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HomeMy WebLinkAboutAPUC Wholesale Power Agreements 1993e So ” 8S 85 52 oie 85% 52s =iti< a 2% & 2a gs —~- O aa 555 LSS 80 = a9 a- < (907) 276-6222 10 1 12 13 14 15 16 17 18 19 20 |; 21 22 wECE VED OCT 2 5 1993 DIVIS:0N OF E; ‘ERCY/DCRA Before Commissioners: Don Schr6er, Chairman Susan M. Knowles Daniel Patrick O’Tierney Mark A. Foster James E. Carter, Sr. In the Matter of the Consideration of Standards for Approval of Whole- sale Power Contracts as Required by Section 712 of the Energy Policy Act of 1992 R-93-4 ORDER NO. 2 ri nae ae aah ac Ras ORDER DECLINING TO ADOPT ADDITIONAL STANDARDS FOR APPROVAL OF WHOLESALE POWER AGREEMENTS; ALLOCATING COSTS; AND CLOSING DOCKET BY THE COMMISSION: Introduction In October 1992, Congress passed and the President signed, the Energy Policy Act of 1992 (EPAct), a comprehensive _ energy bill. The Public Utility Regulatory Policies Act of 1978 . (PURPA)? required state regulatory commissions to consider and ‘| ‘ make determinations regarding certain federal energy standards.? The EPAct added four standards to be considered by state :, regulatory commissions. 23°: 24 25 26 : 116 USCA §2621(a). 216 USCA §2621(d) (10) (i) through (iv). R-93-4(2) - (10/21/93) CC. We , Page 1 of 9 Dow , Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 1 12 13 14 15 16 17 18 19 20 By Order R-93-4(1), dated September 10, 1993, The Commission opened this Docket to address these standards and to inquire whether a rulemaking proceeding was either appropriate or necessary. As noted in Order No. 1 in this proceeding, Sections 111 and 115 of EPAct require the Commission to determine whether it should adopt standards related to Integrated Resource Planning. ‘That issue will be addressed in a separate proceeding. a 22 23 24 25 26 Section 712 of EPAct mandates that any state regulatory authority, which requires or allows electric utilities to consider the purchase of long-term wholesale power supplies as a means of ‘meeting electric demand, must perform, within one year of the | passage of EPAct,? a general evaluation of the following: 1. the potential for increases or decreases in the costs of capital for electric utilities entering into long-term wholesale power contracts (contracting utilities) and any resulting increases or decreases in the retail rates paid by electric consumers that may result from purchases of long-term wholesale power supplies in lieu of the construction of new generation facilities by these utilities; 316 USCA §2621(d) (10) (E) provides that "each State regulatory authority shall consider and make a determination concerning ‘whether it is appropriate to implement the standards set out in subparagraph (A) not later than one year after October 24, 1992." R-93-4(2) - (10/21/93) Page 2 of 9 Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 1 12 13 14 15 16 17 18 19) 20 21 22 23 24 25 26 | 2. whether the use by exempt wholesale generators (EWGs) * of capital structures that employ proportionately greater amounts of debt than capital structures of contracting utilities threatens reliability or provides an unfair advantage for EWGs over such utilities; 3. whether procedures should be implemented for the advance approval or disapproval of long-term whole- sale power supply contracts; and 4. whether reasonable assurances of fuel supply adequacy should be required as a condition for the approval of the purchase of power. The Commission noted that Section 712 of the Act requires an evaluation of the aforementioned issues, not the adoption of specific rules or other affirmative act. In Order No. 1 the Commission observed that current state statutes require its prior approval of wholesale power agreements. > The Commission’s review of wholesale power agreements typically encompasses a variety of elements, including ‘the following: (1) the potential for increases or decreases in the cost of capital for the purchasing utility, as well as the 4EWG’s are exempt from the regulatory provisions of the Public Utility Holding Company Act of 1935. 