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HomeMy WebLinkAboutStaff Report 202-07BUDGET ’07-’09 C ty City of Palo Alto Manager’s Report TO: FROM: ATTENTION: HONORABLE CITY COUNCIL CITY MANAGER FINANCE COMMITTEE DEPARTMENT: UTILITIES DATE: SUBJECT: APRIL 17, 2007 CMR:202:07 UTILITIES ADVISORY COMMISSION RECOMMENDATION TO APPROVE A RESOLUTION ADOPTING AN ELECTRIC RATE INCREASE FOR FISCAL YEAR 2007-08, AND STAFF RECOMMENDATION TO APPROVE, IN CONCEPT, THE ADOPTION OF AN ELECTRIC RATE INCREASE FOR FISCAL YEAR 2008-09 RECOMMENDATION Staff and the Utilities Advisory Commission (UAC) recon~end that the City Council adopt the attached resolution to: (a)Approve a 5 percent increase to electric retail rates, for Fiscal Year (FY) 2007-08, effective July 1, 2007, which will increase annual revenues by $4.4 million; and, (b) Approve the changes to the Electric Utility Rate Schedules, as attached. In addition, for bielmial budgeting purposes, staff recommends: (c)Approval, in concept, of a 9.1 percent system average electric rate increase for FY 2008-09, which will increase annual revenue by an additional $9.2 million. DISCUSSION Compared to FY 2005-06, electric sales for FY 2006-07 are projected to remain flat. Revenue levels will also be flat for FY 2006-07, since there were no increases in electric rates implemented for this fiscal year. Sales projections indicate that the flat sales trend will continue in FY 2007-08, and beyond due to limited customer growth and the impacts of energy efficiency efforts. Expenses are expected to increase which leads to the proposed rate increase. CMR:202:07 Page 1 of 4 Staff is recomlnending a 5 percent electric rate increase to be effective July 1, 2007. This represents an ammal revenue increase of $4.4 million which will be applied to the distribution rates of all customer classes. The driving factors for the rate increase are the increased costs of operating and maintaining the distribution system as discussed in the attached Utilities Advisory Commission report. Another 10 percent revenue increase, or $9.2 million, is proposed, to be "approved, in concept," for FY 2008-09. Distribution Expenses Since there were no electric rate increases in FY 2006-07, the increases in the distribution and supply operating budgets were funded through scheduled draw downs of the Electric Distribution Rate Stabilization Reserve (E-DRSR) and the Electric Supply Rate Stabilization Reserve (E- SRSR). There were, however, unanticipated expenses of $2.2 million for retiree medical and Workers’ Compensation liabilities starting in FY 2005-06. These retroactive expenses were funded from the E-DRSR during Fiscal Year 2006-07. Cun’ent projections show that without a rate increase, the E-DRSR balance will fall below the Minimum Guideline level at the end of FY 2007-08 by $5.2 million. Operating expenses for electric distribution, the Capital Improvement Program (CIP), and electric supply costs are projected to increase for Fiscal Year 2007-08. While the increases in supply costs can be funded tl~’ough a contilming draw down of the E-SRSR, the drawing down of the E-DRSR to fund FY 2007-08 operating expenses would negatively impact the E-DRSR by reducing its balance to $535,000. This will leave the Electric Utility vulnerable to financial losses from either unexpected failure of physical infrastructure or an unanticipated shortfall in sales. The proposed revenue increase of 5 percent, or $4.4 million, will mitigate this funding problem by compensating for the increased distribution expenses (including increased Electric Public Benefits Program funding, as required under state law), and to provide additional funds to bring the E-DRSR to an adequate level. The proposed revenue increase will result in a projected end-of-year balance for FY 2007-08 of $4.6 million in the E-DRSR. This is below the Minimum Guideline level, but above the "Amaual Risk Assessment for Reserves" target of $4 million. To bring the E-DRSR balance to the Minimum Guideline level would require an additional 3.2 percent rate increase, or $2 million in additional a~mual revenue. Supply Expenses Due to very favorable hydro conditions, the ending balance of the E-SRSR for FY 2005-06 was $9.8 million over the Maximum Guideline level approved by the City Council. Continuing CMR:202:07 Page 2 of 4 increases in electric supply costs for Fiscal Year 2007-08 will be funded through a draw down of the E-SRSR, with no rate increase to cover increased supply expenses recommended at this time for Fiscal Year 2007-08. The proposed "approve, in concept" 10 percent increase to electric retail rates, for Fiscal Year 2008-09, representing a $9.2 million increase in revenue, is desigq~ed to allow the E-SRSR to remain above the Minimum Guideline level, and to bring supply costs and revenues back into aligmnent. UTILITIES ADVISORY COMMISSION REVIEW AND RECOMMENDATIONS On April 4, 2007, the UAC voted 4 to 0, with one absent, to recommend that the City Council: (a)Approve a 5 percent increase to electric retail rates, for FY 2007-08, effective July 1, 2007, which will increase a~mual revenues by $4.4 million; and, (b) Approve the changes to the Electric Utility Rate Schedules, as attached. The UAC voted to withhold recommending approval, in concept, of a 10 percent system average electric rate increase, or $9.2 million in additional revenue, for FY 2008-09, feeling that future costs were too uncertain at this time. The UAC also suggested that recommendation for approval of the specific rate schedules be sought during the approval process. ALTERNATIVES Staff evaluated the impact of financial alternatives to the recommended $4.4 million revenue increasel Postponing the increase to a future date would result in: a) a projected E-DRSR balance below both the Minimum Guideline level of $5.8 million by $5.2 million, and the $4 million target of the "Ammal Risk Assessment for Reserves" by $3.5 million; and, b) would result in a much larger proposed rate and revenue increase for FY 2008-09. RESOURCE IMPACT Approval of this proposed rate increase approximately $4.4 million for FY 2007-08. will raise the Electric Fund sales revenues by This 5 percent revenue increase will be fully allocated to electric distribution revenue and will result in a projected end-of-year balance for FY 2007-08 of $4.6 million in the E-DRSR. This is below the Minimum .Guideline level of $6.6 million, but above the "Am~ual Risk Assessment for Reserves" target of $4 million. There is no recommended change to electric supply revenue for FY 2007-08. The projected E- SRSR balance at the end of FY 2007-08 is $43.7 million. This is above the Minimum Guideline level of $30.3 million, but slightly below the "Annual Risk Assessment for Reserves" target of $44.2 million. CMR:202:07 Page 3 of 4 Approval, in concept, of a 10 percent rate increase for FY 2008-09, or $9.2 million in additional revenue, would raise the E-SRSR balance 1.8 percent above Minimum Guideline level of $$32.5 million by $600,000. POLICY IMPLICATIONS This proposed rate increase lneets the Utilities Strategic Plan objective of providing superior financial perfomaance to the City and competitive rates to customers. These recommendations do not represent a change in current City policies. ENVIRONMENTAL REVIEW The adoption of the resolution does not constitute a project under the California Enviromnental Quality Act. Therefore, no envirolamental assessment is required. ATTACHMENTS A:Resolution B.Electric Rate Schedules E-l, E-l-G, E-2, E-2-G, E-3, E-4, E-4-G, E-4-TOU, E-7, E-7-G, E-7-TOU, E-14, E-16, E-18 and E-18-G C.Report to the UAC for its April 4, 2007 meeting: Recommended FY 2007-08 Electric Rate Increase D. Minutes of the UAC lneeting of April 4, 2007 PREPARED BY: REVIEWED BY: Lucie Hirmina, Utilities Rates Manager Tomm Marshall, Assistant Director of Utilities, Resource Management Tom Auzenne, Assistant Director of Utilities, Administrative Services DEPARTMENT HEAD: CITY MANAGER APPROVAL: VALERIE O. FONG Director Of Utilities ’EMILY ~d~iS ON Assistant City Manager CMR:202:07 Page 4 of 4 NOT YET APPROVED ATTACHMENT A RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING UTILITY RATE SCHEDULES E-I, E-l-(3, E-2, E-2-G, E-3, E-4, E-4-(3, E-4-TOU, E-7, E-7-G, E-7-TOU, E-14, E-16, E-18, and E-18-G OF THE CITY OF PALO ALTO UTILITIES RATES AND CHARGES PERTAINING TO ELECTRIC RATES The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-1 (Residential Electric Service) is hereby amended to read in accordance with sheet E-l-l, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-1-G (Residential Green Power Electric Service) is hereby amended to read in accordance with sheet E-l-G-l, attached hereto and incorporated herein.The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-2 (Small Commercial Electric Service) is hereby amended to read in accordance with sheet E-2-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-2-G (Small Commercial Green Power Electric Service) is hereby amended to read in accordance with sheets E-2-G-1 and E-2-G-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-3 (Customer Owned Generation) is hereby amended to read in accordance with sheets E-3-1, E-3-2 and E-3-3, attached hereto and incorporated herein.The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-4 (Medium Commercial Electric Service) is hereby amended to read in accordance with sheet E-4-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-4-G (Medium Commercial Green Power Electric Service) is hereby amended to read in accordance with Sheet E-4-G-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. 070405 jb 0072852 NOT YET APPROVED SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-4-TOU (Medium Commercial Electric Time of Use Service) is hereby amendedto read in accordance with sheet E-4-TOU-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-7 (Large Commercial Electric Service) is hereby amended to read in accordance with sheet E-7-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 10. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-7-G (Large Commercial Green Power Electric Service) is hereby amended to read in accordance with sheet E-7-G-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 11. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-7-TOU (Large Commercial Electric Time of Use Service) is hereby amended to read in accordance with sheet E-7-TOU-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule,. as amended, shall become effective July 1, 2007. SECTION 12. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-14 (Street Lights) is hereby amended to read in accordance with sheets E- 14-1 and E-14-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 13. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-16 (Unmetered Electric Service) is hereby amended to read in accordance with sheets E-16-1 and E-16-2, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 14. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-18 (Municipal Electric Service) is hereby amended to read in accordance with Sheet E-18-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 15. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Schedules E-18-G (Municipal Green Power Electric Service) is hereby amended to read in accordance with sheet E-18-G-1, attached hereto and incorporated herein.The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 16. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. 070405jb 0072852 NOT YET APPROVED SECTION 17. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, California Public Resources Code section 21080, subdivision (b) (8). INTRODUCED AND PASSED: AYES: NOES: ABSENT: AB S TENTIONS: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney Mayor City Manager Director of Utilities Director of Administrative Services. 