NS Purchasing - Raftelis Financial Consultant - Efland Sewer Rates Study

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as D;~~~~ 1 ~~+Mrr ~rr1 ~it'~,F EFLAND SEWER SYSTEM Prapasa for Rate Study for Sma~i Wastewater ~a~lectian Utility declined even though the number of customers has continued to increase. RFC utilized risk analysis techniques to provide insights to Utilities which helped staff develop appropriate estimates of water and sewer billable units and more robust risk contingency plans. City of Buffalo, New York PRQJECT DETAILS RFC recently provided finance advisory services for a comprehensive cost of service and Cost of Seruice Study rate stud for the Buffalo water Board `Board"~. The Board's p~mary prang objectives Rate Study y were revenue cuff ciency afld equitable cost recovery from all customer classes. To achieve REFERENCE these objectives, RFC performed a cast of service study and developed two alternatives to Mr. Jose~l~ Giambra Commissioner of Public Worl<s the existing three-block, declining block rate structure. The results of the cost of service 85 Niagara Square study indicated that the discount. being realized by large volwme customers was not cost Room 502 Buffalo, NY 1~42~2 justified and that only a miwaor portion of consumption was within the midrhe rate block. ~71~} 651-5636 RFC recommended a phased approach to bringing the discount for consumption in the third rate block closer to a cost justified level and phasing out the middle rate block. Both the Board and the City's Common Council un.an~nously approved RFC's recommendations. As part of the project scope, RFC exa~uned the Board's existing rate affordability program in order tv. identify appo~ties far improvement and possible alternative programs that would more effectively target disadvantaged customer groups. fn order to provide the Board with some meaningful. guidance on selecting a~n affordability assistance approach, RFC prepared multiple evaluation matrices examining different affordability approaches and their relevance to the Board's needs and goals. The analysis included statistical data on the City's economic and demographic makeup. Based on this analysis, RFC was able tv make several observations about the goals that should be accomplished by any new program. PROJECT DETAILS C~t3' °f Portland Bureau of water, (]regon Wholesale and Retail Rate Study The City of Pordand water Bureau ~"Bureau"~ provides retail water service to customers Rate Model within the City and wholesale water service to i~ agencies under agreements that are Financial Planning expiring within the next couple of years. RFC assistance will be separated into two parts: REFERENCE assistance in developing wholesale rates; and development of a robust modeling tool for Mr. David Hasson on ' rate calculation and financial. lanniaa use b the Bureau. Finance Director ~g p g y City of Portland 112o SW ~~' Avenue, Suite 60D The Bureau is in the process of finalizing a new long term wholesale agxeement with Poriiand, DR 97284 ~503~ 8237156 explicit terms on rate setting, wholesale customers use 40 percent of the total water produced by the Bureau and generate about 2n percent of the total revenue under the current agreement The new agreements vr~ll take into account peaking factors and include take or pay basis arrangements, provide for interruptible water sales, and excess use. Qther factors that will enter into wholesale rates axe differential losses in the transmission and distribution systems and flexibility to include different asset rate bases far different customers for calculating rates under th.e utility basis. :Rfi`C has been engaged to develop rates consistent with. the new agreement for the wholesale agencies, ONSU~TANTS, NC.17