20120629Reply Comments.pdf

FALLS'WATER
COMPANY
2180 N Deborah Dr, Idaho Falls, Idaho 83401 Tel.: [phone]
Website: www.fallswater.com Fax: [phone]
2012 JUN 29 AM 10: 31
OAHC PUSfi
UT1L1fES COMMISSON
June 28, 2012
Idaho Public Utilities Commission
472 West Washington Street
P0 Box 83720
Boise, Idaho 83720-0074 F (-O)
Enclosed are the original and (7) copies of the Company's Reply Comments. A CD of the Excel
attachment files is included.
If you need anything else, please, let me know what you need.
Thank you,
K. Scott Bruce
General Manager
Falls Water Company, Inc.
Enclosures
K. Scott Bruce
Falls Water Company, Inc.
2180 N. Deborah Dr
Idaho Falls, ID 83401
Tel. [phone]
Fax [phone]
E-mail: [e-mail]
Representative for Falls Water Co., Inc.
RECER'ED
?012 JUN 29 AM 10:31
IL).
L1 ' 0 11tH S S 10
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
FALLS WATER COMPANY FOR AN ORDER ) CASE NO. FLS-W-12-1
AUTHORIZING INCREASES IN THE COMPANY'S ) RATES AND CHARGES FOR WATER SERVICE ) COMPANY'S REPLY TO
) COMMENTS OF THE
) COMMISSION STAFF
)
Comes now Falls Water Company and files the following reply to comments of the Commission Staff
dated June 28, 2012.
The Staff made the following recommendations:
1.Staff recommends use of a 2011 test year.
2.Staff recommends an 11.00% ROE and an overall return on rate base of 7.23%.
3.Staff recommends a rate base of $1,821,144.
4.Staff recommends a decrease in Land and Water Rights of $92,518.
5.Staff recommends a decrease in Meters (radio transmitters, etc.) of $713,542.
6.Staff recommends a decrease in Depreciation Expense and Accumulated Depreciation of $80,739.
7.Staff recommends a revenue requirement of $1,169,054. This represents additional revenue of
$15,832 or a 1.4% increase in revenues.
8.Staff recommends a decrease of Power Cost Expense by $18,535.
9.Staff recommends a decrease in Water Treatments Costs (Chemicals) by $427.
10.Staff recommends a decrease in Office & Warehouse Rent Expense by $11,957.
11.Staff recommends decrease in Equipment Rental Expense of $11,957.
12.Staff recommends an increase in Working Capital of $1,177.
13.Staff recommends that the Commission approve the new customer charges proposed by Staff
maintaining the current volume allowance for various service meter size and maintaining also the
current commodity charge for all service meter sizes.
14.Staff recommends that the Company's CPCN be amended after this rate case is completed.
15.Staff recommends that Commission approve monthly reading of all customer meters throughout
the year as requested by the Company.
16.The Commission approve an additional charge based on time and materials expended when the
installation of a new service line requires the Company to bore a line under a road.
17.The Company refund unauthorized charges collected from customers.
Falls Water Company Comments June 28,2012
18. The Company comply with the requirements of the Commission's Rules of Procedure, in
particular Rule 125, with respect to preparation of Customer Notices and Press Releases.
RESPONSE TO RECOMMENDATION NO. 1
The Company concurs with the Staff's recommendation No. 1, that 2011 be used as the test year.
RESPONSE TO RECOMMENDATION NO.2
Staff has made the recommendation for the return on equity (ROE) to be reduced to 11.00% and an
overall return on rate base of 7.23%. The company recognizes the state of the current economic
environment. Government interest rates are lower and the opportunity for return on investment is
becoming more difficult. Investing in a small water company has many inherent risks, as follows:
1.The first and foremost risk is regulatory risk, as demonstrated by the staffs comments and
actions in response to this rate cast and more particularly the metering project investment
made by the company. Water companies are regulated by many State and Federal
agencies whose policies tend to swing with current political and economic conditions.
2.Investing in a small water company is a very long-term commitment, with little liquidity.
Investments are viewed over Twenty to Forty years. Unlike the Stock market or Bond
market, where investments can be liquidated in a matter of minutes based on trends or
current economic conditions. The investment made in a small water company must return
an average return over many economic and political cycles. When the economy was
doing very well and the stock market was producing 25% to 30% percent returns did the
PUC raise the ROE to compete with the economic conditions?
3.The ROE needs to be adequate to attract new long-term capital and maintain the financial
integrity of the small company. A small, aging water company requires significant capital
to maintain and improve the system. If adequate long term ROE is not produced, the
capital needs of the system will not be available, and the system will slowly deteriorate.
Falls Water is a small utility company with the inherent risk and market forces that justify a
higher ROE than a large utility with the financial ability to withstand market and economic
conditions. The U.S. Supreme Court, in its 1942 decision of the Hope Natural Gas Company (320
US 591) held that "the return to the equity owner should be commensurate with returns on
investments in those enterprises having corresponding risks. The return, moreover, should be
sufficient to assure confidence in the financial integrity of the enterprise so as to maintain credit and
attract capital. .
The company will have great need in the near future to attract capital for projects such as
Trunk line improvements, Storage tank and Booster stations, and replacing 50 year old water lines
and services. However, weighing the future needs of the system with the current economic
environment, the company would accept the 11% ROE, if the arguments to follow concerning rate
base and depreciation are accepted.
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Falls Water Company Comments June 28,20 12
RESPONSE TO RECOMMENDATION NO. 3
The company feels that the Staff recommendation No. 3 to reduce rate base by $713,542 is
unjustified. The company has adjusted the rate base to $2,416,051 to reflect the inclusion of most of the
meter project and reducing the Land and Land Rights as staff recommended, see Attachment 1. The
company will provide additional evidence to include the meter project in the responses below. Such a
large adjustment on a small company would have catastrophic effects to both the current and future
operations of the company and ability to raise future capital for much needed improvements.
RESPONSE TO RECOMMENDATION NO. 4
The Company accepts the decrease in Land and Water Rights of $92,518 as explained in
recommendation No. 4 of Staffs comments.
RESPONSE TO RECOMMENDATION NO. 5
The company feels that the staff recommendation to reduce the automated meter reading (AMR)
project by $713,542, an 85% reduction, prohibits the company from earning a fair rate of return on
investment and is therefore confiscatory of the company rate base and overall rate of return.
The company made an investment in AMR for many reasons that are valuable to the customer and the
system as a whole. Most investments in a water company are not economically justifiable based on a
cost savings analysis or economic benefit. When a looping project or water line project is installed how
is it economically justified with a cost payback, the value is in the benefit to the system performance and
reliability. The value of the project is part of the underlying intrinsic value of the system as a whole.
Many cities throughout Idaho have already fully adopted the AMR system, many are in the process of
very quickly converting their entire systems with the meter reading technology and other cities are slowly
utilizing the technology. However, in talking with over twenty water system operators almost all are
using and implementing the AMR systems and recognize the benefits of the technology and system
improvements. The Following is a list of contacted water systems and their utilization of AMR within
their respected water system.
City Water Systems Currently Utilizing AMR throughout Entire System Include:
Chubbuck, Meridian, Kimberly, Kuna
City Water Systems with Bids and Funding to Implement AMR throughout Entire
System within the next 12— 18 months: Ashton and Burley
City Water Systems with AMR and Touch Read Meters, but Migrating to Full AMR:
Nampa - 40% AMR, 60% Touch/Manual - Converting about 3,000 AMR per year
Caldwell —25% AMR, 75% Touch - Converting to Full AMR over 3-5 years.
Driggs - 50% AMR, 50% Touch - Working towards Full AMR
Ammon - 10% AMR, 90% Unmetered - Full AMR over 4-5 years.
Blackfoot - 10% AMR, 90% Touch - All New Hookups are AMR
Pocatello - 40% AMR, %60% Touch - Slowly Migrating to AMR
United Water - 10% AMR, 90% Manual - Labor Union Agreements
Twin Falls —5% AMR, 95% Touch - Adding 100 - 300 AMR annually
3
Falls Water Company Comments June 28,20 12
These are the only cities contacted, all of which are using the AMR technology either fully or partially
with over 65% either currently fully AMR or have plans to fully utilize over the next 5 years. All the
cities recognize AMR as being beneficial to the system and most cities are pushing for full utilization
over the near future. In talking with an Employee of United Water they are very limited with
implementing AMR because of Labor Union Contracts that limit the use of the technology, but as
employees retire, AMR will slowly be implemented.
AMR technology has also been widely implemented by other local utilities such as Electricity and
Gas Utilities within the State of Idaho.
Many professional engineers and government agencies are supportive of the AMR technology and
recommend its use for small water systems. Please review attachments 2 and 3, which are letters of
recommendation for the AMR project from Schiess and Associates, the Engineer for our water study and
master plan, and also from the Idaho Department of Environmental Quality. Both of which mention the
many benefits of the AMR project and that similar projects have been supported and funded by State and
Federal programs.
Falls Water system is located in a very cold, icy, snow packed climate during the winter months
which limits access to the meter and the old touch pad for meter reading for almost half of the year.
Currently Falls Water takes the last meter reading of the year around October 15th and the first meter
reading for the year around April 15th, so for six months of the year the company and its customers do not
know how much water is being used, where it is being used, or if it is being wasted through leaks, either
on the system side or the customer side of the meter. The installation of the MXU onto the current meter
gives both the company and the customer access to the current information, year round, and helps
promote conservation, early leak detection, and current cost savings.
The company has been converting to the AMR meters since 2007. The commercial and multi-family
residential accounts have been fully radio read for 4 to 5 years. All new construction meters have been
AMR for the past 4 years, with several completed subdivisions within the system being entirely radio
read. The company made the investment to convert the entire system to AMR based on past experience
with the technology, and the sound judgment of our system operators and management team. The
company believes the investment was reasonable and justified to bring all its customers up to the same
standard. Like so many of the municipal water systems within the state have done. Falls water surely
was not the first system in the state to be completely converted to AMR. Other cities of the same size,
and both larger and smaller have embraced the technology and are making similar investments.
Today's consumer is more informed than ever before, and they desire information to be able to make
their own personal decisions based on accurate, current and up to date information. The AMR project
gives current information to the customer year round so they can make their own decision as to how
much water they need to use. The Customer can have better control of their utility bill when they are
educated as to how much water they are actually using, rather than estimating a six month average during
the winter. Accurate information is needed to better control the flow, quality, delivery, and conservation
of water, both by the company, and by the consumer.
4
Falls Water Company Comments June 28,2012
Falls Water is one of the areas lowest cost water providers in Eastern Idaho. In attachment 4,
the company used the current rates of many of the local water providers in Eastern Idaho and
annualized the usage of the other cities to match the water usage of Falls Water Company of 7
months of 12,000 gallon allowance and five months of summer usage of 32,000 gallons for an annual
total usage of 240,000 gallons (20,000 gallon straight line average monthly usage). The comparison
shows the current rates are 33% lower than the average city annual rates and 23% lower with the
proposed rate increase. The customers of Falls Water benefit from paying some of the lowest water
rates in the area. This goes to show the efficiency of the company and that the company strives to
operate a quality water system while keeping the rates extremely competitive with the surrounding
cities.
RESPONSE TO RECOMMENDATION NO. 6
Staff recommends a 35 year depreciable life with a 10% salvage value for the Sensus iPerl meters
installed in the Company's 2011 metering project. The Company will accept that the meter has a useful
life longer than the 10 year depreciable life used by the Company. The useful life of a meter is
determined by multiple factors such as 1) accuracy of the meter, 2) life of meter components, and 3) the
ability to repair the unit.
The meter is only useful if it is accurate. The Company's tariff for a meter testing fee states that the
meter is considered accurate if it is within plus or minus 1.5%. If the meter is outside that parameter, it is
to be replaced. The meter removed can then be possibly rebuilt.
The Company has many Sensus SRII meters in its system. These meters are brass base positive
displacement meters. They can possibly be repaired based upon the meters defect. Registers, freeze
plates, impeller chambers, and screens can be replaced and lengthen the useful life of the meter. If the
brass body cracks then the meter is unusable and must be retired.
The Sensus iPerl meter has a sealed composite plastic body. It has no moving parts. It is magnetic
flow meter and can register lower flows than the SRII. It has a solid state electronic register built into the
body and cannot be replaced. The battery powers the register and powers the generation of the magnetic
field that measures the water flow. The battery and meter have a 20 year warranty as shown in the copy
of the Sensus warranty document -- Attachment 5. The Company is confident that the useful life of an
iPerl meter would be up to 25 years. The limiting factor is how long the battery actually lasts. The
battery cannot be replaced in order to lengthen the useful life of the meter. Because of the battery life
having a 20 year warranty, the Company is not comfortable with the Staff recommendation for a 35 year
depreciable life. The salvage value of 10% is uncertain at this time for an iPerl. The brass meters would
have salvage value from the metal base; however, the Company finds it questionable that the plastic body
of the iPerl or the small amount of metal from the electronic register would have a 10% salvage value.
