory Committee Larry Dunbar, Deputy Director of Power Systems Solid Waste Utility Rates Summary: FCS Group completed comprehensive rate studies for the Solid Waste Collections and Transfer Station utilities. The studies were presented to the Utility Advisory Committee last month including the recommended retail rate adjustments. It will be necessary to adjust retail rates at this time to maintain the funds in a financially prudent position. Recommendation: Forward a favorable recommendation to City Council to proceed with the proposed rate adjustments for the Solid Waste Collection and Transfer Station Utilities. Background/Analysis: Earlier this year, the City contracted with FCS Group to complete comprehensive rate studies for the Water, Wastewater, Solid Waste Collections, and Solid Waste Transfer Station utilities. The studies for Water and Wastewater utilities have been presented and rate and fee adjustments have been considered and approved. After receiving a presentation on the rate studies on September 30, 2008, the Utility Advisory Committee recommended that City Council proceed with a public hearing. The City Council public hearing was held on October 7,2008. At today's meeting staff will summarize the input received at the October 7, 2008 public hearing and any additional input received since then. Staff recommends that the Utility Advisory Committee forwards a favorable recommendation to City Council to continue the public hearing, close the public hearing, then adopt rate ordinance amendments. The proposed rate adjustments would be effective January I, 2009. N:\UAC\DepDir\Solid Waste Utility Rate Recommendations.doc CITY OF n'Q/ 'Rr'T' ,I: A IN,, 'G/ iE'iL: E'iS'i .J!.~ ) i ~ IX I' j1i i ii j , ..........., .-------., . WAS H I N G TON, U. S. A. Utility Advisory Committee Memo Date: October 14,2008 To: Utility Advisory Committee From: Larry Dunbar, Deputy Director of Power Systems Subject: Request For Proposals - Network Needs Assessment and Wireless Technology Plan Summary: Staff prepared a Request For Proposals to obtain consulting services for the Institutional Network Needs Assessment and the Public Safety Wireless Technology Plan. The next step in the process is to advertise the Request For Proposals. Consultant proposals will be due to the City no later than December 26,2008. Recommendation: For information only, no action requested. Background/Analysis: As part of the 2008-2014 Capital Facilities Plan adopted by City Council on June 24, 2008, staff prepared a Request For Proposals to secure consulting services for two related projects, the Institutional Network Needs Assessment and the Public Safety Wireless Technology Plan. The Institutional Network Needs Assessment is related to the City's seven-year service agreement with Capacity Provisioning, Inc., which expires on August 26,2009. As part of the agreement renewal process, a needs assessment needs to be conducted to determine the City's future telecommunications infrastructure, equipment, and service needs. The Public Safety Wireless Technology Plan is an assessment of the Police and Fire Departments technology needs including a plan that identifies hardware and software solutions, vehicle equipment needs, and mobile wireless communications service options within the City. Below is a summary of the milestones and timeline for the Request For Proposals process. Milestones Advertisement of Request for Proposals Consultant proposal submittal deadline UAC recommendation on professional services agreement City Council consideration & approval of professional services agreement Completion October 26, 2008 December 26, 2008 January 13, 2009 January 20,2009 N:\UAC\DepDir\I-Net Needs Assessment & Wireless Technology Plan.doc