HomeMy WebLinkAboutStaff Report 1543City of Palo Alto (ID # 1543)
Finance Committee Staff Report
Report Type:Meeting Date: 4/19/2011
April 19, 2011 Page 1 of 9
(ID # 1543)
Summary T itle: Gas Utility F inancial Projections
Title: Gas Utility Long Term F inancial Projections and Revenue Requirements
From:City Manager
Lead Department: Utilities
Recommendation
This report is provided to the Finance Committee for its discussion of long term financial
projections and revenue requirements for the Gas Utility. No action is required.
Executive Summary
This report discusses the projected costs and revenue requirements for the Gas Utility for Fiscal
Years (FY) 2012 through FY 2016.
Staff assessed major cost drivers and expected costs, the short-term assessment of risks, reserve
guidelines, and determined the revenue requirements for the Gas Utility for the next five years.
The financial forecast shows no need for a rate adjustment for FY 2012, followed by a potential
rate adjustment of 2% in FY 2013, and no further rate adjustment throughout the rest of the
forecast horizon. The average rate adjustments for FY 2013 through FY 2016 are provided for
information purposes only; staff is not requesting a rate change at this time. The rate
projections achieve the goals of matching revenue streams to the expected operating expenses
of the Gas Utility over the next five years, as well as ensuring that the balance of the Gas Rate
Stabilization Reserves is adequate and within the Council-approved reserve guideline levels for
the long-term forecast horizon.
Background
The City of Palo Alto (City)’s Gas Utility serves 23,700 customers over an area of approximately
26 square miles. The City’s average daily consumption of gas in FY 2010 was 110,400 therms
per day in the winter (November through April) and 58,400 therms per day in the summer (May
through October). This represents a total of 30.7 million therms of gas for the year as a whole.
The Gas Utility is responsible for operations and maintenance of the system, and purchases all
of its gas from outside suppliers. A portion of the gas portfolio consists of long-term fixed price
gas purchases. Large customers that have retained gas direct access eligibility and chosen to be
on market based rates are subject to alternate purchasing arrangements.
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In order to maintain the financial viability of the Gas Utility, staff annually reviews major cost
drivers, evaluates the risks and adequateness of its reserves, and determines the revenue
requirements for the Gas Utility for the next five years. The revenue requirements and resulting
rate adjustment targets depend on a number of components including sales revenue
projections, gas supply costs, distribution system operating and Capital Improvement Program
(CIP) expenses, prudent funding of the Gas Rate Stabilization Reserves, the Emergency Plant
Replacement (EPR) Reserve, and debt service payments. Any change in one or more of these
components can trigger a change, up or down, to the revenue requirement. During the budget
process, staff forecasts customer load, revenues and utility expenses to quantify the annual
revenue requirement. Changes to forecasted revenues or expenses are reflected in adjustments
during the mid-year budget adjustment process.
Discussion
Financial Projections
Table 1 below shows the summary of financial projections for the Gas Utility for FY 2010 –FY
2016. Details of financial projections for the Gas Utility are provided in Attachment A. For FY
2010, both budgeted and realized actuals based on City’s Audited Financial Report (CAFR) are
shown. For FY 2011, both budgeted and projected financial expectations are shown. The
projected column for FY 2011 reflects known variations from budget as of February 2011.
