Strategic Plan Implementation: Funding Utility ...
Transcript of Strategic Plan Implementation: Funding Utility ...
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Strategic Plan Implementation: Funding Utility Infrastructure for Growth
July 19, 2021
Lindsey Mohns
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Why We’re Here Today
• Growth and Economic Development strategic plan item review– Overview of staff/consultant efforts on growth
funding
• Water/Wastewater strategic plan item review
No decision required today, feedback appreciated
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Strategic Plan Implementation Item
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Funding Infrastructure for Growth
Historic infrastructure funding options:1. Retail rate increases2. Developer funded
New industry approach: Consider addressing growth using a similar approach to Mason PUD No. 3’s System Impact Fee
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New Electric Industry Approach
• Develop a fee for new electric connections that shares the cost of substation and related infrastructure
• Consistent with existing Board policy that “growth pays for growth”
• Staff worked with consultants to understand cost basis
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Our Growth Planning Assumptions
• 7(+) stations in 5 years for normal growth– Ohme, Chelan, Leavenworth, Wenatchee, Malaga,
Cashmere, Entiat – Additional development efforts underway, such as
West Wenatchee
• Historically 20% reserved for reliability• Over $15 million per year forecasted cost
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Study Results
• Average cost of substations and related infrastructure:
• Equivalent to ~$1,300 for a 400 A residential service• Can be further adjusted for load diversity, changed
reliability reservation, economic development, etc.
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Average total cost $305 / kW
Less 20% reserved ($61 / kW)
Total growth capacity cost $244 / kW
Less costs included in COSA (residential) ($217 / kW)
Adjusted capacity cost (marginal cost) $27 / kW
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Estimated Electric System Impact
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2016 2017 2018 2019 2020 2021 (est)
New Meter Installs
• Approximately $1 million revenue/year at historic growth rates
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Strategic Plan Implementation Item
Note: Adopted water rate plans assumed $1,000 increases in water/wastewater System Development Charges (SDC) as an additional self-sustainability approach
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Water/Wastewater
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Water/Wastewater Growth Funding
• Consultant study of existing SDCs shows existing charges are well below cost
• Depending on number of new connections, additional fees could reduce future rate pressure
• May consider additional increases in future as part of future rate plans
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Water/Wastewater Study ResultsConsultant study results include opportunity cost which staff
recommends excluding from the cost recovery target
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$1,327 difference$2,372
current SDC
$5,594 difference
$4,796 current
SDC
Water Total Cost $5,606 per 5/8” connection
Staff Recommended Target$3,700 per 5/8” connection
Wastewater Total Cost $16,410 per residential equiv.
Staff Recommended Target$10,390 per residential equiv.
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Estimated Water System Impact
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2016 2017 2018 2019 2020 2021 (est)
New Meter Installs
• An increase of $1,000 per connection would result in $100,000 revenue for 100 connections (approx. 1.5% rate equivalent)
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Water SDC Comparison
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000
Soap Lake
Wenatchee
Cashmere
Omak
Yakima
Moses Lake
Cle Elum
Roslyn
Ephrata
Chelan PUD (existing)
Ellensburg
Peshastin Water Dist
East Wenatchee Water District
Walla Walla
Chelan PUD (calculated target)
Water SDC Rate Survey (Single Family)
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Wastewater SDC Comparison
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000
Soap Lake
Wenatchee
East Wenatchee Sewer Dist
Cashmere
Omak
Yakima
Moses Lake
Cle Elum
Roslyn
Ephrata
Chelan PUD (existing)
Ellensburg
Walla Walla
Chelan PUD (calculated target)
Wastewater SDC Rate Survey (Single Family)
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Next Steps
• Immediate: Incorporate Board feedback• Summer: Outreach to building and
development community• Fall: Board update and potential action
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APPENDICES
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Proposed Water SDC Adjustment by Connection Size
Meter Size Calculated Cost Current Fee Fee with +$1,000/ERU
Adjustment
5/8” $5,606 $2,372 $3,372 $1,000
1” $14,015 $5,930 $8,430 $2,500
1 ½” $28,030 $11,859 $16,860 $5,001
2” $44,848 $18,975 $26,976 $8,001
3” $84,090 $35,580 $50,580 $15,000
4” $140,150 $59,300 $84,300 $25,000
6” $280,300 $118,600 $168,600 $50,000
8” $448,481 $189,760 $269,760 $80,000
10” $644,691 $272,780 $387,780 $115,000
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Wastewater SDC Board Options
Migrate SDCs to be assessed in a post-stamp approach, consistent with rates
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Calculated Cost Current Fee with +$1,000/ERU
Per ERU $16,410 $4,796 $5,796
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Water, wastewater fee history
1990’s• Minor adjustments occur attempting to align
with cost increases and new connections
2001• Temporary suspension of SDCs• Intended to encourage growth
2008• Reinstatement of SDC amounts in place
today
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Electric Service Connection FeesService Rating Single Phase Three Phase 208V Three Phase 480V
Current Fee With Additional Current Fee With
Additional Current Fee With Additional
1-100A $1,100 $1,424 $2,100 $2,661 $2,600 $3,895
101-200A $1,900 $2,548 $4,100 $5,222 $5,500 $8,090
201-400A $2,800 $4,095 $8,300 $10,545 $9,000 $14,180
401-600A $4,700 $6,643 $11,100 $14,467 $13,500 $21,270
601-800A $5,700 $8,290 $12,200 $16,689 $17,800 $28,160
801-1000A $5,900 +$27/kW $15,300 +$27/kW $20,300 +$27/kW
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Fee would be combined with existing Service Connection Fees which include average, estimated costs of transformer, meter and labor to install
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Electric Service Connection Fee History
Pre 2000’s• Per Amp• Based on panel
size• Included meter,
transformer and wire costs
2009• Per panel size• Includes average,
estimated cost of meter, transformer and labor to install
2019• Step-wise
adjustments to continue closing cost recovery gap
Current Options• Expands charges
to include costs of meter, transformer and marginal costs from substation to customer
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400 Amp, single phase fee adjustment history$2,360 $2,300 $2,800 $4,095