SVCE 2018 Rates Don Bray, Manager of Account Services Overview - - PowerPoint PPT Presentation

▶
svce 2018 rates
SMART_READER_LITE
LIVE PREVIEW

SVCE 2018 Rates Don Bray, Manager of Account Services Overview - - PowerPoint PPT Presentation

Mar 13, 2024 265 likes •405 views

SILICON VALLEY CLEAN ENERGY SVCE 2018 Rates Don Bray, Manager of Account Services Overview Due to PG&Es recently announced 9% increase in generation rates, SVCE rates for 2018 can be maintained at 2017 levels: o $13M+ addition to

slide-1
SLIDE 1

SVCE 2018 Rates

Don Bray, Manager of Account Services

SILICON VALLEY

CLEAN ENERGY

slide-2
SLIDE 2

Overview

  • Due to PG&E’s recently announced 9% increase in generation rates, SVCE

rates for 2018 can be maintained at 2017 levels:

  • $13M+ addition to SVCE operating margin for 2018
  • meet original SVCE reserve contribution targets
  • expand discount for SVCE customers v/v PG&E gen rates to 6+%
  • However, new/emerging regulatory changes will affect SVCE costs, e.g.

Resource Adequacy, Bucket 2 renewables

  • Increases to SVCE rates for 2018 could be considered, to offset impact of

regulatory changes while expanding SVCE generation discount v/v PG&E

CD

SILICON VALLEY

CLEAN ENERGY

slide-3
SLIDE 3

Developments to date . . .

  • SVCE rates originally set to be effective through 2018 unless

exceptional market conditions warrant changes sooner

  • As of August, projected 2018 PG&E gen rates  by 1½%, PCIA  by 16%
  • SVCE 2018 rate reductions of ~6% required to save 1% v/v PG&E
  • $14 million reduction in SVCE operating margin factored into 2018 budget
  • As of December, projected 2018 PG&E gen rates  by 6%, PCIA  by 14%
  • SVCE 2017 rates would average ~3% below PG&E in 2018
  • BOD evaluated multiple rate change options – favors ‘Min 3%’ approach
  • Restores SVCE 2018 margin near original plan, with no gen rate increases
  • PG&E announces annual rate change postponed until March 2018
  • As of February 2018, actual PG&E gen rates  by 9%, PCIA  by 11-14%
  • PG&E rates effective March 1st , SVCE updates effective April 1st

CD

SILICON VALLEY

CLEAN ENERGY

slide-4
SLIDE 4

Figure 2: Updated 2018 SVCE Rate Scenario - General Case

  • 9% increase in PG&E Gen Rate
  • 14% increase in PCIA rate
  • If SVCE 2017 rates remain unchanged, savings v/v PG&E grows to 6%, but

SVCE customer gen costs rise 3% due to PCIA

1% gen

savings v/v PG&E

in 2017

  • c:

;

<

u

Q-

2017 SVCE

Gen Rate

(Set through

Dec 2018)

v

+-

»

CD

cn

c

<D

CD

LU

u

>

<S)

2017

0) + > cu

OC

C

<u <5 LU

  • 3

Q.

2017

<

u

CL

0)

CD

QC

C

<u

e?

LU

U

>

CO

2018

M

CD

QC

C

<U

LU

66

CL

2018

T;

6% gen savings

^

with SVCE v/v

PG&E in 2018

3% increase in gen cost

to SVCE customers due to 2018 PCIA increase

If no change in 2017

SVCE gen rate

slide-5
SLIDE 5

Rate Scenarios and Options

Rate Setting Scenario Description Options

1) Minimum of at least [x]% savings v/v PG&E in 2018 Maintain all SVCE generation rates at 2017 levels, except where necessary to maintain a minimum [x]% lower price differential versus PG&E, inclusive of PCIA Min 1% Min 2% Min 3% 2) Absorb increase in PG&E’s PCIA for 2018 Lower all SVCE generation rates as necessary to absorb increase in PG&E PCIA rates for 2018 – thus keeping SVCE’s 2018 generation rate plus PCIA equivalent to 2017 Absorb 3) Savings v/v PG&E of exactly [x]% for all rates in 2018 ‘Peanut Butter’ approach whereby all 2018 SVCE generation rates inclusive of PCIA are set so that the cost the customer for SVCE service remains [x]% below PG&E for 2018 for all rate schedules All 1% All 2% All 3%

slide-6
SLIDE 6

Key Rate Schedules

Rate Description Accounts % of Accounts % SVCE Load Typical Gen + PCIA Cost/mo (summer) E1 Residential - Tiered 198,400 81% 33% $ 44 E-TOU Residential - Time of Use 7,600 3% 1% $ 35 EV-A Residential EV 5,000 2% 2% $ 97 A1 Small Commercial 17,700 7% 10% $ 150 A10 Medium Commercial 2,100 1% 15% $ 1,940 E19 Large Commercial 1,200 0.5% 25% $ 17,700 E20 Industrial 30 0.01% 10% $ 49,600

