2013 coss board presentation may 2013
DESCRIPTION
Cost of Service Study Board PresentationTRANSCRIPT
Rate Analysis & Costof Service StudyPowder River Energy Corporation
Presented by: David HedrickGuernsey
May 21, 2013
2
Objectives
Review 2012 Rate Analysis and Cost of Service Study
Review financial goals and objectives
Review objectives for general rate filing- Additional rate revenue required- Class revenue requirements- Rate design changes
3
Rate Philosophy
Balance Conflicting Concerns
Financial Objectives
versus
Minimizing Member Impact
4
Steps in the Cost of Service Study Process
Monitor Performance
Coordinate Rate Design with the Line Extension Policy
Define the Customer Revenue Requirement
Define the Rate Class Revenue Requirement
Define the System Revenue Requirement
5
DEFINE SYSTEM REVENUE REQUIREMENT
Cost of Service Study:
6
Define the System Revenue Requirement
Make adjustments to test year financial information for changes that are known, measurable and continuing in nature
Determine margin required to meet long-range financial goals
7
Development of Adjusted Test Year
Test year ending December 31, 2012
Historical test year with adjustments- Revenue adjustments
- Applied existing rates and current COPA to adjusted billing units- Sales adjustments:
- Decline in sales for GS-CBM, LP-CBM, LPT and LPT-CBM
- Removed deferred revenue
- Purchased power adjustments- Applied 2013 wholesale rates
8
Development of Adjusted Test Year
Historical test year with adjustments- Payroll expense reflects current employees and budgeted positions- Benefits expense reflects increased benefit premium for 2013- Existing plant in service
- Includes $6.5 million of electric plant completed and in service but not classified at end of test year
- Future plant additions not included
- Depreciation expense reflects additional $6.5 million of plant and removal of regulatory debit
- Interest expense adjustment- No new borrowing
9
Large Power Contracts:Minimum Billing Demand and Zero Usage
COSS adjusted to reflect contracts that expired at the end of 2012
681 Large Power CBM accounts
Removed 358,247 Billed kW
10
Usage Adjustments
Test Year 2012 kWh
Budget 2013 kWh Change
Residential 202,505,034 210,008,531 3.7%Seasonal 8,631,442 8,200,000 -5.0%Irrigation 4,425,396 2,500,000 -43.5%GS 139,993,411 142,909,871 2.1%GS-CBM 79,160,604 66,261,032 -16.3%LP 440,889,881 466,600,400 5.7%LP-CBM 579,824,495 431,747,000 -25.5%LPT 1,227,007,339 1,121,946,000 -8.6%LPT-CBM 102,816,544 80,874,000 -21.3%LPC-CBM 31,754,186 33,754,000 6.3%Lighting 3,016,414 3,016,414 0.0%Totals 2,821,093,279 2,568,830,490 -8.9%
11
Primary Concerns in Developing Test Year Data
Proper matching of expenses and billing units
Costs, billing units and resulting unit rates are forward looking
Data can be supported if it is:- Known- Measurable- Continuing in nature
Unit rates reflect “normal” conditions
12
Financial Criteria Required to Define Return
Board Objectives- Recover adjusted test year expenses- Equity objective- Capital credit refund- General funds level- Coverage ratios
Other Factors- Level of plant additions- Cost of debt
13
System CapitalizationTest Year
2007 2008 2009 2010 2011 12/31/2012
Long-Term Debt $ 99,912,033$ 121,455,518$ 118,298,169$ 121,509,046$ 117,567,179$ 121,417,323Equity 124,341,131 147,555,680 161,407,373 166,150,963 174,121,844 182,106,139Total Capitalization $ 224,253,164$ 269,011,198$ 279,705,542$ 287,660,009$ 291,689,023$ 303,523,462
Other Allocated Patronage 46,772,384 69,761,229 79,517,757 84,534,897 90,900,223 101,394,141
Long-Term Debt $ 99,912,033$ 121,455,518$ 118,298,169$ 121,509,046$ 117,567,179$ 121,417,323Equity Excluding Other Patronage Capital 77,568,747 77,794,451 81,889,616 81,616,066 83,221,621 80,711,998Total Capitalization $ 177,480,780$ 199,249,969$ 200,187,785$ 203,125,112$ 200,788,800$ 202,129,321
