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2009 WPSC Rate Case & Decoupling

2009 WPSC Rate Case & Decoupling. Dennis M. Derricks Director – Electric Regulatory Policy & Analysis Integrys Business Support. Agenda. Decoupling 2008 Fuel Case 2009 Rate Case Filing 2010 Rate Re-opener Future cost drivers. Rate Stabilization Mechanism (RSM).

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2009 WPSC Rate Case & Decoupling

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  1. 2009 WPSC Rate Case & Decoupling Dennis M. Derricks Director – Electric Regulatory Policy & Analysis Integrys Business Support

  2. Agenda • Decoupling • 2008 Fuel Case • 2009 Rate Case Filing • 2010 Rate Re-opener • Future cost drivers.

  3. Rate Stabilization Mechanism (RSM) • Electric Rates Will Be Decoupled With Exception Of CP (Large C&I) • Gas Rates To Be Decoupled Include All Firm Classes, Medium Commercial And Smaller • Any Over/Under Collections Will Be Allocated Between These Rate Classes • WPS Will True-Up Over/Under Collection Annually and Provide PSC With Opportunity For Hearing

  4. FOE • WPS Commits To Increase Annual Contribution To FOE .

  5. FOE • Voluntary Contribution Used Exclusively To Fund Energy Efficiency Programs and Services To Residential And Commercial Customers In WPS Service Territory • Including Community Pilot • If Requirements Go Up During Pilot, This Voluntary Contribution Qualifies For New Requirement

  6. Governor’s Task Force • WPS Agrees To Support The Adoption And Implementation Of Specific Recommendations of The Governor’s Task Force on Global Warming • Enhanced Conservation Spending And Conservation Programs • Residential And Commercial Energy Efficient And Green Building Codes • State Appliance Efficiency Standards • Nonregulated Fuels Efficiency And Conservation

  7. Community Based Pilots • 3 communities up to 10,000 Electric customers each. • Jointly Developed And Implemented • Innovative Electric Rate Offerings • Electric Rate Offerings Will Increase The Opportunities For Customers To Use Energy More Efficiently

  8. Community Based Pilot Goals • Provide Customers With Information And Education About Alternative Rates, Energy Efficiency And Load Management Options • Improve The Integration Of Improved Rate Designs And Energy Efficiency Initiatives • Obtain Customer Participation In Such Rates And Options At Least Cost

  9. Fixed Customer Charge Reduction • WPS Shall Reduce Is Fixed Customer Charges for RG and Small C&I • Recoverable Fixed Customer Charge Reduction • Non-recoverable Fixed Customer Charge Reduction • $2.1M • If Not Approved, WPS May Reinstate To 08 Levels, CUB Shall Not Oppose

  10. Term • 4 Years • Effective of the Final Decision Of 6690-UR-119 • 2009, 2010, 2011, 2012 • Duties Of Both Parties Expire On 12/31/2012

  11. 2008 Fuel Increases • No Rate Case Filing for 2008 Fuel Increase: • 2.5% increase January 2008 • $23M • 3.2% increase March 2008 • $30M • 1.9% increase July 2008 • $18M • September 30, 2008 going forward, revenues subject to refund if over collected.

  12. 2009 Rate Case Rate Request for 2009 Electric $106.8M • 11.16% from January 2008 rates • $59M, or 6.1%, from current rates Gas $11.7M • 7.89% from January 2007 rates

  13. 2009 Rate Case - Electric • KNPP Refund (51%) • 2006 and 2007 rates were subsidized using the refund • Proceeds are now exhausted • Weston 4 Costs (17%) • Non-Fuel O&M • Depreciation • Return

  14. 2009 Rate Case - Electric • Emission Compliance Costs (13%) • Emission Allowances • Hardware installations • Transmission Costs (7%) • MISO • ATC • Other (12%) • Primarily Weston 3 lightning strike costs

  15. 2009 Rate Case PSCW Staff Audit for 2009 Electric $100M • 10.1% from January 2008 rates • $52M, or 5.3% from current rates. Gas ($4M) • -2.6% from January 2007 rates

  16. 2009 Rate Case – Tentative Time Table April 1, 2008 April-June Sept Dec. 2008 Jan. 2009 May 15, 2008

  17. 2009 Rate Case – Impacts on Final Rates • Update for current fuel prices – Current market prices would yield $20-$30M decrease. • Weston 3 Lightning Strike – Filing includes approximately $12M /year for two years. Potential to increase amortization. • Return On Equity • Discount Rate for Pensions and Benefits. Discount rate likely to rise, which reduces revenue requirement. • Bottom line – rate increase likely to be less than requested and audit adjust.

  18. WPSC vs IOU’s Total Retail Rates

  19. WPSC vs IOU’s Industrial Rates

  20. WPSC vs IOU’s Commercial Rates

  21. WPSC vs IOU’s Residential Rates

  22. 2009 WPSC Rate Case & Decoupling Questions?

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