070405 jb 0072852 ATTACHMENT B RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-1 A.APPLICABILITY: This schedule applies to separately metered single-family residential dwellings receiving retail energy services from the City of Palo Alto Utilities. A "single-family residential dwelling" is designated as any house, cottage, flat, or apartment unit having a kitchen, bath, and sleeping facilities. TERRITORY: Within the incorporated limits of the City of Palo Alto and on land owned or leased by the City. UNBUNDLED RATES: Per kilowatt-hour Commodity Distribution Public Benefits Total First 300 kwh $0.04554 $0.02920 $0.00255 $0.07729 Next 300 kWh 0.06133 0.03878 0.00255 0.10266 Over 600 kWh 0.08259 0.05184 0.00255 0.13698 SPECIAL NOTES: Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount is broken down into three cost components as calculated under Section C: Commodity Charge, Distribution Charge, and Public Benefits Charge. Solar Energy Discount Upon approval by the City, a 10 percent (10%) discount wil! be applied to a customer’s electric bill if such customer has installed a qualifying solar energy system prior to April 1, 1987. {End} CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-l-1 dated 7-1-2005 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No.E-l-1 RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-I-G APPLICABILITY: This schedule applies to separately metered single-family residential dwellings receiving retail energy services from the City of Palo Alto Utilities under the Palo Alto Greenplan. A "single-family residential dwelling’! is designated as any house, cottage, flat, or apartment unit having a kitchen, bath, and sleeping facilities. Palo Alto Green power provides for the purchase of 100% renewable green energy for participating customers. TERRITORY: Within the incorporated limits of the City of Palo Alto and on land owned or leased by the City. UNBUNDLED RATES: Palo Alto Per kilowatt-hour Commodity Distribution Public Benefits Green Total First 300 kWh $0.04554 $0.02920 $0.00255 $0.0150 $0.09229 Next 300 kwh 0.06133 0.03878 0.00255 0.0150 0.11766 Over 600 kWh 0.08259 0.05184 0.00253 0.0150 0.15198 SPECIAL NOTES: Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount is broken down into four cost components as calculated under Section C: Commodity Charge, a Distribution Charge, a Public Benefits Charge, and a charge for Palo Alto Green. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-1-G-’I dated 7-1-2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No. E-l-G-1 RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-1-G (Continued) 2..Solar Energy Discount Upon approval by the City, a 10 percent (10%) discount will be applied to a customer’s electric bill if such customer has insta!led a qualifying solar energy system prior to April 1, 1987. Palo Alto Green Participation Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. o Notice of Schedule Change This schedule supercedes and replaces the Residential Green Power Electric Services’ formerly designated as Utilities Rate Schedules E- l-G1, E- l-G2, and E- l-G3, effective per adoption of this schedule. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 6-01-2003 Original Sheet No. E-l-G-2 APPLICABILITY: SMALL COMMERCIAL ELECTRIC SERVICE. UTILITY RATE SCHEDULE E-2 This schedule applies to non-demand metered electric service for small commercial customers and master-metered multirfamily facilities. TERRITORY: CQ Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. RATES: Unbundled Seasonal Energy Rates: Per kilowatt-hour Commodi .ty Distribution Public Benefits Summer $0.06684 $0.04254 $0.00255 Winter 0.06026 0.03810 0.00255 Total. $0.1119) 0.10091 D.SPECIAL NOTES: Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount is broken down into three cost components as calculated under Section C: Commodity Charge, Distribution Charge, and Public Benefits Charge. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period is partly in the Summer Period and partly in the Winter Period, the billing will be computed by prorating the total kwh usage, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-2-1 dated 7-1-2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No. E-2-1 SMALL COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2 (Continued) 3.Solar Ener~oy Discount Upon approval by the City, a 10 percent (10%) discount will be applied to a customer’s electric bill if such customer has installed a qualifying solar energy system prior to April 1, 1987. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-2-2 dated 7-1-’1999 CITY OF PALO ALTO UTILITIES Effective 7-01-2001 Sheet No. E-2-2 SMALL COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2-G APPLICABILITY: This schedule applies to non-demand metered electric service for small commercial customers and master-metered multi-family facilities receiving retail energy services from the City of Palo Alto Utilities under the Palo Alto Green plan. Palo Alto Green power provides for either the purchase of 100% renewable green energy for participating customers, or for the purchase of 1000 kWh blocks. TERRITORY: Within the incorporated limits of the City of Palo Alto and on land owned or leased by the City. RATES: 1. Unbundled Seasonal Energy Rates (100% renewable green option): Palo Alto. Per kilowatt-hour Commodity.Distribution Public Benefits Green Summer $0.06684 $0.04254 $0.00255 $0.0150 Total $0.12693 Winter 0.06026 0.03810 0.00255 0.0150 0.11591 Per kilowatt-hour Summer Winter Unbundled Seasonal Energy Rates (1000 kWh block option): Commodi _ty Distribution Public Benefits $0.06684 $0.04254 $0.00255 0.06026 0.03810 0.00255 Palo Alto Green Charge (per 1000 kwh block Total $0.11193 0.10091 15.00 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-2-G-~I dated 7-01-2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No. E-2-G-1 Do SPECIAL NOTES: SMALL COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2-G (Continued) Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount is broken down into four cost components as calculated under Section C: Commodity Charge, a Distribution Charge, a Public Benefits Charge, and a charge for Palo Alto Green. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective fi’om November 1 to April 30. When the billing period is partly in the Summer Period and partly in the Winter Period, the billing will be computed by prorating the total kwh usage, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. Solar Energy Discount Upon approval by the City, a 10 percent (10%) discount will be applied to a customer’s electric bill if such customer has installed a qualifying solar energy system prior to April 1, 1987. 0 Palo Alto Green Participation Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Notice of Schedule Change This schedule supercedes and replaces the Small Commercial Green Power Electric Services’ formerly designated as Utilities Rate Schedules E-2-G1, E-2-G2, and E-2-G3, effective per. adoption of this schedule. {End} CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-2-G-2 dated 6-07-2003 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No. E-2-G-2 CUSTOMER-OWNED GENERATION UTILITY RATE SCHEDULE E-3 A. APPLICABILITY: The following rates shall apply to customer-owned power generating facilities that are not eligible for net metering. B.TERRITORY: Within the service area of the City of Palo Alto and on land owned or leased by the City. C.BUYBACK RATES: The following buyback rates shall apply to the power produced by a City-owned generation facility or a customer-owned qualifying facility on a monthly basis. 1. For facilities not equipped with an interval meter: Type of Power Firm Non-Firm Season Summer Winter Summer Winter kW/month $4.32 4.32 kWh $ .07902 .07831 .07902 .07831 2. For facilities equipped with an interval meter: Type of Power Firm Time of DaySeason Summer Summer Summer Winter Winter Summer Summer Summer Winter Winter Off Peak Mid-Peak Peak Off peak Peak Non-Firm Off Peak Mid-Peak Peak Off peak Peak kW/month $ ~.32 kWh $ 0.07152 0.08824 0.09566 0.07361 0.08595 0.07152 0.08824 0.09566 0.07361 O.O8595 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No, E-3-i dated 4-0%1990 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No. E-3-1 CUSTOMER-OWNED GENERATION UTILITY RATE SCHEDULE E-3 (Continued) 3. Market-Based Buyback Rate: For facilities with a rated capacity in excess of 1 MW, customer may request a market-based buyback rate The buyback rate is equal to the City’s average cost of electricity calculated at the PG&E City Gate for electric energy and capacity purchased by the City at first of the month and daily market prices for that month. The buyback rates Will fall within the minimum/maximum range set forth below. Per kW/Month per kWh Fin’n $2.00-$10.00 $0.03 -$0.20 Non-Firm -$0.03-$0.20 D.TRANSMISSION RATES: Transmission rates are determined site specific on a case by case basis. E.SPECIAL NOTES: Firm power shall be defined as power that can be exactly interchangeable with the utilities’ current resources. Non-firm power shall be defined as that power which is available to the utility on a random basis and no schedule or control shall be available for such power. Such determination shall be made by the utility after reviewing the character of such power generated with respect to reliability, scheduling, availability, terms and conditions, scheduled outages, system emergencies, and other factors which the utility shall deem relevant. Adjustments shall be made to the quantity of power delivered to the utility to account for the effect of losses and for administrative costs associated with the facility. Generation credit, as calculated under the rate above, will be applied to the customer’s monthly charge .for electric service from the utility. The utility shall provide payment to the customer in the event generation credits are in excess of the monthly charges. All conditions relating to the terms of interconnection and sales shall be covered by a service contract. 5.The utility reserves the right to establish a customer charge in order to recover costs of certain facilities required to serve load for which the utility is standing by. Such charges shall be specified in the service contract with the customer. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-3-2 dated 4-0"1-1990 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No. E-3-2 CUSTOMER-OWNED GENERATION UTILITY RATE SCHEDULE E-3 (Continued) 6.A qualifying facility is defined as set forth in the Federal Energy Regulatory Commission’s Order Number 69, of Title 18, Code of Federal Regulations, Part 292, Subpart B entitled ~Small Power Production and Cogeneration Facilities, Qualifying Status." This subpart implements Section 201 of the Public Utility Regulatory Policies Act (PURPA). 7.Generation facilities shall adhere to Rule and Regulation 27: Generating Facility Intercormections. 8.Definition of Time Periods SUMMER (Service from May I to October 31): Peak:12:00 noon to 6:00 p.m.Monday through Friday (except holidays) Mid Peak:8:00 a.m. to 12:00 noon 6:00 p.m. to 9:00 p.m. Monday through Friday (except holidaysi Off-Peak:9:00 p.m. to 8:00 a.m. All day Monday through Friday (except holidays) Saturday, Sunday, and holidays WINTER (Service from November I to April 30): Peak:8:00 a.m. to 9:00 p.m.Monday through Friday (except holidays) Off-Peak:9:00 p.m. to 8:00 a.m. All day Monday through Friday (except holidays) Saturday, Sunday, and holidays HOLIDAYS: "Holidays" for the purposes of this rate schedule are New Years Day, President’s Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, and Christmas Day. The dates will be those on which the holidays are legally observed. SEASONAL RATE CHANGE: When the billing period is partly in the summer period and partly in the winter period, the billing will be computed by prorating the total kWh usage, kW demand, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. END CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Original Sheet No. E-3-3 MEDIUM COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 A. APPLICABILITY: This schedule applies to demand metered secondary electric service for commercial customers with a maximum demand below 1,000 kilowatts who have waived electric direct access eligibility. This schedule applies to three-phase electric service and may include service to master-metered multi- fanaily facilities. B. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. C.RATES: Seasonal Demand and Energy Rates: Commodi _ty Summer Period Demand Charge (kW)$4.27 Energy Charge (kWh)0.04896 Winter Period Demand Charge (kW)$3.93 Energy Charge (kWh)0.04323 Distribution Public Benefits Total $11.88 $16.15 0.01378 0.00255 0.06529 $6.98 $10.91 0.01325 0.00255 0.05903 SPECIAL NOTES: Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any appiicable discounts. On a customer’s bill statement, the bill amount may be broken down into three components as calculated under Section C: Commodity Charge, Distribution Charge and Public Benefit Charge. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-4-’I dated 7-7-2005 Effective 7-1-2007 CITY OF PALO ALTO U T I L I T I E S Sheet No.E-4-1 MEDIUM COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 (Continued) Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period is partly in the Summer Period and partly in the Winter Period, the billing will be computed by prorating the total kWh usage, kW demand, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a maximum demand meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The maximum demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A theI3nal-type demand meter which does not reset after a definite time interval may be used at the City’s option. The billing demand to be used in computing charges under this schedule will be the actual maximum demand in kilowatts for the current month. An exception is that the billing demand for customers with Thermal Energy Storage (TES) will be based upon the actual maximum demand of such customers between the hours of noon and 6 pm on weekdays. Solar Energy Discount Upon approval by the City, a 10 percent (10%) discount will be applied to a customer’s electric bill if such customer has installed a qualifying solar energy system prior to April 1, 1987. Power Factor For new or existing customers whose demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option of installing VAR-hour or any other applicable metering to calculate a power factor. The City may remove such metering from the service of a customer whose demand has been below 200 kilowatts for four consecutive months. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-4-2 dated 7-1-0"i CITY OF PALO ALTO UTILITIES Effective 8-1-2001 Sheet No.E-4-2 MEDIUM COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 (Continued) When such metering is installed, the monthly electric bill will include a °’power factor penalty", if applicable. The penalty adjustment will be applied to a customer’s bill prior to the computation of any primmy 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 demand. o Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable City of Palo Alto full-service rate schedule. Qualified customers may request service under E-4-G1, E-.4-G2, or E-4-G3. Customers served under this rate schedule are not eligible for electric direct access and cannot request a rate schedule change to a full service rate schedule applicable to customers who are eligible for electric direct access (i.e. E-17). 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 for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the customer’s electrical requirements. The City 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 his system so as to receive service at the new line voltage or to accept service (without voltage discount) through transformers to be supplied by the City subject to a maximum kVA size limitation. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-4-3 dated 7-’/-01 CITY OF PALO ALTO UTILITIES Effective 8-1-2001 Sheet No.E-4-3 MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G At APPLICABILITY: This schedule applies to demand metered secondary electric service for commercial customers with a maximum demand below 1,000 kilowatts who receive power under the Palo Alto Green plan and have waived electric direct access eligibility. This schedule applies to three-phase electric service and may include service to master-metered multi-family facilities. Palo Alto Green power provides for either the purchase of 1000 kwh blocks, or the purchase of 100% renewable green energy for participating customers. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. RATES: Unbundled Seasonal Demand and Energy Rates (1000 kWh block option): Commodity Distribution P~ablic Benefits Summer Period Demand Charge (kW) Energy Charge (kWh) $4.27 $11.88 0.04896 0.01378 Palo Alto Green Charge (per 1000 kWh block) Winter Period Demand Charge (kW)$3.93 Energy Charge (kWh)0.04323 Palo Alto Green Charge (per 1000 kwh block) 0.00255 $6.98 0.01325 0.00255 Total $16.15 0.06529 15.00 $10.91 0.05903 15.00 Unbundled Seasonal Demand and Energy Rates (100% renewable green option): Public Palo Alto Commodity Distribution Benefits Green $4.27 $11.88 0.04896 0.01378 0.00255 0.0150 $3.93. $6.98 0.04323 0.01325 0.00255 0.0150 Summer Period Demand Charge (kW) Energy Charge (kWh) Winter Period Demand Charge (kW) Energy Charge (kWh) Total $16.15 0.08029 $10.91 0.07403 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-4-G-1 dated 7-’1-2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No.E-4-G-1 MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE SPECIAL NOTES: UTILITY RATE SCHEDULE E-4-G (Continued) Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and. adjusted for any applicable discounts. On a customer’s bill statement, the bill amount may be broken down into four cost components as calculated under Section C: Commodity Charge, Distribution Charge, Public Benefits Charge mad a charge for Palo Alto Green blocks. Seasonal Rate Changes The Summer Period is effective May I to October 31 and the Winter Period is effective from November I to April 30. When the billing period is partly in the Summer Period and partly in the Winter Period, the billing will be computed by prorating the total kwh usage, kW demand, and the applicable rates tlaereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a maximum demand meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has dropped below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The maximum demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A thermal-type demand meter, which does not reset after a definite time interval may be used at the City’s option. The billing demand to be used in computing charges under this schedule will be the actual maximum demand in kilowatts for the current month. An exception is that the billing demand for customers with Thermal Energy Storage (TES) will be based upon the actual maximum demand of such customers between the hours of noon and 6 PM on weekdays. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 6-01-2003 Original Sheet No.E-4-G-2 MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G (Continued) Solar Energy Discount Upon approval by the City, a 10 percent (10%) discount will be applied to a customer’s electric bill if such customer has installed a qualifying solar energy system prior to April 1, 1987. Power Factor For new or existing customers whose demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option of installing VAR-hour or any other applicable metering to calculate a power factor. The City may remove such metering from the service of a customer whose demand has dropped below 200 kilowatts for four consecutive months. When such metering is installed, the monthly electric bill will include a "power factor penalty", if applicable. The penalty adjustment will be applied to a customer’s bil! 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 or (1/4) 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 demand. Changing Rate Schedules Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of blocks they wish to purchase under the Palo Alto Green plan. Customers may request a rate schedule change at any time to any applicable full-service rate schedule. Qualified customers may elect E-4 or E-4-TOU. Customers served under this rate schedule are not eligible for electric direct access and cannot request a rate schedule change to a full service rate schedule applicable to customers who are eligible for electric direct access (i.e. E-17). CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 6-01-2003 Original Sheet No.E-4-G-3 MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G (Continued) Notice of Schedule Change This schedule supercedes and replaces the Medium Commercial Green Power Electric Services’ formerly designated as Utilities Rate Schedules E-4-G1, E-4-G2, and E-4-G3, effective per adoption of this schedule. 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 2.5 percent for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the customer’s electrical requirements. The City 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 the system so as to receive service at the new line voltage or to accept service (without voltage discount) ttv’ough transformers to be supplied by the City subject to a maximum kVA size limitation. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 6-01-2003 Original Sheet No.E-4-G-4 MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE Ao UTILITY RATE SCHEDULE E-4 TOU APPLICABILITY: This schedule applies to demand metered secondary electric service for commercial customers with a demand between 500 and 1,000 kilowatts per month, who have sustained this level of usage for at least three consecutive months during the most recent 12 month period, and who have waived electric direct access eligibility. This schedule applies to three-phase electric service and may include service to master-metered multi-family facilities. In addition, this rate schedule is applicable for customers who did not pay power factor penalties during the last 12 months. TERRITORY: Within the incorporated limits of the City of Pa!o Alto and land owned or leased by the City. RATES: Seasonal Demand and Energy Rates:Per Meter Per Month Summer Period Commodi _ty Distribution Public Benefits Total Demand Charge (kW) Peak $2.51 Mid Peak 1.60 Off-Peak 0.91 Energy Charge (kWh) Peal($0.08820 Mid Peak 0.04519 Off-Peak 0.03458 $6.99 $9.5O 4.41 6.01 2.54 3.45 $0.02529 $0.00255 $0.11604 0.01266 0.00255 0.06040 0.00950 0.00255 0.04663 Winter Period Demand Charge (kW) Peak $2.27 $3.94 $6.21 Mid Peak --- Off-Peak 1.22 2.27 3.49 Energy Charge(kWh) Peak $0.05731 Mid Peak Off-Peak 0.03345 $0.01773 $0.00255 $0.07759 0.01014 0.00255 0.04614 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No, E-4-TOU-’I dated 7-’I-2005 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No.E-4-TOU-1 Do SPECIAL NOTES: MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU (Continued) Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. Definition of Time Periods SUMMER (Service from May 1 to October 31): Peak:12:00 noon to 6:00 p.m.Monday through Friday (except holidays) Mid Peak:8:00 a.m. to 12:00 noon 6:00 p.m. to 9:00 p.m. Monday through Friday (except holidays) Off-Peak:9:00 p.m. to 8:00 a.m. All day Monday through Friday (except holidays) Saturday, Sunday, and holidays WINTER (Service from November 1 to April 30): Peal<:8:00 a.m. to 9:00 p.m.Monday through Friday (except holidays) Off-Peak:9:00 p.m. to 8:00 a.m. All day Monday through Friday (except holidays) Saturday, Sunday, and holidays HOLIDAYS: "Holidays" for the purposes of this rate schedule are New Years Day, President’s Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, and Christmas Day. The dates will be those on which the holidays are legally obselwed. SEASONAL RATE CHANGE: When the billing period is partly in the summer period and partly in the winter period, the billing will be computed by prorating the total kwh usage, kW demand, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days .in each seasonal period to the total number of days in the billing period. