Virginia Energy Purchasing Governmental Association (VEPGA) Primer On Rate Design Concepts & Practices And Explanation of VEPGA Rates & Schedules (What.

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Presentation transcript:

Virginia Energy Purchasing Governmental Association (VEPGA) Primer On Rate Design Concepts & Practices And Explanation of VEPGA Rates & Schedules (What you need to know) MAY 9, 2013 Presented by: Glenn A. Watkins Senior Economist/Executive V. President Technical Associates, Inc Stony Point Parkway, Suite 580 Richmond, Virginia 23235

Section I: Primer On Rate Design Concepts & Practices

Step 1: Set Overall Revenue Requirement Total Dominion Revenue Requirement VA SCC ≈ 78.9% VEPGA ≈ 5.6% VA State And Federal Government ≈ 7.0% N. Carolina PUC ≈ 5.0% Federal (FERC) ≈ 3.5%

Step 2: Assign Revenue Responsibility to Classes and/or Rate Schedules General Considerations To Assign Revenue Responsibility Conceptually Marginal Costs Embedded Costs (Fully Allocated Cost) Value of Service Other Considerations Prices Relative to Other Utilities Percent Change from Current (Legacy Rate) Policy and Politics Judgment, Negotiations, Representation and Perceived “Fairness” General Considerations To Assign Revenue Responsibility Conceptually Marginal Costs Embedded Costs (Fully Allocated Cost) Value of Service Other Considerations Prices Relative to Other Utilities Percent Change from Current (Legacy Rate) Policy and Politics Judgment, Negotiations, Representation and Perceived “Fairness” General Class Definitions Residential Small Commercial Medium Commercial Large Commercial/Industrial Interruptible Real Time Pricing Street & Area Lighting General Class Definitions Residential Small Commercial Medium Commercial Large Commercial/Industrial Interruptible Real Time Pricing Street & Area Lighting

RATE DESIGN CONCEPTS & ELECTRIC TERMS OF ART --- SYSTEM COST COMPONENTS --- TOTAL INTEGRATED UTILITY Production Primarily Generation Facilities Distribution SubstationsPoles & LinesTransformers Services & Meters Transmission (FERC)

Customer Charges (Fixed Per Customer) Cost of Service Customer Accounting & Billing Metering Customer Service Demand Charges (Per kW) On-Peak Off-Peak Seasonal Reactive (kVAR) Energy Charges (Per kWh) On-Peak Off-Peak Seasonal Capacity Costs Variable Costs RATE DESIGN CONCEPTS & ELECTRIC TERMS OF ART --- BASIC RATE ELEMENTS ---

Demand & Energy Charge Rate Structures Flat Rates (Per kW or kWh) Inverted and Declining Blocks – Price Per Unit Increases or Decreases as Total kW or kWh Increases Diurnal and Seasonal Time of Use Load Factor Based (Energy Use of Demand Blocking) Voltage Differentiation (Sub-transmission, Primary, & Secondary voltage)

Section II: Explanation of VEPGA Rates & Schedules

Revenue Collection Within VEPGA Rates I.BASE RATES II.RIDERS Fixed Rates Per Contract Pre-2008 Generating Units Distribution Company Overhead Automatic Recovery (Updated Annually) Fuel Transmission New Generation Projects (existing generation in base rates)

VEPGA Base Rate Schedules SCHEDULEDESCRIPTION 100Miscellaneous Light & Power 110All-Electric Service & Dual Fuel Systems 120Water & Sewage Pumping & Sewage Disposal 122Time-of-Use 130Large Miscellaneous Light & Power 131Thermal Storage 132Large Misc. Light & Power – Variable Pricing SCHEDULEDESCRIPTION 102Traffic Signals & Control 150Roadway, Directional & Area Lighting – High Pressure Sodium 151Roadway, Directional & Area Lighting – Incandescent, Mercury Vapor & Urbanlites 152Street Lighting Fixtures on Bridges & Overpasses 153Street Lighting – Special Fixtures 154Customer-Owned Lighting Facilities (Operating Only During Night-Time Hours) Metered ServicesLighting Services SCHEDULEDESCRIPTION SGCMStand-by Generator SGCM-1Stand-by Generator (Grandfathered) Complimentary Services

VEPGA Metered Rate Schedules (Base Rates) RATE SCHEDULES W/O Demand W/ Demand W/O Demand W/ Demand Approx. mWh999,100538,700173,10002,410,700125,200166,000 # of Accounts12,7505,2502,70001, Average Annual kWh/Account78,300102,50064,00002,400,0006,260,0002,375,000 RATE ELEMENT Distribution Customer Charges$5.66 $8.11$78.50 $ Demand ChargesNone Flat/kWDeclining/kW (voltage diff.) Reactive DemandNone Flat/kVAR None Energy ChargesFlat/kWh None Electricity Supply (Production) Demand ChargesNone Seasonal Flat/kWInverted/kW1/1/ 1/1/Inverted/Kw (Seasonal TOU Ratchet) (Seasonal TOU Ratchet)(voltage diff.) (Annual Ratchet) Energy ChargesFlat/kWhkWh per kW Seasonal Flat/kWh kWh per kW Seasonal Diurnal Flat/kWh Seasonal Flat/kWhDeclining/kWh Critical Day Designation (Declining) (TOU)/kWh 1/ Flat per kW charge less declining demand credit, which results in an inverted rate per kW.

VEPGA Riders Rate Schedule Rider Lighting Transmission (Rider T)Energy Demand Energy Generation Virginia City Hybrid (Rider S)Energy Demand Energy Bear Garden (Rider R)Energy Demand Energy Warren County (Rider W)Energy Demand Energy Bio-Mass Facilities (Rider B)Energy Demand Energy Fuel (Rider A)Energy (All Rate Schedules Same Rate)