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<br />Adjustments: <br /> <br />For Power Factor: <br /> <br />If Western is required to pay for delivery system improvements associated <br />with power factor corrections, on its own system or the system of its wheeling <br />agents, which are attributable to conditions on the system of the customer, <br />Western will bill and the customer shall pay for such improvements. In <br />addition, there will be a monthly charge of one percent of the total power <br />costs from the SLCA Integrated Projects for each percent or major portion (0.5 <br />or greater) that the customer's power factor at the pOint of use falls below 95 <br />percent lagging or 95 percent leading at the time of its monthly peak at the <br />point of use. <br /> <br />IV. HISTORY OF POWER RATES <br /> <br />Since this is the initial IntegratE!d rate there are no historical rates <br />to discuss. The history of the individual project rates can be found in the <br />individual rate brochures. <br /> <br />V. PROPOSED POWER RATE <br /> <br />Results of the Integrated PRS using current fiscal year 1985 data and <br />estimated FY 1986 data based on the most current information available at the <br />time of the study indicates that a composite integrated rate of 10.25 mills per <br />kilowatthour is needed to meet the needs of the three projects. This rate will <br />allow the timely repayment of all costs assigned to the power function for each <br />project and establish a uniform rate for all customers. <br /> <br />The Integrated PRS indicates that a composite power rate of 10.25 mills <br />per kWh based on a 58.2 percent load factor, with components of $2.18 per kW- <br />month and 5.12 mills per kWh, would pay the annual operating expenses and <br />accomplish timely repayment of all costs assigned to the power function of all <br />three projects. It is proposed that these rates be adopted for the Integrated <br />Projects effective on or before the October 1987 billing period. <br /> <br />VI. POWER REPAYMENT STUDIES <br /> <br />A. Repayment Criteria. Power repayment studies are used to determine if <br />power revenues will be sufficient to pay, within the prescribed time periods, <br />all costs assigned to the power function. Repayment criteria are based on law <br />and policies established in DOE Order RA 6120.2. According to DOE Order RA <br />6120.2, power revenues are required to (1) repay power investment costs <br />including interest within 50 years, (2) repay power replacement costs including <br />interest within the service lives of the equipment, and (3) repay irrigation <br />investment costs assigned to power within the time allowed for repayment by <br />irrigation water users. <br /> <br />Separate power repayment studies were prepared for each of the projects <br />to establish their individual revenue requirements. The studies that were used <br />were the official 1985 Final PRS's modified to include revised 1986 projections <br />based on the 1986 data received to date. Projections for FY 1987 and beyond <br />were not changed. When the final 1986 data are available new studies will be <br /> <br />4 <br />