Power Accountants Association Annual Meeting Potential Impacts from Oct 2015 Rate Change Material Provided by: Chris Mitchell Chris Mitchell Management Consultants (CMMC) mail@chrismitchellmc.com 5/14/2015 1
Definitions of Major Terms Used in Discussion Demand (Max KW) the maximum usage in an individual hour during the month Energy (kwh) the volume of hourly KW used during the month Load Factor kwh in the month / (# of days in a month * Max KW * 24 hours) Customer Class group of customers who are given the same Rate (Sale Price of Product) Fixed Cost a cost that does not vary with sales volume Variable Cost a cost that varies with sales volume Coincident Peak Percent Customer s KW at LPC s Max Demand Hour / Customer s Max KW 2
Wholesale Structure Defined and Discussed Outline of Discussion Discussion of Wholesale Structure Types Standard Service Rate Components Potential Wholesale FCA Structure Change Potential Wholesale Standard Service Structure Change Other Retail Rate Structure Topics 3
Wholesale Structure Types Wholesale Structure evolved from End-Use-Rates to Demand & Energy and Time-of-Use Rates in April 2011 Starting April 2011 there were three types of Wholesale Structures: Served by Local Power Companies Standard Service Residential, GSA1,2,3 and Outdoor Lighting Excluded From Standard Service (still End-Use-Rates) Example: BCD Served by TVA Direct Serve Industries 4
Wholesale Structure Standard Service Rate Components Demand KW Rate (Base + Environmental (0.50) + Adjustments) multiplied by highest hour KW in Month Energy kwh Rate (Base + Environmental (0.00186) + Adjustments) multiplied by the volume of hourly KW in the month Fuel Cost Adjustment kwh Rate applied to Energy 5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Cents per kwh Oct 2015 Wholesale FCA Discussion Starting October 2015 there will be separate FCAs for Standard Service and Excluded Customers 3 Monthly Wholesale Fuel Cost Adjustment Comparison (This Information is Considered Business Sensitive, Proprietary and Confidential) 2.8 2.6 2.4 2.2 2 1.8 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Actual 2015 Current Forecast Historical Average 6
KW by Hour Oct 2015 Wholesale FCA Discussion Under collection of Fuel Cost in a current month is collected in the future through the deferred account 350,000 January 300,000 250,000 200,000 150,000 100,000 50,000 0 Incremental Hours FY12 (01/12) FY13 (01/13) FY14 (01/14) FY15 (01/15) 7
KW by Hour KW by Hour Oct 2015 Wholesale FCA Discussion Residential usage is less in this example during months where under collection is collected --- note: the opposite can happen January March 350,000 350,000 300,000 300,000 250,000 250,000 200,000 200,000 150,000 150,000 100,000 100,000 50,000 50,000 0 Incremental Hours FY12 (01/12) FY13 (01/13) FY14 (01/14) FY15 (01/15) 0 Incremental Hours FY12 (03/12) FY13 (03/13) FY14 (03/14) FY15 (03/15) 8
Oct 2015 Wholesale FCA Discussion My opinion of the impact from FCA structure change: Increase in Standard Service FCA rate volatility Caused by some high load factor customers (BCDs) no longer being included in the FCA for Standard Service. Increase in Standard Service FCA rate level Caused by some high load factor customers (BCDs) no longer being included in the FCA for Standard Service. 9
Current Wholesale Rate Structure TVA Wholesale Rates (without fuel cost) Monthly Demand (kw) - the maximum usage in an individual hour during the month Monthly Energy (kwh) - the volume of (kw) used during the month Energy $/kwh Demand $/kw Demand & Energy Options Time of Use Options Month All (Nearly Flat) Seasonal Nearly Flat Modified (New) Type Calendar Wholesale Options (Expired 9/2012) On-Peak Hours Defined On-Peak Off-Peak On-Peak Off-Peak Transition October 9.27 0.03362 0.03358 0.03358 0.03358 Transition November 9.27 0.03362 0.03358 0.03358 0.03358 Winter December 9.27 0.03362 0.03481 4:00 A.M. till 10:00 A.M. (Monday through Friday) 0.03881 