Virginia Energy Purchasing Governmental Association
(VEPGA)
Primer On Rate Design Concepts & PracticesAnd
Explanation of VEPGA Rates & Schedules(What you need to know)
MAY 9, 2013
Presented by:
Glenn A. WatkinsSenior Economist/Executive V. President
Technical Associates, Inc.9030 Stony Point Parkway, Suite 580
Richmond, Virginia 23235
Section I:
Primer On Rate Design Concepts & Practices
Step 1: Set Overall Revenue Requirement
Step 2: Assign Revenue Responsibility to Classesand/or Rate Schedules
General Considerations To Assign Revenue Responsibility
Conceptually•Marginal Costs•Embedded Costs (Fully Allocated Cost)•Value of Service
Other Considerations•Prices Relative to Other Utilities•Percent Change from Current (Legacy Rate)•Policy and Politics •Judgment, Negotiations, Representation and Perceived “Fairness”
General Considerations To Assign Revenue Responsibility
Conceptually•Marginal Costs•Embedded Costs (Fully Allocated Cost)•Value of Service
Other Considerations•Prices Relative to Other Utilities•Percent Change from Current (Legacy Rate)•Policy and Politics •Judgment, Negotiations, Representation and Perceived “Fairness”
General Class Definitions•Residential•Small Commercial•Medium Commercial•Large Commercial/Industrial•Interruptible•Real Time Pricing•Street & Area Lighting
General Class Definitions•Residential•Small Commercial•Medium Commercial•Large Commercial/Industrial•Interruptible•Real Time Pricing•Street & Area Lighting
RATE DESIGN CONCEPTS & ELECTRIC TERMS OF ART --- SYSTEM COST COMPONENTS ---
CapacityCosts
Variable Costs
RATE DESIGN CONCEPTS & ELECTRIC TERMS OF ART--- BASIC RATE ELEMENTS ---
Demand & Energy ChargeRate Structures
• Flat Rates (Per kW or kWh)
• Inverted and Declining Blocks– Price Per Unit Increases or Decreases as Total kW or kWh
Increases
• Diurnal and Seasonal Time of Use
• Load Factor Based (Energy Use of Demand Blocking)
• Voltage Differentiation (Sub-transmission, Primary, & Secondary voltage)
Section II:
Explanation of VEPGA Rates & Schedules
Revenue Collection Within VEPGA Rates
I. BASE RATES
II. RIDERS
• Fixed Rates Per Contract• Pre-2008 Generating Units• Distribution• Company Overhead
Automatic Recovery (Updated Annually)
•Fuel•Transmission•New Generation Projects (existing generation in base rates)
VEPGABase Rate Schedules
SCHEDULE DESCRIPTION
100 Miscellaneous Light & Power
110 All-Electric Service & Dual Fuel Systems
120 Water & Sewage Pumping & Sewage Disposal
122 Time-of-Use
130 Large Miscellaneous Light & Power
131 Thermal Storage
132 Large Misc. Light & Power – Variable Pricing
SCHEDULE DESCRIPTION
102 Traffic Signals & Control
150 Roadway, Directional & Area Lighting – High Pressure Sodium
151 Roadway, Directional & Area Lighting – Incandescent, Mercury Vapor & Urbanlites
152 Street Lighting Fixtures on Bridges & Overpasses
153 Street Lighting – Special Fixtures
154 Customer-Owned Lighting Facilities (Operating Only During Night-Time Hours)
Metered Services Lighting Services
SCHEDULE DESCRIPTION
SGCM Stand-by Generator
SGCM-1 Stand-by Generator (Grandfathered)
Complimentary Services
VEPGA Metered Rate Schedules (Base Rates)
RATE SCHEDULES
100 110
W/O
DemandW/
DemandW/O
DemandW/
Demand 120 122 130 131 132
Approx. mWh 999,100 538,700 173,100 0 2,410,700 125,200 166,000
# of Accounts 12,750 5,250 2,700 0 1,000 20 70
Average Annual kWh/Account 78,300 102,500 64,000 0 2,400,000 6,260,000 2,375,000
RATE ELEMENT
Distribution
Customer Charges $5.66 $5.66 $5.66 $5.66 $5.66 $8.11 $78.50 $78.50 $141.69
Demand Charges None None None None None Flat/kW Declining/kW Declining/kW Declining/kW (voltage diff.) (voltage diff.) (voltage diff.)
Reactive Demand None None None None None None Flat/kVAR Flat/kVAR None
Energy Charges Flat/kWh Flat/kWh Flat/kWh Flat/kWh Flat/kWh None None None None
Electricity Supply (Production)
Demand Charges None None None None None Seasonal Flat/kW Inverted/kW 1/ Inverted/kW1/ Inverted/Kw
(Seasonal TOU
Ratchet)(Seasonal TOU
Ratchet) (voltage diff.)
(Annual Ratchet)
Energy Charges Flat/kWh kWh per kWSeasonal Flat/kWh
kWh per kW Seasonal
Diurnal Flat/kWh
Seasonal Flat/kWh Declining/kWh Declining/kWh
Critical Day Designation
(Declining) (Declining) (TOU)/kWh
1/ Flat per kW charge less declining demand credit, which results in an inverted rate per kW.
VEPGA Riders
Rate Schedule
Rider 100 110 120 122 130 131 132 Lighting
Transmission (Rider T) Energy Energy Energy Demand Demand Demand Demand Energy
Generation
Virginia City Hybrid (Rider S) Energy Energy Energy Demand Demand Demand Energy Energy
Bear Garden (Rider R) Energy Energy Energy Demand Demand Demand Energy Energy
Warren County (Rider W) Energy Energy Energy Demand Demand Demand Energy Energy
Bio-Mass Facilities (Rider B) Energy Energy Energy Demand Demand Demand Energy Energy
Fuel (Rider A) Energy (All Rate Schedules Same Rate)