Percent CapitalizationLong-Term Debt 44.55% 45.15% 42.29% 42.24% 40.31% 40.00%Equity 55.45% 54.85% 57.71% 57.76% 59.69% 60.00%Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Total Assets $ 289,759,636$ 334,046,557$ 345,227,193$ 359,530,407$ 362,040,082$ 373,448,492
Equity as % of Total Assets 42.91% 44.17% 46.75% 46.21% 48.09% 48.76%
Percent Capitalization Excluding Other Patronage CaptialLong-Term Debt 56.29% 60.96% 59.09% 59.82% 58.55% 60.07%Equity 43.71% 39.04% 40.91% 40.18% 41.45% 39.93%Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Total Assets Excluding Other Patronage Captial 242,987,252 264,285,328 265,709,436 274,995,510 271,139,859 272,054,351
Equity as % of Total Assets 31.92% 29.44% 30.82% 29.68% 30.69% 29.67%
14
Capital Credits Retired
Special General Total
2002 $ 127,766 $ 2,899,856 $ 3,027,6222003 173,652 1,471,899 1,645,5512004 184,767 1,499,609 1,684,3762005 209,669 1,499,999 1,709,6682006 287,587 1,900,000 2,187,5872007 205,269 2,127,398 2,332,6672008 158,927 1,900,000 2,058,9272009 374,550 2,127,398 2,501,9482010 309,515 1,976,845 2,286,3602011 320,002 1,965,305 2,285,3072012 365,416 1,925,087 2,290,503Total $ 2,717,120 $ 21,293,396 $ 24,010,516
15
Calculation of Desired General Funds
Purchased Power $ 144,828,777Payroll 7,950,808Benefits 6,847,849Payroll Taxes 951,346Interest 5,936,620Principal Payments 5,267,269Total $ 171,782,670
Plant Balance $ 339,548,741
Ratio toDesired General Funds: Days Plant Amount
15 2.08% $7,059,562 30 4.16% $14,119,124 45 6.24% $21,178,685
Estimated General Funds 42 5.88% $19,969,430
16
Growth Rate in Net Plant
Utility Accum. PercentAdditions Retirements Plant Deprec. Net Plant Change
December 31, 2003 20,440,477 1,586,707 188,053,851 64,145,809 123,908,042December 31, 2004 32,152,491 1,022,700 219,183,642 69,620,963 149,562,679 20.70%December 31, 2005 19,858,942 2,328,982 236,713,602 74,685,320 162,028,282 8.33%December 31, 2006 24,135,751 1,420,437 259,428,916 81,874,600 177,554,316 9.58%December 31, 2007 28,080,809 1,898,814 285,610,911 90,118,561 195,492,350 10.10%December 31, 2008 20,041,003 3,716,594 301,935,320 97,673,097 204,262,223 4.49%December 31, 2009 16,844,680 814,776 317,965,224 107,996,279 209,968,945 2.79%December 31, 2010 13,707,045 3,829,381 327,842,888 118,065,334 209,777,554 -0.09%December 31, 2011 8,734,849 2,770,526 333,807,211 128,393,859 205,413,352 -2.08%December 31, 2012 8,573,986 2,832,453 339,548,744 139,223,634 200,325,110 -2.48%
Compound Growth 2003-2012 5.48%Compound Growth 2007-2012 0.49%
Projected 12/31/2013 18,500,000 3,000,000 355,048,744 145,579,029 209,469,715 4.56%Projected 12/31/2014 9,574,726 3,000,000 361,623,470 148,274,834 213,348,636 1.85%Projected 12/31/2015 9,715,059 3,000,000 368,338,529 151,028,179 217,310,350 1.86%Projected 12/31/2016 9,509,460 3,000,000 374,847,989 153,697,224 221,150,765 1.77%Projected 12/31/2017 5,635,285 3,000,000 377,483,274 154,777,758 222,705,516 0.70%
17
Long-Term DebtAdjustedPrincipal Interest
Outstanding Rate Interest
RUS 2% $ 448,873 2.000% $ 8,977
RUS Other1B520 6,526,739 4.638% 302,710 1B521 4,334,804 4.850% 210,238 1B522 5,430,894 4.280% 232,442 1B530 11,322,050 4.690% 531,004 1B531 11,774,293 4.720% 555,747 1B532 8,490,879 4.430% 376,146
CFC9007 1,915,280 6.100% 116,832 9009 276,942 6.100% 16,893
OtherH0010 186,449 7.773% 14,493 H0015 25,866 7.378% 1,908 H0020 20,872,281 3.245% 677,306 F0025 48,316,222 3.602% 1,740,350 F0030 17,707,748 3.821% 676,613 Additional Loan Funds 3.670% 0
RI0323T03 12,669,242 3.670% 464,961
Economic Development 1,000,000 1.00% 10,000
Total $ 151,298,563 $ 5,936,620
Test Year Expense 6,296,290
Adjustment $ (359,670)
Average Interest Rate 3.92%
18
Cash Revenue Requirement – Cash Basis
Where does cash come from?- Cash margin from operations- Cash capital credit retirements from others- Cash from line extension contributions- Cash from CBM mitigation policies- Borrowing