Therefore, the Company proposes that for the iPerl meter a depreciable life of 25 years with zero salvage
value is more realistic given the components of the meter.
The Sensus 520M endpoint (MXU) is similar in construction. The body of the unit is made of a
composite plastic with electronics inside the sealed body. The battery has the same 20 year warranty as
the iPerl. The battery cannot be replaced to extend the useful life of the unit. The unit is factory sealed to
Falls Water Company Comments June 28,20 12
keep moisture out of the unit and to protect the electronics. The Company proposes a 25 year depreciable
life and zero salvage value for the MXU on the same grounds as those given for the iPerl.
The Company recognizes that the depreciable life of the asset should closely match the useful life of
the asset. The Company noticed that depending on the source many different and widely varying
depreciable life recommendations can be found. One such example is a memorandum from Arizona
listing typical annual depreciation rates for water companies (see Attachment 6) which lists a 12 year
depreciable life for meters. In the Environmental Protection Agency's Asset Management: A Handbook
for Small Water Systems (publication # EPA 816-R-03-016) page 9 (see Attachment 7) the expected
useful life for metes is listed at between ten to fifteen years.
The Company proposes an adjustment to Staff's adjustment to depreciation for the 2011 meter
project. The Company adjusts Staff's adjustment to the meter project to include $674,024 of the
$713,542 removed by Staff to bring the asset value to $800,360 (see Attachment 8). The Company
proposes the 2011 Meter Project be depreciated over a 25 year life with no salvage value. An adjustment
to depreciation of $28,766 is proposed (see Attachment 9).
The Company noticed that Staff in their rate base calculation (Staff Comments Attachment I)
removed $80,739 from the Accumulated Depreciation. No depreciation for the 2011 Meter project was
booked to depreciation during 2011 because the project was still Construction Work in Progress until
early January 2012. Company adjustments in its calculation of rate base restored the $80,739 removed
by Staff (see Line 14 in Attachment 1).
RESPONSE TO RECOMMENDATION NO. 7
The Company disagrees with Staff's recommendation of a revenue requirement of $1,169,054 and the
resulting $15,832 additional revenue representing a 1.4% increase in revenues. The Company proposes
the following rate design.
Rate Design -
The Company disagrees with the Staffs recommended rate design. The Company is prepared at this
time to keep the volume allowance included in the Water Base charge at 12,000 gallons rather than the
Company's previous rate design which proposed 5,000 gallons as a volume allowance. The Company
maintains that the fairest rate for the customers is to ultimately have a rate design that sets the base rate
based on the Company's fixed costs and include no volume allowance and set the commodity rate to
cover the costs directly associated with the costs of water production so that each customer pays only for
that water that they use. Company recognizes that while this is the fairest rate structure the Company and
its customers are not fully prepared to adopt such a rate design at this time.
The rate design described above will only be possible if the Company can read meters year round.
However, the Company does not wish to read meters year round if it must bear the costs of the automated
meter reading (AMR) equipment on its own. The long term benefit to the customer is real if not
justifiable from a financial and economic standpoint.
6
Falls Water Company Comments June 28,2012
The Company proposes a revenue requirement of $1,281,845 as shown on Line 12 of Attachment 10.
The revenue requirement is based upon the Company's adjustments to Staff recommendations for plant
in service and depreciation shown in Attachment 1. The Company recommends a rate base of
$2,416,051 as shown on line 21 of Attachment 1.
The Company's adjustments to the proforma results of operations are shown in Attachment 11. The
Staff numbers are shown in Column J and the Company's adjustments are shown in Columns K and L.
The Company recommends total expenses of $955,756 as shown on line 29 of Attachment 1.
The Company accepts the Gross up rates used by Staff in their gross-up calculation for revenue
requirement.
The Company used the Staff's recommendation for an 11% ROE rather than the 12% ROE proposed
in the Company's application. The resulting 7.23% rate of return is used in the Company's calculation of
revenue requirement.
Commodity Charge -
The Staff proposes using an annual total excess usage of 639,602,000 gallons to calculate its rate
design. This number is an estimate based upon an estimate of excess usage from the Company's last rate
case FLS-W-09-1. In that rate case, the Company's rate structure was modified to reclassify customer
classes by meter size rather than the previous rate classes based on type of usage (ie. residential,
commercial, etc.). The Company, in 2009, had no way of preparing usage information for Staff based on
meter size. The Company's billing system was unable to provide usage reports based on meter size.
The Company proposes that the calculation for revenue use 2011 excess usage data because it
provides 1) actual historic data from the test year and 2) the number of customers added from January 1,
2011 to January 24, 2012 (the date used to establish the number of customers in the system for rate
design purposes) is 87 or 2.27% of the total customers. Seven of the 87 customers were added in January
2012; therefore, 80 of the new customers were active at some point in 2011. The Company showed
excess usage in 2011 to be 566,024,000 gallons as shown on Line 63 on page 2 of Attachment 12. This
is a difference of 73,578,000 gallons less than the Staff's estimate for rate design.
The Company proposes to add an adjustment of $5,260.50 to total revenue from excess usage as
shown on Line 41 on page 1 of Attachment 12. The calculation was made by adjusting the number of
active customers to reflect only active customers in the system in 2011. Of the 3840 active customers,
the 7 customers added in January 2012 were removed. The number of active customers at the beginning
of 2011 was 3753. The number of customers added to the system, during 2011, was 80 (3833-3753).
The average number of active customers during the year is 3793 ((3833+3753)/2). The 2011 average
excess usage per customer of 149,229.57 gallons=566,024,000 gallons/3 793 average number of active
customers. The adjustment to the 2011 excess usage gallons for the total customers is 149,229.57 gallons
x 3840 active customers = 573,038,000 gallons. The difference is 7,014,000 gallons of excess usage over
the 2011 actual excess usage of 566,024,000 gallons. Detail of the calculation for the additional excess
usage gallons from new customer is shown in lines 79 through 90 on page 2 of Attachment 12.
7
Falls Water Company Comments June 28,2012
Attachment 13 shows that revenue collected under the present rate is $161,661 short of the revenue
requirement.
The Company proposes the following rate design:
BASIC CUSTOMER CHARGES
Service Meter Size Volume Allowance in Gallons Minimum Charge
5/8 and %inch 12,000 $17.85
1 inch 17,000 $24.99
1 Y2inc 22,000 $32.13
2 inch 28,000 $41.06
4 inch 49,000 $73.19
COMMODITY CHARGES
I Commodity Charges for all Meter Sizes ($/1,000 gallons) $0.75
The Company proposed rate design would increase the average monthly billing for a % inch customer
from $23.00 to $26.38 per month, an increase of $3.38 or 14.71%. The total revenue generated from
rates is $1,282,710 ($845,300 from base rate + $429,778 from commodity + $7,632 from nonrecurring
charges). The base rate revenue accounts for 66% of the total revenues and the commodity rate revenue
accounts for 34% of the total revenues. A summary of the rates is shown in Attachment 14.
Attachment 15 shows the calculation for the monthly average billing for each meter size. The
amounts in Columns C through N and Lines 1 through 14 of Attachment 15 are the revenues booked in
2011. The information is summarized by meter size on Lines 30 through 34 of Attachment 15 and
increases for each meter size are shown in dollar amount and percentage.
RESPONSE TO RECOMMENDATION NO. 8
Staff recommends an $18,535 reduction in the Company's normalized Power Costs. The reduction in
water production is attributable to the metering of unmetered customers between 2006 to 2008 and
reduced water use as a result of the economic downturn as exhibited in the Staff Comments, Attachment
F. The water production has been on a slight increase trend as the economy has stabilized and improved.
The Company agrees that the use of a six year water production cycle is acceptable to normalize Power
Costs.
RESPONSE TO RECOMMENDATION NO. 9
The Company accepts the recommendation of Staff to reduce the normalization of Water Treatment
Costs (Chemicals) by $427 because a six year water production cycle is acceptable to normalize the
Water Treatment Costs.
8
Falls Water Company Comments June 28,20 12
RESPONSE TO RECOMMENDATION NO. 10
The Company disagrees with Staff's recommendation to reduce the Building Lease Cost by $11,957.
Staff disallowed the Company's justification of inventory storage because it found no values listed in
Account No. 151 - Materials and Supplies between the years 2007 and 2011. The inventory was not
booked to an asset account but booked to an expense Account No. 620.6 - Distribution Maintenance and
Supply. The items of inventory (twenty foot lengths of six inch, eight inch and twelve inch pipe;
mechanical restraining joints; meter barrels and meter barrel extension rings) are bulky and take up space
Staff stated that they felt that the Company provided no evidence that it was obligated to store the
rental equipment which is rented from the owner. If the Company were renting the equipment from a
equipment rental company on a monthly basis, the Company would need to store the equipment on its
premises. The Company needs to store the equipment it rents long term whether the equipment is rented
from a rental establishment or from the Company's owner. Given that the Company would have to store
the equipment if rented from an equipment rental store, it felt it was under the same obligation to store
the rental equipment even if rented from the Company's owner.
The Company does do routine maintenance of its vehicles. Because of the risk of contamination of
wells, storage of vehicles and vehicle maintenance at well sites, within 100 feet of the wellhead, is not
allowed by Idaho's Department of Environmental Quality (IDEQ). The Company uses a portion of the
rented warehouse space to store the rental equipment and perform routine maintenance on its vehicles.
The storage of the rental equipment was not possible given the warehouse space was previously rented in
the building.
The Company will cede the fact that approximately 2,500 square feet of the additional 5,000 square
feet leased under the new lease is not currently being utilized effectively. The Company proposes an
adjustment to the Staff Recommendation to include 50% rather than the 20% of the additional 5,000
square feet be allowed. The total lease cost to be $50,987 annually. Company recommends that Staff's
adjustment to annual rent be decreased by $8,992 as shown in Attachment 16.
RESPONSE TO RECOMMENDATION NO. 11
The Company has rented the heavy equipment it uses to do system repairs for many years. The
Company routinely repairs service line leaks on the Company's side of the meter as well as repairing and
replacing fire hydrants, and upgrading meter barrels. Equipment rental costs were $20,701 in 2008,
$20,357 in 2009, and $19,806 in 2010. The Company has shown its need to rent equipment in previous
years.
Staff states that the Company only documented $20,000 of the $31,474 of the 2011 Equipment Rental
Expense. The Company's response to Request No. 23 of the First Production Request requested
justification of the rental equipment and copies of invoices. The Company's response included
Attachment 12, which included copies of all invoices totaling $31,474 for 2011.
9
Falls Water Company Comments June 28,2012
The Staff stated that purchasing equipment would be more consistent with an ongoing need and
would reduce the annual cost. Attachment 17 shows a cost comparison of purchasing the same brand and
model of equipment currently rented. The comparison shows that to purchase a new backhoe and a new
dump truck would have a combined monthly cost of $3,820. To find the same equipment used, the total
monthly costs come to $2,751. Currently the monthly rental cost of the equipment is $2,000.
Staff listed the ten invoices from 2011 to justify only $20,000 for Equipment Rental Expense. The
Company started leasing the equipment on March 1, 2011. The equipment is rented twelve months of the
year not just for ten. The Company asks the Commission to allow an increase of $4,000 (2 months rent
times $2,000 per month) to the Staff's recommendation of $20,000 for a total Equipment Rental Expense
of $24,000 annually.
RESPONSE TO RECOMMENDATION NO. 12
Company proposes an increase of $1,624 to Staff's recommended adjustment to Working Capital
Allowance (see Line 31 of Attachment 1). The increase results from proposed Company adjustments of
$12,991 to Staff recommended operating expense adjustments for detail of Company adjustments see
Attachment 11 Proforma Results of Operations.
RESPONSE TO RECOMMENDATION NO. 13
The Company disagrees with the Staffs recommended commodity rate charge in its rate design.
Company is prepared at this time to keep the volume allowance included in the Water Base charge at
12,000 gallons rather than the Company's previous rate design which proposed 5,000 gallons as a volume
allowance
Company's response to Staff recommendation No. 7 details the Company's proposed rate design.
RESPONSE TO RECOMMENDATION NO. 14
The Company is willing to comply and has stated its intent to amend its CPCN No. 236 after the
current rate case is completed.
RESPONSE TO RECOMMENDATION NO. 15
The Company has voiced its position that the value and benefit of the AMR system cannot and should
not be based solely on an economic and financial cost/benefit analysis. The ability to meter year round
has beneficial effects on water resource management, conservation planning, and water right planning.
The Company, while disagreeing with the Staff assessment of the benefit of the project for our
customers, is in agreement that year round meter reading is a positive step towards meeting water
resource management goals.
