# Presentation: 723487

## Informal Discussions on Proposed 2006
Loveland Area Projects
Rate Adjustment

Ron Steinbach						May 2005

- Loveland Area Projects
- Rate Adjustment
- Ron Steinbach						May 2005

## Proposed Rate Adjustment

- 2 Step Adjustment:
- Composite Rate (mills/kWh)
- Current 				23.90
- January 1, 2006:		26.12
- January 1, 2007:		27.36
- Two Components
- Pick-Sloan
- Fryingpan-Arkansas

## Summary

- Final FY 2004 Fry-Ark PRS
- Preliminary FY 2005 Fry-Ark PRS
- Fry-Ark Revenue Requirement History
- Preliminary LAP Rate Adjustment
- LAP Rate History
- Proposed Schedule

## Fry-ArkFinal FY 2004 PRS Results

- 	Comparison of existing rate to solution:
- $12,856k to $13,503k
- FY 2004 expenses exceeded revenues
- Modified Revenue and Expense Projections
- Adjusted miscellaneous revenues
- Increased O&M and Net Purchased Power

## Fry-ArkFY 2004 Expenditures

- O&M				$  4.9 million
- Purchased Power 					and Transmission	$  5.9 million
- Interest on Investment	$  4.4 million
- Deficit Taken			$ 579 thousand

## Fry-Ark Rate Setting (Preliminary FY 05) PRS

- 	Comparison of existing rate to solution
- $12,856k to $13,869k
- Repay FY 2004 deficit
- Add Western and Bureau of Reclamation  FY 2007 work-plans
- Add additional year of purchased power expense and economy sales revenue

## Fry-ArkFuture O&M Expenditures

- 			_Western_	   _Bureau_
- 2005		$685,428	$3,278,808
- 2006		$725,789	$3,519,482
- 2007		$686,777	$3,500,756
- 2008		$705,765	$4,272,130
- 2009		$724,753	$3,891,604
- 2010		$744,086	$3,828,182

## Slide 8

## Fry-Ark History

**  **_**Year**_**	****  ****	**_**Revenue Requirement**_
- 1989		$  9,242,000
- 1991		$11,747,800
- 1992		$13,933,200
- 1994		$12,855,560
- 2006		$13,503k proposed 1st step
- 2007		$13,869k proposed 2nd step

## 
PRESENT REVENUE REQUIREMENT:	$12,855,560

PROPOSED INCREASES:
Jan 06 - 					$     647,840
Jan 07 - 					$     366,000
Total Increase				$  1,013,840

Proposed Revenue Requirement		$13,869,400

- _PRESENT REVENUE REQUIREMENT_:	$12,855,560
- _PROPOSED INCREASES_:
- Jan 06 - 					$     647,840
- Jan 07 - 					_$     366,000_
- Total Increase				$  1,013,840
- Proposed Revenue Requirement		$13,869,400

- Fryingpan-Arkansas

## PRESENT REVENUE REQUIREMENT:
18.06 mills/kWh x 1,988,000,000 kWh			$35,903,280

PROPOSED INCREASES:
Jan 06 - 1.96 mills/kWh x 1,988,000,000 kWh		$  3,896,480
Jan 07 - 1.07 mills/kWh x 1.988,000,000 kWh		$  2,127,160
Total Increase						$  6,023,640

	Proposed Revenue Requirement			$41,926,920
(21.09 mills/kWh x 1,988,000,000 kWh)

- 18.06 mills/kWh x 1,988,000,000 kWh			$35,903,280
- _PROPOSED INCREASES_:
- Jan 06 - 1.96 mills/kWh x 1,988,000,000 kWh		$  3,896,480
- Jan 07 - 1.07 mills/kWh x 1.988,000,000 kWh		_$  2,127,160_
- Total Increase						$  6,023,640
- 	Proposed Revenue Requirement			$41,926,920
- (21.09 mills/kWh x 1,988,000,000 kWh)

- Pick-Sloan WD

## PRESENT REVENUE REQUIREMENT:
23.90 mills/kWh x 2,040,000,000 kWh			$48,758,840

PROPOSED INCREASES:
P-SMBP-WD Revenue Requirement			$  6,023,640
Fry-Ark Revenue Requirement				$  1,013,840
Total Increase						$  7,037,480
Total LAP Revenue Requirement (2nd step)
27.36 mills/kWh x 2,040,000,000 kWh			$55,796,320

- 23.90 mills/kWh x 2,040,000,000 kWh			$48,758,840
- _PROPOSED INCREASES_:
- P-SMBP-WD Revenue Requirement			$  6,023,640
- Fry-Ark Revenue Requirement				_$  1,013,840_
- Total Increase						$  7,037,480
- Total LAP Revenue Requirement (2nd step)
- 27.36 mills/kWh x 2,040,000,000 kWh			$55,796,320

- Loveland Area Projects

## PreliminaryLAP Rate Adjustment

- Comparison of existing LAP rate to preliminary LAP solution
- 23.90 to 27.36 mills/kWh
- (3.46 mills/kWh increase)

## Loveland Area ProjectsRate Setting Proposal

|  | Composite Rate (mills/kWh) | Percent Change | Implementation Date | Western Division Rev. Req. (millions) | Fry-Ark Rev. Req. (millions) | Capacity Charge ($/kW-month) | Energy Charge (mills/kWh) |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Current Rates | 23.90 |  | Oct 2004 | $35.9 | $12.9 | $3.14 | 11.95 |
| 2 Step | 26.12
27.36 |   9.3%
  5.2%
14.5% | Jan 2006
Jan 2007 | $39.8
$41.9 | $13.5
$13.9 | $3.43
$3.59 | 13.06
13.68 |

## Slide 15

## Loveland Area ProjectsRate History

**  ****Year****	****  ****	****Composite Rate**
- 1989	             14.30
- 1990     Step 1  16.78  Step 2   17.20
- 1991     Step 1  19.18  Step 2   20.06
- 1992     Step 1  20.66  Step 2   21.70
- 2003     Step 1  23.44  Step 2   23.90
- 2006	Step 1  26.12  Step 2    27.36

## Proposed Schedule

- Informal Meetings			May 10th	Denver
- Public Process (90 days)
- Federal Register Announcement	June 17th
- Information Forums		July 19-20th	Denver and Lincoln
- Comment Forum			August 16th	Denver
- Close of Comment Period		September 16th
- Implementation of New Rates	January 1, 2006

## Other Information

- Materials for formal process will be posted on Website (after June 17th) _[http://www.wapa.gov/rm/rm.htm](http://www.wapa.gov/rm/rm.htm)_
- To Contact Us
- Ron Steinbach	_[steinbach@wapa.gov](mailto:steinbach@wapa.gov)__	__(970) 461-7322_
- Dan Payton		_[dpayton@wapa.gov](mailto:dpayton@wapa.gov)__	__(970) 461-7442_
- Sheila Cook		_[scook@wapa.gov](mailto:scook@wapa.gov)__	__	__(970) 461-7211_
- 	Mailing Address
- 	 Western Area Power Administration
- Rocky Mountain Region
- PO Box 3700
- Loveland, CO 80539

## Discussion