5AS 42.05.431(b) provides, in pertinent part, "A wholesale power agreement between public utilities is subject to advance approval of the commission. ..." R-93-4(2) - (10/21/93) Page 3 of 9 e Lo aS as E25 so | Ea8 Og 398 “2x ®2o sss oe a 2S 2aS —=~-—9d aoa 3OS ass ge = “ao on <= (907) 276-6222 10 11 12 13 14 15 16 17 18 19 resultant increases or decreases in retail rates; and (2) the : stability and adequacy of the fuel supply source. The Commission has exercised its statutory authority with respect to wholesale power agreements. As to EWGs, the Commission concluded that there are no : such generators in Alaska at the present time nor does there appear to be any plans for EWG development in the foreseeable ' future. The Commission scheduled a public hearing for October '1, 1993, to accept testimony on the issue of whether additional 20 21 22 23 24 25 26 formal standards should be adopted for wholesale power agreements. The Commission also provided for the submission of written comments no later than October 15, 1993. Finally, the Commission scheduled a special public meeting for October 21, 1993, to determine what action, if any, should be taken in response to ‘Section 712 of EPAct. The public hearing was held as scheduled. No members of the public appeared, and no comments were entered on the record. On October 14, 1993, the Commission received written comments from Golden Valley Electric Association, Inc. (GVEA). ‘' GVEA concurs with the Commission’s conclusion that EPAct does not require any specific legislative or Commission action on the evaluation conducted pursuant to Section 712. R-93-4(2) - (10/21/93) Page 4 of 9 Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 11 12 13 | 14 15 16 17 18 19 20 | pound to follow the mandates of EPAct with respect to electric 21 | 22 23 24 25 26 | Further, GVEA asserts that the first two questions presented by Section 712 of EPAct are not relevant to Alaska because the majority of Alaskan consumers receive their power from cooperative utilities rather than investor-owned utilities. Moreover, the competitive relationship between utilities and independent power producers is not a factor in Alaska because no independent power producers have undertaken generation projects. GVEA also asserts that the final two questions presented by Section 712 of EPAct have been resolved in Alaska through the Commission’s exercise of its statutory authority. GVEA concludes that the present statutory scheme is sufficient and that the adoption of additional regulations is unnecessary and unwarranted and would, in fact, create unnecessary complications and unduly | interfere with each utility’s ability to negotiate individual ', power sales agreements to suit its needs. On October 15, 1993, Chugach Electric Association, Inc. " (Chugach) , filed comments that generally agree with the Commis- |; Sion’s conclusion that further action is unnecessary. In ‘addition, Chugach raises the issue of whether the Commission is ,utilities because Alaska’s electric utilities may not have || sufficient involvement in interstate commerce to fall within the if | purview of federal jurisdiction. On October 15, 1993, the Commission also received _written comments from the Alaska Rural Electric Cooperative R=93=4 (2)—=— (210/721, /93) Page 5 of 9 {] Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 1 10 1 12 13 14 15 16 17 18 | 19 20 21 22 23 24 25 26 ‘ Association, Inc. (ARECA). ARECA asserts that the Commission, :under its established practices and procedures, gives due consideration to the factors listed in EPAct during the course its ‘| approval of wholesale power agreements. Accordingly, ARECA argued ' chat further rulemaking is unnecessary. The Commission Staff (Staff) submitted its analysis and ‘| recommendation regarding EPAct to the Commission on October 20, 1993. Staff stated that Commission currently has mechanisms in | place to review wholesale power agreements which address rates and leo designed to protect the financial health of the parties to the ‘| transaction. Therefore, Staff recommended that the Commission ; reject the adoption of additional standards for wholesale power | | \ aeeeraio permit Chugach to brief the issue of federal | || Jurisdiction in subsequent EPAct proceedings, and close the || docket. No other written comments were received by the \ '| Commission. On October 21, 1993, the Commission held a special | public meeting to decide whether to adopt