Where must cash go?- Pay operating expenses including interest- Pay principal on long-term debt- Pay for plant additions
19
Cash Revenue Requirement – Cash Basis
Other possible uses for cash- Build equity by financing plant additions- Retire capital credits- Build cash reserves by increasing Cash-General Funds level- Pay principal on short-term borrowing
20
Cash Revenue Requirement
Cash Requirement Development of Cash-General Fund Level
Plant Additions $ 12,596,595 Cash-General Funds $ 5,305,807 Desired Equity 60.00% Special Deposits 0
Temporary Investments 14,663,622 Cash Requirement for Plant $ 7,557,957 Other Investments & Special Funds 0
Total $ 19,969,430 Capital Credit Retirements $ 2,325,000 Principal Payments 5,267,269 Total Utility Plant in Service $ 339,548,741 Cash to Attain Desired Level 0 Current Level % 5.88%Total $ 15,150,226
Desired Level % 0 Adj Depreciation Expense $ 13,588,082 Desired Level $ $ 19,969,430 Post Retirement Benefits 179,361 Operating Margins (Adjusted) (6,220,915) Desired Total Increase $ 0 Interest Income/Capital Credits Cash 2,390,459 Net Cash from Operations $ 9,936,987 Years to Increase 0
Desired Annual Cash Increase $ 0 Annual Additional Cash Required $ 5,213,239
Proposed Rate Change $ 6,873,943
21
Financial Ratios
Test Year Adjusted Test Year
Proposed Test Year
Operating TIER 1.10 -.05 1.11Net TIER 2.46 1.40 2.55Net TIER w/o Cap Credits
1.45 .33 1.49
RUS OTIER 1.14 -.01 1.15DSC 2.78 1.95 2.57RUS ODSC 2.03 1.21 1.82Rate of Return 3.48% 0.02% 3.33%
22
Components of Revenue Requirement
Revenues- Energy Sales- Other- Total Revenue
Expenses- Purchased Power - Transmission/Distribution O&M- Consumer Accounting & Sales- Administrative & General- Depreciation- Taxes
23
Components of Revenue Requirement
Return
Interest Expense & Other Deductions
Operating Margin
Non-Operating Income
Net Margin
24
Income Statement – For 12/31/12Test Year Adjusted Rate Adjusted w/12/31/12 Adjustments Test Year Change Rate Change
Operating Revenues (a) (b) (c) (d) (e)Base Revenue $ 160,698,575 $ (15,646,465)$ 145,052,110 $ 38,550,429 $ 183,602,539 COPA 28,206,376 3,470,110 31,676,486 (31,676,486) 0 Deferred Revenue (700,000) 700,000 0 0 0 Other 1,814,643 0 1,814,643 0 1,814,643 Total $ 190,019,594 $ (11,476,356)$ 178,543,239 $ 6,873,943 $ 185,417,182
Operating ExpensesPurchased Power $ 144,828,777 $ (4,413,927)$ 140,414,851 $ $ 140,414,851 Transmission O&M 1,215,136 (144,711) 1,070,425 1,070,425 Distribution-Ops 8,937,681 320,340 9,258,021 9,258,021 Distribution-Maint. 3,398,313 312,571 3,710,884 3,710,884 Cons Acctg 2,542,471 288,497 2,830,968 2,830,968 Cust Service 81,154 3,317 84,471 84,471 Admin & General 5,664,905 455,408 6,120,313 6,120,313 Depreciation 15,632,332 (2,044,250) 13,588,082 13,588,082 Tax 484,376 932,000 1,416,376 1,416,376 Total $ 182,785,146 $ (4,290,756)$ 178,494,391 $ 0 $ 178,494,391
Return $ 7,234,448 $ (7,185,600)$ 48,848 $ 6,873,943 $ 6,922,791
Interest & Other Deductions
Interest on L-T Debt $ 6,296,290 $ (359,670)$ 5,936,620 $ $ 5,936,620 Interest-Other 108,778 0 108,778 108,778 Other Deductions 224,365 224,365 224,365 Total $ 6,629,433 $ (359,670)$ 6,269,763 $ 0 $ 6,269,763
Operating Margin $ 605,015 $ (6,825,930)$ (6,220,915)$ 6,873,943 $ 653,028
Non-Operating MarginsInterest Income $ 2,140,098 $ $ 2,140,098 $ $ 2,140,098 Other Margins 28,040 28,040 28,040 G&T Capital Credits 6,316,539 6,316,539 6,316,539 Other Capital Credits 88,028 88,028 88,028 Total $ 8,572,705 $ 0 $ 8,572,705 $ 0 $ 8,572,705
Net Margins $ 9,177,720 $ (6,825,930)$ 2,351,790 $ 6,873,943 $ 9,225,733
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What is driving the Revenue RequirementReduced Operating Margins
