HomeMy WebLinkAboutMinutes - June 17, 2008 SSCITY OF LODI
INFORMAL INFORMATIONAL MEETING
"SHIRTSLEEVE" SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, JUNE 17, 2008
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday,
June 17, 2008, commencing at 7:02 a.m.
A. ROLL CALL
Present: Council Members — Hitchcock, Hansen, Johnson, Katzakian, and Mayor Mounce
Absent: Council Members — None
Also Present: Deputy City Manager Krueger, City Attorney Schwabauer, and City Clerk Johl
B. TOPIC(S)
B-1 "Energy Cost Adjustment Update"
Deputy City Manager Jim Krueger briefly introduced the subject matter of the energy cost
adjustment (ECA) update.
Electric Utility Director George Morrow provided a PowerPoint presentation regarding the
ECA update. Specific topics of discussion included ECA background, an overview, forms of
ECA, California utilities with ECA, Fitch report excerpt, Standard and Poors excerpt, Lodi
ECA, ECA formula, Northern California Power Agency invoice, fiscal year 2008 load
forecast, sample ECA calculation, ECA variability, actual ECA to date, ECA by rate class,
ECA by class, low residential, mid residential, high residential, commercial, industrial, ECA
actuals, ECA forecast, and a summary.
A brief discussion ensued between Mayor Pro Tempore Hansen and Mr. Morrow regarding
the predictions in newspapers of the rising cost of energy, including that associated with
coal and climate change regulations for the same.
In response to Council Member Johnson, Mr. Morrow stated that, while the specific
Standard and Poors slide reference has not been shared with the industrial users, the flavor
of the same has been shared with the industrial users.
In response to Council Member Hitchcock, Mr. Morrow confirmed that the ECA is based on
the cost for power aipply only and other costs associated with running the utility are
adjusted as necessary on the base rate side.
In response to Council Member Hitchcock, Mr. Krueger stated there are cost of living
adjustments built into the water and wastewater utilities and such adjustments, although
automatic, do require City Council approval.
In response to Mayor Mounce, Mr. Morrow stated the ECA was negative at .0125 during the
month of September in the last year.
In response to Council Member Katzakian, Mr. Morrow stated the numbers for the ECA by
rate class is based on six months.
In response to Council Member Hitchcock, Mr. Morrow stated the Seattle City light
exchange will go on until at least 2014 and a review is done on a regular basis to ensure
the deal remains a good one for the City.
Continued June 17, 2008
In response to Deputy City Manager Krueger, Mr. Morrow stated the next base rate
increase will likely not be until 2012 or 2013 provided there are not any major changes in
the market.
In response to Mayor Pro Tempore Hansen, Mr. Morrow stated that, while there may be
some unknowns with the new Lodi energy center and the fact that a new substation and
transmission lines will be coming online at the same time, he is hopeful that the center will
reduce overall costs. Mr. Morrow stated base costs may be adjusted if necessary to assist.
In response to Council Member Johnson, Mr. Morrow stated that, with respect to debt
service, one series is paid in 2013 and another series is paid in 2015, for a savings of
approximately $5.2 million thereafter.
In response to Council Member Hitchcock, Mr. Morrow stated rate comparisons are difficult
because of the differences in customer size, tier levels, high or low factors, and other
variables. He stated in general the City's electric utility rates for residential are below
Edison and San Diego and comparable with PG&E. Mr. Morrow stated the Electric Utility's
residential customers generally pay approximately 70% less than other electric utility
customers in the State.
In response to Council Member Hitchcock, Mr. Morrow stated other local agency rates are
approximately 20% lower because their power supply costs are less than the City's based
on a variety of factors, including the ability to obtain additional hydro and geothermal power
shares.
In response to Council Member Hitchcock, Mr. Morrow stated larger utilities generally have
more control, entitlement, and rights to their power and provided an example of the Redding
electric utility.
In response to Council Member Hitchcock, Mr. Morrow stated industrial rates also have
many factors in comparisons and generally it appears the City's Electric Utility is 20% to
25% less than other utilities, including PG&E, and more comparable with other public
utilities.
In response to Myrna Wetzel, Mr. Morrow stated every customer pays the same rate,
statistically there may be a higher percentage for lower usage, there still remains an
incentive to save costs by conserving power, there are some considerations regarding
nuclear energy although it is banned currently in California, and solar is still high in price
based on kilowatt hours.
C. COMMENTS BY THE PUBLIC ON NON -AGENDA ITEMS
None.
D. ADJOURNMENT
No action was taken by the City Council. The meeting was adjourned at 8:02 a.m.
ATTEST:
Randi Johl
City Clerk
W
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Energy Cost Adjustment (ECA) Update (EUD)
MEETING DATE: June 17,2008
PREPARED B Y Electric Utility Director
RECOMMENDEDACTION: Receive a presentation by the Electric Utility Director regarding
an update of the Energy Cost Adjustment mechanism.
