Incorporating Incorporating an Affordability Rate Cap an Affordability Rate Cap
Into a Florida RPSInto a Florida RPS
FloridaFloridaPublic Service CommissionPublic Service Commission
July 26, 2007July 26, 2007
Kim Owens, P.E.Kim Owens, P.E.
JEA Clean Power JEA Clean Power CoordinatorCoordinator
OverviewOverview
– Affordability Rate Cap Affordability Rate Cap – NationallyNationally
Cost impact studiesCost impact studies Rate caps in RPS designRate caps in RPS design How to define budget and investment? How to define budget and investment?
– JEA Scenario JEA Scenario JEA approved base rate increaseJEA approved base rate increase How much can a rate cap purchase?How much can a rate cap purchase?
– JEA’s renewable energy programJEA’s renewable energy program
Affordability Rate CapAffordability Rate Cap
Will an RPS increase Rates? Will an RPS increase Rates? uncertainuncertain
FMEA RPS proposalFMEA RPS proposal
To protect consumers from uncertain costs To protect consumers from uncertain costs of renewable generationof renewable generation
Flexibility - allows for compliance either Flexibility - allows for compliance either through energy OR investment goalsthrough energy OR investment goals
20 of 28* Analyses Predict Rate 20 of 28* Analyses Predict Rate Increases Increases
of Less Than or Equal to 1%of Less Than or Equal to 1%
* Number of analyses is more than 26 because results for each state in CA/OR/WA (Tellus) are shown separately
-6%
-3%
0%
3%
6%
9%
12%
TX
(U
CS
) -
3%
CA
(T
ellu
s) -
11%
HI (
GD
S)
- 4%
CA
(U
CS
) -
13%
OR
(T
ellu
s) -
11%
PA
(B
&V
) -
7%
CO
(P
PC
) -
9%
CA
(C
RS
) -
17%
WA
(La
zaru
s) -
15%
NY
(D
PS
) -
8%
CO
(U
CS
) -
6%
NE
(U
CS
) -
10%
IA (
WU
C)
- 9%
WI (
UC
S)
- 9%
NY
(P
otom
ac)
- 7%
MD
(S
ynap
se)
- 8%
VT
(S
ynap
se)
- 10
%
VA
(C
EC
) -
17%
AZ
(P
EG
) -
1%
MN
(W
UC
) -
9%
CA
(LA
DW
P)
- 20
%
MA
(S
EA
) -
7%
WA
(T
ellu
s) -
17%
NY
(C
CA
P)
- 5%
NJ
(Rut
gers
) -
14%
RI (
Tel
lus)
- 1
8%
AZ
(P
IRG
) -
20%
NY
(IC
F)
- 8%
Study - Incremental RPS Target %
-0.50
-0.25
0.00
0.25
0.50
0.75
1.00
Average retail (% - left axis)
Average retail (¢/kWh - right axis)
Median retail rate increase = +0.7%Median change in retail rates = +0.04¢5 analyses predict rate savings
Cha
nge
in
Rat
es in
1st
Pea
k T
arge
t Y
r.
Cha
nge
in R
ates
in 1
st P
eak
Tar
get
Yr.
(20
03 ¢
/kW
h)
Source: LBNL, Ryan Wiser, May 2006
-
10,000
20,000
30,000
40,000
VT
(S
ynap
se)
RI
(Tel
lus)
MA
(S
EA
)
NY
(C
CA
P)
NY
(D
PS
)
PA
(B
&V
)
VA
(C
EC
)
NE
(U
CS
)
IA (
WU
C)
MN
(W
UC
)
WI
(UC
S)
TX
(U
CS
)
HI
(GD
S)
AZ
(P
EG
)
CO
(U
CS
)
CO
(P
PC
)
OR
(T
ellu
s)
WA
(T
ellu
s)
WA
(La
zaru
s)
AZ
(P
IRG
)
CA
(T
ellu
s)
CA
(U
CS
)
CA
(C
RS
)
Gen
erat
ion
in 1
st P
eak
Tar
get Y
r. (
GW
h) OtherGeothermalSolarHydroLandfill GasBiomass Co-FireBiomassWind
MidwestEast West
Wind represents 61% of incremental generation: - 90% in Midwest - 62% in East - 51% in West
Source: LBNL, Ryan Wiser, May 2006
Generation TechnologiesGeneration Technologies
Cost Controls in RPS DesignCost Controls in RPS Design
Cost controls take a variety of forms:Cost controls take a variety of forms:– Rate caps; contract rate caps; alternative compliance Rate caps; contract rate caps; alternative compliance
payments; penaltiespayments; penalties
Colorado, New Mexico, Washington have rate Colorado, New Mexico, Washington have rate capscaps– CO (retail rate impact <2% of total annual electric bill CO (retail rate impact <2% of total annual electric bill
for each customer)for each customer)– NM (retail rate impact <1% in 2006 , increasing NM (retail rate impact <1% in 2006 , increasing
0.2%/yr, until 2% in 2011)0.2%/yr, until 2% in 2011)– WA (4% of retail revenue)WA (4% of retail revenue)
Defining Defining Budget and Investment Budget and Investment
Budget Budget – % of electric revenues OR% of electric revenues OR– Maximum increase to retail rateMaximum increase to retail rate
InvestmentInvestment– Marginal costs of renewable resource above Marginal costs of renewable resource above
cost of conventional resourcecost of conventional resource– Loss revenues on debt service and base Loss revenues on debt service and base