- Decline in sales- Expiration of minimum bill contracts- Increase in operating expenses- Increased maintenance expenses
Sufficient cash for general funds, financing plant additions and maintain equity and paying capital credits
RUS OTIER minumum obligation
26
DEFINE CLASS REVENUE REQUIREMENT
Cost of Service Study:
27
Cost of Service Allocation
Allocates plant investment and operating expenses to the various rate classes
Identifies the return (margin) provided under existing rates
Identifies the required revenue change (increase or decrease) for each rate class
28
A Rate or Customer Class is usually defined by:- Existing rate schedule- Proposed rate schedule
Customers are grouped together if they:- Use energy in similar ways- Cause similar types of costs
Customers Grouped Together
29
Steps in Development of Cost of Service Study
1.• Functionalize Costs
2.• Classify Costs
3.• Develop Allocation Factors
4.• Allocate Investment & Responsibility
30
Classify Costs
Classification of Costs- Fixed (demand)- Variable (energy)- Customer- Direct
Concepts- System is designed to serve customer load- Load is defined in terms of:
- Peak demand- Energy requirements- Number of customers served
31
Allocation Factors
Energy- Sales- Adjust for losses
Customer- Actual Customers- Weighted Customers
Capacity / Demand- Coincident Peak (CP) and Non-Coincident Peak (NCP)- Purchased Power- System
32
Allocation Factors
Consistent methodology and assumptions
Allocation factors updated with current costs and reflect changing relationships between the classes- Meter equipment costs were identified through continuing property
records- Single phase and three phase meter equipment costs were allocated to
appropriate classes
33
Customer Subsidies
Inter-Class Subsidies- Charging one group of customers
more than their share as compared to other member groups
Intra-Class Subsidies - Charging one or more members
within a group more than their share as compared to other members of the group
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Cost Allocation Summary – Existing Rates
35
Cost Allocation Summary – Existing Rates
36
Comparison of Cost Allocation Summaries
Res Seasonal GS LP LP-Trans GS-CBM LP-CBM LPT-CBM
Existing Rates - TY Ending 12/31/96Operating Revenue 6,238,933 437,021 7,470,998 15,135,910 26,681,004 Rev deficiency Uniform ROR = 2.00 1,674,539 528,298 1,288,104 (608,968) (5,154,500)Deficiency % of class revenue 26.84% 120.89% 17.24% -4.02% -19.32%
Existing Rates - TY Ending 12/31/06Operating Revenue 10,604,425 1,035,474 7,500,487 15,675,264 35,607,745 10,138,065 37,680,083 3,549,055 Rev deficiency Uniform ROR = 3.716 515,347 342,928 240,411 (107,551) (636,505) (331,909) 422,410 49,927 Deficiency % of class revenue 4.86% 33.12% 3.21% -0.69% -1.79% -3.27% 1.12% 1.41%
Existing Rates - TY Ending 12/31/07Operating Revenue 15,160,816 1,356,968 9,727,716 20,694,724 51,773,592 10,551,203 51,103,688 8,066,543 Rev deficiency Uniform ROR = 3.765 76,480 186,435 414,654 (463,427) 10,179 (150,003) (78,767) (76,266)Deficiency % of class revenue 0.50% 13.74% 4.26% -2.24% 0.02% -1.42% -0.15% -0.95%
Existing Rates - TY Ending 12/31/08Operating Revenue 14,610,228 1,384,428 9,557,552 19,786,810 49,784,528 10,885,300 49,273,116 6,970,359 Rev deficiency Uniform ROR = 3.216 80,423 108,230 109,280 (520,496) 26,890 198,021 899,654 (22,635)Deficiency % of class revenue 0.55% 7.82% 1.14% -2.63% 0.05% 1.82% 1.83% -0.33%
Existing Rates - TY Ending 12/31/09Operating Revenue 16,793,259 9,599,952 22,085,634 53,227,058 9,047,092 51,086,857 8,171,482 Rev deficiency Uniform ROR = 3.527 30,866 (157,334) (205,316) (807,087) 493,374 736,360 (101,645)Deficiency % of class revenue 0.18% -1.64% -0.93% -1.52% 5.45% 1.44% -1.24%
Existing Rates - TY Ending 12/31/12Operating Revenue 19,052,362 11,184,261 31,301,699 64,037,299 6,567,580 39,130,246 4,449,335 Rev deficiency Uniform ROR = 3.527 1,281,164 1,048,218 1,285,610 52,497 805,359 2,263,877 104,175 Deficiency % of class revenue 6.72% 9.37% 4.11% 0.08% 12.26% 5.79% 2.34%
