Title
Draft Resolution - Approval of Rate Changes - R Kruger/W Symank
Other Info
Submitted By: Randy Kruger
Department: Finance
Financial Impact and Cost/Benefit Considerations: Financial impact of the proposed rate changes is as described herein.
Discussion
1. Base Power Charges
• Flat Base Power Charge
The Tariff and Business Rules (Tariff) of the Pedernales Electric Cooperative, Inc. (PEC or Cooperative) currently include a Flat Base Power Charge which recovers the costs to purchase power to serve the membership, including costs incurred in connection with the development and management of the Cooperative’s power supply.
The level of costs recovered through the Flat Base Power Charge is largely driven by the energy and ancillary service costs in the Electric Reliability Council of Texas (ERCOT) market as well as the performance of the generation portfolio of the Lower Colorado River Authority, the Cooperative’s primary power supplier. The Cooperative’s forecast is showing an increase in its purchased power costs, it recommends an increase of $0.004000/kWh to the amount of the Flat Base Power Charge to ensure adequate cost recovery.
|
Charges: |
Current Amount: |
Proposed Amount: |
|
Flat Base Power Charge |
$ 0.061900 |
$ 0.065900 |
The increase of revenue from the recommended adjustment to the Flat Base Power Charge is forecast to be approximately $9.4M in 2026. Expenditure of staff time is not anticipated to be impacted.
• Time of Use Base Power Charge
Additionally, changes to the current TOU Base Power Charge and TOU periods are necessary to more accurately reflect expected pricing patterns in the ERCOT wholesale market for certain seasons and time periods. The changes are expected to be revenue neutral. Expenditure of staff time is not anticipated to be impacted.
Current Time-of-Use Base Power Charge
|
Season |
Time of Use Period |
Current Charge per kWh |
|
Non-Summer (Jan. - May and Oct. - Dec.) |
Super Economy |
2:01 am - 4:00 am |
$0.044895 |
|
|
Economy |
11:01 pm - 2:00 am 4:01 am - 5:00 am |
$0.046671 |
|
|
Normal |
8:01 am - 4:00 pm 7:01 pm - 11:00 pm |
$0.052527 |
|
|
Peak |
5:01 am - 8:00 am 4:01 pm - 7:00 pm |
$0.061350 |
|
Summer (Jun. - Sep.) |
Super Economy |
3:01 am - 5:00 am |
$0.038387 |
|
|
Economy |
11:01 pm - 3:00 am 5:01 am - 7:00 am |
$0.039905 |
|
|
Normal |
7:01 am - 12:00 pm 8:01pm - 11:00 pm |
$0.047026 |
|
|
Peak |
12:01 pm - 2:00 pm 6:01 pm - 8:00 pm |
$0.091961 |
|
|
Super Peak |
2:01 pm - 6:00 pm |
$0.096305 |
Proposed Time-of-Use Base Power Charge
|
Season |
Time of Use Period |
Proposed Charge per kWh |
|
Summer (Jun-Sep.) |
Off-Peak |
12:01AM - 2:00PM; 9:01PM - 12:00AM |
$0.043481 |
|
|
Mid-Peak |
2:01PM - 4:00PM; 8:01PM - 9:00PM |
$0.093169 |
|
|
Peak |
4:01PM - 8:00PM |
$0.161843 |
|
Shoulder (All Other Mos.) |
Off-Peak |
12:01AM - 5:00PM; 9:01PM - 12:00AM |
$0.043481 |
|
|
Mid-Peak |
5:01PM - 9:00PM |
$0.086442 |
|
Winter (Dec.-Feb.) |
Off-Peak |
12:01AM - 5:00AM; 9:01AM - 5:00PM; 9:01PM - 12:00AM |
$0.043481 |
|
|
Mid-Peak |
5:01AM - 9:00AM; 5:01PM - 9:00PM |
$0.086442 |
These adjustments to the Flat Base Power Charge and the Time-Of-Use Base Power Charge will go into effect on March 1, 2026.
2. Sustainable Power Credit
As a component of the Interconnect Rate, the Sustainable Power Credit is designed to compensate a Member for Received Energy (as defined in the Tariff). The Sustainable Power Credit is updated annually to ensure that this credit compensates Members with an active Interconnect Agreement who are not on the Interconnect Wholesale Energy Rate, for Received Energy, at a rate that closely aligns with the benefit to the Cooperative.
