UEC obtains power supply energy resources for members through long-term contractual agreements and short-term market purchases that provide greater flexibility to implement demand-side management programs that can reduce loads during critical demand periods.
UEC serves a broad set of members that can be classified by their rate schedules. The rural system includes those members with peak demand not exceeding 10 MW. These include residential, small, and large commercial, irrigation, and industrial rate classes. Those members with peak demand greater than 10 MW and meet the requirements to be designated as New Large Single Load (NLSL) by Bonville Power Administration (BPA) are classified as “large industrial”.
UEC purchases the bulk of power and transmission services for the rural system through an all-requirements obligation with the Bonneville Power Administration (BPA). BPA’s cost structure for power has a small demand-based billing determinant that only accounts for 10% of the total cost, therefore UEC’s fixed costs remain consistent throughout the year regardless of peak demand. Beginning with the BPA 2024 to 2025 fiscal year UEC will purchase all power necessary to serve the rural system from BPA.
Transmission services for the rural system members are purchased through network transmission service, which has a comparatively small demand-based billing rate ($/kW). The billing determinant (kW) is set based on the rural system’s actual retail peak load each month, thus, lowering demand in 1 month does not reduce the transmission cost in subsequent months. The “low” cost and difficulty in targeting a monthly system peak greatly reduce the ability of UEC to decrease its transmission costs through the implementation of DR programs.
For larger industrial members UEC purchases power through a long-term Power Supply Agreement (PSA) and on the open market. The power costs are directly passed to qualifying large industrial members. These purchases are based on forecasted energy use and have no demand-based billing determinant.
Implementation of a demand response program and rates would not significantly reduce UEC’s wholesale power supply or transmission costs which are passed through to its members. As a result, any demand response program and rate would be unlikely to reduce retail loads during critical demand periods.