The PPS allocates revenue from market-based interruptible tariffs | News
The Paducah Power System’s power plant board voted on Monday to allocate revenues from market-based interruptible rates to the Electricity Cost Adjustment Fund to maintain its rates.
• Allocate 100% of the electricity cost component to the electricity cost adjustment fund (PCA).
• Allocate 100% of the transportation cost component to the PCA fund.
• Allocate 10% of the distribution cost component to the PCA fund and 90% to a rate stabilization fund. This was done so that the rate stabilization fund would be used to reduce future rates or revenue requirements through debt cancellation or other appropriate means.
The reassignment became effective immediately.
“This is the rate we developed to serve the data miners, the cryptocurrency industry,” said Doug Handley, PPS’s director of finance, food and pricing. “It’s a special tariff that is a pass-through of market-based costs plus a distribution cost component that provides the margin to the utility.”
Handley said the 10% distribution cost component allocation would benefit Paducah Power System customers.
“Over the long term, we need something to help reduce tariffs in the future, so this allocation of the distribution cost component – 10% to the PCA fund – would provide immediate benefits to all customers through that revenue,” he told the board. . “The other 90% would go to this stabilization fund that we can use to de-escalate debt or otherwise lower rates in the future because we need it.”
The measure is not permanent and may be reviewed by the council at any time.
Handley said the market-based interruptible rate allows PPS to ask its customer — those with at least 1,000 kilowatts, usually a business or industry — to reduce their electrical load by 90%. This tariff provides businesses with the same cost that PPS pays for energy on a day-to-day, hour-by-hour basis.
The PPS interruptible tariff program started last September, with SOLminer being its first customer. SOLminer is a blockchain company that makes cryptocurrency mining rigs.
• Andrea Underwood, Director of Human Resources and Community Relations for Paducah Power System, spoke to the board about the company’s economic development rates.
“We are obviously interested in doing what we can to encourage economic development in our community,” she said. “It’s good for us, and when it’s good for us, it’s good for our customers, and it’s also good for the community, with the creation of new jobs.”
Underwood said companies with loads up to 1,000 kilowatts get a 75% reduction in their demand load, a 50% reduction in the second year and a 25% reduction in the third year. year.
Large businesses – those using 1,000 to 3,000 kilowatts – would get a 100% reduction in power charges for the first three years, with a 70% reduction in the fourth year and a 30% reduction in the fifth. year.
“So that can be a significant savings, especially for those large entities,” Underwood said. “They have to meet the requirements. They have to deal with the load they tell us they are going to have. If that changes – if they don’t meet those requirements – then they can lose that. »