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Home My WebLink AboutEnergy Policy Report, The Power Cost Equalization Program, January 1988Energy Policy Report: The Power Cost Equalization Program Prepared for the Governor's Energy Policy Task Force Division of Policy Office of the Governor January 1988 STATE OF ALASKA STEVE COWPER, GOVERNOR 01-A34LH “TI STEVE COWPER, GOVERNOR OFFICE OF THE GOVERNOR P.O. BOX AD JUNEAU, ALASKA 99871-0199 PHONE: (907) 465-3568 OFFICE OF MANAGEMENT AND BUDGET DIVISION OF POLICY March 7, 1988 Dear Utility Manager: Enclosed is the Division of Policy's final report on the Power Cost Equalization (PCE) program. This analysis was prepared for use by the Governor's Energy Policy Task Force in evaluating possible improve- ments to the PCE program. The report should also be useful for legislators, rural utility managers, and others involved with the program. The report does not make specific recommendations for change, but rather reviews a wide range of options for limiting or reducing the cost of the PCE program and improving the efficiency of rural electric utilities. I hope you find the work to be helpful. Sincerely, Mae HhCcoemn) Mary Halloran Director MH/JK/dmc/88F-809b Enclosure Energy Policy Report: The Power Cost Equalization Program. Prepared for the Governor's Energy Policy Task Force Prepared by: George Matz Jack Kreinheder Division of Policy, Office of the Governor January 1988 TABLE OF CONTENTS I EXECUTIVE SUMMARY etiscetaectcttestsctstantstescracterersvorscttrarconcetarecrenteesatectcotes 1 TS EBIN ROD UW CLION Seer ctarccs cesar tattcn tan tatcctcetcctact sousatentestentceestoonsactarccrectestannsiveta 4 T TIRE HISTORY4 OB THE PCE PROGRAM orccscrcttctectasssttcctsttsecattotssstcerteasescerattascet i AC POWeTa ELOGUCTIONS COStPASSISCADCE stesatsnssscoccsscccnscostcecnsasnrerssterneseste 8 Bs Power Cost AssistanCe:-.-..cscccssesseceaseeesess C Power Cost Equalization. Me Pending alee gisl ation cccccccccscccesrssestesterssecsss aoe TVA CURRENT ROE ISSUES sratartaetestecrcer patsttchtetantctosctectenserestastsearenantacnctscttntentertenrs 14 AS Coste Ofs thes RCE Pro STATI crcstanestoscctusesncacressecoutvcreossvausscctectecscresseseseeatse 14 By ERPICIONCY IMPTOVEMICING csceccscstcescseatcsosccsanashcotecssecsescceasssuetnsssenscsesee 18 Geime quitie sicccce stirs D. Program Funding E Program Management.... F. Statutory Ambiguities G Rural Economic Development DVSEER OPTIONS secrrseecs crectesstotectsccctcttotecndotentersontetvtcsectanctistatesropnctaesstanteceasncnsctietttatts 28 AS eCH NIC ales IMPLOVE MENS scccccsecatcssotcatacctcssstcstcescsecscetrereorecsotesensTeees 28 Ae echnical SASSIStAN CO strcscascotcsectacessnsescctccescectovtecesovenssotemtstesterits 28 De PELLONMANCE 2 StAMGards vrrcstsctcecsce ccsvssscoscecctrestsvesessncsssrsstecereres Sil SFE ONALEC te SAVAM GB cccteccsoneccsctectccestecteccs nsctocesttenesicetucnevscteecetarettotoetts 32) APPElectrificationps Grants lore resssccrccreectsttcrectertstscteertcrtoesctestsoesraet rots 36 SEW ASte Heats Pr OjCCtS ccceccerccressectesstcttcttoscerstesronttsceceecerctectsrarateses 36 6. Energy Conservation and Efficiency. eee Sai PEPBUIKFRUCIERUTCI ASE Site rccsscesssoecscovectecseetonaceonesceccsocsncsceserccssnees 39 SSE ate ee OLMU] a ettscccterestcctctsscevsssravnessasuecssrceresesetscsenusneesacterstcsnsarceceateasstuszceed 40 TERR TLOLIELE Siectatcesececsestccctastssactasscvesttosesssctsssecssntnscescseesscnesnsavesneceroaeresa 40 2. Parameter Changes. wn 42 3 PED ASCLING GC AleSescsrcrecetccececesectcecercntarctascctceiceesescecestrscetseteersesstscron tes 47 AP ROStASC ROLAND ER ALES corectccersccecctcccestccecerertecccsocstceressescesseteterts atts 48 Sp MOLD Yan CLOCIES ieorcreeccececetcctecestartccere ctesrerasnctectcensessssestecestesrsitersse tre 50 C. Program Funding.............:s00 fecal DCO AME RUNGERRLOCCEC Srecccressrcccrectecesstceesctassorssecesacscrecesscascsutacaseets Sal Dee COOPeTAative UW Uilitypr aXicccrectectcccestec sess ctesesssrsersectoscersceersieasrees Sr D. Program Management...................sscscsssssscsssssecesseseccsesesssesacacessssasacoss 52 EV Testo COINICICUSIOIN forcrtaesceectsetarerscetstes sate rststnsstovascesseetcanset cotentcteassctovcnenssacreresesresrseseass 54 VAI REPARPEEINDDIGES fresetrescrstaccettctsetstsrtcestsserecorctcoeceressscesuscccscrsrerts tasceracpeccerecetscavesteces Hi, DISCLAIMER This document does not represent the position of the Energy Policy Task Force or of the Governor. ACKNOWLEDGMENTS Funding for this report was provided primarily by the Energy Policy Task Force, with additional support from the Division of Policy. Many individuals were helpful in providing information used in the report and reviewing the draft version. In particular, the authors would like to thank the management and staffs of the Alaska Power Authority and the Alaska Public Utilities Commission, and the utility managers who provided comments on the options discussed in this report. l. EXECUTIVE SUMMARY The purpose of this report is to discuss the key issues associated with the Power Cost Equalization (PCE) program and to provide a comprehensive description of the options (or strategies) that have been suggested to improve the program. In order to fully understand the issues and options, the report begins with an overview of the benefits of the program, describes the origin and evolution of PCE, and provides information on other State energy programs that may be instrumental in implementing some of the options. The most important issue concerning the PCE program is its cost, because the expense of the program is increasing steadily, while State revenues have declined sharply and are expected to decline further in coming years. Although PCE is an expensive program, the record shows that its costs could be reduced with technical improvements that can increase fuel and operating efficiencies for the participating utilities. These technical improvements should have little, if any, impact on customer rates. Options included under technical improvements include the following: 1. Technical Assistance: The Alaska Power Authority (APA) is the lead agency for providing rural utilities with the engineering expertise that is needed if efficiency and safety improvements are to be implemented. 2. Performance Standards: Establishing performance standards, perhaps by regulation, would set a minimum level of efficiency for determining costs that are eligible for PCE reimbursement and provide incentive to the utilities for eliminating unnecessary cost. If a utility does not meet standards, it could result in higher rates to its customers until improvements are made. 3. Shared Savings: Currently, the State receives 95 percent of the benefits of any cost reductions that are realized by a PCE utility. Shared savings is a concept that would allow a greater percentage of savings to return to the utility. 4. Electrification Grants: Amending the statutes for municipal grants, in order to allow technical oversight of grants for electrification systems, can reduce wasted capital investment as well as excessive operating costs due to inefficient installations. 5. Waste Heat: The Power Authority's waste heat program can result in more efficient generation and additional revenues for utilities. 6. Energy Conservation: Energy conservation measures can reduce fuel costs and the investment needed for an adequate diesel generation system. However, the potential for energy conservation could be lost by having oversized generators. mi Executive Summary 7. Fuel Purchases: Cooperative fuel purchases among neighboring communities has reduced the cost of fuel oil and the concept should be expanded. Another PCE issue is the inequities that may result from the current rate formula. For example, the program provides the highest subsidy to electric customers who use 750 kilowatt hours (KWH) or more per month. However, customers using 250-400 KWH per month tend to have lower incomes than those using more electricity, yet these customers receive much less assistance from the PCE program. Amending the PCE rate formula could give priority to customers who have greater economic need for subsidy, but without getting into the complications of establishing need by income. Amendments to the rate formula can also be used to reduce the cost of the program. Most amendments could have little if any impact on the rate of customers who have greater economic need for subsidy, but would generally increase rates for higher use customers. Options for amending the rate formula are: 1. Priorities: Currently, the statut¢s does not establish any priority between rate classes if program benefits have to be reduced because of inadequate funding. This option would require that the residential class be most protected from funding reductions, then community facilities and then commercial facilities. 2. Parameter Changes: The four parameters that determine PCE benefits are the consumption cap, the entry rate, the ceiling rate, and the percentage of costs that are reimbursed. Changes to these parameters can reduce program costs. Amending the consumption cap and entry rate should not significantly impact the rates of most rural customers that have the greatest economic need for subsidy. Amending the ceiling rate and percentage of cost would provide utilities with greater incentive to be more cost-effective but would probably have the most significant rate impact on customers who have greater economic need for subsidy. 3. Baseline Rates: Adopting baseline rates, which are similar to lifeline rates, would provide energy assistance based on need but not necessarily on income. 4. Postage Stamp Rate: This rate concept provides a cross-subsidy between customers served by a utility or power marketing agency. Funding is a key consideration. 5. Energy Credits: Energy credits provide a fixed level of energy assistance to those who qualify, in some cases without limiting how the assistance should be applied. Another important issue mentioned in the report is program funding. Supporters of the PCE program have, for years, sought a stable source of funding for the program. Possible options to consider are: Executive Summary 1. Loan Fund Proceeds: Use of the proceeds from the power project loan fund as a source of funding for the PCE program. 2. Cooperative Utility Tax: The State currently has a cooperative utility tax that could be expanded to all utilities and earmarked as a partial source of funding for the PCE program. Other issues that are discussed in the report are: 1. Program Management 2. Statutory Ambiguities 3. Rural Economic Development The report makes no attempt to recommend which options, if any, would be preferred. As previously mentioned, the purpose of the report is to discuss the issues and list each option that has been mentioned with enough supporting analysis to determine how effective or ineffective it would be. The intent of this report is to provide policy makers with enough information to decide which issues and options should receive further attention. Il. INTRODUCTION Most electric utilities in rural Alaska are faced with the difficult task of having to provide affordable and reliable power, under circumstances that often result in high operating costs, to customers who tend to have low incomes. Rural utilities have high operating costs for a number of reasons. Although increasing operating efficiencies would reduce costs, some costs are endemic to utilities that serve small, isolated population centers. For instance, diesel engines are the most practical current technology for generating electricity in most of Alaska's rural communities. One of the most expensive cost factors for utilities that use diesel generators is fuel oil. Currently, it costs the North Slope Borough $1:65 per gallon, or $12.31 per million Btu, for diesel fuel oil that is delivered to its generators at Atqasuk. In comparison, the current blended cost of natural gas to Chugach Electric is $0.43 per mcf or $0.42 per million Btu -- only 3 percent of the fuel cost paid by the North Slope Borough. Chugach's fuel costs are expected to increase when old natural gas contracts expire in the mid-90's, but will still be only a small fraction of fuel costs for rural utilities. High fuel costs usually result in high electric rates. The unsubsidized rates for most rural utilities are much higher than for utilities in urban Alaska or in the lower 48. In 1987, the unsubsidized average rate for utilities that received Power Cost Equalization was 24.5 cents per kilowatt hour (KWH). The average rate in 1986 for all Railbelt utilities (revenues/KWH sold) was 7.5 cents/KWH, only 30 percent of the average rural utility rate.) In 1986, the average rate for the entire U.S. was 6.5 cents/KWH2 Income is an important factor in determining how affordable electric rates are. Many tural residential consumers have some of the lowest personal incomes in the nation. In 1984, which was the last year that the U.S. Census Bureau determined personal income by census area, the per capita personal income was $7,466 for the Wade Hampton area and $9,573 for the Yukon Koyukuk area. The national average that year was $12,772 per capita and the average for Alaska was $17,550, the highest state average in the nation. To provide rural consumers with relief from high electric rates, the State created the Power Production Cost Assistance (PPCA) program in 1980. The following year this program was amended and became the Power Cost Assistance (PCA) program. Significant amendments were again made in 1984 when PCA was supplanted by the Power Cost Equalization (PCE) program. Despite the changes, the principal objective of each program was the same; that is, to have the State subsidize, as determined by formula, some of the operating costs incurred by tural utilities. The subsidy, in effect, lowers the rate that the consumer pays for electricity. With all three versions of the program, income has not been a criteria for determining the amount of subsidy that a customer could receive. A secondary objective of each program was to improve the cash flow and financial stability of participating utilities by reducing -4- Introduction delinquent payments from customers who, in many cases, could not afford the rates. Also, by subsidizing the electricity used by community facilities, the program has reduced the cost of local government. Since many villages do not have much tax base, one way or another, the State pays for a substantial portion of the cost of local government. While each version of this rate subsidy program has been effective in making electricity more affordable to rural consumers and in improving the financial stability of rural utilities, the cost of the program has grown rapidly since its inception. Total disbursements have increased from $2.2 million in FY81 to $16.2 million in FY 87. In terms of general fund expenditures, the FY 87 figure is larger than the operating budgets for 5 out of the 16 departments (including the Governor's Office) in the State's Executive branch. Furthermore, the cost of the program is expected to increase in FY 88 and subsequent years due to increases in the number of customers, inflation, and a recovery in oil prices from the precipitous drop that occurred during the latter part of FY 86 and early FY 87. In FY 88, the PCE program is expected to cost about $19.4 million. For FY 89, the program is projected to require an appropriation of $21.4 million, an increase of more than 10 percent. If this growth rate continues, the cost of the PCE program would nearly double to $41 million per year by FY 96. Even at a more modest 7 percent annual growth rate, the cost of the PCE program would double every ten years. The State's ability to fund increases in program costs is not what it used to be. Although oil prices have recovered from the July 1986 low of $9.27/bbl. for Alaska North Slope oil, the State's fiscal conditions are not expected to return to the affluence that existed in 1984, the year when the PCE program was established and when the Legislature appropriated the most general funds ever ($3.7 billion) for operating agencies, capital projects, debt service and loan programs. Current State revenue projections are that unrestricted general funds will stay approximately at the current level (in nominal terms) for the next couple of years and then decline as Prudhoe Bay reserves become depleted. Given the fiscal projections stated above, the key question regarding the PCE program is: What can the State afford to do to make electricity affordable to rural customers? The answer to this question will be influenced by how the State decides to spend what it now appropriates to PCE and other, related programs. In other words, it may be more prudent to spend money on improvements that will increase the efficiency of rural utilities and reduce their dependence on PCE, than to continue to view the program only in the context of rate subsidies. The optimal solution would be to reduce or limit the cost of the PCE program with technical improvements and without causing substantial rate increases for the rural consumer, particularly those who would otherwise not be able to afford electricity, or jeopardizing the financial stability of rural utilities. The cost of the PCE program may be higher than necessary because it does not offer utilities incentive to achieve more efficient power generation, or to develop reliable alternatives to diesel generation where feasible. Nor does the program provide the consumer with incentive to adopt energy conservation measures that, without subsidized rates, may be cost effective. If so, it should be possible to improve the PCE program and ase Introduction a reduce its cost by amending the current statute to provide incentives for better efficiency and/or using other rural electrification programs to provide technical improvements that achieve the same objective. The high cost of diesel generation in remote communities, although unusual in other parts of the U.S., is also prevalent throughout northern Canada. Most Canadian provinces and territories subsidize the cost of power in their isolated communities through their government power marketing agencies. However, these subsidy programs differ from Alaska's PCE program in that the cost of the subsidies are not borne by the government, but rather by urban and industrial consumers, which absorb the subsidy cost in their rates. The cost of the Canadian power subsidies is generally limited by consumption caps on the subsidized rates. For example, Ontario Hydro provides a remote community power rate of about 10 cents/KWH, but only for the first 400 KWH used per month . This compares to the 750 KWH/month cap under the current PCE program. Until recently, power use in some Ontario communities was also limited by providing only a single 15 amp breaker for each home, which curtailed the number of appliances which could be used. A number of suggestions have been made by various individuals as to how the cost- effectiveness or some other aspect of the PCE program can be improved. This report provides a comprehensive review of these suggestions but without attempting to recommend which combination of suggestions would be preferable. In order to fully understand the merits of each suggestion, the report also describes the origin and evolution of the PCE program and other State energy programs that directly relate to its implementation. Ill. HISTORY OF THE PCE PROGRAM The Electrification of Rural Alaska The electrification of rural Alaska essentially began during the late 1950's when the Bureau of Indian Affairs (BIA) installed diesel generators in schools that it had built or was building in many villages. However, power from these generators was not available for residential or commercial use.* During the 1960's, the BIA continued to bring schools and electricity to the rural villages. By this time, all of the larger rural communities and some of the villages had utilities to serve residential and commercial consumers. In 1965, the smaller communities that were served by utilities included Unalakleet, Point Hope, McGrath, and Naknek in Western Alaska; Glenallen, Fort Yukon, and Tok in the Interior; and Craig, Hydaburg, Skagway, Haines, Pelican, Hyder, Yakutat, Hoonah, and Metlakatla in Southeast Alaska.* In 1968, the Alaska Village Electric Cooperative (AVEC) was organized to electrify a number of villages in rural Alaska. Between statehood (1959) and FY70, 16 unincorporated villages received electrification grants from the State.* By the mid-70's, about 85 rural communities, mostly with less than 200 residents, were without a centralized power utility.