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New Large Single Loads and Economic Development Considerations

New Large Single Loads and Economic Development Considerations. Draft Assessment. Tiered Rates Methodology. In October, Port Angeles BPA’s tiered rate methodology begins

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New Large Single Loads and Economic Development Considerations

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  1. New Large Single Loads and Economic Development Considerations Draft Assessment

  2. Tiered Rates Methodology • In October, Port Angeles BPA’s tiered rate methodology begins • Under tiered rates, load requirements in excess of the City’s actual loads (“High Water Mark”) will be purchased at higher “Tier 2” prices • If a New Large Single Load (“NLSL”) requests retail electric service from the City, the power will be purchased at Tier 2 power prices • If rolled into the total utility revenue requirement, these higher power costs could have a significant impact on retail rates • Other BPA customer utilities are asking themselves two rate policy questions: #1: Should HWMs be established for each customer class with each customer class paying for its own load growth (i.e. the market power costs to serve above-HWM load)? #2: Where should the line be drawn with respect to sharing the incremental costs associated with serving NLSL with the City’s other retail customers?

  3. Projected 2012 Rate Impact of a 2000 kW New Large Single Load * Rate impacts shown above are due only to above-HWM power costs and do not include any future rate increases that may be required due to increases in non-power costs or BPA Tier 1 rate increases.

  4. Rate Policy Alternatives • Three potential rate policies included in this analysis to illustrate the rate impacts of NLSL power costs on all of the City’s retail customers under the potential rate policies • The table below summarizes the three policies with respect to the two critical questions stated on previous slide

  5. New Large Load Rate Policy Analysis • The rate impacts will vary depending on assumptions for: • Tier 2 power cost of serving above-HWM load • Load growth of each customer class • Where the threshold is set • Size of new large load • Test year (above-HWM load increases each year for customer classes with load growth)

  6. Policy Implications • Should the City establish a NLSL policy? • Existing regional standards are for metered loads exceeding 1000 kW • Should the City establish an intermediate “New Large City Load” standard below the existing NLSL guidelines? • Rate impacts could be felt by customers with new metered loads of less than 1000 kW • How should the number of new jobs created play a role in allocating power costs?

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