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Review of 7th Plan Inputs by RTF

Review of 7th Plan Inputs by RTF. August 11, 2014. RTF Input for Seventh Power Plan. Council seeks RTF review of some plan inputs For conservation supply curve development Technical aspects of EE measures such as baseline, costs, savings, applicability Methodology

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Review of 7th Plan Inputs by RTF

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  1. Review of 7th Plan Inputs by RTF August 11, 2014

  2. RTF Input for Seventh Power Plan • Council seeks RTF review of some plan inputs • For conservation supply curve development • Technical aspects of EE measures such as baseline, costs, savings, applicability • Methodology • Staff will be bringing a suite of items for RTF review next six months • Seeking RTF “decisions” • RTF decisions are advisory to the Council

  3. Next Meeting: Financing Terms for EE • Total Resource Cost approach (TRC) • Who pays what part of costs and how paid? • Measure costs borne by multiple sponsors • Customer • Wholesale power supplier (BPA) • Utility (retail electric utility) • Utility (retail gas utility or other sponsor) • Different financing parameters for each

  4. Analysis & Impact • All analysis in “real” terms (net of inflation) • Base year 2012 dollars for 7P • All analysis in present value terms • Council selects discount rate (4% recommended) • Financial parameters differ by sector • Residential, Commercial, Industrial, Utility • Impact of financial parameters • Subtle change on TRC of supply curves

  5. The EE Financing Parameters If financed, what is cost of capital? Interest rate on borrowed money Term of finance period Four cost categories

  6. Proposed Approach for Inputs(Cost of Capital) Use after tax cost of capital developed by Council for discount rate analysis. Final numbers TBD.

  7. Methods EE Finance Rates

  8. Proposed Approach for Inputs(How Much is Financed?) Assume BPA portion of EE costs are financed Assume remainder utility costs are expensed. Term=1 equivalent to expense EE Assume customer portion of costs are financed

  9. Proposed Approach for Inputs(Share of Capital Cost) • Get input from CRAC. • Use 40% Res, Com, Ind, Ag meas • Use 0% for Dist Eff measures Remainder split based on last five years RCP data: BPA Direct 30% / Total Utility

  10. Proposed Approach for Inputs(Share of Other Costs) Annual and Periodic O&M costs all paid by customer Split Admin costs paid by utility system based on BPA/Non-BPA cost shares

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