Utility Rate Task Force Agenda and Packet 2014 02 19

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Utility Rate Task Force Agenda February 19, 2014 Page 3 of 3 rights and Windy Gap rights. It appears as though the city is investing a lot of money in the Windy Gap Firming project, so why not use that system as the basis? Is the city anticipating buying any more C-BT or Windy Gap units over the next decade? If using C-BT or Windy Gap as the value, the purchase cost is only the · value of the unit (and then converted to an acre-foot value), but what about the cost to deliver that water to the treatment plant? Should you include a capitalized cost of the carriage and delivery costs from the Northern system to Louisville? I know it is typically an O&M cost, but should we charge the new customer this cost, as opposed to charging current customers this added cost? Once it gets to the Treatment Plant, all the customers pay and benefit, so I can see that at that point its included in the WSDC-1 value. Tables WCOS-4 and SCOS-2 use very different capital values to calculate · the cost of service monthly rates than the capital values used in Tables WSDC-1, WSDC-2 and SSDC-1 for the SDCs. The capital values for rates are less than the values for the SDC. Please explain why you should use different capital values for rates than for SDCs. I know there is a reluctance to use the non-backbone system values in · determining the SDC value on the basis that the non-backbone system was likely constructed by developers. At the time when a developer- constructed pipe is replaced by the city at 100% city cost, should that pipe now be part of the SDC value? At some point in time, the 6, 8 and 10 pipes will break, become corroded or need to be replaced. When that time comes, should those pipes be included or not be included in the SDC valuation, and what is your rationale for your answer?