10
Falls Water Company Comments June 28,2012
RESPONSE TO RECOMMENDATION NO. 16
The Company agrees with Staff recommendation to amend the Company tariff to include the
Commission approved language:
When the installation of a new service line requires the Company to bore a line under a
road, all additional costs will be charged to the customer on a time and materials basis.
The new customer may, at their option, hire a Falls Water Company approved
independent contractor to perform the road bore and connection. The Company will
require such contractor to show proof of bonding, licensing and insurance and have at
least five (5) years of experience at hot tapping water lines. Falls Water Company will
inspect and approve all the work being performed to insure compliance with the
Company's installation requirements.
RESPONSE TO RECOMMENDATION NO. 17
The Company agrees with Staff recommendation to refund unauthorized charges collected from
customers.
RESPONSE TO RECOMMENDATION NO. 18
The Company agrees with Staff recommendation to comply with the Commission's Rules of
Procedure, in particular Rule 125, regarding the preparation of Customer Notices and Press Releases.
RESPONSE TO MISCELLANEOUS STAFF RECOMMENDATIONS:
Xpress Bill Pay -
The Company concurs with Staff support of the Company's decision to pay for the cost of the
program to provide an online bill pay option to its customers. The program has worked very well and
many of the customers welcomed the opportunity to pay their water bill online just as they pay many of
their other bills.
Private Fire and Sprinkler Service—
The Company agrees with Staff recommendation to investigate the number of customers with private
fire and sprinkler services. The Company will then prepare a proposal for a separate tariff for this
service.
The company and its management and staff take great pride in running a system with very low
complaints and very few violations. The company makes every effort to be both proactive in updating
the system to ensure quality water delivery and service, while keeping the rates competitive with
11
Falls Water Company Comments June 28,20 12
surrounding cities, for the benefit of the customer. The company feels that the PUC staff placed more
emphasis on the economic benefits to the customer with regard to the meter project. If the company
focused only on keeping the rates low, there would be no system improvements and ultimately the
customer will suffer with poor water quality, inadequate water pressure, and little service. There is a fine
balance between maintaining and improving the system and keeping rates low. Which we have found
comes through managements experience and careful judgment, with great emphasis being placed on
satisfying the customer with both high quality of product and service and competitive rates. The
company feels it is being reasonable with the proposed rate changes and continues to make prudent
decisions which benefit the customer, the company, and many governmental agencies who regulate the
company and system.
Respectfully submitted this 28th Day of June 2012.
K ~:ec:T2e
Falls Water Company
K. Scott Bruce, General Manager
12
Falls Water Company Comments June 28,20 12
Attachment 1
Falls Water Company
Calculation of Rate Base
(A) (B) (C) (D) (E) (F) (G)
Meter Proj Totals after Totals after
Year-End Completed Staff Staff Company Company Plant in Service 12131/2011 in 2012 Total Adjustments Adjustments Adjustments Adjustments 1 303- Land & Land Rights 2,213,824.33 $ 2,213,824.33 (92,519.30) 2,121,305.03 2,121,305.03 2 304- Well Structures & Improvements 488,781.50 $ 488,781.50 488,781.50 488,781.50 3 307 - Wells 401930.88 $ 401930.88 401,930.88 401930.88 4 310- Generators 16,693.04 $ 16,693.04 16,693.04 16,693.04 5 311 -Pumps &Accessones 419,991.71 $ 419,991.71 419,991.71 419,991.71 6 320-Separators 48,554.14 $ 48,554.14 48,554.14 48,554.14 7 331 -Water Mains 906,136.08 $ 906,136.08 906,136.08 906,136.08 8 334-Meters 985,253.27 839,878.35 $ 1,825,131.62 $ (713,542.35) 1,111,589.27 $ 674,024.00 1,785,613.27 9 335- Hydrants 59,848.75 $ 59,848.75 59,848.75 59,848.75 10 340-Office Equipment 60,518.83 $ 60,518.83 60,518.83 60,518.83 11 341 - Transportation Equipment 138,402.98 $ 138,402.98 138,402.98 138,402.98 12 343 - Tools & Equipment 26,857.88 $ 26,857.88 26,857.88 26,857.88 13 Total Plant in Service 5,766,793.39 839,876.35 $ 6,606,671.74 (806,061.65) $5,800,610.09 674,024.00 $6,474,634.09
14 Less Accumulated Depreciation 1,589,467.25 1,589,467.25 (80,739.00) 1,508,728.25 80,739.00 1,589,467.25 15 Net Plant in Service $ 5,017,204.49 $ (725,322.65) $4,291,881.84 $ 593,285.00 $4,885,166.84
Less Contributions in Ad of Construction
16 Gross Contributions (12/31/2011) 3,492,484.70 17 Less Accumulated Amortization (903,899.11) 18 Net Contributions in Aid of Construction 2,588,585.59 2,588,585.59 2,588,585.59
19 Net Plant in Service 2,428,618.90 1,703,296.25 2,296,581.25
20 Working Capital (118 of Operation and Maintenance Expense) 116,668.88 1,177.00 117,845.88 1,624.00 119,469.88 21 Rate Base 2,545,287.78 $ (724,145.65) 1,821,142.13 $ 594,909.00 2,416,051.13
Company Adjustment to Staff Working Capital Calculation
Staffs Company's
Proposal Proposal Using 118 of Operating Expenses
22 Subtotal of Operating Expense 890,958.00 903,949.00 12,991.00 23 Property Taxes 24,552.00 24,552.00 - 24 Payroll Taxes 39,210.00 39,210.00 - 25 State Income Tax 20.00 20.00 - 26 Subtotal of Operating Expense 954,740.00 967,731.00 12,991.00 27 less:: Bad Debt Expense (10,921.00) (10,921.00) - 28 less: Amortization of Rate Case (1,054.00) (1,054.00) - 29 Subtotal 942,765.00 955,756.00 12,991.00 30 Divisor 8.00 8.00 - 31 Working Captial Allowance 117,846.00 119,470.00 Compans Adjustment to Working Capital
Attachment 2
j Schiess & Associates
ENGINEERING -PLANNING -LAND SURVEYING
June 27, 2012
Scott Bruce
Falls Water Company
2180 N. Deborah Drive
Idaho Falls, Idaho 83401
Subject: Review of PIJC Staff Comments Related to Falls Water Company Case No. FLS-W-12-01
Schiess Project No. 11084
Dear Scott:
This letter includes our opinion as to why your recently installed automatic meter reading (AMR) system
is a beneficial investment for Falls Water Company (FWC) and its customers. Our opinion is rooted in
our knowledge of the state of the meter reading industry as working design professionals in the municipal
water industry and our knowledge of the Falls Water Company water system. We believe FWC and its
customers will benefit from the AMR system for the following reasons:
First, the State of Idaho and US Government have implicitly accepted AMR technology as purposeful and
effective in managing and operating community water systems. Last year, another client of ours, the City
of Ashton, underwent a facility planning process much like FWC did in 2004-2006. Ashton lives with
several feet of snow during each winter season. Ashton elected to convert to an AMR system for many of
the same reasons that FWC did, including ability to read year-round. Ashton's project is being funded by
State Revolving Funds (SRF as administered by DEQ) and an Idaho Community Development Block
Grant (ICDBG as administered by the Idaho Department of Commerce). Both of these programs
administer federal funds. AMR technology is broadly accepted as a management tool by federal and state
agencies that financially support improvements to community water systems. It seems inconsistent that
the PUC, a state agency, will not consider the benefits of the AMR system.
Second, it was noted by PUC staff on page 7 that the Schiess facility plan of 2006 didn't mention or
recommend AMR meters as an argument to reject the use of them. As the author of the study, Schiess &
Associates, by not mentioning AMR meters, did not purposely exclude AMR technology from its
recommendations. At that time, FWC was focused on a touch-read system and installing meters at every
connection. The draft study document was completed in 2004. Since 2004, the water meter industry has
developed the AMR reading technology to a point where the equipment is now better tested and is backed
by a 20 year warrantee. With the warrantee, metering technology should plateau for FWC with the use of
AMR. Touch-read technology is perhaps the plateau technology for very small water systems. If FWC
asked us to update the water facility planning study today we would recommend AMR metering systems
as the meter reading technology of choice for them. There may yet emerge technologies that improve
operation and control of the system, such as remote shut-off capability. Falls Water Company should
evaluate these technologies as they emerge and stay abreast of those technologies that could benefit them
and their customers.
7103 SOUTH 45 WEST I IDAHO FALLS, 10 83402
PHONE: [phone] FAX: [phone]
S4 Schiess & Associates
ENGINEERING•PLANNING.LAND SURVEYING
Third, it may be a precarious position for the PUC to reject AMR technology in part because no other
PUC regulated water system in Idaho has done it. Several cities in Idaho similar to FWC in size have
converted or are converting to AMR. We documented for you our phone conversations with staff at
Nampa and Chubbuck. Chubbuck is very similar in size to FWC and fllly converted to AMR over a year
ago. Requests to the PUC to convert to AMR from other water systems may come. A system in the size
range of FWC desiring to convert to a clearly superior technology for cold snowy climates shouldn't be
discouraged. Why not allow FWC to set precedent by being the first PUC regulated water system in the
state to make the transition?
Fourth, in response to PUC staff comments in the middle of page 7, we believe that all customers of the
system benefit, not just a few who unpredictably have leaks on the house side of the water meter. Every
year the 100 or so customers in the water system who would benefit from the AMR system because of
early leak detection will be different. Perhaps the PUC should consider the AMR system as a type of
insurance program for the customers. To illustrate this, the cost of the AMR system spread out over all
customers is estimated to be $1 .55/month for each user or $18.60 per year per customer (see attached
calculation). If a leak that had begun shortly after the last reading in the fall was discovered in April on
the first meter reading of the year (with a touch-read system), the leak would have gone undetected for six
months. With an AMR system, that leak would have been detected after the first month for a reduction of
83 percent of the leak period, leak volume and cost of the leak to the customer. This has a potential to
save the customer the financial loss of hundreds of dollars. The savings would justify many-fold the cost
of the AMR system attributable to FWC's early identification of the leak. If a leak goes undetected for
six months and afflicts a financially compromised household, the cost of the leak could be devastating
compared to the annual cost of the AMR system built into the rate.
Fifth, in the publication titled Water Conservation Measures Fact Sheet' it states that low water charges
encourage consumption and waste and puts pressure on O&M budgets which lead to poor water treatment
and deterioration in water quality. Water rates can be used as a tool to encourage conservation. FWC
should encourage conservation of the high quality groundwater provided to its customers. Manual read
meters, touch-read meters and AMR meters all have an upward effect on the customer's water rates that
may not be justifiable by financial metrics alone. This is especially true for systems like FWC that
deliver high quality groundwater requiring little to no treatment. One government sponsored study
showed that metered customers use 1345 percent less water'. Attachment F of the PUC staff comments
document shows an overall reduction of water use in the water system after the entire system became
metered. Although metering every customer contributed to the reduction, cool weather and poor
economic conditions probably contributed. Although it is conceded that the majority of water
conservation gained by conversion to water meters may have already been realized by the water system
through manual or touch-read meters, the environmental, managerial, and customer benefits due to the
AMR technology remain:
• Year-round meter reading
• Early leak detection notification to customers experiencing a leak
• Decrease in wasted water
7103 SOUTH 45 WEST f IDAHO FALLS, ID 83402
PHONE: [phone] FAX: [phone]
Schiess & Associates
ENGINEERING-PLANNING-LAND SURVEYING
• Substantial reduction of meter reading time which will free staff to perform neglected
maintenance tasks
• Additional drop in consumption due to added rate cost
• Less water consumption means more homes can be served from existing water rights. The high
quality groundwater source is conserved.
• Less water consumption results in a reduction of power costs
In summary, the reasons why AMR technology should be allowed include:
• Broad government support
• A good fit for FWC and its mission to provide safe drinking water in this cold climate
• AMR is a superior technology that should be embraced, not discouraged. What is good for
similar sized municipal systems in Idaho and Eastern Idaho should be allowed by the PUC
• The technology has direct cost protection benefits for the customer
• Metering technology of any kind is difficult for FWC to justify on financial metrics alone.
Conservation, managerial and customer benefits that conserve the high quality groundwater must
be weighted heavily to gain acceptance
We hope this information helps you as you provide your comments to the PLJC. Thank you for allowing
us to help you. Please let us know if you need clarification or additional support.
Sincerely,
Paul H. Scoresby, PE
Attachments: Memo Documenting Phone Calls to Nampa and Chubbuck
Brief Calculation of Rate Impact Due to AMR Metering System
National Drinking Water Clearinghouse. 1998. Water Conservation Measures Fact Sheet. West Virginia
University. [phone].
