Beartooth Electric Cooperative Residential and Irrigation Bill - PowerPoint PPT Presentation

Beartooth Electric Cooperative Residential and Irrigation Bill Impacts Analysis December 16, 2019 Russ Schneider, Senior Financial Analyst schneider@eesconsulting.com A registered professional engineering corporation with offices in Kirkland, WA, Portland, OR and La Quinta, CA Telephone: (425) 889-2700 Facsimile: (425) 889-2725 www.eesconsulting.com

2 Agenda 1. Monthly Bill Variability of Residential Rate Designs 2. Irrigation Bill Impacts 3. Discussion and Next Steps

3 Follow-up Tasks from Previous Meeting  Select rate designs for specific analysis • Examine if rate design options were less or more volatile on a monthly basis.  Look at Irrigation Bill Impacts • Explore 12-month billing and other rate design impacts

4 Residential Rate Consideration - Review Boundary Conditions and Demand Rate Options RESIDENTIAL RATE DESIGNS Description Base Demand Energy ($/month) ($/kw) ($/kwh) 2-part Current Rates $33.50 $0.00 $0.08877 1-part All Energy $0.00 $0.00 $0.13001 2-part All Non-Energy Costs in Base $73.32 $0.00 $0.03976 3-part COSA 100% Demand $23.09 $9.64 $0.03976 COSA 100% Demand w/ 60% 3-part $23.09 $8.40 $0.03976 Ratchet 3-part $1/kw Demand $31.75 $1.00 $0.08451 3-part $2/kw Demand $30.00 $2.00 $0.08025 3-part $1/kw Demand w/ 60% Ratchet $31.75 $1.00 $0.08356 3-part $2/kw Demand w/ 60% Ratchet $30.00 $2.00 $0.07835

5 Why is reduced monthly bill variation helpful?  With a large part of revenue collection in the energy charge, there is more variability both for members and for the cooperative from month- to-month based on changes in heating and cooling demands from weather events. • In a cold month, members with electric heat see bills far in excess of their annual average. • In a mild month, members with electric heat see bills below their annual average. • In a mild year, the cooperative may not collect budgeted revenues • In a really cold year the cooperative may collect more than budgeted revenues

6 Monthly Billing Comparison  The following slides show examples of twelve months of billing under current and the four alternative rate designs under consideration. 3-part $1/kw Demand 3-part $2/kw Demand 3-part $1/kw Demand w/ 60% Ratchet 3-part $2/kw Demand w/ 60% Ratchet • Shown are the two most typical residential samples (#6 and #7) • Others shown in the Appendix  Results show that overall bill variability narrows with a demand charge for most members  This provides increase bill and revenue stability from both the Member and Utility Steward Perspectives

7 Residential Sample Avg kWh Avg kW Avg Ratchet kW 829 4.7 4.7 #6 Res #6 Bill Comp $200.00 $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec RES #6 Current Bill $154.85 $187.52 $145.79 $112.86 $98.39 $63.15 $52.41 $42.38 $51.52 $86.58 $134.70 $155.29 RES #6 3-Part $1/kw Demand $152.03 $183.88 $143.41 $111.80 $98.03 $64.23 $55.50 $43.45 $53.16 $86.54 $133.59 $152.70 RES #6 3-Part $2/kw Demand $149.20 $180.24 $141.02 $110.75 $97.66 $65.30 $58.59 $44.53 $54.79 $86.49 $132.49 $150.11 RES #6 3-Part $1/kw Demand w/ 60% Ratchet $150.73 $182.23 $142.21 $110.95 $97.33 $63.91 $55.30 $43.56 $52.96 $85.97 $132.51 $151.40 RES #6 3-Part $2/kw Demand w/ 60% Ratchet $146.61 $176.94 $138.62 $109.05 $96.28 $64.67 $58.19 $44.74 $54.41 $85.36 $130.32 $147.50

8 Residential Sample Avg kWh Avg kW Avg Ratchet kW 919 7.2 7.2 #7 Res #7 Bill Comp $200.00 $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec RES #7 Current Bill $111.08 $181.04 $146.33 $111.08 $118.90 $103.10 $101.85 $88.00 $76.02 $80.37 $127.51 $135.23 RES #7 3-Part $1/kw Demand $112.86 $181.71 $147.16 $112.86 $120.55 $104.76 $103.07 $90.14 $78.48 $82.37 $128.75 $136.35 RES #7 3-Part $2/kw Demand $114.64 $182.38 $148.00 $114.64 $122.20 $106.42 $104.29 $92.27 $80.94 $84.37 $129.99 $137.47 RES #7 3-Part $1/kw Demand w/ 60% Ratchet $112.03 $180.13 $145.96 $112.03 $119.64 $104.01 $102.34 $89.56 $78.03 $81.87 $127.74 $135.26 RES #7 3-Part $2/kw Demand w/ 60% Ratchet $112.98 $179.22 $145.59 $112.98 $120.38 $104.93 $102.83 $91.11 $80.03 $83.37 $127.98 $135.29

9 Comparison of Change in Bill Spread by Rate Option $40.00 $20.00 $- $(20.00) $(40.00) $(60.00) $(80.00) 3-Part $1/kw Demand $ 3-Part $2/kw Demand $ 3-Part $1/kw Demand w/ 60% Ratchet $ 3-Part $2/kw Demand w/ 60% Ratchet $