‘ However, that was soon to change. In 1977, the Trans-Alaska pipeline began operation and revenues from North Slope oil became a major source of revenue for the State. The State was now able to provide funding for many of the basic essentials that were lacking in many villages, such as electricity. Development of the PPCA Program The first attempt to provide a State subsidy for rural electric rates was apparently in 1978, when the Alaska Public Interest Research Group proposed a lifeline rate as part of a utility reform bill that it had drafted. This bill was introduced in the Legislature that year but it had no hearings. The lifeline rate recognized the economic hardships that escalating oil prices were creating in rural Alaska. The proposal would have had the State provide a subsidy for the first 200 KWH per month consumed by residential customers of rural utilities. During the interim, the Legislature established a State Energy Policy Committee to work on a comprehensive list of energy issues that included rate subsidies.» Later that year, the Governor's Office held discussions with other agencies regarding what assistance, if any, should the State provide relative to the electrical needs of its residents. One important concern at the time was the financial stability of rural utilities, particularly AVEC. This effort led to a report in April 1979 by Arthur Young and Company for the Division of Energy and Power Development entitled A Discussion Of Considerations PCE History Pertaining To Rural Energy Policy Options that suggested a State subsidy of electric rates for rural consumers. In 1979, world oil prices nearly tripled and the State's unrestricted revenues increased from $1.1 billion in FY 79 to $2.5 billion in FY 80. This set the stage for the State's rural electrification programs during the early 1980's. The surge in revenues allowed the State to increase its electrification grants. But higher oil prices also greatly increased the cost of generating electricity in rural Alaska. The Legislature needed a double-barrelled approach if it were to not only provide rural Alaska with electricity but also make it affordable. Arthur Young and Company prepared a second report, dated January 1980, for Representative Nels Anderson entitled A Concept for Power Production Assistance To Electric Utilities. This report described in detail how the State could subsidize the power generation costs of rural utilities. Based on the program proposed in the report, Representative Anderson introduced a bill that year to establish the Power Production Cost Assistance (PPCA) program. This bill became part of HCS SB 438, the omnibus energy bill. Following is a description of PPCA arid its amended versions, PCA and PCE. In addition to the PPCA Program, 1980 (FY81) marked the beginning of several other State energy programs which affected rural Alaska. These programs are described in Appendix A. A. Power Production Cost Assistance The PPCA program was designed so that the State, rather than the consumer, would pay for a portion of the generation and transmission (but not distribution) costs incurred by eligible utilities. Only residential customers, community facilities, and charitable organizations of eligible utilities were allowed to benefit from the program. The type of costs that were eligible for payment were referred to as power production costs and included the following: fuels purchased power operation and maintenance depreciation taxes insurance interest on debt The monthly PPCA payment for a utility was calculated by subtracting its actual power production costs from an adjusted cost that was to be set each year by the Alaska Public Utilities Commission (APUC). The adjusted cost consisted of a base cost of 7.65 cents per KWH (adjusted annually for inflation) plus 15 percent of the eligible costs up to 40 cents per KWH. This meant that the PPCA program paid for -8- PCE History 85 percent of a utility's eligible costs that were between 7.65 and 40 cents per KWH and 100 percent of the costs over 40 cents per KWH. The only criteria that a utility had to meet to qualify for the program was to have production costs that exceeded the base level and to document its costs to APUC's satisfaction. Administration of the program was divided between two agencies. The APUC was to verify production costs and establish the adjusted cost, and the APA was to make payments to the utilities. Governor Jay Hammond voiced a number of objections to the new legislation. In a letter to the Legislature he stated, "The current design of this electric power subsidy program has a number of defects. The distribution of benefits is inequitable, inefficiencies are encouraged, incentives to conserve energy and search for alternatives are diminished, program administration is cumbersome, and total cost is uncertain. I gave serious thought to vetoing the bill in order to prevent the creation of a program, which I believe establishes a dangerous precedent. However, because of the many worthwhile and crucially needed elements of the bill, I feel I must accept the power production subsidy as well. However, I intend to submit legislation which will modify the subsidy design in order to reduce the problems noted above." The Legislature appropriated $2.8 million for the program but Governor Hammond, by veto, reduced this to $1.4 million. However, towards the end of its first year, the program was running out of money and $1.2 million of this funding was restored by a supplemental appropriation. B. Power Cost Assistance In 1981, Governor Hammond introduced legislation to amend the PPCA program. The proposed amendments were to make the program more equitable but restrict its growth by: ¢ allowing payment for administrative and distribution costs as well as production costs, ¢ simplifying reporting requirements so that utilities without sophisticated accounting records could partake in the program, ¢ limiting the subsidy to the first 200 KWH per month per consumer, ¢ raising the entry level to 15 cents per KWH, and ¢ adding 2 cents per KWH hour each year for ten years at which time the program would be terminated. Fiscal constraints were not in tune with most of the Legislature that year. State revenues were at a record high and expected to increase in future years. =9= PCE History Consequently, legislators were interested in converting Alaska's nonrenewable oil- derived wealth into capital—intensive renewable sources of energy such as hydroelectric projects. Electric power became one of the major issues of the 1981 legislative session and SB 25 became that year's omnibus energy bill. The principal objective of SB 25 was to establish the Energy Program for Alaska that would fund hydro projects with grants rather than loans or bonds. In order to gain rural support for SB 25, the Legislature expanded on Governor Hammond's proposed amendments and added them to its omnibus energy bill, renaming PPCA the Power Cost Assistance (PCA) program. The highlights of the PCA program included: « All costs, except return on equity but including distribution and operating costs, were eligible for the program. * Complete cost records were no longer required because of the difficulties that many smaller utilities had in presenting records that met APUC's satisfaction. ‘ * The State's reimbursement to utilities was increased to 95 per cent of their costs that exceeded 12 cents per KWH but were less than 45 cents per KWH. « The program was given a finite life by adding one cent per KWH per year to the base cost of 12 cents per KWH. ¢ A cap was established of 55 KWH per month per resident for community facilities and 600 KWH per month for all other customers. ¢ Commercial and industrial customers could now take part in the program. Again, Governor Hammond raised policy objections to the legislation, but did not veto the bill. C. Power Cost Equalization In 1984, State revenues were still near their peak and substantial appropriations were being made by the Legislature for the Four Dam Pool and Railbelt hydro projects, specifically Susitna and Bradley Lake. In the power project political triad that developed, rural legislators did not have a major project to fund but, as a substitute, sought power rate relief for their constituents by increasing the size of the PCA subsidy and giving the program permanent status. This resulted in a bill to amend the PCA program to the PCE program effective October, 1984. In previous years, a number of bills with substantive legislation were combined into an omnibus energy bill. This year, an appropriations bill, SB 409, that included -10- PCE Histor continuing appropriations for major power projects and programs, became the omnibus energy bill. The PCE program received an appropriation of $16.3 million for the remainder of FY 85 (Oct.-June) plus a continuing appropriation in SB 409 of $21.7 million every following year. The Susitna and Bradley lake projects were also given continuing appropriations. Trustees of Alaska, a public interest organization, legally challenged the constitutionality of continuing appropriations and won. The next session, the Legislature repealed the continuing appropriations which made mute any further appeal of this decision. The goal of the Power Cost Equalization (PCE) program was to provide rural utilities with sufficient subsidy so that rates to their consumers would nearly equal mean rate for Anchorage, Fairbanks and Juneau utilities. This was accomplished by: ¢ Establishing the base rate at 8.5 cents per KWH for the first year (FY 85) with annual adjustments by the APUC (although no adjustments have yet to occur). . * Increasing the ceiling to 52.5 cents per KWH. * Keeping the subsidy share at 95 per cent of eligible costs. ¢ Increasing the cap for community facilities from 55 to 70 KWH per month per resident. ¢ Increasing the cap for all other customers from 600 to 750 KWH per month. Conditions were established in order to eliminate urban areas and Four Dam Pool utilities from participating in the PCE program. Only utilities that had sold less than 7,500 MWH's to residential customers in 1983 and used diesel engines to generate more than 75 percent of its load in 1984 were eligible for the program. This eliminated Kodiak and Port Lions from the program and precluded Valdez, Petersburg, Wrangell, and Ketchikan from entering the program. Table 1 provides a statistical history of the PPCA/PCA/PCE program. The growth trends indicated by some of these statistics were reduced when Copper Valley Electric Association no longer participated in the PCA program in FY 83 and when Kodiak Electric Association was excluded from participating in the PCE Program. Each of these utilities accounted for a substantial number of customers and KWH consumption. Sie PCE History D. Pending Legislation In 1987, Governor Steve Cowper proposed two significant changes to PCE: (1) a 20 percent reduction in the PCE budget for FY 88, and (2) House Bill 182 to amend the PCE program. 1. At the time, full funding for the PCE program was expected to cost about $16.8 million which would be 22 percent more than the FY 87 revised appropriation of $13.8 million. The Governor's budget proposed an FY 88 appropriation of $11.1 million for the PCE program, a reduction of 20 percent from FY 87, which was consistent with cuts in revenue sharing and municipal assistance budgets. However, because of an expected $3.2 million carry-over from FY 87, the actual level of funding would have been $14.3 million. The 1987 Legislature appropriated $15.1 million to the PCE program. This appropriation, together with a larger than expected carry-over of $4.2 million from previous years, funded the program at $19.3 million for FY 88. This level is expected to nearly provide full funding for the program. 2. House Bill 182, which amends the PCE program, was introduced by Governor Cowper in the first session of the Fifteenth Legislature. The principal objective for introducing this bill was to establish residential customers as the first priority, community facilities as the second priority, and commercial customers as the third priority for program funding if appropriations should not be enough to cover the cost of the program for the entire fiscal year. As the statutes now read, budget shortfalls are to be prorated, which means that all classes of consumers would experience proportional reductions in benefits. Other statutory changes proposed by Governor Cowper would: ¢ reduce the cap for community facility users from 70 to 50 KWH per month per resident, ¢ reduce the cap for residential and commercial users from 750 to 500 KWH per month, ¢ — redefine "community facility" to include only facilities essential to public health, safety and welfare. The House Labor and Commerce Committee amended HB 182, the most significant amendment being a provision that reduced the cap on eligible PCE consumption from 500 KWH per month to 250 KWH per month over a period of five years. With this amendment, PCE would become essentially a lifeline rate. The legislation is now under consideration in the House Resources Committee. -12- Table 1 Power Cost Equalization Summary Statistics PRCA PCA PCA PCA PCE PCE PCE PCE FY 81% FY 62 FY 63 FY 85** FY esee FY 66 FY 67*0* FY 68 Appropriations ($) 2,657,600 9,300,000 8,300,000 8,300,000 2,800,000 16,300,000 21,700,000 15,067,900 15,067,900 Disbursements ($) 2,245,050 6,464,598 8,283,686 8,715,806 1,962,231 11,585,693 17,784 601 16,223,722 il Participating Utilities 16 4 ag 64 63 82 96 Communities Served 70 87 4 129 122 dat 155 Population Served 36,456 45,971 47,008 61,757 60, 164 60,753 62,823 63,200 Total Customers Served 8,903 | 13,967 17,278 21,636 22,568 24,065 24,960 Community Facilities Customers 4,072 1,107 1,164 Residental, Commercial Customers (21,496 22,958 23,796 Disbursements Per Resid. Included & Commercial Customers($ 252 479 479 403 under PCE. 630 774 oe! Total KWH Sold 153,456,938 224,915,966 237,626,066 Total Eligible Kw 40,818,974 75,011,538 83,436,208 97,550,787 19,627,082 75,949,798 106,338,880 111,952,060 Eligible KWH Per Customer 4584 5,562 4,629 4,509 3,528 89 4,705 Eligible KWH Community Facilities 11,360,226 16,550,730 16,578,528 Eligible KWH Per 5 Community Facilities 10,597 14,951 14,242 Eligible KwH Residential & Commercial 91,788,150 95,373,541 Eligible KwH Per Residential & Commercial 3,998 4,008 Fue! Consumed (Gallons 20,998,026 10,897,478 Total Fuel Costs ($) 23,178,162 18,317,966 Average Fuel Cost Per Gallon ($) 1.27 1.10 0.92 Fuel Effictency KWH Sold Ger Gallon 10.6 10.7 12.0 Total Operating Costs ($) 18,791,634 30,677,615 28,657,852 Operating Costs Per KWH @ 12.3 13.6 12.1 Average PCA/PCE Rate (¢) 5.5 8.6 9.9 8.9 10.0 15.3 16.4 145 EU * PCA program did not begin until October 1980. #* ~The PCE program became effective in October 1985. *** Includes date up to August 1987 which should include about 908 of the finel payments for FY 67. -B- IV. CURRENT PCE ISSUES The principal issue concerning the PCE program, as it currently exists, is that it is a costly program, which is expected to become even more expensive in the future. These cost increases come at a time when State revenues are significantly less than a few years ago, when the program was initiated. Furthermore, revenues are expected to decline even further as Prudhoe Bay oil reserves become depleted. The concern with PCE program costs raises several related issues: 1. Can technical improvements or incentives increase the fuel and operating efficiencies of rural utilities, thereby reducing the cost of the PCE program? 2. Is the PCE formula inequitable because it does not favor those who can least afford electricity and have the greatest need for subsidy? 3. Are there other sources of funding for the PCE program besides the general fund? 4. Would it be more cost-effective to consolidate the administration of the PCE program into either the APA or the APUC? Other issues that are not related to program costs are: 5. Can some of the ambiguous language in the PCE statute be improved? 6. Is PCE sometimes treated as a proxy issue for economic development in rural Alaska? These issues are described below in greater detail. A. Cost of the PCE Program Figure 1 illustrates the growth of the program since its inception. Disbursements grew from $2.2 million in FY 81 under the PPCA program to approximately $17.7 million in FY 87 for the PCE program. The reasons for this growth are described below. 1. Utility Participation: Participation in the program has grown from 16 utilities serving 70 communities in FY 81 to 99 utilities serving 167 communities in FY 87. Future participation growth should be modest since the program now appears to be near its saturation point. Although there may still be about 40 or 50 villages that have isolated electrification systems and could be eligible for the program, most of these villages have populations of less than 100. Their total population is less than 10 percent of the population that now receives PCE benefits. -14- Current PCE Issues Formula Change: Each time the program was amended, the subsidy formula was changed and benefits were increased. Following the change from PPCA to PCA, disbursements increased from $252 per customer to $479 per customer. Following the change from PCA to PCE, disbursements increased from $403 per customer to $630 per customer. The increase in disbursements per customer cannot be entirely attributed to the formula change. Other factors, such as increasing consumption, also had a minor influence on these increases. Fuel Oil Prices: There is no readily available data regarding the average price that utilities paid for fuel oil during the PPCA and PCA phase of the program. But world oil prices hit an all time high in 1981, gradually declined from 1981 until the end of 1985, then dropped sharply in 1986 and are currently recovering. For the immediate future, rising oil prices are expected to increase the cost of the program. Population: From 1980 until 1985, the population of rural Alaska (communities with populations less than 2,500, but excluding the Kenai Peninsula and including Barrow, Kotzebue, Nome, and Bethel) grew from 68,335 to 82,138, an increase of 20 percent. Population increases generally result in additional utility customers and, for those utilities that participate in the program, more program disbursements. For the 16 utilities that first participated in the program, population grew from approximately 31,295 in 1980 to 37,026 in 1985, an increase of 18 percent.§ Consumption: One criticism that has been expressed of the program is that subsidized electric rates will artificially inflate consumption, particularly if the cap for the subsidy is higher than the average amount of consumption. Table 2 indicates that there generally has been an increase in PCE eligible consumption per customer although not a dramatic increase. While this increase in consumption adds to program costs, it has also allowed utilities with overcapacity to operate at more efficient levels thereby off-setting some of the cost increases. SHS Figure 1 Power Cost Equalization Funding FY 81 - FY 88 Disbursements HB Appropriations SJE||OG 40 SUOIIIIN -16- Note: FY 87 Disbursements are estimated. Fiscal Year Current PCE Issues Table 2 Residential KWH Consumption Trends This table illustrates the average monthly consumption of electricity by residential customers for some of the utilities that participated in the PCE program within a year after it was initiated. Growth THREA 333 338 374 385 438 435 473 6.0% Haines 473 456 4,439 471 476 486 480 0.3% Yakutat 597 548 548 561 580 584 564 -0.9% Cordova 492 524 474 447 450 474 485 -0.2% Fort Yukon 142 155 159 154 154 153 177 3.7% AVEC 169 175 197 210 216 231 251 6.8% Barrow 366 417 461 455 426 412 395 1.3% Kotzebue 441 374 463 421 449 504 516 2.7% Bethel 382 383 425 404 418 423 449 2.7% Dillingham 432 426 463 478 450 438 442 0.4% McGrath 266 280 269 296 307 280 296 1.8% Naknek 474 440 407 449 435 497 483 0.3% Source: Alaska Electric Power Statistics Sige Current PCE Issues SEES Eo SSE Table 1 illustrates that disbursements increased steadily from FY 81 to FY 86. However, disbursements for FY 87 are expected to be about the same as FY 86, even though there was: 1. About a 26 percent overall reduction in fuel costs, 2. A 14 percent overall improvement in fuel efficiency, and 3. A 12 percent reduction in operating costs. The explanation is not clear but apparently, the decline in fuel and operating costs plus the improvements in efficiency were offset by a 3.5 percent increase in the number of customers and a small increase in consumption per customer from FY 86 to FY 87. For FY 88, the PCE program has received an appropriation of $15.1 million. This plus a carry-over of nearly $4.3 million from previous fiscal years is expected to fall about $38.7 thousand short of the $19.4 million that was projected for fully funding the program, assuming no change to the formula. 2 Assuming no changes to the program, the PCE funding requirements for FY 89 are projected to be $21.4 million. The increase in cost is due to expected increases in fuel oil prices, inflation, and additional customers. B. Efficiency Improvements Reductions in utility fuel and operating costs should result in proportional cost reductions to the PCE program. Fuel costs can be reduced by improving the fuel efficiency (heat rate) of diesel generators, reducing distribution line losses, improved metering and purchasing lower priced fuel. Conservation measures can also reduce fuel costs but not always. If the generator is currently oversized, reduced loads may cause it to operate less efficiently and nullify any gains from conservation. Operating costs can be reduced with preventive maintenance and cost-reduction measures particularly if the costs are mostly variable instead of fixed. Some rural utilities have virtually no debt service (fixed costs) because their generation and distribution systems were financed either with grants or low interest loans (exceptions to this are the cooperative utilities such as AVEC). Consequently, the operating costs for these utilities should be more responsive to cost-reduction measures than a utility such as Chugach Electric, whose interest expenses are almost equivalent to its power production costs. (According to its 1986 Annual Report, power production made up 30.2 percent of Chugach's annual expenses and interest amounted to 29.3 percent of annual expenses.) During the past few years the State has funded a number of projects that were intended to reduce the fuel and operating costs of rural utilities. These projects include more efficient diesel generators, better sizing of diesel generators to actual demand, better and safer - 18 - Cunnent@RGEaisisiles distribution systems, fuel storage tanks, waste heat systems, energy conservation measures and operator training courses. Although most of the data is too incomplete to make cause and effect correlations, the statistics from Table 1 indicate that whatever the cause, rural utilities are now more efficient than in previous years. From FY 86 to FY 87, the overall fuel efficiency (KWH sold per gallon of fuel) improved from 10.7 KWH/gal to 12.2 KWH/gal. Operating costs (excluding fuel costs) were reduced from 13.6 cents per KWH to 11.9 cents per KWH. Information from AVEC indicates that their fuel efficiency improved from 7.26 KWH sold (rather than generated) per gallon in 1980 (the first year of PPCA) to 9.28 in 1986. In addition, AVEC's average distribution losses were reduced from 13 percent in 1981 to 8.45 percent in 1985. Also, now that virtually every village has fuel oil storage tanks, most fuel is purchased in bulk at much reduced prices. Despite the improvements that have been made with rural utilities, there still appears to be much untapped potential for further cost reductions. Table 3 illustrates that there are considerable differences between rural utilities in terms of their cost of fuel, heat rates, and operating costs. Some utilities are reasonably efficient and others seem to be very inefficient. Some of the inefficient utilities have been targeted by the Power Authority to receive technical assistance to improve the efficiency of their operation. However, not enough is known at this time about all of the utilities that appear to be inefficient to estimate the total cost of improvements that are needed and what effect this could have on rates. In some cases, what appears to be lack of efficiency may be largely due to unreliable data. =O Current PCE Issues Table 3 Power Cost Equalization Summary Statistics The purpose of this table is to indicate which utilities in the PCE program appear to offer the greatest opportunity for cost reductions. Difficulties in data collection may mean some data may not be entirely reliable. The data was derived from the Power Authority's monthly PCE statistics report for FY 86. The report covers the entire year although some utilities have submitted reports for only a portion of the year. The priority column indicates the 10 utilities which have the highest costs for columns 1, 2, or 4 or the least efficiency for column 3. The numbers refer to which column applies. Column #1 is the base fuel prices taken from the report. Some of these prices have since been reduced. Column #2 is based on the PCE rate approved by the APUC as of June 13, 1986. Column #3 is the heat rate calculated by dividing fhe annual total for monthly KWH generated by the fuel consumed. In a few cases, monthly KWH sold was used instead since this utility did not report monthly KWH generated. Column #4 was calculated by dividing the total operating expenses by the monthly KWH generated, or, in some cases, sold. #1 #2 #8 #4 Fuel PCE Heat Operating Price Rate Rate Costs Priori Vill ! 1,4 Akiachak 1.89 22.10 9.5 42. Akiak 1.39 18.07 5.5 14. Akutan 1.14 14.50 Tal 12. APT - Craig 99 4.89 13.1 4, APT - Hydaburg 92 11.14 12.8 6. APT - Skagway 1.12 5.52 17.9** 5. APT - Tok 1.01 7.98 13.0 4. AVEC - Alakanuk 1.34 27.91 10.3 23. AVEC - 46 Villages 1.34 27.91 10.3 23. 1,2 Allakaket 1.90 1.80 74 11. 3,4 Alutiig - Karluk* 1.64 7.13 4.4 35. Andreanof 1.20 16.45 8.1 ae Aniak 1.36 22.14 11.2 18. 1 Arctic Village* 2.50 25.71 7.3 19. Atmautiuak 1.44 26.39 9.2 27. 2 Beaver 1.40 41.50 4.8 20. Bethel 1.25 6.61 1257, 3. Bettles 1.71 34.27 10.8 - 1,3 Birch Creek* 2.13 36.50 4.5 9. Chalkyitsik* 1.55 40.91 8.2 16. -20- Current PCE Issues a Table 3 (Continued) Sie #2 8 aa PCE Heat Operating Price Rate Rate Costs Ph Vil : KW . I Chefornak 1.54 19.76 7.0 16. 