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File #: 110665    Version: Name:
Type: Discussion Item Status: Filed
File created: 3/15/2012 In control: General Manager for Utilities
On agenda: 4/9/2015 Final action: 5/7/2015
Title: Review Of The GRU Cost Of Service and Rate Studies (B) **Estimated Presentation Time 45 Minutes**
Attachments: 1. 20121011 RUC Presentation Item 110665, 2. 20121120-RUC Presentation Item #110665, 3. 20130624 RUC Presentation Item 110665, 4. FINAL GRU Electric Rate Study.Baker Tilly, 5. FINAL GRU Gas Rate Study.Baker Tilly, 6. FINAL GRU Water Rate Study.Baker Tilly, 7. FINAL GRU Wastewater Rate Study.Baker Tilly, 8. 110665 FY15 Cost of Service Study Schedule 20141009, 9. 110665 2015-009 Bid Tab Cost of Svc Study 20141106, 10. 110665 RFP Cost of Service and Utility Rate Studies Solicitation No 2015-009_FINAL 20141106, 11. 110665 GRU - Gas Rate Study Report DRAFT 20150409, 12. 110665 GRU - Wastewater Rate Study Report_DRAFT 20150409, 13. 110665 GRU - Water Rate Study Report_TY 2016_DRAFT 20150409, 14. 110665 GRU Electric Rate Study Draft Report 20150409, 15. 110665 GRU_RUC Rate Study Pres- GRU Introduction 20150409, 16. 110665 GRU Rate Study - BakerTilly Pres - Revised 20150409, 17. 110665 GRU Introduction to Rate Study Presentation 20150507, 18. 110665 GRU COS Electric Report DRAFT 20150507, 19. 110665 GRU COS Water Report - DRAFT 20150507, 20. 110665 GRU COS Gas Report DRAFT 20150507, 21. 110665 GRU COS Wastewater Report - DRAFT - 20150507, 22. 110665 Baker Tilly COS Rate Study Revised Presentation 20150507
Title
Review Of The GRU Cost Of Service and Rate Studies (B)
 
**Estimated Presentation Time 45 Minutes**
 
Explanation
GRU staff periodically performs cost-of-service studies for the electric, gas, water and wastewater utility systems. Revenue requirements and rate designs are also developed by GRU staff and presented to the City Commission during the annual budget process. The last external cost-of-service and utility rate study was performed in 2012 and was based on a test year where the full costs of the GREC purchased power agreement were not fully integrated into GRU's overall revenue requirement.  Additionally, the 2012 cost-of-service study recommended changes to the tiered residential electric rate structure, but those changes were not implemented. The City Commission directed GRU to have an external cost-of-service and utility rates study prepared as the basis for rate structure evaluations in Fiscal Year 2016.
 
Baker Tilly Virchow Krause, LLP was retained to perform the cost of service and rate studies for GRU based on the test year Fiscal Year 2016.   The purpose of the current cost-of-service and rate studies are to address information regarding the appropriateness and adequacy of GRU's revenue requirements by system, unbundle and allocate each revenue requirement by function, type and cost driver, and classify revenue responsibility for each customer class.  Additionally, rates have been designed and proposed by the consultant for inclusion in their final reports.
 
On April 9, 2015, the Regional Utilities Committee (RUC) received a presentation on the results of the cost-of-service and rate studies for each GRU system.
 
Fiscal Note
No fiscal impact at this time.
 
Recommendation:
The City Commission:
 
1)  receive a presentation from Baker Tilly Virchow Krause LLP on the results of the cost of service and rate studies for each GRU system based on the test year FY2016.  
 
2) provide policy guidance on desired rate structure evaluations to be presented for consideration during the GRU FY2016 Budget presentations in July 2015.
 
3) refer wastewater winter max billing to the RUC.
 
4) Remove the Cost of Service Study item from the RUC referral list.
 



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