Utility Rate Projections and Changes
Preliminary rate projections indicate potential changes in electric, gas, wastewater, and water utility rates for fiscal years 2016 to 2020. The impacts of Cap-and-Trade policies on greenhouse gas emissions and cost adjustments are discussed for electric and gas utilities.
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Presentation Transcript
Utility Rate Projections and Changes Facility Managers Meeting February 11, 2015 1
Preliminary Rate Projections FY 2016 0% 3% 9% 7% FY 2017 FY 2018 5% 4% 9% 7% FY 2019 3% 4% 9% 7% FY 2020 2% 4% 7% 3% Electric Utility Gas Utility* Wastewater Water Utility 5% 4% 9% 7% *Gas rate changes are shown with commodity rates held constant. Actual gas commodity rates will vary monthly with wholesale market fluctuations 2
Cap-and-Trade Part of California s Global Warming Solutions Act Goal is state-wide greenhouse gas reduction cap decreases each year One allowance = authorization to emit one metric ton of carbon dioxide equivalent Covered entities purchase allowances for emitting greenhouse gases Allowances can be traded between entities 3
Electric Utility Subject to Cap and Trade since November 2012 Generators have to purchase allowances, will pass on costs to wholesale buyers (like Palo Alto) Palo Alto gets free allowances and sells to counteract increased cost to rate payers Purchases in renewable resources keeping our electric resource mix 100% carbon neutral; Programs and rebates to improve energy efficiency; and Rebates to electric ratepayers. 4
Gas Utility Subject to Cap and Trade since January 2015 Palo Alto has to purchase allowances to cover greenhouse gas emissions from gas customers Palo Alto also gets some free allowances and sells to counteract increased cost to rate payers Programs and rebates to improve energy efficiency; Purchases of or investment in bio-gas; Investment in carbon reduction activities including projects to reduce emissions caused by leaks; and Rebates to gas ratepayers. 5
Adopted Gas Rate Changes New line item to reflect Cap-and-Trade costs Pass-through of the cost of allowances Updated quarterly Range of $0.00 to 0.25 per therm Combine Administration and Transportation rate components with Distribution Administration ($0.0074 per them) and Transportation ($0.0435 per therm) added to each distribution rate tier Change is revenue neutral Simplifies bill presentation 6
