DEPARTMENT:
Finance
DEPARTMENT HEAD:
Troy Elliot
COUNCIL DISTRICTS IMPACTED:
City Wide
SUBJECT:
CPS Energy Proposed Electric and Gas Base Rate Adjustments
SUMMARY:
The proposed Ordinance authorizes approval of adjustments to the CPS Energy base electric and gas rates.
BACKGROUND INFORMATION:
CPS Energy has proposed to increase both its base electric and gas rates by 4.25%. The City hosted two City Council work sessions (September 18th and October 3rd) to allow CPS Energy to present its rate case and to provide an opportunity for the public to provide input on the proposed request. The CPS Energy Board of Trustees also held a public forum on September 9th to gather public input on the proposed increases.
The Public Utilities Staff ("Staff") of the Finance Department has been working with CPS staff to conduct a comprehensive review of the proposed Electric and Gas rate adjustments since August 2013. The review included areas such as:
* Economic/Rate Model
> Flow of Funds Under the CPS Energy Bond Indenture
* Key Financial Targets
> Debt Service Coverage
> Debt/Equity Ratio
> Days Cash on Hand
> Reserve Balances
> Additional Repair and Replacement Funds
* Revenue Requirements
* Proposed Capital Plan
* Operations and Maintenance Budget
* Financing Plan
* Affordability Programs
* Off-System Sales
* Credit Considerations
The proposed electric rate adjustment will equate to an increase of 4.25% on base electric rates (system average) and approximately 3.24% on the average system-wide electric only bill. The estimated increase on the total system-wide bill (electric and gas) will be 3.21%. The table below reflects the projected rate plan over the next 10 years. It shows both the base rate increase as well as the estimated system average bill impacts.
The combined electric and gas rate would equate to an estimated $4.68 per month increase on the typical residential customer bill of $145.54. To help mitigate the impact of the ...
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