6/28/2023
1 RiversideCA.gov1
RiversideCA.gov
FISCAL IMPACT OF ALTERNATIVE RATE SCENARIOSBoard of Public UtilitiesJuly 10, 2023Riverside Public Utilities RiversideCA.gov2
BACKGROUND1. On June 12, 2023, the Board approved a recommendation tothe City Council to conceptually approve both the Waterand Electric Five-Year Rate plans.2. At the meeting, it was requested that staff return to the Boardwith alternative rate plan scenarios using the same ratedesign assumptions and underlying analysis in the respectivecost of service analysis reports. 6/28/2023
2 RiversideCA.gov3
PROPOSED RESIDENTIAL 5 YEAR ELECTRIC RATE PLANWATER: $0.15 Per Day ELECTRIC: $0.21 Per Day REFUSE: + $0.09 Per Day $0.45 Per Dayor$13.50 Per Month Average rate increase per year for 5 years
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$298 $206 $190 $149 $148 $143 $136 $123 $123 $119 $117 $107 $107 $28 $22 $7 $8 $- $50 $100 $150 $200 $250 $300 $350Current Known Increases - Year 1 Proposed Increase - Year 1ELECTRIC RATE PLAN COMPARISONAverage Residential Monthly Bill at 600 kWh Per Month – Year OneRPU RATES REMAIN LOWRPURPU =112K Service Connections 6/28/2023
3 RiversideCA.gov5
Increased construction/equipment costsCosts for natural gas have doubled over the last two years,due to increased liquid natural gas exports and restricted capacity on western interstate gas pipelines.Costs for CAISO Market energy have gone up 60%-80%, due to increasing natural gas costs and supply-chain challenges delaying the development of new renewable resources.THE WHYINCREASED POWER SUPPLY COSTS RiversideCA.gov6
THE WHY($100)($50)$0$50$100$150$200$250FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserves WITHOUTRate IncreasesUndesignated Cash BalanceLine of CreditGeneral Fund SubsidyMin Target 6/28/2023
4 RiversideCA.gov7
ELECTRIC 5-YEAR RATE PLAN SCENARIO 5% SYSTEM AVERAGECustomer Class CustomersYear 1% IncreaseYear 2% IncreaseYear 3% IncreaseYear 4% IncreaseYear 5% IncreaseCompound Annual Growth RateResidential (3 Tiers) 99,718 5.1% 5.1% 5.0% 5.8% 6.0%29.9%Commercial Flat (2 Tiers)11,015 1.8% 2.0% 2.1% 7.5% 7.3%22.3%Commercial Demand (2 Tiers)988 0.0% 0.0% 0.0% 0.0% 0.0%0.0%Industrial TOU(3 periods)622 4.2% 4.7% 4.5% 10.8% 10.8%39.9%Note: The increases per year are estimates for example purposes only and were created by adjusting from the proposed 5-year rate plan rate increases.
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ELECTRIC 5-YEAR RATE PLAN SCENARIO 5% SYSTEM AVERAGE$0$50$100$150$200$250FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserves WITH5% Annual Rate IncreasesUndesignated Cash BalanceLine of CreditMin Target 6/28/2023
5 RiversideCA.gov9
ELECTRIC 5-YEAR RATE PLAN SCENARIO 6.25% SYSTEM AVERAGECustomer Class CustomersYear 1% IncreaseYear 2% IncreaseYear 3% IncreaseYear 4% IncreaseYear 5% IncreaseCompound Annual Growth RateResidential (3 Tiers) 99,718 6.3% 6.3% 6.3% 7.2% 7.5%38.4%Commercial Flat (2 Tiers)11,015 2.2% 2.5% 2.7% 9.4% 9.1%28.3%Commercial Demand (2 Tiers)988 0.0% 0.0% 0.0% 0.0% 0.0%0.0%Industrial TOU(3 periods)622 5.3% 5.9% 5.6% 13.4% 13.4%51.5%Note: The increases per year are estimates for example purposes only and were created by adjusting from the proposed 5-year rate plan rate increases.
