A word to the wise, it may be very appropriate to carefully check your bills. One user recently found his residential account had been billed in error for several YEARS
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Heber Power Board Members and Heber City Council
As this epistle is too detailed for
presentation at the Public Hearing, I'm sending it to the decision
makers (Board) in the hope that you will take it under
consideration
in your decision on the rate increase.
My
two major concerns are raising residential rates and the
possible reduction in larger commercial, that may not be offset
by necessary Peak Power purchases. A minor concern is
also the lack of time based rates and its affect on peak power.
At last year's Rate Increase hearing,
Mr Pender talked about the concept of “Cost of Causation.” “means that those
who cause the utility to incur its costs should be
responsible for
payment of such costs.” pg 4, COS Study
The imposition, or continuation, of a
service charge further hurts those least able to pay bills – the
low residential user. But that IS being addressed somewhat,
relatively, with the new proposed rates.Removing it or reducing
it, with a per kwhr adjustment, might be a better alternative to
an increase.
The Board decision to increase impact
fees from 40% to 60% was a step in the right direction, in my
opinion. I believe last year 75% was recommended.
That does mean, however, that 40%
(rather than 60%) of the 'caused' cost burden must be still be
borne
by the remaining current ratepayers. While this was a good
decision,
it appears that this proposed rate increase may further the
inequitable burden on the residential ratepayer, rather than those
who have benefited from the past lower impact fees.
Last year's rate increase presentation
used 'examples' showing a standard 4.5% for all users. A closer
look
showed that not to be true. Smaller commercial faced a larger
relative burden that larger commercial. That appears to have been
corrected in this year's proposal. All small commercial seems to
be
getting a rate REDUCTION. This is probably a positive step, for
the
existing 1185 small businesses, who may have been beneficiaries of
the lower impact fees of the past.
It appears that an original 4.5% residential increase has been increased to 6% for all nearly
10,000
users. This does seem strange to me as one of the avowed reasons
for municipal (user owned) utilities is lower rates for the
'owners'
(municipalities and their residents and taxpayers). The supposed
advantage of lower impact fees was encouragement for
businesses
who
create employment. Business creation may be a community positive
but lower fees accompanied by lower user costs seems to an
opposing
direction for the municipal concept and the concept of 'Cost of
Causation.'
Last year's proposal clearly favored
big users, of whom there were 10, or so. This year there are shown
21 large and 123 medium commercial entities potentially involved
in
the demand charge system. Although the rate charts indicate a 7%
increase for large commercial at an assumed 46% load factor, no
figures are available to determine the rate at 90%.
The Demand rate system would
supposedly
help correct the Peak Power problem. Is this rate for “coincident
peak demand, non-coincident peak demand and billing demand.”
However no figures are provided to
demonstrate that the proposed rate structure will actually do so.
If
a more complete analysis of the commercial rates (rather than
using
an average factor), who can it be determined what the resultant
revenue AND cost will be??? At a minimum, a few selected actual
examples would be helpful. e.g. Company X, under the proposed new
rates, will pay $50,000/yr using 100K Kwhr with a load factor of
80%; if the load factor is reduced to 40%, then their payment will
decrease to $40,000/yr, and HL&P will save $20,000 in peak
power
purchases, thereby achieving a net benefit to ratepayers of
$10,000. “The utility has
been
collecting data on commercial demands and analyzing the impact
on
these customers of implementing a demand charge.” (pg 1 of
study)
This type of specific information
should be available. However, when some who should know and
understand are asked how this demand rate structure would work, I
get
an answer of 'I understand it, but can't explain it.' or from an
HLP
employee who was kind enough to respond to some of my questions,
in
writing:
ME: Both small and medium
commercial have 'assumed' load factors, how does that compare
with
the actual current load factors?
HLP: The
load factor was calculated from actual data provided by the
company
as well as industry averages.
ME: The large Commercial rates
use an "Assumed Load Factor: 46.1%" - are there any
comparison of rates of the 10 or so entities for their current
rates
vs. the proposal with the SAME usage?
HLP: In
regards to the proposed rate increase, no such comparisons are
presently available outside of the data tables provided in
Exhibit D
of the cost of service study I
emailed
to you yesterday. If customers are curious as to their
individual
impact, we have been encouraging them to come in and we will
walk
through their individual impact(s) directly with them.
ME: Under last year's proposal there were potential great reduction for this group. If the same this year, are the figures available as to whether any potential reductions will accrue to large commercial with their same usage?
ME: Under last year's proposal there were potential great reduction for this group. If the same this year, are the figures available as to whether any potential reductions will accrue to large commercial with their same usage?
HLP: As
with the prior question, the previously referenced Exhibit D
demonstrates the impacts of this rate adjustment.
ME: As the suggested goal of the rate change was to decrease peak power demand factor, will this proposed rate structure do that? How?
ME: As the suggested goal of the rate change was to decrease peak power demand factor, will this proposed rate structure do that? How?
HLP: The
proposed rate design creates economic incentives for the
commercial
customer to reduce their demand on the system.
Last year, it was suggested that time
based usage costs would be implemented, apparently that is still
being studied. After a million dollars worth of installed “smart”
meters, it would seem it could or should have already been
instituted.
ME: Whatever happened to the
time based rates discussed last year using the 'smart-meters,'
or is
there still not the capability to implement it?
HLP: The
Company is developing a Meter Database Management System to
accurately capture the data necessary to analyze and
potentially
implement time of day rates.
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