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HomeMy WebLinkAboutORD 99-14 - TU ElectricORDINANCE ! V_I Zwe) el e 1 i ! 10A I D! DIN 1 11111111 111111 11 111 111 1 IT11111 1111� ! i PUBLIC AS REQUIRED BY LAW; REPEALING CONFLICTING ORDINANCES AND RESOLUTIONS; INCLUDING A SEVERABILITY CLAUSE; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, on January 15, 1999, Texas Utilities Electric Company (hereinafter referred to as "TU Electric") filed with the City of Georgetown a Statement of Intent and Application to implement within the corporate limits of this municipality proposed new rate schedules that provide additional rate options for its customers, which options are entirely voluntary on the part of the customer, namely its proposed Rate GTU-M-General Service Time -of -Use -Municipality, proposed Rate RTU 1 -M -Residential Time -of -Use Service -Municipality, and proposed Rate GTUC-M-General Service Time -of -Use Voluntary Curtailable-Municipality (said three proposed new rate schedules hereinafter collectively referred to as the "Time -of -Use Rate Schedules"); and WHEREAS, the Public Utilities Commission has approved these rates to be offered to TU Electric customers within the city limits of Georgetown. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, THAT: SECTION 1 The facts and recitations contained in the preamble of this ordinance are hereby found and declared to be true and correct, and are incorporated by reference herein and expressly made a part hereof, as if copied verbatim. The City Council hereby finds that this ordinance implements the following policies of the Century Plan - Policy Plan Element: 1, Governmental Affairs Policy End 6.0, which states: "A high level of cooperation and involvement exists among Georgetown's citizens and governmental organizations;" SECTION 2 The Time -of -Use Rate Schedules are hereby approved, and TU Electric is authorized to render service and to collect charges as specified in the Time -of -Use Rate Schedules from its customers TU Electric Rate Ordinance No. X Page 1 of 4 Pages electing to receive electric service under said Time -of -Use Rate Schedules within the corporate limits of this municipality until such time as said rate schedules may be changed, modified, amended or withdrawn with the approval of the Governing Body of this municipality. SECTION 3. The Time -of -Use Rate Schedules herein approved shall be effective from and after the final passage and approval of this Ordinance. SECTION 4. The filing of said Time -of -Use Rate Schedules shall constitute notice to the consumers of electricity within its municipality of the availability and application of such Time -of -Use Rate Schedules. SECTION 5. TU Electric shall not seek any additional rate or surcharge mechanism to recover any revenues lost on account of the application of these time -of -use rates, and there shall be no imputed revenues on account of any reduction in TU Electric's revenues that may result from the application of these time -of -use rates. SECTION 6. The rate reductions approved by the Public Utility Commission of Texas in Docket No. 18490 shall be applied to the time -of -use rates approved herein, such that Rider RRD shall be applicable to Rate RTU 1-M, Rider GSRD shall be applied to all customers taking secondary service under either Rate GTU-M designated as GTU-M-SEC or under Rate GTUC-M designated as GTUC-M-SEC, and Rider RD shall be applied to all other customers on Rate GTU-M or Rate GTUC-M, SECTION 7. In its next general base rate case in which the time -of --use rates herein approved are at issue, TU Electric will either (a) include all customers taking service under Rate GTUC or GTUC-M during the test year involved in such base rate case as a separate rate class in its cost allocation study, or (b) include in its cost allocation study the load and revenue data applicable to each GTUC or GTUC-M customer taking service under Rate GTUC or GTUC-M during the test year involved in such base rate case with the load and revenue data of the rate class applicable to such GTUC or GTUC-M customer immediately prior to such customer's taking service under Rate GTUC or GTUC-M. In the event, however, that industry restructuring is mandated by legislative changes prior to the time that TU Electric has another general base rate case and such legislation authorizes the recovery by TU Electric of any stranded costs from its various customer classes in accordance with its last approved cost of service study, the customers then receiving service under the time -of -use rates will TU Electric Rate Ordinance No. m Page 2 of 4 Pages be included in the customer classes reflected in TU Electric's most recent cost of service study as follows: (A) Customers on Rate RTU I -M shall be included in Rate Class RTU; (B) Customers on Rate GTU-M shall be included in Rate Class HV, GP, or GS, depending upon the voltage level of the service, such that customers on Rate GTU-M receiving service at high voltages shall be included in Rate Class HV, customers receiving service at primary distribution voltages shall be included in Rate Class GP, and customers receiving service at secondary distribution voltages shall be included in Rate Class GS; and (C) Customers on Rate GTUC-M shall be included in Rate Class NI (Noticed Interruptible) depending upon the voltage level of the service, such that customers on Rate GTUC-M receiving service at high voltages shall be included in Rate Class NI (High Voltage), customers on Rate GTUC-M receiving service at primary distribution voltages shall be included in Rate NI (Primary), and Customers on Rate GTUC-M receiving service at secondary distribution voltages shall be included in Rate NI (Secondary). SECTION 8. Nothing in this ordinance contained shall be construed now or hereafter as limiting or modifying in any manner the right and power of the Governing Body of this municipality under the law to regulate the rates, operations, and services of TU Electric. SECTION 9. It is hereby officially found and determined that the meeting at which this ordinance is passed is open to the public as required by law and that public notice of the time, place, and purpose of said meeting was given as required. SECTION 10. The attached Exhibit "A", Application for Approval of Time -of -Use Rate Options for Texas Utilities Company: Statement of Intent and Application is hereby adopted by the City Council of the City of Georgetown, Texas. SECTION 11. All ordinances and resolutions, or parts of ordinances and resolutions, in conflict with this Ordinance are hereby repealed, and are no longer of any force and effect. TU Electric Rate Ordinance No. e' '" S Page 3 of 4 Pages SECTION 12. If any provision of this ordinance or application thereof to any person or circumstance, shall be held invalid, such invalidity shall not affect the other provisions, or application thereof, of this ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are hereby declared to be severable. SECTION 13, The Mayor is hereby authorized to sign this ordinance and the City Secretary to attest. This ordinance shall become effective and be in full force and effect in (10) ten days on and after publication in accordance with the provisions of the Charter of the City of Georgetown. Pf PASSED AND APPROVED on First Reading on the l" day of ,e,rz.�° € 1999. PASSED AND APPROVED on Second Reading on the,/ e(Lday of 1999. THE CITY OF GEORGETOWN: Attest: By: ,EO WOOD Mayor Approved as to form: Marianne Landers Banks City Attorney TU Electric Rate Ordinance No. Page 4 of 4 Pages Sandra D. Lee City Secretary a y� BEFORE THE GOVERNING BODY OF THE - CITY OF GEORGETOWN, TEXAS APPLICATION •• • • APPROVAL . •1. OF RATE w NO. ! TEXAS UTILITIES ELECTRIC • ! TO THE HONORABLE SAID GOVERNING BODY: COMES NOW Texas Utilities Electric Company ("TU Electric") and files this its Statement of Intent and Application to implement proposed Rate GTU-M - General Service Time -of -Use -Municipality, Rate RTU1-M - Residential Time -of -Use -Municipality, and Rate GTUC-M - General Service Time -of -Use Voluntary Curtailable-Municipality, respectfully showing the following: 1. In an effort to provide additional rate options that will not only benefit participating customers but will also benefit non -participating customers, TU Electric has held discussions with several of its customers and has developed optional time -of -use rates that would be available to TU Electric's residential, commercial, and industrial customers on a voluntary basis at the customer's choice. These time -of -use rate options will allow participating customers to plan and manage their electrical energy usage to shift their loads from TU Electric's peak periods to TU Electric's off-peak periods, thereby saving on their electric bills and, at the same time, allowing TU Electric to acquire less resources to meet the peak loads of all of its customers, which will