operating costs if capacity is not avoided (for operating costs if capacity is not avoided (for energy efficiency resources)energy efficiency resources)
JEA RatesJEA Rates
JEA electric revenue – $1.03 B (FY06)JEA electric revenue – $1.03 B (FY06)JEA Sales – 14 Million MWH (FY06)JEA Sales – 14 Million MWH (FY06)Impact of 1% rate increase on residential Impact of 1% rate increase on residential customer @ 1,000 kwh/mo customer @ 1,000 kwh/mo
$0.96/mo (based on FY08 rates)$0.96/mo (based on FY08 rates)
1% rate increase may seem like a minimal 1% rate increase may seem like a minimal impact for our customers but they are impact for our customers but they are absorbing other rate increasesabsorbing other rate increases
FY 2008 Residential Customer Bill ComparisonFY 2008 Residential Customer Bill Comparison(Consumption @ 1000 kWh)(Consumption @ 1000 kWh)
ExistingExisting FY08FY08 FY 08 FY 08 ChangeChange
Customer ChargeCustomer Charge $ 5.50$ 5.50 $ 5.50$ 5.50
Energy ChargeEnergy Charge 44.1544.15 49.6749.67
Fuel Charge @ current rateFuel Charge @ current rate 38.68 38.68 38.6838.68
Sub-TotalSub-Total $ 88.33$ 88.33 $ 93.85$ 93.85 6.25%6.25%
Environmental ChargeEnvironmental Charge -- 0.620.62
Variable Fuel Rate adjustmentVariable Fuel Rate adjustment -- 1.461.46
Additional ChargesAdditional Charges - - 2.082.08
Total JEA Electric ChargesTotal JEA Electric Charges $ 88.33$ 88.33 $ 95.93$ 95.93 8.60%8.60%
$7.60 per month increase
JEA Base Rate Increases Phased in Over 4 Years – Residential class of customers will receive 5.5%, 5.25% and 3% increases in FY09, FY10 and FY11
What does 1% of revenues What does 1% of revenues purchase?purchase?
JEA RenewablesJEA Renewables$10 M incremental revenue:$10 M incremental revenue:100 MW base load (80% CF) biomass project at $65/Mwh 100 MW base load (80% CF) biomass project at $65/Mwh all in cost as a power purchaseall in cost as a power purchase– Displaces $30/MWH average marginal off-peak energy 40% of Displaces $30/MWH average marginal off-peak energy 40% of
the year and $65/MWH average marginal on-peak energy 60% of the year and $65/MWH average marginal on-peak energy 60% of the year.the year.
– Total system energy produced is 700,800 MWH or 5% of salesTotal system energy produced is 700,800 MWH or 5% of sales
A 1% revenue investment in A 1% revenue investment in renewables yields a 100 MW renewables yields a 100 MW base load facility and 5% of retail base load facility and 5% of retail sales from renewablessales from renewables
What does 1% of revenues What does 1% of revenues purchase?purchase?
Energy EfficiencyEnergy Efficiency
JEA’s DSM portfolio proposal: JEA’s DSM portfolio proposal: – Interruptible, load control, new construction, lighting Interruptible, load control, new construction, lighting
and low-income programsand low-income programs– $13M investment in 3 years $13M investment in 3 years – 40 MW demand reduction40 MW demand reduction– 60,000 MWH reduction60,000 MWH reduction
Upfront costs for JEA will yield future reduction Upfront costs for JEA will yield future reduction in peak generation and fuel costsin peak generation and fuel costs
JEA Renewable Energy ProgramJEA Renewable Energy Program
Clean Power Clean Power ProgramProgram MWMW
Solar Solar PhotovoltaicPhotovoltaic
0.320.32
Solar ThermalSolar Thermal 99
BiogasBiogas 15.815.8
WindWind 1010
BiomassBiomass 1313
Efficiency Efficiency ProjectsProjects
4343
Total PlannedTotal Planned 91 MW91 MW
Biomass RFP – Biomass RFP – August 2007August 2007
JEA DSM and EE JEA DSM and EE Portfolio launch – Portfolio launch – FY08FY08
R&DR&D– Biodiesel turbine testBiodiesel turbine test– 100 KW hydro turbine 100 KW hydro turbine – Solar thermal system Solar thermal system
peak reduction studypeak reduction study
411,500 MWH*
Or 3% of Sales
*50% from efficiency
QuestionsQuestions
Contact me: Contact me:
Kim OwensKim Owens
21 West Church 21 West Church Street,T-12Street,T-12
Jacksonville, FL 32202Jacksonville, FL 32202
(904) 665-4673(904) 665-4673
[email protected]@jea.com