§ 13.04.173. Power cost adjustment.

A.

A Power Cost Adjustment (PCA) shall be added to the energy services charge set forth in the service schedules of this chapter. Each customer shall pay the applicable energy services charge plus a PCA for each kWh delivered to the customer.

B.

The PCA shall be based on actual data obtained from the city's accounting system, forecast data obtained from the annual operational plan approved by the City Council, and updated forecast data prepared monthly by PWP.

C.

PWP shall recalculate the PCA each month, and the resulting values for these charges shall be automatically implemented on the first day of the following month.

D.

For purposes of this section, the following definitions apply:

1.

"Direct Access Customers" shall mean customers who choose an energy supplier other than PWP, taking service under Section 3.04.095.

2.

"Energy Costs" means the sum of all costs related to the procurement and generation of energy for delivery to Full Service Customers, including, but not limited to, Power Production Costs and Purchased Power Costs, operating margin, debt service and the general fund transfer associated with these costs.

3.

"Energy Cost Forecast" means the forecast of projected Energy Costs for the twelve months immediately following the last actual billing period. This forecast shall be updated monthly by PWP.

4.

"Energy Services Charge Revenue Forecast" means the forecast of projected Energy Services Charge Revenue for the twelve months immediately following the last actual billing period. The energy services charge set forth in the schedules reflects the energy cost forecast as of July 1, 2002, based on the approved rate restructuring plan approved by the City Council adjusted to each customer group's load profile, and shall remain in effect until modified by Ordinance.

5.

"Energy revenue credit" is a percentage of the Wholesale Net Income used to reduce the Energy Charge. The Energy Revenue Credit shall be applied when the Wholesale Net Income is greater than zero and shall be determined at least quarterly based on the actual accounting data as follows: (i) 75% of the Wholesale Net Income shall be applied as a credit; (ii) additional amounts may be authorized by Council Resolution.

6.

"Energy revenue forecast" means the forecast of projected Energy Revenue Credits for the twelve months immediately following the last actual billing period. This forecast shall be updated monthly by PWP.

7.

"Fuel costs" means the sum of the cost of fuel gas consumed, the cost of fuel oil consumed, and the cost of procuring, scheduling, testing and in-plant handling of that fuel gas and fuel oil. Fuel oil includes both residual fuel oil and distillate fuel oil.

8.

"Full service customers" shall mean customers who choose PWP as their energy supplier.

9.

"Full service energy sales forecast" means the forecast of projected energy sales (in kilowatt-hours) to Full Service Customers for the twelve months immediately following the last actual billing period. This forecast shall be updated monthly by PWP.

10.

"Power production costs" means the sum of all costs for the generation of electric energy at facilities owned and operated by PWP, including, but not limited to, Fuel Costs, labor, operating and maintenance expenses, materials, and emissions credits.

11.

"Purchased power costs" means the cost of energy and ancillary services, including, but not limited to, capacity and energy charges from third parties and all non-transmission charges charged by the California Independent System Operator (ISO).

12.

"System energy sales" means the estimated total energy sales delivered to all customers, including Direct Access Customers.

13.

"Wholesale net income" means the sum of revenues realized from wholesale energy and ancillary service sales, less the associated production cost and purchased power cost attributable to the wholesale sales.

H.

The PCA shall be added to the energy service charge set forth in the service schedules, and shall be calculated monthly as follows:

1.

Commencing July 1, 2002, a separate Energy Services Charge Fund (ESCF) account shall be maintained for balancing costs, revenues, and credits associated with energy delivered to Full Service Customers. Any Energy Charge Fund over collection or under collection existing on July 1, 2002 shall be deposited in the ESCF balance.

2.

The ESCF account balance shall be calculated as the sum of actual revenues from the Energy Services Charge, the Energy Revenue Credit, and any other credits authorized by the City Council, less the actual Energy Costs inched.

3.

The ESCF shall have a target reserve balance which equals the forecast annual ECF amount divided by twelve.

4.

The Energy Services Charge shall be calculated based on the Energy Cost Forecast, Energy Revenue Credit Forecast, Full Service Energy Sales Forecast, and the ESCF balance as follows:

[Energy Cost Forecast - Energy Revenue Credit Forecast - Fund Balance]

[Full Service Energy Sales Forecast]

5.

The PCA shall be calculated based on the twelve month forecast of Energy Services Revenue, Energy Cost, Energy Revenue Credit, Full Service Energy Sales, ESCF balance and Fund Reserve Target as follows:

[Energy Cost Forecast - Energy Revenue Credit Forecast - Fund Balance - Energy Services Revenue Forecast + Fund Reserve Target]

[Full Service Energy Sales Forecast]

6.

The result of the formula shall be rounded to the nearest mill per kilowatt-hour. This shall be the PCA to be implemented.

(Ord. 6901 § 17, 2002)