1. RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
Rural Alaska Electric Utility Management:
Using PCE data to
Improve Customer
Rates
SAFE,
RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
Neil McMahon
Energy Planning Program Manager
BIA Provider’s Conference
November 29, 2018
REDUCING THE COST OF ENERGY IN ALASKA

2. AEA’s mission is to reduce the cost of energy in Alaska
SAFE,
RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
AEA’s mission is to reduce the cost of energy in Alaska
AEA is charged with a mammoth task: to help Alaska communities develop, finance, operate and maintain energy infrastructure for improved safety, reliability and affordability of consumer energy (so called to differentiated electricity and heat from the state’s extractive energy sector)
Our mission is to reduce the cost of energy in Alaska. Our work includes programs and initiatives that identify and implement energy solutions that meet the discrete needs of Alaska’s many communities. We are the state of Alaska’s energy policy and planning lead, and we are a funding conduit for both state and federal dollars. We provide soup to nuts technical assistance, helping communities and utilities select, design, construct, pay for, and operate projects over the long term for maximum economic life of energy infrastructure.
AEA is an energy solutions center for Alaska, working every day with the people and communities around the state making up this “living laboratory” to overcome challenges and capitalize on opportunities.

3. PCE Utility Monthly Report
AEA requires the submittal of the Utility Monthly Report for PCE reimbursement
PCE data is useful for managing a utility
PCE effective rate
Line loss
Generation efficiency

4. PCE Utility Monthly Report PCE Effective Rate
Why PCE cares:
AEA reimburses eligible kWhs the difference between the residential rate and the effective rate
Why the utility should care:
A high effective rate is a sign of an unjustified residential rate
Calculated by RCA. Based on either reported, allowable expenses or rate, whichever is lower.
Why:
PCE subsidizes customers.
Does not necessarily and directly effect utility’s finances—indicates if reporting and/or setting rates properly.
Can be reasons why not—old fuel debts or other actual costs.

5. PCE Utility Monthly Report PCE Effective Rate
Seal City Electric Coop
$ $0.4032
$ $0.3625
Potential actions to take:
Identify and report all eligible expenses to the RCA in the annual report
Evaluate utility expenses to determine if they are necessary and benefiting customers
Adjust customer rates
Reduce line loss
Increase generation efficiency
Calculated by RCA. Based on either reported, allowable expenses or rate, whichever is lower.
Why:
PCE subsidizes customers.
Does not necessarily and directly effect utility’s finances—indicates if reporting and/or setting rates properly.
Can be reasons why not—old fuel debts or other actual costs.

6. PCE Utility Monthly Report Line loss
The difference between the kWh generated and kWh sold to customers
Why PCE cares about it:
The reimbursement rate is decreased if line loss is greater than 12%
Why utility should care:
Increases costs to customers
Reduced PCE reimbursement
Can be a sign of not billing customers due to
Misreading meters
Incorrect meters
Customers stealing power
Can be a sign of power being lost
Transformers, grounding, etc.
Excess diesel being consumed
Not measured
Standard from EIA—achievable by many rural Alaska communities
Why:
$10s to $100ks of dollars of excess fuel or lost revenue
Potential danger if physical losses

7. PCE Utility Monthly Report Line loss
Potential actions to take:
Check that all customers (including streetlights) are being recorded
Check customer ledger for accuracy of meter readings and recordings
Check accuracy of customer meters
Use pre-paid customer meters
Check accuracy of main bus meter
Have a distribution system assessment to find inefficiencies and/or ask for assistance from Circuit Rider

8. PCE Utility Monthly Report Generation efficiency
The kWh of electricity produced per gallon of diesel
Why PCE cares:
The reimbursement rate is decreased if the generation efficiency is below RCA standards
Why the utility should care:
Increases costs to customers
Fuel is generally largest utility expense
Can be a sign that engines need to be overhauled
Why:
Proxy for maintenance.
Need to have good meters
Decrease sign that need to have overhaul

9. Financial and Operational Metrics Generation efficiency
Potential actions to take:
1. Make sure numbers are correct:
Check fuel meter and main bus meter
2. Maintain infrastructure
Enroll in AEA’s utility operator training
Ensure fuel quality (water, etc.)
Perform proper maintenance on the engine
Do overhauls on regular basis
Communicate between operators and managers so that needed maintenance can be scheduled and paid for
Schedule a Circuit Rider trip and/or call
3. Upgrade infrastructure: AEA can assist with selecting new infrastructure
Electronic engine governors
Upgrade and properly size engines
Use automated switchgear
Why:
Proxy for maintenance.
Need to have good meters
Decrease sign that need to have overhaul
Perryville, 2017

10. For assistance, please contact:
Utility management
Neil McMahon
Technical assistance
Alan Fetters

11. RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
SAFE,
RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
ALASKA ENERGY AUTHORITY
813 West Northern Lights Blvd. Anchorage, Alaska Phone: (907)     Fax: (907) Toll Free