1997 AGN OCT 21 I23 - Laserfiche WebLink

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their pricing will be. The CTC charge will be eliminated once all reasonable stranded costs have been recovered. It is important to understand that the provision of energy alone is not the same as providing electric service. The provisionof electric service includes facilities for transmitting and distributing electric energy, as well as providing related services to customers such as metering and billing, energy efficiency programs, and other programs that support localities. Today, energy comprises approximately 30% of the cost of electric service. It is primarily this 30% component that will be opened to competition. The CTC will be one component of a new method of billing customers for electric service. In the future, bills will be broken down into a structure similar to the one shown below: Distribution Charge Transmission Charge Energy Charge Competition Transition Charge Public Benefits Charge Other components, such as Metering and Billing and Street Lighting, may also be broken out to show how those activities affect the overall cost of electric service and to promote competition. ` AB 1890 also requires local publicly owned electric utilities to indicate once per year on the customer's bill the amount of money transferred annually to other funds. The City of Colton is well positioned among municipalities that operate an electric utility with respect to a deregulated market. Our investment in nuclear power is relatively small, and our coal-fired resource is reasonably competitive. The balance of resources to load will improve tremendously upon the opening of the new hospital At that point, the City can enter the new market from a position of increasing strength. Assembly Bill AB1890 requires that the regulating body of a local publicly owned utility must hold a public hearing in which the CTC is presented, and that enactment of direct access may follow 6 months after adoption of the Schedule. This report is presented to facilitate the satisfaction of that requirement. ANALYSIS The electric utility is presenting a fixed, six month CTC applicable to all customers at this time to enable direct access six months from now. This particular CTC, rate reflects a pre -hospital - load resource condition. Once the hospital is opened, the CTC should go down significantly. The electric utility prefers to defer the announcement of future OTC's until market conditions are clarified in the upcoming months. Before the end of 1997, there will be a CTC update presented to Council for the period beyond June 30, 1998, Calculation From 6 Months After Date of Enactment until June 30 1998 Total Fixed Obligations $8,863,209 Generation Capacity $7,355,175 Minimum Energy Take $ 597,008