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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT

COST OF SERVI CE/ ELECTRI C UNBUNDLI NG STUDY - 2012


MARCH 1, 2012














Utility Financial Solutions, LLC
185 Sun Meadow Court
Holland, MI USA 49424
(616) 393-9722
Fax (616) 393-9721
Email: mbeauchamp@ufsweb.com

Submitted Respectfully by:
Mark Beauchamp, CPA, CMA, MBA
President, Utility Financial Solutions





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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
TABLE OF CONTENTS



SECTI ON PAGE NO.


I NTRODUCTI ON 2

PROJECTED REVENUES, EXPENSES & NET I NCOME 4

PROJECTED CASH FLOWS 5

COST OF SERVI CE SUMMARY 6

DEVELOPMENT OF RECOMMENDED RATE TRACK 7

RECOMMENDED RATE TRACK 9

COST OF SERVI CE RESULTS 10

UNBUNDLI NG PROCESS 11

SI GNI FI CANT ASSUMPTI ONS 20

RECOMMENDATI ONS 22

ACCOUNTANTS COMPI LATI ON REPORT 24













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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY - I NTRODUCTI ON


I NTRODUCTI ON

This report was prepared to provide the City of Columbia electric utility with a long-
term financial plan and an electric cost of service and unbundling rate study. The
specific purposes of the financial plan and rate study are identified below:

1) Det er mi ne El ec t r i c Depar t me nt s r evenue r equi r eme nt s f or
c al endar year 2012. The Electric Departments revenue requirements were
projected for the period from 2012 2016 and included adjustments for the
following:
a. Changes in fuel cost and purchased power costs.
b. Capital improvements currently underway and scheduled over the next
five years. The City of Columbia electric utility provided capital
improvement information for 2011 2016.

2) I dent i f y c r oss- subsi di es t hat may exi st be t ween r at e c l asse s. Cross-
subsidies exist when certain customer classes subsidize the electric costs of
other customers. The rate study determined if cross-subsidies exist and
practical ways to reduce the subsidies.

3) Rec ommend r at e adj ust me nt s needed t o meet t ar get ed r eve nue
r equi r ement s. The primary purpose of a rate study is to identify
appropriate revenue requirements and the rate adjustments needed to meet
targeted revenue requirements. The report includes a long-term rate track for
the City of Columbia electric utility to help ensure the financial stability of
the utility in future years.


4) Unbundl ed el ec t r i c r at es. The cost of providing electricity to customers
consists of a number of components, including power generation, distribution,
customer services, transmission, and payment in lieu of tax. Electric
unbundling identifies the cost of each component to assist the utility in
preparing for electric restructuring, understanding its cost structure and
developing special rate forms for customers such as net metering rates,
standby rates, and time of use rates.

5) I dent i f y t he appr opr i at e mont hl y c ust omer c har ge f or eac h
c ust omer c l as s. The monthly customer charge consists of fixed costs to
serve customers that do not vary based on the amount of electricity used.

The City of Columbia electric utility retained Utility Financial Solutions to review
the above items and make recommendations on the appropriate course of action. This
report includes results of the long-term financial plan, electric cost of service and
unbundling study.

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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY- I NTRODUCTI ON


The Executive Summary Section of this report is structured in the following manner:

A) Executive Summary
1) Utility Revenue Requirements for 2012
2) Cost of Service Summary
3) Unbundled Electric Rates
4) Recommended Rate Adjustment
B) Functionalization of Utility Revenue Requirements
C) Unbundling Process
1) Distribution Cost Breakdown
2) Customer-Related Cost Breakdown
3) Unbundled Distribution Rates for Major Customer Classes
4) Power Supply Cost Summary
5) Combined Cost Summary
D) Significant Assumptions Used in Analysis
E) Summary of Recommendations
F) Compilation Report



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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY PROJECTED REVENUE, EXPENSES AND NET
I NCOME


PART ONE - UTI LI TY REVENUE REQUI REMENTS FOR 2011

To determine revenue requirements, the revenues and expenses for the period from
FYE 2008 FYE 2010 and YTD 2011 were analyzed with adjustments made to actual
expenses to reflect anticipated changes in operating expenses. Detailed descriptions
of the methodology are included in the section Summary of Significant Assumptions.

Without rate adjustments an operating loss of $(606,391) is projected for 2012, the
loss increases in 2016 to ($4.5) million. Cash generated from operations is not
sufficient to support projected maintenance and system improvements. To help
ensure reliable electric services to customers is maintained future rate adjustments
are anticipated.

Tabl e One Fi nanc i al Pr oj ec t i on Wi t ho ut Rat e Adj ust ment s



Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Electric Revenue 108,670,248 $ 109,756,951 $ 111,952,090 $ 114,750,892 $ 117,619,664 $
Payment In-Lieu-of-Tax 8,179,392 8,261,186 8,426,410 8,637,070 8,852,997
Sales for Resale 2,000,000 4,000,000 4,080,000 4,182,000 4,286,550
Miscellaneous Revenues 2,743,951 2,771,390 2,826,818 2,897,489 2,969,926
Total Revenues 121,593,591 $ 124,789,527 $ 127,285,318 $ 130,467,451 $ 133,729,137 $
Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Expenses
Purchased Power
Power Production 81,542,715 83,988,997 86,508,666 89,103,926 91,777,044
Transmission & Distribution 10,000,519 10,300,535 10,609,551 10,927,837 11,255,672
Customer Accounts Expense 4,138,451 4,262,605 4,390,483 4,522,197 4,657,863
Administration & General 5,231,297 5,388,236 5,549,883 5,716,380 5,887,871
Property Tax 3,174,073 3,423,435 3,292,633 3,911,423 3,873,733
Payment In-Lieu-of-Tax 8,179,392 8,261,186 8,426,410 8,637,070 8,852,997
Depreciation & Amortization 9,933,534 10,152,416 10,378,965 10,946,800 11,947,652
Total O&M 122,199,982 $ 125,777,409 $ 129,156,592 $ 133,765,633 $ 138,252,834 $
Operating Income (606,391) $ (987,882) $ (1,871,274) $ (3,298,182) $ (4,523,697) $
Interest Expense (5,748,229) (5,922,145) (5,770,107) (6,419,826) (6,274,259)
Miscellaneous Expense (66,438) (68,432) (70,485) (72,599) (74,777)
Interest Income 866,440 805,149 726,610 625,366 1,008,737
Miscellaneous Income 700,000 700,000 700,000 700,000 700,000
Transfer Out (50,000) (50,000) (50,000) (50,000) (50,000)
Total Other Income & Expenses (4,298,227) $ (4,535,427) $ (4,463,982) $ (5,217,059) $ (4,690,298) $
Net Income (4,904,618) $ (5,523,309) $ (6,335,256) $ (8,515,241) $ (9,213,995) $


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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY PROJECTED CASH FLOW


Cash Reser ves and Bal anc es

To help ensure timely completion of capital improvements, fund annual expenses and
to help ensure funds exist if large unexpected expenditures occur, a cash reserve
policy should be established. The determination of cash reserves considers a number
of factors listed below:

Timing differences between when expenses are incurred and revenues
received from customers
Variability in monthly expenses
Risk of changes in power supply costs
Investment in assets
Annual debt service
Capital improvement program

The minimum recommended cash reserve for 2012 is $40 million and increases to $45
million in 2016 (please see detailed assumptions on page 8). For 2012, the projected
cash reserve is $40.3 million and decreases to $18.5 million in 2016.