Total expenses (Row 21 in Table 1) for the Gas Utility were $41.4 million in FY 2010, which is
$4.4 million lower than budgeted. Total revenues were $46.8 million, which is $0.9 million
higher than budgeted. As a result, the Gas Utility returned a net sum of $5.4 million to its
reserves. Most of the savings in total expenditures for FY 2010 were due to lower than
expected supply purchase costs. Total savings in supply purchase costs was $4.3 million or
16.1% mainly due to lower market prices; gas use was only a fraction of a percent lower than
budgeted. Nearly half of this supply purchase cost saving was realized in the gas purchases for
large commercial customers that are on the G-3 rate schedule1. Because the G-3 retail rate is
based on market prices, any savings on gas purchased for this customer group was offset by a
corresponding decrease in retail revenue. The Gas Utility also realized a $1.3 million savings in
Distribution Operations, and $0.4 million savings in Supply Operations costs. Counterbalancing
this was a positive deviation (higher expenditure than budgeted)of $0.9 million for CIPs. The
higher than budgeted revenue in FY 2010 is mainly due to $1.6 million in Other Revenues, of
which, $1.0 million was due to the closing out of the General Fund Transfer Stabilization
Reserves. This was offset by 0.9 million in lower than budgeted revenues from sales to large
commercial customers that are on the G-3 rate schedule as a result of lower than expected
market prices.
The projections for FY 2011 follow a similar pattern. Total expenses are expected to be $3.8
million lower than budgeted due to the lower than budgeted supply costs as a result of the
1 G-3 rate schedule is applicable to large commercial customers who use at least 250,000 therms per year at one
site and have retained gas direct access eligibility.
April 19, 2011 Page 3 of 9
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decrease in market prices. This also results in lower than expected revenues, mainly due to the
lower rates charged to G-3 customers. Variations in other costs and revenues will not be
available until fiscal year-end close of the financial books. As a result of the variation in market
prices, the Gas Utility is expected to drawdown $4.4 million from its reserves instead of the
budgeted $5.3 million drawdown in FY 2011.
Table 1
Five-Year Financial Plan –Projected Costs (in $thousands)
as of Feb 24, 2011
$ (000's)
Adopted Actual Adopted Projected Projected Projected Projected Projected Projected
2010 2010 2011 2011 2012 2013 2014 2015 2016
1 % CHANGE IN AVERAGE POOL RETAIL RATE -9.3%-9.3%0.0%0.0%0.0%2.0%0.0%0.0%0.0%
2 % CHANGE IN TOTAL SYSTEM RETAIL RATE -10.0%-12.2%2.2%-2.4%2.6%3.0%0.8%0.3%0.3%
3 TOTAL SYSTEM AVERAGE RATE ($/Therm)1.448$ 1.413$ 1.445$ 1.379$ 1.415$ 1.458$ 1.470$ 1.474$ 1.479$
4 COMMODITY COST ($/Therm)0.845$ 0.717$ 0.774$ 0.667$ 0.614$ 0.593$ 0.590$ 0.610$ 0.634$
5 SALES IN THOUSAND THERMS 30,783 30,741 30,333 30,333 30,685 30,513 30,363 30,276 30,301
5 CHANGE IN RETAIL SALES REVENUE (4,647) (4,722) - - - 1,358 - - -
6
7 Utilities Retail Sales 44,223 43,296 43,993 41,172 43,029 44,060 44,249 44,254 44,425
8 Service Connection & Capacity Fees 690 521 700 700 710 720 730 752 775
9 Other Revenues & Transfers In 3 1,643 111 111 96 96 96 96 96
10 Interest plus Gain or Loss on Investment 1,010 1,342 847 847 904 577 507 551 559
11 Total Sources of Funds 45,925 46,802 45,652 42,830 44,738 45,453 45,582 45,652 45,855
12
13 Supply Purchases 26,859 22,529 24,595 20,830 19,397 18,627 18,445 19,024 19,795
14 Supply Operations 1,361 916 1,715 1,715 1,847 1,866 1,984 2,104 2,225
15 Distribution Operations 8,417 7,106 9,273 9,273 13,282 9,615 9,711 9,808 9,906
16 Debt Service Payments 947 1,009 947 947 948 948 948 948 948
17 Rent 215 320 215 215 215 218 221 224 226
18 Transfers to General Fund 5,300 5,300 5,304 5,304 5,996 6,365 6,965 6,623 7,013
19 Other Transfers Out 367 892 614 614 388 388 388 388 388
20 Capital Improvement Programs 2,389 3,364 8,325 8,325 7,821 8,188 5,387 5,435 5,491
