1. OCC Utility Consumers Board
April 12, 2016
Steve Andrews and Anne Stattelman, PEF Members in Attendance
Pueblo’s Energy Future Network
Pueblo’s Energy Future is a grassroots network of concerned citizens, business owners, service organizations, the faith community, clean energy advocates, and others. Our mission is to secure a clean, affordable, sustainable, and just energy future for all of Pueblo.
Add the liaison with Larry Atencio at the City of Pueblo and Terry Hart at Pueblo county

2. Background
The Colorado Public Utilities Commission (PUC) approved the pass-through to ratepayers of the acquisition costs paid by BHE for Aquila in 2008.
Rates have increased dramatically since 2010 due to BHE building new natural gas generation, adding tariff riders, and increasing other charges.
BHE’s new 40MW, $70.8 million dollar peaking power plant will add another 5% to customer’s bills and will operate less than 0.1% of the time for the first five years of operation.
Check with Anne on source for 5%. SLP

3. Be clear that we are using this slide and cannot vouch for it.

4. Data prepared by Al Logan, former BHE employee, Feb
Data prepared by Al Logan, former BHE employee, Feb. 14, 2015 based on company tariffs provided on company websites.

5. Black Hills Energy Assistance Program (BHEAP)
In 2012, Black Hills Energy implemented a Low Income Energy Assistance Program, mandated by the Public Utilities Commission and paid for by its customers.
. . .and yet, approximately 1,600 households per quarter are disconnected in Black Hills Territory.
As of June 2015 there were 1,877 active participants

6. The customers who remain disconnected live without power and heat
The customers who remain disconnected live without power and heat. Generator fire, etc.

7. High Residential Fixed Charges Discourage Efficiency and Rooftop Solar
BHE’s high residential fixed service charge of $16.50 per month discourages residential customers from energy efficiency and rooftop solar investments.
BHE’s high fixed charge is added to numerous other fixed costs riders (e.g., GRSA, ECA, TCA, PCCA, CACJA, and DSMCA).
These fixed charges in the aggregate shift Black Hills’ operational risks to its customers even though BHE’s 9.83% allowed return on investment assumes operational risks are borne by BHE.

8. Low Income Program Funding Fee
Comparison of a Monthly Residential Electric Bill During the Winter Billing Period for a Customer Using 600kWh (Winter Billing Period is October - May)
Billing Component
Black Hills Energy
PSCO
Rate Schedule
RS-1 R
Customer Charge
$16.50
$6.75
Energy Charge
$51.90
$27.62
GRSA
$1.34
$4.88
ECA
$25.16
$20.04
TCA
$0.70
$0.38
PCCA
$0.29
$3.90
CACJA
$0.40
$2.35
DSMCA
$2.36
$1.46
RESA
$1.97
$1.35
Low Income Program Funding Fee
$0.28
$0.00
Total Bill
$ (+47%)
$68.73
Source: Al Logan, UCB presentation, 3/15

9. In summary. . .
Pueblo’s residential rates are already among Colorado’s highest, are substantially higher than Xcel’s, will continue to rise, and no relief is in sight…for the city with lowest incomes.
BHE’s disconnect and arrearage policies are unjust and lead to severe economic hardship for many people.
Neither the Public Utilities Commission nor the Office of Consumer Counsel has been effective in protecting embattled customers in Pueblo from BHE’s excesses.

10. Comparing Black Hills Energy vs
Comparing Black Hills Energy vs. Xcel Energy electric rates for business
Small commercial
BHE
Xcel
Demand threshold
10 kW
25 kW
Service Charge $ $
per kW Jun1-Sept30 $ $
per kW other times $
per kWh $ $
ECA / FCA
cacja-dsm-pcca

11. THE IMPACT OF BHE'S RATE CHANGE ON A TYPICAL SMALL GENERAL SERVICE DEMAND RATE CUSTOMER
$22.74
6 cents
$13.03

12. Case studies of Commercial/ Demand Rate Customers
The key to understanding the problems for businesses is demand charges
“Demand” is the peak rate at which electricity is used for 15 consecutive minutes each month.
Measured in kilowatts (kW; a toaster draws about 1 kW in use.)
Demand Charge = 46% to 69% of the customer bills we evaluated.
Fuel and “Energy Charge” make up less than 20% of the bill.
Customers struggle to understand demand rate schedules.
Demand rates hurt our local economy; Xcel’s rates are better; our case studies support this broad assertion.