Tabl e Two Pr oj ec t ed Cash Bal anc e vs Mi ni mum Cas h Re ser ve s
Cal c ul at i o n Wi t hout Rat e Adj ust me nt s

Projected Cash Flows
Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Add Net Income (4,904,618) $ (5,523,309) $ (6,335,256) $ (8,515,241) $ (9,213,995) $
Add Back Depreciation Expense 9,933,534 10,152,416 10,378,965 10,946,800 11,947,652
Subtract Debt Principal 2,433,443 2,226,096 3,025,914 3,162,967 4,894,569
Add Bond Sale Proceeds 0 0 0 44,925,000 0
Funds transf erred to the water f und
Cash Available f rom Operations 2,595,473 $ 2,403,011 $ 1,017,795 $ 44,193,591 $ (2,160,912) $
Estimated Annual Capital Additions 5,660,000 6,330,000 6,080,000 25,025,000 29,800,000
Net Cash From Operations (3,064,527) $ (3,926,989) $ (5,062,205) $ 19,168,591 $ (31,960,912) $
Beginning Cash Balance 43,322,000 40,257,473 36,330,484 31,268,279 50,436,870
Ending Cash Balance 40,257,473 $ 36,330,484 $ 31,268,279 $ 50,436,870 $ 18,475,959 $
Total Cash Available 40,257,473 36,330,484 31,268,279 50,436,870 18,475,959
Recommended Minimum 39,948,619 40,909,057 41,887,956 43,818,104 44,934,613



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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY COST OF SERVI CE SUMMARY RESULTS

COST OF SERVI CE SUMMARY RESULTS

A cost of service study was completed to determine the cost of providing service to
each class of customers and to assist in design of electric rates for customers. A cost
of service study consists of the following general steps:

1) Determine utility revenue requirement for 2012
2) Classify utility expenses into common cost pools
3) Allocate costs to customer classes based on the classes contribution to utility
expenses
4) Compare revenues received from each class to the cost of service

The cost of service summary is included in the table below which compares the
projected cost to serve each class with the revenue received from each class. The %
change column is the rate adjustment necessary to meet cost of service
requirements.

Tabl e Thr ee Cost of Ser vi c e Summar y

Cost of Service
Projected
Revenues % Change
Residential Service 32,109,810 30,836,129 4%
Residential Service Space Heating 13,641,728 12,077,224 13%
Residential Heat Pump 3,643,308 3,150,584 16%
Small General Service 10,262,319 8,565,505 20%
Small General Service Space Heating 2,146,851 1,800,544 19%
Small General Service High Efficiency Heat Pumps 89,482 72,905 23%
Street Lighting 1,507,697 1,390,694 8%
Small General Service Optional Demand 199,718 179,569 11%
Large General Service 32,561,148 31,001,774 5%
Interruptible Service 173,475 161,087 8%
Industrial Service 20,062,686 19,434,232 3%
Total 116,398,223 108,670,248 7.1%
Customer Class


The study indicates that a 7.1% increase would be needed to meet cost of service for
2012.


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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY DEVELOPMENT OF RECOMMENDED RATE
TRACK


Devel opment of Recommended Rate Track

When evaluating rates to charge customers, three factors must be considered:

1. Debt Coverage Ratio
2. Minimum Cash Reserves
3. Optimal Net Income

Each of these factors is discussed below:

1. Debt Cover age Rat i o - Debt coverage ratios are mandated by bond
covenants. To help ensure bond rating are improved or maintained a number
of factors need to be considered including cash reserve policies, power cost
recovery methods, risk of power supply, competitiveness of electric rates and
the ability of the Electric Department to meet or exceed the covenants
established in the bond ordinance. The covenant requires cash generated from
operations exceed 1.20 times the debt payments. The target established in the
study is a minimum ration of 1.40, the 0.20 factor helps ensure convents are
exceeded when changes in sales occur due to weather, loss of major customers
or other unforeseen events. The table below is the projected coverage ratios
without rate adjustments. The Electric Department is projected to fall below
requirements in 2014, without rate relief.

Tabl e Four Debt Cover age Rat i o


Debt Coverage Ratio
Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Add Net Income (4,904,618) $ (5,523,309) $ (6,335,256) $ (8,515,241) $ (9,213,995) $
Add Depreciation Expense 9,933,534 10,152,416 10,378,965 10,946,800 11,947,652
Add Interest Expense 5,748,229 5,922,145 5,770,107 6,419,826 6,274,259
Cash Available f or Debt Service 10,777,145 $ 10,551,252 $ 9,813,816 $ 8,851,384 $ 9,007,916 $
Debt Principal and Interest 8,181,672 $ 8,148,241 $ 8,796,021 $ 9,582,793 $ 11,168,828 $
Projected Debt Coverage Ratio (Covenants) 1.32 1.29 1.12 0.92 0.81
Minimum Debt Coverage Ratio 1.40 1.40 1.40 1.40 1.40

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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY DEVELOPMENT OF RECOMMENDED RATE
TRACK

2. Minimum Cash Reserve Cash reserves are established to ensure funds are
available to meet capital improvement needs or emergency expenditures.
Cash reserve policies and guidelines are often established by utilities to
maintain appropriate cash reserves to help ensure:

1. Cash exists for timely payment of bills
2. The short term and long term financial health of the Utility in maintained
3. Stable rates for customers
4. Cash exists to fund unanticipated cost contingencies and capital
improvement programs

In recent years the compounded impacts of power supply cost uncertainties, a
sluggish economy, volatile energy prices, and rising capital improvement costs have
posed challenges to maintaining stable retail rates and reserves. It is important for
utilities to maintain the financial flexibility to help smooth rate increases and
stagger retail rate adjustments for customers of the utility.
Minimum cash reserve guidelines should be set to allow reserves to float up or down
above the minimum guidelines. The decision to hold more money than the established
minimum cash guidelines should be based on the assessments of uncertainties and
other financial policies such as:

o The financial risk facing the utilities
o Rate setting policies
o Variability in power costs
o Debt policies
o Future capital improvements needed by utility
o Line Extension policies

The adequacy of the guidelines may be reviewed internally each year, and if
appropriate, revised guidelines may be recommended. The minimum recommended
cash reserve for 2012 is $39.9 million and increases to $44.9 million in 2016. For
2012, the projected cash reserve is $40.2 million and decreases to $18.4 million in
2016. The table below is the calculation of the minimum level of cash reserves
identified in this report.