additional rulemaking | Standards regarding wholesale power contracts. Discussion After review of the comments filed by ARECA, Chugach, GVEA, and Staff, the Commission affirms the tentative -conclusion(s) reached in Order R-93-4(1). R-93-4(2) - (10/21/93) Page 6 of 9 Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 1 12 13 14 15 16 31 17 | 18 19 20 21 22 23 24 25 26 First, EPAct does not require any specific legislative or Commission action. Second, the Commission has appropriately inquired into the issue of whether it shotld adopt additional = or standards related to wholesale powex agreements through the public hearing and written comment processes. Third, the Commission’s exercise of its state statutory authority affords sufficient protection t9 both purchasing utilities and retail consumers regarding the relevant factors listed in Section 712 of EPAct. Any further review of wholesale power agreements is neither relevant to Alaska nor necessary at this juncture. Fourth, the Commission does not address the issue of whether the federal government has jurisdiction to mandate the ‘Commission to comply with EPAct. However, Chugach and any other parties to subsequent EPAct proceedings are invited to submit legal briefs addressing this issue. i Finally, EPAct sets forth the manner in which each state I regulatory authority shall comply.® The Commission has conducted ! a public hearing after adequate notice and gave the public an | opportunity to submit written comments, as well. The Commission’s |;decision has been reduced to writing in this Order which shall Hi | §16 USCA 2621(b)(1) provides "(T]he consideration referred ‘ito in subsection (a) of this section shall be made after public aes and hearing. The determination referred to in subsection '| (a) of this section shall be -- (A) in writing, (B) based upon || findings included in such determination and upon the evidence |} presented at the hearing, and (C) available to the public." i } i R-93-4(2) - (10/21/93) | Page Tors Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 1 10 | VW 12 13 14 15 16 17 18 | 19 | 20° 21 22 23 24 25 26 remain in the Commission’s public files. And finally, this Order is being issued prior to October 23, 1993. Therefore, the Commission concludes that its actions are in full compliance with i EPAct. A copy of this decision will be forwarded to the | appropriate federal agency prior to the statutory deadline. Inasmuch as the outstanding substantive issues in Docket ') R-93-4 has been resolved, the only remaining issue in the i proceeding is the allocation of costs under currently applicable ‘law. AS 42.05.651 and 3 AAC 48.157. The allocable costs incurred in Docket R-93-4 were for court reporting services and newspaper || publication in the amount of $751.84. Inasmuch as Docket R-93-4 ; was an inquiry regarding future rulemaking proceedings, the costs | will be borne by the Commission. Accordingly, Docket R-93-4 is i closed. | | | | { | ORDER \\ THE COMMISSION FURTHERS ORDERS: 1. No further wholesale power agreement standards shall |! be adopted responsive/relative to Section 712 of Energy Policy Act of 1992. 2. The allocable costs of Docket R-93-4 will be borne by the Commission. R-93-4(2) - (10/21/93) Page 8 of 9 Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 3. DATED AND EFFECTIVE at Anchorage, Alaska, this 21st day of Octo- ber, 1993. Docket R-93-4 is closed. BY DIRECTION OF THE COMMISSION (Commissioners Susan M. Knowles and Mark A. Foster, not participating) 13 14 15 16 17 18 22 23 24 25 26 R-93-4(2) - | Page 9 of 9 (10/21/93) Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 STATE OF ALASKA THE ALASKA PUBLIC UTILITIES COMMISSION ‘| Before Commissioners: Don Schréer, Chairman i| Susan M. Knowles 7 Daniel Patrick O’Tierney 4 Mark A. Foster James E. Carter, Sr. |,In the Matter of the Consideration ||}of Standards for Approval of |Wholesale Power Contracts as ‘|}Required by Section 712 of the :; Energy Policy Act of 1992 R-93-4 wee ever vw i: CERTIFICATION OF MAILING I, TAMARA M. ALEXANDER , certify as follows: I am a Documents Processor IV_ in the offices of the Alaska | Public Utilities Commission, 1016 West Sixth Avenue, Suite 400, | Anchorage, Alaska 99501. On October _22_, 1993, I mailed copies of