benefit both participating customers and non -participating customers as well. The optional time -of --use rates for which approval is sought are: (a) Rate GTU-M - General Service Time -of -Use -Municipality, which would be available to any TU Electric customer, regardless of the voltage at which the individual customer takes electric service, and which would typically include all customers receiving firm electric service under one of TU Electric's existing general service rates, Rate GS - General Service Secondary, Rate GP - General Service Primary, and Rate HV - High Voltage Service; (b) Rate RTU1-M - Residential Time -of -Use Service -Municipality, which would be available to any TU Electric residential customer who would otherwise take electric service under one of TU Electric's residential rates, including Rate R - Residential Service and Rate RTU - Residential Time -of -Use Service; and (c) Rate GTUC-M - General Service Time -of -Use Voluntary Curtailable- Municipality, which would be available to any TU Electric customer, regardless of the voltage at which the individual customer takes electric service, and which would typically include customers that could interrupt or significantly reduce their usage during peak periods similar to customers receiving interruptible electric service under TU Electric's Rider I - Interruptible Service. Materially identical time -of -use rates are pending approval at the Public Utility Commission of Texas in that Commission's Docket No, 17942. These proposed time -of -use rate options each provide for four different pricing levels with eight distinct time -of -use periods. The proposed rates themselves, as well as supporting data underlying the proposed rates, are set forth in the direct testimony of Stephen J. Houle, attached hereto as Exhibit A and made a part hereof for all purposes. Proposed Rate GTU-M - General Service Time -of - Use -Municipality is attached to Mr. Houle's said testimony as Exhibit SJH-1; proposed Rate RTU1-M - Residential Time -of --Use Service -Municipality is attached to that testimony as Exhibit SJH-2; and proposed Rate GTUC-M - General Service Voluntary Curtailable- Municipality is attached to that testimony as Exhibit SJW3. II. MM TU Electric's authorized representatives are: Stephen J. Houle Rates Manager Texas Utilities Electric Company Energy Plaza 1601 Bryan Street, Suite 32-002 Dallas, Texas 75201 Telephone:.(214) 812-4821 J. Dan Bohannan Worsham, Forsythe & Wooldridge, L.L.P. 1601 Bryan Street, 30th Floor Dallas, Texas 75201 Telephone: (214) 979-3000 General inquiries concerning this Statement of Intent and Application should be directed to Mr. Houle at the above -stated address and telephone number. All pleadings, motions, orders, and other documents fled in this proceeding should be served upon Mr. Bohannan at the above -stated address. This City has jurisdiction over TU Electric and the subject matter hereof by virtue of Sections 33.001, 36.001, 36.003, and 36.101-36.111 of the Texas Utilities Code ("PURR"). IV. TU Electric's business address and telephone number are: Texas Utilities Electric Company Energy Plaza 1601 Bryan Street Dallas, Dallas County, Texas 75201 Telephone: (214) 8124600 V. In accordance with the provisions of PURA § 36.102, TU Electric proposes that these proposed rates be implemented effective on February 19, 1999 (which is 35 days after the filing hereof), the proposed effective date, or as soon thereafter as permitted by law. VI. While each of the proposed time -of -use rate options is wholly optional at the customer's choice, these rates are, considered together, available to all of TU Electric's retail customers. Thus, all of TU Electric's retail customers and classes of retail customers within the corporate limits of this City will be affected if this Application is granted. VII. Notice of the filing of this Application is being published in newspapers of general circulation in each county in which the proposed optional time -of --use rates are proposed to be implemented and is being delivered to all affected customers, all in accordance with PURA § 36.103. WHEREFORE, PREMISES CONSIDERED, TU Electric respectfully prays that this oe ,90 `? ` d -3- Application be in all things granted, that the proposed Rate GTU-M - General Service Time -of -Use -Municipality, Rate RTU1-M - Residential Time -of -Use Service -Municipality, and Rate GTUC-M - General Service Time -of --Use Voluntary Curtailable-Municipality be approved as filed, and that it be granted such other and additional relief to which it is justly entitled. Respectfully submitted, WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P J. Dan Bohannan State Bar No. 02563000 1601 Bryan Street, 30th Floor Dallas, Texas 75201 Telephone: (21J) 979-3000 Fax: (214) 880- 011 _ By: 0 0"V - -4- E ibvv- A e V le° 9 'ey FOR TEXAS UTIL RIC COMPANY ES Tariff for Electric Service Exhibit SJIH4 Texas Utilities Electric Company Page 1 of 2 3.2 General Service Sheet 25 Applicable: Cities Exercising Original Jurisdiction Page 1 of 2 Effective Date: Revision: Ori;inal Application Applicable to any customer for all electric service supplied at one point of delivery and measured through one meter. Each point of delivery is metered and billed separately, unless the Aggregate Billing Option is selected. A time -of -day demand meter or interval recorder is required prior to service being provided under this rate. Not applicable to temporary, shared, or resale service. Type of Service Single or three phase, 60 hertz, at the most available secondary, primary, or transmission voltage. Where service of the type desired by Customer is not already available at the point of delivery, additional charges and special contract arrangements between the Company and Customer may be required prior to service being furnished. The Company may, at its option, meter service on the secondary side of Customer's transformers and adjust for transformer losses in accordance with Company's Tariff for Electric Service. Monthly Rate Charge Amount Secondary Primary Transmission (GTU-M-SEC) (GTU-M-PRI) (GTU-M-TRAN) Customer (per point of delivery) $24.00 $25.00 $425.00 Facilities Higher of the Contract kW or Annual kW $3.47 per kW $2.74 per kW $1.08 per kW Charge (per point of Each current month kW in excess of the Contract kW $1.00 per kW $1.00 per kW $1.00 per kW delivery) Energy Pricing Period 4 13.42 C per kWh 13.02 C per kWh 12.78 C per kWh Pricing Period 3 6.18 C per kWh 5.99 c per kWh 5.88 C per kWh Pricing Period 2 3.50 c per kWh 3.39 C per kWh 3.33 c per kWh Pricing Period 1 1.09 c per kWh 1.06 C per kWh 1.04 C per kWh Fuel Cost: Plus an amount for fuel cost calculated in accordance with Rider FC, using the General Service -Secondary factor for GTU-M- SEC, the General Service -Primary factor for GTU-M-PRI, and the General Service -Transmission factor for GTU-M-IRAN. Power Cost: Plus an amount for purchased power cost calculated in accordance with Rider PCR, using the General Service Secondary factor for GTU-M-SEC, the General Service Primary factor for GTU-M-PRI, and the High Voltage Service factor for GTU-M-TRAN. Payment: Bills are due when rendered and become past due if not paid within 16 days thereafter. Bills are increased by 5% if not paid within 20 days after being rendered. Aggregate Billing Option An entity with multiple points of delivery receiving service under Rate GTU-M may elect to receive an aggregate summary bill. Aggregate billing is available to entities that meet all of the following criteria: a) all points of delivery are billed on the same voltage level service, b) all points of delivery are on the same billing cycle, and c) all points of delivery are under the same ownership. A one-time charge of $25 per point of delivery is made when Customer selects the Aggregate Billing option. ,,te�gt Dermitions iJ exhiblo Contract kW is the maximum kW specified in the Agreement for Electric Service. 5,91C 4?4 0 1999 Texas Utilities Electric Company Rate Schedules 29.24 Tariff for Electric Service Texas Utilities Electric Company 3.2 General Service Applicable: Cities Exercising Original Jurisdiction FffpM;vp T)nt&- Exhibit SJH-1 Page 2 of 2 Sheet 25 Page 2 of 2 Revision: Original Annual kW is the highest 15 -minute kW recorded at the point of delivery during the 12 -month period ended with the current month. Current month kW is the highest 15 -minute kW recorded at the point of delivery during the current month. Pricing Period is the billing period determined in accordance with the following and the specified hours are local Dallas, Texas, time: Special Conditions (a) Where customer has another source of power that is connected, either electrically or mechanically, to equipment that may be operated concurrently with service provided by Company, Customer must install and maintain, at Customer's expense, such devices as may be necessary to protect Customer's and the Company's equipment and service. (b) Customers may discontinue service under Rate GTU-M and change service to an otherwise applicable Company rate during the first year without penalty. An Agreement for Electric Service with a term of not less than three years is required. The maximum electrical load specified in the Agreement for Electric Service may not be less than the sum of Customer's normal load plus the load that may be carried all or part of the time by Customer's generator or prime mover or other source of energy. Notice Service hereunder is subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Electric Service. 