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HomeMy WebLinkAbout2008-07-09 RMLD Power Contracts Rate Setting Green Power Committee MinutesReading Municipal Light Board of Commissioners Power Contracts, Rate Settings, Green Power Committee Regular Session General Manager's Conference Room July 9, 2008 Start Time of Regular Session: 7:00 p.m. End Time of Regular Session: 8:45 p.m. Attendees: Commissioners: Messrs. Hahn and Soli Mses. O'Neill and Kearns RMLD Staff; Mr. Cameron and Ms. Parenteau RECE EVE*D TO "NI CLERK RE ';n Eli IN ti S rynnn 'ILAi 2q p 1o 01 Mr. Hahn called the meeting to order at 7:00 pm. Mr. Hahn started the meeting by explaining that this was the second meeting on the RMLD Cost of Service (COS) Study developed by Virchow Krause (VK). Mr. Hahn asked Mr. Soli if he wanted to comment on the answers to the questions on the COS he had received from Mr. Cameron over the last week. Mr. Cameron mentioned that Mr. Johnson, of VK, is available by phone if the Committee wants to direct questions and comments to him. Mr. Soli said that he was concerned that the sub allocators applied to the plant accounts in the COS were not consistent. Mr. Cameron said that he talked to VK and the sub allocators were based on what is used in similar studies in the electric industry. Mr. Soli then pointed out that the Forfeited Discounts are allocated based on a revenue allocator, which is different from what the actual Forfeited Discounts has been over the last three years. Mr. Cameron said that he supplied the three-year data on Forfeited Discounts and they could be allocated using the actual data. Mr. Soli is also concerned that the CP-12 allocator, which is average of twelve coincident peaks, may not be the correct allocator for demand related costs. Mr. Soli asked Ms. Parenteau how the RMLD's capacity requirement is determined? Ms. Parenteau replied that it is based on the RMLD's annual peak. Mr. Soli was also concerned that the PASNY capacity and transmission costs should be allocated to the residential sector only because the RMLD receives the power for the benefit of the residential customers. Mr. Cameron explained that the RMLD receives an allotment of PASNY power based on a federal statute and the residential customers receive the PASNY credit, which is largely based on the cost of PASNY power. However, the capacity associated with the PASNY power supply is part of the RMLD's total capacity entitlement and, therefore, benefits all customers on the system. Therefore, the PASNY capacity and transmission costs should be allocated using the CP-12 across all customer classes. Mr. Cameron said that the CP-12 allocator was chosen to allocate demand related costs because it is the most fair to all customers. He feels that allocating demand related costs based on the annual peak demand would penalize some customers unfairly. Mr. Hahn asked Mr. Cameron to pass out the information he had about the proposed rate increase. Mr. Cameron explained that the most recent version of the COS was adjusted by including the Forfeited Discounts as a revenue credit, which lowers the revenue requirement to $40,045,175. Subsequently, the proposed rate increases were 4.9% for the Residential A Rate and 3.6% for the Commercial C Rate. The other rates were frozen at their existing levels. The PPA amount of $.003/kWh is being rolled into the energy charges in the base rates and the proposed PPA has been set at $.0032/ kWh to account for the $2.3 million the RMLD will be charged for additional transmission costs in FY 2009. Power Contracts Subcommittee Minutes July 9, 2008 Discussion ensued. 2 Mr. Hahn made a motion that the Power, Rate Setting, Green Power Committee accept the recommendation of the General Manager for the following rate increases of 4.9% (or the final number after the adjustments) for the Residential A Rate and 3.6% (or the final number after adjustments) for the Commercial C Rate, and there be a new School Rate which will be based on the existing Commercial C Rate with no increase in the base rates, and that all other rate classes experience no increase in the base rates at this time, and that the Purchased Power Adjustment for 2008 be rolled into all Base Rates, and that the Purchased Power Adjustment be reset for all the rates at the $.0032/kWh, and that the filed rates include an Energy Efficiency Surcharge to fund the expansion of the efforts of the RMLD to assist our customers in reducing energy consumption. Mr. Hahn Aye, O'Neill aye, Motion passed 2:0:0. Motion to Adjourn At 8:55 a.m. Ms. Soli made a motion seconded by Mr. Hahn to adjourn the Regular Session. Motion carried 2:0:0.