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 1-1-2002 Original Sheet No.E-4-TOU-2 MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU (Continued) Q Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a demand meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The billing demand to be used in computing charges under this schedule will be the actual maximum demand in kilowatts taken during any 15-minute interval in each of the designated Time periods as defined under Section D.2. " Solar Energy Discount Upon approval by the City, a 10 percent (10%) discount will be applied to a customer’s electric bill if such customer has installed a qualifying solar energy system prior to April !, 1987. Power Factor Penalty Time of Use customers must not have had a power factor penalty assessed on their service for at least 12 months. Power factor is calculated based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month, and must not have fallen below 95% to avoid the power factor penalty. Should the City of Palo Alto Utilities Department find that the customer’s service should be subject to power factor penalties, the customer will be removed from the E-4-TOU rate schedule and placed on another applicable rate schedule as is suitable to their kilowatt demand and kilowatt-hour usage. Changing Rate Schedules Customers electing to be served under E-4 TOU must remain on said schedule for a minimum of 12 months.. Should the customer so wish, at the end of 12 months, the customer may request a rate schedule change to any applicable City of Palo Alto full-service rate schedule. Qualified customers may request service under E-4, E-4-G1, E-4-G2, or E-4-G3. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 1-1-2002 Original Sheet No.E-4-TOU-3 MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU (Continued) Q 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 for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the customer’s electrical requirements. The City 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 his system so as to receive service at the new line voltage or to accept service (without voltage discount) through transformers to be supplied by the City subject to a maximum kVA size limitation. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 1-1-2002 Original Sheet No.E-4-TOU-4 LARGE COMMERCIAL ELECTRIC SERVICE APPLICABILITY: UTILITY RATE SCHEDULE E-7 This schedule applies to demand metered secondary service for large commercial customers with a maximum demand of at least 1,000KW per month per site, who have sustained this demand level at least 3 consecutive months during the last twelve months, and who have waived electric direct access eligibility. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. RATES: Seasonal Demand and Energy Rates: Commodi~ Summer Period Demand Charge (kW)$5.27 Energy Charge (kWh)0.04648 Winter Period Demand Charge (kW)$4.58 Energy Charge (kWh)0.04153 SPECIAL NOTES: Distribution Public Benefits Total $9.54 $14.81 0.01388 0.00255 0.06291 $4.39 $8.97 0.01379 0.00255 0.05787 Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount may be broken down into three components as calculated under Section C: Commodity Charge, Distribution Charge and Public Benefit Charge. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-7-’i dated 7-’I-2005 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No.E-7-1 LARGE COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 (Continued) Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period is partly in the summer period and partly in the winter period, the billing will be computed by prorating the total kWh usage, kW demand, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. o Request for Service Qualifying customers may request service under this schedule for more than one account or one meter if the accounts are on one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right-of-ways (e.g. streets) and have a common billing ad&ess. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a maximum demand meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be The maximum demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month provided that in case the load is intermittent or subject tO violent fluctuations, the City may use a 5-minute interval. A thermal-type demand meter which does not reset after a definite time interval may be used at the City’s option. The billing demand to be used in computing charges under this schedule will be the actual maximum demand in kilowatts for the current month. An exception is that the billing demand for customers with Thermal Energy Storage (TES) will be based upon the actual maximum demand of such customers between the hours of noon and 6 pm on weekdays. 5.Power Factor For new or existing customers whose demand is expected to exceed or has exceeded 300 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-7-2 dated 7-’/-0"1 CITY OF PALO ALTO UTILITIES Effective 8-1-2001 Sheet No.E-7-2 LARGE COMMERCIAL ELECTRIC SERVICE o UTILITY RATE SCHEDULE E-7 (Continued) kilowatts for three consecutive months, the City has the option to install VAR-hour or any other applicable metering to calculate a power factor. The City may remove such metering from the service of a customer whose demand has been below 200 kilowatts for four consecutive months. When such 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 demand. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable full service rate schedule. Customers served under this rate schedule are not eligible for electric direct access and cannot request a rate schedule change to the full service rate schedule(s) applicable to customers who are eligible for direct access (E-8). Qualified customers may.request service under E-7-G1, E-7-G2, or E-7-G3. 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 for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the customer’s electrical requirements. The City retains the right to change i~s 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 his system so as to receive service at the new line voltage or to accept service (without voltage discount)through transformers to be supplied by the City subject to a maximum kVA size limitation. {End} CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-7-3 dated 7-7-01 CITY OF PALO ALTO UTILITIES Effective 8-1-2001 Sheet No.E-7-3 Bt Co LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G APPLICABILITY: This schedule applies to demand metered service for large commercial customers who choose service under the Palo Alto Green plan. A customer may qualify for this rate schedule if the customer’s maximum demand is at least 1,000KW per month per site, who have sustained this demand level at least 3 consecutive months during the last twelve months, and who have waived direct access eligibility. Palo Alto Green power provides for the either the purchase of 1000 kwh blocks, or the purchase of 100% renewable green energy for participating customers. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. RATES: Unbundled Seasonal Demand and Energy Rates (1000 kWh block option): Distribution Public BenefitsCommodity $5.27 $9.54 0.04648 0.01388 Summer Period Demand Charge (kW) Energy Charge (kWh) Palo Alto Green Charge (per 1000 kwh block) Winter Period Demand Charge (kW)$4.58 Energy Charge (kWh)0.04153 Palo Alto Green Charge (per 1000 kwh block) 0.00255 $4.39 0.01379 0.00255 t Total $14.81 0.06291 15.00 $8.97 0.05787 15.00 Unbundled Seasonal Demand and Energy Rates (100% renewable green option): Public Palo Alto Commodity Distribution Benefits Green $5.27 $9.54 0.04648 0.01388 0.00255 0.0150 $4.58, $4.39 0.04153 0.01379 0.00255 0.0150 Summer Period Demand Charge (kW) Energy Charge (kWh) Winter Period Demand Charge (kW) Energy Charge (kWh) Total $14.81 0.07791 $8.97 0.07287 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-7-G-7 dated 7-7-2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No.E-7-G-1 LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G (Continued) SPECIAL NOTES: 1.Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount may be broken down into four components as calculated under Section C: Commodity Charge, Distribution Charge, Public Benefit Charge and a charge for Palo A!to Green blocks. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November I to April 30. When the billing period is partly in the Summer Period and partly in the Winter Period, the billing will be computed by prorating the total kWh usage, kW demand, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. 3.Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a maximum demand meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has dropped below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The maximum demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A thermal-type demand meter, which does not reset after a definite time interval may be used at the City’s option. The billing demand to be used in computing charges under this schedule will be the actual maximum demand in kilowatts for the current month. An exception is that the billing demand for customers with Thermal Energy Storage (TES) will be based upon the actual maximum demand of such customers between the hours of noon and 6 PM on weekdays. CITY OF PALO ALTO UTILITIES Issued by the City Council CiTY OF PALO ALTO UTILITIES Effective 6-01-2003 Original Sheet No.E-7-G-2 LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G (Continued) Request for Service Qualifying customers may request service under this schedule for more than one account or one meter if the accounts are at one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right-of-ways (e.g. streets) and have a common billing address. 5.Power Factor For new or existing customers whose demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option to install VAR-hour or any other applicable metering to calculate a power factor. The City may remove such metering from the service of a customer whose demand has dropped below 200 kilowatts for four consecutive months. When such metering is installed, the monthly electric bill shal! 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 or (1/4) 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 demand. 6.Changing Rate Schedules ao bo Customers choosing to participate shall fill out a Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of Palo Alto Green blocks they wish to purchase under the Palo Alto Green plan. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 6-01-2003 Original Sheet No.E-7-G-3 LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G (Continued) Co If a customer account discontinues to qualify for this service for an account(s) on Utility Rate Schedule E-7-G, such account(s) may be charged under Utility Rate Schedule E-4-G or any other applicable rate schedule. do Customers may request a rate schedule change at any time to any applicable full service rate schedule. Customers served under this rate schedule are not eligible for electric direct access and cannot request a rate schedule change to the full service rate schedule(s) applicable to customers who are eligible for direct access (E-8). Qualified customers may request service under E-7 or E-7-TOU. Notice of Schedule Change This schedule supercedes and replaces the Large Commercial Green Power Electric Services.’ formerly designated as Utilities Rate Schedules E-7-G1, E-7-G2, and E-7-G3, effective per adoption of this schedule. 