3 Chenega Bay* 1.28 27.26 4.0 12. Chignik 1.20 17.58 85 13. Chitina 1.09 35.87 6.8 32. Cordova 94 8.13 12.8 2: 4 Diomede NA 26.52 NA 45. Eagle Power 1.18 23.40 9.2 10. 2,3 Eagle Village 1.20 41.80 1.8 23. Egegik 1.25 30.88 9.4 19. Elfin Cove* 97 26.49 6.9 12. 4 Far North - Central* 1.16 33.38 49 33. G &K - Cold Bay 97 16.08 12.4 12. 1 Galena 1.88 20.74 12.0 26. 4 Golovin 1.19 27.15 5.3 41. Gustavus 1.37 38.50 NA NA 1 Gwitchyaa - Fort Yukon + 1.80 18.66 11.5 14. Haines 1.03 4.37 12.8 6. Hughes 1.75 30.20 5.4 25. INN - lliamna 1.52 35.09 12.3 20. Igiugig 1.43 35.25 6.2 16. - \pnatchiag - Deering 1.42 17.07 10.0 16. King Cove 72 6.28 11.8 10. 4 Kobuk NA 27.03 NA 33. 4 Kokhanok NA 28.99 NA 41. Koliganek NA 21.32 NA NA Kotklik 1.07 32.17 7.6 10. Kotzebue 1.11 10.42 11.6 11. Kwethliuk 1.43 23.03 9.9 20. Kwig - Kwigillingok 1.41 25.70 9.1 18. Larsen Bay 1.20 22.71 6.0 16. Levelok : 1.19 38.07 8.0 20. 4 Manley 1.29 19.57 46 33. Manokotak 1.26 21.10 eA 9. McGrath 1.40 25.75 12.6 13. 2 Middle Kusk - Chauthbaluk 1.49 41.80 75 26. 2 Middle Kusk - Crooked Creek* 1.49 41.80 6.1 25. 2,3 Middle Kusk - Red Devil* 1.41 41.80 44 NA 2 Middle Kusk - Sleetmute 1.49 41.80 6.6 28. 2,4 Middle Kusk - Stony River“ 1.48 41.80 5.4 40. Naknek 1.17 13.11 13.1 9. Napakiak 1.39 38.50 NA 30. Napaskiak 1.45 38.46 | 5.0 4. 1 Nelson Lagoon 2.10 23.79 75 13. 3 Nightmute 1.41 14.33 4.2 10. 2 Nikolai 1.74 41.80 6.0 14. Nome 1.13 9.59 13.5 8. 1,4 North Slope - Anaktuvuk Pass 2.25 12.50 11.3 38. 1,4 North Slope - 6 Villages 2.25 10.50-13.50 11.3 38. =21- Current PCE Issues A . Table 3 (Continued) #1 #2 #8 #4 Fuel PCE Heat Operating Price Rate Rate Costs Profty 0 Vilage S$) KWH) KW (KWH) Northway 1.05 19.03 11.0 he Nushagak - Dillingham 1.04 9.65 13.0 10. Ouzinkie 1.38 13.56 7.0 3. 2,3 Pedro Bay 1.46 41.80 45 275 Pelican 77 2.99 NA NA Perryville 1.40 28.50 5.2 a Pilot Point 1.22 26.50 5.5 12. 3 Port Heiden 1.36 11.50 4.4 4. Puvumag - Kongiganak 1.43 16.80 NA NA 2 Rampart 1.35 41.80 6.3 15. Ruby 1.59 31.82 9.7 12. Sand Point 95 NA 15.1 NA Sheldon Point 1.34 19.43 69 27. St. George 1.20 30.97 78 28. St. Paul 1.03 12:71 10.9 75. Stevens Village* 1.25 41.80 6.0 ais Takotna 1.62 13.54 10.5 12: Tanana 1.72 23.32 22" Tatitlek 1.36 29.17 5.1 4. 1,3 Telida* 2.34 41.80 3.4 29. 3,4 Teller 1.25 40.37 3.0 46. Tenakee 1.27 25.13 8.9 18. Tetlin 1.50 25.23 NA NA Thome Bay 1.16 16.24 7.0 tf THREA NA 20.97 10.2 17. Tulkisarmute* 1.19 20.07 68 a Tuntutuliak 1.46 19.19 11.4 19. Umnak - Nikolski* 1.41 NA 6.2 18. Unalakleet 1.12 11.62 13.8 13. Unalaska 1.28 20.51 10.2 23. Unqusrag - Newtok 4.41 22.52 8.5 29. White Mountain 1.26 35.59 46 14. Yakutat 1.04 5.23 13.2 2 * Data is for less than the full year. **Includes some hydroelectric generation. -22- Sand Point Unalakleet Yakutat Bethel McGrath Kotzebue AVEC St. George Kotlik Akiak White Mountain Port Heiden Teller Eagle Village § FIGURE #2 Comparison of Generation Efficiencies FY 1986 KWH Generated Per Gallon Source: APA PCE Records BO Ae Cunnentye.G En sisiwes ea EEE EEE C. Inequities The PCE rate for an eligible utility is determined by the formula specified by AS. 44.83.162. This rate applies to the first 750 KWH consumed per month by any customer other than a community facility and the first 70 KWH consumed per month per resident for community facilities. Every customer of a utility that is eligible for PCE receives subsidized electric rates regardless of need. Although the formula for the PCE program does not specifically use customer income as a criteria for subsidy, the subsidy that it does provide is largely based on the economic need of the utility and indirectly the customer. Utilities that have higher costs tend to have a greater percentage of their costs reimbursed by subsidy. Most of these utilities serve the smaller villages that have, for the most part, limited cash economies and greater economic need by customers for subsidy. However, the formula also creates some inequities between customers, particularly if the program is not fully funded. These inequities are: 1. Customer Priority: As the statute currently reads, if there are insufficient funds to pay for the program for an entire year, the remaining funds are to be pro-rated to all customers. In other words, all customers, regardless of need, would receive a proportional reduction in benefits. For example, a federal facility that uses 250 KWH of electricity per month would receive the same amount of subsidy as a residential customer of the same utility who depends mostly on subsistence for a livelihood and also consumes 250 KWH per month. 2. Usage: The PCE rate formula is structured so that the amount of subsidy received by a customer is proportional to the amount of electricity consumed, up to a maximum of 750 KWH per month. A customer who uses 750 KWH per month will receive the same subsidy rate as a customer of the same utility who uses 250 KWH per month but the first customer will receive 3 times the amount of subsidy in terms of dollars. Generally speaking, more users of more electricity have higher incomes than users of less electricity. If the PCE rate formula were based on customers need rather than utility need, there should be an inverse relationship between the amount of subsidy received and the amount of electricity consumed. 3. Electrical vs. Thermal: The State's energy programs have emphasized electrical end-uses over thermal (i.e. space heating) end-uses. This may result in an inequitable distribution of subsidy based on income, climatic differences, and energy consumption. Several studies have demonstrated that rural households spend much more on space heating than they spend on electricity. A 1979 report found that during the late 1970's (which was before most energy subsidy programs were initiated), Native households spent roughly three times as much on heating oil as on -24- Current PCE Issues electricity.” More recent studies indicate approximately the same relationship although the data gets muddled by subsidies. Despite this, the State's energy subsidy programs emphasize electrical needs rather than space heating needs. State subsidies for the PPCA/PCA/PCE program have totaled $74.7 million from FY 81 through FY 87. Even though the States emphasis on subsidies for electricity is complemented by federal subsidies for low-income space heating needs, there is an imbalance. Federal subsidies for the Low Income Home Energy Assistance Program (LIHEAP) have, ironically, also totaled $74.7 million during this same period of time. However, the expenditures are not comparable since LIHEAP pays for some electric bills, includes some urban recipients, and rural heating needs are greater than electrical needs. Other statistics indicate an inverse relationship between oil needs (as determined by heating degree day units) and electrical consumption in smaller communities. For instance, most villages served by AVEC experience 13,000 to 20,000 heating degree day units annually. The average annual consumption of electricity for residential customers in thes¢ villages was 2,777 KWH in 1985. On the other hand, THREA which serves five Southeast villages where there is less than 8,000 heating units annually, had an average annual consumption of electricity of 5,227 KWH per residential customer in 1985. From this data, it appears that those who live in more severe climates and have greater need and cost for energy receive less subsidy through PCE than those who live in more moderate climates. D. Program Funding Since its inception as PPCA, supporters of the PCE program have sought a permanent and/or stable source of funding that does not require annual appropriations and is not subject to the ups and downs of oil revenues. Unfortunately, a subsidy program is not like a hydro project that has stable costs once the project has been completed. If a subsidy program is to be ongoing, it must have its reservoir of money replenished every fiscal year. Alaska's Constitution establishes certain fiscal constraints that make it difficult to establish a stable source of funding for any program like PCE that needs annual appropriations. The Constitution generally prohibits dedicated funds (diverting a source of revenue to a specific program) and continuing appropriations (making appropriations for future Legislatures). In fact, a continuing appropriation for the PCE program and hydro projects was successfully challenged in State Superior Court on constitutional grounds. However, earmarking certain revenues for a specific purpose and then having them appropriated to that purpose is considered to be legally acceptable. 255 CuinmenaurneE bh musisiters If rate subsidies are essential to achieve affordable electric rates in rural Alaska, then funding of the PCE program is likely to remain an issue until a reasonably secure source of funding is made available. E. Program Management The administration of the PCE program is divided between the APUC and the Power Authority. The APUC establishes the PCE rate for a utility, either annually in the case of a nonregulated utility or at the time of a rate tariff for a regulated utility. The Power Authority receives the monthly requests for payment from the utility and administers the program disbursements. The APUC employs the equivalent of five positions to administer the PCE program and the Power Authority has one dedicated position to fulfill its responsibilities. In FY 86, the Power Authority's administrative costs for the PCE program amounted to $92,662. The Division of Legislative Audit completed an audit of the PCE program in January 1987 and one of its recommendations was that "responsibility for the Power Cost Equalization Program should be administratively combined within the Alaska Public Utilities Commission.” Their reason for this recommendation was that "although there is currently no duplication of effort between the two agencies, enforcement of the Power Cost Equalization Act has been limited by inadequate cooperation between the two agencies." Although the APUC would have better data if it administered the entire PCE program, a similar statement can be made about the Power Authority's involvement in rural electrical projects. Being familiar with PCE payments allows the Power Authority to determine where technical assistance may be needed by a utility that is operating inefficiently. F. Statutory Ambiguities The APUC has noted in its response to the Division of Legislative Audit report on the PCE program, that the PCE statutes (AS. 44.83.162) have ambiguous language in several parts that "are subject to varied interpretation." In brief, the APUC comments are: 1. "The words costs and rates are used, sometimes synonymously, sometimes with different meanings.” 2. "What is the intent of the Legislature in regard to what constitutes 'any other type of assistance’ which is excluded in determining a utility's allowable costs?" 3. "Does the Legislature intend to establish a standard that the Commission should use when the consumption by eligible community facilities exceeds the kilowatt hours (KWH) the PCE subsidy covers?" 4. How should the PCE base rate be calculated and how are annual adjustments to be made? Lose Current PCE Issues 5. If the Commission eliminates duplicative and/or unsupported expenses as eligible costs for unregulated utilities, has it imposed a measure of regulation that was intended by the Legislature? 6. What is the definition of a community building and charitable education facility? If amendments are to be considered to the PCE statutes, it would be desirable to either avoid or clarify these ambiguities. G. Rural Economic Development The PCE program not only makes electricity more affordable, but also increases the discretionary income of rural residents and keeps cash in the local economy longer than if the money had been spent on electric bills. For these reasons, PCE is sometimes considered in terms of being a proxy for rural economic development rather than an energy assistance program. This can result in expectations that are not most suitable to the program. For instance, although PCE does have a very positive affect on the economy of rural Alaska, it can be questioned as to whether PCE is a better investment for economic development than other alternatives. If the same amount of money were to be invested in the weatherization program, it could result in long-term reductions in energy costs similar to a hydroelectric project and create local opportunities for employment. Would these savings result in greater economic benefits to the local economy than a reduction in power rates? This comparison is not intended to suggest that PCE funding should be shifted into the weatherization program, but rather to point out that there may be more effective means for promoting rural economic development. OTe V. OPTIONS This section of the report suggests a number of options (i.e. strategies) that could be used to develop an action plan to address the issues described in the previous section. All of the options have generally proven to be technically feasible, either in Alaska or the lower 48. The options listed do not exactly correspond with the issues previously given since one option can address more than one issue. A. Technical Improvements All of the options listed under Technical Improvements should either reduce the capital investments or the operating costs that are needed for a rural utility to deliver reliable power. None of these options should result in higher rates for any consumer who now receives PCE benefits. 1. Technical Assistance Option: An evaluation could be made of the benefits and costs of having the Power Authority provide rural utilities with adequate technical and administrative support and a determination made as to what the optimal level of support entails. Background: Many rural utilities can become less dependent on PCE by improving the fuel efficiency of their diesel generators and reducing their operating costs. However, most rural utilities that serve only one community are not large enough to afford the technical staff that is needed to plan, design, or install the improvements that may be needed to improve efficiency and reduce costs. The alternatives are to contract for these services with an engineering firm, a distributor of diesel generators, or to obtain assistance from the Power Authority. Most rural electrification systems have been installed by engineering firms and diesel generator distributors. Often a village did not have the technical expertise that was needed to provide oversight of the design or installation. Consequently, there have been cases where systems were elaborate and unnecessarily expensive. Often the generator was too large for the community and could not be efficiently operated at peak efficiency. To generally illustrate the point, in 1985, the installed capacity for utilities in the Interior (less Fairbanks), the Arctic (less Barrow and Deadhorse), and Southwest Alaska, was 97.1 MW. The combined peak demand that year for these same utilities was 39.1 MW.” Although isolated utility systems may need more reserve capacity than systems that are intertied, having an aggregate reserve capacity of 148 percent of peak demand is excessive and costly. The inefficient development that occurred with many rural electrification systems provided reason for the Power Authority to become more actively involved in diesel - 28 - generator systems. Initially, the Power Authority's involvement with rural energy was to conduct reconnaissance and feasibility studies for potential hydroelectric projects that were mostly regional in scope. However, few of these projects turned out to be economically and/or financially attractive. Consequently, the interest of the Power Authority shifted to electrification systems based on diesel generators with utilization of waste heat where possible. An FY 86 appropriation of $125,000 for Rural Electrification enabled the Power Authority with funding to give rural utilities the technical assistance needed to install or improve electrification systems. The service provided by the Power Authority staff was on a first-come-first-served basis and met with immediate favor as several communities requested assistance that year. Because of the demand that was created, in FY 87 the Power Authority received another appropriation of $143,434 for Rural Technical Assistance that resulted in requests for assistance from an additional 20 villages. For FY 88, the program has been funded at $150,000. As of August 1987, the Power Authority had outstanding requests from 16 utilities and 3 school districts. For FY 89, the Power Authority is requesting a capital appropriation of $500,000 for Rural Technical Assistance. This request would also fund small reconnaissance and mini- feasibility efforts as well as engineering assistance for operation and maintenance. In addition, the Power Authority is requesting another capital appropriation of $150,000 to install proper metering with utilities that receive PCE benefits. The total cost for installing meters in villages that have inadequate metering is expected to be $3,000 per village. Better metering will improve the Power Authority's ability to provide technical assistance and result in more accurate data on fuel costs, system losses, and overall system efficiency. The Department of Community and Regional Affairs (DCRA) also provides rural utilities with technical assistance. In FY 87, DCRA spent about $25,000 on workshops that provided rural utility operators with training in administration, conservation measures, and diesel generator operation and maintenance. One product of this workshop was a handbook. These workshops were held in 5 locations and had staff participation from the Power Authority, APUC and DCRA. Similar workshops are being planned for FY 88 but will only need about $9,000 in funding since the handbook is already available. It appears that the Rural Technical Assistance program pays its own way by reducing the capital investments that are needed to have safe and efficient rural power systems and by reducing operating costs and PCE program payments. However, information does not exist at this time to determine if the program is at an optimal level of support and funding. Information does exist regarding the benefits and costs of technical assistance for some electrification projects, but not for overall benefits and costs. -29- Options If Rural Technical Assistance is to have maximum impact on reducing the cost of the PCE program, two efforts could be helpful. These are: 1. Develop a priority list that describes the improvements needed to have each rural utility achieve acceptable fuel and operating efficiencies. It may take years to complete this list but, initially, it could start with those that are known to need improvement. This list could be used to rank utilities and to measure the payback for improvements in terms of reductions in PCE program payments. 2. The priority list could be used to determine a cost-effective level of technical support to rural utilities by the State. The level of support can range from the present level of effort now provided by the Power Authority, to a full-fledged circuit rider program that includes ongoing technical and administrative support to rural utilities. ‘ There are two models that can assist in developing a circuit-rider program; 1) the remote maintenance program that the Department of Environmental Conservation (DEC) developed to service water and sewer facilities in rural villages, and 2) the maintenance program that AVEC uses. In 1981, the Legislature appropriated $160,000 to DEC for a pilot project to provide operation and maintenance assistance for water and sewer facilities in 10 villages along the Lower Yukon River. The pilot project reduced the occurrence of major failures and was soon expanded to include 21 villages served by the Tanana Chiefs Conference (TCC). The program now covers a sizeable portion of rural Alaska and is funded at $504,000 ($72,000 per maintenance worker including travel) for FY 88. Since participation in this program, none of the villages have experienced any catastrophic failures, such as a freeze-up. DEC believes that the project is a success and that the problems that have been averted have more than paid for the cost of the project. Mr. Jeff Weltzin of TCC estimates that if a similar program were created for maintenance and repair of diesel generators, it would require one mechanic/operator trainer for every 12-15 villages and cost about $100,000 a year per position for salary and extensive travel. The mechanic/operator trainer would not eliminate the need to have a resident operator for each utility. Utilities in small villages need administrative support as well as technical support. Mr. Weltzin expressed the view that the mechanic/operator trainer would not be able to fill this role. If a circuit rider program were to also provide administrative support, it would require an accounting position. This position would be responsible for about 12-15 villages and, initially, require extensive travel. Mr. Loyd Hodson, general manager of AVEC, stated that they now have a technical circuit rider program and that it has paid off in terms of improving efficiencies and reducing expensive breakdowns. AVEC assigns five or six villages to each mechanic. The -30- Options administrative functions are now handled by the operator who sends to the central office the information needed for billing, and record keeping. A secondary issue that arises with the Rural Technical Assistance program is to what degree the Power Authority should either compete with or supplement the services offered by the private sector. Contracting with the private sector has advantages but the utilities still need some technical expertise to oversee the performance of the contractor. What may need to be developed is a definition of the role for the Alaska Power Authority that protects the interests of rural utilities yet does not take away opportunities from the private sector. Providing adequate technical and administrative support to rural utilities could be a stepping stone to what may be the inevitable long-term solution for meeting rural power needs; that is, regional public power utilities that operate the power generation systems for villages that are not being served by cooperatives such as AVEC or THREA. 