21 Total Uses of Funds 45,854 41,437 50,989 47,224 49,895 46,214 44,049 44,555 45,994
22
23 Into/ (Out of) Reserves 71 5,365 (5,338)(4,394)(5,157)(761)1,533 1,098 (138)
24
25 Ending Supply RSR 7,456 12,339 9,199 8,036 5,644 4,714 5,666 6,008 5,609
26 Ending Distribution RSR 5,792 6,208 4,010 6,116 3,352 3,520 4,101 4,857 5,118
27 Ending Plant Replacement Reserve 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
28
29 Risk Assessment Value -Supply RSR 5,800 5,800 5,700 5,700 3,300 6,900 6,917 7,134 7,423
30 Risk Assessment Value- Distribution RSR 3,759 3,759 4,070 4,070 4,300 4,300 5,236 5,221 5,225
31
32 Rate Stabilization Guidelines
33 Supply RSR Minimum 6,715 6,715 6,149 6,149 4,849 4,657 4,611 4,756 4,949
34 Supply RSR Maximum 13,429 13,429 12,298 12,298 9,698 9,313 9,223 9,512 9,898
35
36 Distribution RSR Minimum 2,684 2,684 3,230 3,230 2,676 3,473 3,491 3,481 3,483
37 Distribution RSR Maximum 5,368 5,368 6,460 6,460 5,353 6,945 6,981 6,961 6,967
Fiscal Year
City of Palo Alto
Gas Utility
Five Year Financial Projections
Cost Drivers
Looking forward, the Gas Utility is not expected to face significant cost increases. After a $2.7
million increase in total expenses in FY 2012 over the projected total for FY 2011, Gas Utility
expenses are projected to decrease by 7.8% or $3.9 million in total compared to FY 2012 by the
end of the forecast horizon.
Specifically, gas Supply Purchases are projected to decrease by 11% by FY 2013 over their
expected levels in FY 2011 as a result of the recent decline in market prices as shown in Chart 1.
Supply Operations costs are projected to increase by about $100,000 per year due to
investments in gas energy efficiency consistent with the Proposed Ten Year Gas Efficiency Plan.
April 19, 2011 Page 4 of 9
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Distribution Operations costs include a one time increase of $3.8 million in FY 2012 due to plans
to perform a thorough review of the gas system following PG&E’s 2010 San Bruno event.
Chart 1
Natural Gas Prices –Historical and Projected
Natural Gas W holesale Prices at PG&E Citygate
as of January 25, 2011
$0
$2
$4
$6
$8
$10
$12
$14
Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13
Prices ($/MMBtu)Actual
Projected
High
Low
* High and low prices in the 75th and 25th percentile
projected using Black Scholes model
CIP expenditures are projected to decrease from their current levels of $8.3 million in FY 2011
to $5.4 million in FY 2014, and continue at this level into the foreseeable future. The reason for
this is that the majority of gas main replacement projects will have been completed by this
time.
General Fund Transfers are expected to increase from their current levels of $5.3 million in FY
2011 to $7.0 million in FY 2016 based primarily on the expected increases in net book value of
utility assets resulting from planned CIP expenditures less anticipated depreciation.2
Staff projects a long-term net cost increase of 1% per year in other operating expenditures such
as operations, maintenance and administration costs, allocated cost plan and utilities
administration charges, rent, and other transfers.This conservative assumption reflects the
current expectations for the economic activity for the region. Final Operating Budget proposals
will be determined and presented to the UAC at its May 2011 meeting.
2 General Fund Transfers are calculated using the Council approved (CMR:260:09) Utility Enterprise Methodology
(UEM).
April 19, 2011 Page 5 of 9
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Revenue Projections
Retail Sales constitute the largest source of revenue for the Gas Utility. Gas demand
projections are discussed in detail in the following section. Other major revenue sources
include Service Connection and Capacity Fees, which are expected to increase at a modest level
of 2.2% per year, and Interest and Gains on Investments, which are projected to diminish
somewhat in future years based on projected cash reserves and an assumption of 3% return on
investment throughout the forecast horizon.