BACKGROUND INFORMATION: Pursuant to City Council approval, the Electric Utility
Department implemented an Energy Cost Adjustment in August
2007. The purpose of the ECA is to address power supply
related costs that differ from the amount of such costs included in
base electric rates. Attached is a PowerPoint report which
provides additional background and an update on the ECA.
FISCAL IMPACT: None at this time.
FUNDING:
Attachment
Not applicable. C�
F.IY ma
Electric Utility Director
APPROVED:
Blair Kng, City Manager
Electric Utility Update
"ECA"
City Council
June 17, 2008
City of Lodi, California
ECA Background
EUD's previous rates included a "manual"
Market Cost Adjustment (MCA) mechanism
Intent was to review and update
quarterly/regularly to reflect market power costs
Following its initial establishment, MCA level
was not adjusted for over 4 years even though
market power costs changed
MCA varied from zero to as much as 19¢
per KWH depending on rate tariff.
i�
ECA modified the
reflect changes in
" automatically"
Overview
" manual" MCA clause to
power supply costs
Energy Cost Adjustment (ECA) updated
monthly to reflect actual EUD costs
ECA could reflect a charge during periods
where costs are higher than "base" level or a
credit when costs are lower than base level
ECA identical for all rate classes
ll
Forms of ECA
• " ECA " s are called a variety of different names
across the country
• Timeframes of adjustment run from monthly to
quarterly to semi-annually to annually
• The types of charges included in an ECA run the
gamut from all power supply costs, variable
costs only, fuel only, purchased power only, etc.
CI
CA Utilities with ECAs
• Anaheim
• Redding
• Los Angeles
• Roseville■
• Imperial Irrigation District
in Lassen Municipal Utility District
• Pasadena
9
CITY OF ANAB1 ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd Page No. 2021...
Anaheim, CA 42805
SCHEDULE PCRSA
POWER COST ADJUSTMMNTIRATE STABILIZATIONACCOUNT
(FORMERLY KNOWN AS SCHEDULE PCA)
APPLICABH=:
This schedule is applicable to all areas served by the Utility and to all kilowatt-hours billed under all rate schedules
(except domestic lifeline) as dewed under the special conditions of the rate schedules.
PURPOSE:
This factor allows for the recovery of power supply and other relevant operational costs based on actual 12 month
rollmg data from the accounting system and forecasted data to provide the ability for the Utility to meet specified
fmancml performance indicators and goals. These goals include the maintenance of debt service coverage ratios no
less than 1.5 times, rate stabilization account equal to approximately $50 million, and the recovery of expenses
associated with the production and purchase of energy delivered to Anaheim_ This factor also provides a mechanism
to return overcollection of funds when costs decrease.
APPLICATION:
Each quarter, the Utility will recalculate the PCRSA to be added or subtracted to energy service charges_ The
PCRSA shall be calculated as follows:
C'omrnenring January 1, 2007, the Utility will calculate a PCRSA billing £actor that recovers costs relating to the
procurement and generation of energy, including but not limited to power production costs, purchased power costs,
regulatory compliance costs, debt service and any other costs involved in delivering energy to the Utility's local
receiving point(s). There is no limit on the Utility's ability to decrease the PCRSA rate. In order to avoid material
rate fluctuations, increases to the PCRSA billing factor shall he limited to no more than a 'h¢ per kWh during any
12 month period.
Power production costs include the sum of costs for the generation of electric energy at facilities awned and
operated by the Utility or by a facility manager_ Purchased power costs include the sum of costs of energy,
transmission and ancillary services_
Wholesale revenues received from the sale of excess power and the use of the UttWs transmission lines will be used
to reduce the costs that are recovered through the PCRSA.
The Utility will establish a regulatory credit account fimded by PCRSA collections, that maintains a cash reserve
balance equal to approximately $50 million to be used by management to mitigate material fluctuations in the cost
of energy, loss of revenues or unbudgeted costs including the unexpected long-term loss of a generating facility,
unplanned limits on the ability to transmit energy to Anaheimn, or disasters (e.g_ earthquakes, et al) that can
otherwise negatively affect the revenue stream.
This regulatory credit account may be drawn down below the $50 mdhon, at managernent's discretion, to mitigate
the impact on customer bills.
CITY OF REDDING MUNICIPAL UTILITIES - SCHEDULE OF RATES
23
POWER COST ADJUSTMENT
PURPOSE
The purpose of this adjustment is to appropriately adjust for increases in REU's wholesale power
costs due to the Revenue Adjustment Clause (RAC) associated with purchases by REU from the
Department of Energy, Western Area Power Administration (Western).
APPLICATION OF POWER COST ADJUSTMENT
The monthly Power Cost Adjustment (PCA) dollar amount to be added to each bill shall be
obtained by multiplying the number of kilowatt-hours for which the bill is rendered by the
applicable monthly PCA Factor.
CALCULATION OF THE POWER COST ADJUSTMENT FACTORS
1. The PCA Factor will be calculated and made effective every June 15 and December 15 to
reflect any changes in Western's RAC.
