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NAVFAC HAWAII
NAVFAC Hawaii
Electricity Rate Increases
FY13 & FY14
Presented by:
NAVFAC Hawaii
21 February 2013
2 Purchase Electricity
Agenda
I. Background
II. Current Situation
III. Way Ahead
IV. Questions and Answers
V. Break out
3 Purchase Electricity
Background
Electricity
• Purchased Electricity from HECO
• Dramatic increases in Fuel Costs since F...
4 Purchase Electricity
Background
• NAVFAC Utility Rate Includes:
– Purchased electricity cost
– Navy owned system; mainte...
5 Purchase Electricity
Background
History of Costs and Billing Rates
• HECO purchased utility rate increased 68%
(2008 – 2...
6 Purchase Electricity
Current Situation
102
94
106 108
126
156
148
215
168
185
232
283 278
103
85
106 100
120
138
156 153...
7 Purchase Electricity
Current Situation
NAVFAC Hawaii (Oahu) annual electricity
losses since FY09.
NAVFAC HAWAII ELECTRIC...
8 Purchase Electricity
FY-13
FY-14
Current Situation
8/22/2013
Revenue vs. Cost
Plan is to recover losses by end of FY14.
...
9 Purchase Electricity
Current Situation
• Full cost (losses) from FY11 through FY13
will be recovered through the DoN bud...
10 Purchase Electricity
Current Situation
• Full cost (losses) from FY11 through FY13
will be recovered through the DoN bu...
11 Purchase Electricity
NAVFAC Way Ahead
• DoN budget process on-going and final approved billing
rates are pending.
• Ant...
12 Purchase Electricity
Questions & Answers
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Nfh electricity rates brief 21 feb13

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  • Gap between ‘Revenue’ and ‘Expense’ for FY12 and FY13 are being recovered in FY14.Cost to maintain utilities delivery systems: Privatization Study Conducted 2003. Ruled economically beneficial to keep in-house, so we are a low cost proposition.
  • Transcript of "Nfh electricity rates brief 21 feb13"

    1. 1. NAVFAC HAWAII NAVFAC Hawaii Electricity Rate Increases FY13 & FY14 Presented by: NAVFAC Hawaii 21 February 2013
    2. 2. 2 Purchase Electricity Agenda I. Background II. Current Situation III. Way Ahead IV. Questions and Answers V. Break out
    3. 3. 3 Purchase Electricity Background Electricity • Purchased Electricity from HECO • Dramatic increases in Fuel Costs since FY10 – Asia Market – Environmental Requirements NAVFAC Utility Rates • Navy Working Capital Fund – Rates established to recover full cost – Rates adjusted every two years • Rate structure governed by DoD FMR and budget process • Stabilized to minimize ‘churn’ across the Navy
    4. 4. 4 Purchase Electricity Background • NAVFAC Utility Rate Includes: – Purchased electricity cost – Navy owned system; maintenance/recapitalization/overhead – Surcharge, if applicable • A surcharge (up to 6.25%) is added for all non- Defense Federal and private party customers. – 4% (fixed) to cover depreciation & interest – =< 2.25% (variable) for government personnel retirement benefits – Surcharge rate established annually per FMR Vol 11B, CH 11, Par 110109B
    5. 5. 5 Purchase Electricity Background History of Costs and Billing Rates • HECO purchased utility rate increased 68% (2008 – 2012) • Approved NWCF billing rate increased 18% (2008-2012) • NWCF has not recovered the full cost of providing electricity for customers. – Norm is to recover losses 2 years after the loss is incurred – Allow customers the opportunity to adjust budget plans.
    6. 6. 6 Purchase Electricity Current Situation 102 94 106 108 126 156 148 215 168 185 232 283 278 103 85 106 100 120 138 156 153 159 155 157 159 278 $0 $50 $100 $150 $200 $250 $300 FY… FY… FY… FY… FY… FY… FY… FY… FY… FY… FY11 FY… FY… Actual Cost/MWH Budgeted Cost/MWH Starting in FY07: purchase cost was based on Inflation factor. Budgeted vs. Actual Purchase Electricity Costs The budgeted purchased electricity rate used to set utility rate. $/MWH
    7. 7. 7 Purchase Electricity Current Situation NAVFAC Hawaii (Oahu) annual electricity losses since FY09. NAVFAC HAWAII ELECTRICITY HISTORICAL DATA ($M) FY PURCHASED ELECTRICITY LOSS 2009 ($14.1) 2010 ($12.6) 2011 ($49.6) 2012 ($82.2) 2013 - Budget ($40.7) TOTAL ($199.2) FY13 Rates recover FY14 Rates recover
    8. 8. 8 Purchase Electricity FY-13 FY-14 Current Situation 8/22/2013 Revenue vs. Cost Plan is to recover losses by end of FY14. 103 92 112 128 133 379 165131 106 124 178 215 205 210 0 50 100 150 200 250 300 350 400 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Revenue Expense $Million
    9. 9. 9 Purchase Electricity Current Situation • Full cost (losses) from FY11 through FY13 will be recovered through the DoN budget process. • FY14 Rate subject to final approval: FY12 Rate $/MWH FY13 Rate $/MWH FY14 Rate $/MWH (estimated) Increase FY13 to FY14 DoD 202 263 588 123% Non DoD* 214 280 625 123% * Based on 6.25% surcharge
    10. 10. 10 Purchase Electricity Current Situation • Full cost (losses) from FY11 through FY13 will be recovered through the DoN budget process. • FY14 Rate subject to final approval: FY12 Rate $/MWH FY13 Rate $/MWH FY14 Rate $/MWH Increase FY13 to FY14 DoD 202 263 588 123% Non-DoD Fed 202 264 589 123% Private Party 214 280 625 123%
    11. 11. 11 Purchase Electricity NAVFAC Way Ahead • DoN budget process on-going and final approved billing rates are pending. • Anticipate NAVFAC Hawaii will receive approved billing rates after President’s Budget is submitted, currently projected for March. • Letter will be issued to all customers with final approved rates. • Applicable surcharges will be included. • Conservation will reduce losses that must be recovered in future years.
    12. 12. 12 Purchase Electricity Questions & Answers
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