An Act relating to power cost equalization; and providing for an effective date

Prepared by: Senate Finance/Senator Torgerson
Updated: May 11, 1999

(This page accompanies the spreadsheet dated May 11, 1999, and labeled REV 13 in the upper right corner.)

Columns 11 and 12 ("Totals" line) show the following:

• Annual program expenditures are approximately $18.3 million given FY98 program demand and 85% "proration" of the current formula. This represents the current level of benefits.
• The average residential customer currently receives about $505 per year in PCE benefits.

Columns 13-16 ("Totals" line) show the following:

• Column 13: FY 2000 PCE payments are projected to be $12.0 million if commercial customers are removed from eligibility, the monthly PCE "cap" is reduced from 700 to 350 kWh, and the PCE "floor" is increased by 3.6 cents (from the present level of 9.9 cents to a new floor of 13.5 cents.)
• Column 14: The average residential customer is estimated to receive $331 per year under this option.
• Columns 15 and 16 show the same information except in the form of losses and gains to communities and residential customers rather than in the form of expected annual payments.

Additional notes on the uncertainty of modeling the cap reduction:

• The model assumes that the new monthly cap will be a constant 350 kWh throughout the year rather than the variable monthly cap adopted by the Senate Finance committee on May 10. Actual PCE payments should be somewhat higher as a result of the variable cap.
• The assumption used in the model is that reducing the cap from 700 to 350 kWh will reduce annual PCE-eligible kWh in the residential sector by 26.3 percent, a factor based on research conducted 10 years ago. Because electricity usage has increased since this research was conducted, it is likely that the actual percentage reduction will be somewhat higher.
• Finally, the model applies the same percentage reduction in eligible kWh to each community. It is likely, however, that a cap reduction will reduce PCE-eligible kWh to a greater extent in communities that already have a relatively high level of household demand.

Unlike earlier runs, this spreadsheet further adjusts the estimated PCE payments under the revised formula by assuming that FY 2000 electricity demand will be 6% higher than FY 98 (i.e. 3% per year annual growth).

The spreadsheet is available in two formats:

1. "PCE Rate Sort," where the communities are sorted from the lowest to the highest PCE rates now in effect. (The PCE rates shown in column 9 are the full rates established by APUC prior to being prorated.)
2. Alphabetical sort by community name.