Source: SVCE 2017 data, all figures rounded/approximated for clarity.

example rates for scenario analysis

/'

A'N SILICON VALLEY

CLEAN ENERGY

slide-7
SLIDE 7

Board Consensus – Min 3% approach

December Rate Scenario Analysis

O O O

2018 SVCE Operating Margin Impact

($M)

2018 Customer Savings v/v PG&E (Average %) SVCE 2018 Gen Rate Increases

(No) SVCE 2018 Gen

Rate Decreases (No)

E-lTiered

Residential Rate

Impacts A-lSmall

Commercial Rate

Impacts

E-19 Large

Commercial Rate

Impacts Scenario/Option

Min 1

%

+13.2M 3.03% 31 % Savings SVCE 2018 v/v PG&E =>

  • 1.70%
  • 2.77%
  • 4.01%

% Cust Gen 2018 Cost Change => 4.95% 3.14% 3.21%

Min 2% +12.8M

3.15% 55 % Savings SVCE 2018 v/v PG&E =>

  • 2.00%
  • 2.77%
  • 4.01%

% Cust Gen 2018 Cost Change => 4.63% 3.13% 3.21%

Min 3% +11.2M

3.59% 84 % Savings SVCE 2018 v/v PG&E =>

  • 3%
  • 3.06%
  • 4.15%

% Cust Gen 2018 Cost Change => 3.56% 2.83% 3.02% Absorb PCIA

+1.6M 6.27% 179

% Savings SVCE 2018 v/v PG&E =>

  • 6.34%
  • 5.72%
  • 6.36%

% Cust Gen 2018 Cost Change => 0.00% 0.00% 0.00% All1 %

+20.0M

1

% 148

31

% Savings SVCE 2018 v/v PG&E =>

  • 1.00%
  • 1.00%
  • 1.00%

% Cust Gen 2018 Cost Change => 5.70% 5.01% 5.73% All 2% +16.5M 2% 124 55 % Savings SVCE 2018 v/v PG&E =>

  • 2.00%
  • 2.00%
  • 2.00%

% Cust Gen 2018 Cost Change => 4.63% 4.63% 4.63%

All 3% +13.3M

3% 95 84

% Savings SVCE 2018 v/v PG&E =>

  • 3.00%
  • 3.00%
  • 3.00%

% Cust Gen 2018 Cost Change => 3.56% 2.89% 3.59%

/'

A'

S SILICON VALLEY

CLEAN ENERGY

slide-8
SLIDE 8

Updated Analysis for April 2018

  • New rate scenarios required for PG&E increase of 9%, vs. 6% in December
  • New analysis projects ‘Min 5/6/7%’ and ‘All 5/6/7%’ as a range of options
  • Min 6% more attractive than favored Min 3% option in December
  • more operating margin for SVCE, more customer savings v/v PG&E
  • ‘All 6%’ option generates more operating margin than Min 6%, but requires

a significant number of rate increases

CD

SILICON VALLEY

CLEAN ENERGY

slide-9
SLIDE 9

Updated Rate Scenarios and Options

Rate Setting Scenario Description Options

1) Minimum of at least [x]% savings v/v PG&E in 2018 Maintain all SVCE generation rates at 2017 levels, except where necessary to maintain a minimum [x]% lower price differential versus PG&E, inclusive of PCIA Min 5% Min 6% Min 7% 2) Absorb increase in PG&E’s PCIA for 2018 Lower all SVCE generation rates as necessary to absorb increase in PG&E PCIA rates for 2018 – thus keeping SVCE’s 2018 generation rate plus PCIA equivalent to 2017 Absorb 3) Savings v/v PG&E of exactly [x]% for all rates in 2018 ‘Peanut Butter’ approach whereby all 2018 SVCE generation rates inclusive of PCIA are set so that the cost the customer for SVCE service remains [x]% below PG&E for 2018 for all rate schedules All 5% All 6% All 7%

slide-10
SLIDE 10

. . . Similar to ‘Min 3’ in December, but improved

SVCE 2018 Rate Scenario Analysis

O

Annualized SVCE Operating Margin

Impact ($M) 2018 Customer Savings v/v PG&E (Average %) SVCE 2018 Gen Rate Increases (No) SVCE 2018 Gen Rate Decreases (No)

