Rate Proceeding November 5, 2019 – Chehalis
Agenda ▪ What’s Driving the Rate Increase? ▪ Proposed Rate Changes ▪ Residential Rate Increase ▪ Residential Rate Comparison ▪ Commercial Rate Increase ▪ Review Staff Proposal ▪ Programs and Services to Assist Customers ▪ Key Dates ▪ Questions / Answers
What’s Driving the Rate Increase? ▪ BPA Wholesale Power and Transmission Rates ⚫ Power surcharge analysis to be completed in November 2019 ⚫ Transmission increase October 1, 2019 ❖ Financial Reserve Policy ❖ Reduced revenue from surplus power sales ❖ Needed capital investment ❖ Mandatory compliance requirements ▪ Depressed Surplus Power Prices ⚫ Reduced revenue from surplus sales ▪ Energy Independence Act (EIA) aka I-937 ⚫ Renewable energy requirement – 2012 (3%) – 2016 (9%) – 2020 (15%) ▪ Conservation ⚫ Reduced retail sales, partially offset by increased surplus power sales
What’s Driving the Rate Increase? ▪ Capital Projects Investment & Contract Tree Trimming ⚫ Increase in investments to ensure reliable service ▪ Increasing Operating Costs – Material, Goods & Labor ⚫ Reliable service and compliance requirements ▪ Cash Reserves Level ⚫ Cash reserves are less than optimal ▪ Current and Future ⚫ Loss of Residential Exchange Credit / Industrial Load Loss / Clean Energy Transportation Act (CETA)
Proposed Rate Changes ▪ Proposed Rate Changes Effective January 1, 2020 ⚫ No change to the per day basic charge ❖ Single phase = $0.95 ❖ Three phase = $1.57 ⚫ No change to the demand charge ⚫ Increase energy (kWh) charge for all metered accounts ❖ Residential, Industrial, and Irrigation kWh rate schedules increased 4.75% ❖ Residential customer using 1,400 kWh per month would see an increase of $4.43 or 3.6% per month (excluding city taxes) ❖ Commercial declining rate block differential reduced • First tier – 0 to 15,000 kWh increase 2.73% • Second tier – over 15,000 kWh increase 10.55% ❖ Impacts customers within a class differently
Proposed Rates Residential Rate Increase Present Rates Proposed Rate Option 0.06591 Energy Rate ($/kWh) 0.06293 4.74% Base ($/day) 0.95 0.95 Monthly Monthly $ Percent kWh Bill Bill Difference Difference 100 $ 36.89 $ 37.20 $ 0.31 0.9% 200 43.56 44.19 0.63 1.5% 300 50.23 51.18 0.95 1.9% 400 56.90 58.16 1.26 2.2% 500 63.57 65.15 1.58 2.5% 600 70.24 72.14 1.90 2.7% 700 76.91 79.13 2.22 2.9% 800 83.59 86.11 2.52 3.0% 900 90.26 93.10 2.84 3.2% 1,000 96.93 100.09 3.16 3.3% 1,100 103.60 107.07 3.47 3.3% 1,200 110.27 114.06 3.79 3.4% Residential 1,300 116.94 121.05 4.11 3.5% average monthly 1,400 123.61 128.04 4.43 3.6% 1,500 130.29 135.02 4.73 3.6% consumption 1,600 136.96 142.01 5.05 3.7% 1,700 143.63 149.00 5.37 3.7% 1,800 150.30 155.99 5.69 3.8% 1,900 156.97 162.97 6.00 3.8% 2,000 163.64 169.96 6.32 3.9% 2,500 197.00 204.90 7.90 4.0% 3,000 230.36 239.83 9.47 4.1% 3,500 263.71 274.77 11.06 4.2% 4,000 297.07 309.71 12.64 4.3% 4,500 330.43 344.64 14.21 4.3% 5,000 363.78 379.58 15.80 4.3% 5,500 397.14 414.52 17.38 4.4% Based on 30 day month, includes Public Utility Tax 3.8734% and Privilege Tax 2.14%, does not include city taxes
Residential Rate Comparison