2. Performance Standards Option: A number of rural utilities appear to have excessive operating costs and these costs may be adding unnecessary expense to the PCE program. Establishing minimum performance standards for eligible costs could reduce unnecessary expenses. Several rural utility managers have expressed support for such standards, provided they are properly established. Background: Table 3 illustrates that of the utilities that participated in the PCE program in FY 86, the heat rate varied from an inefficient 1.8 KWH/gallon of fuel for Eagle Village to an efficient 13.8 KWH/gallon of fuel for Unalakleet. Operating costs varied from an expensive 46 cents/K WH for Teller to an inexpensive 1- 4 cents/KWH for 11 utilities. Fuel prices ranged from $0.72/ gallon in King Cove to $2.50/gallon in Arctic Village. The range in heat rate and operating efficiencies is far greater than what can be accounted for by the differences in size or make of diesel generator or the location of the community. Although transportation costs vary widely in rural Alaska, there are instances where villages that are relatively close to each other have differing fuel prices. An audit of each utility could determine what technical improvements can be made to reduce costs, what operating expenses may not be necessary, and what costs may not be eligible. However, 167 communities now receive PCE benefits. The travel costs that would be incurred in undertaking an audit, and the time that would be required, may not justify the results. A more reasonable approach for reducing unnecessary costs may be to establish standards that specify the minimum heat rate and the maximum operating and fuel costs that are eligible for PCE reimbursement. If all the utilities listed in Table 3 that have a heat rate of less than 10 KWH/gallon were to operate at this level, the cost of the PCE Program would have been nearly $900,000 less that year. B31 Options If standards are established, they should account for the fact that larger utilities are generally able to operate at a more efficient and less costly level than smaller utilities. Peter Hansen of the Power Authority has suggested a sliding scale for performance standards. He suggests that a fuel efficiency standard consisting of 12 steps based on the annual KWH sold by a utility and the lowest wholesale fuel cost available in the general area, be used to establish the fuel component portion of the PCE payment. The proposed fuel efficiency standard starts at 8.0 KWH sold/gallon for the first 50,000 KWH's of annual sales and tops out at 16.25 KWH sold/gallon at 51,200,000 KWH annual sales. Operating costs, which would include an allowance for distribution expenses, are reimbursed based on a standard that begins at 50 cents/KWH sold for the first 50,000 KWH's of annual sales and tops out at 4.29 cents/KWH at 51,200,000 KWH annual sales. Several persons associated with rural utilities have commented that even if efficiency standards are scaled to the size of the utility, a number of small utilities with limited management skills could have trouble meeting the standards without assistance. If standards are adopted, utilities which do not meet the standards should be targeted by the APA to receive technical assistance and develop an upgrade plan which would allow the utilities to meet the standards. Phasing in the standards over a period of one to two years would also allow more time for compliance by small utilities. Performance standards would be consistent with the PCE statute. AS.44.83.162 (J) states that "In order to qualify for power cost equalization, each electric utility must make every reasonable effort to minimize administrative, operating, and overhead costs". If performance standards are to be established, it may require the promulgation of regulations by either the APUC or the Power Authority, or an amendment to the PCE statutes. The authority for the APUC to promulgate regulations may be implicit in AS 44.83.162 (I) that reads "In reviewing applications for power cost equalization, the commission has the authority to require the elimination of duplicative or otherwise unnecessary operating expenses." Even if regulations were not required, going through the process has the advantage of assuring public participation and the avoidance of performance standards that are unreasonable. 3. Shared Savings Option: Since the PCE program pays for 95 percent of a utility's eligible costs, most of any cost savings (as well as cost increases) accrue to the State instead of the utility or its customers. Consequently, neither the utility or its customers have much financial incentive to reduce costs. Implementing a shared savings program could provide utilities and consumers with incentive for reducing costs. Background: The concept of "shared savings" was developed to provide energy users with incentives for implementing energy conservation measures. The concept has been widely and successfully used in the lower 48. A typical situation where shared savings is used is when a third party assumes responsibility for implementing energy conservation measures in acommercial building and shares some portion of the savings that occur with the owner -32- Options of the building. The savings are usually determined by comparing current energy costs with historical cost records to determine what the cost would have been without the conservation measures. Four methods have been suggested for applying the shared savings concept to the PCE program. With any of the methods, all of the information that is needed to calculate the shared savings is included in the form that utilities submit to receive their monthly PCE payment. Considering that the calculation is fairly simple and that there will probably not be more than several utilities that qualify for shared savings, the administrative burden should not be onerous. Each method arbitrarily assumes that the shared savings would amount to 50 percent of the total savings. a. The first method is based on costs per KWH and includes all costs that are covered by PCE. This method requires an ddjustment for oil prices since fluctuations in the price of oil can be more significant than any change in operating efficiencies. A PCE eligible utility would be entitled to shared savings if it can demonstrate that its eligible costs per KWH sold for the month are less than its base costs per KWH sold for that month. This is determined by calculating: ¢ eligible costs that are determined by multiplying the total monthly gallons of fuel consumed by the average base price for fuel oil and adding the total monthly operating expenses (less fuel) which is then divided by the total monthly KWH's sold, * base costs that are determined by taking the total eligible costs incurred by the utility during the month for the past three years and dividing it by the total number of KWH's sold by the utility for the same period or, if the utility does not have three years of reliable data, it may use data from only the previous year, or, preferably, two years, and ¢ taking one-half of the difference between eligible costs per KWH and the base costs per KWH times the number of KWH's that are eligible to the utility that month. B33h Options Shared Savings Formula Gal. of Fuel x Base Fuel Price + Oper. Exp. Eligible Costs= ---------------------------------------------- 2202-2 -2-2-2-=- KWH Sold Total Eligible Costs For 3 Years Base CostS= -------------------------c-ennnennnenneenene Total KWH Sold Base Costs - Eligible Costs ’ socremecennnnnnnnnneneneceeennccemanes x KWH = Shared Savings s b. The second method uses improvements in diesel generation (heat rate) and distribution as the basis for determining the shared savings. While this approach is not as comprehensive as the first, it eliminates any difficulties that may occur in trying to normalize the price of oil, since some utilities do not have good records, and applying overhead costs to the formula. Overhead costs could be controlled by the APUC when it establishes a utility's PCE rate. The shared savings calculations are done by determining the: ¢ Fuel efficiency for the month by dividing the KWH's sold by the number of gallons of fuel oil consumed, ¢ Base fuel efficiency by dividing the KWH's sold for that month over the past three years by the number of gallons of fuel oil consumed for that month over the past three years, or, if the utility does not have three years of reliable data, it may use data from only the previous year, or, preferably, two years, and ¢ Taking one half of the percentage difference between fuel efficiency for the current month and the base times the cost for the fuel consumed during the current month. , -34- Options Shared Savings Formula KWH/gal. (current month) crcemeeneeneeneccnnecenecccnncnnccne = 1 = % Difference KWH/gal. (base month) % Difference socnececenmccennnnn x Fuel Cost = Shared Savings c. The third method uses historic data to establish a base efficiency level, expressed in KWH/gallon using historic data, that is used to measure any improvements in efficiency. The APUC establishes the base efficiency level when it receives the annual reports of unregulated utilities or tariff change requests from regulated utilities. If there are improvements in efficiency, the utility receives one half of the savings. One problem with this approach is that differences in seasonal load factors could appear as efficiency improvements. However, this could be corrected by establishing seasonal base efficiency levels or using an annual calculation. Shared Savings Formula Total KWH Sold sraowececenenerec nen errs = Historical KWH/Gal. Efficiency Gallons Fuel Used Monthly KWH Sold sonnoeeceencennnnecnnnnnnnee = Fuel Reference Historical KWH/Gal. Fuel Reference x Current Fuel Price = Historical Fuel Value Savings Historical Fuel Value - Monthly Fuel Expense = ----------- 2 d. A fourth method is to use total costs, rather than costs per KWH for calculating the shared savings. While this has the advantage of being an easier calculation than the other methods and in providing shared savings to a utility that reduces its sales because of energy conservation, it has the disadvantage of eliminating shared savings if cost savings due to a more efficient operation are less than additional costs created by growth. =35- Options If any of the methods described above are accepted, a decision would be needed as to whether or not the shared savings should go to the utility or if the utility should pass the savings on to the consumer. Passing the savings on to the consumer would give added incentive to the consumer to be concerned about the operation of its utility. 4. Electrification Grants Option: Experience indicates that pass-through electrification grants to municipalities do not provide the grant recipient or the contractor with much incentive to develop cost- effective electrification systems. Cost-effectiveness can be improved by amending the statute for municipal grants (AS 37.05.315-317) to require a plan that describes how the project meets certain key technical and economic criteria. Even greater cost-effectiveness should be achieved if the plan had to be approved by the Power Authority before the grant is released and performance contracting procedures be allowed when purchasing a system. Background: Although there is no study of the cost over-runs that have occurred with municipal grants for electrification projects, there are numerous accounts of oversized systems and systems that have had to be Virtually rebuilt to be operable. A correction to this problem is to require the grantee to submit a plan that describes how the proposed electrification project meets certain technical and economic criteria before the grant is released. This would result in data that could be used to compare, on a voluntary basis, the cost-effectiveness of a project with other projects. What could be a more effective approach for preventing cost over-runs is to have electrification grants appropriated to the Power Authority's Rural Technical Assistance program and require technical oversight of a project before the grant is released. In the past, a number of electrification projects for specific villages have been appropriated to the Power Authority and these systems have been cost-effective, relatively reliable, and safe. Allowing electrification grants to use performance contracting procedures, which may require some minor statutory changes, can reduce the cost of electrification systems by increasing the opportunities for competition from technologies other than diesel generators. However, a utility that uses performance contracting would have to have the technical capabilities to evaluate competing technologies. 5. Waste Heat Projects Option: Waste heat projects can reduce PCE program costs by improving the efficiency of a diesel generator and by providing a utility with additional revenues. To take full advantage of this potential, the Power Authority should continue its efforts to determine which utilities have situations where waste heat projects are technically and economically feasible and devise an appropriate plan of finance to fund this effort. Background: At least two-thirds of the energy consumed by diesel engine generators is not utilized in the production of electricity. With the installation of proper waste heat equipment, approximately one-half of the wasted heat can be recaptured and used for - 36 - Options space or water heating. Besides reducing heating costs, a utility with a waste heat system can receive additional revenues from the sale of the heat. The Power Authority's Waste Heat Recovery program provides for planning, design and construction of waste heat facilities for utilities that use diesel engines as their primary source of power generation. The waste heat is used for space heating of nearby public use buildings. The Waste Heat Recovery program received an appropriation of $500,000 for FY 88. This funding will be used to develop some or all of the 19 potential projects that have been identified by the Power Authority. Each of these projects are economically feasible since the investment will be recovered by savings in fuel oil consumption within ten years or less. 6. Energy Conservation and Efficiency Option: There are substantial opportunities for cost-effective electrical energy conservation measures in rural Alaska. These opportunities can be realized by better integration, at the planning stage, of energy conservation and electrification programs and by amending the PCE formula so that it provides incentives, rather than disincentives, for energy conservation measures that can reduce actual costs. Background: The past decade has witnessed an explosion of more efficient electrical appliances, lighting, and building control systems, that are too numerous to be described in this report. Many of these improvements in efficiency have, in terms of percentages, been in the double digits. Awareness has been an important limiting factor in consumer acceptance of these new appliances and lighting devices. In rural Alaska, which has limited outlets for consumer products, awareness can be a more significant barrier to overcome than in urban areas. However, State agencies that manage energy conservation and rural electrification programs are generally aware of the energy conservation measures that are commercially available and can help overcome these barriers. The point at which energy conservation measures for rural utilities should be evaluated is in the planning stages of an electrification project. Comparisons should be made, at this time, between the benefits and costs of supply side options (i.e. new diesel generation capacity) and demand side technologies (i.e. more efficient lighting, refrigerators etc.). If replacing old inefficient appliances with new more efficient appliances can essentially provide the same amount of capacity reduction (sometimes referred to as Negawatts) as the capacity expansion that would occur with a larger diesel generator, but for less expense, then the State should be just as receptive to financing the purchase of new appliances as it is to providing grants for new generators. The potential for demand side efficiency measures to reduce utility and PCE costs in rural Alaska varies widely according to the characteristics of individual utility systems. In general, efficiency measures can be considerably more cost-effective for some rural power -37- Options systems than for urban utilities, because of the much higher fuel costs paid by rural utilities. However, as noted previously, many rural utilities have generators which are too large to efficiently match their power demand. For these utilities, the potential benefits of demand- side efficiency improvements are more limited, at least until a more appropriately sized generator is installed. Diesel generators operate most efficiently at or near their maximum rated output. If the load level drops much below 60-70 percent of capacity, fuel efficiency drops, so that fewer KWH are generated for each gallon of fuel. Therefore, if a generator in a given community is usually lightly loaded, efficiency measures which reduce demand will not save as much fuel as if the generator was operating at capacity. In addition, maintenance problems can result from operating diesels at low loads for prolonged periods. In some villages, dummy loads have been attached to generators during the summer months to increase the load factor and avoid these maintenance problems. In these cases, the most cost-effective improvement is usually installing a smaller, more efficient generator. s The variables which affect the potential benefits of demand-side efficiency improvements include the following: ¢ Capacity and number of generating units; ¢ Power demand levels, timing patterns, and load growth rates; ¢ Fuel and maintenance costs; and ¢ End-use characteristics (how much electricity is used by different types of customers, and for what purposes). Demand-side efficiency measures have the most potential for utilities which have demand levels nearing their maximum generation capacity, rapid demand growth (more than 4-5 percent per year), and/or high fuel costs. Demand-side electrical efficiency measures have been employed in a number of rural projects, primarily schools and other public buildings. However, the application of this approach to complete utility systems is just now beginning. For example, in June 1987, the Power Authority provided high-efficiency compact fluorescent lighting to replace incandescent bulbs in nearly every home in the village of Nikolai. These lights have reduced the amount of power consumed by residential lighting by nearly 75 percent. Although no data is yet available on the demand and fuel consumption impacts. of this project, the village mayor reports that residents are pleased with the new lighting. The Power Authority has requested $300,000 in its FY 89 budget to undertake a rural end- use efficiency pilot project in two to three communities. The project would encompass a wide range of generation distribution and end-use measures including both lighting and = 38 = ee appliance improvements. This project is intended to evaluate the overall benefits and savings of these measures to utilities, customers, and the PCE program. DCRA has issued a request for proposals to all rural utilities for a federally-funded demonstration project to upgrade both incandescent and fluorescent lighting in one or more communities. The goal of this project is to develop a model program which could be used by other utilities to implement a similar efficiency program. Despite the similarity in the two projects mentioned above, neither the Power Authority nor DCRA have coordinated their efforts with the other agency. Although state agencies can be instrumental in seeing that cost-effective energy conservation measures are implemented in rural villages, there is no substitute for having market forces, providing they are not distorted by market failures, determine the choice of consumers. If rural consumers are to receive the appropriate market signals regarding electrical appliances, consideration should be given to changing the PCE rate formula. As it is now, the formula provides virtually no incentive for energy conservation. Rate formulas are discussed in the next sectien. If the market for rural residential appliances is to have reasonable penetration by energy efficient appliances, State agencies may have to devise a way to overcome the barrier caused by having little disposable income in most villages. Lack of disposable income can prevent the purchase of big ticket appliances, like refrigerators, even though they may be cheaper in the long run. Mr. Allen Mitchell of Analysis North has proposed a low or zero interest loan program to rural residents as one solution to this problem. 7. Bulk Fuel Purchases Option: Communities have substantially reduced their energy costs by purchasing fuel oil in bulk quantities and coordinating purchases with neighboring communities. State agencies should continue to encourage these arrangements where they do not already exist. Background: Nearly all communities now have fuel oil storage tanks that are large enough to store at least a winters supply of fuel oil. Having storage tanks allows bulk delivery of fuel oil by vessel during the ice-free months and substantially reduces transportation costs. In order to take even greater advantage of the economies of bulk delivery, some neighboring communities are now coordinating their fuel oil purchases. Coordinated purchasing results in larger deliveries and lower transportation costs plus better opportunity for more competitive bids. Nushagak Electric Cooperative, Iliamna-Newhalen-Nondalton Electric Cooperative, and Naknek Electric Cooperative provide an example of the coordination that is now occurring with fuel oil purchases. Nushagak Electric built a one million gallon fuel oil storage tank in 1985 for about $800,000, of which $700,000 was financed with State money. They estimate that because of their fuel storage capability and coordinated purchasing of fuel oil, HR08 Options their costs for the last three years have been about $400,000 less. Instead of paying $1.01 per gallon in 1985 they were able to purchase fuel oil at 90¢ per gallon. Purchases in 1986 were about 18¢ less per gallon and in 1987 about 20¢ less per gallon. B. Rate Formula According to its enabling legislation, the purpose of the PCE program is to equalize the cost of power between rural Alaska and urban Alaska (specifically Anchorage, Fairbanks, and Juneau). Since the program is intended to mitigate the regional economic disparities that occur in Alaska, presumably the wealth distribution formula that is used by this program should result in larger subsidies to those who have greater economic need. But since that is not the case, as discussed in the previous section, the formula results in inequities. Following are four options for amending the rate formula so that there might be a better correlation between the amount of benefits that a consumer receives and economic need and one option that takes a totally different approach. Generally speaking, it is assumed that residential consumers who have low incomes, modest electric consumption habits, very high electric rates, and live in more severe climates, such as many of the smaller villages in the Interior, Arctic, and Western Alaska, have greater economic need than residential consumers who face only some of these conditions, or commercial and industrial customers. In some cases, rate formula changes can reduce the cost of the PCE program with little, if any, affect on consumers who have the greatest economic need for rate subsidies. Data included with each option can help determine how this can be accomplished. 