1999 Texas Utilities Electric Company t/j7+ 47f. / 'Q fIlyea Rate Schedules 29.25 Pricing Period 4 Pricing Period 3 Pricing Period 2 Pricing Period 1 Month Weekdays Weekends Weekdays Weekends Weekdays Weekends December -March N/A NIA N/A N/A 6 a in - N/A All Other Hours 12noon bpm-IOpm April & October - N/A N/A N/A N/A N/A N/A All Hours November May & September N/A N/A 2pm-8pm NIA l0am-2pm 2pm-lopm All Other Hours 8pm-lopm June - August 2pm-8pm N/A 10am-2pm 2pm-IOpm 8am-10am 10am-2pm All Other Hours 8pm lopm IOpm-12 10pm-12 midnight midnight Special Conditions (a) Where customer has another source of power that is connected, either electrically or mechanically, to equipment that may be operated concurrently with service provided by Company, Customer must install and maintain, at Customer's expense, such devices as may be necessary to protect Customer's and the Company's equipment and service. (b) Customers may discontinue service under Rate GTU-M and change service to an otherwise applicable Company rate during the first year without penalty. An Agreement for Electric Service with a term of not less than three years is required. The maximum electrical load specified in the Agreement for Electric Service may not be less than the sum of Customer's normal load plus the load that may be carried all or part of the time by Customer's generator or prime mover or other source of energy. Notice Service hereunder is subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Electric Service. 1999 Texas Utilities Electric Company t/j7+ 47f. / 'Q fIlyea Rate Schedules 29.25 Tariff for Electric Service Texas Utilities Electric Company Exhibit SJH-2 Page 1 of 2 3.1 Residential Service ISheet: 8 Applicable: Cities Exercising Original Jurisdiction Page 1 of 2 Effective Date: Revision: Original � 1 1 Municipality Application Applicable to all customers for all of the electric service supplied at one point of delivery and measured through one meter used for residential purposes (which may include small amounts of commercial usage incidental to residential usage) in an individual private dwelling or in an individually metered apartment for which no specific rate is provided. A time -of --day demand meter is required prior to service being provided under this rate. Not applicable to temporary, shared, or resale service. Type of Service Single or three phase, 60 hertz, at standard voltages as described in the Company's Tariff for Electric Service. Where service of the type desired by Customer is not already available at the point of delivery, additional charges and special contract arrangements between the Company and Customer may be required priorto service being fumished. Monthly Rate Charge Amount Customer $9.00 Facilities Charge Higher of the Contract kW or Annual kW $1.92 per kW Each current month kW in excess of the Contract kW $1.00 per kW Energy Pricing Period 4 13.42 C per kWh Pricing Period 3 6.18 C per kWh Pricing Period 2 3.50 C per kWh Pricing Period 1 1.09 C per kWh Fuel Cost: Plus an amount for fuel cost calculated in accordance with Rider FC, using the Residential Service factor. Power Cost: Plus an amount for purchased power cost calculated in accordance with Rider PCR, using the Residential Service factor. Payment: Bills are due when rendered and become past due if not paid within 16 days thereafter. Definitions Contract kW is the maximum kW specified in the Agreement for Electric Service. Annual kW is the highest 15 -minute kW recorded at the point of delivery during the 12 -month period ended with the current month. Current month kW is the highest 15 -minute kW recorded at the point of delivery during the current month. 01999 Texas Utilities Electric Company Rate Schedules 11.5 Tariff for Electric Service Exhibit S.M-2 Texas Utilities Electric Company Page 2 of 2 3.1 Residential Service Sheet: 8 Applicable: Cities Exercising Original Jurisdiction Page 2 of 2 Effective Date: Revision: Original Pricing Period is the billing period determined in accordance with the following and the specified hours are local Dallas, Texas, time: Agreement An Agreement for Electric Service with a term of not less than one year is required. If Customer terminates service on this rate, said Customer is ineligible for service underthis rate for a period of one year from termination date. If Customer terminates service before the end of the initial one year term of service, the final bill will include an adjustment for the amount by which billing on Residential Service Rate R exceeds the billing rendered on this rate. If service is terminated due to the Company's withdrawing this rate, the above adjustment to the final bill does not apply. Notice Service hereunder is subject to the orders of regulatory bodies having jurisdiction and to Company's Tariff for Electric Service. (01999 Texas Utilities Electric Company Rate Schedules 11.6 Pricing Period 4 Pricing Period 3 Pricing Period 2 Month Pricing Period 1 Weekdays Weekends Weekdays Weekends Weekdays Weekends December - March N/A N/A N/A N/A 6 a in - 12noon N/A All Other Hours 6pm-IOpm April & October - NIA N/A N/A N/A N/A N/A All Hours November May & September N/A N/A 2pm-8pm N/A loam-2pm 2pm-IOpm All Other Hours 8pm-lopm June - August 2pm-8pm N/A l0am-2pm 2pm-10pm 8am-10am 10am-2pm All Other Hours 8pm-lopm lOpm-12 l0pm-12 midnight midnight Agreement An Agreement for Electric Service with a term of not less than one year is required. If Customer terminates service on this rate, said Customer is ineligible for service underthis rate for a period of one year from termination date. If Customer terminates service before the end of the initial one year term of service, the final bill will include an adjustment for the amount by which billing on Residential Service Rate R exceeds the billing rendered on this rate. If service is terminated due to the Company's withdrawing this rate, the above adjustment to the final bill does not apply. Notice Service hereunder is subject to the orders of regulatory bodies having jurisdiction and to Company's Tariff for Electric Service. (01999 Texas Utilities Electric Company Rate Schedules 11.6 Tariff for Electric Service Exhibit SJH-3 Texas Utilities Electric Company Page 1 of 3 Sheet 26 3.2 General Service Page I of 3 Applicable: Cities Exercising Original Jurisdiction Revision: Original Effective Date: 3.2.26 Rate C -M - General Service Time -of -Use Voluntary Curtailable - Municipality Application Applicable to any customer for all electric service supplied at one point of delivery and measured through one meter. Each point of delivery is metered and billed separately, unless the Aggregate Billing Option is selected. An interval demand recorder is required prior to service being provided under this rate. The applicability of this rate is limited, on a first -come -first-served basis, to a maximum total contracted load mers' Contract kW) for the Company's summer peak season of 1949 and 2,000 from all Customers of 1,000 MW (i.e., a total of all Custo MW for the Company's peak season of 2000 and thereafter. Not applicable to temporary, shared, or resale service. Type of Service Single or three phase, 60 hertz, at the most available secondary, primary, or transmission voltage. Where service of the type desired by Customer is not already available at the point of delivery, additional charges and special contract arrangements between the Company and Customer may be required prior to service being furnished. The Company may, at its option, meter service on the secondary side of Customer's transformers and adjust for transformer losses in accordance with Company's Tariff for Electric Service. Monthly Rate Charge Amount Secondary Primary Transmission (GTUC-MSEC) (GTUC-M-PRI) (GTUC-M-TRAM Customer (per point of delivery} $224.00 $225.00 $625.00 EChargeT the Contract kW or Annual kW $3.47 per kW $2.74 per kW $1.08 per kW ent month kW in excess of the Contract kW $1.00 per kW $1.00 per kW 51.00 per kW Energy Pricing Period 4 7.38 C per kWh 7.16 C perkWh 7.03 c per kWh Pricing Period 3 3.40 C per kWh 3.29 c per kWh 3.23 c per kWh Pricing Period 2 1.92 C per kWh 1.86 C per kWh 1.83 C per kWh Pricing Period 1 0.60 C per kWh 0.58 C per kWh 0.57 C per kWh Fuel Cost: Plus an amount for fuel cost calculated in accordance with Rider FC, using the General