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Long Term Rate for Wholesale Water <br />For <br />City of Little Canada <br />2011 Revenue Required* $758,116 <br />2012 Revenue Required (2011 + 6.47%) $807,166 <br />2013 Revenue Required (2012+ 6.48%) $859,470 <br />Ave Annual Water Little Canada in 100 cCF (2004-2011)** 503,735 <br />New Rate is 65% of the inside city seasonal rate. In this case, the following would be applied to the <br />City of Little Canada based on the approved 2013 structure. <br />2013 inside city rate (average of the winter and summer rates) = $2.34 <br />Rate charged to Little Canada would equal 65% of that or = $1.521 <br />This results in a revenue of $1.521 times 503,735 cCF = $766,181 <br />This leaves a fixed revenue requirement of $859,470-766,181= $93,289 <br />We divide this by 12 months which = $7,774 which we round to = $7,800/mo. <br />The 2011 revenue required was increased by our water rate increases in 2012 and 2013 to come to <br />the 2013 revenue required to comply with the contractual requirement of neither party being <br />harmed by a change in rate structure. <br />This methodology results in a rate structure similar to our retail accounts where roughly 11% of the <br />revenue is captured by the Water Service Base Fee and the remaining 89% is captured by the <br />variable fee of $1.521 per unit of water. Each year we develop a budget with proposed rates and <br />the rates for Little Canada would vary with those approved rate adjustments both on the fixed and <br />variable rates. We are willing to update our cost of service study every 5 years to ensure we are <br />charging appropriately. <br />*Figures that were taken either directly from the Cost of Service Study to Serve Wholesale <br />Customers by PCE, Inc. dated 2012. <br />**Table 10 of the report presents this information in gallons. 1t has been converted to billing units <br />of 100 cubic feet (cCF) <br />9 <br />