HomeMy WebLinkAbout1997-11-13 City Council (10)City of Pa|o Alto
City Manager’s Report
TO:
ATTENTION:
FROM:
AGENDA DATE:
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
CITY MANAGER
NOVEMBER 13, 1997
DEPARTMENT: UTILITIES
CMR:455:97
2
SUBJECT:PROPOSED DIRECT ACCESS RATE SCHEDULE
E.9, STANDBY RATE SCHEDULE E-13, AND NET-ENERGY
METERING RATE SCHEDULE E-10
RECOMMENDATION
Staff recommends that Council adopt th~ attached resolution which introduces the following
electric rate schedules effective January 1, 1998.
Direct Access Electric Service Schedule E-9 applicable to large customers who
use at least 1,000 KW per month and request electric service from an Energy
Service Provider other than City of Palo Alto Utilities (CPAU).
Standby Electric Service Rate Schedule E-13 applicable to Direct Access
commercial customers who return to CPAU for commodity supply service on
short notice due to default of their Energy Service Provider (ESP) or by their
choice.
3.Net-Energy Metering Rate Schedule E-10 applicable to residential customers who
own and operate ~olar electric generating facilities.
On November 5, 1997,The Utilities Advisory Commission recommended that Council approve
the proposed rates as reflected in this report.
POLICY IMPLICATIONS
Approval-of Electric Rate Schedules E-9 and E-13 implement the Customer Choice policy
CMR:455:97 Page 1 of 4
adopted by Council earlier’this year. This policy allows CPAU customers to secure utility
services from other Energy Serviee Providers in response to changes in the Electric Industry.
BACKGROUND
CPAU is committed to offering its customers equivalent opportunities they would have if
they were located in areas served by an Investor Owned Utility (IOU). On March 17,
1997, the City Council approved major electric utility policies including customer choice
(CMR: 159:97) and on June 21, 1997, the Council approved unbundling of electric rates
(CMR:219:97). The next step is to offer a direct access tariff for customers who qualify
and elect an alternate Energy Service Provider after January 1, 1998. Rate Schedules E-9
and E-13 have been developed to serve those customers. In addition, a Net-Energy
Metering tariff has been developed to comply with Senate Bill (SB) 656.
DISCUSSION
The proposals in this report are largely driven by current industry changes..Under the
direct access plan being implemented by CPAU, a customer may elect to purchase
electricity from an alternate ESP other than CPAU. In-this case, CPAU will continue to
provide distribution and other system support services but will not charge for the power
supply cost. This loss in revenue for the Power Supply Charge will be offset by a
corresponding reduction in the CPAU cost of power.
Direct Access Rate Schedule:
The proposed E-9 has been developed for direct access customers. A customer who meets
CPAU qualifying criteria and who chooses to be served under this rate schedule will have
to complete a "Direct Access Service request (DASR)" form. To facilitate the flow of
electricity to the customer premises, another agreement between CPAU and the Energy
Service Provider with special terms and conditions to cover specific issues such as
imbalances will be required.
The customer who chooses a direct access program will be responsible to pay the non-
bypassable charges to CPAU. These charges are: distribution charge, transition cost
recovery charge, and public benefits charge. These three components of Rate Schedule
E-9 are the same as Electric Rate Schedule E-6 for full service customers. In addition, the
customer will pay transmission and scheduling charges and a customer charge which
includes any special metering equipment and data validation needed for this service.
CPAU plans to offer direct access customers two alternatives with regard to transmission
services: 1) direct access using the transmission and scheduling facilities of Northern
California Power Agency (NCPA) or 2) direct access which utilizes the services of the
CMR:455:97 Page 2 of 4
Independent System Operator (ISO). There is some question with respect to the continued
availability of the NCPA Transmission-Agreement after 2000 and the associated cost and
continued allocation of NCPA charges. Because of this uncertainty ahd a goal to provide
rate stability for the transmission component, staff has proposed a transmission charge for
NCPA based on a projected market price for such services.
There are also some outstanding issues that are under evaluation which may influence
CPAU’s plan to provide customers the option to utilize ISO services. Among these issues
are the actual charges that would be imposed by the ISO as well as the impact on our
existing NCPA transmission agreement if CPAU provides the ISO alternative to our
customers. Because of these uncertainties and others, CPAU reserves the right to require
direct access using NCPA transmission and scheduling facilities.
Standby Service Rate Schedule:
If the customer’s Energy Service Provider (ESP) fails to deliver the required energy or the
customer is not satisfied with the ESP and wishes to leave the ESP on short notice, then
the customer will return to CPAU and be charged for the energy under the Standby
Service Rate Schedule E-13 on a temporary basis. If the customer decides to choose
CPAU as its ESP, the customer shall request this service in writing and then the customer
can choose one of the rate schedules applicable to the customer’s load. In case the
customer wants to continue to be a direct access customer, the customer has to notify
CPAU in writing and has to choose an ESP within a two months period. However, if the
customer fails to notify CPAU in writing or choose another ESP within the two-month
period, CPAU will transfer the customer at CPAU discretion to another rate schedule
suitable for the customer’s load.
