Denton board backs move to 12‑month outlook, expands ECA buffer to $10 million

The Denton Public Utility Board on March 24 recommended an ordinance to preserve existing electric rates while changing how the utility smooths fuel and transmission costs. The board approved the item unanimously after a presentation from DME finance staff and board discussion.

DME finance analyst Vispapantavan told board members the proposal would move both the energy cost adjustment (ECA) and the transmission cost recovery factor (TCRF) from a six‑month to a 12‑month outlook and increase the ECA buffer from plus/minus $5,000,000 to plus/minus $10,000,000. “To smooth out the variability and normalize the seasonality of the load and pricing, we want to move to a 12 month outlook,” Vispapantavan said.

The change is designed to reduce the chance that a short‑term spike or drop in fuel or sales would trigger a large, temporary rate adjustment. Vispapantavan showed simulations indicating that under the current policy the account balance could swing heavily negative by December, while the 12‑month outlook would keep the balance closer to the smaller buffer range.

Board members discussed policy tradeoffs between a flatter, levelized rate and a seasonal approach that would more closely tie prices to summer and winter usage. Board member Blake asked whether a 12‑month average would cause winter customers to effectively subsidize summer cooling loads; another board member said stability was the priority for many Denton customers after previous large rate increases.

Bill Shepherd, DME, described how the rolling 12‑month forecast would be reviewed quarterly and that the $10 million buffer would trigger recommended adjustments if the 12th‑month forecast exceeded that range. “If on that twelfth month of the forecast we vary by plus or minus $10,000,000, then we'll come to you with a recommended change,” Shepherd said, noting the buffer could be raised in future as load grows.

The board moved and unanimously approved recommending the ordinance establishing the schedule of rates for electric service and amendments to the ECA and TCRF calculation methodology. No roll‑call vote with named tallies was recorded in the meeting transcript; the chair announced the motion passed unanimously.

Background: DME staff framed the change as a tool to manage volatility tied to fuel costs and changing retail load; staff recommended keeping the current base rates while altering the outlook period and buffer. The board directed staff to bring the ordinance forward to the City Council process per normal practice.

Votes at a glance: The board voted to recommend adoption of the ordinance to amend ECA and TCRF calculation methods (motion passed unanimously).