Service -Secondary factor for GTUC-M- SEC, the General Service -Primary factor for GTUC-M-PRI, and the General Service -Transmission factor for GTUC-M-TRAN. Power Cost: Plus an amount for purchased power cost calculated in accordance with Rider PCR, using the General Service Secondary factor for GTUC-M-SEC, the General Service Primary factor for GTUC-M-PRI, and the High Voltage Service factor for GTUC-M-TRAN. Payment: Bills are due when rendered and become past due if not paid within 16 days thereafter. Bills are increased by 5 % if not paid within 20 days after being rendered. Curtailment Provisions Customer's load will be subject to no more than 700 hours of curtailment during the 12 months ending with the current month and no more than 12 hours in any 24 hour period, except when the Company has made public pleas to restrict electric energy usage to essential needs because of an area or statewide shortage of electric power and/or energy, then the 12 hour limit no longer applies. Customer will have 15 minutes in which t6 -voluntarily curtail all of the load at the point of delivery or, if Customer chooses not to curtail all of the load at the point of delivery, all kWh used during the curtailment period will be billed at an energy charge of 700 per kWh, rather than at the energy charge specified above, provided that, in the event the Customer curtails 35% or more of the total load at a point of delivery not included in the Aggregate Billing Option, or 35% or more of the total load at all points of delivery to the Customer aggregated under the (s) of deli Bulini Option, throughout the curtailment period, the energy charge for all kWh used during the curtailment period at such point(s) of delivery will be billed at an energy charge of 50C per kWh. Total load (either at a single point of delivery or all of Customer's points of delivery under the Aggregate Billing Option) is defined as the Customer's 15 -minute demand recorded immediately prior to Customer's receipt of the notice from Company of the curtailment period. q 9~00IIIII, J* ! j �^ Rate Schedules 29.26 0 1999 Texas Utilities Electric Company ;b;r 6 If ®*f t Q Tariff for Electric Service - Exhibit STH -3 Texas Utilities Electric Company Page 2 of 3 3.2 General Service Sheet 26 Applicable: Cities Exercising Original Jurisdiction Page 2 of 3 Effective Date: Revision: Original Curtailments will occur during the following conditions: (a) when the Company is required by the Electric Reliability Council of Texas (ERCOT) Operating Guides or the ERCOT Independent System Operator (ISO) to interrupt interruptible loads. The curtailment period is the entire period during which ERCOT Operating Guides or the ERCOT ISO requires the Company to interrupt interruptible loads, beginning 15 minutes after Customer is requested to curtail load, or (b) when the Company's system load is at or above 95% of the higher of (1) the estimated system annual peak load for the current calendar year or (2) the actual system peak load for the current calendar year. In the event that the actual system peak load in the calendar year exceeds the previously estimated system annual peak load for that calendar year, such actual system peak load shall become the new estimated system annual peak load beginning on the following day. The curtailment period is the entire period during which the Company's system load is at or above 95 % of the estimated system annual peak load for the current year, beginning 15 minutes after Customer is requested to curtail load. Aggregate Billing Option An entity with multiple points of delivery receiving service under Rate GTUC-M may elect to receive an aggregate summary bill. Aggregate billing is available to entities that meet all of the following criteria: points a) all points of delivery are billed on the same voltage level service, b) all points of delivery are on the same billing cycle, and c) all points of delivery are under the same ownership. A one-time charge of $25 per point of delivery is made when Customer selects the Aggregate Billing option. Definitions Contract kW is the maximum kW specified in the Agreement for Electric Service. Annual kW is the highest 15 -minute kW recorded at the point of delivery during the 12 -month period ended with the current month. Current month kW is the highest 15 -minute kW recorded at the point of delivery during the current month. Hourly System Load is TU Electric's total system demand excluding non-firm economy energy sales. Pricing Period is the billing period determined in accordance with the following and the specified hours are local Dallas, Texas, time: Special Conditions a) Where customer has another source of power that is connected, either electrically or mechanically, to equipment that may be operated concurrently with service provided by Company, Customer must install and maintain, at Customer's expense, such devices as may be necessary to protect Customer's and the Company's equipment and service. b) Customer must pay all costs associated with installing and maintaining any special metering equipment and telephone charges, if required. c) An Agreement for Electric Service is required for an initial term of three years when service is first rendered under this rate and for subsequent periods of 2 years thereafter, continuing until canceled by either party by written notice 1 year in advance of the end of the initial period or any subsequent period. Customers that discontinue eurtailable service under Rate GTUC-M during the term of the DRG. 99,-1 1999 Texas Utilities Electric Company e�xlvhivl� *4 Rate Schedules 29.27 /5",e 10 or e/9 avi Pricing Period 4 Pricing Period 3 Pricing Period 2 Month Pricing Period 1 Weekdays Weekends Weekdays Weekends Weekdays Weekends December - March N/A NIA N/A N/A 6 a in - N/A All Other Hours 12noon 6pm-IOpm April & October - N/A N/A N/A N/A N/A N/A All Hours November May & September N/A N/A 2pm-8pm N/A IOam-2pm 2pm-IOpm All Other Hours 8pm-IOpm June - August 2pm-8pm NIA 10am-2pm 2pm-10pm 8am-10am 10am-2pm All Other Hours 8pm-lopm lOpm-12 l0pm-12 midnight midnight Special Conditions a) Where customer has another source of power that is connected, either electrically or mechanically, to equipment that may be operated concurrently with service provided by Company, Customer must install and maintain, at Customer's expense, such devices as may be necessary to protect Customer's and the Company's equipment and service. b) Customer must pay all costs associated with installing and maintaining any special metering equipment and telephone charges, if required. c) An Agreement for Electric Service is required for an initial term of three years when service is first rendered under this rate and for subsequent periods of 2 years thereafter, continuing until canceled by either party by written notice 1 year in advance of the end of the initial period or any subsequent period. Customers that discontinue eurtailable service under Rate GTUC-M during the term of the DRG. 99,-1 1999 Texas Utilities Electric Company e�xlvhivl� *4 Rate Schedules 29.27 /5",e 10 or e/9 avi Tariff for Electric Service Exhibit &MH 3 Texas Utilities Electric Company Page 3 of 3 3.2 General Service Sheet 26 Applicable: Cities Exercising Original Jurisdiction Page 3 of 3 Effective Date: Revision: Original Agreement for Electric Service shall be charged the difference between their billings under Rate GTUC-M and what their billings would have been under an applicable firm service rate (either Rate HV, Rate GP, or Rate GS, depending upon the voltage level of the Customer's service) for the initial term the Customer received service under Rate GTUC-M, not to exceed three years, and not to exceed two years for subsequent terms, plus interest thereon at the rate applicable to undercharges established pursuant to the Commission's Substantive Rule 23.35(h). d) If it is determined at any time by Company that the Customer has failed to operate and maintain communications equipment in such a manner so that there can be compliance with the provisions of this rate, then the Customer will be immediately billed on the rate schedule for firm power for the period since service was first commenced under this rate, or for the one year period just prior to such determination, whichever period is less. The difference between the actual bills rendered and the amount so calculated shall be adjusted each month to cover the Company's annual cost of capital, compounded monthly from such month to date, as determined in the Company's most recent rate case by the Public Utility Commission of Texas. Such adjusted difference shall immediately become due by Customer to Company. Agreement An Agreement for Electric Service with a term of not less than three years is required. The maximum electrical load specified in the Agreement for Electric Service may not be less than the sum of Customer's normal load plus the load that may be carried all or part of the time by Customer's generator or prime mover or other source of energy. Notice Service hereunder is subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Electric Service. VVVJ j ,(/. q, �" f�If®;�w '1 des ® 1999 Texas Utilities Electric Company AO ®/ 07C �8' Q 1 Rate Schedules 29.28 *4121-4 X71 CSI STEPHEN J. HOULE TEXAS UTILITIES ELECTRIC COMPANY DIRECT TESTIMONY OF STEPHEN J. HOULE WITNESS FOR TEXAS UTILITIES ELECTRIC COMPANY 1. POSITION AND QUALIFICATIONS ................................. 