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Strategic Plan | 2013 - 2018 . May 2011. The Strategic Plan will guide our focus on accountability to ratepayers and customers. NOW. Timeline. Initial Draft of Strategic Plan. Interim Outreach. Develop Alternatives, Refine Initiatives. Review Panel Formed. Objectives &
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Strategic Plan | 2013 - 2018 May 2011
The Strategic Plan will guide our focus on accountability to ratepayers and customers NOW Timeline Initial Draft of Strategic Plan Interim Outreach Develop Alternatives, Refine Initiatives ReviewPanel Formed Objectives & Initiatives SWOC, FinancialBaseline Add’tl Outreach Council Adopts May Sept Oct May Summer Winter 2011 2011 2010 Decisions on rates, budgets, investments, programs and services for six years (2013-2018)
What are City Light’s strengths, weaknesses, opportunities and challenges? Customers/Ratepayers Workforce Assets Municipal EnterpriseExcellence
What are City Light’s strengths, weaknesses, opportunities and challenges? Customers/Ratepayers Workforce Assets Municipal EnterpriseExcellence 5
What are City Light’s strengths, weaknesses, opportunities and challenges? Customers/Ratepayers Workforce Assets Municipal EnterpriseExcellence 6
What are City Light’s strengths, weaknesses, opportunities and challenges? Customers/Ratepayers Workforce Assets Municipal EnterpriseExcellence 7
What are City Light’s strengths, weaknesses, opportunities and challenges? Customers/Ratepayers Workforce Assets Municipal EnterpriseExcellence 8
What if we keep doing the same things we are doing today, where do we end up with rates? Alternative(s) Baseline “Financial Baseline” Assumptions • Same level of service to customers • Generally the same operating methods • Same level of operating risk • Meet known regulatory and other requirements 9 9
Estimated customer usage Utility Rates “101”: A very simplified view Utility costs (net of non-customer revenues) = rate/Kwh • Rates are set to cover utility operating costs, based on expected customer demand for energy. 10 10 10
Our baseline rate projection considered: • Continuing need for infrastructure renewal • Costs to purchase power under current long-term power purchase contracts • Rates of inflation in costs of supplies,services, construction, labor, benefits • Growth in demand Utility costs(net of non-customer revenues) Estimated customer usage
Rate Impact with Status Quo: Estimated ~4% Annual Increases ~4% 12 12 12
City Light’s Low Rates: A Comparison 13 13 13
Average residential monthly costfor Seattle residents ∆$2.27 ∆$2.02 ∆$3.33 ∆$2.71 ∆$2.69 14 14
Sample Small and Medium General Customer Monthly Cost ∆$16.83 ∆$20.97 ∆$12.58 ∆$15.30 ∆$5.28 ∆$6.56 ∆$4.00 ∆$4.82 15 15
Sample Large Customer Monthly Cost ∆$8,425 ∆$10,246 ∆$6,125 ∆$7,465 16 16
“Status Quo” projected forward:Conclusions • Significant ongoing reinvestment necessary to maintain infrastructure supporting current levels of service. • Purchased power costs will continue to rise. • Rates likely to remain among the lowest in the nation / region. • Key focus on increasing efficiency of operations to reduce costs. • This “base case” doesn’t fully address all identified challenges: We need to take action and not accept the status quo projection. 17 17
What should be our focus for the next 5-6 years? Priorities Objectives Specific Actions (4) (12) (~40) Customers/Ratepayers Workforce Assets Municipal EnterpriseExcellence
Customers Proposed Objectives Provide greater rate predictability Balance multiple policy goals in rate design Anticipate and exceed customer service expectations Promote environmental stewardship
Workforce Proposed Objectives Ensure a safe work environment Attract, train and retain a high performance workforce
Assets Proposed Objectives Provide reliable, safe, cost-effective electric service to our customers Maintain a stable, cost-effective, environmentally responsible power supply portfolio Incorporate technology to meet future customer needs
Municipal Enterprise Excellence Proposed Objectives Improve communication about, and support for, City Light’s strategic priorities Implement best practices in business processes and technology across the utility Ensure fiscal strength
Questions? 23
What do you think? 1. Are the proposed objectives the right things for City Light to focus on in its Strategic Plan? Why or why not? What is missing? What questions do you have? 2. Select 1 or 2 proposed objectives and give us feedback on what success looks like in your view: What should City Light do to achieve these objectives?