Tabl e Fi ve - Mi ni mum Cash Re ser ve Tar get Compar ed t o Pr oj ec t ed
Reser ves


6/13/2013 9
Percent
Allocated
Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Operation & Maintenance Less Depreciation Expense 20% 6,144,747 $ 6,327,199 $ 6,453,792 $ 6,742,981 $ 6,905,627 $
Pow er Costs 13% 10,916,527 11,244,023 11,581,344 11,928,784 12,286,648
Historical Rate Base 2% 5,692,124 5,818,724 5,940,324 6,440,824 7,036,824
Current Portion of Debt Service Reserve 50% 4,074,121 4,398,011 4,791,396 5,584,414 5,584,414
Next Years Capital Improvements - Net of bond proceeds 15% 2,186,850 2,186,850 2,186,850 2,186,850 2,186,850
Five Year Capital Improvements - Net of bond proceeds 15% 10,934,250 10,934,250 10,934,250 10,934,250 10,934,250
Minimum Cash Reserve Levels 39,948,619 $ 40,909,057 $ 41,887,956 $ 43,818,104 $ 44,934,613 $
Projected Cash Reserves 40,257,473 $ 36,330,484 $ 31,268,279 $ 50,436,870 $ 18,475,959 $

CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY RECOMMENDED RATE TRACK


3. Opt i mal Oper at i ng I nc ome Tar get s - The optimal target for setting
rates is the establishment of a target operating Income. The operating
income is set at a level for the Electric Department to breakeven
considering operating income is used for the following purposes:

a. Funding of Interest Expense on the outstanding principal on debt
b. Funding asset replacements considering the annual inflationary
increase in the cost to replace the assets.

The target established for 2012 is $7.1 million and increases to $8.8 million in
2016. The projected operating loss for 2012 is ($606,391), and the loss
increases to ($4.5) million by 2016.

Tabl e Si x - Opt i mal Oper at i ng I nc o me Tar get s Compar ed t o
Pr oj ec t ed Wi t hout Rat e Adj ust ment s

Percent
Allocated
Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Outstanding Principal on Debt 4.7% 5,748,229 5,649,760 5,515,911 5,376,000 5,159,493
System Equity 7.0% 1,373,355 1,277,576 1,201,193 2,235,663 3,600,478
Target Operating Income 7,121,584 $ 6,927,336 $ 6,717,104 $ 7,611,663 $ 8,759,971 $
Projected Operating Income (606,391) $ (987,882) $ (1,871,274) $ (3,298,182) $ (4,523,697) $
Rate of Return in % 4.7% 4.6% 4.6% 4.8% 5.0%

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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY RECOMMENDED RATE TRACK


RECOMMENDED RATE TRACK

Table Seven is the recommended rate track to achieve targets established in the
study and minimize rate impacts to customers of the City of Columbia electric utility.
We recommend a 2.2% 2012 - 2016 as identified in Table Seven below.

Tabl e Seve n Rec ommended Rat e Adj ust ment s

Fiscal Year
Projected
Rate
Adjustments
Projected
Revenues
Projected
Expenses
Adjusted
Operating
Income
Projected
Cash
Balances
Capital
Improvements Bond Issues
Debt
Coverage
Ratio
2011 0.00% 122,409,496 118,234,566 4,174,931 43,322,000 47,350,000 49,500,000 2.43
2012 2.20% 123,984,337 122,199,982 1,784,355 42,648,218 5,660,000 - 1.61
2013 2.20% 130,039,446 126,144,900 3,894,546 43,651,472 6,330,000 - 1.90
2014 2.20% 135,406,370 129,725,060 5,681,310 46,288,272 6,080,000 - 1.99
2015 2.20% 141,689,194 134,551,147 7,138,047 76,193,492 25,025,000 44,925,000 2.04
2016 2.20% 148,266,873 139,270,465 8,996,408 58,267,818 29,800,000 - 2.06
Recommended Target in 2012 7,121,584 $ 39,948,619 $ 1.40
Recommended Target in 2016 8,759,971 $ 45,138,139 $ 1.40



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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG


DI STRI BUTI ON RATES

Separation of distribution rates is necessary to identify the customer charge for
customers and to ensure the Utility is recovering its operational costs. Distribution
rates include the following costs:

1) Operation and maintenance of distribution & transmission system
2) Payment in Lieu of Tax
3) Customer service
4) Customer accounting
5) Meter reading
6) Billing
7) Meter operation & maintenance
8) Administrative expenses

The distribution rates consist of two components:

1) Monthly customer charge to recover the costs of meter reading, billing,
customer service, and a portion of maintenance and operations of the
distribution system.
2) Distribution rate based on billing parameter, (kW or kWh) to recover the cost
to operate and maintain the distribution system. The table below identifies
the cost based distribution rates for customer classes.

The cost of service study distribution rates by customer are listed below. These are
the results of the study for distribution only rates and are not the recommended rate
design.

Tabl e Ni ne Di s t r i but i o n Rat e s by Cus t o mer

Customer Class
Monthly
Customer
Charge
Distribution
Rate
Billing
Basis
Residential Service 14.40 0.017 kWh
Residential Service Space Heating 14.40 0.020 kWh
Residential Heat Pump 14.40 0.020 kWh
Small General Service 23.70 0.020 kWh
Small General Service Space Heating 23.70 0.017 kWh
Small General Service High Efficiency Heat Pumps 23.70 0.019 kWh
Street Lighting 1.13 0.095 kWh
Small General Service Optional Demand 29.94 5.08 KW
Large General Service 45.00 4.49 KW
Interruptible Service 128.91 4.31 KW
Industrial Service 325.23 4.43 KW




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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG


Delivery of electricity consists of many components that bring electricity from the
power supply facilities to the communities and eventually into customer facilities.
The facilities consist of four major components: transmission, distribution, customer-
related services, and administration. Following are general descriptions of each of
these facilities and the sub-breakdowns within each category.