7103 SOUTH 45 WEST I IDAHO FALLS, ID 83402
PHONE: [phone] FAX: [phone]
MEMORANDUM
To: File
From: Paul Scoresby, Project Manager
Date: June 26, 2012
Subject: Phone Calls to Nampa and Chubbuck inquiring about AMR
Installations
Project: FWC Letter about PUC Rate Case
No. of Pages: 1
I contacted the City of Nampa and the City of Chubbuck and spoke to Lenard Grady, City Engineer,
(208-468-5409) and Steve Smart, Public Works Director (208-237-2430) respectively. This memo
documents these conversations about the use of AMR metering.
Nampa
• Is in process of converting to AMR city wide. Goal is to be completed within five years.
• ±1- 30,000 total connections
• Now reading every month instead of every other month
• Is not sure whether AMR will be a plateau technology for them. There is a meter on the
market now that can be turned on or off remotely with a valve. This meter is desirable but
very costly right now. These could be used on customers that have poor payment histories.
• Converting to Elster meters and the Datamatic reading system
• Meters now on the market are capable of detecting backflow and remotely opening and
closing a valve installed ahead of the meter.
Chubbuck
• Entire system has been converted to AMR (excepting one or two meters which haven't been
done yet). Conversion was completed 12-18 months ago
• ±1- 4,000 connections
• Now reading every month instead of only the warm weather months
• Purchased a Neptune AMR system and using it with brass meters
• Can read all meters in less than four hours
• Considers the investment into AMR as a plateau investment. Chubbuck never fully
embraced touch-read technology.
• Expressed his opinion that meters never pay for themselves when considering financial cost-
benefit alone
r
Brief Rate impact Calculation for FWC
AMR Related Investment: $800,360
Rate of Return 7.50%
Depreciation Period 20 years
Remaining
Yr % Depreciation Value Profit
1 0 $800,360 $60,027
2 0.05 $760,342 $57,026
3 0.1 $720,324 $54,024
4 0.15 $680,306 $51,023
5 0.2 $640,238 $48,022
6 025 $600270 $45020
7 03 $560,252 $42,019
8 0.35 $520,234 $39,018
9 0.4 $480,216 $36,016
10 0.45 $440,198 $33,015
11 0.5 $400,180 $30,014
12 0.55 $360,162 $27,012
13 0.6 $320,144 $24,011
14 0.65 $280,126 $21,009
15 0.7 $240,108
11
$18,008
16 0.75 $200,090 $15,007
17 0.8 $160,072 $12,005
18 0.85 $120,054 $9,004
19 0.9 $80,036 $6,003
20 0.95 $40,018 S3001
$630,284 Total estimated profit
$800,360 Initial investment
$1,430,644 Total
3,840 No. of customers
Rate impact: $1.55 /mo./customer
Prepared by Schiess Associates 6/27/2012
Attachment 3
Is STATE OFIDAHO
DEPARTMENT OF
ENVIRONMENTAL QUALITY
900 North Skyline Dr., Suite B Idaho Falls, Idaho 83402 [phone] C.L. "Butch Otter, Governor
Curt Fransen, Director
June 19, 2012
Scott Bruce
General Manager
Falls Water Company, Inc.
2180 N Deborah Dr.
Idaho Falls, ID 83401
Re: Falls Water Company Water Conservation and Radio Read Metering Technology.
Dear Mr. Bruce
The Department of Environmental Quality (DEQ) is in support of your efforts at Falls Water Company to
provide safe and reliable drinking water to your patrons. DEQ commends your efforts in upgrading your
water system with current technology by providing your customers with the most reliable and accurate meter
reading equipment available. DEQ recognizes the several benefits offered to the customers and to the
environment by using radio read technology.
DEQ recognizes these benefits as listed below:
• There is better accounting of water use for every month of the year including winter months where
meters can now be read during the winter season. This promotes for better water conservation thus
minimizing the demands on the limited aquifer. It also allows for more accurate and equitable billings
during the winter months were only estimates were made before. It allows earlier detection of leaks in
service lines and in the homes, which help both the water company and the users to conserve water
and save money in pumping and treatment costs. Any effort to reduce loss of water from the system is
a direct benefit to your customers and to the environment.
• The remote radio meter reading process is more efficient and minimizes errors in manual reading.
The radio read system also cuts man power and hours that would normally be needed because of
manual reading. This again is a direct cost benefit to the customer.
• The reduced pumping and treatment will save on power and chemical costs and will prolong the
service life of the well pumps, motors and other equipment. It will help in accounting for any loss of
water throughout the system.
• Because water is ever more becoming a precious commodity the conservation of water is paramount.
This conservation effort will also allow the best use of your minimal water rights which are now
becoming more difficult to obtain.
Because of these direct benefits to the water company, customer and the environment DEQ has been
supportive of radio read technology and has allowed these project cost to be eligible for our funding to make
such system improvements. There are other several water systems in Idaho that are turning to remote radio
meter reading technology because of the direct benefits derived.
If you have any questions pertaining to how we may help and support your water system improvements
please call me at 528-2650.
Sincerely,
111111"L 7-A~
William Teuscher PE
Water Quality Engineer
Idaho Falls Regional Office
Attachment 4
Rate Comparison of Falls Water vs. Local City Rates
Equalizing all cities to same water usage of 12,000 Gallons in Winter, 42,000 Gallons in Summer (20,000 Annual Average Usage)
$ for 12,000 $ for 31,000
Included Gal. Monthly Monthly
Flat Rate Base Gallons $ per 1,000 Gal. Winter Summer Winter (7) Summer(S) Annual
Ammon $37.25 $37.25 $37.25 $447.00
Ashton $18.54 0 $1.00 $12.00 $31.00 $30.54 $49.54 $461.48
Blackfoot $19.60 15,000 $1.46 $0.00 $23.36 $19.60 $42.96 $352.00
Challis $13.45 0 $0.95 $11.40 $29.45 $24.85 $42.90 $388.45
Chubbuck $24.00 0 $1.15 $13.80 $35.65 $37.80 $59.65 $562.85
Driggs $27.00 10,000 $1.00 $2.00 $21.00 $29.00 $48.00 $443.00
Heyburn $30.02 5,000 $0.75 $5.25 $19.50 $35.27 $49.52 $494.49
Idaho Falls $21.00 $21.00 $21.00 $252.00
Iona $23.00 $23.00 $23.00 $276.00
Malad $43.00 5,000 $0.60 $4.20 $15.60 $47.20 $58.60 $623.40
McCammon $36.00 $36.00 $36.00 $432.00
Montpelier $28.60 $28.60 $28.60 $343.20
Pocatello $7.79 0 $2.27 $27.24 $70.37 $35.03 $78.16 $636.01
Preston $28.00 $28.00 $28.00 $336.00
Rexburg $15.62 6,000 $0.80 $4.82 $20.08 $20.44 $35.70 $321.54
Salmon $30.00 0 $0.78 $9.36 $24.18 $39.36 $54.18 $546.42
Shelly $17.50 $17.50 $17.50 $210.00
Soda Springs $26.80 $26.80 $26.80 $321.60
St. Anthony $25.09 0 $0.51 $6.12 $15.81 $31.21 $40.90 $422.97
Sugar City $13.24 0 $0.75 $9.00 $23.25 $22.24 $36.49 $338.13
Ucon $24.00 5,000 $0.65 $4.55 $16.90 $28.55 $40.90 $404.35
Victor 1 $24.00 1 0 1 $1.75 1 $21.00 1 $54.25 1 $45.00 1 $78.25 1 $706.25
Falls Water Current $16.10 12,000 1
$0.61 $0.00 $18.33 $16.10 $34.43 $284.85
Falls Water Proposed $17.85 12,000 $0.75 1 $0.00 1 $22.50 1 $17.85 1 $40.35 $326.70
Average Monthly and Annual Cost for the 22 citiesl $30.19 I $42.45 I $423.60
Falls Water Current Rates % Less than the Average 33% 4th Lowest Cost Water Provider out of 23
Falls Water Proposed Rates % Less than the Average 23% 6th Lowest Cost Water Provider out of 23
Attachment 5
Sensus Limited Warranty
1. General Product Coverage
Sensus USA Inc. (Sensus") warrants its products and parts to be free
from defects in material and workmanship for one (1) year from the date of
Sensus shipment and as set forth below. All products are sold to customer
("Customer") pursuant to Sensus' Terms of Sale, avail -'able at http:II
na.sensus.corn/TClTermsConditions.pdf ("Terms of Sale"). -
SR Il® and accuSTREAM 518", 3/4" & 1" Meters...
are warranted to perform to AWWA New Meter Accuracy Standards for five
(5) years from the date of Sensus shipment or until the regis -'tration shown
below, whichever occurs first. Sensus further warrants that the SR II meter
will perform to at least AWWA Repaired Meter Accuracy Standards for fifteen
(15) years from the date of Sensus shipment or until the registration shown
below, whichever occurs first:
New Meter Repair Meter
Accuracy Accuracy
5/8" SR II Meter and
accuSTREAM Meter 500,000 gallons 1,500,000 gallons
$' 3/4" SR II Meter and
accuSTREAM Meter 750,000 gallons 2,250,000 gallons
1" SR II Meter and
accuSTREAM Meter 1,000,000 gallons 3,000,000 gallons
SRO 5/8", 3/4" & 1" Meters...
are warranted to perform to AWWA New Meter Accuracy Standards for one
(1) year from the date of Sensus shipment. Sensus further warrants that the
5/8", 3/4" and 1" SR meter will perform to at least AWWA Repaired Meter
Accuracy Standards for fifteen (15) years from the date of Sensus shipment
or until the registration shown below, whichever occurs first:
Repair Meter Accuracy
5/8" SR Meter 1,500,000 gallons
3/4" SR Meter 2,250,000 gallons
1"SR Meter 3,000,000 gallons
I UT SR 1-1/2" & 2" Meters...
are warranted to perform to AWWA New Meter Accuracy Standards for one
(1) year from the date of Sensus shipment. Sensus further warrants that
the 1-1/2" and 2" SR meter will perform to at least AWWA Repaired Meter
Accuracy Standards for ten (10) years from the date of Sensus shipment or
until the registration shown below, whichever occurs first:
Repair Meter Accuracy
1-1/2" SR Meter 5,000,000 gallons
2"SR Meter 8,000,000 gallons
V. PMM® 5/8", 3/4", 1" Meters...
are warranted to perform to AWWA New Meter Accuracy Standards for one
(1) year from the date of Sensus shipment. Sensus further warrants that the
5/8", 3/4", and 1" PMM meter will perform to at least AWWA Repaired Meter
Accuracy Standards for fifteen (15) years from the date of Sensus shipment
or until the registration shown below, whichever occurs first:
Repair Meter Accuracy
5/8' PMM 1,500,000 gallons
3/4" PMM 2,000,000 gallons
1"PMM 3,000,000 gallons
1. PMM 1-1/2", 2" Meters...
are warranted to perform to AWWA New Meter Accuracy Standards for one
(1) year from the date of Sensus shipment Sensus further warrants that the
1-112", and 2" PMM meter will perform to at least AWWA Repaired Meter
Accuracy Standards for ten (10) years from the date of Sensus shipment or
until the registration shown below, whichever occurs first:
Repair Meter Accuracy
1-1/2" PMM 5,000,000 gallons
2"PMM 8,000,000 gallons
G-500 R14
VII.iPERLTm Water Management Systems...
that register water flow are warranted to perform to the accuracy levels
set forth in the iPERL Water Management System Data Sheet (IPL-110),
available at www.sensus.com/iperl or by request from 1-800-METER-IT, for
twenty (20) years from the date of Sensus shipment. The iPERL System
warranty does not include the external housing.
VIII.Maincase...
of the SR SR II and PMM in both standard and low lead alloy meters are
warranted to be free from defects in material and work-manship for twenty-
five (25) years from the date of Sensus shipment Composite and E-coated
maincases will be free from defects in mate -'rial and workmanship for fifteen
(15) years from the date of Sensus shipment.
IX.Sensus "W" Series Turbo Meters, OMNITU Mr'ters and Propeller
Meters...
are warranted to perform to AWWA New Meter Accuracy Standards for one
(1) year from the date of Sensus shipment
X.Sensus accuMAGTM Meters...
are warranted to be free from defects in material and workmanship, under
normal use and service, for 18 months from the date of Sensus shipment or
12 months from startup, whichever occurs first
XI.Sensus Registers...
are warranted to be free from defects in material and workmanship from the
date of Sensus shipment for the periods stated below or until the applicable
registration for AWWA Repaired Meter Accuracy Standards, as set forth
above, are surpassed, whichever occurs first
5/8" thru 2" SR, SR II, PMM, accuSTREAM
Standard Registers 25 years
5/8" thru 2" SR, SR II, PMM, accuSTREAM
Encoder Registers 10 years
Electronic Communication Index (ECI) 10 years
All HSPU, IMP Contactor, R.E.R. Elec. ROFI 1 year
Standard and Encoder Registers for:
"'N" Turbo and Propeller Meters 1 year
OMNI Register with Battery 10 years
XII.Sensus Electric Meters...
are warranted to be free from defects in material and workmanship for one
(1) year from the date of Sensus shipment Spare parts and components
are warranted to be free from defects in material and workmanship for one
(1) year from the date of Sensus shipment.