2 I1. PURPOSE OF TESTIMONY ....................................... 2 III. GENERAL DESCRIPTION OF PROPOSED RATES .................... 3 IV. DEVELOPMENT OF TIME -OF -USE PRICING PERIODS . . . . . . . . . . . . . . . . . 5 V. COST BASES & RATE DESIGN .................................... 9 VI. SPECIAL PROVISIONS OF PROPOSED RATES .................... a 13 Exhibits Exhibit SJH-1 - Proposed Rate GTU-M - General Service Time -of -Use - Municipality Exhibit SJH-2 - Proposed Rate RTU1-M - Residential Time -of -Use Service - Municipality Exhibit SJH-3 - Proposed Rate GTUC-M - General Service Time -of -Use Voluntary Curtailable - Municipality Exhibit SJH4 - Proposed Time -of -Use Rates Pricing Periods Exhibit SJH-5 - TU Electric System Load Exhibit SJH-6 as System Monthly Peak Demands Exhibit SJH-7 - Rates RTU1-M, GTU-M, and GTUC-M - Calculation of Facilities Charges Exhibit SJH-8 - Rates RTU1-M, GTU-M, and GTUC-M - Price Determination for Pricing Periods 14 -1- Houle - Direct ago. gfna/ ex/vh;v !3,' 4/g' �s DIRECT TESTIMONY OF STEPHEN J. HOULE 1 1. POSITION AND QUALIFICATIONS 2 Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS, 3 A. My name is Stephen J. Houle. My business address is Energy Plaza, 1601 Bryan 4 Street, Dallas, Texas 75201. 5 Q. WHAT IS YOUR POSITION WITH TEXAS UTILITIES ELECTRIC COMPANY? 6 A. I hold the position of Rates Manager, 7 Q. PLEASE OUTLINE YOUR EDUCATIONAL BACKGROUND AND PROFESSIONAL 8 QUALIFICATIONS. 9 A. I graduated from the University of Notre Dame in May 1977, with a Bachelor of 10 Science degree in Electrical Engineering. In December 1979, 1 received the degree 11 of Master of Business Administration from the University of Dallas. I was employed 12 by Dallas Power & Light Company in June 1977. 1 worked in the Distribution Design 3 Division of the Engineering Department from June 1977 through December 1979, 14 the Regulatory Services Department from January through December 1980, and the 15 Rate Department from January 1981 through December 1983, In January 1984, 16 1 was named Supervisor, Rate Design for Texas Utilities Electric Company (TU 17 Electric). In March 1987, 1 was named Supervisor - Rate and Cost Analysis. In 18 October 1990, 1 was named to my current position of Rates Manager. 19 11, PURPOSE OF TESTIMONY 20 Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THIS PROCEEDING? 21 A. The purpose of my testimony in this proceeding is to support three new Time -of -Use 22 rates that TU Electric is proposing in order to provide its customers with additional 23 pricing options. These rates will offer enhanced Time -of -Use pricing to all of TU 24 Electric's Residential and General Service customers, providing these customers 25 increased flexibility to control their operating costs and may encourage innovative 26 Demand Side Management (DSM) activities by these customers. The Company .2_ Houle - Direct ORO. 47? -I 4eeye has pending before the Public Utility Commission of Texas, as Docket No. 17942, 2 an application for approval of materially identical rates to be applicable in those 3 portions of the Company's service area over which that Commission exercises 4 original jurisdiction. 5 III. GENERAL DESCRIPTION OF PROPOSED RATES 6 Q. PLEASE DESCRIBE THE THREE RATES YOU ARE PROPOSING, 7 A. Rate GTU-M, General Service Time -of -Use - Municipality, is applicable to 8 customers that are otherwise eligible for service under the Company's general 9 service rates (i.e., Rates GS, GP, and HV) and is attached as my Exhibit SJHA. 10 Rate RTU1-M, Residential Time -of -Use Service - Municipality, is applicable to 11 residential customers who are otherwise eligible for service under Rate R or Rate 12 RTU, and is attached as my Exhibit SJH-2. Rate GTUC-M - General Service Time - 13 of -Use Voluntary Curtailable - Municipality -- is applicable to those general service 14 customers eligible for Rate GTU-M that are willing to voluntarily curtail their loads 15 during times of system peak or short supply conditions. Rate GTUC-M is limited to 1,000 MW of total contracted load for the Company's 1999 peak load season and 17 to 2,000 MW for the 2000 peak load season, on a first-comeArst-served basis until 18 the total contracted load (i. e., the total of all Contract kW) reaches these maximums. 19 Rate GTUC-M is attached as my Exhibit SJH-3. Each of the proposed rates is 20 comprised of a customer charge, a facilities charge, a time -dependent energy 21 charge, a fuel charge, and a purchased power charge. 22 Q. WHAT ARE THE OBJECTIVES OF THE THREE PROPOSED RATES? 23 A. The objectives of the proposed rates are to: (1) provide customers with additional 24 flexibility regarding pricing options; (2) encourage customers to engage in effective 25 demand side management activities; and (3) reflect TU Electric's cost of service. 26 Q. HOW DO THE PROPOSED RATES PROVIDE CUSTOMERS WITH ADDITIONAL 27 PRICING FLEXIBILITY? 28 A. The proposed rates provide four pricing levels with eight distinct time -of -use periods 29 that offer an additional pricing option for a wide spectrum of residential, commercial, .3_ Houle = Direct b.4�4 4 i,' 070 (If )0&et$ 1 and industrial customers. Customers with minimal on -peak usage and customers 2 with the wherewithal to reduce on -peak load and/or shift load from on -peak to off - 3 peak periods can manage their cost of electric service under these rates. 4 Q. HOW DO THE PROPOSED RATES ENCOURAGE CUSTOMERS TO ENGAGE IN 5 EFFECTIVE DEMAND SIDE MANAGEMENT ACTIVITIES? 6 A. The proposed rates encourage demand side management (DSM) activities by 7 means of the price signals inherent in the rates. Consumption during the s Company's relatively few on -peak hours is discouraged by high energy prices. 9 Conversely, low off-peak pricing gives customers the incentive necessary to engage 10 in load shifting from on -peak to off-peak periods. Customers who can reduce their 11 loads during the on -peak hours specified in these rates and/or who can shift their 12 loads from the on -peak hours to the off-peak hours can achieve considerable 13 savings as a result of their actions. The Company's non -participating customers will 14 also benefit from these DSM measures that reduce the need for additional, and 15 costly, generating resources strictly to serve on -peak loads. a.6 Q. HOW DO THE PROPOSED RATES REFLECT TU ELECTRIC'S COST OF 17 SERVICE? 18 A. The energy pricing provisions of these rates are designed to recover the Company's 19 annual production revenue requirement as set forth in the Company's last general 20 rate case, Docket No. 11735. Similarly, the proposed rates also include cost -based 21 customer charges as well as a facilities charge designed to recover the costs of the 22 Company's transmission and distribution facilities. As a result, these rates are 23 designed to be revenue neutral. 24 Q. HOW DO THESE PROPOSED NEW RATES DIFFER FROM THE COMPANY'S 25 EXISTING TIME DIFFERENTIATED RATES? 26 A. TU Electric's existing time -of -day option contained in Rates GS, GP, and HV, is a 27 demand -based time -of -day option that provides for a reduction in the demand billing 28 for off-peak demand. The proposed time -of -use rates replace the demand charge 29 pricing provisions with an energy -based pricing schedule that is applicable to a set .4- Houle = Direct �d A e /40 W ell Atf CS of pre -determined pricing periods. This energy -based pricing provides the customer 2 with additional flexibility in pursuing demand side management activities and in 3 controlling costs. For residential customers, Rate RTU1-M offers an expanded 4 menu of time -of -use energy prices in addition to the on-peak/off-peak energy prices 5 offered under existing Residential Time -of -Use, Rate RTU, 6 The proposed rates also include a facilities charge that recovers the system 7 costs associated with transmission and distribution facilities. In the existing rates, g these facilities costs are rolled into the energy charges for those customers with 9 non -demand billing and are contained in the demand charge (along with production 10 costs) in rates with demand billing. 11 IV. DEVELOPMENT OF TIME -OF -USE PRICING PERIODS 12 Q. PLEASE DESCRIBE THE TIME -OF -USE PRICING PERIODS INCLUDED IN THE 13 PROPOSED RATES, 14 A. The proposed tariffs contain an identical table that classifies each weekday and .5 weekend hour into one of four pricing periods, denoted as Pricing Periods 14. An enlarged version of this table is included as Exhibit SJH-4. 