Benton PUD Rate Information 1 August 16, 2017 Staff Preliminary Recommendation
Plug Into Your Future: Upcoming Meetings 2 Aug 30 Utility Industry 2.0 Sep 20 Broadband Sep 27 Emerging Technologies All meetings: Benton PUD Auditorium 5:30-7:00pm
Agenda 3 1. Overview Chad Bartram 2. Key Driver: BPA 1 Power Costs Jon Meyer 3. Questions/Comments 4. BiOp 2 & Snake River Dams Chad Bartram 5. Questions/Comments (Break) 6. Non-power Costs Jon Meyer 7. Reserves and Debt 8. Rate Design Jon Meyer/Tony Georgis 9. Cost of Service 10.Questions / Comments 1 Bonneville Power Administration 2 Biological Opinion Staff preliminary recommendation. Commission decision expected September 12.
Staff Proposal 4 1.9% average revenue increase effective October 1, 2017 Applied “across-the-board” to all rate classes Applied entirely to Daily System Charge/Demand Charge BPA wholesale power rate increase is the sole driver 5.4% average increase to all BPA customers 3.8% increase to Benton PUD - $2.3M annualized impact Additional BPA surcharge to occur in 2018 (not in the 3.8%) “Spill-test” ordered by US District Court – cost to be determined Benton PUD plans to absorb 2018 surcharge with cash reserves Staff preliminary recommendation. Commission decision expected September 12.
Monthly Bill Comparison Residential 5 Average Monthly Bill at 1,350 kWh June 30, 2017 $180 $160 EIA EIA $140 EIA $122.00 EIA EIA $113.40 $120 EIA EIA EIA EIA EIA EIA EIA EIA EIA $100 EIA “Mid-C” $80 EIA $60 $40 EIA $20 $0 Average bill information has been calculated by Benton PUD staff from publicly available information from other utilities’ websites. Calculation is Benton PUD’s best effort to provide comparable information. Staff preliminary recommendation. Commission decision expected September 12.
Monthly Bill Comparison Small General Service 6 Average Monthly Bill at 2,500 kWh and 30 KW June 30, 2017 $450 $400 EIA $350 EIA $300 EIA “Mid-C” $231 $250 EIA EIA EIA EIA EIA EIA $181 EIA $200 EIA EIA EIA EIA EIA $150 EIA $100 EIA $50 $0 Average bill information has been calculated by Benton PUD staff from publicly available information from other utilities’ websites. Calculation is Benton PUD’s best effort to provide comparable information. Staff preliminary recommendation. Commission decision expected September 12.
Monthly Bill Comparison Medium General Service 7 Average Monthly Bill at 19,000 kWh and 75 KW June 30, 2017 $2,500 $2,000 EIA EIA EIA EIA $1,479 EIA EIA EIA $1,500 EIA $1,311 EIA “Mid-C” EIA EIA EIA EIA EIA EIA $1,000 EIA EIA $500 $0 Average bill information has been calculated by Benton PUD staff from publicly available information from other utilities’ websites. Calculation is Benton PUD’s best effort to provide comparable information. Staff preliminary recommendation. Commission decision expected September 12.
Monthly Bill Comparison Large General Service 8 Average Monthly Bill at 115,000 kWh and 300 KW June 30, 2017 $14,000 $12,000 EIA EIA $10,000 EIA EIA EIA $7,690 EIA $8,000 “Mid-C” $7,096 EIA EIA EIA EIA EIA EIA EIA EIA $6,000 EIA $4,000 EIA EIA $2,000 $0 Average bill information has been calculated by Benton PUD staff from publicly available information from other utilities’ websites. Calculation is Benton PUD’s best effort to provide comparable information. Staff preliminary recommendation. Commission decision expected September 12.
Individual Utility Bill Comparisons Key Factors Impacting Bill Amounts (Rates) 9 Key factors that can influence utility average bills/rates: EIA - utilities >25,000 customers must buy 9% of load from renewables State/local taxes – different entity types pay fewer taxes Customer density – more customers per line mile = lower rates Customer growth – higher growth can lead to higher rates Debt per customer – borrowing can keep rates lower in the short term May catch up with a utility down the road Cash reserves – can be used to defer/mitigate rate actions Staff preliminary recommendation. Commission decision expected September 12.
Average Retail Rates 1 per kWh APPA 2 2015 Report on Average Revenue ( Cents per kWh) 10 Residential Commercial Industrial Total Benton PUD 7.7 6.4 4.7 6.4 WA Publicly Owned 8.4 7.3 4.7 6.8 WA Investor Owned 10.1 9.6 7.6 9.6 WA Cooperatives 8.7 7.6 6.0 7.8 National Average 12.7 10.6 6.9 10.4 California 16.2 15.6 12.3 15.1 1 Revenues - includes all charges to customer 2 American Public Power Association Staff preliminary recommendation. Commission decision expected September 12.
