Elk Grove WD Board Meeting
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Elk Grove WD Board Meeting Water Rates Habib Isaac – Principal Gregg Tobler – Task Manager PowerPoint PPT Presentation


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Elk Grove WD Board Meeting Water Rates Habib Isaac – Principal Gregg Tobler – Task Manager September 10, 2012. Meeting Goals. Review timeline to date Review Rate Design Fixed / Variable Cost components Variable cost allocation Residential usage characteristics

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Elk Grove WD Board Meeting Water Rates Habib Isaac – Principal Gregg Tobler – Task Manager

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Elk grove wd board meeting water rates habib isaac principal gregg tobler task manager

Elk Grove WD Board Meeting Water Rates Habib Isaac – Principal

Gregg Tobler – Task Manager

September 10, 2012


Meeting goals

Meeting Goals

  • Review timeline to date

  • Review Rate Design

    • Fixed / Variable

    • Cost components

    • Variable cost allocation

    • Residential usage characteristics

    • Customer impact based on usage levels

    • Accounts affected by percentage change in bill

  • What is the preferred rate structure?


Water study summary

Water Study Summary

  • Willdan and staff held first meeting with CAC on August 7th

    • Reviewed existing rate structure and fixed / variable options

    • Implementation options – (January versus July)

    • Identified next steps and timeline

  • Finance Committee Meeting – (August 13th)

    • Supported CAC recommendation of January adjustments

      • Modest adjustments instead of significant adjustments in future years

    • Directed staff to assemble finance team for debt restructuring

    • 40% Fixed / 60% Variable: too significant of a change when compared to current split of existing rate structure

  • Willdan and staff held second meeting with CAC on September 4th

    • Refined Fixed / Variable options

    • Fire protection allocation

    • Preliminary rates

  • Board Meeting September 10th

    • Refined Fixed / Variable options

    • Fire protection allocation

    • Preliminary rates


Refined fixed variable options

Refined Fixed / Variable Options

  • Fixed / Variable options: 60% / 40%55% / 45%

    • 60% fixed / 40% variable: 2 tiered residential structure

    • 55% fixed / 45% variable: 3 tiered residential structure

  • Fixed revenue

    • Costs either apportioned over accounts or based on meter size

  • Variable revenue

    • Costs are allocated between customer classes based on usage

      • Total water units used

      • Peak demand placed on utility system

      • Horizontal equity achieved

    • Residential

      • Further allocated between tiers based on usage characteristics


Scenario 1 45 variable 55 fixed

Scenario 1 – 45% Variable / 55% Fixed

  • 25% of Debt is allocated to BASE (variable cost)


Variable cost allocation

Variable Cost Allocation


Residential usage characteristics

Residential Usage Characteristics

  • 3 Tiered Rate Structure

  • Residential usage characteristics

Winter Avg Use = 11 HCF

Summer Avg Use = 25 HCF


Scenario 1 preliminary rates

Scenario 1 – Preliminary Rates

Residential Accounts

  • Tier 1 = $1.51

  • Tier 2 = $2.50

  • Tier 3 = $4.53

  • Non-Residential Accounts

  • $1.99

  • Irrigation Accounts

  • $2.43

  • Existing Structure

  • Tier 1 = $1.46

  • Tier 2 = $1.80


Scenario 1 fixed charges

Scenario 1 – Fixed Charges


Customer impact scenario 1

Customer Impact – Scenario 1

28.34

3.01

(3.81)


Scenario 2 40 variable 60 fixed

Scenario 2 – 40% Variable / 60% Fixed

  • Entire Debt obligation is under Fixed


Scenario 2 preliminary rates

Scenario 2 – Preliminary Rates

Residential Accounts

  • Tier 1 = $1.55

  • Tier 2 = $3.79

  • Non-Residential Accounts

  • $1.75

  • Irrigation Accounts

  • $2.19

  • Existing Structure

  • Tier 1 = $1.46

  • Tier 2 = $1.80


Scenario 2 fixed charges

Scenario 2 – Fixed Charges


Customer impact scenario 2

Customer Impact – Scenario 2

15.34

0.12

1.78


Proposed financial plan rate structure

Proposed Financial Plan / Rate Structure

  • January implementation date

  • Debt restructured to achieve future level payments

  • Annual revenue adjustments limited to 3%

  • Selection of fixed / variable percentage split

    • 55% / 45%

    • 60% / 40%

  • Fixed cost spread over accounts and meter size

  • Variable cost allocated to customer classes based on usage and peaking factors

  • Residential tiered rate structure tied to fixed / variable split


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