Gas Demand
Gas demand in Palo Alto is generally volatile, varying with both economic and weather
conditions from year to year. After its significant drop of 22.6% from its peak of 40.7 million
therms in FY 1999 to 31.5 million therms in FY 2004 due to the regional economic downturn,
gas demand stabilized somewhat, but continued with its general downward trend and
decreased by another 3.2% in total during the next five years as a result of continued
investments in energy efficiency and conservation, reaching 30.5 million therms in FY 2009.
The City’s gas demand maintained its low levels in FY 2010 due to the continuing economic
slowdown and sustained efficiency and conservation improvements, and is projected to remain
at these levels throughout FY 2011 as well. The projection for FY 2012 is a small increase to
30.7 million therms due to expected normal weather conditions and a moderate improvement
in the economy, but for the rest of the forecast horizon, gas demand is expected to continue its
slow decline at a rate of 0.3% per year. The projections incorporate the expected impact of
investments in gas energy efficiency consistent with specific goals of the Proposed Ten Year Gas
Efficiency Plan, as well as known changes in large customer attrition and additions.
Chart 2 presents the historical gas consumption levels in the City from FY 1985 through FY 2010
and projections for FY 2011 through FY 2010.
April 19, 2011 Page 6 of 9
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Chart 2
Palo Alto Gas Consumption
20,000
25,000
30,000
35,000
40,000
45,000
1984 1988 1992 1996 2000 2004 2008 2012 2016 2020
Fiscal Year
Annual Usage (Therms in 000's)
20000
25000
30000
35000
40000
45000
Actual Forecast
Revenue Requirement
The revenue requirement is defined as the total amount of revenue that must be collected in
order to meet the planned expenditures for the Gas Utility. Without a rate adjustment, the Gas
Utility in total has a revenue shortfall of $5.2 million and $7.3 million in FY 2012 and FY 2013
respectively. On an individual fund basis, the Gas Supply Fund is projected to generate a $4.8
million surplus while the Gas Distribution Fund is projected to operate at a $10 million deficit in
FY 2012. The reasons for this are the recent decreases in gas supply costs and increases in gas
distribution costs. Specifically, gas supply costs are projected to decrease by $5.2 million from
their budgeted levels of $24.6 million in FY 2011 to the proposed budget of $19.4 million in FY
2012. The increases in the distribution costs are as a result of the increases in General Fund
Transfers of $2 million starting in FY 2010, resumption of deferred CIP expenditures of $7
million in FY 2011, and a one time increase in Distribution Operations expenditures of $3.8
million for the gas system review in FY 2012. Given the reserves and risk assessment described
in the following section, staff projects no need to increase rates in FY 2012, followed by an
increase of 2.0% in FY 2013. Based on the financial projections, there is no further rate
adjustment required throughout the rest of the forecast horizon covering the FY 2014 –FY 2016
period.
Reserves and Risk Assessment
The City’s Guidelines for the Gas Supply Rate Stabilization Reserves (G-SRSR) and Gas
Distribution Rate Stabilization Reserves (G-DRSR) are established by the City Council. The
Council reviews reserve adequacy periodically and adjusts the guidelines as needed. The
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currently-adopted reserve guidelines for the G-DRSR are 30% and 15% of sales revenues for
maximum and minimum reserve levels respectively. Maximum and minimum guidelines for the
G-SRSR are 50% and 25%, respectively, of supply purchase costs. Additionally, staff performs an
annual assessment of short term risks for the Gas Utility.
