Direct Access Electricity Administration/Finance Issues Cte May 16, - - PowerPoint PPT Presentation

Direct Access Electricity

Administration/Finance Issues Cte May 16, 2013

Approved Direct Access (DA) Service Providers

1.

Contracts in place for two major DA Service Providers

2.

They will both offer pricing, with the award going to the best offer

Upcoming DA Procurement

► Power purchase for term beginning July 1, 2013 ► Term length & structure is at the District’s option ► Length of term depends on District’s assessment

• f electricity price trends

Rising prices favors long-term fixed Falling prices favors short-term fixed or index

► Typical Structure is combination of fixed block

and index pricing

5-Year Historic Trend

► Price has risen

for past year

► Natural gas has

increased in price do to unusually cold spring

► SONGS effect on

Southern CA pricing

Last Year’s Natural Gas

► Gas price

has risen do to unusually cold spring

10 Years

• Past Five Years – Actual
• SCE bundled rates will increase 16.4 % on 6-1-13, with

additional increases TBD (5-9-13 SCE energy outlook presentation)

• Transition from Bundled into DA
• Next Five Years - Projected

Past Five Years

► Wholesale Price of Generation Fell 39% ► SCE Price of Generation Increased by 36%

January Transition to DA

► January Transition Month ► SCE’s Transitional Bundled Service Month

was high

Next Five Years

► Transmission & Distribution (T&D) is set by SCE and applies

somewhat equally to both bundled & DA

► 5-year DA generation indicative price is almost the same as the

• ne year price

► 3-year DA generation indicative price is lower than the one year

price

► SCE future generation pricing is unknown, but likely to

increase due to renewable generation (RPS) mandates & SONGS problems

► On site natural gas generation option still under consideration.

Implementation could be scheduled to follow the end of a 5- year DA term.

Structure of Purchase

(monthly snapshot of 2012)

• Blend of Block &

Index

• Block is fixed

while index is based on hourly market conditions

• Imbalance

Charges

Block of DA Power

Load is Flat

(daily snapshot from 5-7-13)

Block of DA Power

• Daytime peak is

higher than night time off-peak

• Selling power is

always preferred in the daytime, especially during summer

Index Price Varies by the Hour

(single day snapshot from 3-5-13)

Block of DA Power

• Imbalance charges can

be positive or negative depending on the time

• f day & outside

temperature

• During the day, the

index will be higher than the block

• During the night, the

index will be lower than the block

• Armed with this

knowledge operators can schedule shutdowns accordingly

Recommendations

► Adopt Amendment #1 to Shell Energy North America

Energy Sales Agreement which removes the District’s option to self-procure renewable energy;

► Solicit 5-year fixed block pricing proposals from

Shell Energy North America and Constellation NewEnergy; and

► Authorize execution of Agreement for direct access

electricity with the low bidder

End of Presentation

Questions?