Title
Incorporated County of Los Alamos Code Ordinance No. 02-351; An Ordinance Amending Chapter 40, Article III, Sections 40-121, 40-122, and 40-123 of the Code of the Incorporated County of Los Alamos Relating to Electric Rate Schedules, Customer Service Charges and Electric Energy Charges
Recommended Action
I move that the Board approve Incorporated County of Los Alamos Code Ordinance No. 02-351, An Ordinance Amending Chapter 40, Article III, Sections 40-121, 40-122, and 40-123 of the Code of the Incorporated County of Los Alamos Relating to Electric Rate Schedules, Customer Service Charges and Electric Energy Charges, and forward to Council for Introduction and Adoption.
Utilities Manager Recommendation
The Utilities Manager recommends that the Board approve Incorporated County of Los Alamos Code Ordinance No.02-351.
Body
The Department of Public Utilities has not raised electric rates since 2015. The adopted FY2024 budget includes an 8% increase in revenue anticipating an electric rate increase. DPU contracted for an electric rate study and cost of service study. The proposed rates are based on the results of the rate study portion of the contracted work. DPU is proposing rate increases for both FY2024 and FY2025. The cost of service study is ongoing and DPU anticipates those results to impact rates in FY2026. Staff is developing a work plan on improving the billing software to offer more flexible usage rates such as time of use and/or demand charges to the electric rates which is planned to be implemented in FY 2026.
Introduction to Council: September 5, 2023
Council Public Hearing: September 26, 2023
Background
Overview of Code Ordinance 02-351
- GDS Associates completed their rate study which is based on forecasting future revenue on a system wide basis
- GDS Associates and DPU are working together to complete the Cost of Service study which looks at the cost of providing services by customer classes. They will present the results of this study once concluded
- Our current billing system cannot produce either Time of Use or Residential Demand bills.
- We are currently researching and developing a work plan for a billing system to accommodate Time of Use and/or Residential Demand rate structures
- The FY2024 budget was developed assuming an 8% rate increase effective July 2024
- We have not had an increase to electric rates since 2015
Green Power & Time of Use
- The proposed rate ordinance removes the option to purchase green power
- DPU no longer purchases RECs to offset production of electric power due to DPU’s clean power production and purchases
- The total revenue from voluntary green power initiative for FY2023 was $6,725
- DPU currently doesn’t have any customers on the existing Time of Use Rate Class. Since we cannot accommodate Time of Use rates in our current billing system, DPU is proposing removing the Time of Use rate classes
Alternatives
If this ordinance is not introduced and approved, revenues will not be sufficient to match budgeted FY2024 revenue which will directly impact cash balances.
Fiscal and Staff Impact/Planned Item
The revenues for FY2024 assume a rate increase and will only be achieved if the new rates are approved.
Attachments
A - Code Ordinance 02-351 Electric Rates
B - Rate Comparison & History
C - Electric Rates by Schedule
D - Notice of Public Hearing
E - GDS Associates Presentation