For the G-SRSR, the short term analysis is driven by changes in market cost, load uncertainty
and supplier defaults. It is important to measure net revenue impact rather than cost impact
for the Gas Utility because an increase in costs for the market rate customers is offset by an
increase in revenue. The change in net revenue due to market cost uncertainty is a function of
the un-hedged portion of the pool supply portfolio and the market price risk. As of December
2010, 42% of the pool position for FY 2012 and 77% of the pool position for FY 2013 were un-
hedged. For the market cost uncertainty analysis, staff assumed a 75th percentile high market
price. Furthermore, the risk of higher than forecast gas usage combined with a high market
price scenario will result in additional adverse impacts on net revenue. Staff assumed a 10%
increase in both the projected pool and non-pool load under the high market price scenario to
estimate the net revenue impacts of load uncertainty. Regulatory risk is negligible because the
baseline costs already assumed a worst-case scenario for backbone and local transmission
rates. The credit uncertainty assessment was based on the current exposure level, financial
condition and default probabilities of the existing counterparties, as well as an assessment of
potential increases in credit risk resulting from market price changes.
For the G-DRSR, the short term analysis involves estimating the revenue shortfall due to the
maximum observed budget to actual variance in one year during the past ten years plus a
variance of 10% of planned CIP expenditures for the budget year. These figures are provided in
Table 2 below as “Risk Assessment” along with the minimum and maximum reserve guideline
levels and estimated fiscal year end balances for the Supply and Distribution Funds of the Gas
Utility.
April 19, 2011 Page 8 of 9
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Table 2
Gas Rate Stabilization Reserve Guideline Levels and Short Term Risk Assessment ($M)
The Gas Utility ended FY 2010 with more than adequate funds in its Rate Stabilization Reserves
as shown in Table 1 rows 25 and 26. Staff plans to transfer $6 million in FY 2011 and $7.0
million in FY 2012 from the Gas Supply Fund into the Gas Distribution Fund to align fund level
balances with expected costs. After these alignments and with no change to its rates in FY 2011
and FY 2012, the Gas Utility is projected to end both fiscal years with both its funds within the
minimum and maximum reserve guidelines and above the short term risk assessment levels.
Beyond the budget year, staff forecasts the need for a 2% rate increase in FY 2013.
Rate Comparison with Neighboring Cities
The City currently has a cost disadvantage with respect to the Pacific Gas and Electric Company
(PG&E), the gas utility for the neighboring cities as shown in Table 3 below. Comparisons are
based on the average residential customer usage of 100 therms per month during the winter
months and 30 therms per month during the summer months. Monthly bills shown are based
on the average bill for the prior 12 months.
Table 3
Gas Utility Residential Benchmark Comparison
Current FY 2011 (as of February 1, 2011)
Palo
Alto
Mountain
View
Redwood
City
Menlo
Park
Santa
Clara
Average
Benchmark
City
Monthly Bill ($)99.42 81.29 81.29 81.29 81.29 81.29
Difference from
CPAU -18.2%-18.2%-18.2%-18.2%-18.2%
Gas Supply Rate Stabilization Reserve FY
2011
FY
2012
FY
2013
Estimated Balance prior to Transfer to G-DRSR 14.0 12.6 6.5
Transfer to G-DRSR 6.0 7.0 1.8
Estimated End of Year Balance 8.0 5.6 4.7
Risk Assessment 5.7 3.3 6.9
Minimum Level Guidelines 6.1 4.9 4.7
Maximum Level Guidelines 12.3 9.7 9.3
Gas Distribution Rate Stabilization Reserve
Estimated Balance prior to Transfer from G-SRSR 0.1 (3.6)1.8
Transfer from G-SRSR 6.0 7.0 1.8
Estimated End of Year Balance 6.1 3.4 3.5
Risk Assessment 4.1 4.3 4.3
Minimum Level Guidelines 3.2 2.7 3.5
Maximum Level Guidelines 6.5 5.4 6.9
April 19, 2011 Page 9 of 9
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The City’s current relative position with respect to neighboring cities may change in the future
depending on future financial decisions by PG&E.
Resource Impact
None.
Policy Implications
This report does not represent a change to current City policies.
Environmental Review
California Environmental Quality Act (CEQA) review of this informational report on long term
financial projections and revenue requirements for the Gas Utility is not required, since the
submission of this report does not meet the definition of a “project” under Public Resources
Code Section 21065.