Tr ansmi ssi o n

The transmission system is comprised of four types of subsystems that operate
together:

1) Backbone and inter-tie transmission facilities are the network of high voltage
facilities through which a utilitys major production sources are integrated.
2) Generation set-up facilities are the substations through which power is
transformed from a utilitys generation voltages to its various transmission
voltages.
3) Sub-transmission plant consists of lower voltage facilities to transfer electric
energy from convenient points on a utilitys backbone system to its
distribution system.
4) Radial transmission facilities are those that are not networked with other
transmission lines but are used to serve specific loads directly.

Operation of the transmission system also consists of providing certain services that
ensures a stable supply of power. These services are typically referred to as ancillary
services. The Federal Energy Regulatory Commission (FERC) has defined six
ancillary service charges for the use of transmission facilities and consist of the
following:

Anc i l l ar y Ser vi c e Char ges:
Regulation and Frequency Response Service
Energy Imbalance Charges
Operating Reserves Spinning
Operating Reserves Supplemental
Power losses from use of transmission system




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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG


Di s t r i but i o n Syst em

The distribution facilities connect the customer with the transmission grid to provide
the customer with access to the electrical power that has been generated and
transmitted. The distribution plant includes substations, primary and secondary
conductors, poles, and transformers.

Subst at i o ns typically separate the distribution plant from the transmission
system. The substation power transformer reduces the voltage to a level that
is more practical to install throughout the service territory.

The Distribution system provides primary circuits with voltages of 13.8 kV.
Secondary circuits are 480 volts and less.


Di s t r i but i o n Cust omer Types

Sub-transmission customers are served directly from the substation feeder and
bypass both the secondary and primary distribution lines. The charges for this type
of customer should reflect the cost of the substation and not include the cost of
primary or secondary line charges.

Primary customers are typically referred to as customers who own and maintain their
own transformers. The rates for these customers should reflect the cost of
substations and the cost of primary distribution lines and not include the cost of
secondary line extensions.

Secondary customers have the services provided by the utilities directly into their
facilities. The utility provides the customer with the transformer and the connection
on the customers facilities.















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COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG


Cus t omer - Rel at ed Ser vi c es

Certain administrative-type services are necessary to ensure customers are provided
service connections and disconnections in a timely manner and the facilities are in
place to read meters and bill for customer usages. These services typically consist of
the following components:

1) Customer Services The cost of providing personnel to assist customers with
questions and dispatch personnel to connect and disconnect meters.
2) Billing and Collections The cost of billing and collections personnel, postage,
and supplies.
3) Meter Reading The cost of reading customer meters.
4) Meter Operation and Maintenance The cost of installing and maintaining
customer meters.

Admi ni st r at i ve Ser vi c es

These costs are sometimes referred to as overhead costs and relate to functions that
cannot be directly attributed to any service. These costs are spread to the other
services through an allocator such as labor, expenses, or total rate base. These costs
may consist of administrative expenses, property insurance, and wages for higher-
level management of the utility.

Sys t em Losse s

As energy moves through each component of the transmission and distribution
system, some of the power is lost and cannot be sold to customers. Losses vary based
on time of day and season. Typically, as system usage increases or ambient
temperature increases, the percentages of losses that occur also increase.














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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG


The cost of power supply, distribution, and customer services are identified as part of
the unbundling process and are the first step in determining unbundled charges to
customers. The total revenue requirements of $116.4 million are separated into the
three categories and are identified in the graph below.

Gr aph One Br eakdown of Cost St r uc t ur e

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,-.
/012%03(20"4
5-.
6(12"7$% '$%809$1
:.
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The City of Columbia electric utility is projected to expend 78% of its total costs
toward power supply from purchased power costs. Distribution-related costs are 18%
and customer service amounts to 4%. These components are broken down into each of
the subcomponents and are identified in the following sections.







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CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG


DI STRI BUTI ON BREAKDOWN

As stated earlier, distribution rates consist of a number of different components and
total distribution-related costs of $21.3 million for FY 2012 are broken down into the
main components of transmission, substations, transformers, and distribution lines.

Gr aph Two Br eakdo wn of Di st r i but i on Cost s

!"#$%"&'$"()
+"),#
-./
0%1)#2"##"()
3./
0%1)#4(%2,%#
-/
5'&#$1$"()#
36/
!"#$%&'() '+ ,-./"-01/-') 2'./.


Each cost component is allocated to customer groups based on certain factors
established in the study. These factors are based on the efficiency of each customer
class and the time of day or the season the electricity is used. Other factors are also
considered, such as the length of line extensions to reach certain customer classes. A
complete list of allocators is included in the detailed section of this report.


6/13/2013 17
CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG


Cus t omer - Rel at ed Cost Br eakdo wn

Total expenses for customer-related cost are $4.9 for FY 2012 and broken down into
the following components:

Gr aph Thr ee Br eakdown of Cust omer Co st s

!"#$%&'( *+,'
-.$',$+%,#
/01
2'$'( 342
/51 2'$'(
6'78+,9
:;1
<+==+,9 4
!%=='>$+%,#
:?1
!"#$%&'(
@'(A+>'#
:?1
B+('>$ !%#$#
:51
!"#$%&'() '+ ,-./'0#" ,'./.


Each component is broken down by customer class and the breakdown is included in
the detailed analysis of this report.













6/13/2013 18
CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG

POWER SUPPLY RATES

Tables A and B below identifies average cost of providing power supply to customers
of the City of Columbia electric utility overall and by season.

Tabl e Ten A - Power Suppl y Cos t by Cus t omer Cl ass

Customer Class Demand Billing Basis Energy Billing Basis
Residential Service 0.035 kWh 0.050 kWh
Residential Service Space Heating 0.032 kWh 0.051 kWh
Residential Heat Pump 0.032 kWh 0.051 kWh
Small General Service 0.039 kWh 0.050 kWh
Small General Service Space Heating 0.035 kWh 0.051 kWh
Small General Service High Efficiency Heat Pumps 0.038 kWh 0.050 kWh
Street Lighting 0.000 kWh 0.050 kWh
Small General Service Optional Demand 11.31 kW 0.050 kWh
Large General Service 10.14 kW 0.050 kWh
Interruptible Service 2.70 kW 0.050 kWh
Industrial Service 10.34 kW 0.048 kWh
Current Rates



Tabl e Ten B - Power Suppl y Cos t by Cus t omer Cl ass by Season

The cost of service study breaks power supply costs into four seasons to identify
periods of time when power supply costs change. The table below identifies power
supply costs for demand related expenses and energy related costs. Months for each
season are listed below the table.