ORDER NO. 2, entitled: ORDER DECLINING TO ADOPT ADDITIONAL STANDARDS FOR APPROVAL OF WHOLESALE POWER AGREEMENTS; ALLOCATING COSTS; AND CLOSING DOCKET (Issued October 21, 1993) | | | i i ' in the proceeding identified above to the persons indicated on the ‘tattached service list. ‘DATED at Anchorage, Alaska, this 22nd day of October, 1993. Utrn-wre:. Y- AtiyanAs. TAMARA M. ALEXANDER »R-93-4(2) - (Certification of Mailing) Page 1 of 1 SERVICE LIST R-93-004 Jeffrey D. Landry, Esq. Assistant Attorney General Alaska Public Utilities Commission 1031 West Fourth Avenue, Suite 200 Anchorage, AK 99501 Steve Baden Chief, Affordable Housing and Energy Efficiency Alaska Housing Finance Corporation 520 East 34th Anchorage, AK 99503-4199 James S. Webb President and General Manager Alaska Electric Light and Power Co. 612 West Willoughby Avenue Juneau, AK 99801-1798 Robert S. Grimm President Alaska Power & Telephone Co. and Bettles Light & Power, Inc. P. O. Box 222 Port Townsend, WA 98368 October 22, 1993 Page 1 of 6 Robert E. Stoller, Esq. 800 East Dimond Boulevard, Suite 3-640 Anchorage, AK 99515 Robert L. Hufman General Manager : Alaska Electric Generation and Transmission Cooperative, Inc. P. O. Box 169 Homer, AK 99603 Ronald A. Garzini Executive Director Alaska Energy Authority P. O. Box 190869 Anchorage, AK 99519-0869 David Hutchens Executive Director Alaska Rural Electric Cooperative Association, Inc. 703 West Tudor, Suite 200 Anchorage, AK 99503 SERVICE LIST (CONTINUED) R-93-004 Charles Y. Walls General Manager Alaska Village Electric Cooperative, Inc. 4831 Eagle Street Anchorage, AK 99503 Thomas M. Dow Vice President of Operations Arctic Utilities, Inc. 1001 East Benson Boulevard Anchorage, AK 99508-4256 Harold A. Borrego President Bethel Utilities Corporation, Inc. 3380 C Street, Suite 210 Anchorage, AK 99503-3920 Lola Lind General Manaager Chignik Lake Electric Utility, Inc. P. 0. Box 33 Chignik Lake, AK 99548 October 22, 1993 Page 2 of 6 Artie H. Demandel President Aniak Light and Power Company, Inc. P.. 70. “BOX: 129 Aniak, AK 99557 Kirsten Tinglum, Esq. Ashburn and Mason 1130 West Sixth Avenue, Suite 100 Anchorage, AK 99501 Cory R. Borgeson, Esq. Birch, Horton, Bittner & Cherot 100 Cushman Street, Suite 311 Fairbanks, AK 99701 Paul Dock Manager Kipnuk Light Plant Pi. 0. Box “71 Kipnuk, AK 99614 SERVICE LIST (CONTINUED) R-93-004 Donald W. Edwards, Esq. General Counsel Chugach Electric Association, Inc. P. O. Box 196300 Anchorage, AK 99519-6300 Clayton Hurless General Manager Copper Valley Electric Association, Inc. P. O. Box 45 Glennallen, AK 99588-0045 Gary L. Ferguson President G & K, Inc. P. O. Box 117 Cold Bay, AK 99571 Ronald L. Saxton, Esq. Paul J. Kaufman, Esq. Ater Wynne Hewitt Dodson & Skerritt Suite 1800 222 Southwest Columbia Portland, OR 97201-6618 October 22, 1993 Page 3 of 6 David L. Highers General Manager Chugach Electric Association, Inc. P.O. Box 196300 Anchorage, AK 99519-6300 The Honorable Paul Fuhs Commissioner Department of Commerce & Economic Development State of Alaska P. O. Box 110800 Juneau, AK 99811-0800 Michael P. Kelly General Manager Golden Valley Electric Association, Inc. P. O. Box 71249 Fairbanks, AK 99707-1249 Richard H. Levitt President Gustavus Electric Company, Inc. P. O. Box 102 Gustavus, AK 99826 SERVICE LIST (CONTINUED) R-93-004 Vera James President Gwitchyaa Zhee Utility Company P. O. Box 9 Fort Yukon, AK 99740 Andrew E. Hoge, Esq. Hoge & Lekisch 441 West Fifth Avenue, Suite 500 Anchorage, AK 99501-2309 Roger R. Kemppel, Esq. Kemppel, Huffman & Ginder, P.C. 255 East Fireweed, Suite 200 Anchorage, AK 99503 Brad Reeve General Manager Kotzebue Electric Association, Inc. P. O. Box 44 Kotzebue, AK 99752 October 22, 199 Page 4 of Andrew J. Eggen General Manager Haines Light & Power Company P. O. Box 30 Haines, AK 99827 Norman L. Story General Manager Homer Electric Association, Inc. 3977 Lake Street Homer, AK 99603-7680 David S. Nease, Jr. Manager Kodiak Electric Association, Inc. P. O. Box 787 Kodiak, AK 99615 Charles R. Baldwin, Esq. Law Firm of C. R. Baldwin 125 North Willow Street, Suite 100 Kenai, AK 99611 SERVICE LIST (CONTINUED) R-93-004 B. Richard Edwards, Esq. Law Offices of B. Richard Edwards 550 West Seventh Avenue, Suite 1230 Anchorage, AK 99501 Kenneth