Proposed Rates Commercial Rate Increase Present Rates Proposed Rate Option Energy Rate ($/kWh) 0 to 15,000 0.06416 0.06591 2.73% 0.04745 Over 15,000 0.04292 10.55% Demand Charge ($/kW) First 50 0.00 0.00 Over 50 5.81 5.81 Base ($/day) Single Phase 0.95 0.95 Three Phase 1.57 1.57 Monthly Monthly $ Percent kWh Bill Bill Difference Difference 500 $ 64.22 $ 65.15 $ 0.93 1.4% 1,000 98.23 100.09 1.86 1.9% 2,000 166.25 169.96 3.71 2.2% 3,000 234.27 239.83 5.57 2.4% 4,000 302.29 309.71 7.42 2.5% Tier 1 only 5,000 370.30 379.58 9.28 2.5% 7,500 540.35 554.26 13.91 2.6% 10,000 710.40 728.95 18.55 2.6% 12,500 880.44 903.63 23.19 2.6% 15,000 1,050.49 1,078.32 27.83 2.6% 20,000 1,277.99 1,329.83 51.84 4.1% 25,000 1,505.50 1,581.35 75.85 5.0% 30,000 1,733.00 1,832.87 99.86 5.8% 35,000 1,960.51 2,084.38 123.88 6.3% 40,000 2,188.01 2,335.90 147.89 6.8% 45,000 2,415.52 2,587.42 171.90 7.1% 50,000 2,643.02 2,838.93 195.91 7.4% Tier 1 + Tier 2 60,000 3,098.03 3,341.97 243.94 7.9% 70,000 3,553.04 3,845.00 291.96 8.2% 80,000 4,008.05 4,348.03 339.98 8.5% 90,000 4,463.06 4,851.07 388.01 8.7% 100,000 4,918.07 5,354.10 436.03 8.9% 250,000 11,743.21 12,899.60 1,156.39 9.8% 500,000 23,118.45 25,475.44 2,357.00 10.2% Based on 30 day month, includes Public Utility Tax 3.8734% and Privilege Tax 2.14%, does not include demand or city taxes
Review Staff Proposal ▪ Proposed Rate Changes Effective January 1, 2020 ⚫ No change to the per day basic charge ❖ Single phase = $0.95 ❖ Three phase = $1.57 ⚫ No change to the demand charge ⚫ Increase energy (kWh) charge for all metered accounts ❖ Residential, Industrial, and Irrigation kWh rate schedules increased 4.75% ❖ Residential customer using 1,400 kWh per month would see an increase of $4.43 or 3.6% per month (excluding city taxes) ❖ Commercial declining rate block differential reduced • First tier – 0 to 15,000 kWh increase 2.73% • Second tier – over 15,000 kWh increase 10.55% ❖ Impacts customers within a class differently ▪ Comprehensive Rate Study to be Completed in 2021 ⚫ Revenue requirement ⚫ Cost of Service Analysis (COSA) ⚫ Rate design - additions/adjustments
Programs and Services to Assist Customers ▪ FREE Energy Audits ▪ Rebates and Incentives ▪ Low Income Weatherization ▪ Commercial/Industrial Efficiency Programs ▪ Energy Efficiency Loans ▪ Residential Budget Payment Plans ▪ Project Share Assistance ▪ Community Organization Referrals
Key Dates ▪ September 17, 2019 Commission acceptance of Rate Proceeding date and approval for publication of Rate Proceeding Notice ▪ September 19 and 26, 2019 Publish Rate Proceeding Notice ▪ October 4, 2019 Information available on website and at District offices ▪ October 15, 2019 PUD Rate Proceeding - Morton ▪ November 5, 2019 PUD Rate Proceeding - Chehalis ▪ November 5, 2019 Final date to receive written comments from the public prior to resolution prepared for Commission adoption ▪ November 19, 2019 First reading of new rate schedule resolution ▪ December 3, 2019 Second reading and approval of new rate schedule resolution, action effective January 1, 2020
Questions / Answers www.lcpud.org
Thank You. Brad Ford, CFO 360.740.2417 bradf@lcpud.org www.lcpud.org
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