Attachment D
Quarterly Financial Information Update
Based on the UAC recommendations, the reports for all three utilities now cover the
same reporting period. Therefore, financial data related to Electric purchases are based
on seven months actual and two months estimated costs for the period of February 1,
2005 - March 31, 2005, as bills have not been received. Transitioning to the ISO billing/
settlement regimen is the main cause of the delay in receiving the final electric bills from
NCPA. Gas and Water figures are based on nine months of actual data.
Electric
Retail Sales Units (kWh)
System Average Retail Rate
($/kWh)
Retail Sales Revenue
Purchase Cost
Operating Margin
FY 03-04
FY 04-05
Adopted
Budget
FY 04-05
Actual
Actual
958,025,890
$0.0729
Jul04-Mar 05
705,172,430
$0.0746
Jul04-Mar 05
710,997,625
$0.0753
$69,823,869
22,826,094
$46,997,775
$ 52,571,085
28,660,771
$ 23,910,314
$ 53,509,299
30,811,519
$ 22,697,780
Difference
Of Adopted
Budget and
Actual
%
Difference
5,825,195
$0.0007
0.8%
1.0%
938,214
(2,150,748)
$ (1,212,534)
1.8%
7.5%
(5.1%)
$
Explanation:
FY 03-04: Annual sales level of 958 million kWh was 4.2 percent below the adjusted
budget forecast.
FY 04-05: Sales units and revenues through March have been higher than the adopted
budget projections by 0.8 and 1.8 percent, respectively. Purchase costs for the same
period are estimated to be higher than the budgeted cost by 7.5 percent. Higher purchase
costs are mainly due to lower than budgeted energy availability from Western during the
first quarter, and the delay in receiving budgeted RAC credits from Western. However,
considerable cost offsetting wholesale energy and ancillary services sales revenues were
also received during the period. The projected net impact on the operating margin is a
decrease of 5.1 percent, or $1.2 million.
Item No.6
5/4/05
Page 1 of 7
Attachment D
Proposed Electric Supply Rate Stabilization Reserve
All figures in thousands (000’s)
$ 52,462
FY 04-05 Adopted Budget Ending Balance
Projected Adjustments:
Changes to FY 04-05 Adopted Budget Beginning Balance
Estimated Change in Operating Margin through March
Budget Amendment Ordinance Expense
Other Revenue changes to Budget
Other Expense changes to Budget
Purchase Cost related to outside sales
Other Projected Wholesale Revenue changes to Budget
$ 968
(1,629)
3,841
515
Net Sum of Projected Adjustments
Estimated FY 04-05 Ending Balance
Adopted Budget SRSR Maximum Guideline is
$ 3,694
$ 56,156
$ 37,886
Proposed Electric Distribution Rate Stabilization Reserve
All figures in thousands (000’s)
$ 6,876
FY 04-05 Adopted Budget Ending Balance
Projected Adjustments:
Changes to FY 04-05 Adopted Budget Beginning Balance
Estimated Change in Operating Margin through March
Budget Amendment Ordinances Expense
Other Revenue changes to Budget
Other Expense changes to Budget
$ (1,633)
417
5,307
Net Sum of Projected Adjustments
Projected FY 04-05 Ending Balance
Adopted Budget DRSR Maximum Guideline is
$ 4,091
$ 10,967
$ 10,755
Electric Supply Rate Stabilization Reserve: As explained in the previous UAC
quarterly report, the FY 04-05 adjustment of $968 thousand is the net impact of
savings in purchase costs due to lower sales level, RAC refunds from WAPA,
lower ISO costs, NCPA pool revenues, increased asset layoff revenues and lower
revenues from sales.
In FY 04-05, the projected $1.6 million decrease in operating margin through
March reflects the net impact of higher than projected sales revenues offset by the
estimated $2.2 million higher purchase costs. Lower Western energy availability
and the resulting need to purchase higher cost market energy is the main reason for
the increased costs during the first nine months of the fiscal year. These higher
costs in the first nine months have been somewhat offset by revenues from
wholesale energy and ancillary services sales, lower NCPA legal expenses, and
Item No.6
5/4/05
Page 2 of 7
Attachment D
NCPA FY 03-04 budget settlements. During the last 3 months of the year, costs
are expected to be lower by approximately $3.8 million, mainly a result of the
expectation of receiving the delayed RAC credit from Western during this period.