E. Ritchey General Manager ‘ait Matanuska Electric Association, Inc. P. O. Box 2929 Palmer, AK 99645-2929 3ary Kessinger 3seneral Manager Middle Kuskokwim Electric Cooperative, Inc. P. O. Box 40 Red Devil, AK 99656 Daniel Nelson General Manager Napakiak Ircinaq Power Company P. O. Box 34030 Napakiak, AK 99634 October 22, 1993 Page 5 of 6 Steve Hamlen President Manley Utility Company, Inc. P. O. Box 92730 Anchorage, AK 99509-2730 Bill Frazier General Manager McGrath Light & Power Company P. O. Box 52 McGrath, AK 99627 Thomas R. Stahr General Manager Municipal Light and Power Department, Municipality of Anchorage d/b/a 1200 East First Avenue Anchorage, AK 99501 Clarence L. Larsen President/Manager Northway Power & Light, Inc. P. O. Box 410 Northway, AK 99764 SERVICE LIST (CONTINUED) R-93-004 Jerry Nogle Office Manager PUI Acquisition Corporation P. O. Box 110 Pelican, AK 99832 Linda Dianne Rabb Executive Director Rural Alaska Power Association, Inc. P. O. Box 100214 Anchorage, AK 99510-0214 Mark Lang General Manager Tanalian Electric Cooperative, Inc. 1 Lang Road, General Delivery Port Alsworth, AK 99653-999 Richard L. Blodgett President Teller Power Company, Inc. P.O. Box 243992 Teller, AK 99524-3992 October 22, 1993 Page 6 of 6 Janice R. Ball Village Council President Pilot Point Village Council, Inc. P. O. Box 449 Pilot Point, AK 99649 Jack Mager President Sand Point Electric, Inc. P. O. Box 209 Sand Point, AK 99661 Paula E. Eller General Manager Tanana Power Company, Inc. P. O. Box 873809 Wasilla, AK 99687-3809 Alaska Administrative Journal Val Lind, Word Processing Section Department of Commerce and Economic Development P. O. Box 110800 Juneau, AK 99811-0800 O = ym ss WOHLFORTH, ARGETSINGER, JOHNSON & BRECHT bn B tA PETER ARGETSINGER a a TELEPHONE JULIUS J. BRECHT ATTORNEYS AT LAW (907) 276-6401 CYNTHIA L. CARTLEDGE ROBERT M. JOHNSON 900 WEST STH AVENUE, SUITE 600 TELECOPY THOMAS F. KLINKNER dekh ahegnel BRADLEY E. MEYEN ANCHORAGE, ALASKA 99501-2048 JAMES A. SARAFIN - KENNETH E. VASSAR ERIC E. WOHLFORTH MEMORANDUM TO: William R. Snell Executive Director Alaska Industrial Development and Export Authority FROM: Pete Argetsinger Le DATE: September 15, 1993 SUBJECT: Alaska Public Utilities Commission/Regulatory Cost Charge Our File No. 3730.0701 Enclosed for the Authority’s records is a copy of Order No. 2, U-93-46, of the Alaska Public Utilities Commission. Your attention is called to lines 18-20, 23 and 24 on page 4 which, pursuant to our request filed with the Commission on July 28th (copy also enclosed), clarifies the Authority's status as a utility which provides wholesale service only. What this means is that the Regulatory Cost Charge (which is designed to recover the Commission’s budget from the utilities which it regulates) is not applicable to the Authority. ‘AUU00087, Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 1 12 13 14 15 16 17 18 19 20 21 22; 'Cost Charge Determination for 23 24: 25 26 AeSElVE| SEP 10 1993 OF ALASKA 5 (ea! Wohlforth Argetsinger THE ALASKA PUBLIC UTILITIES COMMIS snson & Brack? Don Schroer, Chairman Susan M. Knowles Daniel Patrick O’Tierney Mark A. Foster James E. Carter, Sr. Before Commissioners: In the Matter of the Regulatory Cost Charge Determination for Fiscal Year 1994 for Regulated Public Utilities U-93-46 ORDER NO. 2 In the Matter of the Regulatory P=93-1 Fiscal Year 1994 for Pipeline Carriers ORDER NO. 2 ORDER ESTABLISHING REGULATORY COST CHARGE 2 Wy G APPLI ON OF 3 AAC 47.040 8 NECESSARY; AND AFFIRMING STATUS OF REGULATED AND EXEMPT UTILITIES, AS CLARIFIED BY THE COMMISSION: Introduction By Order U-93-46(1)/P-93-1, dated July 20, 1993, th Commission issued for public comment the proposed regulatory cos charge (RCC) amounts for Fiscal Year 1994 (FY94) and a designatio: of utilities as regulated or exempt. The proposed amounts wer: $.000439 per kilowatt-hour (/kWh) for regulated electric utilitie and 0.455 percent of adjusted gross regulated operating revenu for all other regulated utilities and pipeline carriers. In tha .Order the Commission also established a filing and hearin U-93-46(2) /P-93-1(2) - (7/8/93) Page 1 of 7 1U16 West Sixtn Avenue, Suite 4uU Anchorage, Alaska 99501 (907) 276-6222 10 WW 12 13 ' 14: 15 i 16 17 18 19 20 21 22 23 24 25 26 