Management Comments. February 12, 2015

Transcription

1 Management Comments February 12, 2015

2 Average Bill, Not Average Cost of Service Court Rich: according to this Exhibit 6, 62.4 percent of the people in E-23 are paying less than the average cost of service, correct? Aidan McSheffrey: Well, again, it s the average cost of service for the average customer, not the average cost of service for the stratum 1 through 4 customers you mentioned. January 15, 2015 Interview Transcript page 73 2

3 Current Rate of Return by Stratum Stratum Avg. Monthly Summer Kwh Current Rate of Return % % % % % % Overall 2.7% 3

4 Typical Solar Customer Average Monthly Demand and Energy 1,545 kwh 8.9 kw 8.5 kw 491 kwh Energy Before Solar After Solar Demand 4

5 Current Solar Customers Compared to Each Residential Stratum Delivered by SRP (July) On Peak - Summer Stratum 1 Stratum 2 Stratum 3 Stratum :00 AM 1:00 AM 2:00 AM 3:00 AM 4:00 AM 5:00 AM 6:00 AM 7:00 AM 8:00 AM 9:00 AM 10:00 AM 11:00 AM 12:00 PM 1:00 PM 2:00 PM 3:00 PM 4:00 PM 5:00 PM 6:00 PM 7:00 PM 8:00 PM 9:00 PM 10:00 PM 11:00 PM Demand (kw) Stratum 5 Stratum 6 Average Solar On-Peak Hours 5

6 Monthly Averages Average Month kwh On-Peak kw Stratum Stratum Stratum Stratum 4 1, Stratum 5 1, Stratum 6 2, Typical Solar Customer Non-Solar 6

7 How Solar Affects SRP s System 4CP Allocator Source: SRP _CommentsInquiriesResponses_PriceProcess.pdf (page 224 and many others of 651) 7

8 How Solar Affects SRP s System -Energy Energy (kwh) 3,500 3,000 2,500 2,000 1,500 1, Typical Solar Customer Monthly Energy Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net Energy Net Energy After Solar 8

9 How Solar Affects SRP s System -Demand Typical Solar Customer Monthly Demand Demand (kw) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Demand Demand After Solar 9

10 Typical Solar Customer Average Monthly Demand and Energy 1,545 kwh 8.9 kw 8.5 kw 491 kwh Energy Before Solar After Solar Demand 10

11 18% 16% Rooftop Solar On A Clear Day Normalized Data from September System Peak Hour 14% 12% 10% 8% 6% 4% 2% 0% Percent of Total Generation 1 AM 2 AM 3 AM 4 AM 5 AM 6 AM 7 AM 8 AM 9 AM 10 AM 11 AM 12 PM 1 PM 2 PM 3 PM 4 PM 5 PM 6 PM 7 PM 8 PM 9 PM 10 PM 11 PM 12 AM Time of Day 11

12 15-Minute vs. 30-Minute Demand Instantaneous peak is what we build for and are obligated to serve. The cost of meeting this obligation doesn t change irrespective of how measured. Measuring over a wider period of time will yield a lower measured peak demand. Thus, demand charges go up with a wider measurement period. 12

13 E-27 Design Comparison E-27 Proposed (Bluebook) 15 min On-Pk Demand E-27 Alternate 30 min On-Pk Demand Amp Svc MSC Amp Svc Season On-Peak Demand ($/kw) First 3 kw Next 7 kw All Add'l kw Energy ($/kwh) On-Peak Off-Peak Summer Peak $8.10 $15.05 $28.93 $ $ $32.44 $45.44 Summer $6.61 $12.07 $22.98 $ $ Winter $2.87 $4.57 $7.91 $ $ Summer Peak $9.59 $17.82 $34.19 $ $ $32.44 $45.44 Summer $8.03 $14.63 $27.77 $ $ Winter $3.55 $5.68 $9.74 $ $

14 We can do either one 14

15 Grandfathering Discussion 15

16 Normal Gradualism 100% 80% 60% 40% 20% 0% Apr 2015 Apr 2016 Apr 2017 Apr 2018 Apr 2019 Apr 2020 Apr 2021 Apr 2022 Apr 2023 Apr 2024 Apr

17 SRP Residential Solar Customer Growth and Upfront Renewable Energy Credit Payment (August 2004 December 2014) Upfront REC Payment / Per Watt $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $ ,000 Number of Residential Solar Customers 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 $0.00 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 0 Average Solar Upfront REC Payment Residential Solar Customers End of SRP Upfront REC Payment 17

18 Payments for REC Agreement Residential Commercial Paid to Customers $36.7 M $37.2 M Paid to Vendors $14.6 M $47.9 M Total $51.3 M $85.1 M Note: Does not include approximately $14M in solar heating payments 18

19 Residential Solar Customers Type Category A: REC agreement paid to customers (customers who own their system, commissioned and in process) Category B: REC agreement paid to vendors (customers who leased their system) Category C: No REC agreement (End of incentives - Sept 6 November 28 ) Category D: No REC agreement (Post Announcement Nov. 29 Dec. 8) # of Customers 4,304 7,310 1,766 2,063 19

20 Grandfathering Costs Type 10 Year Cost Each Add'l Year Category A: REC agreement paid to customers $25M $3M Category B: REC agreement paid to vendors $43M $4M Category C: No REC agreement (End of incentives - Sept 6 November 28 ) $10M $1M Category D: No REC agreement (Post Announcement Nov. 29 Dec. 8) $12M $1M $90M $9M These are estimates only. They can and will change as prices may be changed by SRP s Board over time. 20

21 Conceptual Option for 10 Year Grandfathering (Multi Category) Pay 3 cents/kwh generated in year 11, 2 cents/kwh in year 12, 1 cent/kwh in year 13 Total cost $8.4 million Phases in move to E-27 $20/month impact in first year $10/month incremental impact in years 2, 3, 4 21

22 Combined Net Revenues FY2016 ($ Millions) Zero Price Increase 3.9% Price Increase Total Operating Revenues $3,200 $3,309 Operating Expenses Purchased Power/Fuel/Water for Power $1,252 $1,252 Operating Expenses & Maintenance $1,112 $1,112 Depreciation and Amortization $535 $535 Taxes and Tax Equivalents $167 $167 Total Operating Expenses $3,066 $3,066 Net Operating Revenues $134 $243 Plus Other Income $5 $5 Less Net Financing Costs $185 $182 Combined Net Revenue ($46) $66 22

23 Cost Allocation Question 23

24 AECC Recommended Price Change 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% Residential (Average) Commercial Industrial E-65 SRP Management Proposal AECC Proposal 24

25 SRP Prices Remain Competitive Overall Price (Cents per kwh) Source: Dept. of Energy EIA-826 Reports for 12 months ending July 31, 2014 *Data for Arizona does not include SRP. 25

26 SRP Prices Remain Competitive Industrial Price (Cents per kwh) SO. CALIFORNIA NEVADA ARIZONA* NEW MEXICO SRP (Proposed) SRP (EIA) Source: Dept. of Energy EIA-826 Reports for 12 months ending November 30, *Data for Arizona does not include SRP. Note: APS AG-1 and SRP s FESR are limited alternatives 26

27 Would Dr. Chamberlin prefer a cost recovery shift from summer to winter or vice versa, and why? 27

28 28