existing resources, transmission upgrades, or the costs associated with relicensing any utility-owned hydroelectric facilities.
If the cost limitation is insufficient to support the projected costs of meeting VMUS' RPS targets, as specified above, VMUS may refrain from executing any further contracts for eligible renewable energy resources, beyond what can be procured within the cost limitation.
B. Relevant Factors and Findings
To determine what cost limitation is necessary to prevent disproportionate rate impacts, the Victorville City Council has considered the following factors and made the following findings:
1. Economic Conditions
A significant number of the City’s residents live below the poverty level. In 2018, Victorville’s poverty rate (averaged over the prior 5 years) was 19.5%,1 which is nearly double the statewide average of 10.4%.2 Further, over the same period, Victorville’s unemployment rate was 13.6% compared to a statewide average of 6.7%. The State of California Labor Market Information Data Library lists a preliminary 13.4% unemployment rate in the City of Victorville as of September 30, 2020.
Property tax receipts fund essential City services. VMUS provides electric service to several of the Cities largest property taxpayers. Competitive electric rates are essential to expanding employment opportunities by encouraging existing businesses to remain and expand their facilities and attracting new businesses.
Finding: The Victorville City Council finds that VMUS' cost limitation must be structured and set at a level that avoids harm to the local economy, limits impacts on economically vulnerable residents, and avoids increasing the unemployment rate.
2. Customer Make-up
While VMUS serves a diverse group of customer types, the vast majority of VMUS's total load is associated with just a few large customers. Three of VMUS' customers consume 76% of retail sales. To the extent that any one of these customers ceases to operate or relocates, VMUS's remaining customers would bear the costs of any stranded investments. Shifting these costs to other customers could have cascading consequences by threatening the viability of other customers and further exacerbating the high poverty and unemployment rates in the City. In light of these factors, VMUS's customers could be disproportionately harmed by rate increases.
Finding: The Victorville City Council finds that VMUS' cost limitation must be designed so that it does not overly burden any one-customer class.
3. Improving the Financial Condition of VMUS
1 American Community Survey (2018).
2Id.