E-lTiered

Residential Rate

Impacts A-lSmall

Commercial Rate Impacts

E-19 Large

Commercial Rate

Impacts Scenario/Option

Min 5% +13.9M 7.40%

3 % Savings SVCE 2018 v/v PG&E =>

  • 5.71%
  • 7.36%
  • 8.38%

% Cust Gen 2018 Cost Change => 4.35% 2.06% 1.52%

Min 6% +13.4M 7.50% 26

% Savings SVCE 2018 v/v PG&E =>

  • 6.00%
  • 7.37%
  • 8.38%

% Cust Gen 2018 Cost Change => 4.04% 2.04% 1.52%

Min 7% +12.0M 7.90%

55 % Savings SVCE 2018 v/v PG&E =>

  • 7%
  • 7.58%
  • 8.38%

% Cust Gen 2018 Cost Change => 2.93%

1.81% 1.52% Absorb PCIA +6.6M 9.70% 147

% Savings SVCE 2018 v/v PG&E =>

  • 9.65%
  • 9.22%
  • 9.75%

% Cust Gen 2018 Cost Change => 0.00% 0.00% 0.00% All 5%

+24.2M

5% 176 3 % Savings SVCE 2018 v/v PG&E =>

  • 5.00%
  • 5.00%
  • 5.00%

% Cust Gen 2018 Cost Change => 5.14% 4.45% 4.95% All 6%

+20.5M

6% 153 26 % Savings SVCE 2018 v/v PG&E =>

  • 6.00%
  • 6.00%
  • 6.00%

% Cust Gen 2018 Cost Change => 4.04% 3.43% 3.94% All 7%

+16.8M 7% 124

55 % Savings SVCE 2018 v/v PG&E =>

  • 7.00%
  • 7.00%
  • 7.00%

% Cust Gen 2018 Cost Change => 2.93% 2.39%

2.91 %

/WN SILICON VALLEY

CLEAN ENERGY

slide-11
SLIDE 11

Changing Financial Context - Supply

  • Increasing costs for Resource Adequacy
  • Some/all Bucket 2 renewables may need to be replaced with more

expensive Bucket 1 – ramping to $10M annually in 2020

  • PCIA proceeding underway; annual PCIA increase typical in recent years
  • Expand current reserve contribution through rate increases, to offset/cover

anticipated increases?

CD

SILICON VALLEY

CLEAN ENERGY

slide-12
SLIDE 12

SVCE 2018 Rate Scenario Analysis

O

Annualized SVCE Operating Margin

Impact ($M) 2018 Customer Savings v/v PG&E (Average %) SVCE 2018 Gen Rate Increases (No) SVCE 2018 Gen Rate Decreases (No)

E-lTiered

Residential Rate

Impacts A-lSmall

Commercial Rate Impacts

E-19 Large

Commercial Rate

Impacts Scenario/Option

Min 5% +13.9M 7.40%

3 % Savings SVCE 2018 v/v PG&E =>

  • 5.71%
  • 7.36%
  • 8.38%

% Cust Gen 2018 Cost Change => 4.35% 2.06% 1.52%

Min 6% +13.4M 7.50% 26

% Savings SVCE 2018 v/v PG&E =>

  • 6.00%
  • 7.37%
  • 8.38%

% Cust Gen 2018 Cost Change => 4.04% 2.04% 1.52%

Min 7% +12.0M 7.90%

55 % Savings SVCE 2018 v/v PG&E =>

  • 7%
  • 7.58%
  • 8.38%

% Cust Gen 2018 Cost Change => 2.93%

1.81% 1.52% Absorb PCIA +6.6M 9.70% 147

% Savings SVCE 2018 v/v PG&E =>

  • 9.65%
  • 9.22%
  • 9.75%

% Cust Gen 2018 Cost Change => 0.00% 0.00% 0.00% All 5%

+24.2M

5% 176 3 % Savings SVCE 2018 v/v PG&E =>

  • 5.00%
  • 5.00%
  • 5.00%

% Cust Gen 2018 Cost Change => 5.14% 4.45% 4.95% All 6%

+20.5M

6% 153 26 % Savings SVCE 2018 v/v PG&E =>

  • 6.00%
  • 6.00%
  • 6.00%

% Cust Gen 2018 Cost Change => 4.04% 3.43% 3.94% All 7%

+16.8M 7% 124

55 % Savings SVCE 2018 v/v PG&E =>

  • 7.00%
  • 7.00%
  • 7.00%

% Cust Gen 2018 Cost Change => 2.93% 2.39%

2.91 %

/WN SILICON VALLEY

CLEAN ENERGY

slide-13
SLIDE 13
  • Min 6% - maintain SVCE rates at 2017 levels for 2018:
  • $13M+ addition to SVCE operating margin for 2018
  • meet original SVCE reserve contribution targets
  • expand discount for SVCE customers v/v PG&E gen rates to 6+%
  • All 6% - implement increases to 2017 SVCE rates for 2018, to offset impact
  • f regulatory changes while expanding SVCE generation discount v/v PG&E

Direction and Next Steps

  • r . . .

/'

A'N SILICON VALLEY

CLEAN ENERGY

Hr

*

A