2019 Energy Update Bryan Municipal Utilities Kevin M. Maynard - PowerPoint PPT Presentation

2019 Energy Update Bryan Municipal Utilities Kevin M. Maynard Director of Utilities October 11, 2018 Reliable. Local. Yours.

Bryan Municipal Utilities overview • Non-profit, community-owned utility services provider • Established in 1892 • Three primary services Water • Electricity • Telecommunications • • 48 full-time and 18 part-time employees • 2017 revenue of approximately $29 million Reliable. Local. Yours. 2

Bryan Municipal Utilities overview Oversight provided by five- • member Board of Public Affairs Bryan residents elected by local – citizens to four-year, staggered terms Approve policies, staffing, budgets, – rates Authorize utility improvements and – extensions City Council approval of annual – utilities budget and debt issues required Bryan Board of Public Affairs Reliable. Local. Yours. 3

Water Utility Reliable. Local. Yours.

Municipal Water Utility • Water supply provided by seven deep wells (127 to 147 feet) in four locations • 8.0 MGD raw water production capacity • 5.0 MGD treatment capacity • 1.41 average daily output • 1.91 MGD peak daily output Bryan Water Treatment Plant Reliable. Local. Yours. 5

Municipal Water Utility Treatment process consists of: Aeration to oxidize iron and manganese, release undesirable gases • Chlorination for additional oxidation and disinfection • Filtration to remove oxidized iron and manganese • Ortho/polyphosphate to stabilize water (avoid corrosion) • Bryan’s source water contains naturally occurring fluoride; no • additional fluoridation required Water considered very hard; total hardness of approximately 327 • mg/l (19 grains/gallon) Water treatment process does not include softening • Reliable. Local. Yours. 6

Municipal Water Utility • 1.4 million gallons of elevated storage (two water towers) • One average day of finished water storage • 1.0 million gallons of ground level raw water storage at Water Treatment Plant • No environmental compliance issues Reliable. Local. Yours. 7

Water Utility sales trend • Water sales have decreased over the last 20 years • Decreasing sales and inflation create rate pressure Water Sales by Rate Class (Gallons) Bryan Municipal Utilities % Rate Class 1997 2017 Difference Change Residential 170,007,684 137,779,356 -32,228,328 -18.96 Commercial 307,241,748 174,217,428 -133,024,320 -43.30 Total 477,249,432 311,996,784 -165,252,648 -34.63 Reliable. Local. Yours. 8

Water Utility rate plan • In 2015, BPA adopted a five-year water rate plan • Fourth year of rate plan effective with bills rendered on or after Dec. 20, 2018 (approximate 3% increase) • Water rates generate sufficient revenue to meet O&M expenses but are not sufficient to fully fund annual capital improvement costs of approximately $1 million Reliable. Local. Yours. 9

Water Utility rate plan • BPA directed staff to prepare new four-year rate plan to replace current plan – Approximate 7% annual adjustments from 2019-2022 – Increase fixed charges rather than volumetric charges • Water rates remain competitive with others in area Reliable. Local. Yours. 10

Water Utility primary issues • Ensure adequate capital improvements funding – Additional $600,000-$700,000 needed annually for water supply, treatment and distribution system improvements – Seeking water main replacement financing and grant options in 2019 and beyond Reliable. Local. Yours. 11

Water Utility primary issues • Planning for future – If additional water supply and treatment capacity is needed in the future, what is the best location? – Current location or solar field site west of town? – Do new treatment technologies make softening or other water quality enhancements feasible? – Water supply and treatment master plan being developed Reliable. Local. Yours. 12

Telecommunications Utility Reliable. Local. Yours.

Municipal Telecommunications Utility • Current fiber optic system approximately 20 years old • Estimated service life of fiber optic cable is 20-30 years • Plan to rebuild fiber optic system over next 5-10 years • Plan to increase Internet speeds by year-end 2018 – Residential speeds of up to 30 Mbps – Business speeds of up to 100 Mbps • Future focus: – Reliability – Increased bandwidth/speed – Local customer service – Cost competitiveness Reliable. Local. Yours. 14

Electric Utility Reliable. Local. Yours.

Power Supply Reliable. Local. Yours.

Power Supply arrangements • Emphasis on a diverse, more environmentally friendly power supply portfolio • Approximately 25% generated by renewable resources including: • Landfill gas to energy • Hydroelectric • Solar • Wind • Approximately 30% of power supply is market purchases Auglaize Hydroelectric Plant Reliable. Local. Yours. 17

Bryan 2011 Power Supply Resources Bryan Power Plant Auglaize Hydro 0.2% 4.9% NYPA Hydro 2.6% Belleville Hydro 3.6% American Municipal Power 88.7% Reliable. Local. Yours. 20