schedule. By Errata Notice dated August 9, 1993, the Commission corrected a typographical error regarding the RCC applicable to kWhs in effect in FY93. Written comments were filed by Alaska Industrial and Development and Export Authority (AIDEA); Alaska Rural Electric Cooperative Association, Inc.; Chugach Electric Association, Inc.; Golden Valley Electric Association, Inc. (GVEA); the Municipality of Anchorage d/b/a Anchorage Telephone Utility (ATU); the Municipality of Anchorage d/b/a Municipal Light and Power Department; and the owners of the Trans Alaska Pipeline Systen. The public hearing convened, as scheduled, on August 24, 1993. No member of the public offered testimony. Discussion Several of the written comments filed in this matter stated that the RCC amounts proposed by the Commission should be adjusted downward to reflect that the charge established during FY93 remains in effect during the first quarter of FY94. The charge for FY93 was established to collect the Commission’s budget over a period of only eight months and was, therefore, higher than appropriate if applied over an entire twelve-month period. Several of the comments also mentioned that in adjusting the RCC amounts for the remainder of FY94 there would need to be some consideration of the seasonality of utility revenues. The Commission has considered the foregoing comments and determined that the proposed RCC amounts for FY94 should be U-93-46(2) /: -93-1(2) - (7/8/93) Page 2 of 7 Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 Ue 12 | 13: 14 5 15 i 16 4 18 19 20 21 22 23 24: 25. 26 i adjusted to reflect the fact that the higher rate from FY93 remains in effect for the first quarter of FY94.! The precise adjustment requires the Commission to apply sound judgment in this matter. If the residual RCC revenue requirement were collected on a linear basis; i.e., 25 percent each quarter, then the RCC would be 0.389 percent and $.000376/kWh. (See Appendix A attached hereto.) However, the Commission agrees with GVEA that there is some seasonal variance in public utility revenues, particularly for electric and gas utilities. But, no accurate data on the extent of the seasonality is currently available for all utility sectors. In view of these considerations, the Commission has determined that the RCC applicable to gross revenues should be established at 0.4 percent. Implicit in that figure is an assumption that 21.6 percent of the total regulated gross revenues for the year will occur in the first quarter, which reflects an estimate of seasonality and produces an RCC that is reasonable in amount. While that RCC percentage is slightly above the linear RCC rate, it should help mitigate a larger adjustment upward next year for the lower than average collections during the first quarter of FY95. lsince the state’s budget process was not completed until June of FY93, it was not possible to establish the FY94 RCC prior to the July 1 start of that new fiscal year. U-93-46(2) /P-93-1(2) - (7/8/93) Page 3 of 7 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 a 12 Calculation of the 0.4 percent RCC is set out in Appen- dix B attached hereto. The Commission waives strict application of the formula set out at 3 AAC 47.040(a) to the extent necessary to consider the higher level of collections during the first quarter of FY94. (See line 12.1, Appendix B.) The RCC applicable to kWh sales is established at $0.000386/kilowatt hour. This level is determined based on the RCC of 0.4 percent applicable to gross revenues and the same assumption regarding seasonality. As with the RCC percentage, the Commission waives strict application of the formula set out at 3 AAC 47.040(b) to the extent necessary to offset the higher level ‘of collections during the first quarter of FY94. The calculation 13! 14 3 15 16 17 18 19 20 21 22 23 24 25 is set out in Appendix B, lines 19 — 23. Two comments were also filed regarding the designation of utilities as regulated or exempt. ATU requested clarification why it was properly classified as a regulated utility but "Anchorage, Municipality of" also appears on the list of exempt utilities. AIDEA stated that it is listed as a regulated utility but that it is not subject to the RCC because all of its sales will be at wholesale. The listing of "Anchorage, Municipality of" is clarified ‘to refer to the exempt refuse collection utility of the Munic- 26 ipality. AIDEA is correctly listed as a regulated utility, but the list should note that AIDEA provides wholesale services only. U-93-46(2) /P-93-1(2) - (7/8/93) Page 4 cf 7 Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 aM 12. 