DEPARTMENT: Finance
DEPARTMENT HEAD: Ben Gorzell, Chief Financial Officer
COUNCIL DISTRICTS IMPACTED: City Wide
SUBJECT:
An Ordinance approving the establishment of a CPS Energy tariff for piloting New Service Options. This Ordinance does not include a rate increase.
SUMMARY:
CPS Energy is requesting approval of a tariff which would allow piloting of New Service Options (NSO) to gauge customer interest in new products and services that embrace innovative technologies and refine the offering prior to bringing a final tariff to Council for approval. This Ordinance does not include a rate increase.
BACKGROUND INFORMATION:
The City Council provides oversight of CPS Energy through the approval of rates and charges, authorization of debt issuances, approval of all condemnations, and the approval of the appointment of all Trustees except the Mayor.
Council exercises its oversight over electric and gas rates and charges by approving rate tariffs for various customer classes. Taken together, these rate tariffs define the rates and charges for all retail products and services offered by CPS Energy, and they are designed to recover all costs of serving customers.
Under the current process, Council must approve each rate tariff before that product or service can be offered to customers. This process works well for CPS Energy's standard electric and gas products and services. However, as CPS Energy seeks to develop and launch new innovative products and services, the information and time required to optimally design a new rate tariff is frequently not available. This can result from any number of uncertainties, such as:
* Technology and customer desires are rapidly evolving,
* Customer adoption of new products and services may still be emerging, making it difficult to predict how much of a product will be sold, and/or
* Information on cost requirements to provide an emerging product or service are based on estimates, making it difficult to quantify ...
Click here for full text