Attachments:
·A Gas Utility Financial Projections (FY 2012 -FY 2016)(PDF)
Prepared By:Ipek Connolly, Sr. Resource Planner
Department Head:Valerie Fong, Director
City Manager Approval: James Keene, City Manager
CONFIDENTIAL
as of Feb 24, 2011
$ (000's)
Adopted Actual Adopted Projected Projected Projected Projected Projected Projected
2010 2010 2011 2011 2012 2013 2014 2015 2016
1 % CHANGE IN TOTAL SYSTEM RETAIL RATE -10.0% -12.2% 0.0% 0.0% 0.0% 3.0% 0.0% 0.0% 0.0%
% CHANGE IN AVERAGE POOL RETAIL RATE -9.3% -9.3% 0.0% 0.0% 0.0% 2.0% 0.0% 0.0% 0.0%
2 TOTAL SYSTEM AVG RATE ($/ THERM)1.45 1.41 1.44 1.38 1.42 1.46 1.47 1.47 1.48
3 SALES UNITS (THERMS)30,886 30,741 30,882 30,333 30,685 30,513 30,363 30,276 30,301
4 GAS UTILITY REVENUE
5 BASE SALES REVENUE:
6 COMMODITY SALES 29,126 27,960 25,985 23,981 25,485 25,315 21,279 21,350 21,502
7 DISTRIBUTION SALES 20,001 20,119 17,743 17,748 17,843 17,743 23,271 23,204 23,223
8 SUB-TOTAL BASE SALES REVENUE 49,126 48,079 43,728 41,729 43,329 43,059 44,549 44,554 44,725
9 RATE ADJUSTMENT:
10 COMMODITY (2,447) (2,509) (3,211)0 0 (4,284)0 0 0
11 DISTRIBUTION (2,200) (2,213)3,957 0 0 5,642 0 0 0
12 (4,647) (4,722)745 0 0 1,358 0 0 0
13 194 197 (31)0 0 (57)0 0 0
14 44,673 43,554 44,442 41,729 43,329 44,360 44,549 44,554 44,725
15 DISCOUNTS/UNCOLLECTABLES (450) (258) (450) (557) (300) (300) (300) (300) (300)
16 NET ADJUSTED SALES REVENUE 44,223 43,296 43,992 41,172 43,029 44,060 44,249 44,254 44,425
17 INTEREST 1,010 1,342 847 847 904 577 507 551 559
18 SERVICE CONNECTION & CAPACITY FEES 690 521 700 700 710 720 730 752 775
19 OTHER REVENUES 3 1,158 111 111 96 96 96 96 96
20 FROM RESERVES
21 DISTRIBUTION RSR 0 0 2,198 92 2,765 0 0 0 0
22 SUPPLY RSR 1,275 0 3,141 4,303 2,392 930 0 0 399
22 TOTAL FINANCIAL RESOURCES 47,201 46,317 50,989 47,224 49,895 46,383 45,582 45,652 46,255
23 OPERATING EXPENSES
24 SUPPLY:
25 PURCHASES 26,859 22,529 24,595 20,830 19,397 18,627 18,445 19,024 19,795
26 OPERATIONS & MAINT., OTHER ADMIN.1,132 696 1,425 1,425 1,554 1,570 1,686 1,802 1,920
27 ALLOCATED CHARGES:
28 COST PLAN CHARGES & OTHER 171 132 158 158 159 161 163 164 166
29 UTILITIES ADMINISTRATION 58 89 132 132 134 135 136 138 139
30 SUB-TOTAL SUPPLY 28,220 23,446 26,311 22,545 21,244 20,492 20,429 21,128 22,021
31 DISTRIBUTION:
32 CUSTOMER DESIGN & CONN. (CIP)690 968 700 700 710 720 730 752 775
33 SYSTEM IMPROVEMENT (CIP)1,699 2,396 7,625 7,625 7,111 7,468 4,657 4,683 4,716
34 OPERATIONS & MAINT., OTHER ADMIN.5,829 5,770 6,267 6,267 10,262 6,565 6,630 6,697 6,764