2. If Western's RAC amount, in dollars, is a debit (monies owed to Western by Redding), then:
a. Western's RAC debit will be adjusted by:
(1) Subtracting any amount, in dollars, that is over the PCA
Balancing Account's minimum balance of $300,000 as recorded 2
months prior to the effective date of the PCA Factor being
calculated; however,
(2) If the 2 months' prior balance of the PCA Balancing Account is
below $300,000, then the necessary dollar amount required to
restore the account to $300,000 will be added to Western's RAC
debit.
b. The adjusted debit dollar amount (as referenced in Section 2.a.) will be divided
by the adjusted sum of all retail kilowatt-hour sales for the 6 -month period
beginning 12 months prior to the effective date of the PCA Factor.
c. The adjusted sum of retail kilowatt-hour sales (as referenced in Section 2.b.)
will be determined by multiplying the historical total kilowatt-hour sales by a
historical 3 -year average annual energy growth factor to reflect REU's rate of
growth in kilowatt-hour sales.
d. The PCA Factor resulting from the calculations in Section 2.b. will be applied
as a charge to all retail kilowatt-hour sales on a monthly billing -cycle basis
beginning with the effective date of the PCA Factor being calculated.
e. If the calculation of the PCA Factor results in a debit of less than 0.01 cents per
kilowatt-hour, then the PCA Factor will be 0.00 cents per kilowatt-hour. The
RAC debits from Western will be paid from the PCA Balancing Account.
3. A PCA Balancing Account shall be maintained as an operating account for the purposes
of accommodating the cash-flow fluctuations inherent in the PCA process.
N
Lds Angeles
�7[T oe artment of
Water & Power Service Requests . Nlew Your Account. Payment Options.
Understanding the LADWP BIII . Electric Rates . Water Rates. Trouble Reporting
Search
Advanced Search
YOUR ACCOUNT City of Los Angeles Department of Water and Power
............... ... ._.....__-........ _........ Energy Cost Adjustment Factor
Log Qn Reg#star An Energy Cost Adjustment (ECA) shall be added to all bills on
the basis of total energy use. The ECA recovers the costs of
Electric Rate Schedules fuel, purchased power including renewable resources, and
demand side management casts, including revenue losses
►Enterprise Zones through application of the Energy Cost Adjustment Factor
(ECAF).
Energy Cost
Adjustment Factor
r Electric Subsidy
Adjustment Factor
r Reliability Cost
Adjustment Factor
► Standard Eniorgy Credit
0Typical Electric Bills
BILL INSERTS
Opening 1311) Insert -
Residential Customers
Opening Bill Insert -
Commercial Customers
The ECAF shall be calculated four times each year and shall
take effect January 1, April 1, July 1, and October 1,
respectively. For information on the expenses that are included
and how the ECAF is calculated, please see the General
Provisions.
Historical and Projected
Energy Cost Adjustment Biding Factors
All Units in Dollars/kWh
Period
Year
Year
Year
Year
Applicable
2006
2007
2048
2009
January
0.02940
0.0314D
0.03540
0,04440
February
0.02940
0.03140
D.03540
0.04440
March
0.02940
0.03140
8.03540
0.04440
April
0.02940
0.03240
0.03640
0,04540
May
t702940
0.03240
0.03880
0.04540
June
0.02940
0.03240
0.03890
0.04540
July
0.02940
0.03340
0.04240
0.04890
August
0.02940
0.03340
0.04240
0.04890
September
0.02948
0.03340
0.04240
0.04880
October
0.03040
0.03440
0.04340
0.04990
November
0.03040
0.03440
0.04340
0.04990
December
4.030440
0.03440
0.04340
0.04990
Average
0.02965
0.03290
0.03982 1
4.04715
Ci
Contact Customer
Service
Our Call Center is open 24
hours a day, 365 days a
year
Local Calls
1-818-342-5397
Toll Free
1-800-DIAL-DWP
(1-800-342-5397)
TTY
1-800-HEAR-DWP
(1-800-432-7397)
Commensal Customers
(1-800-499$840)
emaii_j..ADWP
RELATED LINKS
LADWP Water and Power
Rate Changes
General Provisions
WERIAL IRRMTION DISTRICT
Imperial, Caltfamia
SCHEDULE EGA
EhIERGY COST ADJUSTRI MT BILLING FACTOR
APPLIICABILJTY
An a*uknrernt amount applicable -b the Iolawat-how (K1NH) porton of all ram
schedules and spedal conn acts as spied therein. 10 a*PA for changes of assts.
recurred by pine of power frim others. A" rlsed iorgenuation of electric energy, and
rw+wrw irflm wholesale sales of energy to other emilks.