13 14: 15 i 16 a 18 19 20 21 ry 23 24 25 26 ATU filed comments concerning the treatment of various revenue accounts. At the its Public Meeting of January 27, 1993, the Commission concurred with the analysis by Commission Staff that the following revenue accounts should be excluded from the RCC calculation for local exchange carriers: 5081 End User Revenue Settlements 5082 Switched Access Revenue 5083 Special Access Revenue 5084 State Access Revenue 5270 Carrier Billing and Collection Revenue The Commission also determined that the revenue from the classi- fied section of directories, commonly referred to as "yellow page advertising," is derived from services which are "incidental" to public utility operations rather than derived from "regulated" operations. Thus, the Commission found that the revenues within Account 5230, Directory Revenue, derived from yellow page advertising, should be excluded from the RCC calculation. ? ORDER THE COMMISSION FURTHER ORDERS: 1. For regulated electric utilities the regulatory cost charge applicable to kilowatt-hours is $0.000386, applicable beginning October 1, 1993. 2The Commission notes that this exclusion of yellow page advertising revenues from the RCC calculation should not be construed as in any way limiting the Commission’s authority to require yellow page advertising revenues to be used as an offset against basic local exchange rates. U-93-46(2) /P-93-1(2) - (7/8/93) Page 5 of 7 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 W 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ' 2. For all other regulated utilities and pipeline carriers the regulatory cost charge applicable to adjusted gross operating revenues is 0.4 percent, applicable beginning October 1, 1993. 3. The Commission waives 3 AAC 47.040 to the extent set forth in the body of this Order. 4. The listing of regulated and exempt utilities attached to Order U-93-46(1)/P-93-1(1) is affirmed as clarified in the body of this Order. 5. The telephone revenue accounts set out herein and yellow page advertising revenues are excluded from regulatory cost charge calculations for local exchange carriers as discussed in the body of this Order. 6. All regulated utilities and pipeline carriers that wish to recover the regulatory cost charges from their customers or shippers must have an appropriately worded provision to that effect in their tariffs. The Commission Staff shall prepare the tariff revisions necessary to implement the changes in the regulatory cost charges set forth in Ordering Paragraph Nos. 1 and 2 above for all utilities and pipeline carriers that have currently tariffed regulatory cost charges. The changes are effective for billings rendered on and after October 1, 1993. If a regulated utility or pipeline carrier does not currently have a tariffed regulatory cost charge provision and it wishes to recover the regulatory cost charge from its customers or shippers, U-93-46(2) /P-93-1(2) - (7/8/93) Page 6 of 7 1 it may request the Commission Staff to prepare such a filing on 2 its behalf or submit-a tariff advice filing in accordance with 3 3 AAC 47.070(c). DATED AND EFFECTIVE at Anchorage, Alaska, this 8th day of Septem- 5 ber, 1993. 6 BY DIRECTION OF THE COMMISSION 15 | 16 17 18 : 20 21 Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 22 23! 