HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/23/2005 - PROPOSED 2006 WATER, WASTEWATER, STORMWATER PLANT DATE : August 23 , 2005
STAFF : Michael B . Smith WORK SESSION ITEM
Terri Bryant FORT COLLINS CITY COUNCIL
Bill Bray
SUBJECT FOR DISCUSSION
Proposed 2006 Water, Wastewater, Stormwater Plant Investment Fees and Electric Development
Charges .
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1 . Is there any additional information Council would like on utility plant investment fees and
electric development charges?
2 . The proposed fees align with the practice of growth paying for growth. Does Council
support development fees based on this assumption?
3 . Should staff prepare ordinances for Council consideration?
The goal of this process is to establish fair and equitable plant investment fees for the water,
wastewater, and stormwater utilities . The fees should be easy to understand and implement and be
compliant with Colorado legislation. Additionally, this process will result in the annual revision and
update to the electric development charges for Light and Power.
FINANCIAL IMPACT
The proposed plant investment fees and electric development review charges , if adopted, will
increase with the exception of a few of the storm drainage basins . The financial impacts vary by the
size and nature of the development.
EXECUTIVE SUMMARY
Existing plant investment fees for water and wastewater were adopted in 1998 . At that time the
calculations for fees, including inflationary costs and capital improvements , were identified through
2002 . A five-year review and update of the fees was planned for 2003 , however, other priorities in
the Utilities demanded staff time. The revised fee structures will be presented for 2006 .
Existing stormwater development fees are unique to each sub-basin in the City. They were based
on the previous rainfall standard and master plans, which included regional elements sized to handle
additional runoff from development. The recently approved City-wide master plan includes a
change in approach and all new development must now provide on site detention. The current
August 23 , 2005 Page 2
stormwater financing plan uses a pay-as-you-go approach for stormwater capital improvements
funded from rates . The proposed revision to stormwater development fees reflects the change in
master planning and philosophy.
The electric development charges are typically updated on an annual basis as an administrative
process . The revisions to the electric system development charges are being presented along with
the plant investment fee proposals to provide a more complete picture of total utility development
fees .
BACKGROUND
Plant investment fees (PIFs) for water and wastewater, based on estimates of future capital needs,
have historically been adjusted about once every five years . Fort Collins Utility ' s PIFs were last
adopted in 1998 . Since that time, it is becoming more apparent that the developable land in the
water and wastewater utilities service areas is limited. We are transitioning from a growth utility
to a maintenance utility. This fact should be reflected in a revised PIF methodology. All proposed
revisions to Plant Investment Fees must comply with Senate Bill 15 , passed by the State Legislature
in 2001 , governing "impact fees and other similar development charges."
PIFs for stormwater (currently called basin fees) were previously adopted upon the completion of
the stormwater master plan for each basin. In response to the flood of 1997 , City Council changed
the rainfall standard, which required a total rework of the stormwater master plans. The old master
plans often included regional elements sized to handle additional runoff from development. The
recently approved City-wide master plan includes a change in philosophy. All new development
must now provide on site detention. Regional elements are sized to handle existing flows and to
work in coordination with on site detention. City Council has adopted a city-wide, pay-as-you-go
financing plan, funded from rates, for projects designed to solve existing problems . Proposed
revisions to stormwater PIFs must also comply with the provisions of Senate Bill 15 .
The utilities contracted with Red Oak Consulting to provide a broad area of expertise to the
development of the 2006 water, wastewater, and stormwater methodologies and costs .
Water Board members have reviewed and approved the proposed methodologies for plant
investment fees .
Electric development charges pay for the design for electric system additions and modifications to
provide service to new development. These charges are update annually by Light & Power staff to
adjust for inflation and other costs .
PROPOSED METHODOLOGY - WATER
The service area of the City of Fort Collins water utility is approaching build out. This is a rare and
important opportunity. The utility can now predict capital needs to the build out of our service area.
The plant has the capacity to serve future customers and capital projects will include a nominal
amount of growth-related projects that do not add capacity. Based on these considerations, the
August 23 , 2005 Page 3
equity buy-in method was selected. Under this methodology, new customers are required to "buy-
in" to the existing facilities at the same equity position as existing customers .
The equity buy-in method includes calculating net water system equity, capacity units, and
determining the net system equity per unit. Water system assets were valued at replacement costs,
or the cost of duplicating existing facilities at current prices. Replacement costs were based on the
construction cost index as published by Engineering News Record. To determine net system equity,
any outstanding principal on debt was subtracted from the total replacement cost asset valuation.
The net system equity is then divided by total current capacity used in the system. This unit cost is
applied to a fee schedule designated by customer classes and their representative usage
characteristics . The schedule below details PIFs for the various customer classes .