Repaired or refurbished equipment repaired by Sensus is warranted to be
free from defects in material and workmanship for ninety (90) days from the
date of Sensus shipment or for the time remaining on the original warranty
period, whichever is longer. -
XIII.Batteries, iPERL System Components, AMR and FIexNeVU System AMI
Interface Devices...
are warranted to be free from defects in material and workmanship from the
date of Sensus shipment for the period stated below:
Electronic TouchPad 10 years
RadioRead® MXU (Model 505C, 510R or 520R) and
Batteries 20 years*
Act-Pak® Instrumentation 1 year
TouchRead® Coupler and AMR Equipment 1 year
% FlexNet Water or Gas SmartPointlM Modules and
Batteries 20 years*
Tower Gateway Base Station 1 year
FlexNet Network Portal 1 year
iConA and FlexNet Electricity SmartPoint Module 1 year
W iPERL System Battery and PERIL System Components 20 years*
(continued on reverse)
- sEnsus
Sensus Limited Warranty
* Sensus will repair or replace non-performing:
• RadioRead® MXU (Model 505C, 510R and 520R) and Batteries,
FlexNet Water or Gas SmartPoint Modules (configured to the factory setting
of six transmissions per day) and batteries,
• iPERL System Batteries, and/or the iPERL System fiowtube, the flow
sensing and data processing assemblies, and the register (IPERL System
Components") at no cost for the first ten (10) years from the date of Sensus
ship -'ment, and for the remaining ten (10) years, at a prorated percentage,
applied towards the published list prices in effect for the year product is
accepted by Sensus under warranty conditions according to the following
schedule:
Years Replacement Price Years Replacement Price
1-10 0% 16 55%
11 30% 17 60%
12 35% 18 65%
13 40% 19 70%
14 45% 20 75%
15 50% >20 100%
Note: Software supplied and licensed by Sensus is warranted accord-ing to
the terms of the applicable software license agreement. Sensus warrants
that network and monitoring services shall be performed in a professional
and workmanlike manner.
XIV.Return...
Sensus' obligation, and Customer's exclusive remedy, under this Sensus
Limited Warranty is, at Sensus' option, to either repair or replace the product,
provided the Customer (i) returns the product to the location designated by
Sensus within the warranty period; and (ii) prepays the freight costs both to
and from such location.
The return of products for warranty claims must follow Sensus' Returned
Materials Authorization (RMA) procedures. Water meter returns must include
documentation of the Customer's test results. Test results must be obtained
according to AWWA standards and must specify the meter serial number.
The test results will not be valid if the meter is found to contain foreign
materials. If Customer chooses not to test a Sensus water meter prior to
returning it to Senisus, Sensus will repair or replace the meter, at Sensus'
option, after the meter has been tested by Sensus. The Customer will be
charged Sensus' then current testing fee. Sensus SmartPoints modules and
MXU's returned must be affixed with a completed return evaluation label.
For all returns, Sensus reserves the right to request meter read -ling records
by serial number to validate warranty claims.
For products that have become discontinued or obsolete ("Obsolete
Product'), Sensus may, at its discretion, replace such Obsolete Product with
a different product model ("New Product"), provided that the New Product
has substantially similar features as the Obsolete Product. The New Product
shall be warranted as set forth in this Sensus Limited Warranty.
THIS SECTION XIV SETS FORTH CUSTOMER'S SOLE REMEDY
FOR THE FAILURE OF THE PRODUCTS, SERVICES OR LICENSED
SOFT-'WARE TO CONFORM TO THEIR RESPECTIVE WAR-RANTIES.
XV.Warranty Exceptions and No Implied Warranties...
This Sensus Limited Warranty does not include costs for removal or
instal-lation of products, or costs for replacement labor or materials, which
are the responsibility of the Customer. The warranties in this Sensus Limited
Warranty do not apply to goods that have been: installed improperly or in non-
recommended installations; tampered with; modified or repaired with parts or
assemblies not certified in writing by Sensus, including without limitation,
communication parts and assemblies; converted; altered; damaged; read
by equipment not approved by Sensus; subjected to misuse, improper
storage, improper care, improper maintenance, or improper periodic testing
(collectively, "Exceptions."). If Sensus identifies any Exceptions during
examination, troubleshooting or performing any type of support on behalf
of Customer, then Customer shall pay for and/or reimburse Sensus for all
expenses incurred by Sensus in examining, troubleshooting, performing
support activities, repairing or replacing any Equipment that satisfies any
of the Exceptions defined above. The above warranties do not apply in the
event of Force Majeure, as defined in the Terms of Sale.
THE WARRANTIES SET FORTH IN THIS SENSUS LIMITED WARRANTY
ARE THE ONLY WARRANTIES GIVEN WITH RESPECT TO THE GOODS,
SOFTWARE LICENSES AND SERVICES SOLD OR OTHERWISE
PROVIDED BY SENSUS. SENSUS EXPRESSLY DISCLAIMS ANY AND
ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING
WITHOUT LIMITATION, WARRANTIES AS TO FITNESS FOR A
PARTICULAR PURPOSE, MERCHANTABILITY, NON-INFRINGEMENT
AND TITLE.
SENSUS ASSUMES NO LIABILITY FOR COSTS OR EXPENSES
ASSOCIATED WITH LOST REVENUE OR WITH THE REMOVAL OR
INSTALLATION OF EQUIPMENT. THE FOREGOING REMEDIES ARE
CUSTOMER'S SOLE AND EXCLUSIVE REMEDIES FOR THE FAILURE
OF EQUIPMENT, LICENSED SOFTWARE OR SERVICES TO CONFORM
TO THEIR RESPECTIVE WARRANTIES.
XVI.Limitation of Liability...
SENSUS' AGGREGATE LIABILITY IN ANY AND ALL CAUSES OF ACTION
ARISING UNDER, OUT OF OR IN RELATION TO THIS AGREEMENT,
ITS NEGOTIATION, PERFORMANCE, BREACH OR TERMINATION
(COLLECTIVELY "CAUSES OF ACTION") SHALL NOT EXCEED THE
TOTAL AMOUNT PAID BY CUSTOMER TO SENSUS UNDER THIS
AGREEMENT. THIS IS SO WHETHER THE CAUSES OF ACTION ARE
IN TORT, INCLUDING, WITHOUT LIMITATION, NEGLIGENCE OR STRICT
LIABILITY, IN CONTRACT, UNDER STATUTE OR OTHERWISE.
AS A SEPARATE AND INDEPENDENT LIMITATION ON LIABILITY,
SENSUS' LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES.
SENSUS SHALL NOT BE LIABLE FOR: (I) ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES; NOR (II) ANY REVENUE
OR PROFITS LOST BY CUSTOMER OR ITS AFFILIATES FROM
ANY END USER(S), IRRESPECTIVE OF WHETHER SUCH LOST
REVENUE OR PROFITS IS CATEGORIZED AS DIRECT DAMAGES OR
OTHERWISE; NOR (III) ANY IN/OUT COSTS; NOR (IV) MANUAL METER
READ COSTS AND EXPENSES; NOR (V) DAMAGES ARISING FROM
MAINCASE OR BOTTOM PLATE BREAKAGE CAUSED BY FREEZING
TERMPERATURES, WATER HAMMER CONDITIONS, OR EXCESSIVE
WATER PRESSURE. "IN/OUT COSTS' MEANS ANY COSTS AND
EXPENSES INCURRED BY CUSTOMER IN TRANSPORTING GOODS
BETWEEN ITS WAREHOUSE AND ITS END USER'S PREMISES AND ANY
COSTS AND EXPENSES INCURRED BY CUSTOMER IN INSTALLING,
UNINSTALLING AND REMOVING GOODS. "END USER" MEANS ANY
END USER OF ELECTRICITY/WATER/GAS THAT PAYS CUSTOMER FOR
THE CONSUMPTION OF ELECTRICITY/WATER/GAS, AS APPLICABLE.
The limitations on liability set forth in this Agreement are fundamental
inducements to Sensus entering into this Agreement. They apply
unconditionally and in all respects. They are to be interpreted broadly so as
to give Sensus the maximum protection permitted under law.
To the maximum extent permitted by law, no Cause of Action may be
instituted by Customer against Sensus more than TWELVE (12) MONTHS
after the Cause of Action first arose. In the calculation of any damages in any
Cause of Action, no damages incurred more than TWELVE (12) MONTHS
prior to the filing of the Cause of Action shall be recoverable.
6601 Six Forks Road, Suite 700
Raleigh, NC 27615
1-800-638-3748 s!nsus
Attachment 6
MEMORANDUM
DATE: 21 April 2000 (revised March 1, 2001)
TO: UTILITIES DIVISION
FROM: Steve Olea, Chief
Engineering
RE: Typical Annual Depreciation Rates For Water Companies
Attached are general guidelines for annual water company depreciation rates by
NARUC Account Number. These rates represent a typical and customary value
within a range of anticipated equipment life.
Water companies may experience different rates due to variations in construction,
environment, or the physical and chemical characteristics of the water. For rate
making purposes, the actual values used to calculate an annual depreciation
expense should reflect, as closely as possible, the actual retirement rates
experienced by the water company. However, faster depreciation rates should not
be used if they are the result of imprudence, poor maintenance, or negligence by
the water company.
Staff Engineering recommends these depreciation rates be used for all water
companies unless Engineering states otherwise.
Attachment
TYPICAL DEPRECIATION RATES FOR WATER COMPANIES
NARUC
Account No. Depreciable Plant
Average
Service Life
(Years)
Annual
Accrual
Rate (%)
304 Structures & Improvements 30 3.33
305 Collecting & Impounding Reservoirs 40 2.50
306 Lake, River, Canal Intakes 40 2.50
307 Wells & Springs 30 3.33
308 Infiltration Galleries 15 6.67
309 Raw Water Supply Mains 50 2.00
310 Power Generation Equipment 20 5.00
311 Pumping Equipment 8 12.5
320 Water Treatment Equipment
320.1 Water Treatment Plants 30 3.33
320.2 Solution Chemical Feeders 5 20.0
330 Distribution Reservoirs & Standpipes
330.1 Storage Tanks 45 2.22
330.2 Pressure Tanks 20 5.00
331 Transmission & Distribution Mains 50 2.00
333 Services 30 3.33
334 Meters 12 8.33
335 Hydrants 50 2.00
336 Backflow Prevention Devices 15 6.67
339 Other Plant & Misc Equipment 15 6.67
340 Office Furniture & Equipment 15 6.67
340.1 Computers & Software 5 20.00
341 Transportation Equipment 5 20.00
342 Stores Equipment 25 4.00
343 Tools, Shop & Garage Equipment 20 5.00
344 Laboratory Equipment 10 10.00
345 Power Operated Equipment 20 5.00
346 Communication Equipment 10 10.00
347 Miscellaneous Equipment 10 10.00
348 Other Tangible Plant
NOTES:
1. These depreciation rates represent average expected rates. Water companies may
experience different rates due to variations in construction, environment, or the
physical and chemical characteristics of the water.
2. Acct. 348, Other Tangible Plant may vary from 5% to 50%. The depreciation rate
would be set in accordance with the specific capital items in this account.
Attachment 7
Estimated Useful Lives
Expected Useful
Asset Life (in years)
Intake Structures 35-45
Wells and Springs 25-35
Galleries and Tunnels 30-40
Chlorination Equipment 10-15
Other Treatment Equipment 10-15
Storage Tanks 30-60
Pumps 10-15
Buildings 30-60
Electrical Systems 7-10
Transmission Mains 35-40
Distribution Pipes 35-40
Valves 35-40
Blow-off Valves 35-40
Backflow Prevention 35-40
Meters 10-15
Service Lines 30-50
Hydrants 40-60
Lab/Monitoring Equipment 5-7
Tools and Shop Equipment 10-15
Landscaping/Grading 40-60
Office Furniture/Supplies 10
Computers 5
Transportation Equipment 10
Note: These numbers are ranges of expected
useful lives drawn from a variety of sources. The
ranges assume that assets have been properly
maintained.
Introduction to the System Inventory
Worksheet
The following System Inventory Worksheet will help you:
• Identify all of your system's assets;
• Record the condition of your assets;
• Record the service history of your assets;
• Determine your assets' adjusted useful lives;
• Record your assets' ages; and,
• Estimate the remaining useful life of each of your assets. Usually, there are two steps to
estimating useful life:
1.Determine the expected useful life by using the manufacturer's
recommendations or the estimates provided in the box to the right. Adjust these
numbers based on the specific conditions and experiences of your system.