RiversideCA.gov10
ELECTRIC 5-YEAR RATE PLAN SCENARIO 6.25% SYSTEM AVERAGE$0$50$100$150$200$250FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserves WITH6.25% Rate IncreasesUndesignated Cash BalanceLine of CreditMin Target 6/28/2023
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PROPOSED ELECTRIC 5-YEAR RATE PLANCustomer Class CustomersYear 1% IncreaseYear 2% IncreaseYear 3% IncreaseYear 4% IncreaseYear 5% IncreaseCompound Annual Growth RateResidential (3 Tiers) 99,718 7.1% 7.1% 7.0% 2.3% 2.4%28.5%Commercial Flat (2 Tiers)11,015 2.5% 2.8% 3.0% 3.0% 2.9%15.1%Commercial Demand (2 Tiers)988 0.0% 0.0% 0.0% 0.0% 0.0%0.0%Industrial TOU(3 periods)622 5.9% 6.6% 6.3% 4.3% 4.3%30.5% RiversideCA.gov12
WITH PROPOSED ELECTRIC RATE INCREASE$0$50$100$150$200$250FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserves WITHProposed 5-Year Rate PlanUndesignated Cash BalanceLine of CreditMin Target 6/28/2023
7 RiversideCA.gov13
PROPOSED RESIDENTIAL 5 YEAR WATER RATE PLANWATER: $0.15 Per Day ELECTRIC: $0.21 Per Day REFUSE: + $0.09 Per Day $0.45 Per Dayor$13.50 Per Month Average rate increase per year for 5 years
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WATER RATE PLAN COMPARISONAverage Residential Monthly Bill at 21 CCF Per Month – Year OneRPURPU RATES REMAIN LOWRPU = 66K Service Connections 6/28/2023
8 RiversideCA.gov15
Increased construction/equipment costsThe State of California drought messaging and increased Citywide water efficiency have decreased water revenue without decreasing operational costs2011 – 2017 there were no rate increases resulting in a Water Fund Balance that doesn’t meet the minimum reserve levels set by City Council without the line of credit.THE WHY RiversideCA.gov16
THE WHY($40)($20)$0$20$40$60$80FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserves WITHOUTRate IncreasesUndesignated Cash BalanceLine of CreditGeneral Fund SubsidyMin Target 6/28/2023
9 RiversideCA.gov17
WATER 5-YEAR RATE PLAN SCENARIO – 4% SYSTEM AVERAGECustomer Class CustomersYear 1% IncreaseYear 2% IncreaseYear 3% IncreaseYear 4% IncreaseYear 5% IncreaseCompounded Annual Growth RateSingle Family Residential (3 tiers per class)58,731 3.5% 4.1% 4.1% 4.1% 4.1%21.4%Multi Family Residential(2 tiers per class)1,145 2.8% 4.1% 4.1% 4.1% 4.1%20.7%Commercial/ Industrial5,137 5.3% 3.7% 3.8% 3.9% 3.7%22.0%Landscape500 8.4% 3.6% 3.6% 3.8% 3.6%25.0%City Interruptible/ Recycled530 3.6% 3.9% 3.7% 3.6% 3.9%20.0%Agriculture(up to 3 tiers per class)224 1.1% 3.9% 4.0% 3.9% 4.0%18.1%Riverside Water Co. Irrigators (3 tiers per class)24 11.9% 4.4% 4.3% 4.4% 4.2%32.6%Temporary Service72 7.4% 4.3% 4.2% 4.4% 4.3%27.1%Note: The increases per year are estimates for example purposes only and were created by adjusting from the proposed 5-year rate plan rate increases.
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WATER 5-YEAR RATE PLAN SCENARIO – 4% SYSTEM AVERAGE$0$20$40$60$80FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserve WITH4% Annual Rate IncreasesUndesignated Cash BalanceLine of CreditMin Target 6/28/2023
10 RiversideCA.gov19
WATER 5-YEAR RATE PLAN SCENARIO – 5% SYSTEM AVERAGECustomer Class CustomersYear 1% IncreaseYear 2% IncreaseYear 3% IncreaseYear 4% IncreaseYear 5% IncreaseCompounded Annual Growth RateSingle Family Residential (3 tiers per class)58,731 4.4% 5.1% 5.1% 5.2% 5.1%27.3%Multi Family Residential(2 tiers per class)1,145 3.5% 5.1% 5.1% 5.2% 5.1%26.3%Commercial/ Industrial5,137 6.6% 4.6% 4.7% 4.8% 4.6%28.1%Landscape500 10.5% 4.5% 4.5% 4.7% 4.5%31.9%City Interruptible/ Recycled530 4.5% 4.8% 4.6% 4.5% 4.8%25.5%Agriculture(up to 3 tiers per class)224 1.4% 4.9% 5.0% 4.9% 5.0%23.1%Riverside Water Co. Irrigators (3 tiers per class)24 14.8% 5.5% 5.4% 5.5% 5.3%41.9%Temporary Service72 9.2% 5.4% 5.3% 5.5% 5.4%34.7%Note: The increases per year are estimates for example purposes only and were created by adjusting from the proposed 5-year rate plan rate increases.