0.03381 0.04281 0.03281 Winter January 9.27 0.03362 0.03481 4:00 A.M. till 10:00 A.M. (Monday through Friday) 0.03881 0.03381 0.04281 0.03281 Winter February 9.27 0.03362 0.03481 4:00 A.M. till 10:00 A.M. (Monday through Friday) 0.03881 0.03381 0.04281 0.03281 Winter March 9.27 0.03362 0.03481 4:00 A.M. till 10:00 A.M. (Monday through Friday) 0.03881 0.03381 0.04281 0.03281 Transition April 9.27 0.03362 0.03189 0.03358 0.03358 Transition May 9.27 0.03362 0.03189 0.03358 0.03358 Summer June 10.13 0.03362 0.03785 12:00 P.M. till 8:00 P.M. (Monday through Friday) 0.04535 0.03435 0.05285 0.03085 Summer July 10.13 0.03362 0.03785 12:00 P.M. till 8:00 P.M. (Monday through Friday) 0.04535 0.03435 0.05285 0.03085 Summer August 10.13 0.03362 0.03785 12:00 P.M. till 8:00 P.M. (Monday through Friday) 0.04535 0.03435 0.05285 0.03085 Summer September 10.13 0.03362 0.03785 12:00 P.M. till 8:00 P.M. (Monday through Friday) 0.04535 0.03435 0.05285 0.03085 Notes: (1) All hours for the following observed Federal Holidays are off-peak: - New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day (2) All hours are referred to as Central Standard Time or Central Daylight Time, whichever is then in effect (3) Rates include: Demand Environmental rate component of $0.50 and Energy Environmental rate component of $0.00186 10
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY Average Demand (KW) 18,588 18,871 19,873 22,008 22,125 22,386 24,160 22,748 22,113 20,887 19,870 26,102 25,393 26,345 25,459 24,148 29,935 29,075 28,854 27,798 30,982 29,602 28,370 27,913 29,586 27,569 27,450 27,551 27,041 26,913 26,611 24,237 23,134 27,991 28,396 27,125 25,265 26,015 27,893 30,035 28,563 27,348 25,971 25,390 26,259 28,488 33,619 35,843 36,042 Current Wholesale Demand Rate Max kw 40,000 Demand (KW) Standard Service 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Months Fiscal Year 2012 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 11
Oct 2015 Wholesale Demand Rates Day-of-Week & Time-of-Day Does Impact Cost TVA Wholesale Demand Rates Max kw - the maximum usage in an individual hour during the month Max On-Peak kw - the maximum usage in an individual hour during on-peak period Determination of Wholesale Rate Applied Determination of On-Peak kw Month Pre-Oct 2015 Oct 2015 Month Weekday (M-F)(3) Type Calendar Max kw Max kw (2) On-Peak (1,2) Type Calendar Hours Non-Summer October 9.27 2.75 6.63 Summer October 1 pm - 7 pm Non-Summer November 9.27 2.75 6.63 Winter November 4 am - 10 am Non-Summer December 9.27 2.75 6.63 Winter December 4 am - 10 am Non-Summer January 9.27 2.75 6.63 Winter January 4 am - 10 am Non-Summer February 9.27 2.75 6.63 Winter February 4 am - 10 am Non-Summer March 9.27 2.75 6.63 Winter March 4 am - 10 am Non-Summer April 9.27 2.75 6.63 Summer April 1 pm - 7 pm Non-Summer May 9.27 2.75 6.63 Summer May 1 pm - 7 pm Summer June 10.13 2.75 7.49 Summer June 1 pm - 7 pm Summer July 10.13 2.75 7.49 Summer July 1 pm - 7 pm Summer August 10.13 2.75 7.49 Summer August 1 pm - 7 pm Summer September 10.13 2.75 7.49 Summer September 1 pm - 7 pm Notes: times shown in Central time zone (1) Oct 2015 On-Peak kw Rate Includes 0.11 revenue Neutral Charge (2) Oct 2015 Max kw includes Environmental rate component of $0.36 and On-Peak kw includes $0.14 (3) All hours for the following observed Federal Holidays are off-peak: - New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day 12