2.Calculate an adjusted useful life by taking into account the service history and
current condition of your asset.
Two copies of the worksheet are provided. The first copy is followed by instructions that will
help you understand how to complete it. The second worksheet is an example. Appendix A
has blank worksheets that you can photocopy and use.
RJ
Totals After Totals After
Staff Staff Company Company
Units $/Unit Total Adiustment Adiustment Adiustment Adiustment
600 $ 185.00 $111,000.00 $111,000.00 $111,000.00
4 $ 210.00 $ 840.00 $ 840.00 $ 840.00
3,300 $ 168.00 $554,400.00 $(554,400.00) $ - $554,400.00 $554,400.00
2 $ 7,500.00 $ 15,000.00 $ (15,000.00) $ - $ 15,000.00 $ 15,000.00
1 $ 424.00 $ 424.00 $ (424.00) $ - $ 424.00 $ 424.00
1 $42,500.00 $ 42,500.00 $ (42,500.00) $ - $ 42,500.00 $ 42,500.00
604 $ 24.00 $ 14,496.00 $ 14,496.00 $ 14,496.00
3,300 $ 17.00 $ 56,100.00 $ (56,100.00) $ - $ 56,100.00 $ 56,100.00
175 $ 32.00 $ 5,600.00 $ (5,600.00) $ - $ 5,600.00 $ 5,600.00
1 $12,852.35 $ 12,852.35 $ (12,852.35) $ - $ -
$ 26,666.00 $ (26,666.00) $ - $ -
$839,878.35 $(713,542.35) $126,336.00 $674,024.00 1i;:
Straight Line
Asset Depreciation Depreciation
Value Period for 1 Yj
$800,360.00 25
B
CD
Falls Water Co., Inc.
Company Adjustments to Staff Recommendations of Asset Adjustments
Proforma additions to Plant (Radio Read Mtr Project started 2011 ending 2012):
Project to replace manual read meters and install radio transmitters throughout system.
Meters:
3/4" 1000 Gal. Read Sensus IPERL
1" 1000 Gal. Read Sensus IPERL
520M MXU 1 Port I Coupler WI Leak Detection
Upgrade Sensus Handhelds from AR5002 to AR 5502
Sensus Unipro 100A - Device to program IPERL Meters
Sensus VGB (Vehicle Gateway Base Station) Equipment
Labor:
Remove old manual read meters and install new meter
Install MXU, GPS Location, Program with meter
Move MXU 520R to other locations to consolidate reading areas
Temporary Office worker hired to handle extra paperwork
Financing of project through January 2012
Total Cost of Proforma addition of Radio Read Meter Project to Rate Base
Proforma additions to Plant (2012 Radio Read Mtr Project)
Proforma reduction to Plant (Account 303 - Land & Land Rights):
1/2 the purchase price of Well #9 wellsite
Engineering costs associated with water right.
Engineering Services from 9/2/2009
Engineering Services from 9/2/2009
Total of Engineering Services relating to Water Right Purchase
Total of Proforma reductions to Plant Account 303 - Land & Land Rights
(80,000.00)
(7,251.30)
(5,268.00)
(12,519.30)
Attachment 9
Falls Water Company
Comparison of Staff Adjusted Depreciation Expenses
2012 Meter Project
Item Staff Adjust Company Adj Difference
Cost 126,336.00 800,360.00 674,024.00
Salvage Value 12,634.00 - (12,634.00)
Net Depreciable Amt 113,702.00 800,360.00 686,658.00
Depreciable Life 35 25
Depr Expense Adjustment 3,248.63 32,014.40 28,765.77
FALLS WATER COMPANY
CALCULATION OF REVENUE REQUIREMENT
1 Rate Base
2 Required Rate of Return
3 Net Operating Income Requirement
4 Net Operating Income Realized
5 Net Operating Income Deficiency
6 Taxable and Non-Taxable
7 Equity
8 Debt
9
10
11 Total Expenses
12 Total Revenue Requirement
13
14 Revenue increase percentage
(A) (B)
2,416,051.13
7.23%
174,719.14
(45,439.74)
129,279.40
51.38% 66,417.90
48.62% 62,861.49
129,279.40
(C) (D) (E)
174,719.14
1.419702 94,293.63
1.110207 69,789.26

164,082.89 34,803.49
1,072,322.31
1,281,844.94
15.21%
C.,
B (D
0
Falls Water Company, Inc.
Net to Gross Multiplier
Total Gross Revenues
Less Uncollectibles ( percentage)
Less 2011 Regulatory Fees (percentage)
Less Bank Service Charge Fees (percentage)
Net Revenue
State Income Tax Rate - 8%
Federal Income Tax Base
Federal Income Tax Rate - 15%
Net Operating Revenue
Net to Gross Multiplier Equity Return
Gross up Non-Taxable Debt Return
Company Staff Adjust
1.000000 1.000000
0.009816 0.096970
0.002297 0.002297
0.011697 -
0.976190 0.900733
0.078095 0.072059
0.898094 0.828674
0.134714 0.124301
0.763380 0.704373
1.30996 1.419702
1.02439 1.110207
Falls Water Co., Inc
Proforma Results of Operations
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K) (L)
Adjustment for Increased Increased Increased Increased Increased Totals After Totals After Non-Recurring Labor Miscellaneous Source Property Rental Depreciation Adjusted Staff Staff Company Company
Jan - Dec 2011 hems Costs Operating Costs Production Costs Revenue Costs Totals Adjustments Adjustments Adjustments Adjustments Ordinary Income/Expense
Income
400 Operating Revenue
1 461.1 Metered Residential 1,030,460.52 1,030,460.52 1,030460.52 1,030,460.52 2 461.2' Commercial Revenue 41,778.43 . 41,778.43 41,778.43 41,778.43 3 461.5' Multiple Family Cust Revenue 32,740.07 32,740.07 32,740.07 32,740.07 4 470' Late Payment Fee Revenues 4,508.44 4,508.44 4,508.44 4,508.44 5 471 'Misc Service Revenues 3,123.90 3,123.90 3,123.90 3,123.90 8 Total 400'Operating Revenue 1,112,611.36 - - - - - - 1,112,611.36 - 1,112,611.36 - 1,112,611.36 7 414 'Gain (Loss) on Property -158.33 158.33 0.00 - - - -
8 Total Income 1,112,453.03 158.33 0.00 0.00 0.00 0.00 0.00 1,112,611.36 - 1,112,611.36 - 1,112,611.36
9 Expense
10 601.5' Labor Field 154,166.08 12,853.92 167,120.00 167,120.00 167,120.00 11 601.8' Labor Office 21,036.10 8,603.90 29,640.00 29,640.00 29,640.00
12 601,9' Admin - Labor 167,100.12 6,899.88 174,000.00 174,000.00 174,000.00 13 604 Employee Benefits
14 610 ' Purchased Water
76,057.33 (4,191.00) 1,568.31 73,434.64 73,434.64 73,434.64
3,300.38 3,300.38 3,300.38 3,300.38 15 615'Electrical Power 119,395.66 31,010.45 150,406.11 (18,535.00) 131,871.11 131,871.11 16 618'Chemicals 4,548.40 2,503.70 7,052.10 (427.00) 6,625.10 6,625.10 17 620.2' Source M&S 9,950.75 9,950.75 9,950.75 9,950.75 18 620.6 Distribution M&S 28,491.48 28,491.48 28,491.48 28,491.48 19 620.7' Postage 20,393.40 20,393.40 20,393.40 20,393.40 20 620.8 Office
21 620.81 ' Telephone Expense
26,592.17 26,592.17 26,592.17 26,592.17 10,992 18 10,992.18 10,992.18 10,992.18
22 620.82' Bank service charges 9,276.83 3,737.75 13,014.58 13,014.58 13,014.58 23 620,83Office Utilites Expense 4,774.19 2,234.98 7,009.17 7,009.17 7,009.17 24 631.1 'Engineering
25 631.2 ' Accounting
330.00 330.00 330.00 330.00
2,785.00 2,785.00 2,785.00 2,785.00 28 631,4' Payroll Services 255.00 255.00 255.00 255.00 27 635 'Testing 3,428.00 2,725.39 6,153.39 6153.39 6,153.39 28 636.2' Source Contract Repairs 965.22 965.22 96522 965.22 29 638.3'Trash 1,061.49 1,041.55 2,103.04 2,103.04 2,103.04 30 636.4' Outsourced Bad Debt Collection 314.64 314.64 314.64 314.64
31 636.6' Distribution Contract Repairs 9,932.38 9,932.38 9,932.38 9,932.38 32 636,7' Data Processing 4,745.00 1,317.00 6,062.00 6,062.00 6,062.00 33 641 'Rental of Property 49,696.70 4,255.30 53,952.00 (11,957.33) 41,994.67 8,992.00 50,986.67 34 642 -Rental of Equipment 31,474.28 31,474.28 (11,474.00) 20,000.28 3,999.72 24,000.00 35 650' Transportation Expense
36 656 ' Insurance Expense
37,815.78 37,815.78 37,815.78 37,815.78
18,993.00 18,993.00 18,993.00 18,993.00
37 656.1 'Workers Compensation Ins 8,361.90 1,222.79 9,584.69 9,584.69 9,584.69 38 660 'Advertising Expense 683.47 683.47 683.47 683.47 39 666' Rate Case Amortization - 1,054.19 1,054.19 1,054.19 1,054.19 40 670 'Bad Debt Expense 10,921,47 10,921.47 10,921.47 10,921.47 41 675.1 'Training Expenses 522.00 522.00 522.00 522.00 42 675.2 'Dues & Publications 1,180.06 1,180.08 1,180.06 1,180.08 43 675,4- IDHW Fee Expense 16,872.50 16,872.50 16,872.50 16,872.50
44 Total Expense 856,412.96 (3,136.81) 31,248.80 12,586.57 36,239.54 - - 933,351.06 (42,393.33) 890,957.73 12,991.72 903,949.45
45 Net Ordinary Income 256,040.07 3,295.14 (31,248.80) (12,586.57) (36,239.54) - - 179,260.30 42,393.33 221,653.63 (12,991.72) 208,661.91
46 Other Income/Expense
47 Other Income
48 419' Interest Earned 38.69 38.69 38.89 38.69 49 421 'Non-UtIlity Income 8,305.41 (3,819 41) 426.00 5,112.00 5,112.00 5,112.00
50 Total Other Income 8,344.10 (3,619.41) - - - 426.00 - 5,150.69 - 5,150.69 - 5,150.69 51 Other Expense - -
52 403' Depreciation Expense 71,682.02 84,210.10 155,892.12 (80,739.00) 75,153.12 28,765.77 103,918.89
53 408' Taxes - -
54 408.11' Property Taxes 24,552.11 24,552.11 24,552.11 24,552.11 55 408.12' Payroll Taxes 31,392.76 7,817.10 39,209.86 39,209.86 39,209.86 56 409.11 . State Income Tax 20.00 20.00 20.00 20.00
57 Total 408-Taxes 55,964.87 - 7,817.10 - - - - 63,781.97 0.00 63,781.97 0.00 63,781.97 58 408.10' Regulatory Fee 0.00 0.00 - - 59 426' Misc. Non-Utility Expenses 20,551.53 (19,879.53) 672.00 672.00 672.00 60 426.1 'DonatIons - Tax Deductible 0.00 0.00 - - 61 427.3' Interest Expense 0.00 0.00 - -
62 Total Other Expanse 148,198.42 (19,879.53) 7,817.10 - - - 84,210.10 220,346.09 (80,739.00) 139,607.09 28,765.77 168,372.86
63 Net Other Income -139,854.32 16,260.12 (7,817.10) - - 426.00 (84,210.10) -215,195.40 80,739.00 (134,456.40) -28,765.77 (163,222.17)
64 Net Income 116,18575 19.86526 gag.ogs.eot 112.59e.571 sta 224 4A A9A on IRA 91fl 110 ,,5 015 10 191.191, a, €7 11 _.4 7.1 ,0
t
Falls Water Co., Inc.
