Board Finance & Budget Planning Workshop. April 16, 2012

Transcription

1 Board Finance & Budget Planning Workshop 1

2 Agenda Management Introduction Financial Highlights Administration Highlights Energy Resource Planning Highlights Engineering & Operations Highlights Customer Resource Highlights Workshop Recap 2

3 Management Introduction (Girish Balachandran) 3

4 Adaptive and Flexible Process Purpose, Strategies and Work Plans Purpose Stays the same for a long period of time Metrics Strategies Minor changes over a multi-year period Metrics Goals, Work Plans, Initiatives Dynamic as per priorities and resources 4

5 Metrics AMP s PURPOSE & VALUE METRICS PURPOSE: Increase value to Alameda by providing safe, reliable, costeffective, and environmentally responsible electricity OUR METRICS RELIABILITY Strategies Strategies Safety > 3 years without Lost Time Accident Customer Satisfaction rating amongst the highest in California RATES Metrics CUSTOMER/COMMUNITY VALUE AND SATISFACTION Metrics RESOURCES Reliability in top quartile of Western US utilities Power resource mix has most renewable content of any utility in California Strategies Metrics Strategies Rates ~20% lower than PG&E --- translates into $10 million savings/year for Alameda Bond rating A+ WORKFORCE Workforce of 91 that is central to achieving our purpose 5

6 1. Technology 2. Workforce 3. Regulation 4. Customer Experience 5. LBNL 2 nd Campus PUB Prioritization to City Council November

7 November 2011 Prioritization Board made changes to Initiative 4 (changed 2013 and 2014 from Green) and Initiative 8 (changed 2014 from Orange) # Initiative Update RPS Policy - current policy is 40% renewables including large hydro G G G 2 Replace Morgan Stanley contract - expires in 2014 and is 15% of existing supply 3 Implement Rate Increase - PUB conceptual approval of <5%/year for 2011, 12, 13 and 14 4 Update cost of service and study new rates - RFP for Rate Structures for future and cost of service update 5 Get Audit Ready - NERC/WECC 2012 Audit; Compliance Plan by CY11 6 Enhance outage restoration effectiveness - Enhance technology options and procedures; Continue focus on 5-year O&M 7 Modernize delivery system - IT Strategic Plan; Roadmap for Advanced Technology; Electric Vehicles Get Ready Plan and Implement 8 Business Case for Smart Grid - What makes sense for Alameda? 9 Prepare for new block load - LBNL possibility; Other large customer load 10 PUB-City-Community Initiatives - Support PUB communication with Council; Cost-saving opportunities and demonstration projects with City; Support AUSD EE efforts 11 Organization Development - Learning for Board and Employees; Employee Recognition; Workforce skills and succession plan 12 Enhance service delivery infrastructure - improve warehouse storage; lower building carbon footprint 13 Change Management - communication and preparation 14 Update all reports (internal and external) - Improve effectiveness and insight; Update policies and procedures 15 EE Strategic Work Plan - Implement work plan; Increase resources; Develop strategic plan G O R G G G G o r G O O G O O G O O G O r O O O G G G O R R O O O G O R O O O G O O 7

8 PUB s 2012 focus Workforce Advanced Technology Change Management APPA Hometown Connections Organization Checkup RFP for overall business plan Research other utilities AMP Workforce/HR Strategic Implementation Plan Communications plan to be developed Develop & implement a focused plan HR plan to be developed 8

9 Next Steps after this Workshop Internal Evaluate PUB comments February External Board review of Workshop comments February 27 Communicate Board priorities to staff February to June Refine Work Plan and develop budget February to June Board Finance & Budget Workshop April 16 Communicate with Council Council update April/May Budget Adoption June 25 Change Management & Implementation February onwards Review progress Fall 2012 & Council Update November

10 General Discussion Adopted Financial Policies have been incorporated. This is the 3 rd year of the 5-year rate plan. Rates are lower than PG&E rates. Approved load forecast has been incorporated. Purchased power is AMP s largest expense. Business issues that will be considered in FY 2013: Renewable Energy Sales and Reserve Cost of Service and Rate Planning Advanced Technologies and Business Processes 10

