City of Prattville Wastewater Department Sewer Cost of Service Study - - PowerPoint PPT Presentation

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Feb 24, 2023 113 likes •223 views

City of Prattville Wastewater Department Sewer Cost of Service Study 12 months ending September, 2014 Presented February 2, 2016 Jim Marshall | Jackson Thornton Utilities Consultants Typical Objectives of Rate Study 1. Revenue Stability and

SLIDE 1

City of Prattville Wastewater Department

Sewer Cost of Service Study 12 months ending September, 2014

Presented February 2, 2016

Jim Marshall | Jackson Thornton Utilities Consultants

SLIDE 2

Typical Objectives of Rate Study

1. Revenue Stability and Sufficiency
2. Fairness and Equity
Fair is related to cross subsidies
Equity is related to Price=Cost
3. Ability to Pay
4. Simplicity (Admin & Cust Understanding)
5. Defendable

2

SLIDE 3

Overview of Process

1. Determine Revenue Requirements
How much does the system need to operate?
2. Develop Revenue Requirements by Rate

Class

How much do I need to recover by rate class?
3. Develop COS Rates and Design Acceptable

Rates

How do I best recover the needed revenues?
4. Implement Rate Changes

3

SLIDE 4

Cash Method Revenue Requirement

4

Operations & Maintenance Expense 2,361,938 $ Plus: Debt Service 1,338,845 $ Plus: Rate Funded Capital 942,233 $ Total Revenue Requirement 4,643,016 $ Less: Other Revenue 32,233 $ Rate Requirement 4,610,782 $ TOTAL REV. REQ.

**Debt Service includes $1,200,000 of future debt service.

SLIDE 5

Components of Revenue Requirement

5

Operations ¡& ¡ Maintenance ¡ Expense 51% Debt ¡Service 29% Rate ¡Funded ¡ Capital 20%

Revenue ¡Requirement

SLIDE 6

Revenue Requirement

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$-‑ $500,000 ¡ $1,000,000 ¡ $1,500,000 ¡ $2,000,000 ¡ $2,500,000 ¡ $3,000,000 ¡ $3,500,000 ¡ $4,000,000 ¡ $4,500,000 ¡ $5,000,000 ¡ Total Res-‑I Res-‑O Com-‑I Com-‑O Ind

Rev. ¡Req. ¡by ¡Rate ¡Class

Operations ¡& ¡Maintenance ¡Expense Debt ¡Service Rate ¡Funded ¡Capital

SLIDE 7

Recovery by Class

7

78% 79% 84% 77% 76% 72% 0% 20% 40% 60% 80% 100% 120% 140% Total Res-‑I Res-‑O Com-‑I Com-‑O Ind

Recovery ¡by ¡Rate ¡Class

Total Res-I Res-O Com-I Com-O Ind Total Revenue 3,635,024 $ 2,697,358 $ 22,737 $ 867,959 $ 31,054 $ 15,915 $ Over/(Under) Recovery (1,007,992) $ (733,949) $ (4,232) $ (253,965) $ (9,543) $ (6,304) $

SLIDE 8

Recommendations – 5 Year Plan

8 Customer Volumetric Customer Volumetric Total yr 1 1.00 $ 0.25 $ yr 1 123,279 $ 216,652 $ 339,931 $ yr 2 1.00 $ 0.20 $ yr 2 123,279 $ 173,322 $ 296,601 $ yr 3 1.00 $ 0.15 $ yr 3 123,279 $ 129,991 $ 253,270 $ yr 4 1.00 $ 0.10 $ yr 4 123,279 $ 86,661 $ 209,940 $ yr 5 1.00 $ 0.05 $ yr 5 123,279 $ 43,330 $ 166,609 $ 5.00 $ 0.75 $ 616,395 $ 649,957 $ 1,266,352 $ ADDITIONAL REVENUE ANNUAL RATE ADJUSTMENT

SLIDE 9

Residential-Inside Rate Curve – Full Implementation

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Cost of Service Current Rate Proposed Rate Difference Customer Charge 13.84 $ 11.00 $ 16.00 $ 5.00 $ All Usage 2.99 $ 2.55 $ 3.30 $ 0.75 $

$- $5.00 $10.00 $15.00 $20.00 $25.00 1 2 4 5 6 8 10 12 15 20

$/kGal Usage

Res-Inside Cost Curve

COS Total $/kGal Current Rate $/kGal Proposed Rate $/kGal

SLIDE 10

Residential Rate Impact – Full Implementation

10

Usage COS Rates Current Rates Proposed Rates Monthly Change Daily Change Current $/kGal Proposed $/kGal 1 16.84 $ 13.55 $ 19.30 $ 5.75 $ 0.19 $ 13.55 $ 19.30 $ 2 19.83 $ 16.10 $ 22.60 $ 6.50 $ 0.22 $ 8.05 $ 11.30 $ 4 25.81 $ 21.20 $ 29.20 $ 8.00 $ 0.27 $ 5.30 $ 7.30 $ 5 28.80 $ 23.75 $ 32.50 $ 8.75 $ 0.29 $ 4.75 $ 6.50 $ 6 31.80 $ 26.30 $ 35.80 $ 9.50 $ 0.32 $ 4.38 $ 5.97 $ 8 37.78 $ 31.40 $ 42.40 $ 11.00 $ 0.37 $ 3.93 $ 5.30 $ 10 43.76 $ 36.50 $ 49.00 $ 12.50 $ 0.42 $ 3.65 $ 4.90 $ 12 49.75 $ 41.60 $ 55.60 $ 14.00 $ 0.47 $ 3.47 $ 4.63 $ 15 58.72 $ 49.25 $ 65.50 $ 16.25 $ 0.54 $ 3.28 $ 4.37 $ 20 73.69 $ 62.00 $ 82.00 $ 20.00 $ 0.67 $ 3.10 $ 4.10 $ Average Usage 5,396