Calculation of Proposed Rates
Proposed Rates and Usage Allowances (A) (B) (C) (0) (6) (F) (G) (H) (I) (J) (K) (L) (M) (N)
Current Proposed Avg Monthly
Current Current Commodity Current Proposed Minimum Proposed Commodity Minimum Billing
Allowed Cycle Charge per Allowance Usage Allowed Charge Cycle Charge per Charge Avg Monthly Avg Monthly Percentage Percentage
Gallons Minimum 1,000 gallons in 1000's Conversion Gallons Conversion Minimum 1.000 gallons Percentage Bills) the Bill at the Increase from of Total
Rates (in 1,000's) Charge over Allowed of Gallons Rate (in 1,000's) Rate Charge over Allowed Increase Proposed Rate Current Rate Current Rate Customers
1 Residential 5/8 in. & 3/4 in. Meters 12 $ 1610 $ 0.611 12 1.000000 12 1.000000 $ 17.85 $ 0.75 10.87% $ 26.39 $ 2300 14.8% 93.67%
2 Residential un. Meters 17 $ 22.54 $ 0.611 17 1.41e66ee7 17 1.400000 $ 24.99 $ 0.75 10.87% $ 42.40 $ 38.23 17.0% 1.95% 3 Residential 1/2 in. Meters 22 $ 28.98 $ 0.811 22 1.83333333 22 1.800000 $ 32.13 $ 0.75 10.87% $ 70.40 $ 82.97 11.8% 0.18%
4 Residential 2 iv. Meters 28 $ 37.03 $ 0.611 28 2.33333333 28 2.300000 $ 41.0e $ 0.75 10.88% $ - $ - 0.0% 0.00% S Commercial 5/8 in. & 3/4 in. Meters 12 $ 18.10 $ 0.611 12 1.000000 12 1.000000 $ 17.85 $ 0.75 10.87% $ 23.50 $ 21.24 10.6% 1.09%
6 Commercial 1 in. Meters 17 $ 22.54 $ 0.611 17 1.41666667 17 1.400000 $ 24.99 $ 0.75 10.87% $ 45.87 $ 41.11 11.6% 0.16% 7 Commercial 1 1/2 in. Meters 22 $ 28.98 $ 0.811 22 1.83333333 22 1.800000 $ 32.13 $ 0.75 10.87% $ 96.87 $ 88.38 9.6% 0.23%
8 Commercial 2 in. Meters 28 $ 37.03 $ 0.611 28 2.33333333 28 2.300000 $ 41.06 $ 0.75 10.85% $ 86.53 $ e7.38 28.4% 0.55%
9 Commercial 4 in. Meters 49 $ 66.01 $ 0.611 49 4.08333333 49 4.100000 $ 73.19 $ 0.75 10.88% $ 73.35 $ 66.14 10.9% 0.05% 10 MultiFam 5/8 & 314 In. Meters 12 $ 16.10 $ 0.811 12 1.000000 12 1.000000 $ 17.85 $ 0.75 10.87% $ 29.12 $ 25.32 15.0% 1.04%
11 MultiFam 1 in. Meters 17 $ 22.54 $ 0.611 17 1.41666667 17 1.400000 $ 24.99 $ 0.75 10.87% $ 39.70 $ 34.59 14.8% 0.73% 12 MultiFam 11/2 in. Meters 22 $ 28.98 $ 0.811 22 1.83333333 22 1.800000 $ 32.13 $ 0.75 10.87% $ 82.13 $ 69.71 17.8% 0.03%
13 MultiFam2in. Meters 28 $ 37.03 $ 0.811 28 2.33333333 28 2.300000 $ 41.06 $ 0.75 10.88% $ 64.28 $ 56.48 13.8% 0.31% 14 MultiFam 4 in. Meters. 49 $ 66.01 $ 0.611 49 4.08333333 49 4.100000 $ 73.19 $ 0.75 10.88% $ - $ 0.0% 0.00%
Calculation of Revenues using Proposed Rates
(A) (B) (C) (0) (E) (F) (G) (H) (I) (J) (K) (L) (M) (N) (0)
Proposed Proposed
Cycle Monthly Revenues
Active Minimum from Minimum . Proposed Revenues from Commodity Charge
Rates Customers Charge Charge Januarri I February I March April I May I June I July August I September I October I November I December
15 Residential 5/8 is. & 3/4 in. Meters 3,597 $ 17.85 $ 84,206.45 $ 1,498.50 $ 1,498.50 $ 1,498.50 $ 1,498.50 $ 2,532.75 $ 20,051.25 $ 99,410.25 $ 98,535.00 $ 98,624.25 $ 40,913.25 $ 1,235.25 $ 1,235.25 16 Residential 1 in. Meters 75 $ 24.99 $ 1,874.25 $ 55.50 $ 55.50 $ 55.50 $ 55.50 $ 744.00 $ 480.00 $ 4,208.25 $ 3,541.50 $ 4,587.00 $ 1,791.00 $ 49.50 $ 49.50
17 Residential 11/210. Meters 7 $ 32.13 $ 224.91 $ - $ . $ - $ - $ - $ 205.50 $ 753.75 $ 754.50 $ 678.50 $ 822.75 $ 0.75 $ 0.75 18 Residential 2 in. Meters - $ 41.06 $ - $ - $ - $ - $ - $ - $ - $ - $ $ - $ - $ - $ - 19 Commercial 518 in. & 3/4 in. Meters 42 $ 17.85 $ 749.70 $ 27.00 $ 24.00 $ 14.25 $ 12.00 $ 41.25 $ 129.00 $ 752.25 $ 572.25 $ 707.25 $ 387.00 $ 86.25 $ 93.75 20 Commercial un. Meters 6 $ 24.99 $ 149.94 $ 66.00 $ 65.25 $ 50.25 $ 80.25 $ 121.50 $ 76.50 $ 269.25 $ 189.00 $ 269.25 $ 177.00 $ 81.00 $ 57.75
21 Commercial 11/2 in. Meters 9 $ 32.13 $ 289.17 $ 161.25 $ 236.25 $ 208.50 $ 179.25 $ 148.25 $ 217.50 $ 1,788.75 $ 1,123.50 $ 1,790.25 $ 997.50 $ 88.25 $ 75.00
22 Commercial 2 in. Meters 21 $ 41.06 $ 862.26 $ 219.75 $ 352.50 $ 295.50 $ 257.25 $ 282.50 $ 491.25 $ 3,030.00 $ 2,129.25 $ 2,652.00 $ 1,491.75 $ 145.50 $ 132.00
23 Commercial 4 in. Meters 2 $ 73.19 $ 146.38 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3.75 $ - $ - 24 MultiFamS/8&3/4in. Meters 40 $ 17.85 $ 714.00 $ 89.25 $ 104.25 $ 49.50 $ 68.25 $ 90.75 $ 368.25 $ 1,242.75 $ 910.50 $ 1,317.00 $ 928.25 $ 150.75 $ 92.25
25 MultiFam 1 in. Meters 28 $ 24.99 $ 699.72 $ 85.50 $ 156.75 $ 87.75 $ 65.25 $ 91.50 $ 351.75 $ 1,169.25 $ 1,137.75 $ 947.25 $ 553.50 $ 192.00 $ 102.75
26 MultiFam 11/2 in. Meters 1 $ 32.13 $ 32.13 $ 9.00 $ 17.25 $ 11.25 $ 7.50 $ 29.25 $ 70.50 $ 112.50 $ 60.25 $ 85.50 $ 98.25 $ 58.50 $ 20.25 27 MultiFan, 2 in. Meters 12 $ 41.08 $ 492.72 $ 146.25 $ 45.75 $ 21.00 $ 18.75 $ 87.75 $ 357.75 $ 833.75 $ 806.00 $ 611.25 $ 820.25 $ 159.00 $ 36.75
28 MultiFam 4 in. Meters. - $ 73.19 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 29 Total of Commodity Charges $ 2,358.00 $ 2,556.00 $ 2,292.00 $ 2,242.50 $ 4,147.50 $ 22,799.25 $ 113,370,75 $ 109,579.50 $112,267.50 $ 48,782.25 $ 2,226.75 $ 1,896.00 $ 424,518.00
30 Field Collection Fees $ 105.00 $ 60.00 $ 75.00 $ 90.00 $ 15.00 $ 30.00 $ 60.00 $ 30.00 $ 30.00 $ 45.00 $ 120.00 $ - $ 660.00 31 Reconnect Fee* $ 120.00 $ 40.00 $ 80.00 $ 160.00 $ 220.00 $ 103.90 $ 60.00 $ 180.00 $ 140.00 $ 300.00 $ 100.00 $ 80.00 $ 1,583.90
32 Returned Check Fee* $ 80.00 $ 20.00 $ 100.00 $ 80.00 $ 120.00 $ 20.00 $ - $ - $ 180.00 $ 100.00 $ 100.00 $ 80.00 $ 880.00 33 Late Payment Fee $ 278.56 $ 246.75 $ 241.84 $ 234.92 $ 264.85 $ 282.00 $ 286.71 $ 474.73 $ 624.92 $ 651.30 $ 480.60 $ 441.26 $ 4,508.44
3,840
34 Total of Non-Recurring Fees $ 2,941.56 $ 2,922.75 $ 2,788.84 $ 2,807.42 $ 4,787.35 $ 23,235.15 $ 113,777.48 $ 110,264.23 $113,242.42 $ 49,878.55 $ 3,027.35 $ 2,497.26
35 Total of Commodity Charges and Non Recurring Fees $73,383.19 $73,364.38 $73,220.47 $73,249.05 $75,208.98 $ 93,876.78 $ 184,219.09 $ 180,705.86 $183,684.05 $120,320.18 $ 73,468.98 $72,938.89
36 Total Monthly Revenue $ 70,441.83
37 Number of Months to Annualize Monthly Minimum Revenue 12
38 Annual Revenue from Base Charges $ 845,299.56 86% Percentage of Proposed Revenue from Base Charge (Fixed)
39 Annual Revenue from Commodity Charges $424,518.00
40 New Cust Excess Usage (x1,000 gals) 7,014 $ 5,260.50
41 Total Adjusted Revenue from Commodity Chrgu $ 429,778.50 34% Percentage of Proposed Revenue from Commodity Charge (Variable)
42 Field Collection Fees* $ 880.00
43 Reconnect Fee* $ 1583.90
44 Returned Check Fee* $ 880.00
45 Late Payment Fee* $ 4,508.44
48 Total Annual Revenues from Proposed Rates $ 1,282,710.40
47 Total Gross Revenue Requested $ 1,281,844.94
48 Variance of Gross Revenue from Proposed Rates Over/(Under) $ 865.46
Revenues shown are those collected is 2011 test year
C,
B
(D
Page 1 of 2
Excess Use above Allowed based on 2011 Actuals and adjusted to proposed allowances
2011 January February March April May June July August September October November December
49 Residential 5/85. & 3/4 In. Meters * 1,998 1,998 1,998 1,998 3,377 28,735 132,547 131,380 131,499 54,551 1,647 1,647
50 Residential lix. Meters * 74 74 74 74 992 640 5,611 4,722 6,116 2,388 66 66
51 Residential 1 1/2 in. Meters 274 1.005 1.006 902 1,097 1 1
52 Residential 2 in Meters
53 Commercial 5/8 in. & 3/4 in. Meters 36 32 19 16 55 172 1,003 783 943 518 115 125
54 Commercial liv. Meters 88 87 67 107 162 102 359 252 359 238 108 77
55 Commercial 11/2 in. Meters 215 315 278 239 195 290 2.385 1.498 2,387 1,330 91 100
56 Commercial 2 in. Meters 293 470 394 343 350 655 4.040 2,839 3.536 1,989 194 176
57 Commercial 4 in. Meters - - - - - - - - - 5 - -
58 MultiFam 5/8 & 3/4 in. Meters 119 139 66 91 121 491 1,657 1,214 1.756 4,235 201 123
59 Multipum 1 in. Meters 114 209 117 87 122 469 1,559 1,517 1,263 738 256 137
60 Multipam 11/2 in. Meters 12 23 15 10 39 94 150 107 114 131 78 27
61 MultiFam2in. Meters 195 61 28 25 117 477 845 808 815 827 242 49
112 MuhiFxm 4 in Meters - - - - - - - - - - -
Total
Annual Usage
by Rate Class
491,375
20,897
4,288
3.795
2,004
9,323
15,279
7,213
6.588
800
4.459
63 Annual Excess Usage 566,024
* November to April excess usages are an average of the total of residential excess usages for the 6 month period.
Number of Active Customers as of January 24, 2012
64 Residential 5/8 lfl. & 3/4 in. Meters 3597
65 Residential 1 in. Meters 75
66 Residential 11/2 In. Meters 7
67 Residential 2 in. Meters 0 3,679
88 Commercial 5/8 in. & 3/4 in. Meters 42
89 Commercial liv. Meters 6
70 Commercial 1 1/2 ix. Meters 9
71 Commercial 2/n. Meters 21
72 Commercial 4 in. Meters 2 80
73 MultiFam 5/8 & 3/4 In. Meters 40
74 MultiFam lix. Meters 28
75 MoltiFam 1 1/2 in. Meters 1
76 MultiFam 2 iv. Meters 12
77 MultiFam 4 in. Meters. 0 81
78 Active customers 3840
Calculation of Excess Usage Adjustment for New Customers Added during 2011
79 Total Active Customers as of January 24, 2012 3840
80 Less Customers added in January 2012 7
81 Subtotal 3833
82 Active Customers at the beginning of 2011 3753
83 Active Customers Added during 2611 80
84 Avg of New Active Customers during 2041 40
85 Average Number of Active Customers in 2011 3793
86 Average Excess Usage per Avg Active Customers in 2011 (x 1,000 gals) 149
87 Total Active customers used for rate design 3840
88 Estimated Additional Excess usage for New Active Cast. (xl .000 gals) 573,038
89 Actual 2011 Excess Usage (x 1,000 gals) 566,024
90 Difference in Excess Usage over/(under) (xl .000 gals) 7,044
Page 2sf 2
Attachment 13
Falls Water Co., Inc.
