01-06-10 BPU RPT A - Laserfiche WebLink

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W A ` E R E N E R G Y f r ?. RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: January 6, 2010 ITEM NO: A SUBJECT: RE-OPEN ECONOMIC DEVELOPMENT RATE FOR NEW AND EXPANDED LOAD CUSTOMERS, ADD "GREEN" BUSINESSES TO ELIGIBILITY CRITERIA, AND ESTABLISH A NEW BUSINESS RETENTION RATE FOR EXISTING CUSTOMERS ISSUE: Consider re-opening electric Economic Development(Schedule ED)Rate for new or expanded load industrial customers, add "green" businesses to eligible criteria and establish a new Business Retention Rate (Schedule BR)for existing industrial customers. RECOMMENDATIONS: That the Board of Public Utilities: 1. Conduct a public hearing to receive public input related to the re-opening of the Schedule ED Rate for new or expanded load industrial customers, add "green" businesses to eligibility criteria, and the establishment of the new Business Retention Rate (Schedule BR)for existing industrial customers; 2. Adopt a resolution establishing Electric Rate Schedule ED and Electric Rate Schedule BR; and 3. Recommend that the City Council adopt the appropriate resolution approving the above recommendations. SUMMARY. The City Council approved the Economic Development Rate on May 2, 2000. This rate required a four-year agreement that provided rate reductions in the first two years,while still recovering all variable costs to serve the new load during the initial years. The customer would transition to full tariff rates by years 3 and 4. Besides encouraging economic development,the rate also encouraged local job growth and an expanded tax base. Subsequent modifications were made to attract research and development, and high technology companies and incorporate other clarifying criteria for rate applicability. In December 2006,due to concerns regarding load growth and import capability, Schedule ED was suspended pending reliability improvements to electric facilities. Completion of Units 3 and 4 of the Riverside Energy Resource Center, anticipated in fall 2010 will eliminate concerns over power delivery capability and re-opening the Schedule ED rate is recommended. Also recommended is application of Schedule ED to qualifying "Green" businesses The Schedule ED proposed rate reduction is as follows: Year 1 —40%; Year 2—20%; Year 3— 0%; and Year 4—0%. The Utility also proposes a new Business Retention Rate (Schedule BR)to help 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. Schedule BR would provide a two year rate incentive for mid and off peak energy usage under the customer's otherwise applicable rate tariff. 1