11 Financial Highlights (Robert Orbeta) 11

12 Budget Policy Highlights Policy is periodically reviewed and approved by the Board The General Manager submits to the Board a proposed operating budget which includes proposed expenditures and the means of financing them. Ratepayer comments are solicited during regular Board meetings The budget is legally enacted through passage of a resolution. Formal budget integration is employed as a management control device during the year. Budgets are adopted on a basis consistent with generally accepted accounting principles. The budget is organized by Federal Energy Regulatory Commission (FERC) accounts. 12

13 Financial Advisor Recommendations Refinance the 2000 A/AT (Complete) Maintain 145 days operating cash on-hand (Maintained) Take immediate action if operating cash falls to 100 days. Maintain a 1.75 debt coverage ratio (Maintained) Take immediate action if the coverage ratio falls below Consolidate the Purchased Power Balancing Account into working capital. (New Balancing Account Policy to Board June 2012) Consolidate the major contingency reserve, competitive pricing reserve, and operating contingency reserve into working capital. (June 2012) 13

14 General Budget Discussion The proposed rates for FY 2013 comply with the less than 5% per year increase guideline approved in the 5-year rate adjustment plan. The draft budget assumes the Board will approve the 3 rd year rate adjustments prior to the start of the fiscal year. Purchased Power costs are identified in NCPA s draft FY 2013 budget. Staffing levels decrease by 1 position as compared to last year. The rolling 5-year CIP plan is incorporated into the 1 year budget request. The draft budget passes all compliance tests. 14

15 FY 2013 Financial Summary FY 2012 Budget FY 2013 Budget Revenue from Operations $ 52,705,400 $ 53,647,100 Non-Operating Revenue $ 307,260 $ 295,160 REC Sales Net Income $ 0 $ 4,873,500 Reserves UUD & REC $ (1,043,400) $ (5,935,700) Reserve Spending $ 1,548,500 $ 50,000 $ 53,517,760 $ 52,930,060 Purchased Power $ 29,421,000 $ 30,312,700 Operating Expense $ 19,351,060 $ 20,121,875 Non-operating Expense $ 5,716,540 $ 5,737,350 Non-Cash Items ($ 3,684,900) ($ 3,684,900) Debt Principal Payments $ 1,098,000 $ 1,126,200 Capital Projects & Eqpt $ 4,604,000 $ 3,330,900 $ 56,505,700 $ 56,944,125 Net Adjustment ($ 2,987,940) ($ 4,014,065) 15

16 60,000,000 FY2012 $53,517,760 Revenue Electric - FY2013 Budget Comparision to FY2012 Budget (Excluding Depreciation) FY2013 $52,930,060 Operating Expense Non-Operating & Other Expenses 50,000,000 FY2012 $45,087,160 FY2013 $46,749,675 40,000,000 30,000,000 20,000,000 10,000,000 FY2012 $11,418,540 FY2013 $10,194,

17 Revenue is based on the approved load forecast. Revenue Forecasted load, with planned rate adjustments, provides an additional $941,700 of budgeted Sales Revenue in FY Other Operating Revenues are expected to be consistent with historical trends and market conditions. REC Sales Net Income is budgeted at $4,873,000 for FY REC Sales Net Income shall be placed into a designated reserve account per directives in Board resolution AMP expects to use $50,000 of UUD reserves for design. Revenue will not be sufficient to meet Expenses. AMP expects to use $4,014,065 from working capital for these expenses. 17

18 Operating Expenses by FERC 35,000,000 30,000,000 $30,312,700 $29,421,000 Purchased Power & Operating Expenses Budget for FY2013 = $ 46,834,575 (excluding depreciation) 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 $3,969,860 $3,820,200 $4,324,050 $3,912,020 $7,869,180 $8,377,625 - Purchased Power Distribution & Maintenance Customer Accounts & Sales Administrative & General

19 Operating Expenses by FERC Purchased Power costs increased by $891,700. Purchased Power costs incorporates a projected $500,000 rebate. Labor refers to AMP s workforce, Service refers to contracted labor and contractor supplied materials, and Material refers to purchased equipment, tangible goods and miscellaneous items. Operations and Maintenance expenses are consistent with past expenditures. Customer Accounts & Sales expenses have increased as new customer programs are included in the budget. Administrative & General expenses have increased as streetlight energy has been included in the budget. Additionally, a budget for consultants related to Advanced Technologies is incorporated. 19

20 Expenditure make-up FY2013 Budget (Draft) Expenditure = $56,768,765 $30,312,700 54% (2012 = 52%) Purchased Power $8,623,800 15% Labor (2012 = 16%) (2012 = 18%) $9,680,090 17% Material Service (2012 = 14%) $8,152,175 14% 20

