Hetch Hetchy Power
Bill Discount Implementation for
Enterprise Customers on Time of Use
Rates
June 25, 2024
Matthew Freiberg
Rates Manager, Financial Planning
1 Agenda
• Overview on Hetch Hetchy Power’s Discount Programs
• Background on Power’s Rate Consolidation
• Customer Bill Impact
• Implementation Proposal
2 Hetch Hetchy Power Discount Programs
Existing Discounts for
Enterprise Time of Use Rates
• In FYE 2019-20, Hetch Hetchy (HHP)
implemented PG&E’s E-CARE tariff on
Enterprise Commercial’s Time of Use
(TOU) rates
• Eligibility: Enterprise Commercial
accounts that serve unoccupied
residential units or the common areas of
qualifying residential facilities and
nonprofits, as defined by PG&E
• Discount Structure: Fixed $/kWh discount
on energy charges
Bill Discounts for Retail
Customers
• In FYE 2021-22, HHP implemented a
Retail bill discount
• Eligibility: Retail Commercial accounts
that serve unoccupied residential units or
the common areas of residential
buildings, whose occupants meet CPUC’s
low-income guidelines
• Discount Structure: 30% discount on the
total calculated bill.
3 Enterprise Time of Use Rates have
Decreased Over the Past 2 Years
4 A10-US Enterprise Medium Commercial Time of Use Secondary FY21-22 FY22-23 FY23-24 Rate Change
Customer Charge $179.9000 $217.5100 $255.1100 41.8%
Summer Energy Charge
On-Peak $0.2472 $0.2306 $0.2091 -15.4%
Part-Peak $0.2472 $0.2306 $0.2091 -15.4%
Off-Peak $0.2204 $0.1972 $0.1690 -23.3%
Winter Energy Charge
On-Peak $0.0000 $0.0000 $0.0000
Part-Peak $0.1967 $0.1812 $0.1606 -18.3%
Off-Peak $0.1960 $0.1741 $0.1473 -24.8%
Summer Demand
Charge $18.4500 $19.5800 $20.7000 12.2%
Winter Demand
Charge $18.4500 $19.5800 $20.7000 12.2%
Fixed Discounts Have Increased the
Effective Bill Discount
5 A10-US-C Enterprise Medium Commercial TOU Secondary, CARE FY21-22 FY22-23 FY23-24 Rate Change
Customer Charge $179.9000 $217.5100 $255.1100 41.8%
Summer Energy Charge
On-Peak $0.1452 $0.1287 $0.1071 -26.2%
Part-Peak $0.1452 $0.1287 $0.1071 -26.2%
Off-Peak $0.1184 $0.0953 $0.0671 -43.4%
Winter Energy Charge
On-Peak $0.0000 $0.0000 $0.0000
Part-Peak $0.0947 $0.0792 $0.0587 -38.1%
Off-Peak $0.0940 $0.0722 $0.0454 -51.8%
Summer Demand
Charge $18.4500 $19.5800 $20.7000 12.2%
Winter Demand
Charge $18.4500 $19.5800 $20.7000 12.2%
Existing Discounts
for Enterprise TOU
Rates
Energy charges were reduced gradually to
achieve parity with Retail rate
Discount remain fixed
Enterprise Customers with existing
discounts have benefited from the last two
years of rate changes, compared to their
Retail counterparts
Customers’ Bill Impact
6 • On May 14th 2024, the Commission approved the consolidation of Enterprise rates into equivalent Retail rates and transitioning to CAP discounts. • In effect, 21 accounts on Enterprise Time of Use rates with bill discounts will transition to Retail rates and into the Retail bill discount program
1. Apply a 12% increase to the rate tariffs
2. Eliminate the existing discounts and,
3. Transition them to the Retail CAP program
• This transition is projected to increase billing for these accounts by 26.5-
49.4% ($8,000 to $27,000 annually)
Implementation Proposal
This phased approach reduces the FY 2024-25 billing impact to 16-40% across the targeted accounts, with an average increase of 32%, saving the customers just over $88,000 compared to implementing the full transition on July 1, 2024. 7 On July 1, 2024, the Enterprise
Time of Use rates will increase
by 12%, and will maintain the
existing discount program.
On January 1, 2025, SFPUC
will implement the transition to
the 30% discount for Retail
Commercial accounts.
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
DEPARTMENT Financial Services
AGENDA NO.