RATE
An anorart in -cents per KWH, as calculated in aocw&ffine with the compr>fa imm
bL-km. shag be added k� ar subtraded from the amount debmwkwd under the appit;atle
ram schedde_
COMPUTATION
(a) A ping factDF shall be dete mired each January, to be applied February 1.
by d &b ng the budged }mar energ tusks by iheiotal p rojecbe d KWH sans
to retal customers (Founded to the .01 cent) for the budget yea, less tine
compernent tut per KVM fisted n (h} m accordance with the io kmv ng
formda:
F = C - B
F = Bing FacIQ
G =(E—R ) I K = Ccstper KWH
E = EneW Cam Pro jeclad pIs cr mim the
Balani g Accounts December
B = Ccmpmerrt Cost -of Energy
K = Proje� Kh4H SalesAnnnuaTmed on anAcowndated Monthly Basi
R = Revenue, equal to the cost of the en mW iron vhonsan sans
(b) The flompxznerr owAfQcatcdatiomnfthekHlingfachors�alllbe_$Bceni.per
KWH scold_
LMUD Rete Schedule RDCA
(Ver 1".05)
POWER & DELIVERY ODST ADJUSTMEhrir M-ECKMISM
Ondud Ing a General Explenaflan of Selftisd Mandated Fees & CoetB)
IWMODUCMN
A. W#M Ik5 adaption of this P=er R Dellvery Cas# Adjustment (" PDCA") machanlsm
LMUD Japes numerous other electrrc ufllldas in Callfornfa and aarossthe riaaon that
have ImpWment5d variable rats sbWurea to InW electric rade and costs of
9ervlce to the vdlstile cwtta relating to the procurarnw-t, generation and dailvery of
sneW. These r+olOW coats include, but are not Ilmlted to, Items within the
fallowing categories;
i. natural gas and otherenargy sourcas needed to fuel power planis;
Z. Power Plant and Trw9mission Grid "am CDnstruotion and
Related Equipment:
& Faders) and Stats reguiaiory conViiarice Cc3is;
4. f=ederal and StaU faxeia and suraharges;
5_ State mandated Californla Independent SyMarn: Operator ('CALSO l
fees;
6. Power production oasts (a iuUre go2l). This Is the sum of oasts for
the genergon rat electrlc en"y at led iEias owned (partlaAy or wNNbr) and
operated by LNIUQ or by a facility manager, if any,
T. Purchwatil power coats;
53 Local System Debt service (Bawds & CarfiftcaW of Participation),
1 "Anclllary Sere" Goss, approved by the Federal Energy
Regulatory Commission (FERC") and charged by the Stara'$ CAISO,
re;arted to the de"ry of energy to LIOUD's local ramlviing points);
10. Mete Mandated Local Rel) Ulity Costa; and,
11, Luca[ Rlslrlbutlon eta.
B. This Power d, deliveiy Cost AdJustmerrt rnechanism is also desigri" to reds# the
unpradictablllty of the Stile. federal and "i -kat driven changes in the above
enumerated cost milegorles and W offset the Inflationary presaures on
constrr ietiac, rnalntenanos and operadiyns all' bath the WeOwrn States' aystern grid
and LMUD'Som Ideal diatrlbutlon grid and system -
C. All of the anurnerated Et s of coat In above paragraphs A. & B. era, for
convanienae purposes, referred to herelnoUr as 'Pwmer & Delivery Coats''.
10
13.04.173 Power Cost Adjustrnerrt
A. A Power Cost Adjustment {PCA} shall be added to the energy services
charge set forth in the service schedules of this chapter. Each customer
shall pay the applicable energy services charge plus a PCA for each kWh
delivered to the customer.
E. The PCA shall be based on actual data obtained from the city's accounting
system, forecast data obtained from the annual operational plan approved
by the City
Council, and updated forecast data prepared monthly by PWP.
F. PWP shall recalcu€ate the PCA each month, and the resulting values for
these charges shall be automatically implemented on the first day of the
following month_
G_ For purposes of this section, the following definitions apply:
1. `Direct Access Custorners' shall mean customers who choose an
energy supplier other than PWP, taking service under Section
13.04.095.
2. `Energy Costs' means the sum of all casts related to the procurement
and generation of energy for delivery to Fuil Service Customers,
including, but not limited to, Power Production Costs and Purchased
Power Costs, operating margin, debt service and the general fund
transfer associated with these costs.
3. `Energy Cost Forecast' means the forecast of projected Energy Costs
for the twelve months immediately following the last actual billing
period. This forecast shall be updated monthly by PWP.
4. Energy Services Charge Revenue Forecast means the forecast of
projected Energy Services Charge Revenue for the twelve months
immediately following the last actual billing period_ The energy
services charge set forth in the schedules reflects the energy cost
forecast as of July 1, 2002, based on the approved rate restructuring
plan approved by the City Council adjusted to each customer group's
load profile, and shall remain in effect until modified by Ordinance.
5. `Energy Revenue Credif is a percentage of the Wholesale Net Income
used to reduce the Energy Charge_ The Energy Revenue Credit shall
be applied when the Wholesale Net Income is greater than zero and
shall be determined at least quarterly based on the actual accounting
data as follows: {i} 75% of the Wholesale Net income shall be applied
as a credit, (h) additional amounts may be authorized by Council
Resolution.
6. `Energy Revenue Forecast means the forecast of projected Energy
Revenue Credits for the twelve months immediately following the last
actual billing period_ This forecast shall be updated monthly by PWP_
h.Y P A. S A D E N A.
