Loading...
HomeMy WebLinkAbout1980 11 10 Letter Re: FPC Rate Request ~""~-"-",-""",,,,,;,,.",,,,,,.....-,,-,,,;'.."':.~.~' .'.... "......"". ~~ ~. ".""..- //~, ......,t~... M _, _ _ i Jf~IJI'LL..:I""-___1 .__---.-..-- I"ff~t" OF'.\'~~_._" II~~~~ \11i::j ,.1,/ 0 ~ C ~,,~. ~ ~ ~C"":)... :s(s 'r-~_ ~ ~ 'rn .-..._. ~\ ~ ~ ~\ ''Y.:-_. ~~II ~~~~._- '''' II ~~T n ~"'/II ~..{!_.,...,f~i,JJJ --( t ! i . '.- - ) ~ '. ,/ -1..,- ~ / : / ''r~- I T Y OF CLEAllWATEll POST OFFICE BOX 4748 OFFICE OF CENTRAL SERVICES DIRECTOR C LEA R W ATE R, F" LOR IDA 335 1 8 November 10, 1980 From: FloYd Carter, Acting Coordinator To: Local Government Task Force _ F. p. C. R.ate R.eques{'lTY OP i"IArl1 --. .~ ) I.'., If"""'" 'H'. ',,' ., ..... ... 11.:..- 'l...t ~ ...:. ~ nv 1 -\ lQ , ."./ -- Atta ched you will find a COpy of the rough draft of John Peddy's testimony for YOUr review. This will be discussed at the meeting of November 17th. COmPllation of the outage SurVeys has not been completed but should be ready for the uen meeting. For Your information, the fOllowing local gOvernments Were included as original petitioners: St. Petersburg Clearwater Indian Rocks Beach Pinel1as County Seminole Dunedin Largo Gulfport Treasure Island St. Petersburg Beach with the fOllOWing to be inCluded in the fir st amendment: Maitland Indian Shores Kenneth City If You have any questions, please feel free to call me at 462-6777. Q. Would you please state your name, address and occupation? A. John Peddy, Energy Officer, City of Clearwater, Clearwater, Florida. Q. Would you describe your position with the City of Clearwater? A. My responsibility is to develop and implement energy conservation programs which will result in conserving energy for the local govern- ment and its citizens. Q. Please describe your educational background and experience. A. This information is presented in an exhibit attached and marked Exhibit No. JP-I. Q. During your employment with the City of Clearwater have you had occasion to look into the energy consumption of the street lighting system? A. I have. Q. And what did your studies show? A. Approximately two years ago I made an analysis of the City of Clearwater's existing street lighting system and prepared a report showing the potential energy savings that could be accomplished by retrofitting our existing system using high pressure and/or low pressure sodium luminaires. Q. What kind of savings do your studies show can be realized? A. The study indicated that if we changed over to high pres sure sodium lights we would save approximately 3,000,000 kilowatt hours per year and if we changed over to low pressure sodium, we would double that amount. Q. On a percentage basis, this KW consumption represents what portion of the energy consumed under existing street lighting, using mostly mercury vapor luminaires? A. With the high pressure system it would result in approximately a 33% reduction in energy and with the low pressure system it would represent approximately a 66% reduction in energy. Q. If this potential energy savings could be made by converting portions of the City's street lighting system to high pressure and/or low pressure luminaires, why didn't the City follow your recommendation to proceed to do this immediately? - 1 - A. The cost of such a retrofit would require a capital expenditure of an estimated $1,700,000. The only course available at the present time for doing this is to purchase back our lighting system from the utilities and then proceed with the retrofit at the estimated cost I just mentioned. The other alternative would be to have the power company accomplish a retrofit. We would, in either case, save the energy. However, in the latter case where the hardware would be furnished by the utility, I estimate that we would not save any money; in fact, in all probability we would be paying a premium for saving this energy. Q. Why is that? A. This is due to the pricing structure charged by the utility for high pressure sodium fixture rental and maintenance. Q. Could you give us an example of this? A. Yes. In the case of maintenance, the charge for a comparable luminaire, both in wattage and design, is over 400% more for a high pressure sodium than for a mercury vapor unit. The apparent cost of such maintenance is only approximately 50% more. For example, for a 400W mercury vapor lamp the proposed maintenance charge is 50~ per month per fixture. For a 400W high pressure sodium luminaire, the proposed charge is $2.73 per month per year. The labor required for maintaining both lights are approxi- mately the same. The material costs for the maintenance is approximately $15 per fixture more for the high pressure sodium. Should the same formula be used for arriving at a high pressure sodium maintenance charge as the existing formula used for mercury vapor, the monthly charge for high pres- sure sodium would only be 75~ a month. Q. Have you prepared an exhibit demonstrating your calculations? A. I have, and it is attached as Exhibit JP-II. Q. Have you, also in your research, done a comparison of fixture charges for mercury vapor lamps as compared to sodium vapor lamps? A. Yes, I have. Q. And what were your findings? A. The fixture rental charge for a comparable wattage high pressure sodium luminaire is 100% more than that for a mercury vapor 1uminaire, while there is only approximately 12% difference in the cost of these luminaires. Q. Have you prepared an exhibit demonstrating these relative fixture charges and relative fixture costs? A. I