SMUD Speaker Addresses Rate Restructuring Proposal at 7/13 East Sacramento Preservation Meeting

With the proposed rate restructuring, we want to better align pricing with the true cost of maintaining the system infrastructure. While the changes will not increase revenue for SMUD, they will help ensure that the rates and charges better align with the costs they are meant to reflect, including the cost of electricity when it is used and the cost of maintaining the infrastructure that supports a reliable power delivery system.

Proposed Changes
The proposal being considered would allow the System Infrastructure Fixed Charge to change from $7.20 per month to $10 per month (an increase of $2.80) in 2012, with incremental increases beginning in 2013 of $2.00 per month each year over the next five years to align this charge with the true cost of maintaining the system infrastructure. (Total of $20.00 by 2017)

To offset the change in the System Infrastructure Fixed Charge so there will be little or no impact to monthly electric bills for residential customers, and bring no revenue to SMUD, the proposal includes a corresponding reduction in electricity rates each year.

BOTTOM LINE:  If residential customers use the same, average amount of electricity per month, their annualized bills will
not be impacted by this proposal.

With the proposed rate restructuring, we want to better align pricing with the true cost of maintaining the system infrastructure. While the changes
will not increase revenue for SMUD, they will help ensure that the rates and charges better align with the costs they are meant to reflect, including the cost of electricity when it is used and the cost of maintaining the infrastructure that supports a reliable
power delivery system.

Proposed Changes
The proposal being considered would allow the System Infrastructure Fixed Charge to change from $7.20 per month to $10 per month (an increase of
$2.80) in 2012, with incremental increases beginning in 2013 of $2.00 per month each year over the next five years to align this charge with the true cost of maintaining the system infrastructure. (Total of $20.00 by 2017)

To offset the change in the System Infrastructure Fixed Charge so there will be little or no impact to monthly electric bills for residential customers,
and bring no revenue to SMUD, the proposal includes a corresponding reduction in electricity rates each year.

BOTTOM LINE:  If residential customers use the same, average amount of electricity per month, their annualized bills will
not be impacted by this proposal.