Low Income Programs 11 Senior/Disabled Low Income Programs Income as a % of Federal Poverty Level (FPL) Discount Prior to 2015 Discount After 2015 150% 20% 25% 200% 15% 15% 225% N/A 10% Discount is greater of daily system charge or percentage $509K total discounts applied in 2016 Helping Hands Customer Donations (administered by CAC) Increased minimum pledge amount from $100 to $125 Higher amounts based on family size, up to $225 Record level of donations in 2016: $54,000 Low Income Weatherization Staff preliminary recommendation. Commission decision expected September 12.
BPA Power Costs 12
Net Power Cost (1) 13 Significant Uncertainty $90 Primary cost drivers since 2007 $85 • BPA increases every two years Actual Actual Actual • Lower secondary market prices $80 Better • Energy Independence Act (EIA) $75 Forecast: Forecast: Forecast: $70 $ Millions July 2017 July 2017 July 2017 $65 Primary cost drivers - future $60 • BPA increases every two years $55 • Increased EIA compliance cost $50 Significant efforts underway to $45 bend cost curve down $40 (1) Net power costs (NPC) = gross power costs (including power and transmission) less secondary market sales. Staff preliminary recommendation. Commission decision expected September 12.
2017 Costs (Revenue Requirement) Expenditures by Major Category 14 2017 Revenue Requirement Net Power Total Net Expenditures Supply $124.8 million* 64% O&M 17% Taxes less Other Revenue Net Capital Debt Service 3% 11% 5% * Amount needed to collect through electric rates Staff preliminary recommendation. Commission decision expected September 12.
2017 Net Power Costs Expenditures by Major Category 15 Net 2017 Revenue Requirement Power Total Net Power Costs Supply 64% $79.8 million BPA Power 74% BPA Other* Transmission 1% Non-BPA 11% Resource Costs 14% * Net conservation costs, ancillary services, and net secondary market sales and purchases Staff preliminary recommendation. Commission decision expected September 12.
16
BPA Power Increase – Impact to Benton PUD 17 BPA Annual Power Cost $60 million Impact of BPA Power Increase 1 on Benton PUD 3.8% Annual Impact to Benton PUD $2.3 million Revenue Increase Needed to Cover BPA Increase 1.9% Staff preliminary recommendation. Commission decision expected September 12.
Bonneville Power Administration (BPA) 18 Staff preliminary recommendation. Commission decision expected September 12.
BPA Cost Pressure 19 BPA rates increased 33% since Secondary Market Sales October 2011 Internal Operations (dams) Continued investment in fish and wildlife efforts Reduced secondary market sales (more later) Biological opinion (more later) Staff preliminary recommendation. Commission decision expected September 12.
Bonneville Power Administration Fish and Wildlife (F&W) Program 20 BPA F&W costs in 2016 – $622 million $127 million for foregone revenue & power purchases $495 million for program costs Historically ≈ 25% of BPA costs $16.5 billion spent (1978 ‐ 2016) Staff preliminary recommendation. Commission decision expected September 12.
Secondary Market Sales 21 Influenced by: Retail loads: Higher is better but reduces surplus power Water volume & timing: More water through turbines is better Market prices: Higher is better for “net-sellers” into market Staff preliminary recommendation. Commission decision expected September 12.
How Secondary Market Sales Work Simplified Example Many NW utilities have secondary market sales – particularly BPA 22 3.0 ₵ kWh + Other Costs 3.0 ₵ kWh + Other Costs (2016 Avg: 6.7 ₵ ) (2016 Avg: 6.7 ₵ ) Customers Power Purchase Contract thru 2028 3.0 ₵ + kWh Rate changes Excess Power biannually; Sold on Market Trend is higher 2.6 ₵ kWh Used to Buy Down Same Issue Price changes Retail Rates Impacting BPA hourly; Trend is much lower Power Markets Northwest & California Staff preliminary recommendation. Commission decision expected September 12.
Benton PUD Secondary Sales Average Power Market Price 23 7.00 6.50 ₵ BPA impacted by same price trends 5.82 ₵ 6.00 5.56 ₵ Cents per kilowatt-hour 5.00 4.34 ₵ 4.00 3.25 ₵ 3.14 ₵ 2.77 ₵ 2.67 ₵ 3.00 2.57 ₵ 2.13 ₵ 2.04 ₵ 2.00 - Low natural gas prices (fracking) 1.00 - Wind overbuild in the Northwest - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Budget Power market prices are expected to remain low. Staff preliminary recommendation. Commission decision expected September 12.
Recommend
More recommend