37
Comparison of Plant AllocationsTotal Resi GS LP Irrig Lights GS-CBM LP-CBM LPT-CBM LPC-CBM All CBM LP-Trans
Existing Rates - TY Ending 12/31/06Transmission 55,731,117 1,598,165 1,207,790 3,787,314 24,900 23,708 3,258,327 15,625,451 4,123,408 23,007,186 26,082,054 Distribution 181,199,640 42,796,321 23,834,655 23,794,204 546,666 272,225 19,231,540 68,903,922 - 88,135,462 1,820,107 General 18,785,716 4,620,271 2,136,077 1,895,913 43,321 126,116 3,063,179 6,643,371 18,816 9,725,366 238,652 Total 255,716,473 49,014,757 27,178,522 29,477,431 614,887 422,049 25,553,046 91,172,744 4,142,224 120,868,014 28,140,813 % of Total 100.00% 19.17% 10.63% 11.53% 0.24% 0.17% 9.99% 35.65% 1.62% 47.27% 11.00%
Existing Rates - TY Ending 12/31/07Transmission 60,082,429 2,078,934 1,449,877 3,874,019 30,155 23,585 3,098,068 17,318,865 3,793,795 24,210,728 28,415,131 Distribution 188,701,460 43,753,564 24,180,176 23,030,843 576,727 264,383 18,367,075 76,429,378 - 94,796,453 2,099,314 General 22,047,433 5,321,246 2,437,468 2,187,273 53,310 150,885 3,143,405 8,482,565 15,708 11,641,678 255,573 Total 270,831,322 51,153,744 28,067,521 29,092,135 660,192 438,853 24,608,548 102,230,808 3,809,503 130,648,859 30,770,018 % of Total 100.00% 18.89% 10.36% 10.74% 0.24% 0.16% 9.09% 37.75% 1.41% 48.24% 11.36%
Existing Rates - TY Ending 12/31/08Transmission 61,875,558 2,245,256 1,570,015 4,250,622 31,919 27,907 3,214,710 17,226,759 3,735,891 24,177,360 29,572,479 Distribution 208,778,305 47,297,408 24,601,016 24,908,809 644,702 285,287 21,318,314 87,614,619 - 108,932,933 2,108,150 General 23,949,739 5,574,843 2,487,635 2,337,637 57,087 136,690 3,426,792 9,640,260 13,215 13,080,267 275,580 Total 294,603,602 55,117,507 28,658,666 31,497,068 733,708 449,884 27,959,816 114,481,638 3,749,106 146,190,560 31,956,209 % of Total 100.00% 18.71% 9.73% 10.69% 0.25% 0.15% 9.49% 38.86% 1.27% 49.62% 10.85%
Existing Rates - TY Ending 12/31/09Transmission 60,860,389 2,259,742 1,415,773 4,527,861 40,678 28,164 2,639,768 16,751,804 3,501,127 189,523 23,082,222 29,505,949 Distribution 219,116,205 46,709,053 23,512,819 29,495,482 717,326 298,746 18,477,275 97,311,007 49,495 24,748 115,862,525 2,520,254 General 25,899,388 4,469,537 2,201,137 3,120,164 49,262 126,554 3,319,168 12,083,714 56,593 11,296 15,470,771 461,963 Total 305,875,982 53,438,332 27,129,729 37,143,507 807,266 453,464 24,436,211 126,146,525 3,607,215 225,567 154,415,518 32,488,166 % of Total 100.00% 17.47% 8.87% 12.14% 0.26% 0.15% 7.99% 41.24% 1.18% 0.07% 50.48% 10.62%
Existing Rates - TY Ending 12/31/12Transmission 62,280,555 2,747,481 1,687,433 5,934,343 35,413 32,483 1,929,053 13,297,888 4,404,746 917,210 20,548,897 31,294,505 Distribution 245,321,047 56,173,697 31,853,153 47,817,067 884,620 441,067 15,846,488 89,697,868 126,886 50,754 105,721,996 2,429,447 General 30,499,923 6,771,065 3,743,527 4,927,784 75,724 147,152 3,096,187 11,206,856 67,561 24,031 14,394,635 440,036 Total 338,101,525 65,692,243 37,284,113 58,679,194 995,757 620,702 20,871,728 114,202,612 4,599,193 991,995 140,665,528 34,163,988 % of Total 100.00% 19.43% 11.03% 17.36% 0.29% 0.18% 6.17% 33.78% 1.36% 0.29% 41.60% 10.10%
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Proposed Rate Change SummaryAdjusted Proposed Percent
Consumers kWh Sold Revenue Revenue Change Change
Residential 14,199 203,662,298 16,950,672 18,102,654 1,151,982 6.80%Residential ToD 130 3,693,686 248,902 256,121 7,219 2.90%Residential Heat Rate 122 2,652,547 178,629 183,598 4,969 2.78%
Residential 14,451 210,008,531 17,378,204 18,542,373 1,164,170 6.70%
Seasonal 3,360 8,200,000 1,435,328 1,481,710 46,382 3.23%
Irrigation 170 2,500,000 226,848 245,530 18,682 8.24%