WATER PLANT INVESTMENT FEES BY CUSTOMER CLASS
1998 PIF Study Proposed
Customer Class/ Peak Day Current Peak Day Proposed
Meter Size Usa e d Charge Usa e d Charge Change
Unit Fee ($ pergallon) $3 . 39 $3 .69 8 .9%
Residential:
Single Family
Inside Use 180 $ 610 191 $ 710 16%
Irrigation 805 $29752 864 $39180 8.8 %
Total 985 $39362 19055 $39890 15.7%
Multi-Family (per unit)
Indoor Use 145 $ 490 133 $ 490 0 %
$/S . Ft. 268 $ 928 263 $ 970 4 %
Total 413 $19418 396 $19460 3 %
Non-Residential (meter size)
3/4 inch 19357 $ 45600 1 ,800 $ 69640 44%
1 inch 4,513 $ 159300 5 ,230 $ 19,300 26%
1 '/z inch 9,204 $ 319200 109470 $ 38 ,630 23 %
2 inch 159811 $ 535600 165710 $ 61 ,660 13 %
3 inch 309413 $ 103 , 100 335240 $ 1229660 19%
>3 inches Based on specific customer-requirements
PROPOSED METHODOLOGY - WASTEWATER
The City of Fort Collins wastewater utility will need to consider available treatment capacity to
serve future connections . The utility anticipates a significant amount of growth-related treatment
plant projects on the planning horizon. A hybrid method for plant investment fees was selected to
assess PIFs for new wastewater customers . The hybrid method recovers the costs of the existing
facilities and the projected growth-related improvements .
The proposed 2006 wastewater PIF includes a flow component to recognize peak flows to the
treatment plant as a result of infiltration and inflow (I/I) . Infiltration is ground water that enters a
wastewater collection system through leaking joints, cracked pipes , the walls of manholes, leaks in
private service lines, and illegally connected sump pumps. Inflow is surface and subsurface
stormwater entering the collection system at some of the same points as infiltration, as well as
August 23 , 2005 Page 4
through pick holes in manhole covers, illegally connected roof downspouts, exterior foundation
drains, areaway drains, and sump pumps . The high groundwater levels in Fort Collins also
contribute to the high amount of I/1 .
Despite ongoing efforts to minimize and reduce the amount of I/I in the wastewater collection
system, it remains a consideration when sizing capital facilities . The older portions of the collection
system, constructed before the mid 1970 ' s, contribute the majority of I/1. A recently completed year
long monitoring effort, however, indicates that new wastewater collection systems also contribute
to the problem, and therefore impact future capital improvements . Data from treatment plant flow
records were used in determining an appropriate (I/I) allowance. I/I was allocated based on each
customer classes ' proportionate share of total flow to the treatment plant.
WASTEWATER PLANT INVESTMENT FEES BY CUSTOMER CLASS
Customer Class/ Meter Size Existing Proposed Change
Single Family: Winter Qtr Current Volume Unit
Usage Charge Gpd Cost
( d)
Domestic 180 $ 19030 180 $ 19490
Peak flow / I & 1 0 $ 0 160 $ 19330
Total 180 $15030 340 $29820 174 %
Multi-Family
First Unit Domestic 145 $ 830 125 $ 19040
Peak Flow / I & I 0 $ 0 ill $ 920
Total First Unit 145 $ 830 236 $19960 136%
Each Additional Unit 145 $ 830 125 $19040 25%
Non-Residential (Meter Size)
3/4 inch 440 $ 29500 709 $ 5 , 880 135%
1 inch 19110 $ 69500 19814 $ 15 ,040 131 %
1 'h inch 2,260 $ 129900 39279 $ 279180 111 %
2 inch 3 ,240 $ 189900 5 ,802 $ 48, 100 154%
3 inch 69900 $39,600 129105 $ 100,350 154%
4 inch and above assessed on individual basis
The methodologies applied to the water and wastewater PIFs results in PIFs that are equitable to new
customers . The PIFs are directly related to the new customer' s impact on the system, are stable,
predictable, and easy to update, while still flexible . Staff recommends that the water and wastewater
PIFs be updated every other year as a part of the budget cycle . Updating will consist primarily of
updating for inflation and checking for any changes in the capital improvements required.
PROPOSED METHODOLOGY - STORMWATER
City Council has adopted a city-wide financing plan and stormwater master plan that builds projects
designed to solve existing problems using a pay as you go approach funded from rates . New
development is required to provide on site detention to mitigate their impact on downstream
properties . Although there is no "extra capacity" built into capital projects specifically for new
development, runoff from new development — even after on-site detention — uses the existing system
already paid for by rate payers . Therefore developers should pay for a share of the system
infrastructure as it exists at the time they develop . After paying for their share of the existing
system, new customers will pay their share of the future improvements through monthly rates .