Table of Power Supply Rates by Season
Customer Class Demand Energy Demand Energy Demand Energy Demand Energy
Residential Service 0.0456 $ 0.0414 $ 0.0260 $ 0.0506 $ 0.0377 $ 0.0553 $ 0.0358 $ 0.0495 $
Residential Service Space Heating 0.0456 0.0414 0.0260 0.0506 0.0508 0.0553 0.0222 0.0495
Residential Heat Pump 0.0456 0.0414 0.0260 0.0506 0.0507 0.0553 0.0404 0.0495
Small General Service 0.0654 0.0418 0.0189 0.0502 0.0499 0.0553 0.0533 0.0501
Small General Service Space Heating 0.0654 0.0418 0.0189 0.0502 0.0552 0.0553 0.0551 0.0501
Small General Service High Efficiency Heat Pumps 0.0654 0.0418 0.0324 0.0509 0.0505 0.0553 0.0535 0.0501
Special Outdoor Lighting 0.0000 0.0406 0.0000 0.0492 0.0000 0.0537 0.0000 0.0484
Small General Service Optional Demand 19.79 0.0412 7.53 0.0498 8.30 0.0544 13.08 0.0491
Large General Service 17.81 0.0414 6.77 0.0501 7.43 0.0548 11.85 0.0493
Interruptible Service 4.95 0.0411 1.88 0.0498 2.00 0.0544 3.47 0.0489
Industrial Service 18.80 0.0412 7.15 0.0499 7.91 0.0546 12.37 0.0491
Intermediate - 4 Intermediate - 2 Summer Winter


Seaso ns:
Summer July, August
Winter December, January, February, March
Intermediate 4 April, May, October, November
Intermediate 2 June, September

6/13/2013 19
CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY ELECTRI C UNBUNDLI NG

COMBI NED COST SUMMARY

Table Eleven A & B identifies cost of service rates for each customer class broken
down by monthly customer charges, demand charge and energy charge. The rates
listed below are cost of service rates and not the rate design recommended for
customers. The rate design will move charges closer to cost of service over-time to
minimize the rate impacts on customers.

Tabl e El e ven A Cur r ent Mont hl y Cus t o mer Char ge c ompar ed wi t h
Cost of Ser vi c e Cust omer Char ges

Customer Class
Current
Monthly
Customer
Charges
Cost of Services
Customer
Charge
Residential Service 7.20 $ 14.40 $
Residential Service Space Heating 7.20 14.40
Residential Heat Pump 7.20 14.40
Small General Service 7.20 23.70
Small General Service Space Heating 7.20 23.70
Small General Service High Efficiency Heat Pumps 7.20 23.70
Street Lighting 1.13
Small General Service Optional Demand 7.20 29.94
Large General Service 7.20 45.00
Interruptible Service 55.00 128.91
Industrial Service 325.23


Tabl e El eve n B Co st of Ser vi c e De mand & Ener gy Rat e s by
Cus t omer Cl as s


6/13/2013 20
Customer Class
Demand
Charge
per kW
Energy Charge
per kWh
Residential Service 0.101
Residential Service Space Heating 0.103
Residential Heat Pump 0.102
Small General Service 0.109
Small General Service Space Heating 0.103
Small General Service High Efficiency Heat Pumps 0.107
Street Lighting 0.145
Small General Service Optional Demand 16.40 0.050
Large General Service 14.64 0.050
Interruptible Service 7.01 0.050
Industrial Service 14.77 0.048

CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY SI GNI FI CANT ASSUMPTI ONS


This section outlines the procedures used to develop the cost of service and
unbundling study for the City of Columbia electric utility related significant
assumptions.

For ec ast ed Oper at i ng Expenses

Forecasted expenses were based on actual 2008 - 2010 actual costs adjusted for power
supply costs and inflation. The table below is a summary of Operating Expenses for
2008 - 2016.

Expenses
Actual 2008 Actual 2009 Actual 2010
Projected
2011
Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Pow er Production 66,382,778 $ 71,445,583 $ 77,791,022 $ 79,946,505 $ 81,542,715 $ 83,988,997 $ 86,508,666 $ 89,103,926 $ 91,777,044 $
Transmission & Distribution 9,120,759 10,151,606 11,368,196 9,709,242 10,000,519 10,300,535 10,609,551 10,927,837 11,255,672
Customer Accounts Expense 2,351,000 2,828,384 2,468,010 3,208,413 4,138,451 4,262,605 4,390,483 4,522,197 4,657,863
Administration & General 2,901,481 3,187,546 3,762,170 5,078,930 5,231,297 5,388,236 5,549,883 5,716,380 5,887,871
Property Tax 1,885,093 1,918,431 2,207,248 3,063,703 3,174,073 3,423,435 3,292,633 3,911,423 3,873,733
Payment In-Lieu-of -Tax 6,917,884 7,087,271 7,858,199 8,098,408 8,179,392 8,261,186 8,426,410 8,637,070 8,852,997
Depreciation & Amortization 8,455,764 9,129,364 9,933,534 10,152,416 10,378,965 10,946,800 11,947,652
Total O&M 89,558,995 $ 96,618,821 $ 113,910,609 $ 118,234,566 $ 122,199,982 $ 125,777,409 $ 129,156,592 $ 133,765,633 $ 138,252,834 $



Load Dat a

Load data is one of the most critical components of a cost of service study.
Information from the billing statistics combined with information from City of
Columbia and internal statistics provided by large customers was used to determine
the usage patterns of each customer class.

6/13/2013 21
CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY - SI GNI FI CANT ASSUMPTI ONS


KWh Sales Forecast

The kWh sales projected for 2012 is 1.2 billion kWh's. The study assumed sales
would increase by 1% for 2012 & 2013 and 2% for 2014 2016.


