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Truckee Donner Board Approves Battery Storage Assessment Contract, Adopts Rate Design

The Board of Directors for California public power utility Truckee Donner Public Utility District recently voted to award a $60,500 contract to NV5 for a Battery Energy Storage System assessment, which is a key first step to designing, locating and constructing a BESS project in Truckee, and separately adopted a proposed two-year rate design.

If successful, a BESS project would be located at one of TDPUD’s substations and could be used to reduce overall electric costs while improving our clean electricity mix.

The study will be completed in 2024.

Rate Design

In early November, the board of directors met to conduct two public hearings for the adoption of new electric rates and the approval of the TDPUD budget for 2024 and 2025.

The public hearings on budget and rates followed a series of three public workshops, culminating with a presentation on Oct. 18 when TDPUD’s consultant presented several budgetary options and rate tools for the board to consider to fund the electric utility appropriately.

HDR Consultants’ primary task was to present an electric cost of service analysis, which identifies TDPUD’s current and future energy needs and costs, and then propose potential rate structures to fund TDPUD’s operations and services over the next two years.

“In developing new rates, TDPUD must account for increasing cost pressures due to volatility in the energy market, supply chain constraints, unfunded government mandates and inflation. TDPUD also strives to stay true to its mission of balancing high-quality, reliable service with affordability,” the utility noted.

The board unanimously adopted the proposed two-year rate design, which includes a 12 percent increase for 2024 and 2025.

“This will prepare TDPUD to maintain its electrical system, accomplish improvement projects the community has deemed important and recover from unanticipated energy price spikes in the last two years,” it said.

“With this increase, TDPUD’s rates remain aligned with other regional public power utilities. However, they are still less than what others in the Truckee/Tahoe region pay for investor-owned utility services,” the utility said.

“TDPUD staff have worked hard to ensure that the electric and water utilities have the resources needed to address service reliability and safety while modernizing the utilities,” said TDPUD General Manager Brian Wright. “TDPUD’s board was willing to make the necessary investments but was also keenly aware of the importance of maintaining affordable electric rates.”

New Rate Tools

The board also adopted some new rate tools that will help both TDPUD and its customers manage the costs of their energy usage.

The optional time-of-use rate is a way to give customers control of their energy costs by incentivizing energy use outside of peak times when energy costs the most to procure.

TDPUD sees its peak energy usage during the winter, on weekends and at nighttime, from 4 to 9 p.m.

This customer demand profile dictates what kind of electricity TDPUD needs to buy, and electricity purchased during peak times is almost always more expensive, it noted.

While conservation and energy efficiency are critical, customers can also change their behavior and use electricity at off-peak times when it is less expensive and most often cleaner. The savings that occur by using energy in off-peak times can benefit both the customer and the utility.

The optional TOU rate provides a peak rate that reflects the higher costs during that period and a reduced rate for the lower costs during the off-peak period.

Power Cost Adjustment Rate Option

The board also adopted a power cost adjustment (PCA) rate option that would allow electric bills to reflect -- up or down -- recent changes in electric resource procurement costs.

TDPUD experienced severe price spikes during last winter’s natural gas shortages that required the board to utilize a portion of electric rate reserves, which now need to be replenished.

The PCA provides another tool, within changes of +/- 15 percent, to adapt to short-term, yet significant price changes in real time, without requiring a permanent rate change, the utility noted.

Water Connection Project

Another critical board action and success was the completion and close out of the Pioneer Trail Pipeline Project, which provides a second water connection between TDPUD’s main water system and Tahoe Donner, the utility noted.

“This important capital investment will improve service reliability, reduce operating costs, and have a net-carbon benefit for the water utility due to reduced energy consumption.”

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