18 MEETING DATE
June 25, 2024
Public Hearing: Regular Calendar
Project Manager: Matthew Freiberg
Grant the General Manager Discretion to Delay the Implementation of the Discount Consolidation for Hetch Hetchy Power Customers
Summary of
Proposed
Commission
Action:
Public Hearing to consider adopting a Resolution, which grants the General Manager the discretion to delay the implementation of the discount consolidation for Hetch Hetchy Power customers on rate schedules A-1UP and A10-US from July 1, 2024, to January 2025.
Background: In FYE 2019-20, Hetch Hetchy Power began implementing Pacific Gas &Electric’s E-CARE tariff, which applied fixed $/kWh discounts to the energy usage portion of customer rates for qualifying Enterprise commercial customers (Table 1). These fixed discount s apply to common areas and vacant units in subsidized affordable housing (generally, building owners and property managers), as well as accounts for master-metered buildings who voluntarily chose to be on a commercial rate prior to the 2022 Power Rate Study. On July 1, 2024, there will be 21 Hetch Hetchy Power accounts on Enterprise time of use rates, receiving this discount to their power rates.
These accounts are held by a small number of non-profit low -income housing providers and managers.
Table 1: Discounts to Energy Usage Rates for Enterprise Customers Rate Schedule Discounted Tariff
A-1/A-1U $0.10962 per kWh
A-10US $0.10194 per kWh
A-10UP $0.10183 per kWh
E-19S $0.08971 per kWh
E-19P $0.08961 per kWh
E-20S $0.07267 per kWh
E-20P $0.07258 per kWh
E-20T $0.07229 per kWh
Public Hearing: Grant the General Manager Discretion to Delay the Implementation of the Discount Consolidation for Hetch Hetchy Power Customers
Commission Meeting Date: June 25, 2024
In the 2022 Power Rate Study, the consultant recommended retail rates for two years – FY 2022- 23 and FY 2023 -24 – that transitioned all customers to standardized rates based on the cost to serve each customer class rather than setting rates at a percentage of PG&E’s rates. For the Enterprise rate tariffs, the customer charge and demand charges escalated, but the base energy charges were reduced gradually over two years to achieve parity with Retail rates by FYE 2023- 24 (See example for the A10-US tariff on Table 2). However, the $/kWh discount applied to energy charges for customers on these rates, remained fixed . As a result, over the course of the prior two fiscal years, the effective percentage of bill savings have increased more for th ese customers compar ed to their Retail counterparts participating in SFPUC’s bill discount program who receive 30 percent off of their bill (See example for the A10-US tariff with discounts applied on Table 3).
Table 2: FYE 2022- FY 2024 Rate Changes for Enterprise Commercial Time of Use A10-US Enterprise Medium Commercial Time of Use Secondary FY21-22 FY22-23 FY23-24 Rate Change
Customer Charge $179.9000 $217.5100 $255.1100 41.8%
Summer Energy Charge
On-Peak $0.2472 $0.2306 $0.2091 -15.4%
Part-Peak $0.2472 $0.2306 $0.2091 -15.4%
Off-Peak $0.2204 $0.1972 $0.1690 -23.3%
Winter Energy Charge
On-Peak $0.0000 $0.0000 $0.0000
Part-Peak $0.1967 $0.1812 $0.1606 -18.3%
Off-Peak $0.1960 $0.1741 $0.1473 -24.8%
Summer Demand
Charge
$18.4500 $19.5800 $20.7000 12.2%
Winter Demand Charge $18.4500 $19.5800 $20.7000 12.2%
Public Hearing: Grant the General Manager Discretion to Delay the Implementation of the Discount Consolidation for Hetch Hetchy Power Customers
Commission Meeting Date: June 25, 2024
Table 3: FYE 2022 to FYE 2024 Rate Change for Discounted Enterprise Commercial Time of Use
A10-US-C Enterprise Medium Commercial TOU Secondary, CARE FY21-22 FY22-23 FY23-24 Rate Change
Customer Charge $179.9000 $217.5100 $255.1100 41.8%
Summer Energy Charge
On-Peak $0.1452 $0.1287 $0.1071 -26.2%
Part-Peak $0.1452 $0.1287 $0.1071 -26.2%
Off-Peak $0.1184 $0.0953 $0.0671 -43.4%
Winter Energy Charge
On-Peak $0.0000 $0.0000 $0.0000
Part-Peak $0.0947 $0.0792 $0.0587 -38.1%
Off-Peak $0.0940 $0.0722 $0.0454 -51.8%
Summer Demand
Charge
$18.4500 $19.5800 $20.7000 12.2%
Winter Demand Charge $18.4500 $19.5800 $20.7000 12.2%
On May 14 th, 2024, the SFPUC adopted Hetch Hetchy Power rates for FYE 2024- 2025 as authorized by Resolution 24- 0116. The Resolution also approved the consolidation of Enterprise rates into equivalent Retail rates, and consolidation of the Enterprise commercial discount structure to the Retail structure. For the 21 accounts, this action will (1) apply a 12% increase to the rate tariffs, (2) eliminate the existing schedule of discounts for Enterprise Customers and, (3) replace their discount with the Retail bill discount program for qualifying Retail commercial customers.