Customer Class Summer Winter Inter 4 Inter 2 Total
2012 2012 2012 2012 2012
Residential Service 71,496,584 77,931,792 66,977,227 53,759,318 270,164,921
Residential Service Space Heating 17,985,792 56,870,988 27,234,970 14,987,099 117,078,850
Residential Heat Pump 5,153,095 15,133,636 7,909,695 4,361,869 32,558,294
Small General Service 17,756,991 27,476,047 23,002,116 14,664,260 82,899,413
Small General Service Space Heating 3,050,168 7,806,152 4,763,186 2,647,184 18,266,689
Small General Service High Efficiency Heat Pumps 149,630 279,107 192,313 120,561 741,612
Special Outdoor Lighting 1,549,015 3,098,030 3,098,030 1,549,015 9,294,091
Small General Service Optional Demand 474,657 749,360 800,462 438,573 2,463,053
Large General Service 74,965,531 111,812,602 108,991,438 64,312,116 360,081,687
Interruptible Service 302,003 597,925 621,479 323,953 1,845,361
Industrial Service 53,898,425 75,648,212 81,098,099 49,273,098 259,917,835
Total 246,781,890 377,403,852 324,689,016 206,437,046 1,155,311,806



Sys t em Loss Fac t or s

Losses occurring from the transmission and distribution of electricity can vary from
year to year depending upon weather and system loading. Peak summer losses were
estimated based on system losses during each time period.

Revenue For ec ast

The revenue forecast was based on 2010 usages adjusted for the following:
A) Annual growth rate assumption as stated above
B) Changes in purchased power costs
C) Customer rates implemented in 2011

Actual 2008 Actual 2009 Actual 2010
Projected
2011
Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Electric Revenue 98,826,911 $ 101,246,731 $ 104,401,782 $ 107,594,305 $ 108,670,248 $ 109,756,951 $ 111,952,090 $ 114,750,892 $ 117,619,664 $
Payment In-Lieu-of -Tax 6,917,884 7,087,271 7,858,199 8,098,408 8,179,392 8,261,186 8,426,410 8,637,070 8,852,997
Sales f or Resale 2,593,675 5,940,915 5,364,906 4,000,000 2,000,000 4,000,000 4,080,000 4,182,000 4,286,550
Miscellaneous Revenues 4,943,530 3,442,908 2,716,783 2,716,783 2,743,951 2,771,390 2,826,818 2,897,489 2,969,926
Total Revenues 113,282,000 $ 117,717,825 $ 120,341,670 $ 122,409,496 $ 121,593,591 $ 124,789,527 $ 127,285,318 $ 130,467,451 $ 133,729,137 $

6/13/2013 22
CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY - SI GNI FI CANT ASSUMPTI ONS


Capi t al I mpr oveme nt Pr ogr am

The capital improvement program was provided by the City of Columbia electric
utility as listed below:

Year
Projected
Capital
Improvement
2011 47,350,000 $
2012 5,660,000
2013 6,330,000
2014 6,080,000
2015 25,025,000
2016 29,800,000

6/13/2013 23
CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY - RECOMMENDATI ONS


1. Below is a long-term rate track based on anticipated power supply costs and
capital improvements between 2012 and 2016. The rate track indicates a 2.2%
rate adjustment may be needed to maintain bond coverage ratios, cash
balances to remain above minimum cash reserve levels and to move toward
operating income targets over the projection period. It is recommended the
projection be reviewed as part of the annual budget process.

Fiscal Year
Projected
Rate
Adjustments
Projected
Revenues
Projected
Expenses
Adjusted
Operating
Income
Projected
Cash
Balances
Capital
Improvements Bond Issues
Debt
Coverage
Ratio
2012 2.20% 123,984,337 122,199,982 1,784,355 42,648,218 5,660,000 - 1.61
2013 2.20% 130,039,446 126,144,900 3,894,546 43,651,472 6,330,000 - 1.90
2014 2.20% 135,406,370 129,725,060 5,681,310 46,288,272 6,080,000 - 1.99
2015 2.20% 141,689,194 134,551,147 7,138,047 76,193,492 25,025,000 44,925,000 2.04
2016 2.20% 148,266,873 139,270,465 8,996,408 58,267,818 29,800,000 - 2.06
Recommended Target in 2012 7,121,584 $ 39,948,619 $ 1.40
Recommended Target in 2016 8,759,971 $ 45,138,139 $ 1.40


2. The cost of service study identified some customer classes are paying above
cost of service and some below cost of service. To minimize impacts on
customers and move toward cost of service results it is recommended rates be
designed using a bandwidth of 2%. This results in customer class rate
adjustments that would vary between 0.2% and 4.2%. The table below
summarizes the results of the cost of service study.

Cost of Service
Projected
Revenues % Change
Residential Service 32,108,740 30,836,129 4%
Residential Service Space Heating 13,640,948 12,077,224 13%
Residential Heat Pump 3,643,101 3,150,584 16%
Small General Service 10,262,044 8,565,505 20%
Small General Service Space Heating 2,146,773 1,800,544 19%
Small General Service High Efficiency Heat Pumps 93,468 72,905 28%
Special Outdoor Lighting 1,507,697 1,390,694 8%
Small General Service Optional Demand 199,714 179,569 11%
Large General Service 32,560,117 31,001,774 5%
Interruptible Service 173,471 161,087 8%
Industrial Service 20,062,149 19,434,232 3%
Total 116,398,223 108,670,248 7.1%
Customer Class



6/13/2013 24
CI TY OF COLUMBI A WATER & LI GHT DEPARTMENT
COST OF SERVI CE & ELECTRI C UNBUNDLI NG STUDY

EXECUTI VE SUMMARY - RECOMMENDATI ONS


3. The City of Columbia electric utility should consider adopting a cash reserve
policy based on the formula below. The formula below considers the utilitys
working capital requirements, investment in system assets, annual debt
service payments, and the future capital improvement program.

Percent
Allocated
Projected
2012
Projected
2013
Projected
2014
Projected
2015
Projected
2016
Operation & Maintenance Less Depreciation Expense 20% 6,144,747 $ 6,400,697 $ 6,567,486 $ 6,900,084 $ 7,109,154 $
Pow er Costs 13% 10,916,527 11,244,023 11,581,344 11,928,784 12,286,648
Historical Rate Base 2% 5,692,124 5,818,724 5,940,324 6,440,824 7,036,824
Current Portion of Debt Service Reserve 50% 4,074,121 4,398,011 4,791,396 5,584,414 5,584,414
Next Years Capital Improvements - Net of bond proceeds 15% 2,186,850 2,186,850 2,186,850 2,186,850 2,186,850
Five Year Capital Improvements - Net of bond proceeds 15% 10,934,250 10,934,250 10,934,250 10,934,250 10,934,250
Minimum Cash Reserve Levels 39,948,619 $ 40,982,555 $ 42,001,650 $ 43,975,206 $ 45,138,139 $



4. The City of Columbia should consider adjusting customer charges to move
toward cost of service results as part of future rate adjustments. The table
below compares the current monthly customer charge with cost of service
results:

Customer Class
Current
Monthly
Customer
Charges
Cost of Services
Customer
Charge
Residential Service 7.20 $ 14.40 $
Residential Service Space Heating 7.20 14.40
Residential Heat Pump 7.20 14.40
Small General Service 7.20 23.70
Small General Service Space Heating 7.20 23.70
Small General Service High Efficiency Heat Pumps 7.20 23.70
Street Lighting 1.13
Small General Service Optional Demand 7.20 29.94
Large General Service 7.20 45.00
Interruptible Service 55.00 128.91
Industrial Service 325.23


6/13/2013 25
Utility Financial Solutions
185 Sun Meadow Ct.
Holland, MI 49424
Phone: 616-393-9722
Fax: 616-393-9721



ACCOUNTANTS' COMPILATION REPORT



City of Columbia electric utility
Board of Directors


The accompanying forecasted statements of revenues and expenses of the City of
Columbia electric utility were compiled for the year ending September 30, 2012 in
accordance with guidelines established by the American Institute of Certified Public
Accountants.

The purpose of this report is to assist management in forecasting revenue requirements
and determining the cost to service each customer class. This report should not be used
for any other purpose.

A compilation is limited to presenting, in the form of a forecast; information represented
by management and does not include evaluation of support for any assumptions used in
projecting revenue requirements. We have not audited the forecast and, accordingly, do
not express an opinion or any other form of assurance on the statements or assumptions
accompanying this report.

Differences between forecasted and actual results will occur since some assumptions
may not materialize and events and circumstances may occur that were not anticipated.
Some of these variations may be material. Utility Financial Solutions has no
responsibility to update this report after the date of this report.

This report is intended for information and use by management and the Board of
Directors for the purposes stated above. This report is not intended to be used by
anyone except the specified parties.



UTILITY FINANCIAL SOLUTIONS




Mark Beauchamp, CPA, CMA, MBA
Holland, MI
September 14, 2011

6/13/2013 26
Appendix Fee Study

The following appendix summarizes the analysis completed by Utility Financial Solutions
to determine the cost of providing specific services to customers of the City of Columbias
electric utility. The following steps were followed to complete the analysis:

Steps to Complete Analysis

1. Surveyed utility personnel to identify the time and expenses for performing
specific services
2. Calculated current fees using standard costing methods
3. Applied administration and overhead rates
4. Reviewed fees with management
5. Recommended changes to existing fee schedule


Recommendations

UFS recommends adoption of the proposed fees to reflect the current cost of rendering
services. The fees used are for specific services rendered, and will not affect all users of
the system on a regular basis. We recommend adopting the fees as proposed.



6/13/2013 27
Columbia Water & Light
Fee Schedule COS - 2011
Summar y
!"#$%&" (#)$%*"* +,!
+-##"./
0""
(#)1)2"*
0""
("#&"./
3.&45"& 6)/"2
Service Initiation Fee 5.34 $ 6.00 $ 6.00 $ 0%
Transfer Fee 5.43 $ 4.00 $ 5.50 $ 38%
Residential:
Electric connection or disconnection fee during work hours
41.36 $ 15.00 $ 40.00 $ 167%
Residential:
Electric reconnection fee outside of regular working hours
527.55 $ 30.00 $ 130.00 $ 333% Plan to move this rate up over next 4 yrs
Commercial:
Electric connection or disconnection fee during work hours
182.94 $ 15.00 $ 50.00 $ 233% Plan to move this rate up over next 4 yrs
Commercial:
Electric reconnection fee outside of regular working hours
1,639.06 $ 30.00 $ 410.00 $ 1267% Plan to move this rate up over next 4 yrs
Residential:
Temporary Removal & Replacement of Service Drop during work hours
558.55 $ n/a 560.00 $ new fee
Residential:
Temporary Removal & Replacement of Service Drop outside of regular work hours
1,190.16 $ n/a 1,200.00 $ new fee
Commercial:
Temporary Removal & Replacement of Service Drop during work hours
558.55 $ n/a 560.00 $ new fee
Total COS is for both removal and
replacement of service drop being done
during normal working hours
Commercial:
Temporary Removal & Replacement of Service Drop outside of regular work hours
3,286.94 $ n/a 3,300.00 $ new fee
Total COS is for both removal and
replacement of service drop being done in
two separate trips outside normal hours
Meter Test Charge
(Residential meter test)
136.74 $ n/a 140.00 $ new fee (Waived if meter fails test)
Returned Check or Bank Draft Charge 39.39 $ n/a 29.99 $ new fee
Bank charges are between $24.00 &
$42.00
Late Fee for reminder notices 1.25 $ n/a 1.25 $ new fee To be applied to bill as a late fee

6/13/2013 28

Columbia Water & Light
Fee Schedule COS - 2011
Cost Detail
C D E F G H I J K L M
# persons
pay band
(Low - High)
Benefits as
a %
Average time
w/ travel
(Hours)
Overtime
rate
Call out
rate
Call-out
Minimumtime
req's (Hours)
TransferFee 1 $ 16.24 40% 0.20 $ -
(b)Transfer fee. All customers requesting transfers of
services to a new location
Service InitiationFee 1 16.24 $ 40% 0.20 $ -
(a)Service initiation fee. Each new customer shall be
charged a service initiation fee
Returned CheckorBankDraft Charge 1 16.24 $ 40% 0.20 - $
$X/ returned ck
avg. 7 cks/mo
New Fee Proposed
MeterTest Charge
(Residential metertest)
2 37.86 $ 42% 1.00 - $ Pick-Up 5.00 New Fee Proposed
Residential Disconnectionfee 2 34.08 $ 42% 0.33 150% 150% 3.00 - $ Pick-Up 5.00
Residential:
(1)Electricdisconnectionfee fornonpayment
Residential Reconnectionfee 2 34.08 $ 42% 0.33 150% 150% 3.00 - $ Pick-Up 5.00
Residential:
(2)Electricreconnectionfee
Commercial Disconnectionfee 3 70.65 $ 42% 0.50 150% 150% 3.00 - $ Small Bucket 5.00
Commercial:
(1)Electricdisconnectionfee fornonpayment
Commercial Reconnectionfee 3 70.65 $ 42% 1.00 150% 150% 3.00 - $ Small Bucket 5.00
Commercial:
(1)Electricreconnectionfee
Residential:
TemporaryRemoval &Replacement of
Service Drop during workhours
3 70.65 $ 42% 1.50 150% 150% 3.00 - $ Small Bucket 5.00 New Fee Proposed
Commercial:
TemporaryRemoval &Replacement of
Service Drop during workhours
3 70.65 $ 42% 1.50 150% 150% 3.00 - $ Small Bucket 5.00 New Fee Proposed
VEHICLE COST BREAKDOWN: Pickup Truck
Service
Truck
Small Bucket
Truck
Large
Bucket
Truck Backhoe
* Cost pervehicle perhour 8.50 $ n/a 15.00 $ 27.00 $ 32.00 $
Labor
Material
costs
Vehicle type (see
types below)
Average
mileage per
service call
assuming thisisonlydone on
regularhours
Average bank
charges
assuming thisisonlydone on
regularhours
no vehicle required
assuming thisisonlydone on
regularhours
no vehicle required
assuming thisisonlydone on
regularhours
no vehicle required