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 for available line voltages above 2 kilovolts will be allowed; provided, however, the City is not required to supply service at a qualified line voltage where it has, or will install, ample facilities for supplying at anothervoltage equally or better suited to the customer’s electrical requirements. The City 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 the system so as to receive service at the new line voltage or to accept service (without voltage discount)through transformers to be supplied by the City subject to a maximum kVA size limitation. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 6-01-2003 Original Sheet No.E-7-G-4 APPLICABILITY: LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU This schedule applies to demand metered secondary service for large commercial customers with a maximum demand of at least 1,000KW per month per site, who have sustained this demand level at least 3 consecutive months during the last twelve months, and who have waived electric direct access eligibility. In addition, this rate schedule is applicable for customers who did not pay power factor penalties during the last 12 months. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. RATES: Seasonal Demand. and Energy Rates: Summer Period Commodi _ty Distribution PuNic Benefits Per Meter Per Montti Total Demand Charge (kW) Peak $3.48 $6.27 Mid Peal(1.69 3.14 Off-Peak 0.96 1.57 $9.75 4.83 2.53 Energy Charge(kWh) Peak $0.05771 $0.01746 $0.00255 $0.07772 Mid Peak 0.04817 0.01446 0.00255 0.06518 Off-Peak 0.03998 0.01192 0.00255 0.05445 Winter Period Demand Charge (kW) Peak $2.53 $2.46 Mid Peak - Off-Peak 1.32 1.22 $4.99 2.54 Energy Charge(kWh) Peak $0.04673 $0.01557 $0.00255 $0.06485 Mid Peak - Off-Peak 0.03879 0.01284 0.00255 0.05418 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-7-TOU-’I dated 7-%2005 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No.E-7-TOU-1 LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU (Continued) D.SPECIAL NOTES: Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicablb discounts. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. Definition of Time Periods SUMMER (Service fi’om May ! to October 31): Peak:12:00 noon to 6:00 p.m.Monday through Friday (except holidays) Mid Peak:8:00 a.m. to 12:00 noon 6:00 p.m. to 9:00 p.m. Monday through Friday (except holidays) Off-Peak:9:00 p.m. to 8:00 a.m. All day Monday through Friday Saturday, Sunday, and holidays WINTER (Service from November 1 to April 30): Peak:8:00 a.m. to 9:00 p.m.Monday through Friday (except holidays) Off-Peak:9:00 p.m. to 8:00 a.m. All day Monday through Friday (except holidays) Saturday, Sunday, and holidays HOLIDAYS: "Holidays" for the purposes of this rate schedule are New Years Day, President’s Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, and Christmas Day. The dates will be those on which the holidays are legally observed. SEASONAL RATE CHANGE: When the billing period is partly in the summer period and partly in the winter period, the billing will be computed by prorating the total kwh usage, kW demand, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTli2tTIES Effective 1- !-2002 Original Sheet No.E-7-TOU-2 LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU (Continued) Request for Service Qualifying customers may request service under this schedule for more than one account or one meter if the accounts are on one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right-of-ways (e.g. streets) and have a common billing address. Demand Meter Whenever the monthly use. of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a demand meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be The billing demand to be used in computing charges under this schedule will be the actual maximum demand in kilowatts taken during any 15-minute interval in each of the designated Time periods as defined under Section D.2. Power Factor Penalty Time of Use customers must not have had a power factor penalty assessed on their service for at least 12 months. Power factor is calculated based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month, and must not have fallen below 95% to avoid the power factor penalty. Should the City of Palo Alto Utilities Department find that the customer’s service should be subject to power factor penalties, the customer will be removed from the E-7-TOU rate schedule and placed on another applicable rate schedule as is suitable to their kilowatt demand and kilowatt-hour usage. Changing Rate Schedules Customers electing to be served under E-7 TOU must remain on said schedule for a minimum of 12 months. Should the customer so wish, at the end of 12 months, the customer may request a rate schedule change to any applicable City of Palo Alto full-service rate schedule.-Qualified customers may request service under E-7, E-7-G1, E-7-G2, or E-7-G3. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 1-1-2002 Original Sheet No.E-7-TOU-3 LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU (Continued) 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 for available line voltages above 2 kilovolts will be al!owed provided the City is not required to supply service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the customer’s electrical requirements. The City 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 his system so as to receive service at the new line voltage or to accept service (without voltage discount) through transformers to be supplied by the City subject to a maximum kVA size limitation. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 1-1-2002 Original Sheet No.E-7-TOU-4 STREET LIGHTS UTILITY RATE S CHEDULE E- 14 APPLICABILITY: This schedule applies to street and highway lighting installations owned by any governmental agency other than the City of Palo Alto. B. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. C. RATES: Burning Schedule: Lamp Rating: kWh’s Per Month All Night/Midnight Per Lamp Per Month - Class A Utility supplies energy and switching service only. All Night Midnight Mercury-Vapor Lamps 100 watts 42/20 $ 9.63 $ 7.11 175 watts 68/35 11.49 8.96 400 watts 154/71 23.65 18.24 High Pressure Sodium Vapor Lamps 120 volts 70 watts 29/15 8.45 5.92 100 watts 41/20 11.32 8.26 150 watts 60/30 14.59 12.34 240 volts 70 watts 34/17 9.45 7.11 100 watts 49/25 12.34 8.96 150 watts 70/35 14.69 10.14 200 watts 90/45 16.39 13.01 250 watts 110/55 18.60 13.17 310 watts 134/167 21.79 17.23 400 watts 167/84 26.69 19.76 Fluorescent Lamps 40 watts 15/8 3.55 2.87 CITY OF PALO ALTO UTILITIES Issued. by the City Council Supersedes Sheet No. E-’14-1 dated 7-07-2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No.E-14-1 Burning Schedule: kWh’s Per Month All Night/Midnight STREET LIGHTS UTILITY RATE SCHEDULE E-14 (Continued) Per Lamp Per Month - Class C Utility supplies energy and switching selwice and maintains entire system, including lamps and glassware. All Night Midnight Lamp Rating: Mercury-Vapor Lamps 100 watts 42/20 $10.82 $ 8.26 175 watts 68/35 13.01 10.30 250 watts 97/49 16.20 12.52 400 watts 154/71 24.16 18.60 Incandescent Lamps 189 watts (2,500 L)65/32 295 watts (4,000 L)101/5 405 watts (6,000 L)139/70 620 watts (10,000 L)212/106 Fluorescent Lamps 25 watts 12/6 40 watts 15/8 55 watts 18/9 11.49 9.14 14.69 11.49 18.60 15.37 25.85 21.44 4.23 3.22 4.38 3.55 5.07 3.73 High Pressure Sodium Vapor Lamps 120 volts 70 watts 29/15 8.79 ! 00 watts 41/20 11.82 150 watts 60/30 15.20 240 volts 70 watts 34/17 9.80 100 watts 49/25 12.83 150 watts 70/35 15.20 200 watts 90/45 16.89 250 watts 110/55 18.93 6.25 8.62 12.68 7.44 9.45 10.65 13.51 13.86 CITY OF PALe ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-14-2 dated 7-01-2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No.E-14-2 STREET LIGHTS Do SPECIAL CONDITIONS: UTILITY RATE SCHEDULE E-14 (Continued) Type of Service: This schedule is applicable to series circuit and multiple street lighting systems to which the Utility will deliver current at secondary voltage. Unless otherwise agreed, multiple current will be delivered at 120/240 volts, three-wire, single-phase. In certain localities the Utility may supply service from 120/208 volt star-connected poly-phase lines in place of 240-volt service. Single phase service from 480-volt sources will be available in certain areas at the option of the Utility when this type of service is practical from the Utility’s engineering standpoint. All currents and voltages stated herein are nominal, reasonable variations being permitted. New lights will normally be supplied as multiple systems. Point of Delivery: Delivery will be made to the customer’s system at a point or at points mutually agreed upon. The Utility will furnish the service connection to one point for each group of lamps, provided the customer has arranged his system for the least practicable number of points of delivery. All underground connections will be made by the customer or at the customer’s expense. o Switching: Switching will be performed by the Utility (on the Utility’s side of points of delivery) and no charge will be made for switching provided there are at least 10 kilowatts of lamp load on each circuit separately switched, including all lamps on the circuit whether served under this schedule or not; otherwise, an extra charge of $2.50 per month will be made for each circuit separately switched unless such switching installation is made for the Utility’s convenience or the customer furnishes the switching facilities and, if installed on the Utility’s equipment, reimburses the Utility for installing and maintaining them. Annual Burning Schedule: The above rates apply to lamps which will be turned on and off once each night in accordance with a regular burning schedule agreeable to the customer but not exceeding 4,100 hours per year for all-night service and 2,050 hours per year for midnight service. Maintenance: The rates under Class C include all labor necessary for replacement of glassware and for inspection and cleaning of the same. Maintenance of glassware by the Utility is limited to standard glassware such as is commonly used and manufactured in reasonably large quantities. A suitable charge will be made for maintenance of glassware of a type entailing unusual expense. Under Class C, the rates include maintenance of circuits between lamp posts and of circuits and equipment in and on the posts, provided these are all of good standard construction; otherwise, CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-’14-3 dated 7-~-0~CITY OF PALO ALTO UTILITIES Effective 7-1-2003 Sheet No.E-14-3 STREET LIGHTS UTILITY RATE SCHEDULE E-14 (Cominued) the Utility may decline to grant Class C rates. Class C rates applied to any agency other than the City of Pale Alto also include painting of posts with one coat of good ordinary paint as required to maintain good appearance but do not include replacement of posts broken by traffic accidents or otherwise. Multilamp Electroliers: The above charges are made on per-lamp basis. For posts supporting one or more lamps, where the lamps are less than nine feet apart, the above charges for Class C will be reduced by 6 percent (6%) computed to the nearest whole cent, for all lamps other than the first one. o 10. Operating Schedules Other Than All-Night and Midnight: Rates for regular operating schedules other than all-night and midnight will be the midnight rates plus or minus one-eleventh of the difference between the midnight and the all-night rate, computed to the nearest whole cent, for each half hour per night more or less than midnight service. This adjustment will apply only to lamps on regular operating schedules which do not exceed 4,500 hours per year. Street Light Lamps, Standard and Nonstandard Ratings: The rates for incandescent lamps under Class A are applicable for service to regular street lamps only and must be increased by 6 percent, computed to the nearest whole cent, for service to group-replacement street lamps. The rates under Class C are applicable to both regular and group-replacement street lamps. Continuous Operation: The rate for continuous 24-hour operation under Class A service will be twice the all-night rate. System Owned In-Part by Utili .ty ¯ Where, at customer’s request, the Utility installs, owns, and maintains any portion of the lighting fixtures, supports, and/or interconnecting circuits, an extra monthly charge of one and one-fourth percent of the Utility’s estimate of additional investment shall be made. 11.Rates For Lamps Not on Schedule: In the event a customer installs a lamp which is not presently represented on this schedule, the Utility will prepare an interim rate reflecting the Utility’s estimated costs associated with the specific lamp size. This interim rate will serve as the effective rate for billing purposes until the new lamp rating is added to Schedule E-14. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-14-4 dated 7-’1-0~CITY OF PALO ALTO UTILITIES Effective 7-1-2003 Sheet No.E-14-4 UNMETERED ELECTRIC SERVICE UTILITY RATE SCHEDULE E- 16 No APPLICABILITY: This schedule applies to unmetered electric service and other miscellaneous Electric Utility fees to various public agencies and private entities. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. RATES: Service Description Automatic Irrigation Systems: Hwy 101 & Embarcadero, Sand Hill Road Highway Lighting & Sign Illumination Highway Lighting ElectroIier (20,000 L) Electrolier (4000 L) & (7000 L) (B)Sign Lighting Sign (1,910 W) Signs (1,572 W) Signs (786 W) o Page Mill Expressway and E1 Camino Park & Ride Lot Lighting and Signal Automatic sprinklers at Oregon & Page Mill Expressway * Rates are monthly unless otherwise indicated. Customer State of California, Public Works State of California Santa Clara County Public Works Rate * $ 5.89 @ 20.49 ea @ 10.31 ea @ 68.42 ea @ 56.23 ea @28.11 ea 64.00 31.20 CITY OF PALO ALTO UTILITIES Issued by the City Counci! Supersedes Sheet No.E-f6-1 dated 7-01-2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No.E-16-1 UNMETERED ELECTRIC SERVICE Service Description Traffic Signal (A)Controller (B)8" Lamp (C)12" & PVH Lamp (D)PedeStrian Head (E)Vehicle, System and Bike Sensor Loop o Electric Service for Cathodic Protection Station UTILITY RATE SCHEDULE E- 16 (Continued) Customer Rate * PG&E $437.62ea 5.12 ea 6.57ea 8~76ea 17.52 ea 11.92 13. CaNe TV Power Supply/Service Pel~nit Fee for Electric Conduit Usage (A) Exclusive Use (B) Non-Exclusive use Processing Fee for Electric Conduit Usage Permit Fee for Utility Pole Attachments (A)1 ft. of usable space (B)2 ft. of usable space (C)3 ft. of usable space (D)4 ft. of usable space Processing Fee for Utility Pole Attachments Utilities Broadband Local Aa-ea Network (A) Bandwidth Assignment (B) Carrier Usage Power supply to Groundwater Treatment Service Comcast Permittee Permittee Permittee Permittee City Departments City Departments 39.46 1.10/ft/yr 0.55/ft/yr Actual Cost $18.08/pole/yr $19.98/pole/yr $21.87/pole/yr $23.77/pole/yr $47.00/pole 210.80/MHZ 52.70/carrier 114.32 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-’i 6-2 dated 7-0"1-2005 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No.E-16-2 UNMETERED ELECTRIC SERVICE UTILITY RATE SCHEDULE E- 16 (Continued) D. SPECIAL PROVISIONS: In the event a customer requests an electric service which the Utility determines will be an unmetered- service, or miscellaneous fee, the Utility will charge an interim rate reflecting the Utility’s. estimated costs associated with the specific service. The Utility may charge an existing rate contained on this Rate Schedule for an identical or similar type service, or prepare a new rate. This interim rate will serve as the effective rate for billing purposes until the service type is added to Rate Schedule E-16. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No.E-’I 6-3 dated 5-22-00 CITY OF PALO ALTO UTILITIES Effective 7-01-2003 Sheet No.E- 16-3 At Be MUNICIPAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-18 APPLICABILITY: This schedule applies to service for buildings and facilities owned and/or operated by the City of Pale Alto. TERRITORY: Within the incorporated limits of the City of Pale Alto and land owned or leased by the City. RATES: Unbundled Seasonal Energy Rates: Per kilowatt-hour Commodi _ty Summer Winter Distribution PuNic Benefits Total $0.00255 $0.09149 0.00255 0.07375 $0.05438 $0.03456 0.04370 0.02750 SPECIAL NOTES: 1.Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount is broken down into three cost components as calculated under Section C: Commodity Charge, Distribution Charge, and Public Benefits Charge. 2.Seasonal Rate Changes The Summer Period is effective May I to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period is partly in the summer period and partly in the winter period, the billing will be computed by prorating the total kWh usage, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. CITY OF PALe ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-18-’1 dated 7-’1-2005 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No. E-18-1 MUNICIPAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-18 (Continued) Power Factor For new or existing customers whose demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option to install VAR-hour or any other applicable metering to calculate a power factor. The City may remove such metering from the service of a customer whose demand has been below 200 kilowatts for four consecutive months. When such 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 momh. Where time-of-day metering is installed, the monthly power factor shall be the power factor coincident with the customer’s maximum demand. o 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 for available line voltages above 2 kilovoks will be allowed provided the City is not required to supply service at a particular, line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the customer’s electrical requirements. The City 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 his system so as to receive service at the new line voltage or to accept service (without voltage discount) through transformers to be supplied by the City subject to a maximum kVA size limitation. CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 3-1-2002c~T¥ oF PALO ALTO Original Sheet No. E-18-2UTILITIES MUNICIPAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-18-O APPLICABILITY: This schedule applies to service for buildings and facilities owned and/or operated by the City of Palo Alto receiving power under the. Palo Alto Green plan. Palo Alto Green power provides for. either the purchase of 1000 kWh blocks, or the purchase of 100% renewable green energy for participating customers. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. RATES: 1. Unbundled Seasonal Energy Rates (100% renewable green option): Palo Alto Per kilowatt-hour Commodity Distribution Public Benefits Green Summer $0.05438 $0.03456 $0.00255 $0.0150 Winter 0.04370 0.02750 0.00255 0.0150 Total $0.10649 0.08875 Per kilowatt-hour Commodity Distribution Summer $0.05438 $0.03456 Winter 0.04370 0.02750 Palo Alto Green Charge (per 1000 kwh block Unbundled Seasonal Energy Rates(1000 kWh block option): PuNic Benefits $0.00255 0.00255 SPECIAL NOTES: Totd $0.09149 0.07375 15.00 Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts. On a customer’s bill statement, the bill amount is broken down into four cost components as calculated under Section C: Commodity Charge, Distribution Charge, Public Benefits Charge, and a charge for Palo Alto Green blocks. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period is partly in the summer period and partly in the winter period, the billing will be computed by prorating the total kWh usage, and the applicable rates thereto between the two seasonal periods, according to the ratio of the number of days in each seasonal period to the total number of days in the billing period. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-’I 8-G-’/ dated 7-0%2005 CITY OF PALO ALTO UTILITIES Effective 7-01-2007 Sheet No. E-18-G-1 MUNICIPAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-18-G (Continued) Power Factor For new or existing customers whose demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option to install VAR-hour or any other applicable metering to calculate a power factor. The City may remove such metering from the service of a customer whose demand has been below 200 kilowatts for four consecutive months. When such 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 dm’ing the month. Where time-of-day metering is installed, the monthly power factor shall be the power factor coincident with the customer’s maximum demand. Changing Rate Schedules Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of blocks they wish to purchase under the Palo Alto Green plan. 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 for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the customer’s electrical requirements. The City 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 his system so as to receive service at the new line voltage or to accept service (without voltage discount) through transformers to be supplied by the City subject to a maximum kVA size limitation. CITY OF PALO ALTO UTILITIES Issued by the City Council CITY OF PALO ALTO UTILITIES Effective 6-01-2003 Original Sheet No. E-18-G-2 ATTACHMENT C MEMORANDUM 4 TO:UTILITIES ADVISORY COMMISSION FROM:UTILITIES DEPARTMENT DATE: SUBJECT: APRIL 4, 2007 RECOMMENDED FY 2007-08 ELECTRIC RATE INCREASE RECOMMENDATION This report requests that the Utilities Advisory Commission (UAC) recommend that the City Council: a) Approve a 5 percent electric retail rate, or $4.4 million revenue, increase effective July 1, 2007; and b) Approve, in concept, a 10 percent electric retail rate, or $9.2 million revenue, increase for FY 2008-09. BACKGROUND . There were no electric revenue or rate increases recommended to the City Council for EY 2006- 07, due to~ the size of the.balances of the Electric Supply and Distribution Rate Stabilization Reserves at that time. Instead, those Reserves were used to fund increased operational expenses. During FY 2005-06, very favorable hydro conditions resulted in lower wholesale purchase costs, and significant additional funds were added to the Electric Supply Rate Stabilization Reserve (E- SRSR). The actual ending balance of the E-SRSR for FY 2005-06 was $9.8 miIlion over the Maximum Guideline Level approved by the City Council. For FY 2006-07, hydro conditions are still having the same positive effect. However, funds for maanticipated expenses for retiree medical liabilities and increased Workers’ Compensation expenses were withdrawn from the Electric Distribution Rate Stabilization Reserve (E-DRSR) at the end of FY 2005-06.This left the E-DRSR slightly above the Minimum Guideline Level. DISCUSSION Revenues, Expenses and Reserves The main drivers for the recommended increases are higher distribution costs and a low balance in the E-DRSR. The proposed rate increase for FY 2007-08 represents a $4.4 million annual electric revenue increase. Of this, $4.3 million is to increase the E-DRSR balance to the meet the recommended level determined during the ama~.ml "Risk Assessment for Reserves" evaluation and to bring revenue for Electric Distribution back imo aligmaaent with actual costs. The remaining $0.1 million will fund the state-mandated 2.85 percent of sales revenue for the Electric Public Benefits budget. While the Electric Supply Rate Stabilization Reserve (E-SRSR) has benefited from the hydro conditions in the short term, electric supply costs are projected to increase from approximately 5 cents per kilowatt-hour to approximately 6 cents per kilowatt-hour in FY 2007-08. Risk Assessment Staff performed an amaualized risk assessment which compares projected rese~we levels to applicable risk factors. This assessment, shown in Table 1 below, has determined that the forecasted E-SRSR and the E-DRSR balances are adequate for FY 2007-08, but may require adjustment for FY 2008-09. Based on the "Amaual Risk Assessment for Reserves" the E-SRSR will be drawn down in FY 2007-08 to cover anticipated increases in the cost of electric commodity p’archases. The implementation of the 5 percent increase is projected to bring the FY 2007-08 ending E-DRSR to approximately $4.6 million, which is below the Minimum Guideline level of $6.6 million. It is, however, above the risk assessment value of $4 million, and staff feels that the projected reserve balance is adequate to meet any potential short-term risks. Staff will continue to work toward achieving the Minimum Guidelines for both the E-SRSR and the E-DRSR, and will closely monitor tl~e fizzancial !