Risk Mechanisms
During the FY 2024-25 rate period, power and/or transmission rates may be adjusted each fiscal year in accordance with the respective Cost Recovery Adjustment Clause (CRAC), the Reserves Distribution Clause (RDC), and the Financial Reserves Policy (FRP) Surcharge provisions (see Power General Rate Schedule Provisions, sections II.O, II.P, and II.Q, and Transmission General Rate Schedule Provisions, sections II.G, II.H, and II.I).
Power Reserves Distribution Clause (RDC)
The Power RDC has triggered based on FY 2023 end-of-year financial results resulting in a Power RDC Amount of $285.4 million. Please see the Administrator’s letter (Dec 22, 2023) regarding the Power RDC final decision.
The Administrator has determined the Power RDC Amount will be used for the following purposes:
1) $165.4 million as a Power dividend distribution (rate credit).
2) $90 million as flexible debt reduction; and
3) $30 million designated as Reserves Not for Risk for accelerated fish and wildlife mitigation.
Power Dividend Distribution: The FY 2024 non-Slice rate credit is $4.34 per megawatt-hour for the last 10 months of the fiscal year (equivalent to an annual reduction of $3.64 per megawatt-hour). This would reduce the average non-Slice rate by 10.20% compared to the BP-24 Final Proposal. The Power DD credit rate is calculated in accordance with the BP-24 Power Rate Schedules and General Rate Schedule Provisions (GRSP section II.P.2) and would be used to bill PF and IP customers. The rate would also adjust the December 2023 – September 2024 PF Tier 1 Equivalent energy rates.
Transmission Reserves Distribution Clause (RDC)
The Transmission RDC has triggered based on FY 2023 end-of-year financial results resulting in a Transmission RDC Amount of $130.4 million. Please see the Administrator’s letter (Dec 22, 2023) regarding the Transmission RDC final decision.
The Administrator has determined the Transmission RDC Amount will be used for the following purposes:
- $50.4 million will be held as reserves for risk to reflect cost pressures that were not included in the BP-24 IPR process; and
- $80 million will be used for flexible debt reduction.