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Home My WebLink AboutAgenda Packet 10/08/2013 10/9/2013 Advanced Metering Infrastructure City of Port Angeles Electric Meter Inventory 100% System Meter Radio-Frequency 90% Emissions Update 63% of all meters remain 80% more than 20 years old 70% Cumulative Relative Frequency 60% Port Angeles Utility Advisory Committee October 8, 2013 50% 40% Philip D. Lusk 30% Deputy Director of Power & 20% Telecommunications Systems 10% 360.417.4703 0% plusk@cityofpa.us Date Meter Manufactured Situation AnalysisRF-EMF? •Between 2004 and 2009, traditional analog •RF-EMF electric meter production in the U.S. gradually •Radio Frequency Electromagnetic Field shut down as electronic digital meters were •Frequencies from 50 MHz to 3.5 GHz introduced •Measured as Power Density “This transition was the most significant change in –Microwatts/square meter or centimeter (µW/mor µW/cm) • 22 metering technology in over 100 years.” –Decibels/milliwatt(dBm) •Smart meter RF-EMF has been measured •The City’s smart meters are operating at levels about 500,000 lower than the current federal threshold What Levels of RF-EMF will Smart Meters Add to the Environment? •Smart meters use wireless signals in the 900 MHz range that are similar to: •Cordless phones, cellphones, wireless routers and laptops, baby monitors, microwave ovens, radios and televisions, pagers, garage-door openers, touch lamps, and walkie-talkies 1 10/9/2013 What Levels of RF-EMF will Smart What Levels of RF-EMF will Smart Meters Add to the Environment? Meters Add to the Environment? •Very low RF-EMF field levels were measured •Transmitter output power is very low •Highest electric meter •Signal level decreases substantially with meter •300 at 9” µW/m 2 distance (“Inverse-Square Law”) •75 at 18” µW/m 2 Specifically, if you double the distance from the • •19 at 36” µW/m 2 source, the intensity will decrease to 25% of its Representative Phase 1 activated meter • original amount (1/2=1/4). 2 •20 at 9” µW/m 2 •5 at 18” µW/m 2 •1 at 36” µW/m 2 •What does this mean in terms of ensuring safety? International RF-EMF Exposure Limits Smart Meter RF-EMF Summary (1800 MHz Range) 2 LOCATIONREFERENCEBASED ONµW/mLOWER BY •Smart meters are measured operating at levels about 500,000 lower than US, Canadian and most CanadaSaftey Code 6, Table 5Thermal / Heating10,000,000- of Western Europe’s thermal standards USAFCCThermal / Heating10,000,000- •The emissions are 5,000 times lower than the biological IEEE C95.1-1999 and International Most of Western EuropeThermal / Heating10,000,000- Commission on Non-Ionizing standards used by Russia, China, Italy and most of Radiation Protection (ICNIRP) Sanitary Norms and Regulations Eastern Europe RussiaBiological100,000100x 2.2.4/2.1.8.055-96 •The emissions are also 5,000 times lower than the ChinaUDC 614.898.5 GB 9175-88Biological100,000100x precautionary standard used by Switzerland Sanitary Norms and Regulations ItalyBiological100,000100x 2.2.4/2.1.8.055-96 Sanitary Norms and Regulations Most of Eastern EuropeBiological100,000100x 2.2.4/2.1.8.055-96 National Research Programme SwitzerlandPrecautionary100,000100x "Non-Ionising Radiation - Health and Environment" (NRP 57) 20 City of Port AngelesElectric Smart MetersTesting500,000x 2 10/9/2013 SOURCE: http://www.naperville.il.us/emplibrary/Smart_Grid/NSGI-HealthSafety-ExposureLevels-lg.jpg 3 Discussion Outline City of Port Angeles Utility AdvisoryOverview of rate study process  Committee Meeting Key factors  Summaries  Utility Cost of Service Studies Transfer Station  Collection  Water  October 8, 2013 Wastewater  Combined Sewer