~ealt~ of tl’..e Electric Fv.~zd. TABLE 1 : Reserve Balance and Guidelines Compared to Risk Assessment Level Reserve Balance and Guidelines FY 2007-08 FY 2008-09 (Electric Supply) End of Year Balance $43.7 million $33.1 million (Forecast) Risk Assessment Level $44.0 million $45.3 million Reserve Minimum Level $30.4 million $32.5 milli0n Reserve Maximum Level $60.8 million $64.9 million Reserve Balance and Guidelines FY 2007-08 FY 2008-09 (Electric Distribution) End of Year Balance $4.6 million $6.8 million (Forecast) Risk Assessmem Level $4.0 million $4.2 million Reserve Minimum Level $6.6 million $7.0 million Reserve Maximum Level $16.6 mitlion $17.3 million An updated risk assessment will be perfon)aed as part of the budget process for FY 2008-09, and staff will evaluate the revenues, expenses and risks during the FY 2008-09 budget process to ensure that the Electric Utility remains financially sound. Palo Alto Customer Bill Impact and Comparison with PG&E Page 2 of 4 Table 2 shows the impact of this rate proposal on a typical monthly bill for various customer classes. Comparison with PG&E’s January 2007 rates indicates that the average Palo Alto residential customer’s bill for electric service is approximately 37 percent below PG&E’s comparable residential electric bill. The bill impact table does not include the bills for those who participate in the PaloAltoGreen program. However, under this rate adjustment proposal, electric distribution rates for participants in the PaloAltoGreen pro~am will match those of the customers in the appropriate class. TABLE 2: Effect of Proposed Electric Rate Increase on Customer Bills CUSTOMER TYPE MONTHLY KWH USAGE PROPOSED MONTHLY BILL % BILL INCREASE MONTHLY BILL INCREASE $1.11 2.90 18.15 2.54 1,674 21,053 % PA BELOW PG&E Residential Small 300 $ 23.19 5.0 (32.4) Residential Average 650 60.83 5.0 (36,5) ¯ Residential Large 3000 382.74 5.0 (59.1) Commercial Small 500 53.21 5.0 (39.4) Commercial Medium 500,000 40,551 5.0 (30,1) Commercial Large .5,500,000 j 439,769 5.0 (20.8) RESOURCE. II~IPACT Approval of this rate proposal will increase the Electric Fund metered retail sales revenues in FY 2007-08 by approximately $4.4 million on a fiscal year basis. With this infusion of revenue, the balance in the E-DRSR is projected to meet the recommended risk assessment reserve level in FY 2007-08. Staff also recommends Council approve in concept a 10 percent rate increase, or $9.2 million revenue increase, for FY 2008-09. This increase will allow the E-SRSR to remain above the Minimum Guideline Level recommended by City Council. POLICY IMPLICATIONS This rate proposal meets the following Utilities Strategic Plan objectives: to invest in utility infrastructure to deliver reliable service and to provide superior financial service to the City and competitive rates to customers. Approval of the proposed electric rate increase does not represent a change to existing policies. ATTACHMENTS: Electric Rate Schedules: E-l, E-l-G, E-2, E-2-G, E-3, E-4, E-4 TOU, E-4-G, E-7, E-7-TOU, E- 7-G, E-14, E-16, E-18, E-18-G Page 3 of 4 PREPARED BY: REVIEWED BY: DEPARTMENT HEAD: LUCRE Rates Assistant Director, Customer Support Services VALE~i~ O.~ONG Director of Utilities Page 4 of 4 ATTACHMENT D DRAFT UTILITIES ADVISORY COMMISSION MINUTES OF APRIL 4, 2007 CALL TO ORDER Melton called to order at 7:00 pm the regular scheduled meeting of the Utilities Advisory Commission. Present: Melton, Dawes, Bechtel, Rosenbaum ORAL COMMUNICATIONS ......... ,i,du~,,,~()Mrs. C~liaL~ad ....~.~,,,~,~,,,o Rates discussion see belowI,J~ I ql ~:¯ APPROVAL OF THE MINUTES Approval of the minutes of March 7 was made with the following change and comments: Bebhtel asked for clarification on page 3, paragraph 1 of the March 7 draft minutes. He asked whether it was 11.4 perc_ent cost per kWh or if it should be 11.4 cents cost per kWh. Tom Auzenne, Assistant Director, said that it should be cents. Bechtel also requested therebe more specifics and details to the sense minutes rather than just saying there was "comments and concerns" brought up in the meeting. Dawes said he would, like more explanation on the $40 million dollar cost of the Reservoir Project. There was a similar project 4 years ago which cost around $15 or $16 million. He also wondered Utilities Advisory Commission Minutes from: Approved on:Page 1 of 11 why "including land" wasn’t explained further in the minutes. Melton said he did not think there had been discussion of the term "including land" at the meeting and that is why there was nothing in the minutes. Chairman Melton: Moved approval, Dexter Dawes Seconded. Motion passed with four ayes and one absent. AGENDA REVIEW Valerie Fong, Utilities Director, pointed out that Item 2 on the agenda (Ten-Year Energy Efficiency Portfolio Plan) was an Action item, not an Informational item. REPORT FROM COMMISSION MEETINGS/EVENTS NONE UTILITIES DIRECTOR REPORT Fong presented the following report: 1) The Emergency Water Supply Project Notice of Determination was filed on March 9. The CEQA process will be complete, if there are no protests, by April 11. 2) A CMR will go to Council next week to notify them that more time is needed for the FEIR cost allocation schemes and will be brought forward in May. The 2na reading of the Park Ordinances will also take place in May. 3) Water system flushing notices will go in the Palo Alto Weekly and Pato Alto Daily. The flushing will take place the week of Apr 22. 4) There will be a Federal Policy Conference in Washington D.C at the end of April. Val will attend with Council member Bern Beecham and Resour’ce Planner Debbie Lloyd. 5) The next UAC meeting will be a day meeting on May 2. 6) There is a conflict regarding the July 11 UAC meeting date as a Hetch Hetchy tour is scheduled for the same date. Fong asked if July 19 might work as the Chambers are not Utilities Advisory Commission Minutes from: Approved on:Page 2 of 11 available on July 18. Staff was asked to see if a conference room, other than the Chambers, might be available on July 18. Fong said we would look into that option. 7) The Mayor is sponsoring a session on Stanford University’s Green Transportation Program. This will take ’place Apr 5, 4:00 - 5:30 pm in the Council Chambers. 8) There will be a Special Meeting of Council (study session) on April 11 at 2:00 pm in the Council Chambers. Lt. Governor John Garamendi will speak on the issue of Climate Change. UNFINISHED BUSINESS Rosenbaum asked about the overhead for the Green Project and how it was calculated. Assistant Director, Customer Services Tom Auzenne explained that based on the 11.5 cent cost for Palo Alto Green, our overhead was 4%. Rosenbaum then asked what percentage of the $500,000 premium represented. Auzenne said 33%. Auzenne also said that based on an Oct., 2006 publication from the National Renewable Energy Laboratory, the average marketing and administration expenses for the top ten renewable programs in the country was 29%. Palo Alto Green is the number one program in the country and the marketing .and administrative costs are in line with the average noted in ........"~’^ ..........~" ~"SO muLi~i i~ i’,~L,,~ ~,~,~y,c,~,,,~,udod that ,,ur ma, ke,I, NEW BUSINESS ITEM 1: INFORMATION ITEM: 2006 Statewide and Palo Alto Residential Customer Satisfaction Survey Results Senior Resource Planner Karl Knapp presented a summary of the main findings of a residential customer survey conducted by RKS Consulting. The survey is conducted every other year for CMUA and CPAU, and is used to compare CPAU customer attitudes and utility performance in a number of areas, and enables CPAU to benchmark performance against California municipal and investor-owned utilities. The survey was conducted in October and November of 2006. CPAU’s overall Value Rating remains high, which is a composite score of several different areas. CPAU continues to perform well in the areas of overall customer satisfaction, price/value performance, power delivery, and there is growth in users of the website and participation in the green energy option. There was a slight decline in scores on trust, overall feelings, and to some extent, communication effectiveness. Utilities Advisory Commission Minutes from: Approved on:Page 3 of 11 The consultant report indicates that these declines are not statistically significant, but may be consistent with changes that take place after rate increases. Palo Alto residents differ significantly from other California utility customers in three main areas: high awareness of the seriousness of the California energy situation, global warming, and a strong preference for using the internet to obtain information and pay bills, CPAU customers are more aware and concerned about global warming, but are not sure about CPAU’s involvement, and express a willingness to pay more to fund solutions. Main areas for improvement noted by the consultant report were to enhance the website and web- based services, and to embrace the global warming issue. Knapp pointed out that the entire City web page is undergoing a major conversion to an entire new database structure and that no big changes are being made until that effort is completed. .~4~!,,-,,~ ~,o~,~,4 ,,,~,,.,,,,-,, the ro~,,,,{ i,-,,41,-,o+,:,a dissatisfaction with the web<it,~ and whether RK£ ~.qked about specific improvements that customers would like to see. Knapp/Auzenne replied that customers did indicate dissatisfaction with the website and that a table iisiing responses for how Lo make the website better is contained on page 14 of the consultant report. Dawes asked whether customers were asked about bank drafting. Knapp/Auzenne explained that while bank drafting was not specifically included in the survey, a high 3ercentage of customers use CPAU’s bank drafting program. Rosenbaum asked why credit Bard payment options are not shown on web. Auzenne explained that cPAU does do credit card payment in-house, is developing ability to pay using a credit card by phone, and is also working on getting the technology and infrastructure in place to handle web- based credit card payments. Additionally, Auzenne noted that information about all payment options in marketing materials and as the web will be updated. Utilities Advisory Commission Minutes from: Approved on:Page 4 of 11 Melton noted that it appears that more people apparently believe that they are green power customers than actually are, Bechtel suggested a more direct question be included in the next survey regarding incurred PAGreen costs, Staff agreed it would make such a suggestion. ITEM 2: INFORMATION ITEM: Ten-Year Enerqy Efficiency Portfolio Plan Knapp presented a brief summary of the proposed ten-year energy efficiency plan, Adoption of a 10-year plan is required by AB2021 passed last year. The Plan includes all of the elements required by the new statutory requirement, Energy efficiency is the highest priority resource for CPAU, with renewable energy second and conventional supply last, The Plan sets energy efficiency targets that are based on the technical and economic potential study conducted by the Rocky Mountain Institute in 2005, seeking to achieve at least half of the estimated economic potential. AB2021 also requires that utilities "treat energy efficiency as a supply investment", The Plan proposes to fund the efforts needed to achieve the targets by including approximately $2,6 million