Title
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
Proposed Time-of-Use Base Power Charge
These adjustments to the Flat Base Power Charge and the Time-Of-Use Base Power Charge will go into effect on March 1, 2026.
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