08-03-12 BPU RPT 04 - Laserfiche WebLink

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W A Y € R E N E R G Y RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: August 3, 2012 ITEM NO: 4 SUBJECT: SEIZING OUR DESTINY - EXTEND THE BUSINESS RETENTION ELECTRIC RATE SCHEDULE AGREEMENT DEADLINE ISSUE: That the Board of Public Utilities consider extending the Business Retention Electric Rate agreement deadline for existing industrial customers. RECOMMENDATION: That the Board of Public Utilities direct staff to set a Public Hearing for consideration of extending the Business Retention Electric Rate (Schedule BR) agreement deadline. BACKGROUND: In the Mayor's State of the City Address in 2010, RPU was requested to provide assistance with a green economic development plan and to continue to take steps for Riverside to become the model solar city in Southern California. The Riverside Public Utility (RPU) Electric Environmental and Economic Effectiveness (E4) Plan, approved by City Council in July 2010, was created to assist Riverside in continuing to be at the forefront of sustainability and developing a green economy while creating a market segment that can provide jobs and local economic development. The multi-faceted plan developed by staff promoted economic development while still being environmentally responsible. The plan included components for energy efficiency, renewable energy, green jobs, economic development, low income assistance and an electric rate "freeze" through the end of 2012. An 18-month update of the E4 Plan and RPU's participation in the City's Seizing our Destiny/Economic Development Action Plan was presented to the Board of Public Utilities on March 2, 2012 and the City Council on March 6, 2012. The update of the E4 Plan included RPU's ability to assist in economic development. RPU proposes to continue participation in the City's Seizing our Destiny/Economic Development Action Plan by extending the existing agreement deadline date of Schedule BR. Currently, customers who qualify for Schedule BR must have an agreement executed prior to December 31, 2012. RPU proposes to extend the agreement execution deadline to December 31, 2015. Schedule BR helps mitigate additional impacts from the prolonged economic downturn to existing customers that could result from a potential relocation of an existing large load business outside of the electric service territory. Departure or relocation of large load customers could have severe negative impacts to other existing customers, the Utility and the City as this loss of load would reduce the customer rate base to allocate and collect fixed generation, transmission and distribution costs. Schedule BR rate is for existing large customers with a monthly demand of at least 150 kW that execute an affidavit that "but for" the economic development retention rate incentives, in combination with other city-sponsored-incentives, such customers would relocate outside of the City's electric service territory. Schedule BR provides a two-year rate incentive for mid- and off-peak energy usage under the customer's otherwise applicable rate tariff. Program participation program limited to a maximum level of