Net-Energy Metering Rate Schedule:
Senate Bill (SB) 656 requires all California Utilities to offer a "net-energy metering" rate
schedule to residential customers who own and operate a solar electric generating facility
with a capacity of less than 10 kilowatts and is intended to offset part or all the
customer’s own use. A customer who is eligible for the n~t energy metering rate schedule
would have to sign a Net Energy Agreement with CPAU which covers terms and
conditions pertaining to this type of service. A special non-demand differentiated meter is
needed for this service to measure the difference between the electricity supplied by
CPAU and the energy generated by the customer and supplied to CPAU. If the by CPAU
are more than the kilowatthours supplied to CPAU, the customer will be billed based on
the Residential Electric Rate Schedule E-1. If the kilowatthours supplied to CPAU are
greater than the kilowatthours supplied by CPAU, the customer will be credited on a
CMR:455:97 Page 3 of 4
monthly basis for the difference based on the NYMEX cost of energy. At the present
time, one customer qualifies for this rate.
FISCAL IMPACT
Therewill be no fiscal impact due to approval of the above rate schedules. The Direct
Access customers will pay the non-bypassable charges which will recover CPAU~s cost
of delivering the power to customers’ facilities.
ENVIRONMENTAL ASSESSMENT
Adoption of the attached resolution does not constitute a project under the California
Environmental Quality Act, and, therefore, no environmental impact assessment is.
necessary.
ATTACHMENTS
Resolution,
Rate Schedules E-9, E-10, and E-13.
PREPARED BY:Lucie Hirmina, Manager~ Utilities Rates
Randy Baldschun, Assistant Director of Utilities
DEPARTMENT HEAD REVIEW:
CITY MANAGER APPROVAL:
Manager
CMR:455:97 Page 4 of 4
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OFT HE CITY OFPALO ALTO
ADOPTING UTILITY RATE SCHEDULES E-9 AND E-13
PERTAINING TO DIRECT ACCESS SERVICE AND E-10
PERTAINING TO NET-ENERGY METERING OF THE CITY OF
PALO ALTO UTILITIES RATES AND CHARGES PERTAINING
TO NET-ENERGY METERING
The Council of the City of PaloAlto does hereby RESOLVE as
follows:
SECTION I. Pursuant to Section 12.20.010 of the Palo Alto
Municipal Code, Schedules E-9 (Direct Access Electric Service),
Schedule E-10 (Net-Energy Metering Services), and E-13 (Standby
Electric Service) of the Palo Alto Utilities Rates and Charges are
hereby adopted to read in accordance with Sheets E-9-1, E-9-2, E-9-
3 and E-9-4, E-10-1, and E-13-1 and E-13-2, respectively, attached
hereto and incorporated herein by reference. The foregoing Utility
Rate Schedule shall become effective January I, 1998.
SECTION 2. The Council finds that the revenue derived from
the authorized adjustments of the electric service rates shall be
used only fo9 the purposes set forth in Article-VII, Section 2, of
the Charter Of the City of Palo Alto.
SECTION 3.. The Council finds that the adoption of this
resolution does not constitute a project under the California
Environmental Quaiity Act, California Public Resources Code section
.21080, subdivision (b) {8).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk ~-
APPROVED AS TO FORN:
Mayor
City Manager
Senior Asst. City Attorney Acting Director of
Administrative Services
Director of Utilities
971106 syn 0071302~
APPLICABILITY:
DIRECT ACCESS ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-9
This rate schedule applies to City of Palo Alto Utilities (CPAU) non-residential customers
who are eligible to receive their energy supply from an Energy Service Provider other than
CPAU. To meet the eligibility criteria, the customer facility has to use at least 1,000 KW per
month and have sustained this level of usage for at least three consecutive months during the
most recent 12 months.
B. TERRITORY:
Within the incorporated limits of the City of Palo Alto and land owned or leased by the City.
C. RATES:
C.1 NCPA-Direct Access
Per Meter
Per Month
Customer Charge .............................. .................$75.00
Transmission and Scheduling (per KW) ............................$1.76
Other Charges (Distribution, TCR, & PB)
Demand (per KW) ............. ...............: .........$2.62
Energy (per KWH) ......................................$0.0258
C.2 ISO-Direct Access
Customer Charge .............................................$75.00
Other Charges (Distribution, TCR, & PB)
Demand (per KW) ......................................$2.62
Energy (per KWH) ......................................$0.0258
D.SPECIAL NOTES:
Calculation of (he Bill:
The bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts. The bill amount is apportioned between three
components based on percentages shown below for each of the components:
Distribution charge, Transition Cost Recovery Charge, and Public Benefit Charge.