Oct 2015 Wholesale Demand Rate On-Peak Day-of-Week & Time-of-Day does Impact Cost High Hartselle Coincident LPC Low Coincident Sevier Co. LPC High Coincident Hartselle LPC Low Coincident Sevier Co. LPC Mth & YR Max kw Max On-Peak kw Max kw Max On-Peak kw Mth & YR Max kw Max On-Peak kw Max kw Max On-Peak kw April 2011 Monday, 11, 13:59 Monday, 11, 13:59 Sunday, 10, 16:59 Monday, 25, 16:59 March 2013 Thursday, 07, 6:59 Thursday, 07, 6:59 Monday, 04, 6:59 Monday, 04, 6:59 May 2011 Tuesday, 31, 15:59 Tuesday, 31, 15:59 Sunday, 29, 16:59 Tuesday, 31, 16:59 April 2013 Wednesday, 17, 13:59 Wednesday, 17, 13:59 Thursday, 04, 19:59 Thursday, 04, 18:59 June 2011 Thursday, 02, 15:59 Thursday, 02, 15:59 Tuesday, 07, 16:59 Tuesday, 07, 16:59 May 2013 Tuesday, 21, 15:59 Tuesday, 21, 15:59 Friday, 31, 15:59 Friday, 31, 15:59 July 2011 Tuesday, 12, 15:59 Tuesday, 12, 15:59 Saturday, 23, 16:59 Wednesday, 20, 16:59 June 2013 Wednesday, 12, 14:59 Wednesday, 12, 14:59 Wednesday, 12, 16:59 Wednesday, 12, 16:59 August 2011 Wednesday, 03, 15:59 Wednesday, 03, 15:59 Friday, 05, 16:59 Friday, 05, 16:59 July 2013 Wednesday, 17, 14:59 Wednesday, 17, 14:59 Friday, 19, 16:59 Friday, 19, 16:59 September 2011 Thursday, 01, 15:59 Thursday, 01, 15:59 Saturday, 03, 15:59 Friday, 02, 16:59 August 2013 Friday, 30, 15:59 Friday, 30, 15:59 Saturday, 31, 16:59 Friday, 09, 15:59 October 2011 Monday, 17, 16:59 Monday, 17, 16:59 Sunday, 30, 7:59 Thursday, 20, 18:59 September 2013 Tuesday, 10, 14:59 Tuesday, 10, 14:59 Sunday, 01, 15:59 Wednesday, 11, 15:59 November 2011 Friday, 18, 6:59 Friday, 18, 6:59 Friday, 18, 6:59 Friday, 18, 6:59 October 2013 Friday, 04, 16:59 Friday, 04, 16:59 Saturday, 26, 7:59 Friday, 25, 18:59 December 2011 Thursday, 01, 6:59 Thursday, 01, 6:59 Thursday, 29, 7:59 Thursday, 29, 7:59 November 2013 Thursday, 28, 7:59 Thursday, 14, 6:59 Thursday, 28, 7:59 Friday, 29, 6:59 January 2012 Wednesday, 04, 6:59 Wednesday, 04, 6:59 Wednesday, 04, 6:59 Wednesday, 04, 6:59 December 2013 Wednesday, 11, 6:59 Wednesday, 11, 6:59 Wednesday, 25, 6:59 Friday, 13, 6:59 February 2012 Monday, 13, 6:59 Monday, 13, 6:59 Sunday, 12, 6:59 Monday, 13, 6:59 January 2014 Tuesday, 07, 6:59 Tuesday, 07, 6:59 Tuesday, 07, 6:59 Tuesday, 07, 6:59 March 2012 Tuesday, 06, 6:59 Tuesday, 06, 6:59 Tuesday, 06, 6:59 Tuesday, 06, 6:59 February 2014 Friday, 07, 7:59 Friday, 07, 7:59 Friday, 28, 6:59 Friday, 28, 6:59 April 2012 Monday, 30, 16:59 Monday, 30, 16:59 Saturday, 28, 16:59 Monday, 30, 15:59 March 2014 Monday, 03, 18:59 Tuesday, 04, 6:59 Wednesday, 26, 6:59 Wednesday, 26, 6:59 May 2012 Tuesday, 29, 16:59 Tuesday, 29, 16:59 Sunday, 27, 16:59 Friday, 25, 16:59 April 2014 Wednesday, 16, 6:59 Tuesday, 29, 13:59 Wednesday, 16, 6:59 Tuesday, 15, 18:59 June 2012 Friday, 29, 16:59 Friday, 29, 16:59 Saturday, 30, 16:59 Friday, 29, 16:59 May 2014 Friday, 23, 14:59 Friday, 23, 14:59 Saturday, 31, 16:59 Wednesday, 28, 15:59 July 2012 Thursday, 05, 16:59 Thursday, 05, 16:59 Sunday, 01, 16:59 Thursday, 05, 15:59 June 2014 Wednesday, 18, 16:59 Wednesday, 18, 16:59 Friday, 20, 15:59 Friday, 20, 15:59 August 2012 Wednesday, 01, 15:59 Wednesday, 01, 15:59 Thursday, 02, 16:59 Thursday, 02, 16:59 July 2014 Monday, 14, 14:59 Monday, 14, 14:59 Wednesday, 02, 15:59 Wednesday, 02, 15:59 September 2012 Friday, 07, 16:59 Friday, 07, 16:59 Saturday, 01, 15:59 Friday, 07, 15:59 August 2014 Friday, 22, 15:59 Friday, 22, 15:59 Friday, 29, 16:59 Friday, 29, 16:59 October 2012 Wednesday, 31, 7:59 Thursday, 04, 16:59 Tuesday, 30, 18:59 Tuesday, 30, 18:59 September 2014 Thursday, 11, 14:59 Thursday, 11, 14:59 Monday, 01, 15:59 Tuesday, 02, 15:59 November 2012 Thursday, 29, 6:59 Thursday, 29, 6:59 Sunday, 25, 6:59 Thursday, 29, 6:59 October 2014 Thursday, 02, 13:59 Thursday, 02, 13:59 Monday, 13, 15:59 Monday, 13, 15:59 December 2012 Thursday, 13, 6:59 Thursday, 13, 6:59 Saturday, 29, 18:59 Monday, 31, 7:59 November 2014 Wednesday, 19, 6:59 Wednesday, 19, 6:59 Wednesday, 19, 6:59 Wednesday, 19, 6:59 January 2013 Friday, 04, 6:59 Friday, 04, 6:59 Saturday, 05, 7:59 Friday, 04, 7:59 December 2014 Thursday, 11, 6:59 Thursday, 11, 6:59 Friday, 12, 6:59 Friday, 12, 6:59 February 2013 Friday, 01, 7:59 Friday, 01, 7:59 Sunday, 17, 7:59 Monday, 18, 6:59 January 2015 Thursday, 08, 6:59 Thursday, 08, 6:59 Thursday, 08, 6:59 Thursday, 08, 6:59 Note: On-Peak kw dates highlighted identifies when the Max kw was outside the On-Peak Period 13