have. Attached is Exhibit JP-III. - 2 - Q. What are your conclusions from your studies of the utilities pricing struc- ture for maintenance and facility rental for street lighting? A. It is apparent that the major reason for cities not retrofitting their current street lighting systems to high-efficiency type luminaires, or incorporating high-efficiency luminaires in the expansion of their existing street lighting systems, is the disproportionately high charge made by the utilities for such high-efficiency hardware. When the City's total rental maintenance and energy charges of a high pressure sodium. lamp equals or exceeds similar charges on their existing mercury vapor lum.inaires, while at the same time using approximately 40% les s electricity, the cost effectivenes s of making a retrofit or changing types of new equipment is minimal and in some cases would increase their overall cost. It is this one fact that is the greatest deterrent for the potential energy savings that could be accomplished in this area. Q. What, then, is your recommendation concerning Florida Power's schedule rate per month charges for street lighting fixtures on their request for new rate schedules E-I and M-2? A. I would recommend that they use the same formula for establishing the rental and maintenance charge on sodium luminaires as they use for establishing the charges on mercury vapor luminaires. Q. Have you prepared a recommended list of fixture types with a maintenance and fixture charge, using what you perceive to be the formula used by Florida Power Corp. presently in"developing their rate schedule for mercury vapor street lighting lum.inaires and fixtures? A. I have, and attached is Exhibit JP-IV. I have also included in this schedule a recommended list of commonly used sodium and metal halide lamps with fixtures that we are requesting be made available for rental by the local governments from the power company. Q. Is there another method that could be used to accomplish the same savings? A. Yes. As I stated earlier in my testimony that the street lighting system of a local government might be purchased from the utility, and the energy- saving retrofit could then be accomplished with the total savings incurred accruing to the local government for the amortization of the capital expenditure. There appears to be, however, a possible problem which is the selling price the utility might place on such a system. If the selling price was based on the depreciated value of such a system, there is little doubt that this would be the cost-effective program for a local government to undertake. This, of course, would also have to include an equitable adjustment for the local governments use of a multi-purpose support. - 3 - Q. In reviewing the E-l and M-2 rate schedules, are there other matters of concern that you wish to bring to the attention of the Public Service Com- mis sion? A. Yes, there are 3 other areas of concern. The first is the method of listing the street lights by lumens rather than identifying them by the rated wattage. Q. What difference does it make whether the fixture types are listed in lumens or watts? Aren't you buying the same thing? A. No, we are not. A given wattage of street lamps will produce a number of different lumens and the lumens of such lights will decrease with the age or life of the lamp. I have prepared an exhibit to demonstrate this point, and it is attached as Exhibit JP- V. Although it might be considered that we are buying light, we are paying and are charged for kilowatts; thereby our lamps should be rated in watts or kilowatts. The second reason for this is that it is next to impossible for a lay person to identify comparable fixtures when th.e proposed schedule lists such sizes in lumens. The schedule further complicates this identification by using the initial lumen level for mercury vapor type fixtures and the average, or mean, lumen level for the sodium type fixtures. In comparing lumens of different types of light you are not comparing apples to apples, you are comparing apples to oranges. Q. What do you mean? Aren't the lumens corning from a given wattage mercury vapor equal to the lumens coming from the same wattage high pressure sodium ? A. No, they are not. In fact, a 250W high pressure sodium will produce more lumens than a 400W mercury vapor lamp. Q. Would it not be even more confusing to some people if the fixture type rental rates were said in watts when different types of luminaires did not produce the same quantity or amount of light? A. I don't think so because the amount of light necessary to do a given job can be readily esta1:>lished and the proper wattage and type of fixture can be easily selected. Q. Would it not be easier for a local government to select the fixture by lumens to meet a required lighting assignment rather than select that fixture by wattage? A. The determination of the number of lumens to produce the proper re sults for a given set of conditions is the first step in selection. The next step is to select a lamp that will give you those lumens at the lowest energy consump- tion in order to meet the energy goals of the Public Utility Regulatory Policies Act of 1978 and the stated goals of the Florida Public Service Commis sion. - 4 - Q. What is the next area of concern? A. The next area of concern is the proposed 1. 86 percentage charge per month for the installed cost of unscheduled facilities. This is an increase of .36% over the existing rate. It is my contention that the percentage charge per month should be reduced from 1. 