Water PO r
OE IABOLA GAS AND F.LUCT MC CXH"ANY 5 FZEUr P(O_ M
P_ O_ Box 321 DATE ESQ
owabCity, oulb� 73in
STAMARD rKlBMG SCE32M K FCA 5TAM OF OKIAHOIL3
RIDER FOR FUEL COST ADJUSi2E9T
EFF MYE IIF_ AM %ved
A LH�hAn I1V_ TYm rim is akable in acid Geo®!s a put of ems Okbb=m iii oda
9C M&k i Whk[h refermoe is made ID lie tdEF WpkaVA pend is
earb oAndarper.
FUEL COSr ADJUS'rl MCP The ow&�r bi as ral-i d&d 711dei the staled rates shil be
imetised or dmmLmd far eat kbaalt-haa (MV ams®ed by m mme a z4KM d m
arrnmflanmviththe larmn facmL:
FCA = (FC + TUA - B
MEW FICA= lie SEMA bM aOZODEMPar kWh MU
jr- = lie SEWA k Vd a®aAlZEdaost OffMiVhih My oft tie
mpph3bk seal Eo srdes. The East Ail be the
MioM r9d dlue of kd asd PMThM ed Pnxec eXPMM
a xkdmg Powmmmtb andASS Eaparrgand O&M charges.
TUAMW-Up M*MMIMFfQ ONE piffhkWYAaoe PEMMI
B = De baseEoilaffodperbWk $9029M
S = The wim• kM a®aaked OkLRhcma mLa bWk sales
sahject to the PSI Cod AdimunmL
PC = (VPC x SLB AF) + {PFIC s REA)+ GTC
VFC= The varabk ford aasia ofM mdp¢r{ha9edpoweiE aasiN m
aEtAmmn frX 547 and 555.
JmumKLT iL 29W IP,pWHO
Ralu Anflauiad Me $ 1 20M
by UfiM FLfl 12r12415 _
@OraQ Ida-) TAmm IFarbi ft) the idOrieo DIRECTOR OF
PUBLiC UTILITIES
INDEPENDEPCE POWER & LIGHTBEPART61ENY
rrdWendenee, Mita wi
Scnebue ;FAr1
Pmer Skaft Fuel -Energy CaW �►dlrstr►errt
APPLEMBILrrY
T?M PffPff S Fuel-EXMW Ca61 AJSjA*Mn 9C MUle F,-1 rM #e WpllCable 1D RM
DW@tDwA%FteW lREe SchBMIee R", RS4, G:3-1, LGST-1,7EGS, LP -Z 3CF-1, SP -1, GSSF�-1,
9CIS-1, PSL-2FK PSL--dCF,PSL-3DF MW TRS -1-
POWER SUPPLY FUEL -ENE FtGY ODST 1AiMUSTMEN T
agffig or A*
The Paws SUWIY Fuel-EWM 0011 AgWh at Ram Is d DBMK —42 the Deparkmd Por IN
emgm in ine Dw Qrf11e1 arc energi mdmmg a taxer, {agUffW1; rnMMFlaCeb ftGWgl
firepumiusearsaleareeergytnalheremchletm arenCihCiiueuInMeenmoprloeaper
11ICwud-Nmrad131e Departrnertts RetRRate SctredWe&
,CIstf EFILFanrrulaCharlie
Whale We I)epatrnerff& momlh�rabpsb�tl milt Fuel EB rgyaCrytlorthe pmceM rg calm" mmUh
(a�mslmd for kME PNMWe and si ie DF a mug b mer u0l ) 16 A dnan or em ee s 44 A 47 per
MINIM WLL the NEt Noft4r Eli steal tie deceased OF I=eMid MgMfftfveiy by a imetenagy
arlpwwhnenl ctrarge of 0.0615 cents perKINH aFcugbrrder usage dor eaM one terrthr auU per m■Ion
Bb Wkmp In he wd arfuel mw energy. Tire miDum cerdpermii 3MA=erm rale nbas+ed Lpm a.
p DANINGn eQlc"a0W Sysere KSS hp Leuel r:r 1Z755 (5l1VKW K)flFimel IraattMa Fore=
PH KNH of gUffir M pV&md or purchaFed-
The appllrahoe OF IE morrthlyfuel enefN M*MlrWrrimarge INeacn using FnGWn " apply bD
mestfr rugs OR aQprnufrWIEly rre 20tn day of the month plirrg qiE ane)%tMg eah pXMdm9
mmm% rare no Ca(r; dEter miumon.
Mori:My UnN Fwe -EneW C= Detemtaraian
The aw thlyumtt rW per m■m EU nil be determined drgrn the R*m*q loaowta:
{E+F-G"Eiz{12,766EMU I fl kBk*
KNH I"D.4 mo I3411
W Wm A- Ail? kd Cost pEF 111111lon Ob of e W Nafrni heat used
5- f D Ei cost ur fuel used at dle D+eP wWw Cs Ge� rr9 SblonanWw" sage
and handbg =61E and emimmrwe aedE pur� amb& made by the
Dep rtrneritrr arderla eamplylrft Sla Band Feral ffMm r *r" rem Bots.
