HomeMy WebLinkAboutResolution No. UB- 04-C570 0
RESOLUTION NO. 04-057
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF AZUSA AMENDING THE SCHEDULE OF ELECTRIC
RATES AND CHARGES TO ADD A SCHEDULE FOR
RECOVERY OF SAN JUAN REPLACEMENT ENERGY
COST VIA FUEL COST ADJUSTMENT CLAUSE.
WHEREAS, pursuant to Section 78-36 and Section 78-37 of the Azusa
Municipal Code, the rates and charges of the City of Azusa electric utility are set by
a Resolution passed by the Council; and
WHEREAS, the City incurs additional replacement power cost during the
periods when City's San Juan resource is unavailable; and
WHEREAS, the precise forecast of such additional costs has been
increasingly difficult to ascertain due to increased level of San Juan unavailability and
increasingly volatile market price for power when replacement power purchases
take place; and
WHEREAS, the City Council desires recover prudently incurred San Juan
replacement power cost in a timely and efficient way.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA DOES HEREBY
RESOLVE AS FOLLOWS:
Section 1. The City's schedule of rates and charges for its Electric
Utility are hereby amended to include the schedule shown in Exhibit
A which is attached to this Resolution and made a part of it; and
Section 2. The amended rates and charges of the City of Azusa
Electric Utility shall take effect for all bills rendered on or after
October 1, 2004; and
MAYOR
certify the adoption of this Resolution.
THIS 26th DAY OF JULY, 2004.
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City
Council of the City of Azusa at a regular meeting thereof, held on the 26th day of
July, 2004 by the following vote of the Council:
AYES: COUNCIL MEMBERS: HARDISON, CHAGNON, ROCHA
NOES: COUNCIL MEMBERS: MADRID
ABSENT: COUNCIL MEMBERS: STANFORD
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EXHIBIT "A"
FUEL COST ADJUSTMENT - SAN JUAN RESOURCE
JULY 26, 2004
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EXHIBIT A
SCHEDULE FCA -SJ
FUEL COST ADJUSTMENT — SAN JUAN RESOURCE
Background:
The City's San Juan Unit 3 resource is its single largest resource providing up to 75% of
City's annual energy requirement.
Due to the sunk cost nature of San Juan resource, the cost incurred in procuring
replacement power when the unit is derated, or unavailable due to scheduled or forced
outages is an addition to the power resource cost that must be recovered. This rate
schedule would ensure timely and prudent recovery of the replacement power costs for
San Juan Unit 3 resource.
Applicability:
Applicable to all electric services.
Territory:
Within the electric service territory of the City of Azusa.
Rate:
Energy Charge As determined by the methodology below
Rate Determination:
The Azusa Light and Water shall determine the fuel cost adjustment component
associated with its San Juan unit 3 resource pursuant to the following methodology each
quarter. The Director of Utilities shall notify the City Council of the new fuel cost
component associated with its San Juan unit 3 each quarter. It shall be applied to all
electric bills beginning the first billing cycle of each quarter.
Determine the base San Juan replacement power cost for the quarter through the
following calculation:
(A) = Base San Juan Replacement Power Cost in $ = 30 x (N# of days during the
quarter) x 24 x 0.15 x 40
2. Determine the actual San Juan replacement power cost in $ incurred during the
quarter (B)
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3. Determine other San Juan associated costs (+) or credits (-), e.g. outage insurance
premium payment (+), outage insurance payout (-) incurred during the quarter (C)
4. Derive the amount of Replacement Power Cost (RPC) eligible to be recovered
through the following calculation:
RPC = (A) — (B) + (C)
Adjust the RPC in accordance with the following to derive Adjusted Replacement
Power Cost (ARPC):
(i) If RPC< -$750,000, then ARPC= -$750,000
(ii) If-$750,000<RPC<-$100,000, then ARPC=RPC
(iii) If-$100,000<RPC<+$100,000,then ARPC=$0
(iv) If $100,000<RPC<+$750,000, then ARPC=RPC
(v) IfRPC>+$750,000, then ARPC=+$750,000
Derive Replacement Power Cost Balancing Account (RPCBA) by subtracting
ARPC from RPC, i.e., RPCBA=RPC-ARPC
7. Forecast the retail sales for the immediately succeeding quarter (R)
8. Derive the fuel cost adjustment associated with the San Juan unit 3 resource by
dividing ARPC by (R)
Any balance remaining in RPCBA shall be added to the RPC of the immediately
succeeding quarter for recovery or credit. Subject to City Council's approval, the
Director of Utilities may establish a minimum RPCBA threshold to be retained
for the purposes of reducing the fluctuations in fuel cost adjustment.
This rate schedule is applicable to San Juan energy resource only. To the extent a need
arises to apply FCA provision to energy resources other than San Juan, the Director of
Utilities may implement it with the approval of the Utility Board.