Oct 2015 Wholesale Demand Rate Financial Impact Estimate of Financial Impact High Hartselle Coincident Utilities LPC Analysis of Wholesale Invoice *** Case 6 using Oct 2014 TVA Approved Wholesale Rates *** Standard Service Method Used to Determine 12 Month Financial Impact: 12 Month Rolling Time Stamp is shown in Central Time Zone *** Highlighted "Yellow" dates identify On-Peak KW is different than Max KW *** Currently Defined Demand (KW) Defined as Max hour in the Month Proposed October 2015 Defined Demand (KW) New Summer Defined (13:59-18:59) and New Winter Defined (4:59-9:59) Monthly KW Peak Wholesale Wholesale On-Peak Max-Peak Total Difference from Current Peak Date KW KW Rate Cost Peak Date KW KW Rate Cost KW Rate Cost Cost Dollar Percent Rolling 12 Mo FY 2011 April 2011 Monday, 11, 13:59 19,300 9.27 178,911 Monday, 11, 13:59 19,300 6.63 127,959 2.75 53,075 181,034 2,123 1.19% FY 2011 May 2011 Tuesday, 31, 15:59 26,841 9.27 248,816 Tuesday, 31, 15:59 26,841 6.63 177,956 2.75 73,813 251,769 2,953 1.19% FY 2011 June 2011 Thursday, 02, 15:59 28,223 10.13 285,899 Thursday, 02, 15:59 28,223 7.49 211,390 2.75 77,613 289,004 3,105 1.09% FY 2012 July 2011 Tuesday, 12, 15:59 29,935 10.13 303,242 Tuesday, 12, 15:59 29,935 7.49 224,213 2.75 82,321 306,534 3,293 1.09% FY 2012 August 2011 Wednesday, 03, 15:59 30,982 10.13 313,848 Wednesday, 03, 15:59 30,982 7.49 232,055 2.75 85,201 317,256 3,408 1.09% FY 2012 September 2011 Thursday, 01, 15:59 29,586 10.13 299,706 Thursday, 01, 15:59 29,586 7.49 221,599 2.75 81,362 302,961 3,254 1.09% FY 2012 October 2011 Monday, 17, 16:59 18,588 9.27 172,311 Monday, 17, 16:59 18,588 6.63 123,238 2.75 51,117 174,355 2,045 1.19% FY 2012 November 2011 Friday, 18, 6:59 22,386 9.27 207,518 Friday, 18, 6:59 22,386 6.63 148,419 2.75 61,562 209,981 2,462 1.19% FY 2012 December 2011 Thursday, 01, 6:59 26,102 9.27 241,966 Thursday, 01, 6:59 26,102 6.63 173,056 2.75 71,781 244,837 2,871 1.19% FY 2012 January 2012 Wednesday, 04, 6:59 27,041 9.27 250,670 Wednesday, 04, 6:59 27,041 6.63 179,282 2.75 74,363 253,645 2,975 1.19% FY 2012 February 2012 Monday, 13, 6:59 28,396 9.27 263,231 Monday, 13, 6:59 28,396 6.63 188,265 2.75 78,089 266,354 3,124 1.19% FY 2012 March 2012 Tuesday, 06, 6:59 19,873 9.27 184,223 Tuesday, 06, 6:59 19,873 6.63 131,758 2.75 54,651 186,409 2,186 1.19% 33,798 FY 2012 April 2012 Monday, 30, 16:59 22,113 9.27 204,988 Monday, 30, 16:59 22,113 6.63 146,609 2.75 60,811 207,420 2,432 1.19% 34,107 FY 2012 May 2012 Tuesday, 29, 16:59 26,611 9.27 246,684 Tuesday, 29, 16:59 26,611 6.63 176,431 2.75 73,180 249,611 2,927 1.19% 34,082 FY 2012 June 2012 Friday, 29, 16:59 30,035 10.13 304,255 Friday, 29, 16:59 30,035 7.49 224,962 2.75 82,596 307,558 3,304 1.09% 34,281 FY 2013 July 2012 Thursday, 05, 16:59 29,075 10.13 294,530 Thursday, 05, 16:59 29,075 7.49 217,772 2.75 79,956 297,728 3,198 1.09% 34,187 FY 2013 August 2012 Wednesday, 01, 15:59 29,602 10.13 299,868 Wednesday, 01, 15:59 29,602 7.49 221,719 2.75 81,406 303,124 3,256 1.09% 34,035 FY 2013 September 2012 Friday, 07, 16:59 27,569 10.13 279,274 Friday, 07, 16:59 27,569 7.49 206,492 2.75 75,815 282,307 3,033 1.09% 33,813 FY 2013 October 2012 Wednesday, 31, 7:59 18,871 9.27 174,934 Thursday, 04, 16:59 18,660 6.63 123,716 2.75 51,895 175,611 677 0.39% 32,445 FY 2013 November 2012 Thursday, 29, 6:59 24,160 9.27 223,963 Thursday, 29, 6:59 24,160 6.63 160,181 2.75 66,440 226,621 2,658 1.19% 32,640 FY 2013 December 2012 Thursday, 13, 6:59 25,393 9.27 235,393 Thursday, 13, 6:59 25,393 6.63 168,356 2.75 69,831 238,186 2,793 1.19% 32,562 FY 2013 January 2013 Friday, 04, 6:59 26,913 9.27 249,484 Friday, 04, 6:59 26,913 6.63 178,433 2.75 74,011 252,444 2,960 1.19% 32,548 FY 2013 February 2013 Friday, 01, 7:59 24,148 9.27 223,852 Friday, 01, 7:59 24,148 6.63 160,101 2.75 66,407 226,508 2,656 1.19% 32,081 FY 2013 March 2013 Thursday, 07, 6:59 25,265 9.27 234,207 Thursday, 07, 6:59 25,265 6.63 167,507 2.75 69,479 236,986 2,779 1.19% 32,674 FY 2013 April 2013 Wednesday, 17, 13:59 20,887 9.27 193,622 Wednesday, 