21 150 Staff Positions by Budget Year Budgeted Staffing Electric and Telecom Electric 21

22 Non-Operating Expense Interest income and miscellaneous revenues are expected to continue at levels similar to last year. Debt service charges will increase slightly in FY PILOT/ROI payments will continue at the City ordinance level of 1% and AMP will make a prepayment of the FY 2014 amount. Charter compliance calculations indicate a city transfer is not required; however, in accordance with policies established by Board resolution 4528, a transfer to the City s General Fund of $2.8 million has been included in the budget. Capitalized Infrastructure Projects include substantial subcontract and special purchases. 22

23 City Related Contributions & Expenses Budget Budget FY 13/ FY 2012 FY 2013 FY 12 General Fund Transfer $2,800,000 $2,800,000 0% PILOT / ROI * $1,300,000 $1,285,210 99% City cost allocation $ 785,900 $ 689,620 88% City direct cost $ 175,000 $ 135,000 77% Streetlight Energy $ 0 $ 380,000 New Rent warehouse, etc. $ 198,200 $222, % Garage fees & sewer $ 73,950 $74, % Total $5,333,050 $5,586, % AMP PERS cost $ 981,500 $ 981,500 AMP benefit cost $2,741,075 $2,767,945 Other Payments $3,722,575 $3,749, % * FY 2014 PILOT / ROI to be prepaid in FY

24 2010 A/B Debt Service 24

25 Direct and Indirect Debt Service $14,000,000 Direct and Indirect Debt Service Including NCPA & TANC Obligations $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Fiscal year 2000 AT Interest 2010 A/B Interest 2010 A/B Principal NCPA & TANC Obligation - Combined 25

26 Sources of Funds for Investment Special Reserves $106,365 Competitive Pricing Reserve (To Working Capital 06/30/2012) Solar PV Rebate Reserve $196,858 $403,327 Operating Contingency Reserve (To Working Capital 06/30/2012) Major Contingencies Reserve (To Working Capital 06/30/2012) Insurance Reserve $650,000 $1,000,612 $1,200,000 Underground District Reserve $3,525,299 Operating Funds Balancing Account $12,043,735 $12,396,276 26

27 Administration Finance & Accounting Utility Billing & Information Systems Meter Reading Support Services (Robert Orbeta) 27

28 Administration Division Organization AGM Administration Finance & Accounting Utility Billing & Information Systems Meter Reading Support Services 28

29 29

30 Finance & Accounting Work Plan Highlights Provide financial analysis for contribution to 10-year pro forma and 5-year rate plan. Assist Auditor during interim and final audit. Implement accounting actions as recommended by Financial Advisor. Develop and Issue an RFP for Banking Services (Under consideration) Continue business-wide work processes reviews 40 hours / person. Policy and procedure reviews. 30

31 Utility Information Systems Work Plan Highlights Develop and issue an RFP for Advanced Technology. Continue computer workstation and software upgrades. Perform server virtualization. Develop disaster recovery plan and implementation. Internet service redundancy and load balancing. Customer Information System business process review. Solar / Net Metering modifications to Customer Information System. Network security assessment. 40 hours /person. Policy and procedure reviews. 31

32 Meter Reading Work Plan Highlights Review meter reading and service order technologies. Perform succession planning. Route review, analysis, and modifications. 40 hours /person. Policy and procedure reviews. 32

33 Support Services Work Plan Highlights Improve the interior of the Service Center Service Center lobby renovations. Replace the furniture in conference room A/B. Replace the roof on the warehouse overhang. Replace one fork truck. 40 hours / person. Policy and procedure reviews. 33

34 Energy Resource Planning (Janet Oppio) 34

35 Energy Resources Organization AGM Energy Resource Planning Resource Management Load Forecasting Rate Design & Analysis 35

36 ERP Focus Power and resource planning and procurement Contract administration including billing verification Rate design and analysis Annual Load Forecast Manage NCPA costs Monitor industry legislative and regulatory changes 36

37 37

38 Energy Resource Planning Division: FY 2013 Goals Strengthen the Foundation by: Utilizing 10 year financial pro forma model to evaluate alterative cost and revenue scenarios. Continuing implementation of 5-year rate adjustment plan. Develop a new rate adjustment plan recommendation going forward. Incorporating the results of the detailed cost of service analysis (COSA) into the design of AMP s rates going forward Developing and implementing an Electric Vehicle policy and rate. Evaluating commercial Time of Use (TOU) metering and rate design. Executing sales of Renewable Power in compliance with AMP s renewable portfolio standard (RPS) 38