C - The =sl at pr.:.3sEd elle energg hrlydtrg i3my Vammisslom iasis ram
after tkilles Fens aj demand ar capao" chmp lexrAm2ge of BD*u
Cars pwetsa m).
Effie Date: January 1, 2046 G-36
Ordlnance #I0. 15886
COF'FEY TU LE MUNICIPAL LIGHT & POWER
RATE SCHEDULE PCA -02
PRODUCTION COST ADJU7STMENI`
All electrical usage in the area served by the City of Coffeyville may be subject to application of
a Production Cost Adjustment (PCA)_ The rates for energy to all customers may be increased by
6.611 l cents per kilowatt-hour (kWh) for each 0.001 cent or major fraction thereof, increase in the
aggregate cost of fuel and energy per kWh as computed by the following formula-
Adjustment
ormula:
Adjustment=�[G+P]
F'+E*LF�—b
Where:
F = Total fuel cost during the current month to supply electric energy to customers_
E = Total cost of purchased power, energy, and transmission thereof , and all other related costs
therefore, including, without limitation, transmission and power supply studies.
G = kWh (gross) generated during the current month.
P = kWh purchased from wholesale suppliers for the current month.
LF = Loss factor shall be equal to the greater of 1.07 or one (1) plus the difference, expressed as a
fraction, between system energy purchased and generated for the previous year and annual retail
use for the same period to account for distribution losses, plant use, and energy furnished free by
the utility to the city_
b = Base cost of $0.0468 per kWh (Summer) and $0_0335per kWh (Winter)_
This adjustment may be made each month, and shall be computed on the cost of fuel and energy
purchased during the monthly period immediately preceding the period for which the energy is
furnished_ An estimated adjustment may be applied to the rates in advance when the city has
reason to believe combined fuel and energy costs will exceed the base cost during the next
monthly period. An example of such a case would be when generation is scheduled during an
upcoming month and there was no generation during the current month. Any amount added to a
monthly bill under the PCA shall not be reduced by any other adjustment. Any month where the
PCA computes as a negative number a cern adjustment will occur. Application of the PCA
during any monthly period shall be at the option of the city.
AdgpW 12119M
Anwnded 06127106
Credit
Effect
Fitch Report "Excerpt'
I I
Positive
Neutral/
Weak
Liquidity Factor Considerations
Quick
Liquidity Access
15
Slow
A
B
Best
Good
oo
Unrestricted cash.
oo Automatic adjustment rate
oo
Cash informally pledged.
(semi annual or longer).
oo
Automatic rate adjustment
oo Cash formally pledged.
(monthly preferred).
oo Margins substantially above rate
oo
No automatic rate adjustment (but
covenant.
good dialogue with board).
oo
Surplus fuel reserves.
C
D
Less Favorable
Least Favorable
oo
Low fuel reserves.
oo Operating margins narrowly
oo
Use of existing commercial paper
meeting rate covenant.
program.
oo No automatic rate adjustment.
oo
Drawdown of bank facility.
oo New long-term deficit
financing.
oo Asset sale.
Quick
Liquidity Access
15
Slow
California Public Power Credits Are Adapting
To An Evolving Market
Publication date: December 18, 2006
"On the financial side, many utilities that lacked fuel or power cost
adjustments five or 10 years ago have now established them. These
adjustments allow for quicker and more complete recovery of
variable power and fuel supply costs, while at the same time
reducing some of the politics that can limit or delay cost recovery.
We believe utilities that have yet to implement some version of a
variable cost recovery mechanism in their rate structures should
certainly consider them, especially those that are gas -dependent, as
these mechanisms can help to stabilize financial performance and
debt service coverage ratios --two key factors in our credit analysis."
Excerpt
16
Lodi ECA
Equals amount of power supply cost different
from 8.31 0/kwh
Monthly based on actual power supply related
costs (NCPA All Resources Bill plus locally
paid for energy, if any)
Adjustment for variations in actual vs. projected
sales on a two month lag
Simple and transparent
Readily trackable auditable
17
ECA Formula
ECA= (a) + (b) - {c}(d+ -(f)
(e)
(a) equals the amount the City of Lodi is actually charged by the Northem California Power Agency for
the billing month, including adjustments for prior billing periods, less any third party revenue credits_
(b) equals the City of Lodi°s estimated costs related to the acquisition of wholesale power: both
financial and physical, procured directly by the City for the billing month, including adjustments for
prior billing periods_
(c) equals the difference between actual retail energy sales and projected sales level for the month
which is two () months prior to the billing month_
(d) equals the ECA billing factor for the month which is two () months prior to the billing month_
(e) equals the forecast of projected retail energy sales for the billing month.