Net costs during the last quarter are also expected to be lower than budget, due to
higher than average Calaveras production and lower than projected transmission
related charges. The net result of the above factors is a projected increase in the
ending balance of the SRSR of $3.7 million.
Note: As outlined in Attachment C, a number of transmission related charges were
conservatively budgeted for by staff in prior years. However, PG&E/ISO had not
billed Western or NCPA for this service until the most recent $51 million bill
received by Western to cover periods dating back to 2001.
Electric Distribution Rate Stabilization Reserve: The $1.6 million decrease to
the adopted beginning balance is the net impact of lower than projected sales and
unrealized investment income. The $417 thousand increase in the operating
margin through March is the result of higher than projected sales. In addition,
$5.3 million is expected to return to the reserves as a result of the closure of past
CIP projects. The net result is a projected increase of $4.1 million to the ending
balance of the DRSR.
Gas
Sales Units (Therms)
System Average Rate
($/Therm)
Retail Sales Revenue
Purchase Cost
Operating Margin
FY 04-05
Adopted
Budget
FY 04-05
Actual
Actual
31,506,997
$0.785
Jul 04–Mar 05
24,749,442
$0.83
Jul 04 –Mar 05
24,696,090
$0.91
(53,352)
$ 0.07
(0.2%)
8.7%
$ 24,734,399
15,965,423
$ 8,768,976
$ 20,655,543
13,413,336
$ 7,242,207
$ 22,394,506
15,099,255
$ 7,295,251
$ 1,738,963
1,685,919
$
53,044
8.4%
12.6%
0.7%
FY 03-04
Difference
Of Adopted
Budget and
Actual
%
Difference
Explanation:
FY 03-04: Sales units were 9.2 percent below budget projections.
FY 04-05: Sales units through March are lower than projected by 0.2%, however,
revenues for the same period are higher than projected by 8.4 percent due to a 20%
supply-side rate increase effective January 1, 2005. Due to higher than projected
market prices, purchase costs are greater than the adopted budget by 12.6 percent.
Preliminary figures show the net impact for the first nine months of the fiscal year
is an increase of $53 thousand, or 0.7 percent of the Operating Margin.
Item No.6
5/4/05
Page 3 of 7
Attachment D
Proposed Gas Supply Rate Stabilization Reserve
All figures in thousands (000’s)
$ 6,556
FY 04-05 Adopted Budget Ending Balance
Projected Adjustments:
Changes to FY 04-05 Adopted Budget Beginning Balance
Change in Operating Margin through March
Budget Amendment Ordinances (BAO)
Other Revenue changes to Budget
Other Expense changes to Budget
$ (139)
53
1,762
(694)
Net Sum of Projected Adjustments
Projected FY 04-05 Ending Balance
Adopted Budget SRSR Minimum Guideline is
$ 982
$ 7,538
$ 6,275
Proposed Gas Distribution Rate Stabilization Reserve
All figures in thousands (000’s)
$ 3,862
FY 04-05 Adopted Budget Ending Balance
Projected Adjustments:
Changes to FY 04-05 Adopted Budget Beginning Balance
Change in Operating Margin through March
Budget Amendment Ordinances (BAO)
Other Revenue changes to Budget
Other Expense changes to Budget
$ (251)
(56)
Net Sum of Projected Adjustments
Projected FY 04-05 Ending Balance
Adopted Budget DRSR Maximum Guideline is
$ (307)
$ 3,555
$ 4,236
Gas Supply Rate Stabilization Reserve: The $139 thousand decrease to the FY
04-05 beginning balance is primarily the net result of lower than the adopted
budget purchase costs offset by decreased sales and interest income. For FY 0405, the operating margin through March has increased by $53 thousand, which
reflects the impact of higher sales revenues offset by higher purchase costs. For
the months April through June, a $1.8 million projected revenue change. The
expected revenue change is a combination of $964 thousand in additional revenues
resulting from the January 1, 2005, rate increase plus a $798 thousand PG&E
refund. The $694 thousand expense change reflects a $581 thousand projected
increase in purchase costs for the last three months of FY 04-05, as well as $113
thousand cost addition legal and regulatory expenses from the midyear process.