After further bill impact analysis, SFPUC staff identified that th e combined updates to the rates and the transition of discount programs will have a large bill impact on the 21 accounts on the Small and Medium Commercial Time of Use rates. In effect, the transition to the Retail bill discount program combined with the 12% rate increase is pr ojected to increase billing for th ese accounts by 26.5-49.4% in FY 2024-25. This translates to a n annual bill impact ranging from $8,000 to $27,000.
Attachment 1 contains a summary of the annual bill impact for each of the 21 accounts impacted by the proposed rates.
To minimize the rate impact to these customers , SFPUC staff propose t o delay the transition from the Enterprise Time of Use discounted rates to the Retail bill discount for these customers by six months. On July 1, 2024, the Enterprise Time of Use rates will increase by 12%, and will maintain the existing discount program. On January 1, 2025, SFPUC will implement the transition of these customer to the Retail discounts. This phased approach reduces the FY 2024-25 billing impact to 16-40% across the targeted accounts, with an average increase of 32%, saving the customers just over $88,000 compared to implementing the full transition on July 1, 2024.
Public Hearing: Grant the General Manager Discretion to Delay the Implementation of the Discount Consolidation for Hetch Hetchy Power Customers
Commission Meeting Date: June 25, 2024
Impact to Hetch Hetchy Power Revenues
This proposal would result in Hetch Hetchy Power collecting approximately $88,000 less in rate revenues. The FY 2024 -25 Hetch Hetchy Power revenue requirement is $319.1 million, of which $199.8 million is projected to be collected from retai l sales. The one-time loss of ~$88,000 in rate revenues constitutes less than 0.1% of the rate revenue requirement of Hetch Hetchy Power and will not have any significant impacts to the financial sustainability of Hetch Hetchy Power, nor will it have any material impacts to the utility’s ability to maintain sufficient day’s cash on hand, debt service coverage, or any of its other key financial performance metrics.
Customer Outreach
Upon adoption of the path forward, the SFPUC will contact affected account holders with a proposal to hold a meeting to discuss the pending rate changes.
Estimated cost variances will be shared for customer budgeting purposes.
Environmental
Review:
On April 30, 2024, the San Francisco Planning Department determined the Project to be statutor ily exempt from environmental review under the CEQA section 21080(b)(8) and the CEQA Guidelines s ection 15273 ( Rates, Tolls, Fares and Charges) (Case Number 2024- 003765ENV) related to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges. The exemption determination can be found here:
https://sfpuc.sharefile.com/public/share/web-
s494936fa4b3e42d0933a97d2bf29697c
Attachment: 1. Summary of Hetch Hetchy Power Enterprise Small and Medium Commercial Time of Use Customers FY 2024-25 Bill Impact Comparison.
2. Existing Energy Charge Discount for Enterprise Customers on Time of Use Rates
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO. __________
WHEREAS, Hetch Hetchy Power provides electric service to municipal, governmental, residential, and commercial customers within the City & County of San Francisco and Tuolumne County at rates set by this Commission; and
WHEREAS, The Commission adopted Fiscal Year 202 4-25 Hetch Hetchy Power tariffs and tariffs for Tuolumne County customers on May 14, 2024, through Resolution 24-0116; and WHEREAS, On April 30, 2024, the San Francisco Planning Department determined the Project to be statutor ily exempt from environmental review under the California Environmental Quality Act (CEQA) section 21080(b)(8) and the CEQA Guidelines s ection 15273 (Rates, Tolls, Fares and Charges) (Case Number 2024-003765ENV) related to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges; and WHEREAS, Resolution 24- 0116 also approved consolidation of the Enterprise commercial discount structure to the Retail structure, resulting in significant rate impacts to some customers on top of the rate increase adopted for all customers; and WHEREAS, This Commission seeks to provide additional notice and time to prepare for the combined rate impact to the non-profit organizations that provide affordable housing to low - income tenants in San Francisco by delaying for six months the implementation of the discount consolidation for customers under tariffs A1-UP and A10-US; now, therefore, be it RESOLVED, The General Manager shall have the discretion to delay the implementation of the discount consolidation of the existing discount program to the Retail discount program for Hetch Hetchy Power customers on rate schedules A -1UP and A10- US from July 1, 2024, to January 2025.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of June 25, 2024.