over two years in the e!ectric and gas supply budgets, which when added to the existing Public Benefits efficiency budgets would bring the two-year efficiency programs total to $7 million, The Plan wiii be staffed with existing positions. The estimaied financial impacts are a potential i-ate increase of 0.5-1,0% with an average bill decrease of 2,5-3%. Six of the main near-term efforts were described, including revamping existing programs and establishing new programs that address underserved segments such as new construction and remodeling, Dawes asked whether the Plan costs are identified as a line item in financial reports and included in the long-term financial forecasts and rate projections, Staff responded affirmatively and explained that a new Fund Center has been created and all of the Plan costs are included in the proposed budget. Melton asked whether the Plan takes a stepped approach, going after the "low-hanging fruit" that is on the cheaper end of the scale first. Staff replied that it will be emphasizing the "low-hanging fruit", but that much of the proposed plan will be approaching things more holistically and not simply more of the same prescription-style rebates, Staff noted that the law and our own policies require that CPAU pursue all cost-effective energy efficiency opportunities, and not just the cheapest ones, Utilities Advisory Commission Minutes from: Approved on:Page 5 of 11 Dawes noted that the rate of return of 1.6% described in the report is low and asked if there is a mandated minimum spending threshold requirement. Staff explained that the very low IRR cited reflects the added cost of the many required reporting and verification elements of the energy efficiency program, so that while the incentives alone might have an estimated 10,6% return, the other reporting requirements eat up nearly all of that benefit, dropping the payback to only 1,6%. The cost effectiveness tests described in the plan state that energy efficiency that costs less than energy from the market is a preferred investment, consistent with the higher priority of efficiency over supply dictated by the resource loading order. Dawes asked whether small customers will fail to benefit if they do not participate. Knapp explained that one of the main tenets of the Plan is to ensure that there are programs available for all customers to be able to participate. Staff feels that the rigorous and industry-standard cost- effectiveness testing and criteria described in detail in the Plan along with follow-up using independent verification of program resL!!ts (as required by law) provides the necessary financial controls to ensure that energy efficiency investments are selected judiciously. Melton noted that the Plan does appear to offer opportunities for residential customers. Bechtel asked for an explanation of the carbon adder methodology. Knapp explained the proxy value of approximately $10/ton of carbon dioxide used by California’s investor-owned utilities when making energy procurement decisions. A GHG adder is used in evaluation criteria for purchasing decisions to encourage choosing the lowest cost resource, including the adder, Dawes asked what staff will do next year that is not being done now. Staff explained that in the near term, the main activities will be adding programs to target areas not currently addressed such as new construction and remodeling, coordinating with the Green Building efforts in the Planning Department, supporting both end-user efficiency and supply-side efficiency, third-party programs like "Right Lights", and joint action with other agencies. Utilities Advisory Oommission Minutes from: Approved on:Page 6 of 11 Rosenbaum moved approval of staff recommendation that UAC recommends that Council approve the ten-year energy efficiency portfolio plan. Bechtel seconded. Motion passed with three ayes, one abstained, and one absent. PUBLIC COMMENT: Prior to the discussion of utility rate increases, Mary Carlstead (resident) spoke regarding how increases, especially those from bond measures, affect the senior/fixed/low income populations adversely, Parcel taxes are increasing, and are not deductible. Her feelings were that Palo Alto was creating a "perfect storm". ITEM 3: ACTION ITEM: Recommended FY 2007-08 Water Rate Increase Auzenne stated that the Fiscal Year 2007-08 (FY07-08) water system average rate was $4.59 per one hundred cubic feet (ccf), and presented a slide titled "Components of System Average rate FY 2007-08", wh!ch ~hows the breakdown of costs. For FY07-08, a 10 percent or $2.2 million increase was proposed (Item A), as well as another 10 percent increase in Fiscal Year 2008-09 (FY08-09) (Item B). Also inciuded was the discontinuance of a price discoun[ for irrigation custo~-,qe~s on W-7 (Item C) and the introduction of the fixed charge "customer Charge" (Item D). Customer charges will provide revenue stability, and reduce the need for rapid increases in the future due to fact that sales volume depends on weather and economic factors. Charges for small customers are being phased in, as to limit the overall impact to customers. Bechtel commented on how he appreciated the charts, and would like to be emailed copies. The concept of customer charges appeared rational, so he had no questions regarding these. He did question whether supply/distribution breakdowns were displayed on the customer bills. Auzenne stated that they were not, but it would be an option to be reviewed in the future. Dawes stated that there does need to be an explanation of where costs come from, and the charts showed this well, especially in light of customer questions (such as Ms. Carlstead). There was some question as to how current costs would compare to costs five years ago, but it was not a request to produce data. He stated he was ready to approve the issue. Utilities Advisory Commission Minutes from:Approved on:Page 7 of 11 Rosenbaum stated that Item B related to FY08-09 rate approval had not been done by the UAC in the past, and questioned whether it made sense. As costs are too variable, he considered striking Item B from all proposals. Auzenne commented that as this represent a two-year budget process, something regarding FY08-09 should be added. However, rate changes would be re-evaluated during FY 08-09 budget process. Rosenbaum countered that it is a question of emphasis. While the future increases are in the budget, they are conceptual. He did not think that the UAC should add their imprimatur to items beyond the immediate budget year in their recommendations to FinancelCouncil. Dawes had a question as to the total bill, and wished to see how the proposed rates compare with the current rates for water commodity. Auzenne explained the current vs. proposed bill effects. Melton asked for staff’s anticipation of the length of the phase-in period for the customer chargeto go from roughly 50% to 100%. Auzenne indicated a 3 to 4 year time frame. Dawes pointed out that rents, general fund transfers, and other transfers are a large portion of the water budget, and that these are the items that the public needs to know about when rate increases are proposed, Melton mentioned that conceptual approval of the second year increases had been brought up before in memoranda, although not as formally currently proposed by staff as an explicit item for approval. Rosenbaum generally agreed that the "approve in concept" request was more explicit than in the past. Bechtel moved to recommend the water proposal as worded. Melton seconded. Rosenbaum asked if a friendly amendment eliminating Item B (approving year !wo rate increase in concept) would be entertained. Bechtel declined to accept the friendly amendment and instead indicated a strong preference and obligation to advise the Council of potential increases in the Utilities Advisory Commission Minutes from: Approved on:Page 8 of 11 2008-09 budget year. However, Dawes indicated his cdncurrence with Rosenbaum on the removal of Item B. Rosenbaum proposed an amendment to strike Item B. Dawes seconded. Melton noted the substitute motion. Three Commissioners voted in favor of the amendment (Melton, Dawes, Rosenbaum), one voted against (Bechtel), with one absent (Keller). Motion passed. Rosenbaum commented on how he understood the concerns raised by Carlstead, however, he also noted the UAC’s obligation to look out for the utilities businesses on behalf of the City. He acknowledged that it will be difficult for Palo Alto to go forward with bonds, but was unsure of what else could be done, A motion was made to approve ’the Water proposal with the removal of Item B. It passed unanimously (Rosenbaum, Dawes, Bechtel, Melton), with one absent (Keller). Dawes mentioned that while he understood that there was a two year budget process, the second year was too much of an estimate. The UAC would reserve its judgment on such issues. ITEM 4: ACTION ITEM: Recommended FY 2007-08 Electric Rate Increase Auzenne stated that with this proposal, every customer class receives the same 5 percent increase in FY07-08, and no customer charges were proposed. He presented a slide titled "Components of System Average Rate FY 2007-08". Melton questioned whether a "Customer Charge" would be considered in the future. Auzenne said not at this time, as usage/weather variability was not as much of an issue with electricity as with water and natural gas. Dawes had concerns regarding future hydro projections, and asked for any update on the water situation. Auzenne stated that the last data he had heard was 43 percent of normal snow-pack levels. Dawes commented that this was very serious, and as such, Item B regarding FY08-09 rate increases should also be removed in this case, Utilities Advisory Commission Minutes from: Approved on:Page 9 of ! 1 Rosenbaum stated his agreement with the 5 percent increase at this time because of the hydro situation, even though the reserves are large. Bechtel moved approval for staff’s recommendation to increase Electric rates in FY 2007-08 with the removal of Item B (approval in concept of an electric rate increase in FY 2008-09). Rosenbaum seconded. Passage was unanimous (Rosenbaum, Dawes, Bechtel, Melton), with one absent (Keller). ITEM 5: ACTION ITEM: Recommended FY 2007-08 Gas Rate Increase Melton commented that the structure of the increase was similar to water. Auzenne concurred, commenting how gas usage was quite variable based on weather effects, He presented a similar slide titled "Components of Average System Rate FY 2007-08". ’ Fong mentioned that, becaL!se of the laddering of gas purchases, future costs were better known. However, staff was still amenable to removal of Item B (approval in concept of gas rate increases for FY 2008-09). Melton question how long it would be before customer charges were up to cost of service recommendations. Auzenne and Fong commented it was a function of reserve depletion. Auzenne clarified that although 9.5 percent increase was an overall figure, the allocations to individual customer classes would be different. Dawes questioned whether, with increased efficiency measures; measures were made using heating degree data, Auzenneconfirmed that such comparisons were made, Dawes felt we should publish our efficiency metrics. Bechtel questioned whether the wording regarding the increase should include a mention that it is a 9.5 percent system average increase. Fong agreed. Utilities Advisory Commission Minutes from: Approved on:Page 10 of 11 Melton commented that the UAC is in essence recommending the rate schedules. Auzenne stated that this would be clarified in the transmittals to the Finance committee. Rosenbaum moved to recommend the Gas increase with Item B removed. Dawes seconded. Passage was unanimous (Rosenbaum, Dawes, Bechtel, Melton), with one absent (Keller). Meeting adjourned at 9:35 p.m. Respectfully submitted, Melody Vega City of Palo Alto Utilities Utilities Advisory Commission Minutes from: Approved on:Page 11 of 11