24 25 26 U-93-46(2) /P-93-1(2) - Page 7 of 4 / (7/8/93) Computation of Regulatory Cost Charge (RCC) For FY94: July 1, 1993 - June 30, 1994 A 8 4 2 Line Utility Gross Revenues Three 0.389% 1992 Revenue Quarters Percent RCC Estimated SECTOR (Actual) 75.0% (1.17) RCC 1 Electric $351,860.486 $263,895.365 0.389% $1,026,553 2 Gas $114,199,505 $85,649,629 0.389% $333,177 3 Retuse $20,656,122 $15,492,092 0.389% $60,264 4 Wastewater $20,594,329 $15,445,747 0.389% $60,084 5 Local Exchange Telephone $78,835,789 $59,126,842 0.389% $230,003 6 Interexchange Telephone $92,130,745 $69.098,059 0.389% $268,791 7 Cable $502,500 $376,875 0.389% $1,466 8 Water $24,097,453 $18,073,090 0.389% $70,304 9 Pipeline $111,838,906 $83.879.180 0.389% $326.290 10 TOTAL $814.715.835 $611,036,876 $2.376.933 | ace emencee E ——— Formula for Computing RCC: RCC = (B-(E+E')+X)/GR 11 B = APUC Budget (4Qs) $3,624,200 12 E = Estimated Actual Cost Charges ($100,000) 12.1 E' = Estimated 10 collections ($1,330,024) 0.6530% * line 10, col. A * (25%) 13. X = Uncoliectibles allowance (5% X 1.11) $181,210 14 Total to be Recovered (3Qs) $2.375.386 15 GR = Utility Gross Receipts (3Qs) $611,036,876 75.0% 16 RCC Percent (1.14/1.15) 0.3887% tena 17 RCC Percent Rounded 0.389% 18 Estimated Collections FY 94 (1.12.1 + 1.10.col.D) Computation for Electric kWh 19 1992 Electric Gross Retail Revenue (I.1) $263.895,365 75.0% of line 1 20 Multiply by RCC (1.17) 0.389% 21 Amount Derived trom Electric (1.19 X 1.20) $1,026,553 22 1992 Electric Retail kWh 2.733,432.446 75.0% of annual retail kWh 23 Rate per kWh (1.19/1.20) $0.000376 NOTES: Assume 25% of revenue collected in 1st Quarter ORDER U-93-46(2)/P-93-1(2) APPENDIX A Page 1 of! Computation of Regulatory Cost Charge (RCC) For FY94: July 1, 1993 - June 30, 1994 A 8 c 2 Line Utility Gross Revenues Three 0.400% 1992 Revenue Quarters Percent RCC Estimated SECTOR (Actual) 78.4% (117) RCC 1 Electric $351,860.486 $275.858,621 0.400% $1,103,434 2 Gas $114,199,505 $89.532.412 0.400% $358.130 3 Refuse $20,656,122 $16,194,400 0.400% $64,778 4 Wastewater $20,594.329 $16,145.954 0.400% $64,584 5 Local Exchange Telephone $78,835,789 $61,807,259 0.400% $247,229 6 Interexchange Telephone $92,130,745 $72,230,504 0.400% $288,922 7 Cable $502,500 $393,960 0.400% $1,576 8 Water $24,097,453 $18,892,403 0.400% $75,570 9 Pipeline $111,838.906 $87,681,702 0.400% $350.727 10 TOTAL $814.715.835 $638.737.215 $2,554.949 ee 0 sede Formula for Computing RCC: RCC = (B-(E+E')+X)/GR 11 8 = APUC Budget (4Qs) $3,624,200 12 E = Estimated Actual Cost Charges ($100,000) 12.1 E' = Estimated 1Q collections ($1,149,140) 0.6530% * line 10, col. A * (21.6%) 13. X = Uncollectibles allowance (5% X 1.11) $181.210 14 Total to be Recovered (3Qs) $2.556.270 15 GR = Utility Gross Receipts (3Qs) $638.737.215 78.4% 16 RCC Percent (1.14/1.15) 0.4002% (ee 17 RCC Percent Rounded 0.400% 18 Estimated Collections FY 94 (1.12.1 + 1.10,col.0) $3.704.089 Computation for Electric kWh 19 1992 Electric Gross Retail Revenue (i.1) $275,858,621 78.4% of line 1 20 Muttipty by RCC (1.17) 0.400% 21 Amount Derived from Electric (1.19 X 1.20) $1,103.434 22 1992 Electric Retail kWh 2.857.348.0050 78.4% of annual retail kWh 23 Rate per kWh (I.19/1.20) $0.000386 NOTES: Set RCC = 0.4% for ‘rounding’ Assume 21.6% of revenue collected in 1st Quarter ORDER U-93-46(2)/P-93-1(2) APPENDIX B Page! of! 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 (907) 276-6222 10 am] 12 STATE OF ALASKA Before Commissioners: In the Matter of the Regulatory Cost Charge Determination for Fiscal Year 1994 for Regulated Public Utilities In the Matter of the Regulatory Cost Charge Determination for Fiscal Year 1994 for Pipeline Carriers 13! 14 15 1 16 17 18 19 20 21 22 23 IES _C ON Don Schréer, Chairman Susan M. Knowles Daniel Patrick O’Tierney Mark A. Foster James E. Carter, Sr. U-93-46 PeS3-1 Verve ve ve ye eve ee CERTIFICATION OF MAILING I, _TAMARA M. ALEXANDER I am 2 Documents Processor IV , certify as follows: in the offices of the Alaska Public Utilities Commission, 1016 West Sixth Avenue, Suite 400, Anchorage, Alaska 99501. On September 9, 1993, I mailed copies of ORDER NOS. 2/2, entitled: ORDER ESTABLISHING REGULATORY COST CHARGE AMOUNTS; WAIVING APPLICATION OF 3 AAC 47.070, AS NECESSARY; AND AFFI ING STATUS OF REGULATED AND_EXEMPT UTILITIES, AS CLARIFIED (Issued September 8, 1993) 24 25 26 U-93-46(2)/P-93-1(2) - (Certification of Mailing) Page 1 cf 2 1016 West Sixth Avenue, Suite 400 Anchorage, Alaska 99501 Alaska Public Utilities Commission (907) 276-6222 1 10 WW 12; 13 14 15 i 16 17 18 19 20 21 22! 23 24 25 26 | in the proceeding identified above to the persons indicated on the attached service list. DATED at Anchorage, Alaska, this _9th day of September, 1993. U-93-46(2) /P-93-1(2) Page 2 of 2 Garraruae Yr. Alive bela! TAMARA M. ALEXANDER (Certification of Mailing)