(f) equals the baseline energy cost for the City: of ►0.0831_
NCPA Invoice
0 rmu�
CPAJUL 2 �
110Rr.m.tdll�dhhL4li1S1ER AGEhiCr
InVaus
Cu [ mmr a" Ol um- EAdm 1.w bwl. IHS
L3]Ii91eLmre TOA T& Jpb71ll7hO7
LWIl, C8 tS4SJM
AJU.d .n: rte, Pay.ele TE Ma: PA Lmh 30 Prfr
ALUITTit MaWMMN elkLITOMMUL rnwm J1.GRwhr
wElftwo
RMM M,CA !Elle
Mtimllm!Am Rb&Pl&
Pierre MP711-011
6AT6
GFemprm
AIMF(T
Ai mem Uu
ARP44Af+
hgl All RN rrerd
r3mr■trr:ariea s 3131&,11&
IVERNMAIMM Sm"
M.ryf cSim Itch 1"7,Ap
Ldit Tdrrd F" R-- KHRM3)
s alUL74r
F.kr Mor1�A�iyrrlrro�
Gerrrrtflr }y=
TrONFEASlu Now
mtmd"m t sm km d Am
Lcut T1&d Pira 11,.1o3mom Ktw 1141
ET#N
a9h lillr14f: 12112NIM
ILA a-6
#fs 1ru Sb*PL 5001 NO
4HFNM@W6CAM14 lD{FOR PMEw
Fre 4ep0 Tar P4m Llkra COP-
4pp- /r I-M4411447ki
TOTAL WE- FLL&!z rAY TM AMOUNT
uTT.PAM1Nf11Mj6LTYi r.�.�..e.r..irr.r11.r4Ei.4�lGxrWfielriw,yrair.��.�
*f dbt%.4.r.il—lq RF i&8a rw L dbq 14c1nNeew pvrrrr rel rmkL
$4,127,823
FY08 Load Forecast
$ MEMORANDUM
Office of George F. Morrow, Director
TO: George Morrow
FROM: Stacy Olson
DATE: June 25, 2007
SUBJECT: FY08 Load Forecast
July
2007
August
2007
September
2007
October
2007
November
2007
December
2007
51,989,122
48,104,414
41,651,619
37,276,836
34,647,567
36,667,702
January
2008
February
2008
March
2008
April
2008
May
2008
June
2008
35,884,152
34,446,521
35,573,879
35,204,693
37,887,505
41,770,348
Projected kWh Sales
471,104,356
FY08 projections based on NCPA Generation forecast.
Ge ge F. Morrow
Electric Utility Director
SAMPLE
ECA CALCULATION
ECA = (a) + U - U(d+f) _ (fl
(e)
ECA (1/08) = 3,439,729 + 0 - (-3,159,556) (.0055 +. - .0831
= 3,719,665
411 770) 348
41, 770, 348
- 0.0831
_ .0891 - .0831
_ .006
21
ECA Variability
Generally market power prices higher in
summer and winter (hence higher ECA)
Seattle City Light Exchange
— Reduces power cost in summer months
— Increases power cost in winter months
W
Actual ECA to date
($/kwh)
June
0.0060
May
0.0097
Apr
0.0055
Mar
0.0224
Feb
0.0253
Jan 2008
0.0177
Dec
0.0280
Nov
0.0148
Oct
0.0055
Sep
-0.0125
Aug 2007
0.0027
23
r OF
i *jJ ECA by Rate Class
EA
580,246
ED
427937
EM
91837
G1
163,673
G2
433,651
G3
65,326
G4
70,227
G5
215,272
11
1947578
ES
42,892
11818,638
Note: Actual totals for August 2007 through January 2008 (6 months)
ECA by Class
Note: Actual totals for August 2007 through January 2008 (6 months)
25
$ Collected
% Ttl Dollars
# Accts
% Ttl Accts
Avg ECA/Bill
Residential
633,021
34.81%
24,545
86.47%
25.79
169.10
7,973.69
11,077.02
Small Comm
640,215
35.20%
3,786
13.34%
Lg Comm/Sm In
135,553
7.45%
17
0.06%
Lg Industrial
409,850
22.54%
37
0.13%
1,818,638
100%1
28,385
1 100.00%1
64.07
Note: Actual totals for August 2007 through January 2008 (6 months)
25
Low Residential
07-08 Usage
Tier 1
Tier 2
Tier 3
Tier 4
Tier 5
Subtotal
ECA
Total
ECA %
Jan 585
55.52
16.97
17.21
-
-
89.70
10.35
100.05
11.5%
Dec 544
55.52
16.97
8.05
-
-
80.54
15.23
95.77
18.9%
Nov 445
60.77
2.47
-
-
-
63.24
6.58
69.82
10.4%
Oct 465
66.03
-
-
-
-
66.03
2.56
68.59
3.9%
Sep 700
68.30
20.88
16.76
-
-
105.94
(8.75)
97.19
-8.3%
Aug 735
68.30
20.88
24.59
-
-
113.77
1.98
115.75
1.7%
Total 1 34741
374.44
78.17
1 66.61
1 -
I -
1 519.221
27.951
547.17
5.4%
Note: Actual totals for August 2007 through January 2008 (6 months)
26
Mid Residential
07-08 Usage
Tier 1
Tier 2