17 Q. HOW WERE THESE TIME -OF -USE PERIODS DETERMINED? 18 A. The analyses described below identified four distinctive load groups based on the 19 relationship of both the average hourly load and the maximum hourly load to the 20 annual system peak demand. A summary of the system load data that were used 21 to determine these time -of -use pricing periods are shown in Exhibits SJH111115 and 22 SJH-6, 23 Q. HOW DID YOU DETERMINE WHICH HOURS TO INCLUDE IN EACH PRICING 24 PERIOD? 25 A. The classification of each hour was based on an assessment of three primary 26 factors: (1) the average load for each hour in a given month as a percentage of the 27 Company's annual system peak; (2) the maximum load for each hour in a given 28 month as a percentage of the Company's system peak demand; and (3) simplifying 29 - -the application of Rates GTU-M, RTU1-M, and GTUC-M to the maximum extent Houle - Direct L? . tyf- lel FwXhi*h;y e d7,,r 11 " 1 possible. 2 Q. HOW WERE THE AVERAGE HOURLY LOADS USED TO DEVELOP THE 3 PRICING PERIODS IN THE PROPOSED RATES? 4 A. The Company's average hourly load (as a percentage of the annual peak load) was 5 analyzed for each month in the three-year period ending in December 1996, to 6 determine the hourly variation of the load and the average hourly load compared to 7 the annual peak load. The main conclusions that can be drawn from a review of 8 Exhibit SJH-5 are as follows: 9 (1) The average hourly loads in the months of December - February to exhibit both a morning and an afternoon peak, with a maximum 11 average weekday load of about 60% of the Company's peak load. 12 (2) The average hourly loads in the months of March and November 13 exhibit a load pattern with relatively minor morning and evening peaks 14 of about 55% of the annual peak. 15 (3) The average hourly loads in the months of April and October exhibit �6 a load pattern with a fairly constant average weekday load of about 17 55% of the peak. 18 (4) The average hourly loads in the months of May and September, for 19 both weekdays and weekends, exhibit a load pattern that is very 20 similar to the Company's traditional summer load pattern, but at lower 21 percentages of the Company's peak load (about 70% to 75% of the 22 annual peak). 23 (5) The average hourly loads in the months of June - August exhibit the 24 Company's familiar summer load pattern characterized by a rapid 25 increase in load beginning at 5:00 a.m. to 6:00 a.m., peaking at 26 5:00 p.m., and gradually decreasing, but remaining at relatively high 27 levels, throughout the remainder of the day. The average peak 28 weekday load during June - August is about 85% to 90% of the 29 annual peak load, and the average peak weekend load is about 75°f° -6. Houle - Direct 0,ev. , ?'df/ 4� jui e 100 61 1/9 1 to 80% of the annual peak. 2 Q. DOES THE AVERAGE HOURLY LOAD DATA FOR EACH MONTH PROVIDE A 3 SUFFICIENT BASIS FOR DETERMINING WHICH HOURS SHOULD BE 4 INCLUDED IN EACH PRICING PERIOD? 5 A. No. While the average hourly load in each month provides a reasonable starting 6 point for such a determination, the averaging process often conceals the peak load 7 requirements in a given month. These peak load requirements result from weather- s related fluctuations in the Company's load. For example, the highest average 9 hourly load in February (1994-1996) is about 60% of the annual peak demand. 10 However, from February 1 through February 5, 1996, the hourly load exceeded 70% 11 of the annual peak demand in 59 hours and 75% of the annual peak demand in 26 12 hours. Clearly, the average hourly load does not capture the peak load 13 requirements of the TU Electric system and, as such, are not sufficient to form the 14 sole basis for the assignment of hours into time -of -use pricing periods. 15 Q. HOW WERE THE MAXIMUM HOURLY LOADS USED IN THE DEVELOPMENT OF :6 THE PRICING PERIODS IN THE PROPOSED RATES? 17 A. The hourly loads for the peak day(s) in each month of 1996 were analyzed to 18 determine how the peak loads in each month relate to one another with respect to 19 the magnitude of the monthly peak demand and the daily load patterns experienced 20 in each month. As a result, common load relationships were noted in four distinct 21 monthly groups: (i) December - March; (ii) April, October, and November; (iii) May 22 and September; and (iv) June - August. The main conclusions that can be drawn 23 from a review of Exhibit SJH-6 are as follows: 24 (1) The maximum hourly loads in the months of December - March 25 exhibit both an morning and an afternoon peak, with the maximum 26 load of about 80% of the Company's peak load. 27 (2) The maximum hourly loads in the months of April, October, and 28 November do not deviate significantly from the average values. 29 (3) The maximum hourly loads in the months of May and September, -7- Houle - Direct ► % i approach 85% to 95% of the annual peak. 2 (4) The maximum hourly loads in the months of June - August exhibit the 3 same pattern as the average hourly load pattern for these months, but 4 at a higher percentage of the Company's peak load. 5 Q. HOW DID THE NEED FOR SIMPLIFYING THE APPLICATION OF THE 6 PROPOSED RATES AFFECT THE DEVELOPMENT OF THE PRICING PERIODS? 7 A. Rates with an overly -complex pricing structure typically discourage customer s acceptance. One way to simplify these rates is to limit the number of times per year 9 that the pricing period changes. The proposed rates are limited to weekday and 10 weekend pricing periods in four seasonal groups. In addition, the two pricing 11 periods with the highest prices (Pricing Periods 3 and 4) occur only in the five 12 consecutive months of May - September. The simplicity of these rates is also 13 enhanced by having as many pricing periods throughout the year as possible begin 14 or end at certain "key" hours (e.g., as shown in Exhibit SJH-4, many pricing periods 15 begin at 10:00 a.m. or 2:00 p.m, and many pricing periods end at 2:00 p.m. or 10:00 6 p.m.). The Company has attempted to strike a balance between the multiple pricing 17 periods needed to send proper pricing signals and the need to simplify the 18 application of the rates as much as possible. Also, meter costs and technology 19 must be considered. The proposed rate structure can be administered using 20 existing meter technology. 21 Q. HOW WERE THE HOURS IN A GIVEN MONTH OF THE YEAR ASSIGNED TO 22 THE FOUR PRICING PERIODS? 23 A. Pricing Period 1 represents the hours for which the Company's average load is less 24 than about 60% of its annual peak demand and for which the maximum load does 25 not consistently exceed about 66% of the annual peak demand. For example, as 26 shown in Exhibit SJH4, all hours in the months of April, October, and November are 27 in Pricing Period 1. Pricing Period 1 contains 5,880 hours, or about 67.1% of the WOO hours in a year. 29 Pricing Period_ 2__includes: _(i) the peak load hours during the months of _g. Houle - Direct OR ,0 December - March, (ii) some of the "shoulder" load hours in May - September, and 2 (iii) the weekend peak hours in the months of May and September. Pricing Period 3 2 represents the hours for which the Company's average load is typically about 60% 4 to 70% of its annual peak demand, although for relatively few hours during the 5 winter months, the hourly load can exceed 80% of the Company's traditional 6 summer peak load. These relatively few high load hours are offset by the number 7 of winter days when the maximum hourly load is less than 60% of the system peak 8 load. The maximum hourly load in this period typically ranges from about 66% to 9 about 80% of the annual peak demand. Pricing Period 2 contains 1,640 hours, or 10 about 18.7% of the hours in a year. 11 Pricing Period 3 includes: (i) the peak load hours during the months May - 12 September, (ii) the weekend peak load hours in the months of June - August, and 13 (iii) some of the "shoulder" load hours on weekdays in June - August. Pricing Period 14 3 represents the hours for which the Company's average load is between 70% and 5 80% of the annual peak demand and for which the maximum load is typically about 1 80% to 92% of the annual peak demand. Pricing Period 3 contains 854 hours, or 17 about 9.7% of the hours in a year. 18 Pricing Period 4 includes the peak load hours (weekdays from 2:00 p.m. to 19 8:00 p.m.) during the months June, July, and August. Pricing Period 4 represents 20 the hours for which the Company's average load is greater than 80% of the annual 21 peak demand and for which the maximum load is typically more than about 92% of 22 the annual peak demand. During this period, the Company's costs are usually the 23 highest due to the need to use additional peaking capacity for extended periods in 24 order to meet its load. Pricing Period 4 contains 384 hours, or about 4.4% of the 25 hours in a year. 26 V. COST BASES & RATE DESIGN 27 Q. PLEASE EXPLAIN THE BASIS FOR THE MONTHLY CUSTOMER CHARGES IN 28 THE PROPOSED RATES, 29 - A. The customer charges in Rate GTU-M vary according to the type of service required .g_ /� p+'Houle - Direct i/ 4/ • v lfvl to �l a �,� 1 (i.e., secondary, primary, or transmission) and are the same as those for the 2 Company's General Service time -of -use rates approved in Docket No. 11735. The 3 customer charge proposed for Rate RTU1-M, Residential Time -of -Use Service - 4 Municipality, is $9.00 per month. TU Electric has an existing Residential Time -of - 5 Use Rate (TU Electric's Rate RTU - Residential Time -of -Use Service, a two-step 6 time -of -use rate), which would remain in effect after the approval of the new rate, 7 that has a customer charge of $9.00 per month. The proposed customer charge in 8 Rate RTU 1-M would make the two charges the same and would simplify customers' 9 ability to choose between the two rate options. The customer charges in Rate 10 GTUC-M also vary according to the type of service required and are equal to the 11 sum of the Rate GTU-M customer charges plus a $200 charge to recover the cost 12 of additional metering and communications equipment and the administrative costs 13 associated with curtailable service. 