35 ALLOCATED CHARGES:
36 COST PLAN CHARGES & OTHER 1,344 279 1,464 1,464 1,463 1,477 1,492 1,507 1,522
37 UTILITIES ADMINISTRATION 1,244 1,057 1,542 1,542 1,557 1,573 1,589 1,605 1,621
38 SUB-TOTAL DISTRIBUTION 10,806 10,470 17,598 17,598 21,103 17,803 15,098 15,243 15,398
39 TOTAL MAJOR ACTIVITIES 39,026 33,916 43,909 40,144 42,347 38,295 35,528 36,372 37,419
40 DEBT SERVICE 947 1,009 947 947 948 948 948 948 948
41 TRANSFERS:
42 GENERAL FUND TRANSFER 5,300 5,300 5,304 5,304 5,996 6,365 6,965 6,623 7,013
43 RENT 215 320 215 215 215 218 221 224 226
44 OTHER TRANSFER 367 407 614 614 388 388 388 388 388
45 SUB-TOTAL TRANSFER 5,882 6,027 6,134 6,134 6,600 6,971 7,573 7,235 7,627
46 TOTAL OPERATING EXPENSES 45,854 40,952 50,989 47,224 49,895 46,214 44,049 44,555 45,994
47 RESERVE FUNDING:
48 PLANT REPLACEMENT 0 0 0 0 0 0 0 0 0
49 DISTRIBUTION RSR 1,346 1,759 0 0 0 168 581 755 261
50 SUPPLY RSR 0 3,606 0 0 0 0 952 342 0
51 SUB-TOTAL RESERVE FUNDING 1,346 5,365 0 0 0 168 1,533 1,098 261
52 TOTAL REVENUE REQUIREMENT 47,201 46,317 50,989 47,224 49,895 46,383 45,582 45,652 46,255
53 RESERVES BALANCES
54 PLANT REPLACEMENT 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
55 DISTRIBUTION RSR (Pre Transfer)5,792 6,208 4,010 116 (3,648)1,770 4,101 4,857 5,118
56 DISTRIBUTION RSR (Post Transfer)(Year End)5,792 6,208 4,010 6,116 3,352 3,520 4,101 4,857 5,118
57 SUPPLY RSR (Pre Transfer)7,456 12,339 9,199 14,036 12,644 6,464 5,666 6,008 5,609
58 SUPPLY RSR (Post Transfer)(Year End)7,456 12,339 9,199 8,036 5,644 4,714 5,666 6,008 5,609
59 DEBT SERVICE RESERVE 952 952 952 952 952 952 952 952 952
60 TOTAL RESERVES BALANCES 15,199 20,499 15,161 16,104 10,947 10,186 11,719 12,817 12,678
61
62 Short Term Risk Assessment Value -Supply RSR 5,800 5,800 5,700 5,700 3,300 6,900 6,917 7,134 7,423
63 Short Term Risk Assessment Value- Distribution RSR 3,759 3,759 4,070 4,070 4,300 4,300 5,236 5,221 5,225
64
65 Long Term Rate Stabilization Guidelines
66 Supply RSR Minimum 6,715 6,715 6,149 6,149 4,849 4,657 4,611 4,756 4,949
67 Supply RSR Maximum 13,429 13,429 12,298 12,298 9,698 9,313 9,223 9,512 9,898
68
69 Distribution RSR Minimum 2,684 2,684 3,230 3,230 2,676 3,473 3,491 3,481 3,483
70 Distribution RSR Maximum 5,368 5,368 6,460 6,460 5,353 6,945 6,981 6,961 6,967
71
2010 2010 2011 2011 2012 2013 2014 2015 2016
TOTAL RATE ADJUSTMENT
SUB-TOTAL ADJUSTED S&D SALES
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Five Year Financial Projections
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