17, 13:59 20,887 6.63 138,481 2.75 57,439 195,920 2,298 1.19% 32,539 FY 2013 May 2013 Tuesday, 21, 15:59 24,237 9.27 224,677 Tuesday, 21, 15:59 24,237 6.63 160,691 2.75 66,652 227,343 2,666 1.19% 32,278 FY 2013 June 2013 Wednesday, 12, 14:59 28,563 10.13 289,343 Wednesday, 12, 14:59 28,563 7.49 213,937 2.75 78,548 292,485 3,142 1.09% 32,116 FY 2014 July 2013 Wednesday, 17, 14:59 28,854 10.13 292,291 Wednesday, 17, 14:59 28,854 7.49 216,116 2.75 79,349 295,465 3,174 1.09% 32,092 FY 2014 August 2013 Friday, 30, 15:59 28,370 10.13 287,388 Friday, 30, 15:59 28,370 7.49 212,491 2.75 78,018 290,509 3,121 1.09% 31,956 FY 2014 September 2013 Tuesday, 10, 14:59 27,450 10.13 278,069 Tuesday, 10, 14:59 27,450 7.49 205,601 2.75 75,488 281,088 3,020 1.09% 31,943 FY 2014 October 2013 Friday, 04, 16:59 22,008 9.27 204,014 Friday, 04, 16:59 22,008 6.63 145,913 2.75 60,522 206,435 2,421 1.19% 33,687 FY 2014 November 2013 Thursday, 28, 7:59 22,748 9.27 210,874 Thursday, 14, 6:59 21,895 6.63 145,164 2.75 62,557 207,721 (3,153) -1.50% 27,877 FY 2014 December 2013 Wednesday, 11, 6:59 26,345 9.27 244,218 Wednesday, 11, 6:59 26,345 6.63 174,667 2.75 72,449 247,116 2,898 1.19% 27,981 FY 2014 January 2014 Tuesday, 07, 6:59 35,843 9.27 332,265 Tuesday, 07, 6:59 35,843 6.63 237,639 2.75 98,568 336,207 3,943 1.19% 28,964 FY 2014 February 2014 Friday, 07, 7:59 27,125 9.27 251,449 Friday, 07, 7:59 27,125 6.63 179,839 2.75 74,594 254,433 2,984 1.19% 29,291 FY 2014 March 2014 Monday, 03, 18:59 26,015 9.27 241,159 Tuesday, 04, 6:59 25,991 6.63 172,320 2.75 71,541 243,862 2,703 1.12% 29,214 FY 2014 April 2014 Wednesday, 16, 6:59 19,870 9.27 184,195 Tuesday, 29, 13:59 17,875 6.63 118,511 2.75 54,643 173,154 (11,041) -5.99% 15,876 FY 2014 May 2014 Friday, 23, 14:59 23,134 9.27 214,452 Friday, 23, 14:59 23,134 6.63 153,378 2.75 63,619 216,997 2,545 1.19% 15,754 FY 2014 June 2014 Wednesday, 18, 16:59 27,348 10.13 277,035 Wednesday, 18, 16:59 27,348 7.49 204,837 2.75 75,207 280,044 3,008 1.09% 15,621 FY 2015 July 2014 Monday, 14, 14:59 27,798 10.13 281,594 Monday, 14, 14:59 27,798 7.49 208,207 2.75 76,445 284,652 3,058 1.09% 15,505 FY 2015 August 2014 Friday, 22, 15:59 27,913 10.13 282,759 Friday, 22, 15:59 27,913 7.49 209,068 2.75 76,761 285,829 3,070 1.09% 15,454 FY 2015 September 2014 Thursday, 11, 14:59 27,551 10.13 279,092 Thursday, 11, 14:59 27,551 7.49 206,357 2.75 75,765 282,122 3,031 1.09% 15,465 FY 2015 October 2014 Thursday, 02, 13:59 22,125 9.27 205,099 Thursday, 02, 13:59 22,125 6.63 146,689 2.75 60,844 207,533 2,434 1.19% 15,478 FY 2015 November 2014 Wednesday, 19, 6:59 27,991 9.27 259,477 Wednesday, 19, 6:59 27,991 6.63 185,580 2.75 76,975 262,556 3,079 1.19% 21,710 FY 2015 December 2014 Thursday, 11, 6:59 25,459 9.27 236,005 Thursday, 11, 6:59 25,459 6.63 168,793 2.75 70,012 238,805 2,800 1.19% 21,613 FY 2015 January 2015 Thursday, 08, 6:59 36,042 9.27 334,109 Thursday, 08, 6:59 36,042 6.63 238,958 2.75 99,116 338,074 3,965 1.19% 21,635 Total $ 11,524,955 $ 8,334,709 $ 3,301,881 $ 11,636,590 $ 111,635 0.97% 14
Oct 2015 Wholesale Demand Rate Financial Impact Date: September 2012 Max Peak Date: Friday 7, 16:59 ; Max Peak KW: 27,569 Cost Formula: Max KW * Max KW Rate Cost Calculation: 27,569 * 10.13 = $279,274 Max On-Peak Date: Friday 7, 16:59; Max Peak KW: 27,569; Max On-Peak KW: 27,569 Cost Formula: (Max KW * Max KW Rate) + (Max On-Peak KW * On-Peak Rate) Cost Calculation: (27,569 * 2.75 = $75,815) + (27,569 * 7.49 = $206,492) = $282,307 Financial Impact: $3,033 Date: November 2013 Max Peak Date: Thursday 28, 7:59 ; Max Peak KW: 22,748 Cost Formula: Max KW * Max KW Rate Cost Calculation: 22,748 * 9.27 = $210,874 Max On-Peak Date: Thursday 14, 6:59; Max Peak KW: 22,748; Max On-Peak KW: 21,895 Cost Formula: (Max KW * Max KW Rate) + (Max On-Peak KW * On-Peak Rate) Cost Calculation: (22,748 * 2.75 = $62,557) + (21,895 * 7.49 = $145,164) = $207,721 Financial Impact: ($3,153) 15