5 to 1. 35 instead of increased from 1. 35 to 1. 86. Q. What kind of calculations have you done that led to this conclusion? A. We used a formula which allows the return of the initial cost plus the requested percentage per year (9.95%) on investment, plus a reasonable percentage (1. 25%) per year for the loss of hardware due to Acts of God. Dividing this figure by 240 months, the stated depreciation time for such hardware by the utility, re suIts in a monthly char ge of 1. 35% of installed cost. However, if the monthly percentage of installed cost for such un- scheduled facilities were based on the standard amortization schedule which takes into account the depreciating value of such hardware, then the cur rent unscheduled utility charge of 1. 5% of the company's installed cost of the facility, equates to a 16% return on investment amortized over 20 years. The proposed facility charge of 1. 86% of the company's installed cost of the facility equates to a 20.5% return on investment amortized over 20 years. If the requested return of 9.95% is used, plus the 1. 25% per year los s due to Acts of God, then using available amortization schedules, the charge per month for unscheduled facilities should be 1. 07% of the company's installed cost. Q. Why do your calculations indicate such a great difference.in required return on installed cost from those developed by Florida Power? A. I am not privy to the formula used by FPC for obtaining their needed per- centages. Mine are based strictly on the factors I stated previously. The increase of . 36% is approximately 24% greater than their existing schedule which the FPC stated they used for developing their new figure. This 24% increase should not apply to this particular schedule because the schedule is based upon a percentage of installed cost and not on a fixed figure; therefore, inflation, labor costs, etc. will not affect the establishment of an actual dollar amount. Q. Have you prepared an exhibit demonstrating your calculations in determining the 1. 350/0 figure? A. Yes, I have, and it is attached as Exhibit JP-VI. Q. What is the last of the 3 additional concerns on the E-l and M-2 rate schedules? A. The last concern is the estimated burning time charged by the FPC to the local governments for their street lights. - 5 - Q. On what rate schedule does this appear of FPC' s proposed rate schedule? A. This appears on Schedule E-l. , Q. How many hours of ,annual operation does the FPC charge for unmetered street lamps? A. 4200 hours per year. Q. Is 4200 hours of annual operation the actual amount of service offered under the rates of E-I and M-2 and, if not, what is the amount of time offered? A. No, it is not. The annual amount of service offered by FPC for the burning of street lights is 3943 hours. Q. How did you determine such an exact figure? A. The figure was determined based on a statement that appears on Page 3 of the rate schedule M-I entitled "Municipal Service", paragraph 8, which states" street lighting service shall be from 30 minutes after sunset until 30 minutes before sunrise", or 365 hours less than the elapsed time between official sunset and official sunrise. Q. How do you determine the number of hours between i hour after sunset and i hour before sunrise? A. An official set of sunrise-sunset tables was obtained from the National Observatory which gives these times based on the standard time median. These tables were then adjusted by formulas supplied by the Observatory for the latitude and longitude of the midpoint in the City of Clearwater. I have attached a copy of these calculations, marked Exhibit JP- VII. Q. Obviously, one area of concern in street lighting is that during periods of extreme inclement weather, street lighting does come on. Have you given any consideration to the amount of time annually that lights would burn for this purpose? A. No, I have not. I have based it only on the information stated above. Q. Would you consider the number of hours street lights burn during inclement weather to be significant, and perhaps you could give us the number of hours involved each year? A. In my opinion the actual 3943 hours should be adjusted to allow for such conditions. In my opinion, the actual estimated burning time should be established at 4000 hours per year. This would allow 57 hours of possible light reduction due to inclement weather or celestial phenomenon per year which might occur during the normal non-burning hours. - 6 - Q. Why did you use an allowance of 57 hours for street light burning during periods of inclement weather, per year? A. It was the number of hours required to bring the estimated burning time to 4000 hours annually, which is the estimated burning time used by a number of power utilities, i. e. Q. In addition to doing the calculations to derive the 3943 hour figure, did you do any additional investigation to determine the service required in street lighting? A. Yes, I did. For a one-week period I measured the natural light level from before sunset to well after the loss of all natural light, and again in the A. M. before any natural light until official sunrise. The need for street lighting is the same as the time period for such service that is the offered service by the FPC, as stated in schedule M-l. Q. Are there any methods of turning street lighting on and off other than photo- ele ctric cells? A. Yes. Timing devices can be used but I would not recommend them simply because