14 Q. WHAT IS THE BASIS FOR THE FACILITIES CHARGES IN THE PROPOSED 15 RATES? 6 A. The Facilities Charges are based on the Company's unbundled transmission and 17 distribution costs, adjusted for losses. These charges are applied to the higher of 18 the customer's maximum annual demand or contract demand. The calculation of 19 the facilities charges for secondary, primary, and transmission voltage customers 20 for Rates RTU1-M, GTU-M, and GTUC-M are as shown in Exhibit SJH-7. 21 Q. WHAT IS THE PURPOSE OF THE $1.00/KW FACILITIES CHARGE FOR 22 DEMAND IN EXCESS OF THE CONTRACT DEMAND? 23 A. This charge is designed to partially recover the costs associated with possible 24 equipment failures and related engineering studies, and with the administrative work 25 associated with reevaluating and recontracting for higher electric loads, when the 26 customer places a higher demand on the Company's facilities than the customer 27 has contracted for. This charge also acts as an incentive to customers to adjust 28 their contractual arrangements with the Company, so that the types of expenses 29 mentioned above can be avoided. This provision is identical to the $1/kW charge .gyp. Houle - Direct OBC). 999 /s, "Xhr`bw "op ice, i'ke 2ze 1 for demand in excess of the contact demand that was approved in Docket No, 2 11735 for the Company's General Service rates. 3 Q. HOW WERE THE ENERGY CHARGES IN RATE GTU-M DERIVED FOR EACH OF 4 THE FOUR PRICING PERIODS, AS SHOWN IN EXHIBIT SJH-1? 5 A. The calculations of the energy prices in Rate GTU-M are shown in Exhibit SJH-8. 6 These calculations are based on the Company's demand and energy usage data 7 for the 12 months ending in December 1996. The methodology used to determine 8 these charges can be summarized as follows: 9 (1) Calculate the average of the maximum demands in each month, for to each pricing period, from the data tabulated in Exhibit SJH-8, Sheet 11 3. For example, the maximum monthly demands during Pricing 12 Period 4 for the three months with Pricing Period 4 hours (June - 13 August) are 19,382 kW, 19,668 kW, and 19,268 kW, respectively. 14 Thus, the average monthly maximum demand for Pricing Period 4 is 15 19,439 kW (see column [1] of Exhibit SJH-8, Sheet 1). .6 (2) Develop a demand allocation percentage for each of the four Pricing 17 Periods based on the ratio of the average monthly maximum demand 18 for each pricing period to the total of the average monthly maximum 19 demands for Pricing Periods 1-4 (67,640 kW). Thus, the Demand 20 Allocator for Pricing Period 4 is 19,439 kW divided by 67,640 kW, or 21 28.74% (see column [2] of Exhibit SJH-8, Sheet 1). 22 (3) Determine the number of hours in each pricing period (see column [3] 23 of Exhibit SJH-8, Sheet 1). 24 (4) Allocate the system -wide Annual Production Revenue Requirement 25 (excluding fuel) of $2.743 billion from the Company's latest Public 26 Utility Commission -approved functionalized cost -of -service study 27 (based on the Final Order in Docket No. 11735) to each pricing 28 period, by multiplying the total revenue requirement by the demand 29 allocator for each pricing period. For example, the Revenue -11- Houle - Direct OR0 . to -r' �� A r,..., 1 Requirement applicable to Pricing Period 4 is 28.74% of $2.743 2 billion, or approximately $788 million (see column [4] in Exhibit SJH-8, 3 Sheet 1). 4 (5) Determine the number of kilowatt-hours consumed during each of the 5 four pricing periods (see column [5] in Exhibit SJH-8, Sheet 1). 6 (6) Calculate the unit charges for each pricing period by dividing the 7 revenue requirement for each pricing period (column [4] in Exhibit s SJH-8, Sheet 1) by the number of kilowatt-hours in each pricing 9 period (column [5] in Exhibit SJH-8, Sheet 1). For example, for 10 Pricing Period 4, the energy charge is $788 million divided by 6.362 11 billion kWh, or 12.390/kWh. 12 (7) Adjust the unit charges for each pricing period by the appropriate loss 13 factor to determine the energy charges for service at secondary, 14 primary, and transmission voltages. These loss factors, and the 15 energy charges for each voltage level and pricing period, are shown .6 in Exhibit SJH-8, Sheet 2. 17 Q. HOW WERE THE ENERGY CHARGES IN RATE RTU1-M DERIVED FOR EACH is OF THE FOUR PRICING PERIODS, AS SHOWN IN EXHIBIT SJH-2? 19 A. The energy charges in each pricing period in Rate RTU1-M were determined by the 20 same methodology described above for Rate GTU-M. 21 Q. HOW WERE THE ENERGY CHARGES IN RATE GTUC-M DERIVED FOR EACH 22 OF THE FOUR PRICING PERIODS, AS SHOWN IN EXHIBIT SJH-3? 23 A. The energy charges in each pricing period in Rate GTUC-M were determined 24 by applying a 45% reduction to the system production cost. Otherwise, the 25 energy charges were determined by the same methodology described above for 26 Rate GTU-M. 27 Q. WHAT IS THE BASIS FOR THIS REDUCED ENERGY CHARGE? 28 A. The energy charges in Rate GTUC-M were designed to recover the same 29 percentage of the Company's production costs as is recovered from the Company's -12- Houle - Direct 1,- °*/ a 10a- e 21/ 0�p fr/'y P1ej 1 Noticed Interruptible Rate.' This is an appropriate basis for the energy charges in 2 Rate GTUC-M because the value of curtailable service to the Company is 3 essentially the same as that of noticed interruptible service. 4 Q. HOW WILL THE COST OF FUEL BE RECOVERED UNDER RATES GTU-M, 5 RTU1-M, AND GTUC-M? 6 A. As shown in Exhibits SJH-1, SJH-2, and SJH-3, the applicable fuel cost is 7 determined in accordance with the Company's Rider FC, which is applicable to the s Company's standard Residential and General Service rates. 9 Q. HOW WILL THE COST OF PURCHASED POWER BE RECOVERED UNDER 10 RATES GTU-M, RTU1-M, AND GTUC-M? 11 A. As shown in Exhibits SJH-1, SJH-2, and SJH-3, purchased power costs are 12 determined in accordance with the Company's Rider PCR. This is the same cost 13 recovery mechanism that is applicable to the Company's standard Residential and 14 General Service rates. 15 VI, SPECIAL PROVISIONS OF PROPOSED RATES 6 Q. PLEASE EXPLAIN THE AGGREGATE BILLING OPTION PROPOSED IN RATES 17 GTU-M AND GTUC-M. 18 A. This option allows customers with several points of delivery to receive a single 19 monthly bill, provided the following criteria are met: (i) all points of delivery are billed 20 on the same voltage level service; (ii) all points of delivery are on the same billing 21 cycle; and (iii) all points of delivery are under the same ownership. A one-time 22 charge of $25 for each point of delivery is made under this billing option in order to 23 recover the administrative costs associated with this service. 