July (pdf) - New York Power Authority

July 26, 2011
“The proposed action to adjust the preference power rates must be posted for public comment in the New
York State Register. In addition, as a matter of Authority policy, any proposed action that would increase rates by
2% or more will be the subject of a public forum for the purpose of gathering the views of interested persons
concerning the proposal. Any comments received during this comment period, along with supporting staff analyses,
will be presented to the Board at the time the proposal is considered for final action, which is anticipated for the
October 2011 Trustee meeting. A final staff report will be issued shortly after this meeting and will reflect public
comments, staff analysis of those comments and the final action of the Trustees.
Industrial Power Rates
“In conjunction with the preference power rate increase, staff recommends removal of the suspension of the
indexed production rate increase for industrial customers.
“Staff has updated the production rates for the RP, EP, GM and ALCOA/Reynolds customers applying
various economic indices and recommends the following proposed demand and energy rates for the 2011 rate year
commencing September 1, 2011. Though the Authority normally implements revised indexed rates effective May 1
of each year under its contracts, staff agrees to waive recovery of increased charges from the May 1 – August 31,
2011 period. Customers will receive the usual duration of notice for the increased industrial hydroelectric rates.
Demand
($/kW)
EP/RP/GM ALCOA Reynolds
Energy
($/MWh)
Demand
($/kW)
35
Energy
($/MWh)
Demand
($/kW)
Energy
($/MWh)
Current 5.17 8.84 4.31 8.52 4.38 8.67
Proposed 5.47 9.36 4.40 8.69 4.47 8.84
“Like the reinstatement of the RSR, the reinstatement of the price indices for the Authority’s hydroelectric
industrial customers can be achieved by Trustee approval and is not part of the NOPR described herein.
FISCAL INFORMATION
“Implementation of the proposed schedule of rate increases would allow the Authority to recover its costs
associated with serving the preference power customers. For the 2011 rate year, the estimated revenue increase
would be about $3.0 million. For the 42-month period from November 2011 through April 30, 2015, the estimated
cumulative base rate revenue increases would be about $56.4 million with the additional RSR surcharge of $3.3
million being collected from preference power customers for the period May 1, 2014 to April 30, 2015.
“In addition, the reinstatement of the price indices for the Authority’s hydroelectric industrial customers
would provide for an estimated revenue increase of about $3.5 million for the period September 1, 2011 to April 30,
2012.
RECOMMENDATION
“The Vice President – Financial Planning and Budgets recommends that the Trustees authorize the
Corporate Secretary to: (1) file notice for publication in the New York State Register of the proposed Authority
action to adjust the hydroelectric preference power rates; and (2) schedule a public forum for the purpose of
gathering the views of interested persons concerning the preference power customers.
“It is also recommended that the Senior Vice President – Corporate Planning and Finance be authorized to
reinstate the Rate Stabilization Reserve mechanism used to calculate surcharges/credits for preference power
customers.
“It is also recommended that the Senior Vice President – Marketing and Economic Development be
authorize to reinstate the application of indices used to calculate revised production rates for the Authority’s
industrial hydroelectric power customers.