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY Average FY Average Weighted Coincident Peak to TVA Percentage 98.4% 99.8% 98.5% 98.7% 99.9% 99.4% 97.3% 99.7% 94.3% 99.5% 90.8% 97.9% 98.1% 97.5% 93.7% 97.5% 98.3% 95.6% 94.0% 99.4% 92.5% 98.9% 99.4% 96.5% 99.8% 99.3% 96.7% 99.7% 96.1% 99.2% 99.3% 97.0% 98.1% 99.1% 99.3% 96.9% 98.1% Current Wholesale Demand Rate Coincident Peak Example of a highly coincident LPC Coincident Peak to TVA Percentage Standard Service 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Months Fiscal Year 2012 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 16
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY Average FY Average Weighted Coincident Peak to TVA Percentage 63.8% 70.6% 79.1% 78.0% 98.6% 93.4% 96.5% 98.7% 98.2% 94.9% 87.1% 98.5% 83.5% 94.1% 94.2% 90.4% 98.6% 88.5% 88.8% 88.5% 90.6% 96.4% 96.3% 96.3% 86.3% 92.0% 89.6% 89.9% 86.2% 85.7% 96.4% 96.9% 99.1% 98.8% 94.1% 98.1% 93.3% 98.3% 94.2% 89.4% 90.9% 97.5% 94.4% 89.6% 91.2% 97.3% Current Wholesale Demand Rate Coincident Peak Example of a low coincident LPC Coincident Peak to TVA Percentage Standard Service 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Months Fiscal Year 2012 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 17
Oct 2015 Wholesale Demand Rates Summer On-Peak Period Reduced Two Hours (from 8 to now 6) TVA Wholesale Energy Rates (without fuel cost) Monthly Energy (kwh) - the volume of (kw) used during the month Month Seasonal On-Peak Hours Defined Modified TOU Type Calendar D&E Pre-Oct 2015 Oct 2015 On-Peak Off-Peak Transition October 0.03429 0.03429 0.03429 Transition November 0.03429 0.03429 0.03429 Winter December 0.03552 4:00 A.M. till 10:00 A.M. (Monday through Friday) 4:00 A.M. till 10:00 A.M. (Monday through Friday) 0.04352 0.03352 Winter January 0.03552 4:00 A.M. till 10:00 A.M. (Monday through Friday) 4:00 A.M. till 10:00 A.M. (Monday through Friday) 0.04352 0.03352 Winter February 0.03552 4:00 A.M. till 10:00 A.M. (Monday through Friday) 4:00 A.M. till 10:00 A.M. (Monday through Friday) 0.04352 0.03352 Winter March 0.03552 4:00 A.M. till 10:00 A.M. (Monday through Friday) 4:00 A.M. till 10:00 A.M. (Monday through Friday) 0.04352 0.03352 Transition April 0.03429 0.03429 0.03429 Transition May 0.03429 0.03429 0.03429 Summer June 0.03856 12:00 P.M. till 8:00 P.M. (Monday through Friday) 1:00 P.M. till 7:00 P.M. (Monday through Friday) 0.05356 0.03156 Summer July 0.03856 12:00 P.M. till 8:00 P.M. (Monday through Friday) 1:00 P.M. till 7:00 P.M. (Monday through Friday) 0.05356 0.03156 Summer August 0.03856 12:00 P.M. till 8:00 P.M. (Monday through Friday) 1:00 P.M. till 7:00 P.M. (Monday through Friday) 0.05356 0.03156 Summer September 0.03856 12:00 P.M. till 8:00 P.M. (Monday through Friday) 1:00 P.M. till 7:00 P.M. (Monday through Friday) 0.05356 0.03156 Notes: (1) All hours for the following observed Federal Holidays are off-peak: - New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day (2) All hours are referred to as Central Standard Time or Central Daylight Time, whichever is then in effect (3) Rates include: Energy Environmental rate component of $0.00186 5/15/2015 Provided by Chris Mitchell (CMMC) Contains Business Sensitive Information 18
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY Average Summer FY Average Winter Percent On-Peak 18.6% 17.8% 19.3% 19.5% 19.7% 21.0% 20.2% 20.2% 20.4% 18.7% 21.1% 21.4% 19.3% 19.7% 20.5% 28.2% 28.4% 31.3% 30.8% 33.3% 32.9% 31.2% 29.7% 28.9% 26.6% 29.3% 30.3% 31.1% 29.0% 30.4% 30.4% 29.2% 30.6% 30.3% Cost of Service Allocation of Wholesale Energy Cost Identify Standard Service On & Off Peak kwh by Month and Allocate to Classes 40% Percent On-Peak Energy (kwh) Standard Service 35% 30% 25% 20% 15% 10% 5% 0% Months Fiscal Year 2012 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 Breakeven Percent 5/15/2015 Provided by Chris Mitchell (CMMC) Contains Business Sensitive Information 19