24 Q. PLEASE DESCRIBE THE BASES FOR THE CURTAILMENT PROVISIONS 25 INCLUDED IN RATE GTUC-M. 26 A. Rate GTUC-M limits the curtailment of the customer's load to no more than 700 Noticed Interruptible Service (NIS) includes both a demand charge (that is 50% of the demand charge for comparable firm service rate) and an energy charge, with 5% of the demand -related production costs recovered in the energy charge. Hence, the net production cost discount for NIS customers is 45%. A3_ Houle - Direct er 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Company is required by the ERCOT Independent System Operator to interrupt -14- Houle - Direct , e oue Pic hours in the last 12 months and no more than 12 hours in any 24 hour period, except that the 12 hour limit is not applicable during system emergencies when the Company has made public pleas to restrict electric energy usage to essential needs because of an area or statewide shortage of electric power and/or energy. These provisions are identical to those applicable to noticed interruptible service, as contained in the Company's Rider I. In lieu of interrupting equipment, Rate GTUC- M contains an energy charge applicable during a curtailment period of 70¢ per kilowatt-hour unless the customer actually curtails at least 35% of its total load throughout the curtailment period, in which case, the energy charge is 50¢ per kilowatt-hour. The 35% minimum voluntary curtailment in order to qualify for the 50¢ energy price, rather than the 70¢ energy price, is applicable to the total load at each individual point of delivery if the customer has not selected the Aggregate Billing Option or to the total load of all of a customer's points of delivery under Rate GTUC-M that are aggregated under the Aggregate Billing Option provided for in Rate GTUC-M, with total load being defined as the customer's 15 -minute demand recorded immediately prior to the customer's receipt of notice from the Company of the curtailment period. This alternative curtailment period energy price is purposed to provide further encouragement to the customer to curtail load during a curtailment period, without imposing such a high price as to make the marketing of this rate impossible. This provision is designed to replace the active control hardware required for service under Rider I and assures that the Company will be able to recover the costs of capacity and energy used by a Rate GTUC-M customer in the event the customer chooses not to curtail load when requested to do so. This pricing level also represents a price that will exceed the outage costs of most customers and, in so doing, sends the proper price signal to any customer that might otherwise ignore a curtailment request. The Company will request customers served under Rate GTUC-M to curtail their loads within 15 minutes after either of the following occurrences: (i) when the 2 3 4 5 6 7 8 9 10 11 12 13 14 15 6 17 18 19 20 21 22 23 24 (noticed) interruptible loads, or (ii) when the Company's hourly load is at or above 95% of the estimated system peak load for the current calendar year. In the event that the actual system peak load exceeds the estimated system peak load, the actual system peak load automatically becomes the new estimated system peak load on the next day. Q. PLEASE EXPLAIN THE BASES FOR SPECIAL CONDITIONS (c) AND (d) IN RATE GTUC-M. A. The initial three-year term of service is required to assure some reasonable level of cost recovery for the Company's facilities used to serve the curtailable load. The initial three-year term and the one-year termination notice allow the Company the time to adjust its planning process associated with securing capacity resources. These terms are also needed to prevent customers from attempting to "game the system" by switching back and forth between firm service and curtailable service. Special Condition (c) requires the customer to pay the difference between the billings under Rate GTUC-M and what the billings would have been under the applicable firm service rate (i.e., Rate HV - High Voltage Service, Rate GP - General Service Primary, or Rate GS - General Service Secondary, depending upon the voltage level of the service provided at the point of delivery) for a period not to exceed three years if the customer decides to switch from Rate GTUC-M during the initial term of the Agreement for Electric Service and not to exceed two years if the customer decides to switch from Rate GTUC-M during a subsequent term. Interest would also be payable on such difference at the rate applicable to undercharges. Q. DOES THIS CONCLUDE YOUR DIRECT TESTIMONY? A. Yes, it does. A 5_ Houle - Direct Eoyhibh� *4 pa e « 7 ole STATE OF TEXAS COUNTY OF DALLAS BEFORE ME, the undersigned authority, on this day personally appeared Stephen J. Houle, who, having been placed under oath by me, did depose as follows: My name is Stephen J. Houle. I am of legal age and a resident of the State of Texas. The foregoing direct testimony and the attached exhibits offered by me are true and correct, and the opinions stated therein are, to the best of my knowledge and belief, accurate, true and correct. SUBSCRIBED AND SWORN TO BEFORE ME by the said Stephen J. Houle this 4z— day of , 1999. Public, State of Texas M16" !I 40 qq. Exhrhd yl ACJ rel 0 ■® H Exhibit SJH-4 Sheet 1 of 1 L s- ch a� 0 .c .tom V ®LM o ¢ a o Q �r rn o O O c N d' eF til Q Q N T N Z Z o `d' O N 'i atS ot5 otS <i± >1 pp OOcu OO N Q qmT N N Y z „ N pT N co N S� p to O c N (1) Q Q Q N z Z Z N M ai T L Qo O NOw O 0 N N tll Z Z o NN qt `- N N a) Q Q Q Q Z Z Z Z LM cn Q. m O Z7 < Q Q N tl) Z Z Z N T tU 06 G N 0 ® Q � p (c CL c � tU cc N 0� < OZ -)¢ Exhibit SJH-4 Sheet 1 of 1 Ul) In ... 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X O. 6 ' �ba �. w 0 Exhibit SJH-6 Sheet 4 of 4 iq CD lea )189d lenuuV 10 °fo iil 0 M 0 7 i i 0 M 0 7 Exhibit SJH-7 Sheet 1 of 1 TEXAS UTILITIES ELECTRIC COMPANY Rates RTU1-M, GTU4, and GTUC=M Calculation of Facilities Charges Transmission Costs Annual Transmission Rev. Req.' Class NCP ( kW )' Avg. Class NCP ( kW) 2 Avg. of Customer Max. Demand ( kW ) 2 Residential $89,491,596 8,254,252 4.36 10.63 General Service Secondary Primary Transmission $75,998,555 6,409,748 22.72 30.48 $143447,382 1,232,688 181.44 210.41 $7,705,718 640,728 10,775.90 11,507.24 Annual Cost $10A065 Monthly r $0,370 i . f:$0,9385 General Service Distribution Costs Residential Secondary Primary Transmission Annual Distribution Rev. Req.' $343,948,404 $258,4771275 $30,434,833 $902,854 Class NCP ( kW )' 89254,252 61409,748 11232,688 640,728 Avg. Class NCP { kW) 2 4.36 22.72 181.44 10,775.90 Avg. of Customer Max. Demand ( kW) 2 10.63 30.48 210.41 11,507.24 Annual Cost / kW 3 $17.0911 Monthly Cost/ kW $1.4243 Total Monthly Cost/ kW $1.7949 Demand -Related Loss Factor 1.07091 i i f$212904 $11*3196 $2,5049 $1,7742 $0,1100 1.07091 1.048861 1.026417 Monthly Facilities Charges ($/kW) $1.92 $147 $2.74 $1.08 1 - Source: Functionalized Cost of Service Study based on the Final Order in Docket No. 11735. 2 - Avg. Class NCP and Avg. of Customer Max. Demand are based on the Company's load research data for the 12 months ending in December 1996. 3 - The Annual Cost per kW for each cost component is determined as follows: Cost Component = ( (Revenue Requirement) / (Class NCP) j " [ (Avg. Class NCP) / (Avg. of Customer Maximum Demand) 094D . q9� I w Exhibit SJH-8 Sheet 1 of 3 O O O O O ^ o 0 0 0 0 to a m O O r iC N LO 00 0) 'd N M r%+ N O et m L Z CO r N co Lr)E Q O E m G. ) o cn ,O �yLa N C U) V tLl r N N r tt! c) E o (.} Q„ 0) M t.0 to M C+^? 0? CO O O X uj = d C'7 N N M N ai cn N a U _ ti m c t� r O C3 .r 0) c0 t0 c� d ? w Z m V Q. a' O N um)(0 h- d• cn C" ev W � ~U? 6 (0 LO � N y 0 °' g O "- L n L W E D M CD C LLJ = 00 to LO00 00 cffi O .i L C+? CX) CS) O (�� U i% N v d Ln 00 O N y O CL 00 C f4 C(D tv0 EM 4) CO .0 N N N to V O O O 4 O N ?+ N O E V ® tai t ) O N 'm-' ~ t06 O '-' \ N N N N ami v 2 L Q '� L y 00 0 a Q L U L 0 � p � m O 'A cn O 0t6 C ca U v m C E �^ O to CO O O to >m ami a m M O r 00 d m m N r O d 'S1► dw Ci r r to CC m f� P� til r r r r t0 O U p N X poi d N E (O.! rc IL- U.I=- U d r N M d N z O .� N E= � r �W CL n- e d s O C'7 r r-, = O) 3: t 7 ti N O t0 G R Y nj LO Ce) r u = `- U v. O O O O O ^ o 0 0 0 0 to a m O O r iC N LO 00 0) 'd N M r%+ N O et m L Z CO r N co Lr)E Q O E m G. ) o cn ,O �yLa N C U) V tLl r N N r tt! c) E o (.} Q„ 0) M t.0 to M C+^? 0? CO O O X uj = d C'7 N N M N ai cn N a U _ ti m c t� r O C3 .r 0) c0 t0 c� d ? w Z m V Q. a' O N um)(0 h- d• cn C" ev W � ~U? 6 (0 LO � N y 0 °' g O "- L n L W E D M CD C LLJ = 00 to LO00 00 cffi O .i L C+? CX) CS) O (�� U i% N v d Ln 00 O N y O CL 00 C f4 C(D tv0 EM 4) CO .0 N N N to V O O O 4 O N ?+ N O E V ® tai t ) O N 'm-' ~ t06 O '-' \ N N N N ami v 2 L Q '� L y 00 0 a Q L U L 0 � p � m O 'A cn O 0t6 C ca U v m C E �^ O to CO O O to >m ami a m M O r 00 d m m N r O d 'S1► dw Ci r r to CC m f� P� til r r r r t0 O U p N X poi d N E (O.! rc IL- U.I=- U d r N M d N z O .� N E= � r �W CL n- co r` N r N coNT r CD co N r 0 di UO 00 r CU co co co O co Cfi O Uf7 M co co M N d' O I• O1 O r O v V) co O UD O r Is Exhibit SJH-8 Sheet 2 of 3 aY r ;1' s+ v i r � 0 Y V = v co r` N r N coNT r CD co N r 0 di UO 00 r CU co co co O co Cfi O Uf7 M co co M N d' O I• O1 O r O v V) co O UD O r Is Exhibit SJH-8 Sheet 2 of 3 aY r ;1' s+ i r co r` N r N coNT r CD co N r 0 di UO 00 r CU co co co O co Cfi O Uf7 M co co M N d' O I• O1 O r O v V) co O UD O r Is Exhibit SJH-8 Sheet 2 of 3 aY r ;1' s+ TEXAS UTILITIES ELECTRIC COMPANY Monthly Peak Demands By Pricing Period Maximum Demand (MVV) In Pricing Period Month 1 2 3 4 January 15,160 15,826 - - February 15,371 15,775 - March 13,355 155162 - - April 13,746 - - - May 14,531 16,308 17,804 - June 13,189 16,133 18,359 19,382 July 139694 16,856 18,746 19,668 August 139150 16,477 18,013 19,268 September 14,719 15,884 169601 - October 13,328 - - November 14,316 - - - December 15,605 16,624 - Average 14,180 16,116 17,905 19,439 Exhibit SJH-8 Sheet 3 of 3 r