1. Priorities Option: The PCE rate formula would be more equitable, relative to economic need, if it established customer priorities in the following order: residential, community facilities, commercial, and government agencies. Background: AS 44.83.162 (j) states that "If appropriations are insufficient for payment in full, the amount paid to each electric utility is reduced on a pro-rata basis". In other words, if appropriations are sufficient to fund only 75 percent of the program needs, all customers, irrespective of need would receive only 75 percent of the subsidy that they would have received if full funding had been available. If HB 182 were enacted, AS 44.83..162 (j) would be amended so that "If the commission determines that appropriations are insufficient for payment in full, the amount paid to each electric utility must fully fund, in decreasing order, residential customers, community facilities, and commercial facilities until the appropriation is fully spent. If the appropriation is insufficient for payment in full to a class of eligible customers, the amount paid to customers in that class must be reduced on a pro-rata basis." - 40 - Options A recent survey by the Power Authority of 10 utilities that receive PCE benefits provides Statistical data (Table 4) to determine the significance of this option. Table 4 also provides data for estimating how much PCE program costs can be reduced if government agencies, other than community facilities, are eliminated from the program. The rationale for this is that the utility costs for schools, and state and federal agencies are funded by budgets that do not depend on rural economies. Also, subsidizing these agencies via PCE gives an inaccurate perspective of the cost of their respective program. The current PCE statues define community facility as "a water and sewer facility, public outdoor lighting, charitable educational facility, or community building whose operations are not paid for by the State, the federal government, or private commercial interest". The Power Authority has recently begun to enforce this definition. Table 4 provides information regarding the number of community facilities that receive PCE benefits but, at this time, there is no data as to the percentage that use state, federal, or private funding to pay for operations. CAI Options Table 4 PCE UTILITY SURVEY This survey by the Power Authority provides a breakdown of customers and electric consumption for one month (either November or December 1986) by ten utilities that participate in the PCE program. The number of customers included in this table represents about 52 percent of the number of customers that receive PCE benefits. CUSTOMERS CONSUMPTION PCE ELIGIBLE MBER PERCENT MWH‘ i PERCENT Residential 9,248 75.3 4,178 39.3 3,579 61.3 Commercial Schools 215 18 1,542 14.5 213 3.7 Federal 195 1.6 762 7.2 175 3.0 State 167 1.4 Other 1874 153 * 3.005 28.3 247 12.8 SUBTOTAL 2,451 20.0 5,309 50.0 1,135 19.4 Community 585 48 1,135 10.7 1,127 19.3 Eaciliti TOTAL 12,284 100.1 10,622 100.0 5,841 100.0 Utilities included in this survey; AVEC, Cordova, Haines, INNEC, Kotzebue, Naknek, Nome, North Slope Borough, THREA, and Unalakleet. It should be noted that not all survey forms were properly filled out and there may be some minor inaccuracies in the data. 2. Parameter Changes Option: The cost of the PCE program can be reduced without causing rate shock to consumers who have substantial need for subsidy by changing the parameters for the consumption cap and the entry rate. Changing the percentage of rate that is subsidized would also reduce program costs but would impact target consumers. Background: Four key parameters in the PCE formula are: a. A consumption cap limits PCE benefits to 70 KWH per month per resident for community facilities and 750 KWH per month for other customers. HB 182 would reduce the consumption cap to 50 KWH per month per resident for community facilities and 500 KWH per month for other customers. b. The entry rate for the PCE program requires a utility to have an electric rate of at least 8.5 cents/KWH. c. A ceiling of 52.5 cents/KWH is the upper limit for PCE eligible costs. A utility is not reimbursed for costs that exceed this limit. Reducing the PCE -42- Options ceiling rate is not included as a parameter change since the utilities with rates that approach or exceed the ceiling are the smaller utilities. The rate impact of lowering the ceiling would probably be most severe on rural consumers that have the greatest economic need for subsidized rates. d. The PCE program pays for 95 percent of a utility's eligible costs as determined by the three parameters listed above. Tables 5 through 7 indicate the cost reductions that would result if the consumption cap, the entry rate, or percentage were changed. This information should aid a policy decision as to whether or not any of these parameters should be changed and, if so, by what amount. The data on residential customers indicates a bimodal distribution of KWH's consumed for the month that was surveyed. There are'a large number of customers (2,734) that consumed rather small amounts of electricity and a large number of customers (2,710) that consumed about as much electricity as the average residential customers in urban Alaska (740 KWH/month in 1986) or the lower 48 (753 KWH/month on 1986). Most of the smaller consumers are in villages and-most of the larger consumers are in the regional centers. For instance, AVEC had 1421 customers that were in the 1-200 KWH bracket and 480 customers that were in the 501-750 KWH brackets. Nome had 165 customers in the 1- 200 KWH bracket, and 287 customers in the 501-750 KWH bracket (see Figure #3). - 43 - Options Table 5 PCE Consumption Parameters This data is from a Power Authority survey that provides a breakdown by monthly KWH consumption level of residential, commercial, and community facilities customers for twelve utilities that participated in the PCE program during FY 87. The utilities include AVEC, Bethel, Cordova, Haines, INNEC, Kotzebue, Naknek, Nome, North Slope Borough, Nushagak, THREA and Unalakleet. All twelve utilities comprise 64 percent of the customers that received PCE benefits that year. However, because of incomplete data, not all of the data was used for each class of customer. The survey is based on a one month record; either November or December 1986 depending on the utility. MWH consumed refers to the total electrical consumption for customers for each respective consumption bracket 4 MWH Eligible refers to the electrical consumption that was eligible for PCE benefits under the current formula. Residential Customers MWH amended cap indicates the consumption level the would be eligible for PCE benefits if the cap was at the higher number for the respective bracket. Percent Retained is the MWH's that would be eligible under the amended cap divided by the MWH's that were eligible using the current formula. 1-200 201-300 301-400 __401-500__501-750 Over 750__Tota # of Customers 2,734 1,573 1,386 $277 |)||| Beene ||\/)|| 1.108|||| toed MWH Consumed 286.1 394.1 485.8 578.1 1,972.5 1,139.6 4,856.0 MWH Eligible 286.1 394.1 485.8 578.1 1.9725 7358 4,452.2 MWH Amended Cap 1,896.1 2,623.2 3,202.3 3,650.9 4,452.2 Percent Retained 43% 59% 72% 82% 100% Haines was not included in the residential breakdown. Options Table 5 (Continued) Commercial Customers 501- 751- 1501- —-2501- 5001- 10,000- Over y 1 | # of Customers 1,257. 235 483 228 = 225 141 57 83 2,709 MWH Consumption 216.9 147.0 510.3 451.7 8328 1,021.3 726.1 2,409.1 6,315.2 MWH Eligible 174.6 2198 263.3 1215 102.0 78.8 33.0 428 1,035.7 Haines is not included in MWH consumption. Haines, Cordova, INNEC, THREA, and Unalakleet are not included in MWH eligible Bethel community facilities are included in commercial. Community Facilities 501- 751- 1501- 2501- 5001- 10,000- Over ———_________ 1500 _750 _1501_ _2500 _5000_ _10,000__15,000__15,.000__Total # of Customers 284 82 136 74 54 32 8 18 688 MWH Consumption 69.4 524 149.8 141.4 191.0 211.3 93.9 547.3 1,456.4 MWH Eligible 51.6 443 123.8 102.5 132.6 142.5 83.1 254.7 935.1 Haines is not included in MWH consumption Haines, Nushagak and THREA are not included in MWH eligible. The survey did not include data regarding consumption by community facilities based on 70 KWH per month per resident. -45- Options Table 6 Entry Rate Increases This table illustrates the approximate PCE program cost reductions that would result if the entry rate (currently 8.5 cents/KWH) were increased. If the entry rate were increased to 12 or 14 cents/KWH, some utilities would no longer be in the program thereby reducing the number of KWH that are eligible for PCE benefits. a a | eee] MWH Eligible 105,954.1 105,954.1 95,480.2 93,116.7 Cost Reduction ($000) 0 1,589.3 3,376.8 S121-41 P. Ri ion 2 Utilities that do not qualify for PCE at 12 cents/KWH includes Skagway (APT), Craig (APT), Haines and Pelican. Additional utilities that do not qualify for PCE at 14 ‘Cent/KWH include Tok (APT) and Sand Point. Rates are based on the PCE rate approved by the APUC as of September 1987 MWH Eligible is based on the Power Authority's PCE Statistics Report dated August 14, 1987 which does not include all of FY 87. Increasing the entry rate would have the least impact or utilities that have the highest rates. For instance, increasing the rate from 8.5¢/KWH to 10¢/KWH would reduce PCE benefits by about 50 percent for a utility having an unsubsidized rate of 11.5¢/KWH but result in a reduction of only about 5 percent for a utility having an unsubsidized rate of 38.5¢/KWH - 46 - ~ Mike Harper From: Jodi Fondy [jfondy@denali.gov] Sent: Monday, October 20, 2008 5:45 PM To: Mike Harper; Chris Mello Subject: FW: Draft Policy document for review Attachments: DC Draft Policy Doc.pdf Good afternoon Mike and Chris, Please find attached a copy of the Draft Denali Commission Policy document, which has been posted for public comment through November 10, 2008. Please feel free to distribute throughout AEA as well. I'd like to draw your attention to the following additions/deletions within the major policy areas: ? Investment Guidance o Strengthening of the requirements related to regional planning, including prioritzation of projects that provide regional or multi-community connectivity (particularly in energy and transportation projects), in advance of stand-alone projects co Ingeneral, the Commission will not invest in similar infrastructure projects (primary care clinics for example) within a fifty mile radius of one another o Recommendation that in general, the Commission will not invest in communities with less than 100 year round residents o Deletion of the “Per capita investment” section o Right of the Commission to pursue alternative design and construction methodology in cases where unit costs are too high © Prioritization of projects receiving cost share match from the following sources: Federal, State of Alaska and Other (including community contribution, philanthropic, tribal corporation, etc.) Sustainability o Commission advocacy and encouragement of project funding entities coordinating at the earliest phases of project development o Recognition of the business plan document as a “snap shot” and implementation of additional project and sustainability processes over the course of project development o More focused reliance on A-DCCED RUBA resources and use of Community Economic Development Planning documents Community Planning o Focusing on both individual project investments, and the impact such investments will have on all project activity in a community Open Door o NoChange Private Enterprise o Minor rewording of introductory paragraph o Limited investment in additional retail facilities in the same community Competitive Bid o Addition of the Commission’s intent to encourage local hire to the greatest extent possible Cost Containment o Additional narrative regarding the completed benchmark data and application by program partners of same in project budgeting and reporting This document is in draft form; each of the additions or deletions summarized above will be reviewed at the Commission's November 18” quarterly meeting. Commissioners will also be reviewing the public comment that is submitted. Commissioners will be approving some form of the policy document at that meeting, and the policies will be effective shortly thereafter; which has significant implications for projects in our FY09 funding cycle. Please review this document and provide your comments to me by November 10th via e-mail. Thanks. - Jodi Jodi Fondy Denali Commission 510 L Street, Suite 410 Anchorage, AK 99501 907.271.1414 tel 907.271.1415 fax 888.480.4321 toll free www. denali.gov DENALI COMMISSION DRAFT POLICY DOCUMENT — PUBLIC COMMENT PERIOD Dear Reviewer, The Denali Commission (Commission), an independent federal agency, is primarily tasked with critical infrastructure planning, design and construction, and workforce development and training throughout Alaska. Over the past ten years, the Commission has adopted several policies to guide program investment and project selection. We have adopted policies in the following general categories: Investment Guidance; Sustainability; Community Planning; Open Door; Private Enterprise; Competitive Bid; and Cost Containment. We have received considerable feedback from our constituents that these policies are not keeping up with the pressing challenges affecting rural Alaska and our nation. These issues include the dilemma of unaffordable energy, rising construction costs, declining federal funding and evidence of population changes. The Denali Commissioners have prepared an updated draft of our policies (attached). Proposed changes are identified in the document. We invite the public to respond to the attached draft policy document. The public comment period shall be October 10-November 10, 2008, close of business. We intend to use information gathered in this process at the Commission’s November 18, 2008 quarterly meeting in Anchorage, AK, as we develop and adopt this updated version of the Commission’s policies. Comments may be submitted via e-mail, fax or hard copy to: Ms. Tessa Rinner Director of Programs Denali Commission 510 L Street, Suite 410 Anchorage, AK 99501 Fax: 907. 271.1415 Phone: 907.271.1624 trinner@denali.gov We look forward to your thoughts and insights. Best Regards, Beflna George J. Cannelos Federal Co-Chair, Denali Commission Denali Commission 510 L Street, Suite 410 Anchorage, AK 99501 907.271.1414 tel 907.271.1415 fax 888.480.4321 soll free www.denali.gov Summary of Denali Commission Policies Since its inception in 1998 the Denali‘Commission (Commission) has developed a number of policies intended to guide federal funds investment in the most efficient, effective and prudent manner possible, while at the same time maximizing the benefit to Alaskan communities and residents in the areas of infrastructure development, economic development and training and workforce development. These policies have been adopted throughwarious methods including: which appear in more detailed form below: Investment Guidance Sustainability Community Planning Open Door Private Enterprise Competitive Bid Cost Containment ae INVESTMENT GUIDANCE m The Denali Commission (Commission) is Rigen infrastructure in rural Alaska to enhance the ni rural residents and to provide the underpinnings for economic opportunity. ission iivestments are directed by federal law, by the Commission’s Annual Work Plan. Infrastructure needs of rural Alaska are enormous compared to available funding, thus, it is imperatiVe,that each dollar be invested in a way that will maximize the sustainable long term benefits to “Alaskans. Factors pte oat elence investment decisions: Immii Soom [:threats eoeoeevee5ne g the building of sustainable i 4 Priority to be platy needs of existing communities The Commission will give priority to the critical infrastructure needs of existing communities before considering osals to create new communities unless there is relocation of an existing community. | Denali Commission -Draft Policy Document . October, 2008 Page 2 of 7 . Regional support ’ The Commission recognizes that borough, tribal and local government involvement increases the probability that basic infrastructure and services provided with Denali Commission funds will be sustained over the long term. The Commission also recognizes that other regional organizations share both responsibility and capacity to contribute to sustainability. The Commission shall require regional planning documentation before providing funding for projects. Consistency with regionally approved plans is a factor lending strength to investing in a particular project. The Commission shall give priority consideration to projects that have regional support and demonstrate regional planning and coordination. itionally. the Commissi rioritize inves in energy an i ‘ojects that r ent regional and/or multi- i ben intérti ry igher priority ission funding. Proximity/access to existing services and/or faciliti In determining the need for a new facility, a car all . facilities will be performed. Where the needs oftw eo one another can be adequately and more cost effectivel ser will be selected over separate facilities for each communiti critical unmet needs are demonstrated. In gene: ile radius of one anoth uation: of existing access to services or ore communities in close proximity to éd bya single facility, that option investments will be made where ; S a Renovation versus new construction 2 Where existing facilities aoe renovated or expanded to adequately meet community needs at significantly lower life ‘a new construction, that option will be favored. Population trends : Infrastructure will be si e that can reasonably be projected over the design life of the project. If population is i i i accommodate growth. Di population inayt result i ina smaller facility then the current population would dictate. In g i Affordability The Commission will evaluate proponents’ capacities to afford the life-cycle costs associated with sustaining proposed services and/or facilities, either through user fees, industry support, government transfer payments or grants from private entities. Unit cost | Denali Commission -Draft Policy Document October, 2008 zl Page 3 of 7 Unit cost of construction varies widely across the state for a number of reasons including the technology employed and/or designs utilized. High unit cost tends to work counter to project sustainability. Some of the variables impacting unit cost (project location, soil conditions, etc.) are not controllable, but many others are. The Commission will make every reasonable effort to control unit cost by working with award recipients through its Partners to ensure that the most appropriate technology and designs are applied._ However, in cases where the Commission it costs too high, the Commission reserves the right to pursue alternative construction and design met logy. i i wing: re-design. va. ineeri: Itemative si i iti revision of the construction budget including materials and categories. fi Good faith The long term sustainability of Commission investments is highly te the recipients of those investments. In evaluating potential in estment priority to advocates who have historically demonstrated Lei faith i in dent on the good faith of Commission will give Match Funding The Commission will give priority to projects that have cost share match from the following Commission ‘funding fora project. In some Color({RGB(79,129,189)) 3ateh contribution from one or all of the match identified for the health facili rosram.Proiects which D rovide a vari ety of match in, View ly those that do not. Implementation ba ; The Commission will consider all available information regarding each of the factors identified above and any-other relevant information in making investment decisions. In cases where sustainabitity'o any nVestment is questionable, the Commission, either directly or through its Partn will work wi ect proponents to attempt to find workable solutions. It will be incuml on requestors vide pertinent information that is not otherwise available and to actively’ engage i in the effo develop workable solutions. Solutions may involve smaller scale or mobile facilities and mayiin clude multi-community or regional management approaches. If no workable sus: is apparent, the Commission or its Partners may suggest alternative meant agcagtia services. ' ae For the purposes of Denali Commission funded infrastructure projects, sustainability is defined as the ability of a recipient or applicant to demonstrate the capacity, both administratively and financially, to provide for the long-term operation and maintenance (typically a 30 year life cycle) of a facility. This demonstration may include such factors as maintenance costs, fuel/heating costs, staffing/personnel costs, insurance as applicable, bonding, cost escalation factors, etc. Further, sustainability includes all costs associated with management, operation and maintenance, renewal and replacement necessary to maintain a given level of service. The Sustainability Policy indicates that because the Commission, through its enabling legislation, is charged with ensuring that all infrastructure projects demonstrate sustainability | Denali Commission -Draft Policy Document October, 2008 Page 4 of 7 prior to Commission funding projects must provide documentation of their ability to meet the _ definition above. In most Commission programs this is achieved through the business plan process. However, applicants may also be asked to revise business plans, or application documents as their projects progress through the different phases of project development. The Commission recognizes that the high cost of infrastructure makes it infeasible for the total costs of all services in all communities to be borne by local users; however, to the extent feasible, user rates should include all costs necessary to achieve sustainability. All practical steps should be taken, including simplification of projectss'standardization of infrastructure, combining of facilities, regionalization of management structures, bulk purchases of fuels, training and development of management personnel an: ot er actions that reduce the cost of sustainable infrastructure. a mission r i importance of the lannin rocess. hi Wwever: also tands that the business plan ts a “snapshot” of da c mm a and construction ction specifications sustainability over the course of a proj and shall reserve the ability to alter pro munity sustainability [he Commission shall work in concert ili i documen ation and analysis. a oy ates the community’s goals and ability to focus on future initiatives. The plan should be the’ community’s starting point for any outside agency or business considering work in a community. Title 29 of the Alaska Statutes states that boroughs and first class cities established under state law shall be responsible for land use planning. In communities outside organized boroughs (and not first class cities), the task for identifying who is responsible for community planning falls to local leadership including recognized tribes in a community. The Commission requires communities to provide a copy of their current community plan when submitting funding requests. The reason for this request is two-fold: 1) the plan provides a current economic, social, and infrastructure summary of a community and 2) the plan provides a prioritized list of projects for which the community is seeking funding assistance. The plan also | Denali Commission -Draft Policy Document October, 2008 Page 5 of 7 explains how the community intends to sustain its existing infrastructure as well as any additional infrastructure. In general, any infrastructure projects identified for funding from the Commission should also appear as a prioritized infrastructure goal, or initiative in the community plan submitted by the applicant community. Community plans submitted to the Commission are retained in the project file, and are also provided to the State of Alaska, Department of Commerce, Community and Economic Development to be added to the online database of community plans. issi i Ch j t i se correlat The Commission will m vi the benefi ay determinations. The ission will rely largely on icati ity planning detail to document this analysis. but may also utilize site visitsand.other sources of information. OPEN DOOR POLICY As the Commission is a federal entity, funded by ist ions the Commission requires that any funded infrastructure project be available to 1 . This requirement may be documented in varying forms in Commission col as (for example, commitment to the open PRIVATE ENTERPRISE POLICY ie In general, the