8.
City Council Work Session
- Meeting Date:
- 01/31/2017
- From:
- Nicole Woodman, Sustainability Manager/Interim Public Works Section Dir.
- Department:
- Public Works
Co-Submitter:
Sterling Solomon, City Attorney
TITLE:
Discussion/presentation regarding a proposed 2017 Arizona Public Service Rate Case to the Arizona Corporation Commission.
DESIRED OUTCOME:
This is informational only.
EXECUTIVE SUMMARY:
Arizona Public Service (APS) filed a general rate case with the Arizona Corporation Commission (ACC) on June 1, 2016 (Docket Number: E-01345A-16-0036). The case, which proposes new rates and a demand rate structure, is expected to be ruled on April 24, 2017. If approved by the ACC and the rate case is completed, the new rate structures would go into effect on July 1, 2017 impacting commercial and residential customers.
Commercial Customers: If approved, the new rate structure would impact commercial customers depending on their rate type. For the City of Flagstaff, the most significant impact would be to the Utilities Department, since the majority of the high-use meters are associated with water production and treatment. City staff prepared fiscal scenarios based on FY 17 data and anticipates an annual increase of $166,000. APS is analyzing City data and will provide more comprehensive estimates at the 1/31/17 work session.
Residential Customers: If approved by the ACC as proposed, the average monthly bill according to APS for residential customers would increase 7.96 percent, from $139.32 to $150.41. APS is also seeking to change the peak hours for customers on time-of-use rates from noon to 7 p.m. in summer to 3 p.m. to 8 p.m. Electricity is priced higher on those rate plans during those hours. As proposed, the demand charge rate structure would be mandatory.
Residential Solar Customers: The proposed rate case would reduce the amount of compensation rooftop solar customers receive for excess energy they send back to the grid. The net metering credit would drop from the current retail electricity rate to the wholesale rate of between 2.5 cents and 3 cents per kilowatt-hour. APS has met the Arizona Renewable Energy Standard requirement.
City staff will discuss the potential impacts of the proposed rate structure on City and residential customers. APS staff will provide additional information on the rate case.
Commercial Customers: If approved, the new rate structure would impact commercial customers depending on their rate type. For the City of Flagstaff, the most significant impact would be to the Utilities Department, since the majority of the high-use meters are associated with water production and treatment. City staff prepared fiscal scenarios based on FY 17 data and anticipates an annual increase of $166,000. APS is analyzing City data and will provide more comprehensive estimates at the 1/31/17 work session.
Residential Customers: If approved by the ACC as proposed, the average monthly bill according to APS for residential customers would increase 7.96 percent, from $139.32 to $150.41. APS is also seeking to change the peak hours for customers on time-of-use rates from noon to 7 p.m. in summer to 3 p.m. to 8 p.m. Electricity is priced higher on those rate plans during those hours. As proposed, the demand charge rate structure would be mandatory.
Residential Solar Customers: The proposed rate case would reduce the amount of compensation rooftop solar customers receive for excess energy they send back to the grid. The net metering credit would drop from the current retail electricity rate to the wholesale rate of between 2.5 cents and 3 cents per kilowatt-hour. APS has met the Arizona Renewable Energy Standard requirement.
City staff will discuss the potential impacts of the proposed rate structure on City and residential customers. APS staff will provide additional information on the rate case.
INFORMATION:
COUNCIL GOALS:
5) Explore and adopt policies to lower the costs associated with housing to the end user
10) Support and assist the most vulnerable
REGIONAL PLAN:
1) Policy E.1.7. Support policies and programming that reduce electricity, natural gas, and water consumption in order to conserve natural resources and reduce financial costs.
2) Policy E.1.8. Incorporate alternative energy conservation and renewable energy systems in applicable codes.
3) Policy E.1.11. Identify financing mechanisms to support water and energy efficiency improvements in public, residential, commercial, and industrial sectors.
4) Policy E.2.1. Promote renewable energy sources that reduce demand upon fossil fuels and other forms of generation that produce waste.
5) Policy E.2.2. Preserve opportunities for development of renewable energy resources in the planning process.
6) Policy E.2.4. Encourage small-scale renewable energy production and use on the local level on appropriate residential, commercial, and industrial parcels.
7) Policy E.2.5. Pursue, promote, and support utility-scale renewable energy production such as biomass facilities, solar electricity, wind power, waste-to-energy, and other alternative energy technologies.
5) Explore and adopt policies to lower the costs associated with housing to the end user
10) Support and assist the most vulnerable
REGIONAL PLAN:
1) Policy E.1.7. Support policies and programming that reduce electricity, natural gas, and water consumption in order to conserve natural resources and reduce financial costs.
2) Policy E.1.8. Incorporate alternative energy conservation and renewable energy systems in applicable codes.
3) Policy E.1.11. Identify financing mechanisms to support water and energy efficiency improvements in public, residential, commercial, and industrial sectors.
4) Policy E.2.1. Promote renewable energy sources that reduce demand upon fossil fuels and other forms of generation that produce waste.
5) Policy E.2.2. Preserve opportunities for development of renewable energy resources in the planning process.
6) Policy E.2.4. Encourage small-scale renewable energy production and use on the local level on appropriate residential, commercial, and industrial parcels.
7) Policy E.2.5. Pursue, promote, and support utility-scale renewable energy production such as biomass facilities, solar electricity, wind power, waste-to-energy, and other alternative energy technologies.