Explanation
BACKGROUND: This ordinance amends Title 11, Chapter 1163, Section 1163.03, Power Cost Reserve Adjustment, of the Columbus City Code pertaining to the municipal Electric Rates charged by the Department of Public Utilities, Division of Power and Water, for electric services.
The Prime Group, LLC has performed a cost of service study for the Division of Power and Water and has analyzed the current power cost base contained in the Power cost Reserve Adjustment (PCRA) to determine whether it is consistent with the expected purchased power cost. The current base is $0.06419 per KWH. The base was calculated in 2006 based on an estimate of the cost contained in the purchased power contract being negotiated at the time. Based on the actual negotiated contract with AEP, the power cost base in the PCRA should be $0.05773 per KWH. The Prime Group recommends that the power cost base contained in the PCRA be modified to reflect $0.05773 per KWH. This change will preserve the margins that were expected from the rates implemented in 2007. (Ord. 1911-2006, passed 11/20/06)
The Prime Group also recommends a change to the definition of Egm (the net energy produced by the O'Shaughnessy facility) in the PCRA to exclude energy generated from the O'Shaughnessy Dam hydroelectric facility unless that energy is being used to directly serve the customers of the City of Columbus. When the PCRA was initially developed, the O'Shaughnessy Generating Plant was used to serve the City of Columbus' native load customers. Therefore, the energy produced by O'Shaughnessy had to be accounted for in the calculation of the PCRA to accurately reflect the cost of Power. However, today the energy generated by O'Shaughnessy is not used to directly serve our customers but is sold to others. (The revenue earned helps to offset some of the cost of purchased power.) As a result, including the energy from O'Shaughnessy in the calculation of the PCRA would artificially lower the ...
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