6/13/2013 29
Columbia Water & Light
Fee Schedule COS - 2011
Ca l c u l a t i on s
NOTES:
MARGIN 7.0%
Overhead 10.0%
Overtime rate multiplier (1.5x) 50.0%
Electric Benefits 42.2%
Admin Benefits 39.6%
Call-out mimimum time (Hours) 3.00
A Commercial: Electric connection or disconnection fee during work hours
Personnel needed 3.00
Pay 70.65
Average length of time 0.50
Total Labor 105.97
Total labor and benefits 147.93
Cost of materials -
Vehicle cost per trip 7.50
small bucket
Overhead 15.54
Margin 11.97
Total Fee per application 182. 94 $
B Commercial: Electric reconnection fee outside of regular working hours
Personnel needed 3.00
Pay (/hr) 70.65
Over-time pay (additional $/hr) 35.32
Average length of time (3hr min after hours) 3.00
Vehicle length of time 0.50
Total Labor 635.81
Total Overtime 317.90
Total labor and benefits 1,356.17
Cost of materials -
Vehicle cost per trip 7.50
small bucket
Overhead 168.16
Margin 107.23
Total Fee per application 1, 639. 06 $
C Transfer Fee
Personnel needed 1.00
Pay 16.24 $
Average length of time 0.20
Total labor 3.25
Total labor and benefits 4.62
Cost of materials -
Vehicle cost per trip -
Overhead 0.46
Margin 0.36
Total Fee per application 5. 43 $
Assumpt i ons


6/13/2013 30
Columbia Water & Light
Fee Schedule COS - 2011
Ca l c u l a t i on s
D Commercial: Temporary Removal & Replacement of Service Drop during work hours
Personnel needed 3.00
Pay 70.65
Average length of time 1.50
Total labor 317.90
Total labor and benefits 452.06
Cost of materials -
Vehicle cost per trip 22.50
small bucket
Overhead 47.46
Margin 36.54
Total Fee per application 558. 55 $
E Commercial: Temporary Removal & Replacement of Service Drop outside of regular work hours
Personnel needed 3.00
Pay 70.65
Over-time pay (additional $/hr) 35.32
Average length of time (3hr min after hours) 6.00
3hr minimum for both removal & replacement
Vehicle length of time 1.50
Total Labor 1,271.61
Total Overtime 635.81
Total labor and benefits 2,712.34
Cost of materials -
Vehicle cost per trip 22.50
small bucket
Overhead 337.06
Margin 215.03
Total Fee per application 3, 286. 94 $
F Resi denti al : El ectri c connecti on or di sconnecti on fee duri ng work hours
Personnel needed 2.00
Pay 34.08
Average length of time 0.33
Total Labor 22.72
Total labor and benefits 32.30
Cost of materials -
Vehicle cost per trip 2.83
pickup truck
Overhead 3.51
Margin 2.71
Total Fee per application 41. 36 $
G Resi denti al : El ectri c reconnecti on fee outsi de of regul ar worki ng hours
Personnel needed 2.00
Pay 34.08
Over-time pay (additional $/hr) 17.04
Average length of time (3hr min after hours) 3.00
Vehicle length of time 0.33
Total Labor 204.45
Total Overtime 102.23
Total labor and benefits 436.09
Cost of materials -
Vehicle cost per trip 2.83
pickup truck
Overhead 54.12
Margin 34.51
Total Fee per application 527. 55 $

6/13/2013 31

Columbia Water & Light
Fee Schedule COS - 2011
Ca l c u l a t i on s
H Residential: Temporary Removal & Replacement of Service Drop during work hours
Personnel needed 3.00
Pay 70.65
Average length of time 1.50
Total labor 317.90
Total labor and benefits 452.06
Cost of materials -
Vehicle cost per trip 22.50
small bucket
Overhead 47.46
Margin 36.54
Total Fee per application 558. 55 $
I Residential: Temporary Removal & Replacement of Service Drop outside of regular work hours
Personnel needed 3.00
Pay 70.65
Average length of time (3hr min after hours) 3.00
Total labor 635.81
Total labor and benefits 908.38
Cost of materials -
Vehicle cost per trip 45.00
small bucket
Overhead 158.92
Margin 77.86
Total Fee per application 1, 190. 16 $
J Returned Check or Bank Draft Charge
Personnel needed 1.00
Pay 16.24
Average length of time 0.02
appx. 98 checks per month
Total labor 0.33
Total labor and benefits 0.46
Average Bank Charges 33.00
Overhead 3.35
Margin 2.58
Total Fee per returned check 39. 39 $
K Meter Test Charge (Resi denti al meter test)
Personnel needed 2.00
Pay 37.86
Average length of time 1.00
Total labor 75.72
Total labor and benefits 107.67
Vehicle cost per trip 8.50
Pickup truck
Overhead 11.62
Margin 8.95
Total Fee per application 136. 74 $
(Wai ved i f meter fai l s test)


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Columbia Water & Light
Fee Schedule COS - 2011
Ca l c u l a t i on s
M Servi ce I ni ti ati on Fee
Personnel needed 1.00
Pay 16.24 $
Average length of time 0.20
Total labor 3.25
Total labor and benefits 4.53
Cost of materials -
Vehicle cost per trip -
Overhead 0.45
Margin 0.35
Total Fee per application 5. 34 $
O Late Fee for reminder notices
Personnel needed 1.00
Pay 16.24
Average length of time 0.030
30 min/day * 30 days / 500 notices
Total labor 0.49
Total labor and benefits 0.68
# of notices sent before shut-off 1.00
Postage 0.44
Material Costs 1.00
paper/envelopes/address labels
Overhead 0.21
Margin 0.16
Total Fee per notice 1. 25 $

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