Oct 2015 Wholesale Energy Rate Financial Impact Estimate of Financial Impact High Hartselle Coincident Utilities LPC Analysis of Wholesale Invoice *** Case 6 using Oct 2014 TVA Approved Wholesale Rates with FCA of 0 *** Standard Service Method Used to Determine 12 Month Financial Impact: 12 Month Rolling Energy Currently Defined kwh Proposed October 2015 Defined Demand (kwh) Date On-Peak On-Peak Off-Peak Total On-Peak On-Peak Off-Peak Difference TVA Additional Charge Total Difference from Current Fiscal Year Month KWH Percent KWH Cost KWH Percent KWH Cost Dollars % kwh Cost Cost Dollar Percent Rolling 12 Mo FY 2011 April 2011-7,385,279 247,998 0 20.43% 7,385,279 247,998-0.00% $0.00071 5,244 253,241 5,244 2.11% FY 2011 May 2011-10,486,947 352,152 0 21.72% 10,486,947 352,152-0.00% $0.00071 7,446 359,597 7,446 2.11% FY 2011 June 2011 4,245,144 32.0% 9,019,248 502,600 3,233,000 24.37% 10,031,392 480,332 (22,267) -4.43% $0.00071 9,418 489,750 (12,849) -2.56% FY 2012 July 2011 4,034,946 28.2% 10,296,424 530,892 3,073,373 21.45% 11,257,997 509,737 (21,155) -3.98% $0.00071 10,175 519,912 (10,979) -2.07% FY 2012 August 2011 4,694,617 32.9% 9,576,464 543,544 3,584,570 25.12% 10,686,511 519,123 (24,421) -4.49% $0.00071 10,132 529,256 (14,289) -2.63% FY 2012 September 2011 2,965,510 28.8% 7,321,315 382,590 2,247,933 21.85% 8,038,892 366,803 (15,787) -4.13% $0.00071 7,304 374,107 (8,483) -2.22% FY 2012 October 2011 0 9,277,241 311,530 0 20.45% 9,277,241 311,530-0.00% $0.00071 6,587 318,117 6,587 2.11% FY 2012 November 2011 0 9,574,608 321,515 0 19.78% 9,574,608 321,515-0.00% $0.00071 6,798 328,313 6,798 2.11% FY 2012 December 2011 2,157,947 18.8% 9,334,949 398,661 2,157,947 18.78% 9,334,949 398,661-0.00% $0.00071 8,160 406,821 8,160 2.05% FY 2012 January 2012 2,240,197 19.5% 9,233,841 398,865 2,240,197 19.52% 9,233,841 398,865-0.00% $0.00071 8,147 407,012 8,147 2.04% FY 2012 February 2012 2,100,814 20.4% 8,219,468 359,617 2,100,814 20.36% 8,219,468 359,617-0.00% $0.00071 7,327 366,944 7,327 2.04% FY 2012 March 2012 1,734,811 18.2% 7,785,943 329,724 1,734,811 18.22% 7,785,943 329,724-0.00% $0.00071 6,760 336,484 6,760 2.05% 9,867 FY 2012 April 2012 0 9,227,837 309,871 0 21.46% 9,227,837 309,871-0.00% $0.00071 6,552 316,423 6,552 2.11% 11,176 FY 2012 May 2012 0 11,456,916 384,723 0 23.13% 11,456,916 384,723-0.00% $0.00071 8,134 392,858 8,134 2.11% 11,864 FY 2012 June 2012 3,918,871 31.4% 8,578,088 471,746 2,989,345 23.92% 9,507,614 451,297 (20,450) -4.33% $0.00071 8,873 460,170 (11,577) -2.45% 13,137 FY 2013 July 2012 4,160,259 29.1% 10,145,026 532,844 3,167,432 22.14% 11,137,853 511,002 (21,842) -4.10% $0.00071 10,157 521,158 (11,685) -2.19% 12,431 FY 2013 August 2012 4,301,925 32.3% 9,001,337 505,048 3,269,760 24.58% 10,033,502 482,340 (22,708) -4.50% $0.00071 9,445 491,786 (13,262) -2.63% 13,457 FY 2013 September 2012 3,005,788 27.9% 7,757,562 398,177 2,282,052 21.20% 8,481,298 382,254 (15,922) -4.00% $0.00071 7,642 389,896 (8,280) -2.08% 13,660 FY 2013 October 2012 0 9,599,180 322,340 0 22.18% 9,599,180 322,340-0.00% $0.00071 6,815 329,156 6,815 2.11% 13,889 FY 2013 November 2012 0 10,161,522 341,224 0 20.41% 10,161,522 341,224-0.00% $0.00071 7,215 348,439 7,215 2.11% 14,305 FY 2013 December 2012 2,013,010 17.8% 9,288,470 390,932 2,013,010 17.81% 9,288,470 390,932-0.00% $0.00071 8,024 398,956 8,024 2.05% 14,169 FY 2013 January 2013 2,549,973 20.3% 10,007,140 437,499 2,549,973 20.31% 10,007,140 437,499-0.00% $0.00071 8,916 446,414 8,916 2.04% 14,938 FY 2013 February 2013 2,196,978 19.9% 8,854,065 384,555 2,196,978 19.88% 8,854,065 384,555-0.00% $0.00071 7,846 392,401 7,846 2.04% 15,457 FY 2013 March 2013 2,380,951 20.6% 9,174,596 402,947 2,380,951 20.60% 9,174,596 402,947-0.00% $0.00071 8,204 411,151 8,204 2.04% 16,902 FY 2013 April 2013 0 9,513,212 319,454 0 21.55% 9,513,212 319,454-0.00% $0.00071 6,754 326,208 6,754 2.11% 17,104 FY 2013 May 2013 0 10,574,145 355,080 0 22.57% 10,574,145 355,080-0.00% $0.00071 7,508 362,587 7,508 2.11% 16,478 FY 2013 June 2013 