Projected Bryan Municipal Utilities 2019 Power Supply Resources NYPA Hydro, 2.6% Belleville Hydro, 3.6% BP Purchase (2024), AMP Hydro, 4.0% 22.5% Meldahl Hydro, 3.2% Greenup Hydro, 1.5% AFEC (Natural Gas), 14.2% Morgan Stanley Purchase (2020), 8.9% Auglaize Hydro, 4.2% Bryan Solar, 1.1% Blue Creek Wind (2022), 2.3% Prairie State (Coal), EDI Landfill Gas (2021), 28.2% 3.9% Reliable. Local. Yours. 20

Power Supply arrangements • Diverse resources reduce power supply cost volatility • More environmentally friendly resources reduce risk of carbon tax, cap and trade or other environmental compliance costs • New assets help stabilize power costs for foreseeable future • Transition to more diverse, asset-based, environmentally- friendly power supply portfolio was accomplished without significant long-term changes in power supply costs Reliable. Local. Yours. 20

Historic total power supply costs BMU Annual Power Supply Costs $/MWh $90.00 $82.84 $80.00 $72.92 $72.17 $71.05 $69.10 $68.67 $68.64 $68.55 $70.00 $67.66 $65.91 $65.31 $64.23 $60.94 $60.00 $50.00 $40.00 $34.93 $30.00 $20.00 $10.00 $0.00 2005 2006 Reliable. Local. Yours. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 21 $ per MWh

Electric Rate Plan Reliable. Local. Yours.

2017 Electric COS study/rate plan • In 2017, BPA adopted first year of proposed three-year electric rate plan • Rates last adjusted in 2006 – Power supply resources/costs changed significantly from 2006-2017 – New resources had greater demand and lesser energy charges – Power Supply Cost Adjustment (PSCA) had grown to $0.0279/kWh • Help ensure adequate capital improvements funding • Provide adequate funds (~$2.0 million annually) to maintain reliable service and keep long term rates lower and more stable Reliable. Local. Yours.

Three-year electric rate plan • Overall revenue neutral • Moves rate classes toward cost of providing service while minimizing customer financial impacts • Increase monthly customer charge • No change in General Service/Large Power demand (kW) charge • Decrease energy (kWh) charge • $2 million annual capital improvements allocation • Power supply costs included in base rates rather than in PSCA • BPA adopted Year 1 of three-year plan on August 15, 2017 • Year 2 modifications to be presented to BPA in November 2018 Reliable. Local. Yours.

Large Power rates Current and Proposed Rates Current Three-Year Year 1 Year 2 Year 3 Customer Charge $ 187.50 $ 220.00 $ 225.00 $ 230.00 Energy Charge (1st 300 kWh per kW Demand) $ 0.02900 $ 0.04800 $ 0.04710 $ 0.04625 $ 0.02200 $ 0.04800 $ 0.04710 $ 0.04625 (All other energy) All Demand Charge $ 20.00 $ 20.00 $ 20.00 $ 20.00 PSCA $ 0.02790 $ - $ - $ - Rates with PSCA Included in Energy Cost Current Three-Year Year 1 Year 2 Year 3 Customer Charge $ 187.50 $ 220.00 $ 225.00 $ 230.00 Energy Charge (1st 300 kWh per kW Demand) $ 0.05690 $ 0.04800 $ 0.04710 $ 0.04625 $ 0.04990 $ 0.04800 $ 0.04710 $ 0.04625 (All other energy) All Demand Charge $ 20.00 $ 20.00 $ 20.00 $ 20.00 PSCA $ - $ - $ - $ - Reliable. Local. Yours.

Typical Customer Bill Comparisons Increase/Decrease City of Bryan Percent from Existing to Rate Class Monthly Use Prior Existing Proposed Year 2 Plan Change 2017 2018 Year 2 w/$ 0.000 PSCA Residential 375 kWh $ 50.33 $ 47.42 $ 48.86 $ 1.44 3.0% 750 kWh 91.16 86.59 87.46 $ 0.87 1.0% 1,500 kWh 169.58 164.93 164.68 $ (0.25) -0.2% General Service: 1,000 kWh $ 146.43 $ 143.18 $ 147.68 $ 4.50 3.1% (1-Phase) 2,000 kWh 280.31 269.82 274.32 $ 4.50 1.7% 5,000 kWh 677.39 646.92 652.17 $ 5.25 0.8% General Service: 10 kW/2,000 kWh $ 280.31 $ 269.82 $ 274.32 $ 4.50 1.7% (3-Phase) 25 kW/5,000 kWh 677.39 646.92 652.17 $ 5.25 0.8% 50 kW/10,000 kWh 1,259.37 1,226.42 1,244.92 $ 18.50 1.5% 100 kW/20,000 kWh 3,096.95 3,002.05 2,999.55 $ (2.50) -0.1% Large Power 500 kW/200,000 kWh $ 21,952.82 $ 20,555.32 $ 20,380.32 $ (175.00) -0.9% 1,000 kW/400,000 kWh 43,708.82 40,881.32 40,526.32 $ (355.00) -0.9% Reliable. Local. Yours. 2,500 kW/1,000,000 kWh 108,976.82 101,859.32 100,964.32 $ (895.00) -0.9%

Factors impacting electric bills Reliable. Local. Yours.

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