Item No.6
5/4/05
Page 4 of 7
Attachment D
The projected net impact of the above for the fiscal year is an increase in the
SRSR ending balance of $982 thousand.
Gas Distribution Rate Stabilization Reserve: The $251 thousand decrease in the
beginning balance reflects lower than expected Administrative and Operating
Expenses, lower sales levels and unrealized investment income. For FY 2004-05,
there was a $56 thousand increase in expenses for contract services approved
during the midyear process. Based on the above, the net impact is a projected
decrease of $307 thousand in the DRSR ending balance.
Water
Sales Units (Ccf)
System Average Rate
$/Ccf)
Sales Revenue
Purchase Cost
Operating Margin
FY 04-05
Adopted
Budget
FY 04-05
Actual
Jul 04–Mar 05
4,289,000
$3.88
Jul 04– Mar 05
4,021,524
$3.91
FY 03-04
Actual
5,962,767
$3.54
$ 21,131,850
7,441,523
$ 13,690,324
$
$
16,637,000
5,557,850
11,079,150
$
$
15,709,795
5,242,339
10,467,456
Difference
Of Adopted
Budget and
Actual
$
$
%
Difference
(267,476)
$0.03
(6.2%)
0.7%
(927,205)
(315,511)
(611,694)
(5.6%)
(5.7%)
(5.5%)
Explanation:
FY 03-04: Sales Units of 5.9 million CCF were 0.1 percent below projections.
FY 04-05: Water sales units were 6.2 percent lower than the budget projected figures
through March, primarily due to higher precipitation than normal weather. Consequently,
sales revenues are 5.6 percent lower than the budget projections for the same months and
purchase costs were 5.7 percent lower than the adopted budget. The net impact of the
above is a decrease in the Operating Margin of $612 thousand, or 5.5 percent.
Proposed Water Rate Stabilization Reserve
All figures in thousands (000’s)
$ 6,728
FY 04-05 Adopted Budget Ending Balance
Projected Adjustments:
Changes to FY 04-05 Adopted Budget Beginning Balance
Change in Operating Margin through March
Budget Amendment Ordinances (BAO)
Other Revenue changes to Budget
Other Expense changes to Budget
$ (863)
(612)
200
Net Sum of Projected Adjustments
Projected FY 04-05 Ending Balance
Adopted Budget RSR Minimum Guideline is
Item No.6
5/4/05
$ (1,275)
$ 5,453
$ 7,105
Page 5 of 7
Attachment D
The $863 thousand change to the FY 04-05 Beginning Balance is primarily due to
unrealized investment income, lower than budgeted connection fee revenue, and higher
operating expenses. For FY 2004-05, from July to March, the net impact of lower than
projected sales and decreased costs is a decrease in the operating margin of $612
thousand. Purchase cost for the final quarter of FY04-05, is expected to be lower than the
projected figures for this period by $200 thousand due to reduced wholesale water rates.
The net impact of the above is that the RSR expected ending balance of $5.5 million is
lower than projected by $1.3 million.
Residential Electric Bill Comparison
Mar-05
Feb-05
Jan-05
Dec-04
Nov-04
Oct-04
Sep-04
Aug-04
May-04
Jun-04
Jul-04
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
Apr-04
Monthly Bill
Based on 650 Kwh/Mo
Billing Month
PG&E
Palo Alto
Residential Gas Bill Comparison
Based on 100 therms Winter & 30 Therms Summer
$120
$80
$60
$40
$20
Mar-05
Feb-05
Jan-05
Dec-04
Nov-04
Oct-04
Sep-04
Aug-04
Jul-04
Jun-04
May-04
$-
Apr-04
Monthly Bill
$100
Billing Month
Item No.6
5/4/05
PG&E
Palo Alto
Page 6 of 7
Attachment D
Residential Water Rate Comparison
Billing Month
Palo Alto
Item No.6
Menlo Park
5/4/05
Los Altos Hills
Los Altos
Redwood City
Page 7 of 7
Mar-05
Feb-05
Jan-05
Dec-04
Nov-04
Oct-04
Sep-04
Aug-04
Jul-04
Jun-04
May-04
$60
$55
$50
$45
$40
$35
$30
$25
$20
Apr-04
Monthly Bill
Based on 14 Ccf/Mo