39 Energy Resource Planning Division: FY 2013 Goals Strengthen the Foundation by: Initiating a study to identify and evaluate ways to reduce GHG emissions in support of the city of Alameda s Local Action Plan for Climate Protection. Evaluating Community Solar for Alameda Developing AMP s GHG Cap and Trade compliance strategy Continuing to enhance AMP s risk management procedures and practices. Developing ERPs workforce through 40 hours of training/conference opportunity Digitizing ERP s files and background materials to enhance the effectiveness of ERP s library resources. Enhancing division efficiency and effectiveness through better tools and work practices. 39

40 Revenue Requirement ($000) Purchased Power makes up over half the expected increase in costs (which are projected to increase by $6.9 million by FY 2022). $80,000 Revenue Requirement ($000) $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 Undergrounding & Other Capital & Equipment Material and Services Labor Contribution to City Debt Service Transmission Power Costs $10,000 $

41 $/MWh Transmission costs are projected to increase from 21% of power costs in FY 2013 ($6.2 million) to 22% by FY 2017 ($7.3 million), continuing to rise through FY % Transmission Costs as Percent of Power Costs 25 Projected Transmission Costs per MWh 22% 20 21% % 5 19%

42 Transmission FY 2013 power cost budget is $30.3 M compared to FY 2012 budget of $29.4 M 7,327 Geo Landfill Gas 5,971 5,726 Calaveras 5,031 Morgan Stanley 2,326 Wind 1,672 CT2 1,497 NCPA Services 1,154 FY13 Western CT FY12 Graegle 180 Market Transactions -1,372 Prior Year True-up Rebate ,000-1, ,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 42

43 ERP Power Budget Increases Butte LFGE project coming online in July Increase in transmission costs due to higher GMC, TAC and lower value of COTP Calaveras: Evaluating Beaver Creek Project CT1 and CT2 maintenance projects 43

44 ERP Power Budget Reductions Projects at Geo 1, Geo 2 and Steam Field pulled from NCPA budget for possible NCPA financing. NCPA service costs lower due to cost sharing with LEC. Net Renewable Power sales revenues estimated at $4.9 M 44

45 NCPA Forecast of PG&E Rates

46 NCPA Forecast of PG&E Rates

47 Third Year of Five Year Rate Adjustment Plan Recommended Rate Increase of 3.25% Rate Schedule Current Average AMP Rate ($/kwh) Proposed Average AMP Rate ($/kwh) Change in Average Rate (%) Current PG&E Rate ($/kwh) AMP Proposed Compared to PG&E (% Difference) Residential D % % D % % Commercial A % % A % % A % % CT % % OL % % Municipal MU % % MU % % MU % % System Average % % AMP rates will remain 17% below PG&E on average. 47

48 Customer Count by Rate Class As of (Feb, 2012) Rate Schedule Avg. # Customers D1 30,108 30,030 D A-1 3,401 3,333 A A OL CT 2 2 MU MU MU Total Customers 34,281 34,150 48

49 Cents/kWh Historical AMP A1 vs. PG&E A1 Small Commercial Rates AMP Small Commercial PG&E Small Commercial 2013 AMP average commercial rates are projected to be more than 15% lower than PG&E. 49

50 Cents/kWh Historical AMP vs. PG&E Residential Rates AMP Residential PG&E Residential 2013 AMP average residential rates are projected to be about 24% lower than PG&E. 50

51 Engineering & Operations Line Operations Electrical Maintenance Engineering Dispatch Compliance & Safety (Douglas Draeger) 51

52 Engineering & Operations Division Organization AGM Engineering & Operations Line Operations Electrical Maintenance/ Substations Engineering Dispatch Compliance & Safety 52