13. Dr. John Highfill: A Small Medical Practice
Why are so many small offices penalized by being included in a demand rate that begins at such a low threshold, compared to the other investor-owned utility in the state?
Taking this small-demand user (6 kW to 13 kW) off the demand rate would reduce their bill by 15%-20%
Customer Profile
916 Indiana Ave, Suite 110
Established in 2004
3,163 ft2 office space, built in 2004
Main electrical uses: lighting, air conditioning, medical equipment
$5,055 annual electric bill
59% is for demand charge; energy charge 2%; ECA 17%
Dr. Highfill’s comment: “I would also like City Council to know that my overall [electricity] charges have gone up 300% in five years!  For example, May 2010 averaged kWh/day and cost $5.24 a day; May 2015 averaged kWh/day yet cost $14.78 a day.  How can a 300% increase be justified?”

14. An anonymous Pueblo Church
Why are so many organizations and businesses penalized by a ratchet in the demand rate, such that they pay a considerable amount for a demand rate that they normally don’t reach during nearly the entire year?
Since the church’s peak demand load has come in well above 50 kW, that shoves it into a demand rate schedule (CO720) that not only costs more per kW but doesn’t allow less than a 50 kW demand charge per month….ever.
Not the church shown here
Customer Profile
Size: est. 30,000 to 35,000 ft2
Built: 1890, then 1926, plus newer additions
$28,744 annual electric bill
Demand charge: 60% of bill
Intermittent use = high rate ($0.25) per kWh

15. The Thatcher Building: Office
This building’s economics suffer from BHE’s overall high rates
In any other of the 20 largest municipalities in Colorado, the electricity bill would have been lower, often considerably lower, due to more favorable rate structures offered by utilities serving those territories.
Customer Profile
503 N. Main St.
Opened in 1914
150,000 ft2 of office space with two-meter electric system
$265,000 electric bill in 2015 = 35% of building operating expenses ($710,000/yr)
Demand roughly 50% of bill; 4% energy usage; 30% fuel cost
Ratchet on air conditioning meter keeps demand cost high 12 months
Co-owner Louie Carleo: “When you look at all the expenses for the building—property taxes, maintenance, renovations, water, natural gas, snow removal, etc.—it is the largest single expense by far.”

16. Summary of first utility bill analyses
Business
Annual bill
Demand bill
% demand
Size demand
$/kWh
Rate code
Medical office
$ ,050
$ ,000
59%
13.22 kW
$0.24
CO711
Retail showroom
$ ,600
$ ,800
50%
10.9
$0.22
Sitdown restaurant
$ 14,600
$ ,900
54%
31.6
$0.16
Fast food
$ 26,700
$ 12,100
46%
26.8 / 28.2
$0.13
Church
$ 28,744
$ 17,346
60%
72.8
$0.25
CO720
Corrections home
$ 34,700
$ 17,600
51%
51.4 / 37.2
CO877
Senior apartments
$ 124,000
$ 64,000
52%
241.6
$0.15
Industrial cust.
$ 72,300
$ 43,000
78.4 / 87
CO820
Large office bldg.
$ 267,000
$ 125,000
47%
95.3 / 303
$0.14
$ 768,000
$ 526,000
69%
2700 / 636
$0.33
CO836-CO720

17. Bottom Line from the Commercial Rate Case Studies
1) Demand charges dominate commercial bills;
2) Certain commercial tariffs set extraordinarily high demand charges;
3) High demand charges disincentivize investments in energy efficiency and renewable energy; and
4) BHE’s high demand charges hurt all participants in Pueblo’s economy.
What is the ask of the UCB?