Overflow (CSO) • Electric  Questions  Next Steps  Variable Page 1Page 2 Overview of the Study ProcessKey Factors Study period 2014-2016 (carried through 2019)  Projected rate revenue based on 2012 actual data  FISCAL POLICIES Step 1: ECONOMIC 2013 budget used as baseline –escalation factor ASSUMPTIONS Revenue  Requirement CAPITAL FUNDING OPERATING REVENUE REQUIREMENT BUDGETS PLAN applied for future years: CUSTOMER STATISTICS General: 3.0% per year  CLASSIFY COST BY FUNCTION Labor: 2.0% per year  PERS: 9.2% per year  WASTEWATER TRANSFER STATIONWATER Step 2: Cost of Service CSO Medical: 0.0% 2014, 5.0% per year thereafter COLLECTIONELECTRIC  Incorporated utility specific fiscal policies  ALLOCATE COSTS TO CUSTOMER CLASSES Reserves  Annual system replacement funding  VARIABLE RATE DESIGN FIXED CHARGES CHARGES Step 3: Rate Debt service coverage  Design Page 3Page 4 Key DriversAverage Residential Bill Impacts UtilityExisting201420152016 Transfer Station  Solid Waste Collection$ 27.15$ 28.75$ 30.09$ 31.66 $19.5 million Land Bluff Stabilization project  Water 36.11 38.10 40.10 42.20 Collection  Wastewater 44.30 48.80 53.50 57.58 Wastewater - HSM 4.50 4.50 4.50 - Transfer station cost increases  Wastewater - CSO 20.10 20.10 20.10 20.10 Water Electric 98.01 104.38 111.17 117.56 Medic I 5.12 5.43 5.43 5.43 Reduced consumption  Total$ 235.29$ 250.06$ 264.89$ 274.53 Wastewater Monthly Increase$ 14.77 $ 14.83 $ 9.64  Percent Increase6.28%5.93%3.64% Capital needs and reduced consumption  Notes: Rate adjustments may occur in 2015 and 2016 Electric  Rates shown exclude utility tax; no utility tax changes proposed Bonneville Power Administration Solid Waste Collection - Includes EOW pickup and yard waste  Water - Residential 5/8" meter with 450cf per month Wastewater - Residential > 430cf per month Variable Electric - Residential with 1,300 kWh per month Page 5Page 6 1 TS Revenue Requirement Summary $9,000,000 6.10% 14.65% $8,000,000 19.00% $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 TRANSFER STATION OPERATIONS $2,000,000 $1,000,000 COST OF SERVICE $0 2013201420152016 Cash Operating ExpensesContractual New Debt ServiceAdditions to Meet Coverage Post Closure Reserve TransfersTotal Existing Revenue Total Revenue After Increase Reduction in tonnage is driving down revenues  New debt service for $19.5 million post closure Land Bluff Stabilization project  Growth in existing O&M and contract costs  Debt service coverage requirements  Variable Page 7Page 8 TS Cost of Service & Proposed RatesTS Considerations/Issues Rate Increases201420152016 Land Bluff Stabilization Cost  Proposed Increases19.00%14.65%6.10% $4.0 million DOE contribution  2014 2015 2016 CategoryExisting2014 COSA ProposedProposedProposed $15.5 million revenue bond (25-year term, 4.6% interest, first  Tax Exempt Transfer Station 5-year interest only) Municipal Solid Waste$ 116.10$ 119.44$ 139.13$ 159.73$ 169.49 Yard Waste 27.70 74.93 29.09 30.54 32.07 City taxes associated with new debt paid by general fund  Biosolids 50.85 74.06 74.06 85.03 90.23 Self-Haul $59,000 increasing to $135,000 • Municipal Solid Waste 141.95 218.15 170.11 195.29 207.23 $637,000 in transfers to post-closure fund to Tires 141.95 306.65 170.11 195.29 207.23  Asbestos 394.40 447.24 447.24 513.44 544.84 meet ending balance requirements Contaminated Soils 207.30 237.76 237.76 272.96 289.66 Yard Waste 44.95 174.16 47.20 49.56 52.04 Metals and White Goods 68.85 127.74 72.29 75.91 79.70 Blue Mountain 237.40 225.59 237.40 272.54 289.21 Note: Minimum fee applies to Self-Haul Customers Proposed unit costs are based on a phase-in strategy Variable Page 9Page 10 