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EIGHT 8 WATE&
INFORMATION ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES �T JUd h717444-
DATE: SEPTEMBER 26, 2005
SUBJECT: QUARTERLY FUEL COST ADJUSTMENT FOR SAN JUAN RESOURCE
On July 26, 2004, the Utility Board approved a fuel cost adjustment mechanism for San Juan
power plant. This mechanism is intended to credit customers with cost savings that are
realized when our power plant operates reliably and replacement power cost are avoided, and
conversely, allow the Utility to increase revenues to recover a portion of our replacement
power costs when the San Juan resource experiences outages.
This report encompasses replacement power costs incurred for the San Juan resource during
the period of June 16, 2005 through September 15, 2005. There will be no Fuel Cost
Adjustment on customer electric billings for the billing period of October 1, 2005 through
December 31, 2005.
The San Juan unit #3 availability during the period of June 16 through September 15, 2005
was 88%, 3% higher than the budgeted availability. However, the cost of replacement power
was considerably higher than the budgeted cost ($58.2/MWh actual vs $40/MWh budget)
reflecting a much higher energy commodity price environment in general during this period.
The total replacement power cost incurred above the budgeted amount for the period is
$65,395 which is lower than the minimum threshold amount of$100,000 for quarterly fuel
cost adjustment recovery. The amount of $65,395 will be carried over to the first quarter of
2006 for recovery if applicable.
Prepared by:
Bob Tang, Assistant Director of Resource Management
Attachment: /
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San]uanFuelCostAdj
.pdf /./_ t/
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055
San Juan Fuel Cost Adjustment Calculation for Q4 2005
June16-July August September (*)
Actual SJ Output 26,372 21,275 10,640
Actual SJ Replac Energy Cost $378,984 $71,662 $12,189
Maximum Output 33,120 22,320 10,800
Unavailable SJ Output 6,748 1,045 160
% Outage Rate 20.37% 4.68% 1.48%
Base SJ Output @`85% 28,152 18,972 9,180
Unavailable SJ Output 4,968 3,348 1,620
Outage Rate 15.00% 15.00% 15.00%
Base SJ Replac Energy Cost @$40/MWh $198,720 $133,920 $64,800
Actual - Base SJ Replac Energy Cost $180,264 -$62,258 -$52,611
San Juan Insurance Premium Recovery $0 $0 $0
San Juan Insurance Payout $0 $0 $0
Cumulative Quarterly Difference (CQD) $65,395
Q2 Carry-Over
If ((CQD) <$100,000, then adjustment=0
If I(COD)I>$750,000, then adjustment=+-$750,000
or else adjustment = CQD $0
October November December
Forecast Retail Sales (MWh) 23,374 19,400 20,200
SJ FCA for Q4 2005 (cents/KWh) 0.00
(*) Through September 15th, 2005