Power Cost Adjustment Factor

Power Cost Adjustment Factor – Schedule PCAF

Applicable: Entire service area--All rate schedules

Purpose. The purpose of this schedule is to accurately recover from Weatherford Municipal Utility System (WMUS) customers on a monthly basis the cost of wholesale power purchases charged by the WMUS wholesale power provider(s). All wholesale power costs charged by the WMUS wholesale power provider(s) shall be billed and recovered by the WMUS on its monthly billing. Wholesale power costs shall be all the costs included, and only the costs included, on the WMUS monthly wholesale power invoice(s) received from the WMUS wholesale power provider(s). Wholesale power costs shall include, but not be limited to, energy costs, fuel costs, transmission costs, ancillary service costs, ERCOT costs, balancing energy costs, meter charges, and delivery point charges. Additionally, the Weatherford Municipal Utility Board (WMUB) will defer amounts as specified by the Deferral Policy below for the sole purpose of managing wholesale costs incurred from the WMUS wholesale power provider(s) and mitigating rate changes related to wholesale costs to the customers.

Application. The energy charges stated in all rate schedules applicable for the current billing month will be increased or decreased by the Power Cost Adjustment Factor (PCAF) amount which shall be the average cost of purchased power plus production cost per kilowatt hour sold for the previous month exceeds $0.0150. The formula for calculating PCAF shall be as follows:

PCAF = (((PPC + PC + APM)/KWHP) –$0.0150) +/- ADF

Definitions.

PCAF = Power Cost Adjustment Factor

PPC = Purchased power cost for the most recent month for which final costs are available.

PC = Production cost for the most recent month for which final costs are available.

APM = Adjustment for previous month over/under PCAF recovery.

KWH = Total kilowatt hours purchased, previous month.

ADF = Annualized deferral factor based on a 12 month rolling average of projected costs and sales variances keeping a rate stabilization fund minimum as set by the Utility Board and revised as needed.

Deferral Policy. When calculating the PCAF for application to all rate schedules, the WMUB may also determine an amount to be deferred. The purpose of any deferral shall be to mitigate rate changes that are directly attributed to wholesale power cost changes and to average the PCAF to retail customers. The funds retained in deferral will be earmarked for use only in adjusting PCAF and mitigating rate changes directly attributed to wholesale power cost changes. The deferral amount on a monthly basis shall be no less than $500,000 and no greater than $3,000,000.

The fiduciary responsibility of appropriately accounting for any deferral amount shall be borne by the City of Weatherford Finance Director. The Director of Utilities on a monthly basis shall assess the deferral, whether over-collection or under-collection, in conjunction with the monthly PCAF calculation proposal. The Director of Utilities shall then make a recommendation to the WMUB, with oversight and approval functions to be performed by the City of Weatherford Finance Director, Assistant City Manager-Utilities of the City of Weatherford, and the City Manager of the City of Weatherford.

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