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CHAPARRAL RATE CASE. Discussion of recent rate case and effect on ratepayers. REVENUE REQUIREMENTS COMPARISON. PROPOSED BY Company - EPCOR $ 2,727,122 Commission – APPROVED – YR 1 $ 2,054,093 ROO / Adm. Law Judge $ 1,625,544 ACC Staff Analysts $ 1,304,325 RUCO $ 754,940.

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chaparral rate case

CHAPARRAL RATE CASE

Discussion of recent rate case and effect on ratepayers

slide2

REVENUE REQUIREMENTS COMPARISON

PROPOSED BY

Company - EPCOR $ 2,727,122

Commission – APPROVED– YR 1 $ 2,054,093

ROO / Adm. Law Judge $ 1,625,544

ACC Staff Analysts $ 1,304,325

RUCO $ 754,940

slide3

Commission Decision and the Effects on Ratepayers

Commission Approved Revenue Increase $ 2,054,093

Administrative Law Judge (ALJ’s) $ 1,625,544

Additional Costs to Ratepayers – Year 1 $ 428,549

The additional revenues of $428,549, approved by the Commission, represents a 26.4% increase over and above what the Administrative Law Judge recommended. The additional increase was approved by the Commissioners and not one asked the effect the additional increase would have on the ratepayers.

slide4

BUT IT’S GOING TO GET WORSE

SYSTEM IMPROVEMENT BENEFIT CHARGE

INCREASE INCREASE

YEARPER YEAR PER MONTHPERCENTAGE

2015 $ 308,618$ 1.76 3.87 %

2016 $ 296,752 $ 1.69 3.72 %

2017 $ 302,579 $ 1.73 3.79 %

2018 $ 303,159 $ 1.73 3.80 %

2019 $ 291,406 $ 1.673.67 %

TOTALS $1,502,514 $ 8.58 19.23 %

The System Improvement Benefit (“SIB”) projects have already been approved by the Commission. Once the expenditures are made in the respective years the above rates will go into effect when submitted to the ACC Staff for review. No additional rate case is required to implement the addition to rates.

slide5

BUT IT’S GOING TO GET WORSE –SLIDE 2

INITIAL SIB

CURRENT INCREASE INCREASE ADJUSTED

YEARRATE PER MONTHPERCENTAGE RATES

2014 $ 37.85 $ 7.68 -0- $ 45.53

2015 $ 45.53$ 1.76 3.87 % $ 47.29

2016 $ 47.29 $ 1.69 3.72 % $ 48.99

2017 $ 48.99 $ 1.73 3.79 % $ 50.71

2018 $ 50.71 $ 1.73 3.80 % $ 52.45

2019 $ 52.45 $ 1.67 3.65 % $ 54.11

The Order as approved by the Commission states that the rate increase on the average residential ratepayer is $7.68 per month or 20.3%. In reality, the rates increase each year and at the end of year five the rate has increased to $54.11, a percentage increase of 43.0%.

slide6

WE’RE NOT FINISHED YET

  • COMMISSIONERS APPROVAL vs. ALJ
  • Additional Depreciation Expense through the use of the Group Depreciation Method as opposed to the modified Vintage method, and the continuation of over-depreciating Utility Plant Assets.
  • Changing the Rate of Return on Rate Base from 8.06 percent to 8.95 percent.
  • ADDITIONAL APPROVALS
  • Declining Usage $ 22,174
  • Tank Maintenance Expense (18years) $ 202,184
  • Additional Post Test Year Plant over what
  • RUCO recommended $ 2,278,882
  • System Improvement Benefit $ 1,502,514