Commission will support private enterprise where itis functioning or can function eet the needs of all members of the local ans Where Fl Fictures fo 3 publicly funded service to compete with services delivered by private enterprise as T O§ gzyices are: 2. Reasonably priced when comipared to comparable communities; 3. Predictably available and ta ible for the long term. # All proposals for new or upgraded infrastructure facilities to be funded with Denali Commission funds shall be evaluated on the basis of public benefits resulting from the project. A proposal for funding may be approved where the facility is or will be owned, operated, and/or maintained by private entities only if there is found to be a direct and substantial public benefit from the project. Facilities funded in whole or in part by the Denali Commission may not be sold, leased, sub- leased, or interest otherwise assigned without the express approval of the Denali Commission or its successor agency. In any event, the facility shall continue to provide the originally intended public benefit until such time as that public need no longer exists or until the serviceable life of the facility has expired. Funding decisions must take into account existing private enterprise in the community. Funding should not generally be used to create new or additional competition with existing private enterprise in the community. However in cases where an unregulated monopolistic or other wise inefficient condition exist in which current services are not available at fair and reasonable rates | Denali Commission -Draft Policy Document October, 2008 Page 6 of 7 the Commission, after appropriate consultation, may consider funding projects that would contribute to more competitive rates. Provisions Specific to Health Care: The Commission seeks to support health care facilities in a manner which improves access to quality, affordable health services, be it by a private entity or a publicly funded one. The Denali Commission does not seek to create or enhance competition in an inefficient market. In this scenario, an inefficient market is one that cannot support two mutually exclusive health care providers. Given the economic fragility of rural health care systems, Denali Commission funding for health care facilities will be deployed in a manner which encourages a cooperative and collaborative arrangement for the‘tiealth benefit of the community in question, and improves the sustainability of the overall’caré‘delivery system for that population. Denali Commission health facility funding suppor stems that ensure access to care for everyone regardless of ability to pay. It is expected: at 'a:system that is exclusively private in rural Alaska will not be able to meet that criteria. “Thus, som egration of public and private provider entities will likely be required in areas where ahy private: currently exists. , ni Provisions Specific to Bulk Fuel Storage: The development of any bulk fuel storage consolidation project funded in whole or in part by Denali Commission funds will consult with all retail fuel suppliers within a community in the course of developing the project’s conceptual design to ensure that their interests are iigderstood and, to the extent feasible, dealt with in the course of conceptual design. The existing market share balance among rebel i within a community may be significantly altered as a result of a Denali Cot Sion funding only if all of the affected retail fuel suppliers currently operating in the commu ty agree to’it or if such alteration is deemed necessary to facilitate competitive conditions in the community. For each type of fuel, the existing market share for a retail fuel supplier is de ined as the supplier’s existing in-service storage capacity as a percentage of the total gallons of existing in-service storage capacity for all retail fuel sy the community. Wifi retail ielssuppliers are involved in a project, comparable levels of investment in projéci ts (based on market share) will be sought from each participating retail fuel supplier in , Whether publ the se. tec or private. Denali Co “Sion funds be used to upgrade or replace fuel storage facilities owned by private sector retail. el suppliers if there is determined to be significant public benefit. However, to ensure atdong term project benefits flow through to the public, such new or improved fuel storagerand dispensing facilities will generally be owned by a local government entity which may lease the facilities to the private sector fuel supplier at a nominal cost or contract with the private sector fuel supplier for facility operation. The term of such lease or contract will be for the life of the assets, and is not transferable as an asset of the leaseholder without express written approval of the Denali Commission or its successor agency. If more than one retail facility is necessitated within'a community. a nominal contribution from the iSSi Il be provided for the secondary facility. COMPETITIVE BID POLICY | Denali Commission -Draft Policy Document October, 2008 Page 7 of 7 Any infrastructure project funded by the Denali Commission with a total project cost (to include the planning, design and construction phases) of $3 million or greater shall be competitively bid. A waiver to this policy may be granted if an applicant demonstrates that it is in the best | economic, cultural or social interest of a community or region to not competitively bid a project. The waiver request must document the benefit to the federal government (in the form of cost savings, job creation, etc.) and the community and/or region of not utilizing a competitive bid process. Key considerations for reviewing the waiver request will include cost, local preference, opportunities for local hire and local economic impact. py, and to the. it It e Commissi the use of loca] T ' OL ¢ NS The Denali Commission is committed to both internal and external cost 3 ai it for all of its programs. All Commission projects are to be sustainable and that requires =e projects on a life-cycle cost basis in the context of the community’s long-term developmenit:plany* The trade- offs between initial costs of construction and long-term operating and maintenance'costs must seek to minimize the true life cycle costs of the project. , need specific designs, competitive procurement, The Commission requires cost effective® i of cost benefit via project selection. effective project management, and LI P. P Appeals to any of these policies should be sent to the Denali Commission Federal Co-Chair in writing. Options Table 7 PCE Reimbursement Percentage This table illustrates the reduction in PCE program costs that would occur if the percentage of eligible costs that are reimbursed is changed from 95 percent to a lesser amount. These calculations are based on FY 86 data in Table 1. PERCENT REI 50% 60% 0% BOM Average PCE Rate 8.6 10.4 2a 13.8 15.6 16.4 (Cents/KWH) Disbursements 9,360.5 11,234.7 13,109.0 14,983.3 16,857.5 17,784.6 ($000) Cost Reduction 8,424.1 6,549.9 4,675.6 2,801.3 927.1 - Perhaps the most significant reason why the PCE formula has little incentive for reducing costs is that 95 percent of a utility's eligible costs are subsidized. Reducing this percentage should create greater incentive for reducing costs but would also have the greatest rate impact on rural utilities that are more highly subsidized. If one objective of any change in the PCE formula is to minimize the impact of the change on high-cost utilities, this objective is better met by reducing the consumption cap or raising the entry rate, rather than lowering the percentage of costs reimbursed. 3. Baseline Rates Option: If the PCE program were amended to link benefits more closely with need, an appropriate rate concept to consider would be a modified baseline rate structure. Background: The concept of baseline rates recognizes that electricity is essential in today's world and that some people do not have the income to pay for even modest levels of consumption. A utility that has a baseline rate structure provides low income customers with a block of power for "essential needs" at a lower rate than higher consumption levels or other customers who are not low income. This is similar to an inverted rate. In 1984, the California Public Utilities Commission required the electric and gas utilities that it regulates to phase in baseline rates. The number of KWH's that are included in the ' baseline block depends on the climatic zone that the customer is in since electric or gas space heating is common in California. Those who qualify for baseline rates are made an exception to the usual utility principle that the cost-causer should be the cost-payer, and the cost of the subsidy is made up by other consumers. Besides providing low income customers with power rates that are subsidized by other customers, it is believed that -47- Options baseline rates encourage conservation. Customers who have greater levels of consumption also have higher rates and, according to the theories of price elasticity, usually respond by consuming less than if rates were lower. Prior to 1984, California required lifeline rates. The number of KWH's included under the lifeline rate depended on how many appliances each customer had and what was considered to be essential. This version of lifeline became too complicated and was replaced by baseline rates. If baseline rates were to be used in rural Alaska, it would be difficult to establish need according to income for many of the same reasons that it is difficult to correlate subsistence needs with income. It would be more practical to have all of the customers of PCE eligible utilities receive baseline rates since many of these utilities are in low income regions of the State. ‘ One potentially controversial aspect of baseline rates is how many KWH's should be included in the essential needs block. There is a wide range of opinion on what constitutes essential electric services. ‘ If baseline rates are to be implemented, another consideration is whether baseline rates should apply to one tier or more than one tier. A second tier could apply to consumption levels that are not as essential. 4. Postage Stamp Rates Option: Postage stamp rates are one approach to equalizing electric rates between all consumers regardless of their cost of service. Background: The postage stamp rate concept is patterned after the policy of the U.S. Post Office to charge the same amount of postage regardless of where delivery is intended providing that it is domestic. The concept applies well to situations where costs are about the same for all customers (such as AVEC which uses a postage stamp rate) or where high cost customers represent a small minority of the total number of customers and may not appreciably raise the average rate (such as Ontario Hydro). However, postage stamp rates do not encourage efficiency since there is little reward for those who reduce costs and little penalty to those who increase costs. The postage stamp concept had been considered in 1984 by Governor Sheffield's Advisory Committee on Statewide Power Production Costs. A statewide wholesale power rate was suggested using a power marketing agency that would purchase power from each utility at its cost and then sell it back at the statewide average cost. This would normally require consumers that have lower than average costs to subsidize those with higher than average costs. However, in this case, the Susitna Project was to be the nucleus of the system and the postage stamp rate would provide a means by which rural utilities would also receive some of its benefits. In return for these benefits, rural utilities were expected to lend their - 48 - Options support to the project. Since serious questions about the financial feasibility of the Susitna Project developed soon after, interest in the postage stamp concept faded. Funding is a significant consideration with postage stamp rates. Essentially, there are two approaches; (1) State funding as with the PCE program or (2) cross-subsidies by consumers with lower rates. Ontario Hydro has a postage stamp rate for residential customers that live in the remote villages of northern Ontario. The postage stamp rate is 10¢ per KWH for the first 400 KWH per month. Customers in urban and industrial Ontario pay for this subsidy by paying slightly higher rates. If the postage stamp rate were to be implemented in Alaska without State funding, it would probably result in the urban areas of the state, which have lower power rates, greater wealth, and most of the state's population, subsidizing the rates of rural consumers. The subsidy could either be rolled into the rates of urban consumers by a power marketing entity similar to Ontario Hydro, or collected as a tax and then disbursed to rural utilities (which is discussed below under finan¢ing). Data given below in Table 8 can be used to roughly estimate the subsidy that would be needed for a postage stamp rate. Table 8 1985 Billing Charges and Energy Use Begon Charge cents/KWH KWH Sold Arctic/Northwest 29.9 86,469 Southwest 22.8 49,350 Southeast 9.9 520,714 Southcentral 75 2,765,238 Yukon 10.3 534,883 Statewide 9.5 3,956,654 Source: Alaska Electric Power Statistics, 1985, Alaska Power Authority AOE Options 5. Energy Credits Option: Rather than provide consumers with relief from expensive energy costs by subsidizing specific uses of energy, the State could provide a subsidy of a fixed amount for whatever energy uses the consumer prefers to spend the subsidy on. Background: The concept of energy credits is used by the Low Income Home Energy Assistance Program (LIHEAP) for distributing transfer payments to low income households. LIHEAP is a federally funded program that is administered by the Alaska Department of Health & Social Services (DHSS) to provide low income households with assistance in paying their home heating costs. In some cases, electric bills are also included in this assistance. The program determines a grant amount for a household and then makes payment of this amount directly to the energy supplier such as a fuel oil distributor. The proposed budget for federal FY 88 is $9,990,431 of which $6,613,140 will go to DHSS and $3,377,291 will go to tribal organizations. Suggestions have been made that the expenditures for the PCE program would be more effective in reducing the energy budget of rural households if the household, rather than an agency, could decide how the money should be spent. If given this opportunity, an individual household may prefer to allocate its energy credit to the purchase of fuel oil for space heating instead of its electric bill. The appeal of this approach is that it provides a subsidy to rural residents but causes minimal disruption to normal market forces. However, implementing energy credits would face some difficult decisions such as how it would be integrated with the LIHEAP program, whether or not income would be a condition for receiving benefits, and how to make a distinction between rural and urban residents. Alan Mitchell of Analysis North has reviewed a different variation of the energy credits concept, under a contract with the Energy Policy Task Force. His approach would focus on electric bills, and would provide a credit of a fixed amount to each monthly bill. The amount of the credit would vary across communities according to the cost of producing power in communities of different size and location. He concluded that a fixed payment program was superior to the current PCE program and several other subsidy options because it would provide better incentives for efficient production and use of electricity to both utilities and customers. Mr. Mitchell also noted that the fixed payment program would be simpler to administer than the current PCE program, and that the distribution of benefits would differ from PCE. Generally, at any given funding level, customers with low consumption would receive more assistance under the fixed payment approach than under PCE, while customers with higher consumption would receive less. Efficiently operated utilities would also receive more assistance than inefficient utilities, in comparison to the current program. -50- Options The energy credit approach clearly offers several advantages over the current PCE program, particularly with respect to efficiency incentives. However, implementing this approach would require a complete rewrite of the PCE statute, and might also be controversial because of the major shift in the distribution of benefits among customers and utilities. C. Program Funding The PCE program is now funded by the operating budget with general fund appropriations. Described below are two options for funding that would reduce vulnerability to changes in oil prices. 1. Loan Fund Proceeds The Power Authority has three loan funds which include the Rural Electrification Revolving Loan Fund (RERLF), the Power Project Loan Fund (PPLF), and the Power Development Revolving Loan Fund (PDRLF). The first two funds are described in the appendices. The latter fund is a $189 million loan from the DCED to the Power Authority that completed the financing needed for the Four Dam Pool. Each of these loan funds yields a stream of loan proceeds consisting of principal repayments and interest payments. The FY 87 principal repayments and interest payments of the PPLF and the PDRLF, as well as the interest payments of the RERLF were appropriated to the general fund. Listed in Table 9 are the expected loan proceeds for FY 88. Table 9 Power Authority Loan Proceeds Loan Fund EY88 RERLF $ 121,948 PPLF 2,918,964 PDRLF 6,373,792 Total $9,414,704 In the last session of the Legislature, a bill was introduced (SB 206) that would consolidate all three loan funds into a Power Project Revolving Fund. This new loan fund would then be used to finance the feasibility studies and development of additional power projects, either directly as a loan or by using the loan proceeds as security for issuing revenue bonds. -51- Options In addition to financing the power projects, SB 206 would have the proceeds from the loan fund capitalize the PCE program and support the administrative costs of the Power Authority. In fact, "the first priority for use of the unrestricted funds shall be to fully fund the power cost equalization program." 2. Cooperative Utility Tax The Electric Cooperative Tax (AS 10.25.555) imposes a tax on cooperative utilities of one- half mill for each KWH sold to consumers. In FY 87, this tax, combined with a tax on tele— phone cooperatives, produced about $1,900,000 in revenues. These revenues, though not dedicated funds, are considered shared taxes and most of the revenues are appropriated by the Legislature to the respective municipal governments. If the Electric Cooperative Tax were applied to all utilities in 1985 (including municipally- owned and PCE-eligible utilities), revenues would have been approximately $2,012,000. The effect of this tax on residential consumers would be: * An average increase of 38 cents per month for electricity based on an average residential consumption of 752 KWH per month, ¢ An average increase of 0.6 percent to the monthly electric bill based on $66.75 as the average monthly bill for residential consumers. The Electric Cooperative Tax is rather innocuous at its present rate. If it were to be used as a funding source for the PCE program, it could be doubled or tripled without significant economic impact to the consumer. This tax, combined with reductions in the cost of the PCE program because of efficiency improvements, could provide a substantial source of funding for the PCE program. Tax revenues could not be dedicated to PCE but could be earmarked for annual appropriation to the program, similar to shared taxes. D. Program Management Following are some of the responses of the APUC and the Power Authority to the suggestion by the Division of Legislative Audit that the administration of the PCE program should be combined. 1. APUC: "The Commission does not object to assuming the administration of the PCE program providing that the funding recommendation of the legislative auditor is approved and the responsibilities clarified." Regarding inadequate cooperation "The Commission would only briefly respond by stating that while early efforts were made to provide for data exchange and to minimize any duplication of effort, time and budget constraints made ongoing coordination difficult. The results, as stated in the audit report, have been marginal especially with regard to the development of a common database and the effective conduct of field audits." -52- Options 2. Power Authority: "The Power Authority firmly opposes this recommendation. The objections are: ¢ The Power Cost Equalization Program (PCEP) was audited as a ‘stand-alone’ energy program while, in effect, the program is but one of the numerous and diffused elements within the realms of State energy support/development/ conservation. Because of this limited audit scope, the recommendation disregards the larger picture in which this energy subsidy program is included. ¢ "Also, it must be noted that the Power Authority staff is eminently qualified to perform audits as well as to analyze, comment on and make recommendations for program management and it is ready to offer, upon request from the appropriate government offices, measures or changes to promote program efficiencies which, in view of financial restrictions resulting from the drop in state oil revenue have become more vital than ever." : s -53- VI. CONCLUSION This report provides a comprehensive review of the PCE program, some of the problems created or overlooked by the program and a number of options that could be used to correct these problems. The PCE program has been quite successful in meeting its objectives of reducing rural power rates to affordable levels, and aiding the financial stability of rural utilities. However, the cost of the program is growing steadily during a period of declining State revenues. This trend will make it more difficult to fully fund the program in coming years, unless changes are made that will limit the cost of the program. The options described in this report may be able to limit or reduce the cost of the program, without causing significant increases in power bills for most rural consumers, by making the program more efficient and better targeted to needs. If so, these options could contribute to a more secure future for the PCE program and for rural power consumers. - 54- NOTES NG lement on Railbelt Utilities, Alaska Power Authority, October 1987. 2. Alaska Electric Power Statistics, December 1986, Alaska Power Authority. 3. Alaska Power Survey, U.S. Federal Power Commission, 1969. 4. Rural Energy: verview of Pr Policy, February 1985, Alaska State Legislature, House Research Agency. 5. Th ka; Origi Evolution, March 1985, Office of the Governor, Division of Strategic Planning. 6. Alaska Population Overview 1985 Estimates, April 1987, Alaska Department of Labor. , 7. The Impact of Rising Energy Costs on Rural Alaska, November 1980, Nabesky and Digman, Institute of Social and Economic Research. - 55- VII. Appendices - 57- Appendix A This appendix describes several energy programs which were established in the early 1980's and which are relevant to the PCE program. During the 1980 session of the Legislature, 66 pieces of energy legislation were introduced and 25 energy studies had been done for the State. All of the legislation that was seriously considered that year was rolled into an omnibus energy bill: HCS SB 438. This bill "established several new programs related to energy use in Alaska and modified existing law concerning the Alaska Power Authority and long-term energy planning. The new programs include a variety of incentives and mandates for energy conservation and alternative energy use by individuals, state government and businesses; standardizes the procedures leading to power project financing or construction by the Alaska Power Authority; establishes bulk fuel and bulk fuel facility assistance for rural communities and provides a power generation subsidy to high cost utilities."