Collection Revenue Requirement Summary $4,500,000 5.60% 5.60% 5.60% $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 COLLECTION OPERATIONS $1,000,000 $500,000 $0 COST OF SERVICE 2013201420152016 Cash Operating ExpensesAdministrative Contractual (Yard/Recycling)Disposal Total Existing RevenueTotal Revenue After Increase Revenue not sufficient to meet projected needs  Disposal cost increases from the Transfer Station utility along with  general and Contractual cost increases causing rate pressure Fund balance allows use of $725,000 in 2014 through 2016 to phase-in  Variable rate increases Page 11Page 12 2 Collection Cost of Service & Collection Considerations/Issues Proposed Rates Reserve used to keep rates down  $725,000 2014-2016  Rate Increases201420152016 Balance still above target  Proposed Increases5.60%5.60%5.60% Every 1.0% of increase = $33,000  2014 2015 2016 Weekly service change  CategoryExisting2014 COSA ProposedProposedProposed Residential - Weekly$ 30.65 $ 30.45 $ 32.17 $ 34.28 $ 36.26 2% reduction in residential weekly service  Residential - Every Other Week 19.75 22.03 20.35 21.36 22.60 Residential - Yard Waste 7.40 8.42 8.40 8.72 9.06 2% increase in every other week service  Commercial - 90 gallon 22.60 33.80 26.89 29.84 33.10 Commercial - 300 gallon 78.15 74.59 81.51 85.10 88.85 Schools Recycling 13.05 5.46 13.05 13.05 13.05 Note: Proposed unit costs are based on a phase-in strategy Variable Page 13Page 14 Water Revenue Requirement Summary $7,000,000 5.25% 5.25% 5.50% $6,000,000 $5,000,000 $4,000,000 $3,000,000 WATER $2,000,000 $1,000,000 COST OF SERVICE $- 2013201420152016 Cash Operating ExpensesExisting Debt Service Rate Funded System ReinvestmentTotal Existing Revenue Total Revenue After Rate Increase Currently revenue does not cover expenses  Expenses have increased faster than revenues  Phasing in system reinvestment  Variable Page 15Page 16 Water Cost of Service FindingsWater Proposed Rates Across the Board 2014 RevenueCOSA 2014 Revenue Rate Increases201420152016 Commercial Irrigation Irrigation, Proposed Increases5.50%5.25%5.25% Commercial / Municipal $0.1M $0.3M / Municipal $1.6M 3% 6% $1.4M 32% 2014 2015 2016 Sample BillsExisting 29% ProposedProposedProposed Residential Fixed$ 26.75 $ 28.22 $ 29.70 $ 31.26 Volume (450 CF) 9.36 9.87 10.39 10.94 Total$ 36.11$ 38.09$ 40.09$ 42.20 Increase$ 1.98$ 2.00$ 2.11 Commercial/Municipal Residential Residential Fixed$ 37.90 $ 39.98 $ 42.08 $ 44.29 $3.1M $3.4M Volume (730 CF) 12.70 13.40 14.10 14.84 62% 68% Total$ 50.60$ 53.38$ 56.18$ 59.13 Increase$ 2.78$ 2.80$ 2.95 Proposed Existing COSA $ Class% 2014 2014 Difference Irrigation 201420152016 Fixed$ 32.60 $ 34.39 $ 36.20 $ 38.10 Residential$ 3,208,851$ 3,078,941$ (129,910)-4.05%5.50%5.25%5.25% Volume (3,000 CF) 55.80 58.87 61.96 65.21 Commercial / Municipal 1,372,763 1,606,501 233,73817.03%5.50%5.25%5.25% Total$ 88.40$ 93.26$ 98.16$ 103.31 Irrigation 139,974 295,834 155,860111.35%5.50%5.25%5.25% Increase$ 4.86$ 4.90$ 5.15 Total$4,721,588 $4,981,276 $ 259,6885.50%5.50%5.25%5.25% Note: Fixed rates shown are for 5/8" meter and would increase with meter size Page 17Page 18 3 Water Considerations/Issues Recapitalization/system reinvestment  Base case $80,000 -$400,000  Annual depreciation = $1.4 million  Every 1.0% rate impact = $50,000  WASTEWATER Cost of service differentials identified  Swings from 2008 study due to changes in demand  COST OF SERVICE Recent demand history atypical  Equal adjustment to all classes and rates  VariableVariable Page 19Page 20 Wastewater Revenue Requirement Wastewater Cost of Service Findings Summary Across the Board 2014 RevenueCOSA 2014 