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Non-Utility Costs in Utility Bills Non-Utility Costs in Utility Bills

Non-Utility Costs in Utility Bills - PowerPoint Presentation

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Non-Utility Costs in Utility Bills - PPT Presentation

M Sarafolean J Kaman Iowa Industrial Energy Group Meeting April 9 2013 Utility Bills Special Riders Surcharges Above Market PPAs Cross Class Subsidies Taxes City Franchise Fees Bill Markup ID: 636588

franchise utility fees electric utility franchise electric fees energy public costs income taxes 199 cost efficiency class cross gas local iac electrical

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Slide1

Non-Utility Costs in Utility Bills

M. Sarafolean

J. KamanIowa Industrial Energy Group Meeting April 9, 2013Slide2

Utility BillsSpecial Riders, SurchargesAbove Market PPAs

Cross Class SubsidiesTaxes

City Franchise FeesSlide3

Bill Markup

More to come…Slide4

RidersRenewable development fundsEnergy efficiency charges

Special pollution surcharges - externalitiesCarbon surcharges

System/Public Benefits FundsSlide5

Administrative Code - RidersSpecifies criteria for whether a rider could apply [e.g. electric rates 199 IAC 20.9(1)]Incurred in supplying energy

Beyond direct control of managementSubject to sudden important change in levelImportant factor in total cost to serve

Segregated in utility accountsRecent Iowa examplesAlliant’s electric Energy Adjustment Clause (EAC), electric utility AEPsElectric (and Gas) EECRs, 199 IAC 35.12Capital Infrastructure, e.g. 199 IAC 19.18 (gas)Slide6

Tariff

Cities Served

- Electric Service territory map

http://

www.iowadot.gov/maps/msp/electrical/electrical.html

Riders

Franchise Fees imposedSlide7

System Benefit CostsLow income subsidies

Cash fuel assistance paymentsCrisis intervention fundingEnergy efficiency funding

Cross class subsidiesEnergy efficiency, DSM, renewable programshttp://liheap.ncat.org/workbook/questions.htm Slide8

Above Market PPAsWind power mandates Solar power mandates

Other PPA embedded cost riskSlide9

Cross Class SubsidiesBuilt into IOU cost of service allocationsTiered kWh purchases

Allocation of variable costs to demand chargesIncreased CP eventsSlide10

TaxesPhantom income taxesState and Federal taxes included in base rates but never paid to States and the Feds.

Local taxes on utility assetsState and local sales taxes on utility revenuesSlide11

FeesMunicipal fees Low income assessments

Meter chargesCustomer chargesCity franchise feesSlide12

Utility Franchise FeesBy the CITYIn lieu of

municipalization?Des Moines franchise fee lawsuit

Iowa Code 480A (local option) and 364.2 (franchise fees) – mutually exclusiveNow (since 2009): Up to 5% without proving costs are for “inspecting, supervising, and otherwise regulating…” the franchiseCan use excess for property tax relief, public improvements, low-income energy conservation, public safety, public works and transportation, streets, economic development….Slide13

A Story About Waterloo…Cities need revenue, property tax concerns in IowaEnergy bill taxes are disproportionate to industry/employers

Appears can:Modify for different customer classesApply to Electric, Nat Gas, Telecom, (etc.) any combination or none

Apply a cap per customerSlide14

Non-Utility Costs in Utility Bills

M. Sarafolean

J. KamanIowa Industrial Energy Group Meeting April 9, 2013