Tier 3
Tier 4
Tier 5
Subtotal
ECA
Total
ECA %
Jan 1138
55.52
16.97
61.24
113.21
-
246.94
20.14
267.08
8.2%
Dec 1076
55.52
16.97
61.24
93.49
-
227.22
30.13
257.35
13.3%
Nov 871
64.32
19.58
57.00
8.90
-
149.80
12.89
162.69
8.6%
Oct 1 842
68.30
20.88
48.50
-
-
137.68
4.63
142.31
3.4%
Sep 1060
68.30
20.88
75.32
31.16
-
pp 195.66
(13.25)
182.41
-6.8%
Aug 1011
68.30
20.88
75.32
15.58
-
180.08
2.73
182.81
1.5%
Total 5998
380.26
116.16
1 378.62
1 262.34
-
1 1,137.38
1 57.27
1,194.65
5.0%
Note: Actual totals for August 2007 through January 2008 (6 months)
27
High Residential
07-08 Usage
Tier 1
Tier 2
Tier 3
Tier 4
Tier 5
Subtotal
ECA
Total
ECA %
Jan 1867
55.52
16.97
61.24
124.34
229.02
487.09
33.05
520.14
6.8%
Dec 1490
55.52
16.97
61.24
124.34
104.61
362.68
41.72
404.40
11.5%
Nov 1009
64.32
19.58
70.85
33.07
-
187.82
14.93
202.75
7.9%
Oct 1076
68.30
20.88
75.32
36.25
-
200.75
5.92
206.67
2.9%
Sep 1722
68.30
20.88
75.32
152.96
92.07
409.53
(21.53)
388.00
-5.3%
Aug 1832
68.30
20.88
75.32
152.96
128.37
445.83
4.95
450.78
1.1%
Total 1 8996
380.26
116.16
419.29
623.92
1 554.07
1 2,093.70
79.04
2,172.74
3.8%
Note: Actual totals for August 2007 through January 2008 (6 months)
Commercial
07-08
Usage
Tier 1
Cust Chg
Subtotal
ECA
Total
ECA %
13.1%
20.5%
8.6%
3.0%
-6.9%
1.5%
Jan
5240
696.92
10.35
707.27
92.75
800.02
Dec
4760
633.08
10.35
643.43
131.85
775.28
Nov
5320
910.05
10.35
920.40
78.74
999.14
Oct
4880
877.62
10.35
887.97
26.84
914.81
Sep
7440
1,338.01
10.35
1,348.36
(93.00)
1,255.36
Aug
6520
17172.56
10.35
17182.91
17.60
17200.51
Total
34160
5,628.24
62.10
57690.34
254.78
5,945.12
4.5%
Note: Actual totals for August 2007 through January 2008 (6 months)
29
Industrial
Note: Actual totals for August 2007 through January 2008 (6 mo
30
Off Peak
Partial Peak
On Peak
Cust Chg
Subtotal
ECA
Total
ECA %
Jan -2008
11,589.36
9,300.73
-
128.13
21,018.22
3,470.74
24,488.96
16.5%
Dec -2007
12,791.48
9,669.45
-
128.13
22,589.06
6,018.68
28,607.74
26.6%
Nov -2007
13,959.73
8,009.16
1,061.03
128.13
23,158.05
3,074.35
26,232.40
13.3%
Oct -2007
13,165.26
6,445.81
962.67
128.13
20,701.87
986.18
21,688.05
4.8%
Sep -2007
13,645.51
7,735.94
1,135.31
128.13
22,644.89
(2,513.08)
20,131.81
-11.1%
Aug -2007
14,296.96
6,640.53
2,415.08
128.13
23,480.70
535.41
24,016.11
2.3%
Totals
79,448.30
47,801.62
5,574.09
768.78
133,592.79
11,572.28
145,165.07
8.7%
Note: Actual totals for August 2007 through January 2008 (6 mo
30
ECA Actuals
r Type
Usage
Elec Amt
ECA Amt
Billed Amt
ECA %
Residential
3,474
$
519.22
$
27.95
$
547.17
5.4%
5.0%
3.8%
4.5%
8.7%
Residential 5,998 $ 1,137.38 $ 57.27 $ 1,194.65
E
e Residential 8,996 $ 2,093.70 $ 79.04 $ 2,172.74
cial (G1) 34,160 $ 5,690.34 $ 254.78 $ 5,945.12
al n/a $ 133,592.79 $ 11,572.28 $ 145,165.07
Note: Actual totals for August 2007 through January 2008 (6 months)
31
ECA Forecast
FY08
0.73
FY09
1.4
FY1 0
1.3
FY1 1
0.9
32
Summary
• City has implemented an ECA beginning in August 2007
• Similar to Lodi's past Market Cost Adjustment Charge
(MCA)
• Consistent conceptually with the rate/fiscal practices of
many other electric utilities.
• Operates automatically versus past MCA which required
manual action to change
11
Reduces Lodi's exposure to market energy prices
Recommended by financial rating agencies
33
Questions/Comments?
34