To align with the benefits received by the Cooperative, the Sustainable Power Credit will decrease from $0.082666 to $0.071921 per kWh. This credit will be applied toward Flat Base Power Charges, and any unused credit will expire at the end of each calendar year.
Expenditure of Cooperative funds is not anticipated to be impacted by the decrease to the Sustainable Power Credit; expenditure of staff time is not anticipated to be impacted.
This adjustment to the Sustainable Power Credit will go into effect on March 1, 2026.
3. Time-of-Use Base Power Credit
This new credit will apply to Members with an active Interconnection Agreement who are not on the Interconnect Wholesale Energy Rate, and who enroll in the Interconnect TOU Rate. This credit will be applied toward TOU Base Power Charges, and any unused credit expires at the end of each calendar year.
This credit will allow Members with an interconnection agreement to earn a credit for surplus energy generated by a distributed generation (DG) system and received by the Cooperative’s Delivery System (as defined in the Tariff) during a billing cycle at a rate that varies based on the time of day and season during which energy is produced. Members must make a twelve (12) month commitment to participate in the TOU rate to receive this credit. If a member opts out of the TOU rate option, the TOU rate and this credit will not be available to the Member for the following twelve (12) months.
Proposed Time-of-Use Base Power Credit:
|
Season |
Time of Use Period |
Proposed Charge per kWh |
|
Summer (Jun-Sep.) |
Off-Peak |
12:01AM - 2:00PM; 9:01PM - 12:00AM |
$0.043481 |
|
|
Mid-Peak |
2:01PM - 4:00PM; 8:01PM - 9:00PM |
$0.093169 |
|
|
Peak |
4:01PM - 8:00PM |
$0.161843 |
|
Shoulder (All Other Mos.) |
Off-Peak |
12:01AM - 5:00PM; 9:01PM - 12:00AM |
$0.043481 |
|
|
Mid-Peak |
5:01PM - 9:00PM |
$0.086442 |
|
Winter (Dec.-Feb.) |
Off-Peak |
12:01AM - 5:00AM; 9:01AM - 5:00PM; 9:01PM - 12:00AM |
$0.043481 |
|
|
Mid-Peak |
5:01AM - 9:00AM; 5:01PM - 9:00PM |
$0.086442 |
This credit will be applied toward TOU Base Power Charges and is expected to be revenue neutral. Expenditure of staff time is not anticipated to be impacted.
The Time-of-Use Base Power Credit will go into effect March 1, 2026.
4. Peak Capacity Charge
The Peak Capacity Charge will replace the current Peak Demand Charge. The purpose of this charge is to recover the cost associated with the maintenance and operations of PEC’s delivery system and other related costs. PEC’s Tariff currently defines a Peak Demand Charge which measures peak demand on an hourly interval basis during the Peak and Super Peak time periods of the current TOU Base Power Charge pricing schedule. The current TOU Base Power Charge pricing schedule is changing, and the Peak and Super Peak periods will no longer exist. In addition, certain Members have installed DG systems that produce more power than the Members consume onsite. These Members are currently being charged only for the peak demand of power consumed, but PEC must design its system to receive the excess power produced by the Member’s DG system. Hence, PEC must adjust the charge to reflect Members’ actual use of its system capacity, which is the greater of either peak power produced or consumed.
The Peak Capacity Charge, defined as the maximum demand of power delivered or received, is measured as the maximum demand during a fifteen (15) minute interval within the billing period. The Peak Capacity Charge will be applicable according to the Member’s rate schedule and shall replace current use of the Peak Demand Charge. This adjustment will address potential over/under recovery between member groups. Expenditure of staff time is not anticipated to be impacted.
The Peak Capacity Charge will go into effect March 1, 2026.
Body
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE the rates and effective dates as described herein are approved with such changes, if any, as were discussed and approved by the Board on this day; and
BE IT FURTHER RESOLVED that the Cooperative is directed to incorporate such rate changes into its Tariff and Business Rules as of the effective date described herein; and
BE IT FURTHER RESOLVED that the Chief Executive Officer, or designee, is authorized to take all such actions as needed to implement this resolution.