General Service 5,555 142,909,871 11,100,595 12,180,376 1,079,781 9.73%
General Service - CBM 1,467 66,261,032 6,503,814 7,309,305 805,491 12.38%
Large Power 848 466,600,400 31,042,895 32,387,290 1,344,395 4.33%
Large Power CBM 1,702 431,747,000 38,700,710 40,967,780 2,267,069 5.86%
Large Power Trans 13 1,121,946,000 63,309,141 63,340,341 31,200 0.05%
LP Trans CBM 5 80,874,000 4,410,408 4,516,513 106,104 2.41%
LP Compression CBM 2 33,754,000 2,293,950 2,293,950 0 0.00%
Black Hills 2 1,001,405 45,738 45,738 0 0.00%
Security Lighting 0 2,109,828 203,274 210,439 7,165 3.52%Street Lighting 30 911,000 77,690 80,122 2,432 3.13%
Lighting 30 3,020,828 280,964 290,561 9,597 3.42%
Total Energy Sales 28,249 2,568,823,067 176,728,596 183,601,467 6,872,871 3.89%
Other Revenue 1,814,643 1,814,643 0 0.00%
Total Revenue 178,543,239 185,416,110 6,872,871 3.85%
39
Cost Allocation Summary – Proposed Rates
40
Cost Allocation Summary – Proposed Rates
41
DEFINE CUSTOMER REVENUE REQUIREMENT
Cost of Service Study:
42
Rate Evaluation Criteria
Fair / non-discriminatory
Customer impact
Competitive
Proper pricing signal
Understandable
Encourage proper usage
43
Components of Expenses
44
Components of Expenses
45
Primary Rate Change Objectives
Overall system rate increase of 3.85%
Rebase Cost of Power Adjustment to zero
Use Cost of Service Study as guide for rate changes by class- All classes require an increase except LPC-CBM
46
Comparison of Existing and Proposed Residential Rates
kWh Usage
Consumers in Block Existing Proposed Change
Percent Change
Customer Charge $22.50 $22.50 $0.00 0.00%kWh $0.053520 $0.070000 $0.016480 30.79%COPA Factor, per kWh $0.010824 $0.000000 ($0.010824) -100.00%Total kWh Charge, per kWh $0.064344 $0.070000 $0.005656 8.79%
50 601 $25.72 $26.00 $0.28 1.09%100 364 $28.93 $29.50 $0.57 1.97%300 1,029 $41.80 $43.50 $1.70 4.07%500 1,120 $54.67 $57.50 $2.83 5.18%800 1,806 $73.97 $78.50 $4.53 6.12%
1,000 1,418 $86.84 $92.50 $5.66 6.52%2,000 4,276 $151.19 $162.50 $11.31 7.48%3,000 1,311 $215.53 $232.50 $16.97 7.87%4,000 453 $279.87 $302.50 $22.63 8.09%5,000 174 $344.22 $372.50 $28.28 8.22%
1,168 Average $97.65 $104.26 $6.61 6.77%
47
Comparison of Existing and ProposedSeasonal
Annual kWh
Usage Existing Proposed ChangePercent Change
Customer Charge $270.00 $270.00 $0.00 0.00%Energy Charge, per kWh $0.053520 $0.070000 $0.016480 30.79%COPA Factor, per kWh $0.010824 $0.000000 ($0.010824) -100.00%Total kWh Charge, per kWh $0.064344 $0.070000 $0.005656 8.79%
250 $286.09 $287.50 $1.41 0.49%500 $302.17 $305.00 $2.83 0.94%750 $318.26 $322.50 $4.24 1.33%
1,000 $334.34 $340.00 $5.66 1.69%1,500 $366.52 $375.00 $8.48 2.31%2,000 $398.69 $410.00 $11.31 2.84%2,500 $430.86 $445.00 $14.14 3.28%3,000 $463.03 $480.00 $16.97 3.66%4,000 $527.37 $550.00 $22.63 4.29%5,000 $591.72 $620.00 $28.28 4.78%
2,445 Average $427.32 $441.15 $13.83 3.24%
48
Comparison of Existing and ProposedGeneral Service
kWh Usage
Consumers in Block Existing Proposed Change
Percent Change
Customer Charge, Single Phase $27.00 $30.00 $3.00 11.11%Customer Charge, Three Phase $32.00 $35.00 $3.00 9.38%Energy Charge, per kWh $0.053020 $0.070000 $0.016980 32.03%COPA Factor, per kWh $0.010824 $0.000000 ($0.010824) -100.00%
Total kWh, per kWh $0.063844 $0.070000 $0.006156 9.64%
Single Phase50 301 $30.19 $33.50 $3.31 10.96%
100 201 $33.38 $37.00 $3.62 10.84%300 439 $46.15 $51.00 $4.85 10.51%500 221 $58.92 $65.00 $6.08 10.32%800 213 $78.07 $86.00 $7.93 10.16%
1,000 100 $90.84 $100.00 $9.16 10.08%1,500 325 $122.77 $135.00 $12.23 9.96%2,000 176 $154.69 $170.00 $15.31 9.90%3,000 92 $218.53 $240.00 $21.47 9.82%5,000 56 $346.22 $380.00 $33.78 9.76%1,119 Average $98.44 $108.33 $9.89 10.05%
Three Phase50 155 $35.19 $38.50 $3.31 9.41%
100 134 $38.38 $42.00 $3.62 9.43%300 378 $51.15 $56.00 $4.85 9.48%500 174 $63.92 $70.00 $6.08 9.51%800 157 $83.07 $91.00 $7.93 9.55%
