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~ ~~e <br />__ <br />,, <br />'~ <br />a e ~~, <br />~; <br />n <br />a <br />in n <br />a ce <br />a~ n <br />e es <br />Renewable energy, a sagging economy, aging infrastructure and other trials <br />put pressure on utility finances. <br />__ <br />Today, many public power utilities face common challenges operating in the chaotic <br />utility environment. How do you compare to the issues and solutions adopted by our <br />utility? <br />As a city-owned electric utility serving a community with a population of approxr <br />mately 75,000, the Municipal Utility is a theoretical but typical mid-sized municipal <br />utility. It has a peak demand of 200 MW and annual energy sales of 1 million kWh. Its <br />customers are mostly residential and commercial with some light industry and one <br />large manufacturing facility, which accounts for 25 percent of the annual energy sales. <br />The Municipal Utility meets its wholesale requirements through a combination of <br />owned generation and market purchases. It owns a portion of a large coal-fired base <br />load plant and has local peaking resources, and it is planning to add additional local <br />peaking resources in the near future. The utility is governed by an autonomous Utility <br />Board whose members are appointed by the City Council. <br />Looking forward, the Municipal Utility recognizes that there are many important is- <br />sues it will need to address. These issues often have a component that directly <br />impacts the utility's rates and charges to its customers. At a basic level, the Municipal <br />Utility is in the business of providing electric service to its customers. The revenue side <br />of this business is driven by the utility's rates and charges, which in turn can be de- <br />signed to affect customer usage behavior that can impact the cost side of the <br />business. The Municipal Utility has identified the following issues that will require rate- <br />related tactics as part of the utility's broad business strategy: <br />• Special rate programs, including conservation and demand response <br />• Net metering and backup power tariffs <br />• Renewable portfolio standards and carbon legislation <br />• arge customer/local employer incentives <br />• Municipal government cash requirements <br />• Infrastructure needs: debt vs. cash flow funding <br />• Overall rate strategy <br />~8 SEPTEMBER 2009 PUBLIC POWER <br />