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7 Rate and Finance Challenges <br />`~l~ . .. <br />Tie Municipal Utility is concerned about the rate impala of <br />putenrial environmental legislation. Implementation of re- <br />newable portfolio standards (RI'S) and potential legislation <br />or regulation to limit rarhon dioxide emissions are of partic- <br />ular concern.7he Municipal Utility has added wind resources <br />to its yeneratipn portfolio and currently provides 4 <br />percent of its energy sales from wind. Flowever, it also rec- <br />ognizes that (here has been a net cost to add these <br />resources. The utility is concerned that if RPS mandates 70 <br />percent to 3(} percent of energy requirements from renew- <br />ables, there may be a significant cost impart. Tltis cost <br />impact could he driven by numerous factors including higher <br />Capllal COStS dUe to InCI'caSP,(1 demitnd, increased UanSn11S- <br />sion requirements, and expanded operating challenge"s. <br />Potential carbon (fioxide legislation is a source of rate iml)act <br />anxiety for the Municipal Utility. t\ny proposal Io limit carbon <br />dioxide emissions will likely increase costs to the Municipal <br />Utility and its customers. This cost increase could be sub- <br />stantial. The challenge for the Municipal Utility is how to <br />prepare when the outcome is largely unknown. <br />'blur 1lunicijxd Utilil~ hats ahcath intj)Ict-x?ttk'tl SICj)S to tltiuti-~r jl5 <br />huwcrul,hlc Lnul;ranr to mininrirc• nc•~!atisr cost intlrtc•I Irum lrentl- <br />iu~ cuvironntcnlal rc~;nl;tlions. tielaliye lu the rate si(Ir of the <br />business, it has decided hr iucrcase its crrslonu'r a~y;uc•ness pre~~rauts <br />btu lnrlrue c•nslnnters h,r ch:ut};e. cyh:de~cr that ehanl;e n,•,ty he. 7•he <br />nlilily lint (Iccided lu inq,lcmm~t an "cuyironnu•ntal a(Ijuslrncnl" h) its <br />~alc schedules. "phis :older will he similar to a fiu•I or lnuc•hased power <br />adjusbncn(. 'fhc cnyirunnu•nlal adjustntcnt mill I)el;in appcarigt; on <br />hills inuncdiatcly, htrt the inili;tl aruututt of the ;tdjnstment will he <br />zero. "I'he uccy hills will incln<.Ie infornrttiun about the rationale li)r the <br />adjusbncnl (il will rellecl inc•rc:tsed rusts to meet new eurirounrcntal <br />rc~<;ulalirmsl. "I'hc• adjustnecnl ~yill he a shai~;ht pass-lhrunfh un a pcr- <br />k\1'h basis, applied erlualk to all costumer class(~s. As e•usts arc <br />incurrc(I, the adjuslnrcut will hr~;in lu impact (till ;unuunts, :ut<I the <br />bills syill inclodr specilic inli>rntaliun abutd the jttstilicalion and c:dcu- <br />laliun of the adjuslmeul. ']'he \lunicipal Utility ~yill also add <br />infitrneUion to its nurtnal cunuuuniraliuu outlets such ;ts its \I'eb site, <br />e-mail, mctlia unllcls :uul ronumutih organization prctc~nlutions. In <br />addiliuu, it has he t;nr, to imcsligalc uutre andenrpora,v con-numica- <br />tiunssuch at a hk~~, a Iracc•huuk page and'I\yitler. <br />18 Srr rEr~Nen 2009 <br />PUnLIC POWER <br />