* HCS SB 438 and its appropriations bill established three types of State programs for rural utilities and their customers. These were: ¢ Capital appropriations (grants) for electrification projects. ¢ Loans for fuel and generation facilities. ¢ A program to subsidize electric rates. Following are further details on each type of program that was initiated in 1980 and significant developments in subsequent years. A. Capital Appropriations 1. Alaska Power Authority The general fund portion of the State's capital budget increased from $92 million in FY 80 to $565.2 million in FY 81. About $62.9 million of the FY 81 capital budget was appropriated to the Power Authority for power project development of which about $13.4 million went to rural projects. Although most of the rural appropriations were for reconnaissance and feasibility studies of hydroelectric projects, some of the funding was for electrification projects. A significant rural energy program that was initiated by the Power Authority's FY 81 capital budget was the Waste Heat Recovery program. This program began with a $500,000 appropriation that was used by the APA for a waste heat pilot project in Unalaska and Ouzinkie. The project demonstrated that waste heat systems are technically and economically feasible. This led to an FY 82 appropriation of $5,000,000 for alternative energy systems, including waste heat systems, that was not project specific. - Al- In 1983, $3,900,000 of this funding was spent on installing waste heat systems in 11 villages. Other systems were funded with this money in subsequent years. The success of this program led to an additional appropriation of $1,131,000 in FY 85 that funded the construction of additional waste heat systems and a feasibility study of the waste heat potential for 42 villages. Now that the feasibility of waste heat systems is widely recognized, municipalities and REAAs that receive electrification grants often include waste heat systems in their grant request. For FY 88, the APA received a reappropriation of $500,000 that will be used as seed money for a $5,000,000 revenue bond issue to finance 12 systems that were determined to be feasible in the waste heat study. 2. Alternative Energy Projects In addition to potential hydroelectric projects, the State was also interested in the possibility of alternative energy systems, such as wind turbines, solar panels, Stirling engines, and utilization of biomass. If some of these systems were technically and economically feasible, they could provide rural utilities with a renewable energy alternative to diesel generators. The Division of Energy and Power Development in the Department of Commerce and Economic Development (now the Office of Energy Programs in the Department of Community and Regional Affairs) had received federal grants and State appropriations for numerous alternative energy demonstration projects. The funding for alternative energy projects increased from $446,000 in FY 80 to $1,634,000 in FY 81.4 The demonstration projects experienced significant difficulties, some due to the technology and some due to management. The result was that none of the systems were serious contenders to diesel generators. 3. Electrification Grants The 1980 Legislature established a program to provide capital project grants to municipalities (AS 37.05.315) and unincorporated communities (AS 37.05.317). The Department of Administration was to administer the grants to municipalities and the Department of Community and Regional Affairs was to administer the grants to unincorporated communities (see Table 1-A for FY 81-88 grant amounts). Neither agency was to have any oversight regarding project feasibility or design, but the statute does allow audits. This program provided nearly every community in Alaska with pass- through grants for basic infrastructure such as water, sewer, roads, and electricity. This program has been the most significant source of funding for rural electrification projects. - A2- Table 1-A Funding For Rural Electrification Grants (including waste heat projects) Fiscal Appropriation Amount ($000) ee ee oe 81 $ 1,603.4 $ 215.0 82 4,329.4 5,326.6 83 4,650.0 830.8 84 2,934.5 863.5 85 4,573.0 | 1,151.8 86 1,001.4 120.0 87 262.6 61.2 88 46.0 0.0 $19,400.3 $8,568.9 Source: Department of Administration and Department of Community and Regional Affairs 4. Bulk Fuel Storage Grants Electrification increased the consumption of oil by rural communities. Consequently, bulk fuel storage facilities were needed if there was to be an adequate supply of fuel on hand and if oil was to be purchased in bulk in order to take advantage of significantly lower prices that could then be realized. Prior to FY 81, the State had a Bulk Fuel Storage grants program that was administered by the Department of Community and Regional Affairs. In FY 81, funding for this program was dramatically increased and so were the number of grants, as illustrated by Table 2-A. The Bulk Fuel Storage Facilities Grant program allows a community a one-time grant of up to $100,000 for a bulk fuel storage facility. The oil can be used for heating as well as electrical generation. Currently, there is no funding for the program. AS = B. Loans 1. Bulk Fuel Revolving Loan Fund Most communities that are not on the road system, purchase their entire electrical generation and space heating fuel oil needs for the year during the ice-free summer months when bulk delivery by vessel is possible. During the 1979-1980 surge in oil prices, the federal government initiated an emergency loan program that provided rural communities with the front-end money that was needed for bulk fuel oil purchases (see Table 3-A on page AS for FY 81-87). This program was administered by RurAL CAP which made loans to 42 villages.4 The State's Bulk Fuel Revolving Loan Fund was established in 1980 which supplanted the federal program. The loan program is administered by the Department of Commerce & Economic Development through its Division of Investments. ‘Table 2-A Bulk Fuel Storage Facility Grants Fiscal Y A 7 Boa 3 73 $10,810 $10,810 1 74 0 0 0 75 28,640 28,640 2 76 14,200 14,200 1 77 0 0 0 78 19,000 19,000 1 79 0 0 0 80 0 0 0 81 1,714,900 1,714,900 23 82 2,426,000 2,426,000 30 83 1,178,400 1,178,400 16 84 5,961,950 5,961,950 83 85 600,000 600,000 14 86 600,000 600,000 8 87 0 0 0 88 feet) een =—0 Total $12,553,900 $12,553,900 179 A total of 84 villages have received Bulk Fuel Storage grants. Apparently, some villages have received more than one grant. Source: Department of Community and Regional Affairs, Division of Municipal and Regional Affairs. - A4- Municipalities with a population under 2,000, or an individual with written consent from the governing body of a municipality can apply for the loan. There usually is no interest rate on the first loan, an interest rate of 5 percent on the second loan, and an interest rate based on the municipal bond rate for any additional loans. The rationale for this is that the community is expected to use the sales from its first loan to help capitalize future bulk purchases. The loan amount may not exceed $50,000 or 90 percent of the wholesale price of the purchased fuel and must be repaid within one year. Table 3-A Funding for Bulk Fuel Loans (§ in thousands) : a al 81 $1,500.0* 50.0 1 82 1,000.0 804.7 23 83 1,000.0 1,685.2 45 84 0 1,979.6 51 85 0 1,965.9 54 86 0 1,520.3 43 87 — 64.0 1214.8 37 $2,114.0 9,220.5 254 *$1,450.0 of this appropriation lapsed at the end of FY 81. As of June 30, 1987, 48.1 percent of these loans were delinquent and 1.3 percent were in default. Source: Department of Commerce and Economic Development, Division of Investments. For FY 88, new loans will be funded by repayment of previous loans. 2. Power Project Loan Fund The Power Project Revolving Loan Fund had been established under the Power Authority in 1978. In 1980, HCS SB 438 amended the terms of the Power Project Revolving Loan Fund, changed its name to the Power Project (Loan) Fund (PPLF), and added the Water Resources Revolving Loan Fund to it. Loans from this fund can be used by utilities or communities for reconnaissance and feasibility studies, design, and development of small- scale power production, conservation, bulk fuel storage, and transmission and distribution facilities as well as potable water projects. Any small-scale non-nuclear source of power could qualify for the loan fund. Small-scale is not defined by the statutes or the regulations. The terms for this loan program include: « a. The project must be technically, economically, and financially feasible, - AS- b. The maximum term is 50 years, c. Interest rates are to be the lesser of the average yield on municipal bonds for the past 12 months or a rate that meets financial criteria but is not less than 5 percent, d. Repayment of loans may be deferred for 10 years, e. Anunsecured loan may be made if the borrower is in good financial standing, f. The legislature may forgive repayment of a loan for studies if the project is not feasible, and g. There is no limit to the size of the loan that can be made. Since April 1978, the Power Authority has approved 28 loans totaling over $22,229,030 (see Table 4-A). Nine of these loans went to AEL&P in Juneau. All the other loans went to rural utilities for initial electrification or upgrade. No PPLF loans have been delinquent or in default. 3. Rural Electrification Revolving Loan Fund The Rural Electrification Revolving Loan Fund (RERLF) is a low—interest loan fund that was established in 1982 and is administered by the Power Authority. It bears some resemblance to the federal Rural Electrification Administration loans that were previously used to electrify many areas of the Midwest and West. The RERLF provides utilities with 2 percent loans for extending electrical service into previously unserved areas. The maximum amount that may be borrowed is $500,000 or $250,000 if the fund balance is less than $3 million at the time of application. To be eligible for an RERLF loan, the utility must make a minimum investment in the project which equals the cost of the acquisition and installation of one transformer, one span of line, one pole and one service drop for each initial customer. Additionally, there must be at least 3 new customers served by the project to make it eligible for an RERLF loan. Principal on an RERLF loan is repaid based on a formula that considers the rate at which new customers are added to the extension but may be deferred indefinitely. RERLF loans will only be made however, where a repayment analysis projects that repayment of principal is likely to occur within ten years. With the exception of one loan to GVEA in Fairbanks, all loans have gone to rural utilities. None of these loans are delinquent. Table 4-A lists the loans that have been made. TENGE Table 4-A Alaska Power Authority Programs-- Projects Funded (Prepared 10/15/87) Loan Cesginal Interest Date Borrower mount Rate(%) Purpose BOWER PROJECT FUND LOANS: Ras uae L uneau 500,000 6.50 Automate Annex. Creek hydro 8/80 City of King Cove 200,000 7.00 Acquire 2 300 kw generators 10/80 INNEC (Iliamna area) 300,000 8.60 Initial electrification 10/80 AEL&P (Juneau) 1,000,000 8.60 Substation & 69 kv trans line 8/81 Bethel Cogen. Util. 1,000,000 5-11 Construct waste heat system 12/81 AEL&P (Juneau) 2,300,000 11.80 Upgrade trans & dist system 8/82 AEL&P (Juneau) 1,700,000 13.23 Upgrade trans & dist system 8/83 AEL&P (Juneau) 1,000,000 9.95 Upgrade Lwr Salm Crk hydro 8/83 AEL&P (Juneau) 2,000,000 9.29 Upgrade trans & dist system 4/84 AEL&P (Juneau) 500,000 9.95 Upgrade Lwr Salm Crk hydro 4/84 AEL&P (Juneau) 2,000,000 9.95 Upgrade trans & dist system 4/84 AEL&P (Juneau) 2,000,000 9.29 Upgrade trans & dist system 8/85 Tanana Power Co. 130,000 9.55 Finance new powerhouse 9/85 G&K Inc. (Cold Bay) 1,283,836 9.80 Upgrade system-phase 1 8/85 Levelock Elect. Coop. 30,000 8.90 Acquire new diesel generator 11/85 Middle Kusk. Elec. Coop. 250,000 5.00 Initial electrif (Red Devil) 8/86 City of King Cove 120,000 7.95 Acquire new diesel generator 9/86 City of Clarks Point 1774000 7.50 Initial electrification */87 G&K Inc. (Cold Bay) 1,000,000 8.45 Upgrade system-phases 2 & 3 9/86 Chitina Electric, Inc. 101,500 7.65 Complete constr. of mini-hydro 5/87 Cordova Elec. Coop. 1,950,000 5.00 Desg & Constr Humpback Crk Hydro */87 City of Galena 1,350,000 7.71 Expansion to serve Air Force 2/87 Kwig Power Company 25,000 5.00 Acquire new diesel generator 6/87 City of Galena 245,000 6.86 Acquire new diesel generator */87 City of Ouzinkie 350,000 7.34 Desg & Constr small hydro 6/87 Coffman Cove Util. Ass'n. 70,000 6.86 Expanded service to new customers 8/87 City of ae Bay taa*eas 7.65 Desg & Constr small hydro 9/87 Middle Kusk. Elec. Coop. 153,000 7.56 P'house upgrades & line extension 22,229,030 RURAL ELECTRIFICATION REVOLVING LOAN FUND: jamna area »940,000 2.00 Initial electrification 1/83 Andreanof Elec. Co. 200,000 2.00 Initial electrif (Atka) 7/83 INNEC (Iliamna area) 230,202 2.00 Initial electrification 10/83 Egegik Light & Power 130,000 2.00 Cnnct 12 new homes (& 36 future) 11/83 Yakutat Power, Inc. 134,000 2.00 ASHA subdivision extension 1/84 City of Unalaska 250,000 2.00 Cnnct harbor, dock & airport 1/84 City of Unalaska 1,560,486 2.00 Feeder-cnnct Unak. & Amknk. Ph's 7/84 Egegik Light & Power 83,830 2.00 Phase 2 of 1983 project (above) 7/85 City of Saint Paul 687,285 2.00 Elrmnigts, wndfrm, USCG, arprt; Dock 9/86 City - Clarks yt "as 2.00 Initial electrification 6/87 GVEA (Fairbanks 90,000 2.00 Tungsten Subdivision extension 7,955,803 GOVERNOR'S DISASTER FUND LOANS: > inc. (Co ay 500,000 6.00 rep] gen's destroyed by fire 3/86 Venetie Village Council 50,000 5.00 rep] gen lost to mjr break-down 2/87 Venetie Village Council 65,000 5.00 rep] gen's destroyed by fire LOANS AUTHORIZED BY SPECIFIC APPROPRIATION: uneau ,000 7.00 Automate Upr Salm Crk Ph 8/82 City of Sitka 15,000,000 4.00 Finance Green Lake Hydro 11/85 Far North Util. (Central) 200,000 9.05 Initial electrification Total Loan Approved T3195 ,,833 *Loan approved by Board, agreement not yet completed ATE Appendix "B" Alaska Power Authority Power Cost Equalization Summary Statistics -Id- FY 1987 POPULATION NUMBER OF TOTAL SERVED NUMBEROF COMMUNITY FUEL PRICE FUEL TOTAL OPERATING PCE ELIGIBLE UTILITY _(JUNE 1987) CUSTOMERS FACILITIES (JUNE 1987) CONSUMED __FUELCOST EXPENSE __KWH SOLD _ KWH SOLD. Akiachak Limited 378 125 1 1.22 39,917 50,613 313,735 369,227 278,475 Akiak City Council 247 71 30 1.39 43,000 58,770 27,048 244,926 247,627 Akutan Electric 189 34 5 0.68 31,435 25,856 28,517 160,263 144,060 Alaska Power & Telephone 3,307 1866 23 1,517,085 966,900 1,031,500 18,520,423 8,406,173 Alaska Village Electric Cooperative 16,173 4574 367 0.93 3,193,299 3,053,300 7,166,357 31,062,694 451,459 Allakaket Energy Systems 189 67 5 1.42 10,815 17,407 11122 73,085 73,085 Alutiiq Power Company 85 27 3 1.64 15,515 25,636 32,003 126,262 84,366 Andreanof Electric 93 31 2 1.08 27,675 29,239 10,240 192,139 155,391 Aniak Light & Power 483 208 0 1.08 160,528 ,.210,371 310,000 1,638,199 918,971 Arctic Village Electric 150 55 5 1.57 22,283 35,024 15,412 168,410 112,627 Atmautluak Joint Utilities 240 57 1 1.22 43,304 53,397 118,385 442,954 248,539 Bethel Utilities Corp. 3,681 1695 0 1.08 507,500 525,752 14,800,000 25,687,234 8,264,649 Bettles Light & Power 94 50 0 1.41 86,357 101,475 0 849,100 264,660 Birch Creek Village 50 18 3 1.28 10,506 14,134 13,593 76,806 48,443 Brevig Mission Utility 159 38 8 0 0 0 32,456 64,810 60,564 Chefornak Electric Co. 270 69 3 0.89 47,921 54,186 44,265 363,535 283,009 Chenega Bay IRA Vil. Council 75 23 0 1.27 CL RULITA 28,965 6,860 104,934 55,932 Chignik Electric 124 66 8 0.58 41,131 33,185 61,616 369,321 256,325 Chittina Electric Inc. 42 34 3 0.74 20,279 15,371 82,994 134,632 132,824 Circle Electric Utility 70 21 3 0.73 30,080 21,739 °O 204,716 99,297 City of Clarks Point 88 28 4 0.95 820 783 0 8,546 8,346 City Of Ekwok 107 36 5 1.8 1,465 2,081 17,506 72,158 76,114 Coffman Cove Utility Assn. 175 56 3 0.86 38,693 35,637 26,919 391,451 290,846 Cordova Electric Coop. 2,520 1377 50 0.6839 1,448,287 974,000 517,360 18,278,320 7,950,826 Diomede City Council 178 43 2 0 18,712 20,208 73,788 225,388 106,609 Eagle Power Co. 142 103 3 0.85 38,475 31,123 65,008 361,873 217,605 Eagle Village Energy System 54 22 3 1.19 19,457 22,702 15,672 49,702 51,222 Egegik Light & Power 104 87 5 1 54,016 59,847 74,801 534,890 309,718 Elfin Cove Electric Utility 58 31 3 0.75 13,412 11,005 15,629 111,397 113,045 False Pass Electric Assoc. 72 29 3 0.49 18,342 9,152 15,763 117,343 63,497 Far North Utilities 48 48 1 0.71 26,407 18,748 88,641 225,142 150,634 G & K, Inc. (Cold Bay) 250 68 0 0.81 268,954 235,074 384,795 2,936,708 483,144 Galena, City of 998 313 12 1.09 215,178 232,731 311,601 2,298,000 1,594,802 Golovin Power Utilities 121 52 7 1.08 41,171 44,774 70,017 216,770 180,009 UTILITY Gustavus Electric Co. Gwitchyaa Zhee Utilities Haines Light & Power Hughes Light & Power I-N-N Electric Coop. Igiugig Village Council Ipnatchiaq Electric Co. King Cove, City of Kobuk Valley Electric Coop. Kokhanok Village Council Koliganek Village Council Kotlik Electric System Kotzebue Electric Assoc. Kwethluk, Inc. Kwig Power Co. Larsen Bay Utility Levelock Electric Coop. Manley Utility Co. Manokotak Natives, Ltd. McGrath Light & Power Middle Kuskokwim Naknek Electric Napakiak Ircinraq Power Co. Napaskiak Inc. Nelson Lagoon Electric Nightmute Power Plant Nikolai Light & Power Nome Joint Utilities North Slope Borough Northway Power & Light Nushagak Electric Coop. Ouzinkle, City of Pedro Bay Village Council Pelican Utility Company Perryville, City of Pilot Point Village Council Port Heiden, City og Puvumag Power Co. Rampart Village Energy System POPULATION continued... JUNE 1987) CUSTOMERS FACILITIES 151 643 1,079 98 499 33 158 552 86 130 154 426 3,594 507 354 180 110 99 299 510 443 1,275 323 311 58 145 119 3,372 2,152 342 2,128 233 70 213 110 67 94 234 Alaska Power Authority Power Cost Equalization S Statistics FY 1987 NUMBER OF SERVED NUMBER OF COMMUNITY FUEL PRICE FUEL JUNE 1987) CONSUMED 155 1 1.21 70,250 283 9 1.34 194,373 8 1.01 717184 515,230 36 3 1.6 19,170 239 17 1.23 136,756 26 3 1.22 11,428 46 4 1.08 44,447 186 10 0.6 154,485 25 17 0 0 31 3 0 5,214 50 2 0 4,133 108 13 0.97 46,130 968 33 1.04 1,074,002 157 0 1.08 30,686 69 8 1.28 38,561 58 7 1 43,982 64, 3 1.03 80,436 80 1 tit 30,266 90 3 1.31 57,835 190 6 1.23 98,478 151 13 82,518 750 4 0.85 1,145,370 91 8 1.22 35 92 4 1.42 42,599 27 2 1.5 33,501 34 2 1.28 7,583 40 6 1.59 26,845 1588 45 0.96 1,617,824 783 12 1,145,370 103 4 0.85 152,850 1112 59 0.87 1,013,527 75 7 0.83 53,502 30 2 1.34 21,921 119 0 0.77 20,991 20 3 0.85 26,625 37 1 1.19 27,994 37 3 1.36 46,349 61 4 1.28 7,874 29 3 1.03 15,786 50 TOTAL TOTAL OPERATING PCE EUGIBLE FUEL COST EXPENSE KWH SOLD KWH SOLD 85,441 80,276 484,066 392,243 273,092 253,020 1,865,210 1,020,186 484,402 8,824,800 4,255,949 45,518 17,311 116,668 87,769 171,909 412,581 1,613,038 987,873 14,916 45,666 76,059 65,142 50,385 77,635 413,784 283,132 79,296 203,303 1,487,227 1,033,824 0 22,605 66,826 62,087 4,005 43,443 94,432 94,432 7,045 500 87,955 117,133 50,701 47,922 453,572 381,048 979,844 1,416,680 1,132,807 5,191,290 52,328 7,030 302,186 154,271 49,330 98,007 298,719 257,414 44,101 52,012 295,735 231,802 31,914 92,570 283,917 215,491 34,252 66,691 256,467 175,197 76,052 15,826 466,921 318,996 121,242 175,000 1,067,507 484,097 96,447 129,865 609,192 385,675 1,155,366 1,388,160 14,433,140 3,490,856 44 130,567 319,459 241,030 72,866 17,609 271,473 220,335 47,759 56,103 265,676 177,793 10,665 7,186 93,193 59,218 42,682 23,269 237,672 156,850 1,584,543 1,852,963 20,396,265 9,661,216 1,375,635 3,024,108 8,335,199 3,817,454 130,659 145,090 1,471,967 502,165 905,762 788,988 12,778,004 5,848,474 47,112 13,995 414,065 287,566 29,711 20,698 104,534 89,331 16,527 0 1,843,713 427,075 34,067 14,781 168,737 121,216 32,846 22,891 153,276 149,319 63,035 25,359 137,796 199,476 10,079 54,975 286,918 218,894 16,260 15,198 96,599 96,629 -B2- -¢q- continued... Alaska Power Authority Power Cost Equalization Summary Statistics FY 1987 POPULATION NUMBER OF TOTAL SERVED = NUMBEROF COMMUNITY FUEL PRICE FUEL TOTAL OPERATING PCE ELIGIBLE ___uTILITY,___(JUNE_1987) CUSTOMERS FACILITIES (JUNE _1987) CONSUMED _FUELCOST__EXPENSE_KWH SOLD _KWH SOLD Ruby Electric Co. 233 123 10 1.24 59,230 74,484 55,278 397,185 352,567 Sand Point Electric 890 333 17 0.75 471,028 334,687 0 6,306,562 1,927,426 Sheldon Point City Council 123 25 5 1.08 39,156 43,790 42,461 180,164 60,302 St. George Electric Utility 172 84 3 1.2 37,510 39,011 93,888 344,119 169,820 St. Paul Municipal Electric Utility 595 165 26 1.4 146,017 162,996 102,637 1,020,535 816,745 Stevens Village Energy System 110 38 3 1.03 15,331 17,663 10,945 75,037 57,288 Takotna Community Assoc. 76 32 7 1.6 19,616 31,055 8,053 150,631 128,630 Tanana Power Co. 417 175 11 1.17 148,090 178,972 365,024 1,577,291 683,641 Tatitlek Electric Utility 103 40 2 0.98 25,300 23,449 4,490 120,746 120,746 Telida Village Utility 26 7 2 2.34 7,833 18,719 10,806 28,131 23,862 Teller Power 247 79 3 1.46 65,046 95,694 115,625 526,008 213,397 Tenakee Springs Electric 125 89 9 1 33,344 32,718 68,009 248,631 223,202 Tetlin Village Energy 110 29 2 1.5 28,809 44,879 12,390 130,408 63,792 Thorne Bay Public Utility 475 192 66 0.86 81,854 69,122 34,511 1,101,696 903,333 Tlingit Haida Reg. Elec. Auth. 2,783 917 36 0 811,388 616,847 1,511,834 8,793,957 6,557,555 Tulkisarmute, Inc. 272 73 5 1.19 11,084 13,190 7,074 95,262 95,262 Tuntutuliak Comm. Serv. Assoc. 216 71 2 0.99 40,379 45,774 91,492 473,996 263,285 Umnak Power Co. 50 32 4 1.41 22,149 24,214 21,420 110,261 98,062 Unalakleet Valley Electric 787 259 12 1.04 231,479 254,537 414,688 2,934,229 1,620,229 Unalaska Electric Utility 1,922 343 26 0.63 699,704 447,185 1,292,815 10,002,634 2,564,862 Unqusrag Power Co. 187 39 5 1.38 16,506 20,604 43,300 117,094 115,108 Venetie Village Electric 237 65 4 1.23 22,457 27,407 35,171 186,561 128,836 White Mountain Utilities 177 73 4 1.19 23,752 28,556 51,332 195,237 138,507 Yakutat Power Inc. 462 277 17 0.87 358,800 294,538 136,700 4,250,709 1,802,811 UTILITY AEL&P ALP AP&T AP&T AP&T AP&T AVEC Akchk Akiak Akutan Alkt Alutiiq ArcVil Atmtlk BL&P BUCI BUEC! Beaver BrchCrk BrvMis CHUGACH CVEA CVEA CfmnCv Chfrnk Chignik Chitina Chiktsk ChngaBy Circle CirksPt Cordova Diomde EL&P Eagle P Eagle V Ekwok ElfnCv FNU FbksMun FisPass G&K GVEA G2UC LARGEST COMMUNITY Juneau Aniak Craig Hydaburg Skagway Tok AVEC Akiachak Akiak Akutan Allakaket Karluk Arctic Village Atmautiuak Bettles Bethel Barrow Beaver Birch Creek Brevig Mission Anchorage Glennallen Valdez Coffman Cove Chefornak Chignik Chitina Chalkyitsik Chenaga Bay Circle Clarks Pt Cordova _ L Diomede Egegik Eagle Eagle Village Ekwok Elfin Cove Central Fairbanks False Pass Cold Bay Fairbanks Ft. Yukon Alaska Utility Rates PCE [$/KWH] 0.0000 0.2457 0.0411 0.0784 0.0269 0.0512 0.2603 0.2679 0.1807 0.1450 0.2981 0.2704 0.2146 0.2639 0.2955 0.0679 0.0000 0.2177 0.3289 0.2115 0.0000 0.0000 0.0000 0.0730 0.2189 0.1270 0.2450 0.4091 0.2222 0.3650 0.1568 0.0784 0.1300 0.3750 0.2963 0.4180 0.2150 0.1568 0.2586 0.0000 0.1804 0.2319 0.0000 0.1841 Appendix "C" 100 KWH BILL PRE PCE [$] 14.77 41.87 18.83 22.57 25.11 22.95 39.79 49.00 35.00 37.00 60.00 42.00 71200 46.38 43.60 21.72 15.20 50.00 60.00 35.00 12.87 26.07 23.07 20.00 42.00 30.00 43.87 54.00 38.00 45.00 39.00 35.48 45.00 54.39 40.00 55.00 30.00 29.00 42.97 14.00 42.00 44.19 18.76 42.41 PCEON 100 KWH BILL [$] 0.00 24.57 4.11 7.84 2.69 §.12 26.03 26.79 18.07 14.50 29.81 27.04 21.46 26.39 29.55 6.79 0.00 ett 32.89 21.15 0.00 0.00 0.00 7.30 21.89 12.70 24.50 40.91 22.22 36.50 15.68 7.84 13.00 37.50 29.63 41.80 21.50 15.68 25.86 0.00 18.04 23.19 0.00 18.41 alee POST PCE 100 KWH BILL [$] 14.77 17.30 14.72 14.73 22.42 17.83 13.76 22.21 16.93 22.50 30.19 14.96 49.54 19.99 14.05 14.93 15.20 28.23 27aut 13.85 12.87 26.07 23.07 12.70 20.11 17.30 19.37 13.09 15.78 8.50 23.32 27.64 32.00 16.89 10.37 13.20 8.50 13.32 17.11 14.00 23.96 21.00 18.76 24.00 250 KWH BILL PRE PCE [$] PCEON POST PCE 250 KWH 250 KWH BILL [$] BILL [$] 26.43 104.67 42.00 50.72 48.68 53.81 99.48 122.50 87.50 92.50 150.00 105.00 177.50 115.95 109.00 51.61 24.50 125.00 150.00 87.50 22.80 53.93 46.43 50.00 105.00 75.00 109.68 135.00 95.00 112.50 97.50 61.70 112.50 135.98 100.00 137.50 75.00 72.50 107.43 26.00 105.00 91.73 31.89 83.54 102. 