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W A T E R I E N E R G Y I l I E E RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T T I I T T F $ BOARD OF PUBLIC UTILITIES DATE: May 07, 2010 ITEM NO: B SUBJECT: ADOPTION OF PROPOSED CHANGES TO ELECTRIC RATES-GENERAL SERVICE- (SCHEDULE A), DOMESTIC SERVICE (SCHEDULE D), WIND MACHINES FOR FROST PROTECTION (SCHEDULE PW-1), AND LARGE GENERAL AND INDUSTRIAL SERVICE (SCHEDULE TOU) ISSUE: Consideration of changes to Electric Rates - General Service (Schedules A), Domestic Service (Schedule D), Wind Machines for Frost Protection (Schedule PW-1), and Large General and Industrial Service (Schedule TOU), including waivers of or adjustments to the Reliability Charges for qualified customers. RECOMMENDATIONS: That the Board of Public Utilities: 1. Conduct a public hearing to receive public input related to proposed changes to the Electric Rate Schedules A, D, PW-1, and TOU, including waivers of or adjustments to the Reliability Charges for qualified customers as outlined in this report; 2. Adopt a resolution establishing changes to the Electric Rate Schedules; and 3. Recommend that the City Council adopt the appropriate resolution approving the above recommendations. BACKGROUND: In December 2007, the City Council approved the three-year Electric Utility Rate Plan. A major component included establishing a Reliability Charge to fund electric system reliability improvements to include a second interconnection to the State's transmission grid and construction of internal generation to ensure import capability and reliable service delivery during times of peak and normal energy use. The Reliability Charge specifically pays the thirty-year debt service on approximately $350 million for these projects. The City Council approved application of the Reliability Charge to all customer classes, since all customers benefit from the reliability improvements. The three year phase-in helped lessen the financial impact to customers. The Reliability Charge is determined either by the customer's maximum rated electric service panel capacity, or through a combination of such panel capacity and actual usage, all according to the customer's applicable rate tariff. Reliability Charge Waivers Electric Rate Schedule PW-1 (Wind Machines for Frost Protection) is applicable only for service to wind machines for frost protection. Electric usage for these accounts is very minimal and seasonal with use typically limited to winter months and during off peak hours. Several other areas appear appropriate to temporarily waive the Reliability Charge. The economic downturn has increased the number of vacant (unoccupied) commercial buildings. Minimal electric service for these vacant properties is crucial for public safety and to provide security lighting, alarms and landscape irrigation. 1