August 23 , 2005 Page 5
The proposed unit of measure used to allocate the value of the existing system between new
customers and existing customers is acres of developed land, adjusted with a runoff coefficient (a
measure of how water runs off various surfaces) .
Proposed stormwater development fees would be calculated by dividing the value of the current
system, less outstanding debt, by the total acres of land (existing developed and developable) in the
service area. This number is then adjusted by the average runoff coefficient for the system. The
result is the unit value of the existing system per acre of developed land.
PROPOSED STORMWATER PLANT INVESTMENT FEE
Single Family
Component Unit Unit
Cost
Unit Charge, $ per acre $ 3 ,070
Runoff Coefficient 0.40
Gross Developed Area, sq ft 18,330
Gross Developed Area, acres 0 .42
( 185330/43 ,643)
Total $3 ,070 x .40 x .42 $ 520*
*rounded
A stormwater PIF of $3 ,070 per acre is recommended for 2006 . Staff recommends the stormwater
PIF be reviewed every other year as a part of the budget process . Updating will consist primarily
of updating the value of the existing infrastructure due to capital additions and repayment of debt,
and adjusting the service area due to any annexations.
This methodology results in stormwater PIFs that are fair to new and existing customers and are
practical to administer.
Due to the changes in stormwater master planning philosophy and the change to a City-wide pay as
you go program, funded from rates, direct meaningful comparisons to the previous stormwater basin
fees are difficult. Nonetheless, the following table shows the proposed 2005 stormwater PIF as
compared to the previous basin fees .
August 23 , 2005 Page 6
Proposed 2005 Stormwater PIF Com arison
Current
Basin Fee Proposed PIF
Basin (per acre (per acre $ Change Change
Canal Importation $ 65181 $35070 $ .35111 - 50%
CooperSlough/
Boxelder $ - $3 ,070 $ 31070 NA
Dry Creek $ 51000 $35070 $ - 1 ,930 -39%
Evergreen/
Greenbriar* $ 10,000 NA NA NA
Foothills $ 6,525 $3 ,070 $ -3 ,017 -53 %
Fossil Creek $ 21274 $31070 $ 796 35%
Fox Meadows $ 6A68 $3 ,070 $ -3 ,005 -53 %
McClelland/
Mail Creek $ 31717 $31070 $ -647 - 17%
Old Town $ 4, 150 $3 ,070 $ - 1 ,080 -26%
Poudre River* * $ - $3 ,070 $ 31070 NA
Spring Creek $ 25175 $3 ,070 $ 895 41 %
West Vine $ 71004 $3 ,070 $ .35934 -56%
City Wide Avg $ 4 458 $3 070 $ -1 441 -31 %
* Incorporated into the Dry Creek Basin
* * No basin fee collected at this time
PROPOSED ELECTRIC DEVELOPMENT CHARGES
Electric development charges include the allocated and actual costs to the utility for each
commercial or residential development. The two components of these charges are the Electric
Capacity Fee for the off- site electric system, and Building Site Charge for the on-site electric costs .
The electric development charges are typically increased annually to adjust for inflation and cost
increases, however, no adjustment was made in 2005 . The proposed 2006 changes include a two-
year inflation adjustment, a new standard for larger residential service wire, the final 25 % capital
costs for substation transformer allocation and the final 25 % capital costs for distribution
transformers . The net increase to a new residential customer is 4 . 6%, and commercial increases vary
by development.
August 23 , 2005 Page 7
The following tables compare current fees with proposed fees for residential and commercial
development:
ELECTRIC DEVELOPMENT FEES & CHARGES
RESIDENTIAL
Category Charge 2004/2005 2006 % cliff.
Per square foot $0.03395 $0.03625
Per lineal front foot $7.24 $7 .36 2°/
Dwelling 150A Single °
ECF Unit $891 $952 7 /
200A Single $ 1 ,572 $ 1584 1 %
150A Multi $625 $635 2%
200A Multi $ 19049 $ 1111 6%
Secondary
Service 1 /0 $413 $436 6%
4/0 $556 $ 573 3 %
BSC F 350 $606 $639 5 °/
1 /0 mobile $310 $326
410 mobile $435 $448
ELECTRIC DEVELOPMENT FEES & CHARGES
NON-RESIDENTIAL ( COMMERCIAL)
Category Charge 2004/2005 2006 % diff.
Per square foot $0.03395 $0.03625 7%
Per lineal front foot $26.27 $26 .87
208V 1 -p $625 $ 830 33°/
ECF I 240V 1 -P
Service $721 $957 33 %
Entrance (per 208V 3 -P $ 1082 $ 1 ,437 33 %
100 amps)
240V 3 -P $ 1249 $ 19658 33 %
480V 3 -P $2498 $39316 33 %
Primary Circuit ( 1 - h) $6.32 $6. 51 3%
BSC
Primary Circuit (3 - h) $ 10.91 $ 11 . 13 2%
Transformer Installatiod $ 1789 $ 1806 1 °/
August 23 , 2005 Page 8
The impact to a typical single family residence is $2 ,448 .