Revenue Collected at Present Rate Using 2011 Test Year Number of Customers
Calculated Metered Service Revenue Collected (see below)
2011 Non-Recurring Fee Revenue*
Total of Caic Rev and 2011 Non-Recurring Fee Revenue
Company Proposed Revenue Requirement
Revenue Collected over/(under) Revenue Requirement
Total Number of Customers
$ 1,112,551.38
$ 7,632.34
$ 1,120,183.72
$ 1,281,844.94
$ (161,661.22)
3840
Minimum Customer Charge
Service
Meter Size
# of
Customers
Minimum
Volume-Gals
Minimum
Charge
Total Annual
Revenue from
Minimum Chrg
3/4" 3679 12,000 $ 16.10 $ 710,782.80
1" 109 17,000 $ 22.54 $ 29,482.32
11/2" 17 22,000 $ 28.98 $ 5,911.92
2" 33 28,000 $ 37.03 $ 14,663.88
4" 2 49,000 $ 66.01 $ 1,584.24
Total 3840 $ 762,425.16
Commodity Charges
Total 2011 Annual Excess Volume for All meter Sizes (xl 000) 573,038
Commodity charges for all meter sizes ($/1,000 gallons) $ 0.611
Total Commodity Revenue $ 350,126.22
Revenue from Rates (base and Commodity Charges) $ 1,112,551.38
Revenue Collected over/(under) Revenue Requirement $ (161,661.22)
Various Charges as a % of Gross Revenue
Minimum Charge 69%
Commodity Charge 31%
* Total 2011 Non-Recurring Fee Revenue.
** Adjusted annual excess volume 573,038=566,024 (actual 2011 excess
usage)+7,014 (adjustment normalize for 3,840 customers)
Attachment 14
Falls Water Co., Inc.
Revenue Collected at Proposed Rate Using 2011 Test Year Number of Customers
Calculated Metered Service Revenue Collected (see below) $ 1,275,078.06
2011 Non-Recurring Fee Revenue* $ 7,632.34
Total of CaIc Rev and 2011 Non-Recurring Fee Revenue $ 1282,710.40
Company Proposed Revenue Requirement $ 1,281844.94
Revenue Collected over/(under) Revenue Requirement $ 865.46
Total Number of Customers 3840
Minimum Customer Charge
Service
Meter Size
# of
Customers
Minimum
Volume-Gals
Minimum
Charge
Total Annual
Revenue from
Minimum Chrg
3/4' 3679 12,000 $ 17.85 $ 788,041.80 1 1. 109 17,000 $ 24.99 $ 32,686.92
1 1/2" 17 22,000 $ 32.13 $ 6,554.52
2' 33 28,000 $ 41.06 $ 16,259.76
4' 2 49,000 $ 73.19 $ 1,756.56
Total 3840 $ 845,299.56
Commodity Charges
Total 2011 Annual Excess Volume for All meter Sizes (xl 000) 573,038
Commodity charges for all meter sizes ($/1,000 gallons) $ 0.750 1 Total Commodity Revenue $ 429,778.50
Revenue from Rates (base and Commodity Charges) $ 1,275,078.06
Revenue Collected over/(under) Revenue Requirement $ 865.46
Various Charges as a % of Gross Revenue
Minimum Charge 66%
Commodity Charge 34%
* Total 2011 Non-Recurring Fee Revenue.
** Adjusted annual excess volume 573,038=566,024 (actual 2011 excess
usage)+7,014 (adjustment normalize for 3,840 customers)
Falls Water Co., Inc
Calculation of Average Monthly Bill Based on Actual Metered Service Revenue (Present Rate)
for 2011
(A) (B) (C) (D) (E) (F) (G) (I-I) (I) (J) (K) (L) (M) (N) (0) (P)
Avg Mnthly Active 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 Total Monthly Bill per Rate Descriptions Customers January February March April May June July August September October November December Revenues Customer
1 Residential 5/8 in. & 3/4 in. Meters 3597 $56729.91 $56,912.37 $ 57,227.96 $ 63,766.03 $ 59,372.51 $ 73,870.66 $138,982.47 $ 138,544.14 $138,496.01 2 Residential 1 in. Meters 75 $ 1,690.50 $ 1,690.50 $ 1,690.50 $ 2,544.62 $ 1,210.12 $ 2,126.67 $ 5,141.36 $ 4,508.03 $ 5,427.41 3 Residential 1 1/2 in. Meters 7 $ 231.84 $ 231.84 $ 231.84 $ 275.44 $ 231.84 $ 428.23 $ 874.86 $ 811,95 $ 931.07 4 Residential 2 in. Meters 0 $ - $ - $ - $ - $ - $ - $ - $ - $ - 5 Commercial 5/8 in. & 3/4 in. Meters 42 $ 762.59 $ 760.15 $ 671.71 $ 702.07 $ 742.00 $ 813.49 $ 1,305.13 $ 1142.62 $ 1,252.39 6 Commercial 1 in. Meters 6 $ 189.00 $ 188.40 $ 176.18 $ 200.62 $ 234.23 $ 220.11 $ 377.12 $ 311.74 $ 377.13 7 Commercial 11/2 in. Meters 9 $ 421.17 $ 482.27 $ 459.66 $ 435.83 $ 408.96 $ 466.99 $ 1,747.04 $ 1,632.16 $ 1,748.24 8 Commercial in. Meters 21 $ 771.50 $ 879.65 $ 833.23 $ 802.06 $ 843.36 $ 1,029.72 $ 3,209.05 $ 2,085.17 $ 2,827.03 9 Commercial 4 in. Meters 2 $ 132.02 $ 132.02 $ 132.02 $ 132.02 $ 132.02 $ 132.02 $ 132.02 $ 132.02 $ 132.02 10 MultiFam 5/8 & 3/4 in. Meters 40 $ 716.71 $ 728.92 $ 668.23 $ 699.59 $ 717.93 $ 944.01 $ 1,656.42 $ 1,418.00 $ 1,716.97 11 MultiFam 1 in. Meters 28 $ 700.78 $ 758.84 $ 702.80 $ 684.27 $ 705.66 $ 917.70 $ 1,583.69 $ 1,558.00 $ 1,402.85 12 MultiFam 11/2 in. Meters 1 $ 38.31 $ 43.03 $ 38.15 $ 35.09 $ 52.81 $ 88.41 $ 120.63 $ 94.36 $ 98.63 13 MultiFam2in. Meters 12 $ 563.51 $ 518.66 $ 481.47 $ 459.63 $ 515.85 $ 735.80 $ 960.67 $ 975.08 $ 942.34 14 MultiFam 4 in. Meters. 0 $ - $ - $ - $ - $ - $ - $ - $ - $ - 15
16
17 3840 $62,945.84 $63,326.65 $ 63,293.55 $ 70,737.27 $ 65,167.29 $ 81,771.81 $156,090.46 $ 153,213.27 $155,352.09 18
19
20
21
22
23 Calculation of Average Monthly Bill by Meter Size:
24
25
26 Excess Minimum Avg. Monthly Avg. Monthly 27 Proposed 2011 Excess Usage Charges Charges Customer Customer Increase 28 Number of Proposed Commodity Usage based on (Proposed Bill (Proposed Bill (Present For Average Percentage 29 Meter Size Customers Base Rates Rate (x 1,000 Gals) Proposed Rate Rate) Rate) Rate) Monthly Billing Increase 30 5/8 and 3/4 inch 3679 $ 17.85 $ 0.75 502,383 $ 376,787.25 $788,041.80 $ 26.38 $ 23.00 $ 3.38 14.71% 31 1 inch 109 $ 24.99 $ 0.75 29,489 $ 22,116.75 $ 32,686.92 $ 41.90 $ 36.08 $ 5.82 16.14% 32 11/2 inc 17 $ 32.13 $ 0.75 14,409 $ 10,806.75 $ 6,554.52 $ 85.10 $ 76.81 $ 8.30 10.80% 332 inch 33 $ 41.06 $ 0.75 19,738 $ 14,803.50 $ 16,259.76 $ 78.44 $ 63.41 $ 15.03 23.70% 344 inch 2 $ 73.19 $ 0.75 5 $ 3.75 $ 1,756.56 $ 73.35 $ 66.14 $ 7.21 10.90% 35
36 Totals 3840 566,024 $ 424,518.00 $845,299.56
$ 92,048.78 $58,413.46 $58,201.51 $ 992,565.81 $ 23.00
$ 3,172.17 $ 1,713.04 $ 1,690.50 $ 32,605.42 $ 36.23

576.70 $ 231.84 $ 231.84 $' 5,289.29 $ 62.97
1,007.56 $ 762.58 $ 784.77 $ 10,707.06 $ 21.24

301.98 $ 201.23 $ 182.29 $ 2,960.03 $ 41.11

li 1,102.43 $ 316.43 $ 321.91 $ 9,543.09 $ 8836
1,955.88 $ 859.14 $ 885.16 $ 16,980.95 $ 67.38

135.08 $ 132.02 $ 132.02 $ 1,587.30 $ 66.14

1,398.56 $ 766.80 $ 719.16 $ 12,151.30 $ 25.32
1,082.06 $ 787.53 $ 737.38 $ 11,621.36 $ 34.59
109.02 $ 76.64 $ 45.48 $ 836.56 $ 69.71

949.65 $ 573.89 $ 474.30 $ 8,130.85 $ 56.46
$1,104,979.02
$103,839.87 $84,834.60 $64,406.32 $1,104,979.02
.1
0)
C-,
3
(D
i-I.
U,
Falls Water Co., Inc.
Calculation of Building and Property Rent
CYE 2011
Staff's Proposed Adjustment Allowed
Cost per Leased Total Staff
L# Description Year Monthly SqFt SqFt SqFt Months Adjustment
I Rockwell Lease
2 Base Rent 2011 $3,000.00 4000 0.7500 4000 12 $ 36,000
3 Escalators 2011 $ 811.91 4000 0.2030 0 12 0
4
5 Triple Net Lease 2011 $4,496.00 9000 0.4996 1000 12 -$ 5,995
6 Total $ 41,995
7 Reported Expense $ 53,952
8 Staff Adjustment $ (11,957)
9
10 Company's Proposed Adjustment
11
12 Rockwell Lease
13 Base Rent 2011 $3,000.00 4000 0.7500 4000 12 $ 36,000 2
14 Escalators 2011 $ 811.91 4000 0.2030 0 12 0
15 f-I.
16 Triple Net Lease 2011 $4,496.00 9000 0.4996 2500 12 $ 14,987
17 Total $ 50,987
18 Reported Expense $ 53,952
19 Company Adjustment
20
21 Adjustment to Staff Adjustment ,., i j... -"v'-.j ,' 4rmii $ 8,992
/'
Attachment 17
Falls Water Company
Brent Johnson
Equipment Lease vs. Purchase
Purchase New
Backhoe Dump Truck
John Deere 310 SC Peterbilt 379
With Compactor
Purchase Price $87,500.00 $90,000.00
Return on Investment $10,500.00 $10,800.00
10 yr Depreciation $8,750.00 $9,000.00
Annual Tire Fund $1,000.00 $690.00
Estimated Annual Repair $750.00 $750.00
Annual Cost $21,000.00 $21,240.00
Monthly Cost $1,750.00 $1,770.00
Monthly Insurance $75.00 $225.00
Total Monthly Cost $1,825.00 $1,995.00
Combined Monthly Cost $3,820.00
Purchase Used
Backhoe Dump Truck
John Deere 310 SC Peterbilt 379
With Compactor
Purchase Price $39,000.00 $42,000.00
Return on Investment $4,680.00 $5,040.00
5 yr Depreciation $7,800.00 $8,400.00
Annual Tire Fund $1,000.00 $690.00
Estimated Annual Repair $1,500.00 $1,500.00
Annual Cost $14,980.00 $15,630.00
Monthly Cost $1,248.33 $1,302.50
Monthly Insurance $50.00 $150.00
Total Monthly Cost $1,298.33 $1,452.50
Combined Monthly Cost $2,750.83
Lease
Backhoe Dump Truck
John Deere 310 SC Peterbilt 379
With Compactor
Monthly Cost $1,200.00 $800.00
Total Cost $2,000.00
Note: Insurance and Major Repairs Paid by Leasor, Minor Repairs and Fluids Paid by Leasee.