Issued by the City Council
CITY OF PALO ALTO
UTILITIES
Effective 1-1-98
Original Sheet No. E-9-1
DIRECT ACCESS ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-9
These percentages reflect forecasted annual costs. The breakdown of the bill amount
into cost components is provided for the customer’s information and does not affect
how much a customer pays.
Illustrative Cost component Percentages
a. Transition Cost Recovery Charge
b. Distribution Charge
c. Public Benefits Charge
46.0%
51.1%
2.9%
2.Request for Direct Access Service
A customer who meets the CPAU qualifying criteria and who chooses direct access
service shall complete a "Direct Access Service Request (DASR)" form. Del~ending
on the availability as set forth in the "Diredt Access Service Provider Agreement
(DASPA)", customers may choose direct access service using the transmission and
scheduling facilities of Northern California Power Agency (NCPA) or choose direct
access which utilizes the services of the Independent System Operator (ISO) and be
charged under Section C-1 or C-2 respectively.
Special terms and conditions shall be covered by separate agreement between CPAU
and the Energy Service Provider. A customer can request this service during the open
season designated by CPAU. The customer will pay a monthly customer charge as
shown on sheet E-9-1. The customer charge includes charges for special metering
equipment and data validation needed for this service. In addition, the customer will
be responsible for payment of transmission, scheduling and administration charges.
The amount of the transmission, scheduling and administration charges will depend
on which type of direct access program the customer has selected.
3.Full Electric Service Request
Ifthe customer’s Energy Service Provider (ESP) fails to deliver the required energy
or the customer is not satisfied with the ESP and wishes to leave the ESP on short
notice, then the customer will be charged for the use of energy under the CPAU
applicable-Standby Service Rate Schedule temporarily. If the customer decides to
choose CPAU as its ESP, the customer shall request this service in writing. The
customer can choose one of the applicable CPAU rate schedules with commodity
prices, based on load requirements and cannot switch between CPAU rate schedules
or back to ESPs for a 12 month period and during the open season if applicable.
Issued by the City Council
CITY OF PALO ALTO
UTILITIES
Effective 1-1-98
Original Sheet No. E-9-2
DIRECT ACCESS ELECTRIC SERVICE
,UTILITY RATE SCHEDULE E-9
o
o
o
Electricity Supply Requirements
ESP supplying direct access customers shall be required to deliver an amount of
energy (kilowatt-hours) equal to the estimated consumption plus an additional
amount to the City gate each month to cover energy losses arising in the distribution
of that commodity supply to the customers’ facilities. The energy losses are
estimated to be 2 ½ percent for customers rec~eiving service from CPAU at the
primary level and 5 per cent for customers receiving service at the secondary level.
Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the service
is supplied, a discount of 2-1/2 percent on the CPAU distribution bill for available
line voltages above 1 kilovolt will be allowed. CPAU retains the right to change its
line voltage at any time after providing reasonable advance notice to any customer
receiving a discount hereunder and affected by such change. The customer then has
the option to change its system so as to receive service at the new line voltage or to
accept service (without voltage discount) through transformers to be supplied by
CPAU subject to a maximum kVa size limitation.
Power Factor
For new or existing customers whose demand is expected to exceed or has exceeded
300 Kilowatts for three consecutive months, CPAU has the option to install
VAR-hour metering to calculate power factor. CPAU may remove VAR-hour
metering from the service of a customer whose demand has been below 200 kilowatts
for four consecutive months.
When VAR-hour metering is installed, the monthly electric bill shall include a
"power factor penalty", if applicable. The penalty adjustment shall be applied to a
customer’s bill prior to the computation of any primary voltage discount. The power
factor penalty is applied by increasing the total energy and demand charges for any
month by 0.25 percent (0.25%) for each one percent (1%) that the monthly power
factor of the customer’s load was less than 95%.The monthly power factor is the
average power factor based on the ratio of kilowatt hours to kilovoltampere hours
consumed during the month.where time-of-day metering is installed, the monthly
power factor shall be the power factor coincident with the customer’s maximum
CITY OF PALO ALTO
UTILITIES
demand.
Issued by the City Council
Effective 1-1-98
Original Sheet No. E-9-3
DIRECT ACCESS ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-9
Additional Charges
If, as a result of nonperformance of the outside Energy Service Provider (ESP) (e.g.
¯ failure to schedule sufficient power), the City incurs costs through our contractual
arrangements with PG&E, we will pass all of these costs onto the ESP. Depending
on the performance of the ESP, these charges could be very large. The ESP may pass
these charges onto the customer.
