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1
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- FINANCIAL REVIEW
- ALLOCATED COST OF SERVICE ANALYSIS
- AND
- RETAIL RATE REVISIONS
- Presentation to City Council
- January 11, 2010
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2
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- Overview
- Financial Review
- Allocated Cost of Service Analysis
- Rate Revision Guidelines
- Retail Rate Revisions
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3
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- Determine Overall Revenue Requirement
- Perform Allocated Cost of Service Analysis
- Establish Rate Revision Guidelines
- Examine Competitive (Comparative) Position
- Develop Retail Rate Revisions
- Implement Revised Retail Rates
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4
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5
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6
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7
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- Revenue Does Not Meet Revenue Requirement
- Deficit Net Income After Transfer to General Fund
- Rate Increase of 6% Should be Implemented March 1, 2010
- Address Deficit Net Income
- Reverse the Trend of Declining Reserve Fund Balances
- Begin Phase-In Recovery of New Power Contract
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8
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9
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- Residential RS
- Small General Service SGS
- Medium General Service MGSI
- Medium General Service Demand MGSD
- Large General Service LGS
- Municipal Service MS
- Load Control Service LC
- Outdoor Lighting OL
- Church and Synagogue Service (New) CS
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10
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- Identify Revenue For Each Present Rate Class
- Total Dollars
- Rate Components
- Examine Costs to Serve Each Rate Class
- Direct (Specific)
- Allocated (Estimated)
- Determine the Adequacy of Each Present Rate
- Operating Income
- Rate of Return
- Relative Rate of Return
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11
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- Variances (Inequities) Among Rate Classes is Very Common
- VSCC Does Not Require Uniform ROR
- Movement Towards Better Equity is Sufficient
- General Indication of Cost Responsibility
- Results Should Not Be Strictly Interpreted
- (Modeling) versus (Data)
- Sensitivity Increases as Rate Class Size Decreases
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12
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13
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14
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15
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16
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17
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- “Base Rates” Effective January 15, 2001
- Fuel and Purchased Power Cost Adjustment Schedule PCA
- Fuel Cost Adjustment is Pass-Thru of Wholesale FA Factor
- April 2008 to May 2009 =
$0.02279 per kWh
- June 2009 to November 2009 =
$0.01096 per kWh
- December 2009 to May 2010 =
$0.00556 per kWh
- Change in FA = $17.23 Decrease on a Bill for 1,000 kWh
- Purchased Power Cost Adjustment Portion Not Currently Used
- Consumption Tax and Local Tax Added to Rate Charges
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18
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- Rates to Remain Competitive with Neighboring Utilities
- Projected kWh Sales to Stay Level or Decrease vs FY 2009
- Revised Rates to Increase Total Revenue by 6%
- Develop Separate Rate Class for Places of Worship
- Load Control Rate To Be Phased Out Before 12-31-10
- Reduce the Relative ROR for the SGS Rate Class
- Increase Customer Charge Rate Component
- Preliminary Revised Rates Presented to City Council 01-11-10
- Final Revised Rates Presented to City Council 01-25-10
- Revised Retail Rates To Be Effective 03-01-10
- Rates Reviewed Again in Mid-CY2010 and Then Annually
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19
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20
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21
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22
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23
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24
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25
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26
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27
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28
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29
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30
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31
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32
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33
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34
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35
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36
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37
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38
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39
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40
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41
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42
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43
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44
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- Schedule CS Availability:
- This rate schedule is available only to synagogues and churches of all
denominations for the supply and delivery of all of the electric
service requirements of the Customer. The availability of this rate
schedule shall be limited to the meter that serves the synagogue or
church building in which the sanctuary or principal place of worship is
located.
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45
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46
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47
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48
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49
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50
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51
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52
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- Rate Revisions Produce Overall Revenue Increase of 6%
- Rate Increases Vary Based Partially on Cost of Service Results
- Comparison with Other Utilities’ Rates Considered
- Implementation on March 1, 2010
- Continue to Pass-Thru Wholesale FA Factor
- Next Retail Rate Revision in Summer 2010
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Notes