of the requirement for constantly changing lighting times. The state of the art of computer control has reached a point that this method might well be employed. Q. You have addressed the technical aspects of street lighting, types of lumi- naires, cost of these services, etc. Are there other types of issues you feel should be considered in determining the power cost for street lighting? A. Yes, there are 2 other issued that should be addressed. The first is the area of outages caused by malfunctioning equipment, and the second is the rate schedule charged for street lighting. Q. Would you please explain your concern over inoperative street lights? A. We, the City of Clearwater, together with other local governments, have run a survey to determine the estimated number of outages we experience each burning period. The results of this survey indicate that we have approximately 0/0 of our system that is not functioning; consequently, not using any power. This survey is shown on Exhibit JP- VIII. Q. What is a malfunction which would cause street lights to be inoperative? A. There are a number of things that could happen just naturally - the lamp itself will burn out. The second would be the malfunction of the control device which, in all probability, would knock out a number of units. The third would be a malfunction of the circuitry, resulting in a complete power loss. - 7 - Q. Do you have a recommendation to make on how the service user could be compensated for the non-energy consumption state of the lamp during periods that it is inoperative? A. Yes. An equitable method for adjusting the total energy use by a given system would be to allow a credit applied to the estimated burning hours for the established percentage of outages during a given burning period. This percentage of outages could be arrived at by using historical data. Q. What is the other energy cost issue? A. The other area that should be addressed is the one of the actual rate charged for the energy consumed by the street lighting system. Approximately 88% of the burning hours for the power consumed is during an off-peak period as established by the FPC in their proposed schedules, with only 12% of the burning hour s of street lighting falling within their peak load period. In the attached Exhibit JP-IX, I have demonstrated the calculations used to derive these percentages. The adjustment or the establishment of a schedule for street lights, using the same percentage of base rate for both on and off-peak charges as offered the private sector, would result in a rate of approximately 8 mils a kilowatt hour less than the proposed standard municipal rate, or 16.13% less. Q. Taking all things into consideration, including the extremely high off-peak power usage by street lighting and the 96% or better predictable power load, do you feel that the rates being proposed for the private sector for peak use are appropriate for application without change to the energy consumed by street lights? A. No, because the load generated by the street lights are a constant whereas in the private sector it could be quite a variable. However, as I stated before, the percentage difference used in calculating the actual on and off peak charges for the private sector would be acceptable if applied to the standard municipal base rate. Q. Is there any other area where off-peak metering could be utilized by a local government? A. Yes, there are several areas where the use of energy could be confined to off-peak hours, such as wellfield pumping, certain lift station operations, and effluent discharge. These operations consume a large amount of energy and if their operation were confined to off-peak periods, this would help result in the discontinued use of highly inefficient peaking units, thereby resulting in a substantial saving of diesel fuel. Q. Would you please summarize the issues and your recommendations for changes to the FPC!s request for an increase in rates and charges? - 8 - A. In sununary, the primary issue that I feel should be addressed is the one concerning conservation of energy. The specific items that I have already testified to are ones which deter a local government from employing the state of the art to accomplish the most efficient use of energy that is used in street lighting affecting the health, safety and welfare of its citizens. An equitable distribution of the charges made by the utility for its product and services should be a matter of concern for the Florida Public Service Commission. I feel that an indepth study made by the FPSC will show that many of the policies and practices of the utility create a dis-incentive for real and cost-effective conservation. I have pointed out in my testimony the apparent discrepancies in the pnclng structure of the highly efficient sodium street light. I have also pointed out that if certain incentives were provided by the utility, namely for peak metering, to local governments, it could and would result in practices that would aid the power company by helping level their load and at the same time result in the discontinuing use of highly inefficient peaking units. The testimony that I gave covering estimated burning time for street lights, proper formulas for estimating charges on unscheduled facilities, and credits for unused services, will save the local governments large amounts of money that could be used for retrofitting facilities to bring them to peak efficiency, which would result in additional energy conservation. - 9 -