{End}
Issued by the City Council
CITY OF PALO ALTO
UTILITIES
Effective 1-1-98
Original Sheet No. E-9-4
APPLICABILITY:
NET ENERGY METERING SEI~’~ICE
,UTILITY RATE SCHEDULE E-10
Bo
This schedule is applicable to residential customers for whom Rate Schedule E-1 applies
and that own and operate a solar electric generating facility with a nameplate capacity
output of not more than 10 Kilowatts that is located on the customers’ premises, and is
intended to offset part or all of the customers’ own eIectrical requirements., The customer
who is eligible for this Rate Schedule under the above condition must sign a Net Energy
Metering and Energy Purchase Agreement.
TERRITORY:
Within the incorporated limits of the city of Palo Alto and land owned or leased by the
City.
SPECIAL CONDITIONS:
Net energy metering uses non-demand differentiated meter to measure the difference
between the electricity supplied by CPAU and the energy generated by a customer and
supplied to the CPAU.
If the Kilowatthours supplied by CPAU are mort than the Kilowatthours supplied to
CPAU, the customer will be billed on amonthly basis for the difference, based on the
applicable Electric Rate Schedule E-1. If the Kilowatthours supplied to CPAU are more
than the Kilowatthours supplied by CPAU, the customer will be credited ,. on a monthly .
basi~, for the difference based on the NYMEX cost of energy adjusted for customer’s
usage.
{End}
Issued by the City Council
CITY OF PALO ALTO
UTILITIES
Effective 1-1-98
Original Sheet No. E-t0-1
ELECTRIC STANDBY SERVICE
UTILITY RATE SCHEDULE E-13
APPLICABILITY:
This schedule applies to existing direct access customers with a maximum metered demand
of at least 1,000 KW per month who return to CPAU for commodity supply service on short
notice either due tO default of their outside Energy Service Provider or by choice of the
customer.
B. TERRITORY:
Within the incorporated limits of the City of Palo Alto and land Owned or leased by the City.
RATES:
Flat Rates with a Market-based Power Supply Charge:
Schedule Activation (one-time fee) .....................................$200.00
Per Meter
Per Month
Customer Charge ...................................................$75.00
Power Supply Charge
Demand (per KW) ............................................$3.73
Energy (per KWH) ..........................Daily DJCOB Firm On Peak
Other Charges (Distribution, TCR, & PBC)
Demand (per KW) .......................~ .....~ ..............$2.62
Energy (per KWH) ............................................$0.0258
SPECIAL CONDITIONS:
1.Schedule Activation
A Schedule Activation charge applies each time the customer begins service on the
Standby Service Rate Schedule to cover the administrative costs of securing the
necessary power needed.
2.Calculation of Cost Components
The breakdown of .the bill amount into four cost components is provided for the
customer’s information. "Other Charges" identified on a customer’s bill are:
Transition Cost Recovery Charge, Distribution Charge, and Public Benefits Charge.
The following three-step formula is used to estimate the four cost components:
Issued by the City Council
CITY OF PALO ALTO
UTILITIES
Effective 1-1-98
Original Sheet No. E-13-1
1)
2)
3)
ELECTRIC STANDBY SERVICE
UTILITY RATE SCHEDULE E- 13
The Power Supply Charge is the sum of the demand and energy components.
The energy component is based on the Daily DJCOB firm on peak price as
published in the Wall Street Journal. It includes a 2 ½ percent loss factor on
the primary service level or a 5 percent loss factor on the secondary service
level. The demand component includes transmission and scheduling costs
and California Oregon Transmission Project (COTP) costs which will be
prorated for the length of the month.
The Power Supply Charge is subtracted from the total bill amount to arrive
at the RESIDUAL amount of the bill.
The RESIDUAL amount of the bill is brokdn down into three components by
application of the relative percentages shown below. The percentage for each
component is based on the annual estimated cost of that component relative
to the estimated total costs of the three components.
Illustrative Cost component Percentages
a. Power Supply Charge
Demand (per KW)
Energy Charge (per KWH)
b. Transition Cost Recovery Charge
c. Distribution Charge
e. Public Benefits Charge
$3.73
Based on the Daily DJCOB
46.0%
51.1%
2.9%
Availability of Service
Service under this schedule is provided on an as available basis. Service under this
schedule is for a minimum of one month. If the customer wants to keep CPAU as its
power supplier, the customer has to request in writing to be billed under the terms
of an electric rate schedule that is applicable to the load for which the customer is
eligible. Billing under another rate schedule would begin with the next billing cycle.
During the interim, the bill amount is calculated as the sum of the charges in Section
Cabove. If the customer chooses to continue as direct access customer, the customer
has to choose an ESP within three months, otherwise CPAU will transfer the
customer at CPAU discretion to another rate schedule suitable for the customer’s
load.
{End}
Issued by the City Counci!
CITY OF PALO ALTO
UTILITIES
Effective 1-1-98
Original Sheet No. E-13-2