Acting Commission Secretary, Public Utilities Commission
ID Rate FYE 2023-24
Billing
July 1 CARE
Consolidation
% Change from
FY 23-24
Increase in Annual Bill
from FY 2023-24 ($)
January 1 CARE
Consolidation
% Change from FY
23-242
Increase in Annual Bill
from FY 2023-24 ($)2
1 A10-US 50,487.96$ 74,848.42$ 48.3% 24,360.46$ 68,942.99$ 36.6% 18,455.03$ 2 A10-US 34,834.26$ 50,625.35$ 45.3% 15,791.09$ 47,096.69$ 35.2% 12,262.43$ 3 A10-US 46,314.88$ 67,525.96$ 45.8% 21,211.08$ 59,185.81$ 27.8% 12,870.93$ 4 A10-US 33,549.42$ 47,876.65$ 42.7% 14,327.23$ 44,511.43$ 32.7% 10,962.01$ 5 A10-US 53,166.75$ 72,196.64$ 35.8% 19,029.89$ 61,485.72$ 15.6% 8,318.97$ 6 A10-US 44,212.28$ 55,939.05$ 26.5% 11,726.77$ 54,618.02$ 23.5% 10,405.74$ 7 A10-US 27,877.56$ 39,870.71$ 43.0% 11,993.15$ 37,147.14$ 33.3% 9,269.58$ 8 A1-UP 52,994.46$ 70,633.86$ 33.3% 17,639.40$ 67,124.81$ 26.7% 14,130.35$ 9 A10-US 40,815.65$ 56,866.57$ 39.3% 16,050.92$ 55,773.38$ 36.6% 14,957.73$ 10 A10-US 45,711.54$ 64,631.95$ 41.4% 18,920.41$ 60,490.86$ 32.3% 14,779.32$ 11 A10-US 50,062.54$ 74,642.93$ 49.1% 24,580.39$ 68,534.74$ 36.9% 18,472.20$ 12 A10-US 46,534.15$ 69,517.47$ 49.4% 22,983.32$ 63,913.28$ 37.3% 17,379.13$ 13 A10-US 28,464.12$ 39,408.90$ 38.5% 10,944.78$ 37,270.85$ 30.9% 8,806.73$ 14 A1-UP 28,235.53$ 37,172.48$ 31.7% 8,936.95$ 35,791.54$ 26.8% 7,556.01$ 15 A10-US 37,775.88$ 55,391.57$ 46.6% 17,615.69$ 51,282.98$ 35.8% 13,507.10$ 16 A10-US 44,792.74$ 65,709.17$ 46.7% 20,916.43$ 61,181.67$ 36.6% 16,388.93$ 17 A10-US 55,991.93$ 81,542.91$ 45.6% 25,550.98$ 76,088.18$ 35.9% 20,096.25$ 18 A10-US 25,168.06$ 36,060.09$ 43.3% 10,892.03$ 33,501.84$ 33.1% 8,333.78$ 19 A10-US 54,968.46$ 81,975.95$ 49.1% 27,007.49$ 75,720.85$ 37.8% 20,752.39$ 20 A10-US 21,578.93$ 29,984.75$ 39.0% 8,405.82$ 28,180.10$ 30.6% 6,601.17$ 21 A10-US 35,049.29$ 50,983.30$ 45.5% 15,934.01$ 47,332.31$ 35.0% 12,283.02$ Annual Total 858,586.37$ 1,223,404.68$ 42.5% 364,818.31$ 1,135,175.19$ 32.2% $276,588.82 $ Savings from Proposed vs Current -$88,229.49
A : Current Implementation Process B : Proposed Implementation Process Summary of Hetch Hetchy Power Enterprise Small and Medium Commercial Time of Use Customers FY 2024-25 Bill Impact Comparison Existing Energy Charge Discount for Enterprise Customers on Time of Use Rates