Revenue $7,000,000 9.00% 11.00% 11.50% Commercial / $6,000,000 Commercial Municipal / Municipal $1.4M $5,000,000 $1.6M 29% 32% $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- 2013201420152016 Residential Residential Cash Operating ExpensesNew & Existing Debt Service $3.1M $3.4M Rate Funded System ReinvestmentTotal Existing Revenue 62% 68% Total Revenue After Rate Increase Proposed Currently revenue does not cover expenses Existing COSA $  Class% 2014 2014 Difference 201420152016 Expenses have increased faster than revenues  Residential$ 3,280,867$ 3,234,047$ (46,820)-1.43%10.15%9.63%7.64% Phasing in system reinvestment  Commercial/City/LEKT 1,030,411 1,573,027 542,61652.66%15.79%15.18%12.97% Excludes costs associated with the Harbor Study Mandate (HSM), which are  Total$4,311,278 $4,807,074 $ 495,79611.50%11.50%11.00%9.00% funded by a separate surcharge (effective until July 2015) Page 21Page 22 CSO Revenue Requirement SummaryProposed Total Wastewater Rates COSA Rate Adjustments201420152016 $2,500,000 Residential10.15%9.63%7.64% Non-Residential15.79%15.18%12.97% 0.00%0.00%0.00% 2014 2015 2016 $2,000,000 Existing ProposedProposedProposed Residential < 430 CF $1,500,000 General$ 39.90 $ 43.95 $ 48.18 $ 51.86 CSO 18.00 18.00 18.00 18.00 HSM 4.10 4.10 4.10 - $1,000,000 Total$ 62.00$ 66.05$ 70.28$ 69.86 Increase$ 4.05$ 4.23$ (0.42) Residential > 430 CF $500,000 General$ 44.30 $ 48.80 $ 53.50 $ 57.59 CSO 18.00 18.00 18.00 18.00 $-HSM 4.10 4.10 4.10 - 2013201420152016 Total$ 66.40$ 70.90$ 75.60$ 75.59 Increase$ 4.50$ 4.70$ (0.01) Non-Residential New & Existing Debt ServiceTotal Existing RevenueTotal Revenue After Rate Increase Base Charge General$ 11.20 $ 12.97 $ 14.94 $ 16.88 CSO 4.70 4.70 4.70 4.70 HSM 1.15 1.15 1.15 - Volume Charge (730 CF) No rate change through 2016  General 23.29 26.97 31.06 35.09 Phase II CSO debt service in 2017 (PWTF or SRF loan)  CSO 11.75 11.75 11.75 11.75 HSM 2.56 2.56 2.56 - Total$ 54.65$ 60.10$ 66.16$ 68.42 Increase$ 5.45$ 6.06$ 2.26 Page 23Page 24 4 Wastewater Considerations/Issues Recapitalization/system reinvestment  Base case $0 -$200,000  Annual depreciation = $1.7 million  Every 1.0% rate impact = $50,000  ELECTRIC Cost of service differentials identified  Trends similar to 2008 study  COST OF SERVICE Begin phasing in cost of service over time  VariableVariable Page 25Page 26 Electric Revenue Requirement SummaryProposed Electric Rates/ Impacts 5.75% 25,000,000 6.50% Proposed Phase-In 6.50% ClassExisting 0.00% 201420152016 20,000,000 Residential (1,300kWh) Fixed$ 15.75$ 16.77$ 17.86$ 18.89 15,000,000 kWh 82.26 87.61 93.30 98.67 Total$ 98.01$ 104.38$ 111.16$ 117.56 10,000,000 $ Difference$ 6.37$ 6.78$ 6.40 5,000,000 General Service (Single Ph., 2,300kWh)$ 167.78$ 178.68$ 190.29$ 201.23 $ Difference$ 10.90$ 11.61$ 10.94 - G.S. - Demand (Multi Ph., 25,000kWh, 98kW)$ 1,532.04$ 1,632.01$ 1,737.90$ 1,838.13 2013201420152016 $ Difference$ 99.97$ 105.89$ 100.23 Cash Operating ExpensesPower G.S. - Demand Primary (Multi Ph., 145,000kWh, 568kW)$ 8,225.95$ 8,757.86$ 9,327.67$ 9,861.05 Existing Debt ServiceRate Funded System Reinvestment $ Difference$ 531.91$ 569.81$ 533.38 Reserve FundingTotal Existing Revenues Primary (600,000kWh, 1,494kW)$ 32,751.13 $ 34,877.12 $ 37,142.20 $ 39,274.24 Total Revenue After Increase $ Difference$ 2,125.99$ 2,265.08$ 2,132.04 : Comparison does not include costs or revenues associated with Industrial Transmission. Note Municipal Water Pumping (97,000kWh, 532kW)$ 7,674.06$ 8,174.74$ 8,704.26$ 9,205.98 $ Difference$ 500.68$ 529.52$ 501.72 Increases in BPA wholesale power costs  Loads are flat through the forecast period, while