1,000 86 $95.84 $105.00 $9.16 9.56%1,500 314 $127.77 $140.00 $12.23 9.57%4,000 398 $287.37 $315.00 $27.63 9.61%6,000 219 $415.06 $455.00 $39.94 9.62%8,000 136 $542.75 $595.00 $52.25 9.63%3,076 Average $228.38 $250.32 $21.94 9.61%
49
Comparison of Existing and ProposedIrrigation
Load Installed Annual Existing Proposed PercentFactor HP kW kWh Rate Rate Change Change
Installed HP $15.50 $18.50 $3.00 19.35%Energy Charge, per kWhEnergy Charge, per kWh $0.047900 $0.060000 $0.012100 25.26%
COPA Factor, per kWh $0.010824 $0.000000 ($0.010824
) -100.00%Total kWh Charge, per kWh $0.058724 $0.060000 $0.001276 2.17%
5.00% 10.00 7.46 4,380 $412.21 $447.80 $35.59 8.63%10.00% 10.00 7.46 8,760 $669.42 $710.60 $41.18 6.15%20.00% 10.00 7.46 17,520 $1,183.84 $1,236.20 $52.36 4.42%30.00% 10.00 7.46 26,280 $1,698.26 $1,761.80 $63.54 3.74%50.00% 10.00 7.46 43,800 $2,727.10 $2,813.00 $85.90 3.15%
5.00% 25.00 18.65 10,950 $1,030.52 $1,119.50 $88.98 8.63%10.00% 25.00 18.65 21,900 $1,673.55 $1,776.50 $102.95 6.15%20.00% 25.00 18.65 43,800 $2,959.60 $3,090.50 $130.90 4.42%30.00% 25.00 18.65 65,700 $4,245.64 $4,404.50 $158.86 3.74%50.00% 25.00 18.65 109,500 $6,817.74 $7,032.50 $214.76 3.15%
5.00% 50.00 37.30 21,900 $2,061.05 $2,239.00 $177.95 8.63%10.00% 50.00 37.30 43,800 $3,347.10 $3,553.00 $205.90 6.15%20.00% 50.00 37.30 87,600 $5,919.19 $6,181.00 $261.81 4.42%30.00% 50.00 37.30 131,400 $8,491.29 $8,809.00 $317.71 3.74%50.00% 50.00 37.30 219,000 $13,635.48 $14,065.00 $429.52 3.15%
5.00% 75.00 55.95 32,850 $3,091.57 $3,358.50 $266.93 8.63%10.00% 75.00 55.95 65,700 $5,020.64 $5,329.50 $308.86 6.15%20.00% 75.00 55.95 131,400 $8,878.79 $9,271.50 $392.71 4.42%30.00% 75.00 55.95 197,100 $12,736.93 $13,213.50 $476.57 3.74%50.00% 75.00 55.95 328,500 $20,453.22 $21,097.50 $644.28 3.15%
50
Comparison of Existing and ProposedLarge Power
Load Billing Existing Proposed PercentFactor kW kWh Rate Rate Change Change
Customer Charge $90.00 $90.00 $0.00 0.00%Demand Charge, per Billing kW
First 50 Billing kW $2.65 $2.65 $0.00 0.00%Next 50 Billing kW $5.35 $5.35 $0.00 0.00%
Energy Charge, per kWhFirst 200 kWh per Billing kW $0.051310 $0.068550 $0.017240 33.60%Over 200 kWh per Billing kW $0.031310 $0.042000 $0.010690 34.14%
COPA Factor, per kWh $0.010824 $0.000000 ($0.010824) -100.00%
10.00% 50 3,650 $449.29 $472.71 $23.42 5.21%30.00% 50 10,950 $883.86 $947.90 $64.04 7.25%50.00% 50 18,250 $1,191.44 $1,254.50 $63.06 5.29%70.00% 50 25,550 $1,499.02 $1,561.10 $62.08 4.14%90.00% 50 32,850 $1,806.59 $1,867.70 $61.11 3.38%
10.00% 75 5,475 $696.43 $731.56 $35.13 5.04%30.00% 75 16,425 $1,348.30 $1,444.35 $96.05 7.12%50.00% 75 27,375 $1,809.66 $1,904.25 $94.59 5.23%70.00% 75 38,325 $2,271.02 $2,364.15 $93.13 4.10%90.00% 75 49,275 $2,732.39 $2,824.05 $91.66 3.35%
10.00% 150 10,950 $1,437.86 $1,508.12 $70.26 4.89%30.00% 150 32,850 $2,741.59 $2,933.70 $192.11 7.01%50.00% 150 54,750 $3,664.32 $3,853.50 $189.18 5.16%70.00% 150 76,650 $4,587.05 $4,773.30 $186.25 4.06%90.00% 150 98,550 $5,509.77 $5,693.10 $183.33 3.33%
10.00% 250 18,250 $2,426.44 $2,543.54 $117.10 4.83%30.00% 250 54,750 $4,599.32 $4,919.50 $320.18 6.96%50.00% 250 91,250 $6,137.20 $6,452.50 $315.30 5.14%70.00% 250 127,750 $7,675.08 $7,985.50 $310.42 4.04%90.00% 250 164,250 $9,212.95 $9,518.50 $305.55 3.32%
33.38%Avg 108 26,317 $2,073.63 $2,211.59 $137.96 6.65%
51
Comparison of Existing and ProposedGeneral Service - CBM
kWh Usage
Consumers in Block Existing Proposed Change
Percent Change
Customer Charge, Single Phase $35.00 $35.00 $0.00 0.00%Customer Charge, Three Phase $40.00 $40.00 $0.00 0.00%Energy Charge, per kWh $0.059320 $0.082300 $0.022980 38.74%COPA Factor, per kWh $0.010824 $0.000000 ($0.010824) -100.00%Total kWh Charge, per kWh $0.070144 $0.082300 $0.012156 17.33%
Single Phase50 18 $38.51 $39.12 $0.61 1.58%