10 Results on Average Reduced Bill Reduced Bill Spread to Spread to Average Bill Avg of Max Avg of Min Avg Spread Current Bill Current Bill ($) (%) Current Rate $149.33 $213.40 $88.82 $124.58 - 0.00% 3-Part $1/kw Demand $150.02 $211.34 $89.54 $121.80 $(2.78) -1.86% 3-Part $2/kw Demand $150.71 $209.84 $90.06 $119.78 $(4.80) -3.19% 3-Part $1/kw Demand w/ $149.17 $209.79 $90.92 $118.87 $(5.71) -3.83% 60% Ratchet 3-Part $2/kw Demand w/ $149.00 $206.37 $92.82 $113.56 $(11.02) -7.40% 60% Ratchet  Ratchet Demand Charge of $2/kW reduces the average overall spread the most, by 7.4%  All options for the sampled accounts result in similar bills overall

11 Takeaways  Monthly spread of bills (difference between highest bill and lowest bill) goes down with each of the four alternative rate designs  A higher demand charge with a ratchet provides more monthly consistency of than a simple demand charge  The reason for this is that the current 2-part rate collects more revenue on energy, energy varies more than demand or customer components of the bill

12 Irrigation Rate Options IRRIGATION RATE DESIGNS Description Base Demand Energy 6 Month Billing* ($/month) ($/kw) ($/kwh) 3-part Current Rates $121.80 $12.40 $0.05071 3-part Power & NWC Tx in Energy $121.80 $13.21 $0.04752 Power & NWC Tx in Energy w/ 3-part 60% Ratchet $121.80 $10.46 $0.04752 12 Month Billing* 3-part Current Rates $60.90 $12.40 $0.05071 3-part Power & NWC Tx in Energy $60.90 $13.21 $0.04752 Power & NWC Tx in Energy w/ 3-part 60% Ratchet $60.90 $6.09 $0.04752  Currently Irrigation pays for energy and demand in off-season on April billing.  12-month and 6-month billing comparisons provided for each of the irrigation member examples *Demand Charge adjusted for 12 Month billing to be revenue neutral based on this sample

13 Description Base Demand Energy 6 Month Billing ($/month) ($/kw) ($/kwh) 3-part Power & NWC Tx in Energy $121.80 $13.21 $0.04752 Irr Bill Impacts - Pow & Trans in Energy - 6 Month Billing IRRIGATION #1 IRRIGATION #2 IRRIGATION #3 IRRIGATION #4 IRRIGATION #5 IRRIGATION #6 IRRIGATION #7 IRRIGATION #8 15.0% 10.0% 5.0% 1.1% 1.0% 0.5% 0.4% 0.0% 0.0% -0.1% -0.2% -1.0% -5.0% -10.0% -15.0% Power & NWE Tx in Energy 10% -10%

14 Description Base Demand Energy 6 Month Billing ($/month) ($/kw) ($/kwh) 3-part Power & NWC Tx in Energy w/ 60% Ratchet $121.80 $10.46 $0.04752 Irr Bill Impacts - Pow & Trans in Energy w/Ratchet - 6 Month Billing IRRIGATION #1 IRRIGATION #2 IRRIGATION #3 IRRIGATION #4 IRRIGATION #5 IRRIGATION #6 IRRIGATION #7 IRRIGATION #8 30.0% 25.8% 25.0% 20.0% 15.0% 10.3% 9.0% 10.0% 2.6% 5.0% 1.4% 0.0% 0.0% -5.0% -10.0% -7.5% -8.4% -15.0% Power & NWE Tx in Energy w/ 60% Ratchet 10% -10%

15 Description Base Demand Energy 12 Month Billing ($/month) ($/kw) ($/kwh) 3-partPower & NWC Tx in Energy $60.90 $13.21 $0.04752 Irr Bill Impacts - Pow & Trans in Energy - 12 Month Billing IRRIGATION #1 IRRIGATION #2 IRRIGATION #3 IRRIGATION #4 IRRIGATION #5 IRRIGATION #6 IRRIGATION #7 IRRIGATION #8 15.0% 10.0% 5.0% 1.1% 1.0% 0.5% 0.4% 0.0% 0.0% -0.1% -0.2% -1.0% -5.0% -10.0% -15.0% Power & NWE Tx in Energy 10% -10%

16 Description Base Demand Energy 12 Month Billing ($/month) ($/kw) ($/kwh) 3-part Power & NWC Tx in Energy w/ 60% Ratchet $60.90 $6.09 $0.04752 Irr Bill Impacts - Pow & Trans in Energy w/Ratchet - 12 Month Billing IRRIGATION #1 IRRIGATION #2 IRRIGATION #3 IRRIGATION #4 IRRIGATION #5 IRRIGATION #6 IRRIGATION #7 IRRIGATION #8 35.0% 29.3% 30.0% 25.0% 20.0% 15.0% 11.4% 10.2% 10.0% 3.5% 5.0% 0.7% 0.0% -0.7% -5.0% -10.0% -6.9% -10.0% -15.0% Power & NWE Tx in Energy w/ 60% Ratchet 10% -10%

17 Discussion

18 Appendix – Results Tables