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WATER 5-YEAR RATE PLAN SCENARIO – 5% SYSTEM AVERAGE$0$20$40$60$80FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserves WITH5% Annual Rate IncreasesUndesignated Cash BalanceLine of CreditMin Target 6/28/2023
11 RiversideCA.gov21
WATER 5-YEAR RATE PLAN SCENARIO – 6% SYSTEM AVERAGECustomer Class CustomersYear 1% IncreaseYear 2% IncreaseYear 3% IncreaseYear 4% IncreaseYear 5% IncreaseCompounded Annual Growth RateSingle Family Residential (3 tiers per class)58,731 5.3% 6.1% 6.1% 6.2% 6.1%33.5%Multi Family Residential(2 tiers per class)1,145 4.2% 6.1% 6.1% 6.2% 6.1%32.2%Commercial/ Industrial5,137 7.9% 5.5% 5.6% 5.8% 5.5%34.4%Landscape500 12.6% 5.4% 5.4% 5.6% 5.4%39.1%City Interruptible/ Recycled530 5.4% 5.8% 5.5% 5.4% 5.8%31.2%Agriculture(up to 3 tiers per class)224 1.7% 5.9% 6.0% 5.9% 6.0%28.1%Riverside Water Co. Irrigators (3 tiers per class)24 17.8% 6.6% 6.5% 6.6% 6.4%51.6%Temporary Service72 11.1% 6.5% 6.4% 6.6% 6.5%42.7%Note: The increases per year are estimates for example purposes only and were created by adjusting from the proposed 5-year rate plan rate increases.
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WATER 5-YEAR RATE PLAN SCENARIO – 6% SYSTEM AVERAGE$0$20$40$60$80FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserves WITH6% Annual Rate IncreasesUndesignated Cash BalanceLine of CreditMin Target 6/28/2023
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PROPOSED WATER 5-YEAR RATE PLANCustomer Class CustomersYear 1% IncreaseYear 2% IncreaseYear 3% IncreaseYear 4% IncreaseYear 5% IncreaseCompounded Annual Growth RateSingle Family Residential (3 tiers per class)58,731 5.7% 6.6% 6.6% 6.7% 6.6%36.7%Multi Family Residential (2 tiers per class)1,145 4.6% 6.6% 6.6% 6.7% 6.6%35.2%Commercial/ Industrial5,137 8.6% 6.0% 6.1% 6.3% 6.0%37.6%Landscape500 13.6% 5.9% 5.8% 6.1% 5.8%43.0%City Interruptible/ Recycled530 5.8% 6.3% 6.0% 5.8% 6.3%34.1%Agriculture (up to 3 tiers per class)224 1.8% 6.4% 6.5% 6.4% 6.5%30.7%Riverside Water Co. Irrigators (3 tiers per class)24 19.3% 7.1% 7.0% 7.2% 6.9%56.7%Temporary Service72 12.0% 7.0% 6.9% 7.1% 7.0%46.8% RiversideCA.gov24
WITH PROPOSED WATER 5-YEAR RATE PLAN$0$20$40$60$80FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028MillionsUndesignated Reserves WITHProposed 5-Year Rate PlanUndesignated Cash BalanceLine of CreditMin Target 6/28/2023
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25High Performing Government:Goal 5.4. Achieve and maintain financial health byaddressing gaps between revenues and expendituresand aligning resources with strategic priorities to yield thegreatest impact.Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
RiversideCA.gov26
That the Board of Public Utilities receive an update on the fiscal impacts of alternative rate scenarios from the currently proposed for the Water and Electric Utility Five-Year Rate Plan Proposal introduced to the Board on June 12, 2023.RECOMMENDATION