Let’s wrap up what happened at Monday’s Danville Utility Commission meeting. We already covered a lot in Part #1, so let’s continue where we left off.
When we left off, we had a half-win & half-loss on the customer service policies. Next, Mark Beauchamp is here from Utility financial Solutions. That’s the consultant firm that Danville Utilities uses for electric rate advice.
Mark Beauchamp has three presentations for the Utility Commission today.
He’s got three things to talk about. The first one will be a proposed Time Of Use electric rate plan. That means that you’d be paying more for electricity during defined peak periods but less during off-peak periods. If a Time Of Use rate plan is set up relatively well, then customers can see big savings on their electric bill. If it’s not set up well, it can be a disaster. Sadly, this first version of the TOU rate plan isn’t set up very well.
Danville Utilities customers pay about 11.75 cents per kilowatt for electricity. (Helpful Hint: You can easily figure out how much you used in electricity by going out to your electric meter now and writing your reading down. Go out the same time tomorrow and do the same thing. Subtract out the numbers and then multiply it by 11.75 cents. That’s the dollar value that you used over the last 24 hours.) If you decided to go to the TOU plan, here’s how it would break down…
- PEAK: 8:00 AM – 11:00 PM, Monday through Friday: You’d pay 15.36 cents per kilowatt of electricity.
- OFF-PEAK: All other times including federal holidays: You’d pay 8.98 cents per kilowatt of electricity.
- The monthly basic customer charge would double to $15.56. That’s an additional $7.78 per month.
If you can shift a lot of your electrical usage to the off-peak times, you can save a lot of money. But that’s not really feasible in this first draft of the plan because that’s a one-size-fits-all peak/offpeak rate period, and people’s electric usage is way different from winter months to summer months. In winter, most electricity is used early morning as people heat there houses, with the usage dropping significantly once the sun does its natural warming. In summer months, electric usage gets high as people start cooling their house at noon and into the evening. Heating & cooling is usually around 40% of your electric bill, so that adds up quickly. Also, although Danville Utilities does have the smart meters than can tell when the electricity is used, but they currently don’t have the software to let a customer monitor their own hourly electric usage to see if this rate plan would work for them. The utility commission wants more information on this, so no decision is made. Because I know a lot about these TOU rate plans, I spoke in the public comment section about these potential pitfalls. I’m sure that will make Randy Stafford’s head explode again. Heh. If nobody else shows up for these meetings, somebody’s got to speak up.
Beauchamp’s next topic is allowing large industrial customers to buy their electricity from another company at a possibly cheaper rate. This may not make sense at first, but it’s a great idea. Danville Utilities doesn’t make any real profit on the actual electricity costs. They make their money on the distribution costs (the lines to get the power to the premises). This would only apply to the biggest customers and that’s a risk to them as they’d have to pay market rates for electricity, while buying electricity from Danville Utilities would be a fixed cost for budgeting. Beauchamp says there would be a small loss of profit, but that’s highly acceptable to keep the big customers happy.
Finally, Beauchamp talks about the giant elephant in the room. Because Danville Utilities accepted his company’s advice not to incrementally raise electric rates as costs went up, Danville Utilities is still way in the hole in the Power Cost Adjustment fund. The best way to explain the PCA account is that it’s the day-to-day profit and loss of regular operations. Failing to raise the rates as they should have been raised gradually, combined with the congestion charges accrued when temperatures were low and electricity was scarce… Danville Utilities PCA fund is sitting at -$17,011,028.17 at the end of May 2015. Ouch. Believe it or not, that’s over $2,000,000 better than where they were at the end of Jun 2014. The Utility Commission agrees with Beauchamp and decides to spend $2,000,000 in unreserved funds to write down the PCA fund somewhat. That won’t affect the bond ratings at all.
We finish up with the commission reauthorizing a power sale agreement for the electricity generated at the Schoolfield Dam. Danville bought the dam in 2013 but they lease it to STS Hydropower. They bought it to protect the water rights at the intake near Abreu-Grogan Park. The city gets $45000 a year out of the deal. Today, the commission approved a 20-year agreement to keep that agreement going. If memory serves me right, Jason Grey says the hydro power generated is around 4 megawatts.
Hey! Is Jason Grey secretly giving me the finger (lower right corner)?
That’s it for the business part of the meeting and the around the horn session. No commission members have anything to say, and I make my comments about the problems with the TOU plan. I also ask for a complete copy of the agenda, because they normally only put the topics out. Interim Director Jason Grey says that will be no problem. Barry Dunkley, director of water and wastewater treatment says that results are starting to come in for the studies on what caused the stinky water problem. They’re making preliminary plans for a public meeting once all of the information comes back, and that will probably be in September.
And there you have it. That’s the most detailed coverage on the Danville Utility Commission meeting that you’ll get anywhere… and it’s only on SouthsideCentral!
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