Salem Electric (SE) is currently accepting proposals to perform a Comprehensive Utility System Cost of Service and Rate Study for its electric distribution utility. It is expected that the selection will be made and work can commence in June 2020.
Please submit a copy of the proposal electronically to: Chris Krieck, Administrative Services Manager, firstname.lastname@example.org
Also mail one hard copy of the RFP to Salem Electric, attn. Chris Krieck, PO Box 5588, Salem, OR 97304. Deadline for submission is no later than 5:00 pm, Friday, March 27, 2020. Please direct your questions regarding this RFP to Chris Krieck, at 503-362-3601 or email@example.com.
Background of Salem Electric
Salem Electric is a 501(c)(12) member-owned electric cooperative corporation formed in 1938. Annual revenues are approximately $29 million per year, and the organization employs 48 people at one location. The organization has approximately 18,600 members in Polk and Marion counties of Oregon.
SE is currently a 100% National Rural Utilities Cooperative Finance Corporation (NURCFC) borrower and purchases electrical power and transmission services from the Bonneville Power Administration as a full-requirements customer. In May 2019 SE completed its deployment of Landys & Gyr’s RF Mesh AMI system that provides daily billable readings and interval readings at 15 minute increments. SE also utilizes NISC’s Meter Data Management System (MDMS) module to manage and analyze the data provided by the AMI system.
Scope of Services
SE has historically designed its rates to be understandable, meet revenue requirements, provide revenue stability, be fair in the apportionment of the total cost of service, and promote the efficient use of electricity. The cost of service study should provide an analysis of the revenue requirement and the cost of providing electric service to all customer classes. SE is seeking a rate design methodology that develops not only effective and equitable rates but can also be applied to the changing power supply environment of renewable energy and distributed generation.
To accomplish this we expect the scope of services to involve the following:
- Review of regulatory, contractual, and debt financing requirements.
- Review of historical revenues, expenses, billing data, customer information and usage data, reserves, and capital expenditures.
- Develop revenue requirement analysis of test period revenue and expenses as the foundation of the cost of service class analysis.
- Identify annual and peak requirements and usage by customer class.
- Identify current electric load and project future loads.
- Examine customer database and review current customer classifications and current rate approaches.
- Review net metering and distributed generation and analyze impacts they may have on rate strategies.
- The cost of service study will define and separate fixed and variable costs. The study should identify costs to be allocated across all customer classes and those costs that are specific to a class. In determining the actual cost of providing electric service to each customer class, traditional cost of service and rate setting principles and approaches should be employed such that SE can ensure that class rate requirements are equitable.
- Project rate increases and recommend structure needed to meet operating requirements, capital improvements, regulatory and debt obligations, and reserve funding levels assuming no additional obligations.
- Identify various scenarios for alternative rate strategies and structures, including but not limited to pre-paid, time-of-use, three part rate, electric vehicle, and changes to basic, kWh, or kW charges.
- The alternatives should consider the cost of service, SE fiscal health as well as ratepayer impacts.
The Consultant is to present the findings and conclusions of the cost of service and rate studies final report in a clear and concise manner. The report should include detailed recommendations for changes, if any, to current practices and/or procedures. A written report supporting the recommendations is required along with a presentation to management and board rate committee. A summary presentation to the full board at a board meeting could be requested.
Response to this Request for Proposal
Please address the following in your written request.
- A general overview of your firm.
- Describe your firm's familiarity with electric cooperatives, and specifically those that are full-requirements customers of BPA.
- Biographical information of the staff who would be assigned to this engagement including office location, years of experience, and specific experience with net metering and distributed generation impacts.
- Provide a narrative description summarizing the expected tasks and activities, with a description of the analysis, reports, summary of the steps to be completed, approaches to the project, and your firm’s understanding of the project requirements.
- Include a work plan that outlines the estimated length of the project and the schedule of the different components including anticipated meetings.
- Proposed project cost, including out-of-pocket and travel costs.
- A minimum of three client references for projects of comparable size and scope performed by the staff who will be assigned to the project.
- Provide an example of a recently completed costs of service and rate study.
- SE will assist with data collection and staff will be made available for interviews and to gather data that is essential to complete the cost of service analysis, rate study models, and final reports. The proposal must be clear in addressing what SE will be expected to assist with. Therefore, provide a description of required documentation and estimated time and effort required by SE staff to assist in the preparation of the work plan and study.