08/11/1986 Meeting - Laserfiche WebLink

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lowest load factor in this case would be $700,000, which is well above the $300,000 that might have been needed for the construction. He said that the e construction allowance is LEC's way of recognizing the benefit of that load on the cooperative. He said that the industry may be charged for a portion of the construction costs, if it had a very low load factor (10 percent), but with a 50 percent load factor, there would be no charge since there is a construction allowance. Mr. Oakley was asked to clarify the costs shown to the group. He said that $300,000 is part of the construction costs that might be attributed to the consumer. He said the consumer will be charged that amount of money if there is no power usage. Mr. Crinklaw, of LEC, said the $1.4 million would be the total construction needs for meeting that additional load of 10 megawatts in that area. He said that would mean a new substation and transmission lines would be needed. Of that $1.4 million, he said that a large portion of that would be used for the system to meet other customers. needs. A portion of that transformer in that substation would only be going to a portion of the new 10 megawatt load. He said that is where the $300,000 comes from--the portion of that $1.4 million initial investment by LEC. He said that has no bearing or relationship to the construction allowance. Further, up to $700,000 may be given to the consumers, depending on their load factor. He said that the initial $1.4 million would be acquired either through build out and the General Fund, or the money would be borrowed. Ms. Wooten asked how this would affect the rates for the rest of the LEC consumers. He said that in this particular case, with the density in this area, it would have very little, if any, effect. He said the $300,000 that would be needed for construction would be taken out of the users rates over a period of time. Mr. Fadeley, attorney for LEC, said that in the examples cited, no money would have to be paid by the e locating company. Mr. Oakley discussed the Fantus Report which showed that all of the utilities in the Eugene area are assets as far as industrial development is concerned. According to those graphs, he said that LEC was shown to be the second lowest utility and EWEB was shown to be the lowest. He sa i d that all other utilities--from the Mexican border to British Columbia--had higher electric rates. He said that should indicate that if a company relocates to another area, it would not be the electric rates that would cause a firm to settle in another location. Mr. Oakley showed the difference in LEe and EWEB electric rates. He said that for a one megawatt load, 200 megawatts usage a month, is $61.26, 400 megawatt hours is $8,478; versus LEC's $78.89 and $10,949, respectively. Ms. Bascom asked to see detailed start-up costs. Mr. Oakley said that under the Tampa exercise, the start-up costs for consumers would be zero. Mr. Oakley said that LEe long-range plans include construction of the Four Oaks substation in the area, with two underground double feed circuits to the area, with switching on the transmission line which will provide the capabi 1 i ty to serve duri ng an outage situation. He said that any rate reduction to the consumer would occur after 20 years, if the projected area growth takes place. He advised that the cost to build the substation is e MINUTES--Eugene City Council Dinner Session August 11, 1986 Page 4