53 53

54 November 2011 Prioritization # Initiative Update RPS Policy - current policy is 40% renewables including large hydro G G G 2 Replace Morgan Stanley contract - expires in 2014 and is 15% of existing supply 3 Implement Rate Increase - PUB conceptual approval of <5%/year for 2011, 12, 13 and 14 4 Update cost of service and study new rates - RFP for Rate Structures for future and cost of service update 5 Get Audit Ready - NERC/WECC 2012 Audit; Compliance Plan by CY11 6 Enhance outage restoration effectiveness - Enhance technology options and procedures; Continue focus on 5-year O&M 7 Modernize delivery system - IT Strategic Plan; Roadmap for Advanced Technology; Electric Vehicles Get Ready Plan and Implement 8 Business Case for Smart Grid - What makes sense for Alameda? 9 Prepare for new block load - LBNL possibility; Other large customer load 10 PUB-City-Community Initiatives - Support PUB communication with Council; Cost-saving opportunities and demonstration projects with City; Support AUSD EE efforts 11 Organization Development - Learning for Board and Employees; Employee Recognition; Workforce skills and succession plan 12 Enhance service delivery infrastructure - improve warehouse storage; lower building carbon footprint 13 Change Management - communication and preparation 14 Update all reports (internal and external) - Improve effectiveness and insight; Update policies and procedures 15 EE Strategic Work Plan - Implement work plan; Increase resources; Develop strategic plan G O R G G G G o r G O O G O O G O O G O r O O O G G G O R R O O O G O R O O O G O O 54

55 1. Technology 2. Workforce Initiatives: 6, 7, 8, 9 4. Customer Experience 3. Regulation Substation Protective Relay Replacement SCADA Fiber Trunk configuration 12kV Breaker replacement Change management Upgrade Subs 12 & 14 Distribution/Engineering Geospatial Identification System Automated Switches LED Street lights Extension of fiber Reliability Asset Management System Coast Guard Crossing Enhance outage restoration effectiveness 55

56 Comparison of 11 & 12 Labor Hours by MWC 2011 Actual 2012 Planned 56

57 E&O Division: Work Priority Highlights Internal Safety and Compliance Program In-house development and delivery of effective training programs Design, Operating and Work Procedures developed or revised Injury & Illness Prevention Program manual revision Continue building Robust Compliance program Reliable Distribution 5-year cycle of Distribution detailed and visual inspection Condition & inspection based Asset Maintenance Program Annual cycle of Transmission Inspection & Maintenance System Enhancement Increase Distribution Automation Harnessing underground Fault Indicators with fiber New Business Responsive service to residents and developers 57

58 Capital Infrastructure Program 20 Year Plan 5 Year Summary FY

59 20 Year Plan Transmission Expansion Dispatch Center Substation Replacement Electric Vehicles System Capacity Transmission Enhancement Smart Grid/ AMI 59

60 5 Year Capital Infrastructure Plan Expand Fiber to Automate Substation & Distribution Reliability tie to Coast Guard Station Dispatch Center Upgrades Substation Breaker Replacement Electric Vehicles Historic Streetlight Replacement & Maintenance Program LED Streetlight Program 60

61 5 Year Plan Highlights Total Programs Utility Systems $2,489,500 $4,310,000 $4,025,000 $3,695,000 $4,073,800 $18,593,300 Programs - Blanket Work Orders $ 283,400 $ 315,000 $ 355,000 $ 415,000 $ 496,600 $ 1,865,000 Programs - Information Systems $ 130,000 $ 140,000 $ 201,000 $ 75,000 $ 000 $ 546,000 Programs - Support Services $ 428,000 $ 000 $ 80,000 $ 70,000 $ 000 $ 578,000 TOTAL - 5-YEAR CIP $3,330,900 $4,765,000 $4,661,000 $4,255,000 $4,570,400 $21,582,300 61

62 FY 2013 CIP Highlights Utility System programs will continue with a budget ~ $ 3.0 million. Blanket work orders will continue to meet system reliability goals and address new customer needs with a budget ~ $ 283,000. Electronic hardware and software enhancements will continue with a budget ~ $130,000. The lobby and main conference room improvements have a budget ~ $75,000. AMP will continue to support developers through outside billing activities as needed. 62

63 QUESTIONS? 63

64 CUSTOMER RESOURCES Customer Service Customer Resource Communication Energy Efficiency (Sherri Hong) 64

65 Customer Resource Division Organization AGM Customer Resources Customer Services Customer Resources Communication Energy Efficiency 65

66 Customer Resource Division Objectives The Customer Resource Division strives to fulfill the needs and expectations of our customers by providing responsive, quality service. We are the customers advocate and will provide a positive experience for our customers bringing programs and services which are convenient, easy, and saves customers time and money through the integration of technology. We are part of and outreach to the community providing information, resources, and educational materials. A high satisfaction level is our goal and strive to achieve service excellence. 66