3,752,593 29.6% 8,929,521 473,800 2,855,590 22.52% 9,826,524 454,066 (19,734) -4.17% $0.00071 9,004 463,070 (10,730) -2.26% 17,325 FY 2014 July 2013 4,069,330 31.1% 9,024,165 493,460 3,098,799 23.67% 9,994,696 472,108 (21,352) -4.33% $0.00071 9,296 481,404 (12,055) -2.44% 16,955 FY 2014 August 2013 4,103,359 30.8% 9,199,401 500,664 3,120,647 23.46% 10,182,113 479,044 (21,620) -4.32% $0.00071 9,445 488,489 (12,175) -2.43% 18,042 FY 2014 September 2013 3,512,161 29.8% 8,264,468 440,577 2,669,975 22.67% 9,106,654 422,048 (18,528) -4.21% $0.00071 8,361 430,410 (10,167) -2.31% 16,156 FY 2014 October 2013 0 9,904,943 332,608 0 22.64% 9,904,943 332,608-0.00% $0.00071 7,033 339,640 7,033 2.11% 16,373 FY 2014 November 2013 0 10,325,590 346,733 0 18.85% 10,325,590 346,733-0.00% $0.00071 7,331 354,064 7,331 2.11% 16,490 FY 2014 December 2013 2,382,566 19.6% 9,801,852 423,596 2,382,566 19.55% 9,801,852 423,596-0.00% $0.00071 8,651 432,247 8,651 2.04% 17,116 FY 2014 January 2014 3,239,459 21.0% 12,178,150 538,246 3,239,459 21.01% 12,178,150 538,246-0.00% $0.00071 10,947 549,193 10,947 2.03% 19,147 FY 2014 February 2014 2,434,255 20.9% 9,201,406 406,109 2,434,255 20.92% 9,201,406 406,109-0.00% $0.00071 8,261 414,370 8,261 2.03% 19,562 FY 2014 March 2014 2,190,048 21.1% 8,209,997 363,126 2,190,048 21.06% 8,209,997 363,126-0.00% $0.00071 7,384 370,510 7,384 2.03% 18,742 FY 2014 April 2014 0 8,990,787 301,911 0 21.04% 8,990,787 301,911-0.00% $0.00071 6,383 308,294 6,383 2.11% 18,371 FY 2014 May 2014 0 10,558,031 354,539 0 21.92% 10,558,031 354,539-0.00% $0.00071 7,496 362,035 7,496 2.11% 18,360 FY 2014 June 2014 3,626,340 30.2% 8,393,423 450,589 2,754,822 22.92% 9,264,941 431,416 (19,173) -4.26% $0.00071 8,534 439,950 (10,639) -2.36% 18,450 FY 2015 July 2014 3,770,390 3 8,790,290 470,446 2,869,749 22.85% 9,690,931 450,631 (19,814) -4.21% $0.00071 8,918 459,550 (10,896) -2.32% 19,609 FY 2015 August 2014 4,021,867 30.2% 9,275,217 498,696 3,061,709 23.03% 10,235,375 477,573 (21,123) -4.24% $0.00071 9,441 487,014 (11,683) -2.34% 20,102 FY 2015 September 2014 3,620,843 30.8% 8,133,624 442,284 2,749,493 23.39% 9,004,974 423,114 (19,170) -4.33% $0.00071 8,346 431,460 (10,824) -2.45% 19,444 FY 2015 October 2014 0 9,556,211 320,898 2,191,696 22.93% 7,364,515 320,898-0.00% $0.00071 6,785 327,682 6,785 2.11% 19,197 FY 2015 November 2014 0 10,658,049 357,897 1,995,022 18.72% 8,663,027 357,897-0.00% $0.00071 7,567 365,465 7,567 2.11% 19,433 FY 2015 December 2014 2,229,529 19.8% 9,030,590 391,740 2,229,529 19.80% 9,030,590 391,740-0.00% $0.00071 7,995 399,734 7,995 2.04% 18,776 FY 2015 January 2015 2,657,854 20.1% 10,587,762 461,167 2,657,854 20.07% 10,587,762 461,167-0.00% $0.00071 9,404 470,572 9,404 2.04% 17,234 Total 18,605,210 18,280,145 (325,065) -1.75% 372,165 18,652,310 47,100 0.25% 5/15/2015 Provided by Chris Mitchell (CMMC) Contains Business Sensitive Information 20
Oct 2015 Wholesale Demand Rate Financial Impact Date: June 2011 Pre-October Structure On-Peak kwh: 4,245,144; Off-Peak kwh: 9,019,248 Cost Formula: (On-Peak kwh * On-Peak Rate) + (Off-Peak kwh * Off-Peak Rate) Cost Calculation result: $502,600 Pre-October Structure On-Peak kwh: 3,233,000; Off-Peak kwh: 10,031,392 Cost Formula: (On-Peak kwh * On-Peak Rate) + (Off-Peak kwh * Off-Peak Rate) + (All kwh * 0.00071) Cost Calculation result: reduction of ($22,267) + $9,418 = ($12,849) All non- summer months show an increase because the 0.00071 is applied to all kwh. The result is an increase in kwh cost for Standard Service for the FY. 21
Other Retail Rate Structure Topics The Residential and GSA 1 may have too wide of usage pattern to be in a class Consider developing additional classes based on Load Factor Your Residential and GSA 1 classes may not fully address demand cost for low load factor Residential and GSA 1 customers Consider having a low load factor retail rate 5/15/2015 Provided by Chris Mitchell (CMMC) Contains Business Sensitive Information 22