100 7 $42.01 $43.23 $1.22 2.90%300 7 $56.04 $59.69 $3.65 6.51%500 4 $70.07 $76.15 $6.08 8.68%800 8 $91.11 $100.84 $9.73 10.68%
1,000 4 $105.14 $117.30 $12.16 11.57%2,000 14 $175.29 $199.60 $24.31 13.87%3,000 9 $245.43 $281.90 $36.47 14.86%4,000 5 $315.57 $364.20 $48.63 15.41%5,000 4 $385.72 $446.50 $60.78 15.76%2,675 Average $222.63 $255.15 $32.52 14.61%
Three Phase50 161 $43.51 $44.12 $0.61 1.40%
100 57 $47.01 $48.23 $1.22 2.60%300 103 $61.04 $64.69 $3.65 5.98%500 56 $75.07 $81.15 $6.08 8.10%800 65 $96.11 $105.84 $9.73 10.12%
1,000 39 $110.14 $122.30 $12.16 11.04%2,000 157 $180.29 $204.60 $24.31 13.48%4,000 241 $320.57 $369.20 $48.63 15.17%6,000 150 $460.86 $533.80 $72.94 15.83%8,000 98 $601.15 $698.40 $97.25 16.18%3,869 Average $311.39 $358.42 $47.03 15.10%
52
Comparison of Existing and ProposedLarge Power - CBM
Load Billing Existing Proposed PercentFactor kW kWh Rate Rate Change Change
Customer Charge $100.00 $100.00 $0.00 0.00%Demand Charge, per Billing kW
First 50 Billing kW $3.00 $3.00 $0.00 0.00%Next 50 Billing kW $7.00 $7.00 $0.00 0.00%
Energy Charge, per kWhFirst 200 kWh per Billing kW $0.049200 $0.067600 $0.018400 37.40%Over 200 kWh per Billing kW $0.029200 $0.042000 $0.012800 43.84%
COPA Factor, per kWh $0.010824 $0.000000 ($0.010824) -100.00%
10.00% 50 3,650 $469.09 $496.74 $27.65 5.89%30.00% 50 10,950 $888.26 $965.90 $77.64 8.74%50.00% 50 18,250 $1,180.43 $1,272.50 $92.07 7.80%70.00% 50 25,550 $1,472.60 $1,579.10 $106.50 7.23%90.00% 50 32,850 $1,764.78 $1,885.70 $120.92 6.85%
10.00% 75 5,475 $753.63 $795.11 $41.48 5.50%30.00% 75 16,425 $1,382.39 $1,498.85 $116.46 8.42%50.00% 75 27,375 $1,820.65 $1,958.75 $138.10 7.59%70.00% 75 38,325 $2,258.91 $2,418.65 $159.74 7.07%90.00% 75 49,275 $2,697.17 $2,878.55 $181.38 6.72%
10.00% 150 10,950 $1,607.26 $1,690.22 $82.96 5.16%30.00% 150 32,850 $2,864.78 $3,097.70 $232.92 8.13%50.00% 150 54,750 $3,741.30 $4,017.50 $276.20 7.38%70.00% 150 76,650 $4,617.81 $4,937.30 $319.49 6.92%90.00% 150 98,550 $5,494.33 $5,857.10 $362.77 6.60%
10.00% 250 18,250 $2,745.43 $2,883.70 $138.27 5.04%30.00% 250 54,750 $4,841.30 $5,229.50 $388.20 8.02%50.00% 250 91,250 $6,302.16 $6,762.50 $460.34 7.30%70.00% 250 127,750 $7,763.02 $8,295.50 $532.48 6.86%90.00% 250 164,250 $9,223.89 $9,828.50 $604.61 6.55%
28.50%Avg 83 17,268 $1,504.13 $1,631.22 $127.09 8.45%
53
Comparison of Existing and ProposedLarge Power - CBM
54
Comparison of Existing and ProposedLighting
Existing Proposed
Base COPABilling
w/ Base COPABilling
w/ PercentLamp Rate per kWh COPA Rate per kWh COPA Change Change
Street Lighting100 Watts HPS 52 kWh $6.95 $0.010824 $7.51 $8.10 $0.000000 $8.10 $0.59 7.86%150 Watts HPS 78 kWh $6.95 $0.010824 $7.79 $8.10 $0.000000 $8.10 $0.31 3.98%175 Watts MV 82 kWh $6.95 $0.010824 $7.84 $8.10 $0.000000 $8.10 $0.26 3.32%400 Watts MV 172 kWh $12.05 $0.010824 $13.91 $14.40 $0.000000 $14.40 $0.49 3.52%400 Watts HPS 188 kWh $12.05 $0.010824 $14.08 $14.40 $0.000000 $14.40 $0.32 2.27%
Outdoor Lighitng100 Watts HPS 52 kWh $6.95 $0.010824 $7.51 $8.10 $0.000000 $8.10 $0.59 7.86%150 Watts HPS 78 kWh $6.95 $0.010824 $7.79 $8.10 $0.000000 $8.10 $0.31 3.98%175 Watts MV 82 kWh $6.95 $0.010824 $7.84 $8.10 $0.000000 $8.10 $0.26 3.32%400 Watts MV 172 kWh $12.05 $0.010824 $13.91 $14.40 $0.000000 $14.40 $0.49 3.52%400 Watts HPS 188 kWh $12.05 $0.010824 $14.08 $14.40 $0.000000 $14.40 $0.32 2.27%
55
BALANCING FINANCIAL OBJECTIVES & RATES CHARGED TO MEMBERS
Cost of Service Study:
56
Recommendations
System rate increase of $6,873,943 (3.85%)
Rebase rates to reflect Basin’s 2013 rates and reset COPA to zero
Make necessary rate changes to classes based on Cost of Service Study
Make changes to miscellaneous service fees to move closer to actual costs
57
Board Action Items
Decide whether to proceed with general rate application in 2013
Approve amount of rate change
Approve changes to rate design