Power Rates - Review

1. Power Rates - Review Rate Applications Group LADWP Rates & Contracts 2012-13

2. Power Rates - Introduction • Rates are designed to reflect DWP costs • Rates are set by ordinance • Designed to reflect the costs incurred for all aspects of providing electric service for the city • Reviewed by the independent Ratepayer Advocate • Submitted to the Board of Water and Power Commissioners • Approved by the Los Angeles City Council • Rates are applied based on DWP rules and policies

3. Residential Rates - overview • Designed to encourage conservation • Bill consists of kwh charges and taxes • Standard rate R-1A: • Tiered rates are now in effect year-round • Tier allocation determined by Zone • TOU mandatory if monthly usage exceeds 3000 kwh • Optional TOU rate R-1B: • Peak rates are higher June – September • All 3 rates (base, low peak and high peak) are lower than the standard rate October - May • Not recommended if 2 month consumption averages less than 2000 kwh, or if summer usage is higher due to high AC usage • Tiered rates not in effect • Recommended for customers who can control their energy usage, high kwh users and solar customers • Lifeline, Low Income discounts not available

4. Residential TOU – some important points to remember • Meter availability is limited, and DWP has discretion over which customers will receive them • Not every customer who requests a TOU meter will receive it • Customers can opt out of the TOU rate at any time, but they cannot return to the TOU rate until 12 months have elapsed • After a TOU meter has been installed, it will remain at the customer’s location on a permanent basis, and the old meter cannot be returned

5. Solar net metering – some important points to remember • A net meter records the net difference between energy sent from DWP to the customer, and energy sent back to DWP • DWP cannot read

6. Residential Rates – Q & A • Q: why are my rates so high? • A: DWP residential electric rates are among the lowest in CA • Q: why is my bill so high? • A: The bill is based on consumption as recorded by the electric meter. The usage should be analyzed to check for consistency, seasonal variations, or anything that may appear unusual • Q: why are there so many line items? • A: Every line item represents a specific cost that is incurred by DWP as it provides electric service • Q: why did my rate go up in the summer? • A: Seasonal rates are in effect June – September. This is not an increase: it is simply a seasonal variation • Q: I have solar – why do I still get a bill? • A: All customers receive an electric bill, even if there is no consumption. Every customer incurs costs of service (for billing, meter reading, etc), even if the usage is low or negative • Q: why don’t my regular and solar bills agree? • A: The solar statement supersedes the regular bill because it shows credits and numbers that the regular bill is unable to display • Q: I have solar, so why am I not on TOU? • A: The TOU rate is optional, not mandatory. Customers must request it in writing

7. Commercial Rates - overview • Rate is determined based on kw demand and the service voltage • A1: demand is less than 30 kw • A2: demand is greater than 30 kw, service voltage is 4.8 kv • A3: demand is greater than 30 kw, service voltage is 34.5 kv • A4: demand is greater than 80 Mw, service voltage is 138 kv • CG, XRT eligibility requires analysis and special DWP approval • TOU is optional for A1, mandatory for A2 and A3 • Demand meters are installed at DWP’s discretion • There is no separate solar commercial rate

8. Commercial Rates - components • The electric bill consists of service charges, kw charges, kwh (and kvar) charges, and taxes. (Please note: these terms are defined and explained in the ordinance, which is posted on the DWP website) • Kwh charges: • Energy charges • ECA, VRPSEA, CRPSEA, VEA • State tax • Kw charges: • Facilities • Demand • ESA, RCA, IRCA • Reactive (Kvar) charges (only with minimum 250 kw): • Nonexistent on Rate A1 • Per kvar when kvar is metered • Per kwh when kvar is unmetered

9. Commercial Rates Q & A • Q: why is my bill so high? • A: The bill is based on kwh usage and kw demand. Billing history should be analyzed to determine if there are any inconsistencies or any other information that may indicate there is a possible error • Q: why is the commercial rate so high? • A: DWP commercial rates are competitive with those of neighboring utilities • Q: why is my demand charge so high? • A: Demand is a major component of the bill. A relatively high demand and low kwh usage will have disproportionally high demand charges • Q: why do I have to pay a facilities charge? • A: Facilities represents another main component of the bill – it is not optional • Q: why is the facilities charge for a whole year? • A: This is a rate ordinance requirement. The kw read helps DWP determine the service size and transformer requirements of equipment that serves multiple customers • Q: why are my reads multiplied by a k constant? • A: A meter with a k multiplier is designed to read higher volumes of kwh and kw. This provides DWP with an opportunity to bill more accurately • Q: why am I being billed on the A2 rate, even though I haven’t exceeded 30 kw? • A: This can be corrected retroactively by Rate Applications • Q: where are my commercial solar credits? • A: These will be present if the net energy kwh total is negative. The primary benefit provided by a commercial solar installation is to benefit a customer in a similar manner as any other energy efficiency project – by reducing kwh usage

10. Power rates – General Q & A • Q: there is no way this bill is correct. How can I challenge the meter reads? • A: The DWP representative should try to help the customer determine why the reads may be relatively high, as well as check for historical consistency. The customer may also request a field investigation • Q: my bill went up when you replaced my meter. How can I get my old meter back? • A: Meters don’t use energy – they are simply recording devices. In most cases, the old meter is no longer available • Q: why are my taxes, sewer charges, and trash fees so high? • A: These bill components are controlled by the City Bureau of Sanitation. DWP is only the billing agent • Q: why do I have to pay a “cost adjustment?” • A: The term “adjustment” indicates that this particular billing component may be adjusted quarterly. The ECA is not a surcharge or a bill correction. It is a main component of the bill that represents certain variable costs and DWP programs • Q: my service is a residence. Why am I on the commercial electric rate? • A: The A1 rate applies to common area meters serving 2 or more units. This determination is made by providing a meter survey in the field • Q: why haven’t I received the TOU meter I requested? • A: TOU meters are installed based on availability. When TOU is optional and not mandatory, DWP has the discretion to determine meter installation priorities • Q: how can I lower my electric bill? • A: By identifying energy usage and demand characteristics in order to manage costs, and by using electricity as efficiently as possible. There is a lot of valuable and useful energy efficiency information on the DWP website

11. Power Rates – Where to find basic billing information • OnDemand displays the bill exactly as the customer sees it • CIS displays all billing information • CUSE shows kwh history, meter number, rate code • DUSE shows kw demand • EHIS shows the electric bill calculation • MTRD shows the meter reads as recorded • AJMT and POOE show any adjustments, comments • Other databases (WMBA, WMIS) show meter installations and removals

12. Power Rates Review - Summary • Rates reflect DWP costs • Rates are set by ordinance and undergo an extensive approval process • Rates are applied based on requirements outlined in the current ordinance and on DWP rules, policies and procedures • Rates are competitive with those of neighboring utilities • Rates reflect DWP commitment to promoting energy efficiency