![Page 1: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/1.jpg)
Non-Utility Costs in Utility BillsM. Sarafolean
J. Kaman
Iowa Industrial Energy Group Meeting
April 9, 2013
![Page 2: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/2.jpg)
Utility Bills
• Special Riders, Surcharges• Above Market PPAs• Cross Class Subsidies• Taxes• City Franchise Fees
![Page 3: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/3.jpg)
Bill Markup
More to come…
![Page 4: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/4.jpg)
Riders
• Renewable development funds• Energy efficiency charges• Special pollution surcharges - externalities• Carbon surcharges• System/Public Benefits Funds
![Page 5: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/5.jpg)
Administrative Code - Riders
• Specifies criteria for whether a rider could apply [e.g. electric rates 199 IAC 20.9(1)]– Incurred in supplying energy– Beyond direct control of management– Subject to sudden important change in level– Important factor in total cost to serve– Segregated in utility accounts
• Recent Iowa examples– Alliant’s electric Energy Adjustment Clause (EAC), electric utility AEPs– Electric (and Gas) EECRs, 199 IAC 35.12– Capital Infrastructure, e.g. 199 IAC 19.18 (gas)
![Page 6: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/6.jpg)
Tariff
• Cities Served- Electric Service territory maphttp://www.iowadot.gov/maps/msp/electrical/electrical.html
• Riders• Franchise Fees imposed
![Page 7: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/7.jpg)
Above Market PPAs
• Wind power mandates • Solar power mandates• Other PPA embedded cost risk
![Page 8: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/8.jpg)
Cross Class Subsidies
• Built into IOU cost of service allocations• Tiered kWh purchases• Allocation of variable costs to demand
charges• Increased CP events
![Page 9: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/9.jpg)
Taxes
• Phantom income taxes– State and Federal taxes included in base
rates but never paid to States and the Feds.• Local taxes on utility assets• State and local sales taxes on utility
revenues
![Page 10: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/10.jpg)
Fees
• Municipal fees • Low income assessments• Meter charges• Customer charges• City franchise fees
![Page 11: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/11.jpg)
Utility Franchise Fees• By the CITY• In lieu of municipalization?• Des Moines franchise fee lawsuit• Iowa Code 480A (local option) and 364.2 (franchise fees)
– mutually exclusive• Now (since 2009):
– Up to 5% without proving costs are for “inspecting, supervising, and otherwise regulating…” the franchise
– Can use excess for property tax relief, public improvements, low-income energy conservation, public safety, public works and transportation, streets, economic development….
![Page 12: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/12.jpg)
A Story About Waterloo…
• Cities need revenue, property tax concerns in Iowa• Energy bill taxes are disproportionate to
industry/employers• Appears can:
– Modify for different customer classes– Apply to Electric, Nat Gas, Telecom, (etc.) any combination or
none– Apply a cap per customer
![Page 13: Non-Utility Costs in Utility Bills M. Sarafolean J. Kaman Iowa Industrial Energy Group Meeting April 9, 2013](https://reader035.vdocument.in/reader035/viewer/2022070323/56649da65503460f94a92552/html5/thumbnails/13.jpg)
Non-Utility Costs in Utility BillsM. Sarafolean
J. Kaman
Iowa Industrial Energy Group Meeting
April 9, 2013