67 67

68 Customer Service Work Plan Highlights Implement advanced online self-service applications Research and identify advanced technology requirements Implement Voluntary Renewable Program Conduct customer satisfaction survey Continue organizational service excellence Succession planning and training 68

69 Customer Resources Work Plan Highlights Promote education in new technology Enhance key accounts and commercial outreach Provide UUD outreach/communication Provide Operations communication support Improve solar rebate application processes Enhance website applications and security Develop and conduct educational workshops, community events 69

70 Communication/Public Relations Work Plan Highlights Implement Phase 2 outage communication Conduct 125 th Birthday recognition Pilot a residential customer engagement platform Enhance external and internal communications Support PUB/Council communication Conduct quarterly employee events 70

71 Energy Efficiency Work Plan Highlights Implement Energy Efficiency Work Plan Initiatives Develop the Energy Orbit tracking and reporting system for energy efficiency programs Implement an online rebate process Develop new AB2021 target & achieve savings Pilot Tier 3 Program for Energy Efficiency Research/implement new technology & programs. Implement City Commissioning project Continue to partner with various key customers/stakeholders in EE efforts (i.e. AUSD, MARAD, City, other agencies) 71

72 PROFESSIONAL DEVELOPMENT & TRAINING GENERAL» Industry» Networking Opportunities» Technology» Service Excellence PROFESSIONAL» Personal development» Project Management 72

73 Workshop Recap (Girish Balachandran) 73

74 November 2011 Prioritization Board made changes to Initiative 4 (changed 2013 and 2014 from Green) and Initiative 8 (changed 2014 from Orange) # Initiative Update RPS Policy - current policy is 40% renewables including large hydro G G G 2 Replace Morgan Stanley contract - expires in 2014 and is 15% of existing supply 3 Implement Rate Increase - PUB conceptual approval of <5%/year for 2011, 12, 13 and 14 4 Update cost of service and study new rates - RFP for Rate Structures for future and cost of service update 5 Get Audit Ready - NERC/WECC 2012 Audit; Compliance Plan by CY11 6 Enhance outage restoration effectiveness - Enhance technology options and procedures; Continue focus on 5-year O&M 7 Modernize delivery system - IT Strategic Plan; Roadmap for Advanced Technology; Electric Vehicles Get Ready Plan and Implement 8 Business Case for Smart Grid - What makes sense for Alameda? 9 Prepare for new block load - LBNL possibility; Other large customer load 10 PUB-City-Community Initiatives - Support PUB communication with Council; Cost-saving opportunities and demonstration projects with City; Support AUSD EE efforts 11 Organization Development - Learning for Board and Employees; Employee Recognition; Workforce skills and succession plan 12 Enhance service delivery infrastructure - improve warehouse storage; lower building carbon footprint 13 Change Management - communication and preparation 14 Update all reports (internal and external) - Improve effectiveness and insight; Update policies and procedures 15 EE Strategic Work Plan - Implement work plan; Increase resources; Develop strategic plan G O R G G G G o r G O O G O O G O O G O r O O O G G G O R R O O O G O R O O O G O O 74

75 Next Steps after this Workshop Internal Evaluate PUB comments February External Board review of Workshop comments February 27 Communicate Board priorities to staff February to June Refine Work Plan and develop budget February to June Board Finance & Budget Workshop April 16 Communicate with Council Council update April/May Budget Adoption June 25 Change Management & Implementation February onwards Review progress Fall 2012 & Council Update November

76 General Discussion Adopted Financial Policies have been incorporated. This is the 3 rd year of the 5-year rate plan. Rates are lower than PG&E rates. Approved load forecast has been incorporated. Purchased power is AMP s largest expense. Business issues that will be considered in FY 2013: Renewable Energy Sales and Reserve Cost of Service and Rate Planning Advanced Technologies and Business Processes 76

77 Budget Schedule Annual Planning Workshop (Completed January 30, 2012) 10-year Pro Forma and update on rate projections planned for regular meeting of the Public Utilities Board (Completed March 19, 2011) Staff will present rate recommendations & the Board will consider at the regular meeting of the Public Utilities Board on April 16 Board provides final comments on draft budget by May 4 Staff will present the budget & the Board will consider adoption at the regular meeting of the Public Utilities Board on June 25 Staff will implement the approved rate schedules and FY 2013 budget beginning July 1 77