HomeMy WebLinkAboutE-1.1. PCA Stabilization PlanUB-69
APPROVED
UTILITY BOARD
6/26/17
UB-70
RESOLUTION NO. UB-08-2017
A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE
CITY OF AZUSA, CALIFORNIA, TO ESTABLISH A POWER COST
ADJUSTMENT STABILIZATION PLAN
WHEREAS, the Power Cost Adjustment (PCA)was adopted by the Utility Board in June
2010 as Schedule PCA; and
WHEREAS, the purpose of Schedule PCA was to adjust electric rates annually, with semi-
annual true-ups, to reflect actual/variable power supply costs; and
WHEREAS, Azusa Light & Water (ALW) is currently a participant in San Juan Unit 3
though the Southern California Public Power Authority; and
WHEREAS, San Juan Unit 3 is scheduled to be retired on December 31, 2017; and
WHEREAS,ALW has procured relatively low cost electric power for calendar years 2018,
2019 and 2020 to replace the lost output of San Juan Unit 3 following its retirement which will result
in power supply cost reductions; and
WHEREAS,ALW Staff has proposed a Power Cost Adjustment"Stabilization Plan"(PCA
Stabilization Plan) in conjunction with San Juan Unit 3 retirement; and
WHEREAS, the PCA Stabilization Plan proposes to reduce Fiscal Year 2018, 2019 and
2020 electricity price to ALW customers by approximately ten percent (10%) overall from Fiscal
Year 2017 projected retail electric revenues;
WHEREAS, any excess power cost reductions not necessary to effectuate the proposed ten
percent price/revenue reductions will be placed in a PCA Stabilization Account;
WHEREAS, a number of highly probable factors including(i) tightening Greenhouse Gas
(GHG)rules,(ii)escalating renewable portfolio standards(RPS),(iii)increased CAISO transmission
and scheduling charges,(iv)higher resource adequacy,local resource capacity and flexible capacity
requirements and market prices,(v)loss/reduction of special tax credits for solar and wind resources,
and (vi) legislative mandates and an operational need for energy storage deployment will place
upward pressure on power supply costs;
WHEREAS,a well-priced San Juan replacement energy purchase will expire at the midpoint
of Fiscal Year 2021 and subsequent replacement power will likely be at a much higher price point;
WHEREAS, funds in the PCA Stabilization Account will be maintained as a separate
reserve account in the Electric Fund and will be used to "smooth" future projected increases in
electric power supply costs.
NOW,THEREFORE,THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA,
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. PCA Stabilization Plan. The Utility Board/City Council hereby adopts a
PCA Stabilization Plan directing ALW Staff to set the base Power Cost
Adjustment so that the average overall projected price of served electricity
for Fiscal Year 2018 is ten percent(10%) less than in Fiscal Year 2017 and
to maintain any residual power supply cost savings not required for such
price/revenue reduction in a PCA Stabilization Account for the purpose of
smoothing future electric cost increases. The ten percent electricity price
reduction from Fiscal Year 2017 and the PCA Stabilization Account
accruals shall also be effective for Fiscal Years 2019 and 2020. Provisions
of Schedule PCA related to semi-annual true-ups shall continue in effect.
SECTION 2. Effective Date. This Resolution shall become effective July 1, 2017.
PASSED, APPROVED and ADOPTED this 26th day of June, 2017.
J•seph omero Rocha,
Boardmember/Mayor
ATTEST:
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Secretary/City Clerk /'
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Utility Board/City
Council of the City of Azusa at a regular meeting of the Azusa Light&Water Utility Board on the
26th day of June, 2017.
AYES: BOARDMEMBERS: GONZALES, CARRILLO, MACIAS,ALVAREZ, ROCHA
NOES: BOARDMEMBERS: NONE
ABSENT: BOARDMEMBERS: NONE
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J-- .,a‘y ..+ e. Cornejo, , , ` .
City Cler
APPROVED AS TO FORM:
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