104. -00 43 .28 .60 -73 -80 .08 -98 18 25 53 -60 -65 -98 -88 -98 .00 43 .23 -88 -00 -00 .00 -25 73 .75 25 28 55 .25 .20 .60 .50 .75 .08 50 75 .20 .65 .00 10 .98 .00 .03 26 43 31 31 41 41 34 55 42 56. 75. 37 123 49. 35 34 24 70 67 34 22 $3 46 31 50 43 48 32 39 21 58 42 80 42 25 33 a3 42 $9 aoe ~ 32 3° 43 -29 13 mie 95 01 40 53 33 25 48 40 85 98 11) 63 50 58 78 63 80 93 43 75 28 25 43 us) 45 25 30 10 90 23 93 30 725 39 78 aan 9 39 52 LARGEST UTILITY | COMMUNITY AEL&P ALP AP&T AP&T AP&T AP&T AVEC Akchk Akiak Akutan Alkt Alutiiq ArcVil Atmtlk BL&P BUCI BUECI Beaver BrchCrk BrvMis CHUGACH CVEA CVEA CfmnCv Chfrnk Chignik Chitina Chiktsk ChngaBy Circle CirksPt Cordova Diomde EL&P Eagle P Eagle V Ekwok ElfnCv FNU FbksMun FisPass G&K GVEA G2UC Juneau Aniak Craig Hydaburg Skagway Tok AVEC Akiachak Akiak Akutan Allakaket Karluk Arctic Ville Atmautlual Bettles Bethel Barrow Beaver Birch Cree Brevig Mis Anchorage Glennallen Valdez Coffman Cc Chefornak Chignik Chitina Chalkyitsi Chenaga B: Circle Clarks Pt Cordova L Diomede Egegik Eagle Eagle Villa Ekwok Elfin Cove Central Fairbanks False Pass Cold Bay Fairbanks Ft. Yukon 500 KWH BILL PRE PCE [$] 45.85 199.62 80.63 97.65 86.90 99.86 198.95 245.00 175.00 185.00 300.00 210.00 355.00 231.90 218.00 90.16 40.00 250.00 300.00 175.00 39.35 98.46 85.35 100.00 210.00 150.00 219.35 270.00 190.00 225.00 195.00 105.40 225.00 271.95 200.00 275.00 150.00 145.00 214.85 46.00 210.00 170.95 §3.78 152.09 PCEON POSTPCE 500 KWH BILL [$] 0.00 122.85 20.55 39.20 13.45 25.60 130.15 133.95 90.35 72.50 149.05 135.20 107/30 131.95 147.75 33.95 0.00 108.85 164.45 105.75 0.00 0.00 0.00 36.50 109.45 63.50 122.50 204.55 111.10 182.50 78.40 39.20 65.00 187.50 148.15 209.00 107.50 78.40 129.30 0.00 90.20 115.95 0.00 92.05 500 KWH BILL [$] 45.85 76.77 60.08 58.45 73.45 74.26 68.80 111.05 84.65 112.50 150.95 74.80 247.70 99.95 70.25 56.21 40.00 141.15 135.55 69.25 39.35 98.46 85.35 63.50 100.55 86.50 96.85 65.45 78.90 42.50 116.60 66.20 160.00 84.45 51.85 66.00 42.50 66.60 85.55 46.00 119.80 55.00 53.78 60.04 =@2s 750 KWH BILL PRE PCE [$] PCEON POSTPCE 750 KWH BILL [$] 750 KWH BILL [$] 65.28 294.57 119.25 144.57 123.55 145.91 298.43 367.50 262.50 277.50 450.00 315.00 532.50 347.85 327.00 128.72 55.50 375.00 450.00 262.50 55.90 140.13 123.38 150.00 315.00 225.00 329.03 405.00 285.00 337.50 292.50 149.10 337.50 407.93 300.00 412.50 225.00 217.50 322.28 63.50 315.00 250.18 71.30 201.89 0. 184. 30. 58. 20. 38. 195. 200. 135. 108. 223 202. 160. 197. 221 50. 163. 246 158. 54. 164. 95. 183. 306. 166. 273. 117. 58. 97. 281. 222. 313. 161. me 193. 135. 173. 138. 00 28 83 80 18 40 23 93 53 75 58 80 95 93 -63 93 .00 28 68 63 -00 -00 .00 75 18 25 75 83 65 75 60 80 50 25 23 50 25 60 95 00 30 93 00 08 65 110. 88 85. 103 107 103. 166. 126 371 77 55. 211 203 103 55 140 123 95 150 129 145 98 118 63 174 90 240 1266 77 99 28 29 43 77 38 51 20 58 98 168. 226. 112. 75 43 20 55 149, 105. 93 38 79 50 73 33 88 90 13 38 25 83 75 28 18 35 75 9) 30 39 ng oO) 63 75 99 128 63 179 76 71 63 ww wo 4 hr MOD > Wwns UTILITY COMMUNITY AEL&P ALP AP&T AP&T AP&T AP&T AVEC Akchk Akiak Akutan Alkt Alutiiq ArcVil Atmtlk BL&P BUCI BUECI Beaver BrchCrk BrvMis CHUGACH CVEA CVEA CfmnCv Chfrnk Chignik Chitina Chiktsk ChngaBy Circle CirksPt Cordova Diomde EL&P Eagle P Eagle V Ekwok ElfnCv FNU FoksMun FisPass G&K GVEA G2uc LARGEST Juneau Aniak Craig Hydaburg Skagway Tok AVEC Akiachak Akiak Akutan Allakaket Karluk Arctic Ville Atmautiual Bettles Bethel Barrow Beaver Birch Cree Brevig Mis Anchorage Glennallen Valdez Coffman Cc Chefornak Chignik Chitina Chalkyitsi Eagle Eagle Villa; Ekwok Elfin Cove Central Fairbanks False Pass Cold Bay Fairbanks Ft. Yukon 1000 KWH BILL PRE PCE [$] 84.70 389.52 157.88 191.50 160.20 191.96 397.90 490.00 350.00 370.00 600.00 420.00 710.00 463.80 436.00 167.27 71.00 500.00 600.00 350.00 72.45 181.81 160.80 200.00 420.00 300.00 438.70 540.00 380.00 450.00 390.00 192.80 450.00 543.90 400.00 550.00 300.00 290.00 429.70 81.00 420.00 329.40 88.81 251.69 PCEON POSTPCE 1000 KWH BILL [$] 0.00 184.28 30.83 58.80 20.18 38.40 195.23 200.93 135.53 108.75 223.58 202.80 160.95 197.93 221.63 50.93 0.00 163.28 246.68 158.63 0.00 0.00 0.00 54.75 164.18 95.25 183.75 306.83 166.65 273.75 117.60 58.80 97.50 281.25 222.23 313.50 161.25 117.60 193.95 0.00 135.30 173.93 0.00 138.08 1000 KWH BILL [$] 84.70 205.24 127.05 132.70 140.03 153.56 202.68 289.08 214.48 261.25 376.43 217.20 549.05 265.88 214.38 116.35 71.00 336.73 353.33 191.38 72.45 181.81 160.80 145.25 255.83 204.75 254.95 233.18 213.35 176.25 272.40 134.00 352.50 262.65 177.78 236.50 138.75 172.40 235.75 81.00 284.70 155.48 88.81 113.62 =C3= 1500 KWH BILL PRE PCE [$] 123.55 579.41 235.13 285.35 233.50 274.41 596.85 735.00 525.00 555.00 900.00 630.00 1065.00 695.70 654.00 244.38 102.00 750.00 900.00 525.00 105.55 265.17 235.65 300.00 630.00 450.00 658.05 810.00 570.00 675.00 585.00 270.20 675.00 815.85 600.00 825.00 450.00 435.00 644.55 116.00 630.00 487.85 123.84 351.29 PCEON POST PCE 1500 KWH BILL [$] 0.00 184.28 30.83 58.80 20.18 38.40 195.23 200.93 135.53 108.75 223.58 202.80 160.95 197.93 221.63 50.93 0.00 163.28 246.68 158.63 0.00 0.00 0.00 54.75 164.18 95.25 183.75 306.83 166.65 273.75 117.60 58.80 97.50 281.25 222.23 313.50 161.25 117.60 193.95 0.00 135.30 173.93 0.00 138.08 1500 KWH BILL 55 .14 .30 -55 33 01 63 .08 -48 .25 -43 .20 .05 -78 .38 46 .00 -73 33 .38 55 17 65 .25 83 75 .30 18 .35 25 .40 40 50 60 78 .50 75 .40 60 .00 .70 93 .B4 22 UTILITY LARGEST COMMUNITY PCE [$/KWH] 100 KWH PCEON POSTPCE BILL PRE PCE [$] 100 KWH BILL [$] 100 KWH BILL ($] 250 KWH BILL PRE PCE [$] PCEON POSTPCE 250 KWH 250 KWH BILL [$] BILL [$] Gstvs HL&P Hughes INNC Igiugig Ipntchq KEA KOTZ KngCv KobkV Kokhnk Kolgnk Kotlik Ktchkn Kwethlik KwigPC LECI LarsnBy MEA MEA MKEC ML&P MLPC MPC NECI NIPC NPLI NSlpe NSlpe NSlpe Nakek Napskik Nelsnign Nightmt Nikolai Nome Ouzinki PELCO PedroB Auke Bay Golovin Gustavus Homer Seldovia Haines Hughes lliamna Igiugig Deering Kodiak Kotzebue King Cove Kobuk Kokhanok Bay Koliganek Kotlik Ketchikan Kwethluk Kwigillingok Levelock Larsen Bay Unalakleet Wasilla Chauthbaluk Anchorage McGrath Manokotak Dillingham Napakiak Northway Anaktuvuk Atkasuk Pt. Hope Naknek Napaskiak Nelson Lagoon Nightmute Nikolai Nome Ouzinki Pelican Pedro Bay 0.1346 0.0000 0.2922 0.3850 0.0000 0.0000 0.0389 0.3653 0.3239 0.4180 0.1390 0.0000 0.1074 0.0770 0.2059 0.4180 0.1833 0.2158 0.0000 0.1672 0.2627 0.2890 0.2279 0.1195 0.0000 0.3797 0.0000 0.2419 0.2110 0.0864 0.3850 -1747 -1250 -1350 -1050 -1000 .3846 .2309 -1433 .2682 .0798 -1356 .0299 .3934 ooooo0ooocoooco°o°o°oRg 40.90 31.93 45.00 47.00 22.43 23.50 22.39 51.00 40.89 58.00 38.50 22.10 31°76 20.00 53.00 55.10 30.00 42.00 20.05 44.00 50.00 43.24 40.00 38.03 19.00 54.40 11.42 36.37 30.00 25.36 48.92 25.97 15.00 15.00 15.00 30.00 59.00 42.00 40.00 60.00 18.19 28.80 15.10 63.00 13.46 0.00 29.22 38.50 0.00 0.00 3.89 36.53 32.39 41.80 13.90 0.00 10.74 7.70 20.59 41.80 18.33 21.58 0.00 16.72 26.27 28.90 22.79 11.95 0.00 37.97 0.00 24.19 21.10 8.64 38.50 17.47 12.50 13.50 10.50 10.00 38.46 23.09 14.33 26.82 7.98 13.56 2.99 39.34 -C4- 27.44 31.93 15.78 8.50 22.43 23.50 18.50 14.47 8.50 16.20 24.60 22.10 21.02 12.30 32.41 13.30 11.67 20.42 20.05 27.28 23.73 14.34 17.21 26.08 19.00 16.43 11.42 12.18 8.90 16.72 10.42 8.50 2.50 1.50 4.50 20.00 20.54 18.91 25.67 33.18 10.21 15.24 Vat 23.66 102.25 51.81 112.50 117.50 33.96 36.64 42.18 127.50 102.23 145.00 96.25 44.01 62.06 50.00 132.50 137.75 75.00 105.00 32.80 110.00 125.00 108.10 100.00 68.42 32.49 136.00 21.81 87.25 75.00 §1.22 122.30 64.93 37.50 37.50 37.50 65.50 147.50 105.00 100.00 150.00 45.48 72.00 37.75 157.50 33. 0. 73. 96. 0. QO. 9. 91. 80. 104. 34. 0. 26. 19. 51. 104. 45. 53. 0. 41 65. Ue 56. 29. 0 94. 0 60 52. 21 96. 43. 31 33. 26. 25. 96. 57. 35. 67 19. 33. 7 98. 65 00 05 25 00 00 73 33 98 50 75 00 85 25 48 50 83 95 00 .80 68 25 98 88 .00 93 .00 48 75 60 25 68 .25 75 25 00 15 73 83 .05 95 90 48 35 68. 51 39. 21 33 32 21 61 44 35. 30 81 51 68. 59. 35. 43 38. 32. 41 21 26. 22. 29. 26. ei! lal 40. Sit 47 64 82. 25 38 30 59 60 81 45 .25 96 36. 45 36. 25 40. -50 01 64 18 50 21 75 .03 33. 29. 25 18 05 32. 80 20 33 85 .03 54 49 .08 81 78 25 62 05 .25 .25 75 25 50 35 28 18 95 53 10 28 vs) UTILITY Gstvs HL&P Hughes INNC Igiugig Ipntchq KEA KOTZ KngCv KobkV Kokhnk Kolgnk Kotlik Ktchkn Kwethlik KwigPC LECI LarsnBy MEA MEA MKEC ML&P MLPC MPC NEC! NIPC NPLI NSlpe NSipe NSipe Nakek Napskik Nelsnign Nightmt Nikolai Nome Ouzinki PELCO PedroB 500 KWH BILL LARGEST PRE PCE COMMUNITY [$] Galena 204.50 Auke Bay 84.93 Golovin 225.00 Gustavus 235.00 Homer §3.17 Seldovia 58.54 Haines 78.15 Hughes 255.00 lliamna 204.45 Igiugig 290.00 Deering 192.50 Kodiak 80.52 Kotzebue 112.56 King Cove 100.00 Kobuk 265.00 Kokhanok | 275.50 Koliganek 150.00 Kotlik 210.00 Ketchikan 54.05 Kwethiuk 220.00 Kwigilling: 250.00 Levelock 216.20 Larsen Bay 200.00 Unalakleet | 119.07 Wasilla | 54.99 Chauthbal: | 272.00 Anchorage 39.11 McGrath | 170.35 Manokotak 150.00 Dillinghan 94.32 Napakiak | 244.60 Northway | 129.85 Anaktuvuk 95.00 Atkasuk 105.00 Pt. Hope 75.00 ‘Naknek 118.00 Napaskiak 295.00 Nelson Lag: 210.00 Nightmute 200.00 Nikolai 300.00 Nome 90.95 Ouzinki 144.00 Pelican 75.50 Pedro Bay 315.00 PCEON POSTPCE 500 KWH BILL [$]} 67.30 0.00 146.10 192.50 0.00 0.00 19.45 182.65 161.95 209.00 69.50 0.00 53.70 38.50 102.95 209.00 91.65 107.90 0.00 83.60 131.35 144.50 113.95 59.75 0.00 189.85 0.00 120.95 105.50 | 43.20 192.50 87.35 62.50 67.50 52.50 50.00 192.30 115.45 71.65 134.10 39.90 67.80 14.95 196.70 500 KWH BILL [$] 137.20 84.93 78.90 42.50 53.17 58.54 55.70 72.35 42.50 81.00 123.00 80.52 58.86 61.50 162.05 66.50 58.35 102.10 54.05 136.40 118.65 71.70 86.05 59.32 54.99 82.15 39.11 49.40 44.50 $1.12 52.10 42.50 32.50 37.50 22.50 68.00 102.70 94.55 128.35 165.90 51.05 76.20 60.55 118.30 -C5- 750 KWH BILL PRE PCE [$] PCEON POSTPCE 750 KWH BILL [$] 750 KWH BILL [$] 306. 118. 337. 352. 72. 80. 107. 382. 306. 435. 288. 117. 163. 150. 397. 413. 225. 310. 75. 330. 375. 324. 300. 169. 77. 408. 56. 248. 225 134. 366. 194. 157. 180. 112. 168 442 300 136 216 75 06 50 50 39 43 60 50 68 00 75 03 06 00 50 25 00 00 30 00 00 30 00 72 48 00 42 03 00 51 90 78 50 00 50 25 .50 315. .00 450. 00 00 .43 .00 113. 472. 25 50 100.95 0.00 219.15 288.75 0.00 0.00 29.18 273.98 242.93 313.50 104.25 0.00 80.55 57.75 154.43 313.50 137.48 161.85 0.00 125.40 197.03 216.75 170.93 89.63 0.00 284.78 0.00 181.43 158.25 64.80 288.75 131.03 93.75 101.25 78.75 75.00 288.45 173.18 107.48 201.15 59.85 101.70 22.43 295.05 205 118. 118. 63. .39 80. 78. 108. 63. 50 50 .03 82. 92. 243. 99. 87. We 121 184 TET. 148 7S 204 177 107. 129 80 Wad. 123 56 66 66 69 78 63 63 78 33 93 154 141 192 248 76 114 90 177 80 06 35 75 43 43 53 75 51 25 08 75 53 15 30 60 98 55 08 09 48 23 42 60 75 71 15 75 75 is 75 25 05 83 53 85 58 30 83 4 4 1000 KWH PCEON POSTPCE 1500 KWH PCEON POSTPCE BILL 1000 KWH 1000 KWH BILL 1500 KWH 1500 KWH LARGEST PRE PCE BILL BILL PRE PCE BILL BILL UTILITY =COMMUNITY [$] [$] [$] {$] [$] [$] Galena Galena 409.00 100.95 308.05 613.50 100.95 512.55 GicHwy Auke Bay 151.18 0.00 151.18 217.43 0.00 217.43 Golvn Golovin 450.00 219.15 230.85 675.00 219.15 455.85 Gstvs Gustavus 470.00 288.75 181.25 705.00 288.75 416.25 HEA Homer 91.60 0.00 91.60 123.73 0.00 123.73 HEA Seldovia 102.33 0.00 102.33 146.13 0.00 146.13 HL&P Haines 135.33 29.18 106.15 190.78 29.18 161.60 Hughes Hughes 510.00 273.98 ° 236.03 765.00 273.98 491.03 INNC lliamna 408.90 242.93 165.98 613.35 242.93 370.43 Igiugig Igiugig 580.00 313.50 266.50 870.00 313.50 556.50 Ipntchq Deering 385.00 104.25 280.75 577.50 104.25 473.25 KEA Kodiak 153.55 0.00 153.55 226.57 0.00 226.57 KOTZ Kotzebue 213.56 80°55 133.01 314.56 80.55 234.01 KngCv King Cove 200.00 57.75 142.25 300.00 57.75 242.25 KobkV Kobuk 530.00 154.43 375.58 795.00 154.43 640.58 Kokhnk = Kokhanok I 551.00 313.50 237.50 826.50 313.50 513.00 Kolgnk _— Koliganek 300.00 137.48 162.53 450.00 137.48 312.53 Kotlik Kotlik 410.00 161.85 248.15 610.00 161.85 448.15 Ktchkn —_ Ketchikan 96.55 0.00 96.55 139.05 0.00 139.05 Kwethlk Kwethluk 440.00 125.40 314.60 660.00 125.40 534.60 KwigPC = Kwigilling: 500.00 197.03 302.98 750.00 197.03 552.98 LECI Levelock 432.40 216.75 215.65 648.60 216.75 431.85 LarsnBy Larsen Bay 400.00 170.93 229.08 600.00 170.93 429.08 MEA Unalakleet 220.37 89.63 130.74 321.67 89.63 232.04 MEA Wasilla 99.97 0.00 99.97 141.15 0.00 141.15 MKEC Chauthbali 544.00 284.78 259.23 816.00 284.78 §31.23 ML&P Anchorage 73.72 0.00 73.72 108.33 0.00 108.33 MLPC McGrath 325.70 181.43 144.28 481.05 181.43 299.63 MPC Manokotak 300.00 158.25 141.75 450.00 158.25 291.75 NECI Dillinghan 174.71 64.80 109.91 255.10 64.80 190.30 NIPC Napakiak 489.20 288.75 200.45 733.80 288.75 445.05 NPLI Northway 259.70 131.03 128.68 389.55 131.03 258.53 NSlipe Anaktuvuk | — 220.00 93.75 126.25 345.00 93.75 251.25 NSipe Atkasuk 255.00 101.25 153.75 405.00 101.25 303.75 NSipe Pt. Hope 150.00 78.75 71.25 225.00 78.75 146.25 Nakek Naknek 209.50 75.00 134.50 292.00 75.00 217.00 Napskik Napaskiak 590.00 288.45 301.55 885.00 288.45 596.55 Nelsnlign Nelson Lag: 420.00 173.18 246.83 630.00 173.18 456.83 Nightmt Nightmute 400.00 107.48 292.53 600.00 107.48 492.53 Nikolai Nikolai 600.00 201.15 398.85 900.00 201.15 698.85 Nome Nome 181.90 59.85 122.05 272.85 59.85 213.00 Ouzinki = Ouzinki 288.00 101.70 186.30 432.00 101.70 330.30 PELCO Pelican 151.00 22.43 128.58 226.50 22.43 204.08 PedroB = Pedro Bay 630.00 295.05 334.95 945.00 295.05 649.95 Aon. 100 KWH BILL LARGEST PCE PRE PCE UTILITY COMMUNITY [$/KWH] [$] Peryvie Perryville 0.1884 35.00 Petrsbg Petersburg 0.0000 9.50 PilotPt Pilot Pt 0.2418 35.00 Pt Heidn Port Heiden 0.1150 20.00 Pyrnq Puvurnaq 0.2239 45.00 Rampart Rampart 0.4180 60.00 Ruby Ruby 0.2424 54.00 SPEI Sand Point 0.0441 22.69 Seward Seward 0.0000 24.98 ShidnPt Sheldon Pt 0.2332 50.00 Sitka Sitka 0.0000 T2712 StGeorge St George 0.2502 5§.88 StPaul St Paul 0.1516 38.00 StevnsV Stevens Village 0.2118 55.00 TANANA Tanana 0.1905 41.50 TELLER Teller 0.4037 §3.75 THREA Hoonah 0.2176 35.20 Takotna Takotna 0.1155 48.10 Tatik Tatitlek 0.2917 39.00 Telida Telida 0.4180 63.00 TenkeSp Tenakee Spr 0.2315 39.00 Tetlin Tetlin 0.2993 47.00 ThorneB Thorne Bay 0.1272 31.20 Tulksrmt — Tuluksak 0.2150 30.00 Tuntntlk Tuntuntuliak 0.1481 46.00 Umnak Nikolski 0.3350 58.00 Unalska Unalaska 0.0634 20.00 Ungsrq Ungusraq 0.3890 52.00 Venetie Venetie 0.0722 51.00 WhteMt White Mt. 0.2367 40.84 Wrangell Wrangell 0.0000 18.00 YPI Yakutat 0.0642 23.78 Prepared by: Judith M. White, Utility Tariff Analyst Alaska Public Utilities Commission Questions: 276-6222 PCEON 100 KWH BILL ($] 18.84 0.00 24.18 11.50 22.39 41.80 24.24 4.41 0.00 23.32 0.00 25.02 15.16 21.18 19.05 40.37 21.76 11.55 29.17 41.80 23.15 29.93 12.72 21.50 14.81 33.50 6.34 38.90 7.22 23.67 0.00 6.42 Note: 10000 put in blocks to indicate “all” or “all remaining” POST PCE 100 KWH BILL ($] 16.16 9.50 10.82 8.50 22.61 18.20 29.76 18.28 24.98 26.68 12.12 33.86 22.84 33.82 22.45 13.38 13.44 36.55 9.83 21.20 15.85 17.07 18.48 8.50 31.19 24.50 13.66 13.10 43.78 eda, 18.00 17.36 250 KWH BILL PRE PCE [$] PCEON POSTPCE 250 KWH 250 KWH BILL [$] BILL [$] 87.50 23.75 87.50 50.00 112.50 150.00 135.00 55.44 35.60 125.00 21.21 147.20 95.00 137.50 102.50 134.38 88.00 120.25 97.50 157.50 97.50 117.50 78.00 75.00 115.00 145.00 50.00 130.00 127.50 102.10 33.00 53.60 47.10 0.00 60.45 28.75 55.98 104.50 60.60 11.03 0.00 58.30 0.00 62.55 37.90 52.95 47.63 100.93 54.40 28.88 72.93 104.50 57.88 74.83 31.80 53.75 37.03 83.75 15.85 97.25 18.05 59.18 0.00 16.05 40. Zar on 24 56. 45. 74 44 35. 66. 21 84 57. 84. 54. 33. 33. 94 24. 53 39. 42. 46. 24 77 61 34. 32. 109. 42 33 37 40 75 .05 25) 53 50 -40 a2 60 70 wet 65 10 55 88 45 60 .38 58 .00 63 68 20 25 .98 25 ws 75 45 93 00 55) 1000 KWH PCEON POSTPCE 1500 KWH PCEON POSTPCE BILL 1000 KWH 1000 KWH BILL 1500 KWH 1500 KWH LARGEST PRE PCE BILL BILL PRE PCE BILL BILL UTILITY COMMUNITY [$] [$] [$] {$] ($] [$] Peryvie Perryville 350.00 141.30 208.70 525.00 141.30 383.70 Petrsbg Petersbur 93.00 0.00 93.00 125.50 0.00 125.50 PilotPt Pilot’ Pt 350.00 181.35 168.65 525.00 181.35 343.65 Pt Heidn Port Heide 200.00 86.25 113.75 300.00 86.25 213.75 Pyrnq Puvurnaq 450.00 167.93 282.08 675.00 167.93 507.08 Rampart Rampart 600.00 313.50 286.50 900.00 313.50 586.50 Ruby Ruby 540.00 181.80 358.20 810.00 181.80 628.20 SPEI Sand Point 206.34 33.08 173.27 306.94 33.08 273.87 Seward Seward 88.70 0.00 88.70 124.10 0.00 124.10 ShidnPt Sheldon Pt 500.00 174.90 325.10 750.00 174.90 575.10 Sitka Sitka 66.66 0.00 66.66 96.96 0.00 96.96 StGeorge St George 588.80 187,65 401.15 883.20 187.65 695.55 StPaul St Paul 380.00 113.70 266.30 570.00 113.70 456.30 StevnsV Stevens Vi 550.00 158.85 391.15 550.00 158.85 391.15 TANANA = Tanana 373.40 142.88 230.53 550.40 142.88 407.53 TELLER Teller 537.50 302.78 234.73 806.25 302.78 503.48 THREA Hoonah 319.10 163.20 155.90 471.60 163.20 308.40 Takotna Takotna 481.00 86.63 394.38 721.50 86.63 634.88 Tatlk Tatitlek 390.00 218.78 171.28 585.00 218.78 366.23 Telida Telida 630.00 313.50 316.50 945.00 313.50 631.50 TenkeSp Tenakee S 390.00 173.63 216.38 585.00 173.63 411.38 Tetlin Tetlin 470.00 224.48 245.53 705.00 224.48 480.53 ThorneB Thorne Ba: 312.00 95.40 216.60 468.00 95.40 372.60 Tulksrmt Tuluksak 300.00 161.25 138.75 450.00 161.25 288.75 Tuntntlk = Tuntuntuli 460.00 111.08 348.93 690.00 111.08 578.93 Umnak _Nikolski 580.00 251.25 328.75 870.00 251.25 618.75 Unalska Unalaska 200.00 47.55 152.45 300.00 47.55 252.45 Ungsrq Ungusraq 520.00 291.75 228.25 780.00 291.75 488.25 Venetie Venetie 510.00 54.15 455.85 765.00 54.15 710.85 WhteMt White Mt. 408.40 177.53 230.88 612.60 177.53 435.08 Wrangell Wrangell 94.00 0.00 94.00 134.00 0.00 134.00 YPI Yakutat 181.00 48.15 132.85 259.90 48.15 211575 Prepared by: Judith M. White, Utility Tariff Analyst Alaska Public Utilities Commission Questions: 276-6222 Note: 10000 put in blocks to indicate “all” or “all remaining” - C8 - UTILITY |COMMUNITY Peryvie Petrsbg PilotPt Pt Heidn Pyrnq Rampart Ruby SPEI Seward ShidnPt Sitka StGeorge StPaul StevnsV TANANA TELLER THREA Takotna Tatlk Telida TenkeSp Tetlin ThorneB Tulksrmt Tuntntlk Umnak Unalska Ungsrq Venetie WhteMt Wrangell YPI LARGEST Perryville Petersbur Pilot Pt Port Heide Puvurnaq Rampart Ruby Sand Point Seward Sheldon Pt Sitka St George St Paul Stevens Vi Tanana Teller Hoonah Takotna Tatitlek Telida Tenakee S Tetlin Thorne Ba: Tuluksak Tuntuntuli Nikolski Unalaska Ungusraq Venetie White Mt. Wrangell Yakutat 500 KWH BILL PRE PCE [$] 175.00 47.50 175.00 100.00 225.00 300.00 270.00 105.74 53.30 250.00 36.36 294.40 190.00 275.00 196.40 268.75 166.60 240.50 195.00 315.00 195.00 235.00 156.00 150.00 230.00 290.00 100.00 260.00 255.00 204.20 54.00 97.10 PCEON POSTPCE 500 KWH 500 KWH BILL [$] 94.20 0.00 120.90 57.50 111.95 209.00 121.20 22.05 0.00 116.60 0.00 125.10 75:80 105.90 95.25 201.85 108.80 57.75 145.85 209.00 115.75 149.65 63.60 107.50 74.05 167.50 31.70 194.50 36.10 118.35 0.00 32.10 Prepared by: Judith M. White, Utility Tariff Analyst Alaska Public Utilities Commission Questions: 276-6222 BILL [$] 80.80 47.50 54.10 42.50 113.05 91.00 148.80 83.69 53.30 133.40 36.36 169.30 114.20 169.10 101.15 66.90 57.80 182.75 49.15 106.00 79.25 85.35 92.40 42.50 155.95 122.50 68.30 65.50 218.90 85.85 54.00 65.00 Note: 10000 put in blocks to indicate “all” or “all remaining" -C9- 750 KWH BILL PRE PCE ($]} 262.50 70.25 262.50 150.00 337.50 450.00 405.00 156.04 71.00 375.00 51.51 441.60 285.00 412.50 284.90 403.13 242.85 360.75 292.50 472.50 292.50 352.50 234.00 225.00 345.00 435.00 150.00 390.00 382.50 306.30 74.00 139.05 PCEON POSTPCE 750 KWH 750 KWH BILL [$] 141.30 0.00 181.35 86.25 167.93 313.50 181.80 33.08 0.00 174.90 0.00 187.65 113.70 158.85 142.88 302.78 163.20 86.63 218.78 313.50 173.63 224.48 95.40 161.25 111.08 251.25 47.55 291.75 54.15 177.53 0.00 48.15 BILL 121. 70. 81. 63. 169. 136. 223. 122. 71. 200. $1. 253. 171. 253. 142 100. 79. 274 73. 159. 118 128. 138. 63. 233. 183. 102. 98 328. 128. 74. 90. 20 25 15 75 58 50 20 97 00 10 51 95 30 65 .03 35 65 13 73 00 88 03 60 75 93 75 45 .25 35 78 00 90 AVEC Bethel Cordova Haines 1NN Kotzebue Naknek Nome NSB Nushagak THREA Residential Appendix "D" Additional PCE Statistics PCE SURVEY NUMBER OF CUSTOMERS Feb. 1987 Commercial otal Less Bethel, Nushagak Kotzebue Naknek Nome NSB Nushagak THREA Unalakleet Total Less Bethel, Nushagak Unalakleet T 11,335 9,248 Residential 1,227,018 592,770 473,559 270,202 35,299 316,634 229,084 623,267 511,308 355,718 386,119 105,255 5,126,233 4,177,745 PCE SURVEY KWH CONSUMPTION Commercial Federal Schools & State 852,682 110,373 N/A N/A 59,073 133,907 77,263 46,180 37,567 22,219 10,826 14,938 53,658 147,162 129,633 230,800 157,189 4,671 92,840 N/A 136,353 30,278 27,650 21,405 1,634,734 761,933 1,541,894 761,933 -D1- 2,451 1,397,379 1,059,123 Sh 652 369,578 95,496 349,730 471,822 1,178,312 654,270 316,735 229,686 108,019 6,684, 802 5,308,944 Community Facilities N/A Wi 585 Commun ity Facilities 414,772 N/A 155,570 44,655 17,887 11,6, 749 7,302 176,680 16,892 365,687 154,326 30,527 1,501,047 1,135,360 | PCE SURVEY PCE ELICIBLE KWH'S Commercial Federal Community Utilit: Residential & State Facilities AVEC 1,172,785 309,149 414,772 Bethel 592,770 139,725 N/A Cordova 407,271 106,663 155,570 Haines 241,928 83,358 44,655 INN 35,299 33,319 17 ,887 Kotzebue 316,634 91,166 115,436 Naknek 183,144 105,070 7,302 Nome 540,153 184,362 176,680 NSB 237,430 122,900 16,892 Nushagak 340,818 83,310 76,445 THREA 351,169 77,225 147,657 Unalakieet 93,109 21,557 30,527 Total 4,512,510 174,749 1,357,804 1,203,823 174,749 1,134,769 1,127,378 Less Bethel, Nushagak 3,578,922 NUMBER OF RESIDENTIAL CUSTOMERS KWH CONSUMPT ION “401-500 AVEC 177 Bethe! 0 Cordova 233 INN Kotzebue 123 Naknek 116 Nome 302 NSB . Nushagak 19 THREA 100 Unalakleet Haines did not provide enough data to be included. KWH CONSUMPTION BY RESIDENTIAL CLASS AVEC 146,178 187,027 209,599 208,778 288,453 186,983 Bethel 30,899 47,275 63,586 87,433 363,577 - Cordova 17,093 15,593 29,049 39,329 131,457 241,038 INN 3,012 4631 8,470 9,177 10,009 - Kotzebue 20,780 33,376 31,432 47,809 90,987 92,250 Naknek 6,550 11,250 10,460 15,384 52,500 132,940 Nome 17,874 24,183 42,123 52,297 177,176 £309,614 NSB 5,212 8,431 8,721 28,726 460,218 - Nushagak 16,888 21,892 25,842 27,913 234,033 29,150 THREA 16,917 33,898 46,009 51,882 127,463 109,950 Unalakleet 4 661 6,494 394,050 10,477 485,768 9,327 578,055 36,650 1,972,523 37,646 1,139,571 -D2 -