expenses are increasing Nonprofit (Single Ph., 5,000kWh)$ 366.00$ 389.80$ 415.14$ 438.99 $ Difference$ 23.80$ 25.34$ 23.85 Reserve levels  Phasing-in rate funded system reinvestment  Cost of service differentials identified  Page 27Page 28 Electric Considerations/Issues Recapitalization/system reinvestment  Currently at annual depreciation = $1.22-$1.35 million  Every 1.0% rate impact = $188,000  Cost of service differentials identified Combined Residential  Proposed across the board implementation for 2014  Bill Impacts Review of cost of service phase-in during 2014 for 2015  rate period VariableVariable Page 29Page 30 5 Average Residential Bill Impacts2014 Impact by Utility Medic I, $0.31 Solid Waste , 2% Collection, UtilityExisting201420152016 $1.60 , 11% Solid Waste Collection$ 27.15$ 28.75$ 30.09$ 31.66 Water, $1.99 , Water 36.11 38.10 40.10 42.20 14% Wastewater 44.30 48.80 53.50 57.58 Electric, $6.37 , 43% Wastewater - HSM 4.50 4.50 4.50 - Wastewater - CSO 20.10 20.10 20.10 20.10 Electric 98.01 104.38 111.17 117.56 Medic I 5.12 5.43 5.43 5.43 Wastewater, Total$ 235.29$ 250.06$ 264.89$ 274.53 $4.50 , 30% Monthly Increase$ 14.77 $ 14.83 $ 9.64 Wastewater - Wastewater - CSO, $-, 0% Percent Increase6.28%5.93%3.64% HSM, $-, 0% Notes: 2014Total Monthly Utility Bill Increase: $14.77 Rate adjustments may occur in 2015 and 2016 CategoryElectricCollectionWaterSewerMedic 1Total Rates shown exclude utility tax; no utility tax changes proposed O&M$ 1.89 $ 0.30 $ 1.02 $ 2.80 $ 0.31 $ 6.32 Solid Waste Collection - Includes EOW pickup and yard waste Power/Contractual 2.54 1.30 - - - 3.84 Water - Residential 5/8" meter with 450cf per month Capital - Total Debt - - 0.05 1.70 - 1.75 Wastewater - Residential > 430cf per month Capital - Reinvestment 1.94 - 0.92 - - 2.86 Total$ 6.37$ 1.60$ 1.99$ 4.50$ 0.31$ 14.77 Electric - Residential with 1,300 kWh per month Page 31Page 32 Alternative1: Full R&R Funding in Alternative2: No R&R Funding in (2014-2016) (2014-2016) UtilityExisting201420152016UtilityExisting201420152016 Solid Waste Collection$ 27.15$ 28.75$ 30.09$ 31.66Solid Waste Collection$ 27.15$ 28.75$ 30.09$ 31.66 Water 36.11 40.44 45.30 50.73 Water 36.11 37.19 38.31 39.46 Wastewater 44.30 64.55 71.40 72.10 Wastewater 44.30 48.80 53.50 56.92 Wastewater - HSM 4.50 4.50 4.50 -Wastewater - HSM 4.50 4.50 4.50 - Wastewater - CSO 20.10 20.10 20.10 20.10 Wastewater - CSO 20.10 20.10 20.10 20.10 Electric 98.01 104.38 111.17 117.56Electric 98.01 102.91 107.29 111.85 Medic I 5.12 5.43 5.43 5.43Medic I 5.12 5.43 5.43 5.43 Total$ 235.29$ 247.68$ 259.22$ 265.42 Total$ 235.29$ 268.15$ 287.99$ 297.58 Monthly Increase$ 12.39 $ 11.54 $ 6.20 Monthly Increase$ 32.86 $ 19.84 $ 9.59 Percent Increase5.27%4.66%2.39% Percent Increase13.97%7.40%3.33% Notes:Notes: Would need to shift/cut CIP Rate adjustments may occur in 2015 and 2016 Rate adjustments may occur in 2015 and 2016 in 2014-2016 Rates shown exclude utility tax; no utility tax changes proposedRates shown exclude utility tax; no utility tax changes proposed 1.Electric: $2.9 million 2.Wastewater: $500,000 Solid Waste Collection - Includes EOW pickup and yard waste Solid Waste Collection - Includes EOW pickup and yard waste Water - Residential 5/8" meter with 450cf per month Water - Residential 5/8" meter with 450cf per month Wastewater - Residential > 430cf per month Wastewater - Residential > 430cf per month Electric - Residential with 1,300 kWh per month Electric - Residential with 1,300 kWh per month Page 33Page 34 Next Steps Rate Hearing October 15  Second Reading and Adoption November 5  Rates effective January 1, 2014  QUESTIONS? Variable Page 35Page 36 6