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2013-06-18; City Council; 21276; SDGE Enercy Outlook Rate Change Update
16 CITY OF CARLSBAD - AGENDA BILL AB# 21,276 SDG&E SUMMER ENERGY OUTLOOK AND RATE CHANGE UPDATE DEPT. DIRECTOR MTG. 6-18-13 SDG&E SUMMER ENERGY OUTLOOK AND RATE CHANGE UPDATE CITY ATTORNEY (j^ DEPT. CM SDG&E SUMMER ENERGY OUTLOOK AND RATE CHANGE UPDATE CITY MANAGER ^ RECOMMENDED ACTION: To receive a presentation from representatives of San Diego Gas & Electric. ITEM EXPLANATION: Representatives from San Diego Gas & Electric will give an update on the summer energy outlook and upcoming SDG&E rate change. FISCAL IMPACT: None. EXHIBIT: None. DEPARTMENT CONTACT: Morgen Fry 760-434-2821 , morqen.frv(a),carlsbadca.aov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED • DENIED • CONTINUED • WITHDRAWN • AMENDED • CONTINUED TO DATE SPECIFIC • CONTINUED TO DATE UNKNOWN • RETURNED TO STAFF • OTHER - SEE MINUTES ^ Council received the presentation, Summer Preparedness in San Diego Summer Outlook, General Rate Case and Bill Impacts Amber Ter-Vrugt June 2013 © 2012 San Diego Gas & Electric Company. All copyright and trademark rights reserved. 1 2013 SDG&E Summer Outlook •SDG&E expects to meet summer demand, but there could be tight days when we will need help from customers conserving and demand response –Without SONGS, there are challenges •SDG&E’s projected peak demand is around 4,600 MW under normal summer conditions, however, an unusually hot summer peak demand can reach 5,100 MW •In 2012, SDG&E completed the Sunrise Powerlink which has greatly increased reliability, allowed renewable development in Imperial Valley to flourish and increased Southern California’s ability to import power •In addition, SDG&E has completed several transmission upgrade projects that will strengthen the system and help us reliably serve our customers in 2013 and beyond 2 SDG&E and SCE Electric Transmission System 3 Hot and/or High Risk Days •Historically, the peak electric demand in San Diego occurs in late August to early September. –However , heat waves can occur any time during the summer months. •San Diego normally gets 2-3 heat waves each summer, each lasting about 3-4 days. –Consequently, calls for conservation could be made 6 – 12 days due to weather variability. •Last year was an average summer and we are expecting warmer than average (2-4 degrees) summer this year. •Operational issues, such as the loss of a major plant or transmission line, or statewide issues, could trigger the need for conservation at any time. 4 SDG&E’s Community Fire Safety Program SDG&E’s Weather System SDG&E owns and operates 145 weather stations making it the third-largest nongovernmental weather network in the United States. Installed at least one anemometer (weather station) per circuit in HRFA 6 Weather Cameras - Borrego Springs, Creelman, Loveland, Rincon, Rough-Acres, and Warner Springs to monitor weather, flying debris and impacts to structures and vegetation Enhanced situational awareness Supports forecasting, operational decisions and research All information is made available to the NWS, local universities and the public Three full-time meteorologists 5 SDG&E’s Weather System 6 Sumer Bills Outlook •Several changes in SDG&E’s electric rates will go into effect this year increasing bills for about 25 percent of customers as soon as June 1 •These changes in 2013 are among the toughest challenges SDG&E and our customers have faced in a decade •A number of factors are driving up utility costs and customers’ bills •Customers in Tiers 3 & 4 will carry the burden of these increases 7 Who’s affected? About 25 percent or 1 in 4 SDG&E customers, including: •Approximately 300,000 residential customers •Electricity usage in Tiers 3 and 4 •Monthly electric bills of more than $80 •Usage of more than 500 kilowatt-hours (kWh)/month •Majority of those affected use 1,000 kWh or more •~1,200 SDG&E employees •All 80,000 business customers 8 $290 Average monthly electric bill for Small Business Customers Have SWIMMING pools 17% Use more than 1,500 kwh per month Tiers 3 & 4 For residential customers, what’s included in an electric bill? Commodity 48% Distribution 36% Transmission 10% Public Purpose Programs 4% Other 2% Residential Tiered Rate Structure 672 kWh Tier 4 $0.29 437 kWh Tier 3 $0.27 336 kWh Tier 2 $0.17 Tier 1 $0.15 Based on Basic Summer Inland Effective as of 01/01/13 9 What’s causing Summer bill increases? GRC costs . Commodity Costs (ERRA pending) •A Smart & Reliable Grid to manage intermittent solar, wind, & growing EV demand, to re-route power automatically through smart switches •Safety through fire hardening & weather stations •Higher insurance costs of wildfire liability, health care •Compliance with more stringent GHG environmental laws Regulatory Timing •GRC covers 2012-2015 period •17 months without an operating budget •Catch-up 2012-2013 revenues to be collected Sept 1 •FLAWED RATE DESIGN… 10 •33% renewable resources required by 2020, cost of renewable contracts hits bills this year •SONGS replacement power •DWR replacement contracts Legacy AB1x Rate Design New Costs Disproportionately Borne by Tiers 3 & 4 11 12.9 14.8 14.8 17.1 17.1 14.9 26.5 28.5 13.7 18.3 0 5 10 15 20 25 30 35 40 45 1 2 3 Tier 1 Tier 2 Tier 3 Tier 4 Sys Avg Jan 2013 Sept 2013 Jan 2001 ₵ per kilowatt hour Reduce Your Use Day Rewards •In 2012, SDG&E rolled out Reduce Your Use. All residential customers are encouraged to sign up for alerts: 12 •Enhanced Energy Management functionality •Snapshot of your Energy Information •Links for more in depth analysis •Tools you can use to customize Energy Plan What can you and your family do to help? •Conservation/Energy-saving tips: –Turn off unneeded lights, computers and appliances when not in use –Close your blinds, shades or drapes during the hottest part of the day to block out the sun's heat –Replace regular light bulbs with CFLs or LEDs –Filter pools and spas in the early morning or after the sun goes down –Use smart strips and reduce vampire loads (unplugging unused charging devices) –Change out a single speed pool pump to a variable speed one –Sign up for our Summer Saver AC load cycling program— reduce your bills and get a credit 14 CAISO Flex Alerts If CAISO officials call a Flex Alert: Turn off unneeded lights Use electric appliances after 6 p.m. Adjust your A/C to 78 or higher www.flexalert.org 15 Thank you! 16