6.7.ERMUSR 04-17-2008 - Laserfiche WebLink

Home Browse Search

Adding to the magnitude of PCA charges is significant growth in member energy sales beyond budget forecasts. Heating loads continue to grow, notably in the dual fuel program. Rates for this program fall far short of incremental costs, so the faster the growth in dual fuel sales, the more upward pressure will be placed on t' general service rate and PCA. We must address this rate issue prior to the next heating season. Please be assured that we are doing everything within our power to control these costs, but at the same time, be aware that much of these costs are uncontrollable due to higher than budgeted member energy usage. Based on what we are seeing, we must put much greater emphasis on our conservation programs. At the senior staff strategy session last week, we concluded that we should regard conservation as our first fuel. We will also continue to maintain plants to assure improved reliability during peak energy usage. With the Coal Creek Station Unit 2 forced outage lasting through March 7, the probability for continued PCA charges through the first quarter of 2008 is high. Natural gas prices, a primary driver of purchased power costs in the MISO market, have been unfavorable during the outage. The graph below shows the gas price trend for the past few months. ib.'4 12 ~6 t0 :24 7 2i 4 id 3 it OCT Oi WCC~vv OEfi .lAf~•08 f~8 MAR As of 03! R ~ R}$ ~ Hu~~troow X15 i~ 105 10 45 85 4 P5 T 65 Coal Creek Station Unit 2 was off line for approximately two weeks (last week of February and first week of March) due to hydrogen leakage in the generator. The leaks were found to be in the clips that attach to the generator bars rather than in the hoses that were a problem a few years ago. GE has identified the problem as a corrosion issue with the brazing material used in the attachment. Five leaks were fixed during the outage. The unit was back on line and is performing well at this time. Additional investigation with GE will be done to determine long term solutions. The effect of the Coal Creek Station outage alone on the February PCA is about $4.SM. We expect the effect on the March PCA to be about $4.9M.