Title
Update on Fuel Levelization Balance and Reduction of Fuel Adjustment (B)
**Estimated Presentation Time 10 minutes**
**This item is informational.**
Explanation
The final fuel expenses and revenues have been posted for FY2015 and, as of September 30, 2015, the fuel levelization balance was approximately $16.9 million, which exceeds 10% of the annual fuel budget. Additionally, fuel and purchased power cost projections for FY2016 have been revised due to GREC not running recently, as well as favorable movement in the natural gas market, which also reduces the cost of gas generated power available for purchase from the market. Given these revisions, the General Manager for Utilities has directed that the Fuel Adjustment be reduced beginning in January 2016. The current Fuel Adjustment is $0.078 per kWh through December 2015 and will be lowered to $0.073 per kWh in January 2016. Staff will continue to monitor the expenses and loads to determine if additional reductions will be appropriate at any time in the future.
Recommendation:
Hear a brief presentation from staff to address the revisions to the fuel cost assumptions, the impact to the Fuel Levelization and the resulting customer bill reductions.