Electric Rate Action Proposal. February 2017

Transcription

1 Electric Rate Action Proposal February 2017

2 Huntsville Utilities Rate History (2000 present) October % to all rate classes impacting availability and demand/energy charges Residential availability increased $1.33 (from $3.67 to $5.00) Prior to this increase, last HU increase was in 1987 (15 years) October % to all rate classes impacting availability and demand/energy charges Residential availability increased $3.11 (from $5.77* to $8.88) May/October 2016 proposal $4.90 residential availability increase ($13.78) $3.99 small commercial availability increase ($15.38) City Council requested alternatives

3 Council Recommendations Any rate increase should be spread across all rate classes Increases should be in both availability and usage charges Consideration given to impacts on fixed and low income ratepayers Retain multiple usage tiers to support conservation

4 February Rate Action Proposal Across the board adjustment of 2.75% Availability, demand and energy increases for residential, general service commercial/industrial and outdoor lighting customers Residential Customer impacts Availability increases $0.29 per customer per month from $8.88 to $9.17 Energy rates increase $ /kWh for 0-1,400 kwh and $ /kWh for any additional kwh used Revenue generated relies more on usage and minimizes availability impact

5 Estimated Monthly Residential Electric Bill Impact Monthly Usage Current Proposed Increase 500 kwh $ $ $ kwh $ $ $ ,000 kwh $ $ $ ,250 kwh $ $ $ ,400 kwh $ $ $ ,496 kwh $ $ $ ,750 kwh $ $ $ ,000 kwh $ $ $ ,250 kwh $ $ $ ,500 kwh $ $ $ ,750 kwh $ $ $ ,000 kwh $ $ $ 8.02 Calculations include seasonal rates for Winter, Summer and Transition periods Includes Availability Increase of $0.29 Includes Tier 1 (0-1,400 kwh) Increase of $ /kWh Includes Tier 2 (additional kwh) Increase of $ /kWh All numbers calculated using October 2016 fuel costs of $

6 Why Is A Rate Increase Needed? Electric system maintenance and improvements are required to ensure reliable service and meet the needs of our growing community HU was awarded a Diamond ranking (highest available) in the RP3 program from the American Public Power Association in RP3 recognizes utilities that demonstrate high proficiency in reliability, safety, work force development and system improvement. Funding for all expenses comes from sales revenue Current sales revenue is dependent on weather and customer behavior Supply and material costs have increased steadily over time

7 Rising Costs Here are examples of items we purchase to keep the system operating and how the costs have changed from 2010 through We have limited control over these costs $ Increase % Change 75 Concrete Pole $3,090 $3,315 $ % 2,000 Reel of Cable $4,060 $4,620 $ % Bucket Truck $167,500 $200,000 $32, % Substation Transformer $320,000 $414,000 $94, %

8 Managing Costs Despite the rising supply and material costs, Huntsville Utilities compares favorably with other TVA utilities in regards to operating costs per customer and per 1,000 kwh sold. Huntsville Utilities Similar Utilities Neighboring Utilities All TVA Utilities All TVA Municipalities All TVA Cooperatives O&M per Average Customer $255 $387 $286 $362 $359 $367 O&M per 1,000 kwh Sold $9 $14 $13 $14 $12 $17 Source: TVA Distributor Financial Report for the Fiscal Year Ended June 2016 (preliminary)

9 Unexpected Costs Gurley Area Damage from November/December Storms

10 Only 15% of Electric Revenue Pays for Op Costs Electric Sales Revenue Water Sales Revenue Gas Sales Revenue HU 15% TVA 85% HU 100% HU 62% Gas Suppliers 38%

11 Partial List of Items Funded by the Rate Increase Substation Improvements Moontown SE Water Plant Redstone Gateway County Line Tree Trimming Distribution transformers Madison Hospital Northwest Sunlake Pole inspection and replacement General Development and Service Extensions

12 Estimated Electric Bill Comparison (1,000 kwh) $ $ $96.96 $99.74 $ $ $ $ $ $ $ $ $ $ $80.00 $60.00 $40.00 $20.00 $- Note: Calculations based on rate information available on individual local power company websites. October fuel costs used.

13 Projected Timeline August 30, 2016 September 2016 September 2016 December January 9, 2017 January 12, 2017 January 19, 2017 January 26, 2017 February 1, 2017 Request Electric Board approval to present the rate adjustment to City Council Present rate adjustment to TVA for approval Individual meetings with each Council member Public notice Formal Public Hearing Council meeting City Council work session City Council vote Rate Implementation (Based upon Council approval)

14 Questions

15 This Page Intentionally Left Blank