Assumptions 2004/05 2006 Change
8,600 ft2 $292 $312
83 ft. fronta e $601 $611
150 Amp Panel $ 891 $952
4/0 Service Wire $ 556 $573
Tota $2 340 $2 448 4.6 %
SUMMARY
The following table shows the overall impact of the proposed Plant Investment fees and Electric
Development Charges on a typical single family residence. Single family customers represent 85 %
of our customer base.
Impact on Sin le Family
Current Proposed Change
Water* $3 ,362 $39890 15 . 7%
Wastewater $ 1 ,030 $29820 173 . 8%
Stormwater* $ 751 $ 520 -32 .4%
Electric* $29340 $21448 4. 6%
Total $79483 $99678 29.2 %
* Typical, based on lot size
Comparisons to other utilities is difficult due to differences in customer use patterns, the unique
capital needs of each utility, and different policy direction from governing bodies. The question of
how we compare to other area utilities often arises. Below is a table showing comparisons based
on estimated water, wastewater, and stormwater PIFs for a single family residence.
August 23 , 2005 Page 9
Raw
utility Water Water Wastewater Stormwater 2 Total
Arvada $ 9 885 $ $2 860 $0 $ 12 745
Aurora 14 858 0 3 502 320 18 680
Broomfield 249424 71250 0 31 ,677
Boulder 7,345 0 1 ,405 21110 10, 860
Fort Collins- 3936 59200 1903 750 (3) 109340
Existin
Fort Collins- 3989 59200 29820 520 (3) 12943
2005 Proposed
Greeley 7 400 9 500 1 3 900 0 20 800
Longmont 7 856 9 000 1 3 000 650 20 506
Loveland 3 650 m 9 200 1 1 940 490 15 28
Thornton 59930 8 610 21940 17 48
Windsor 6,300 165400 31000 630 26,33
Avg. w/o Ft. 9970 10950 3930 840 24934
Collins
(1) Water dedication fees requirements are3 acre-ft/acre minimum. Calculation based on
8,600 sq ft residential lot.
(2) Residential customer with 8,600 square foot lot and 0.4 impervious factor.
(3) Typical residential customer based on gross developed acres. Gross developed acres
can include open space and right-of-way.
The table and graph below compares the impact of total development fees for a single family
residence linked to the building permit process with Fort Collins, Loveland, Greeley, and Windsor.
Survey of Total Development and
Investment Fees ( 1 )
Fee Type Fort Collins Fort Collins Greeley Loveland Windsor
Existing 2006 Proposed
Water $3,360 $3,890 $7,400 $3,650 $6,300
Water Dedication 51200 51200 9,500 91200 16,400
Wastewater 19030 21820 31900 1,940 31000
Stormwater 750 (3) 520 (3) 300 (4) 490 (5) 630 (5)
Trans./Road Impact/ 29446 21446 11512 23931 11993
Oversizing (2)
Recreational (2) 19814 11814 21887 3,650
Capital Expansion (2) 31267 31267 2,496
All Other Fees (2) 63841 61841 51898 7,643 10,902
Total $24,708 $26,798 $31 ,397 $32,000 $39,225
(1 ) Based on a single family residential 2,500 sq ft home on a 8,600 sq It lot.
(2) Information provided by Homebuilder's Association Research. Accuracy not guaranteed.
(3) Typical residential customer based on gross developed acres. Gross developed acres can include open
space and right-of-way.
(4) City-wide average; varies by basin.
(5) Residential customer with 8,600 square foot lot and 0.4 impervious factor.
Pathways to Lasting Solutions
August 23 , 2005 Page 10
Survey of Total Development and
Investment Fees - Residential
Ft. Collins-Existing
Ft. Collins-2006 Proposed
Greeley
Loveland
\Nndsor
$0 $5rOOO $10r000 $15r000 $20,000 $25,OOO $340DO $3 ,000 $4O,OOO
❑ Water ❑ Water Dedication ❑ Wastewater
❑ Stormaater ❑ Road Bawd/Oversize ■ Recreational
■ Capital Bwrsim ❑ All Other Fees
Electric Development Fees for a typical single family residence compare to neighboring utilities
is as follows :
Electric Residential Development Fees* :
How do we compare ?
$ 3 , 000
6 Dev ■ Builder
$ 2 , 500
$ 2 , 000
$ 1 , 500
$ 1 , 000
$ 500
$ 0
* Includes both off-site and on-site charges
15
ATTACHMENTS
1 . Presentation Slides for "Plant Investment Fee Review"
2 . Presentation Slides for "Proposed 2006 Electric Development Fees and Charges
ATTACHMENT
City of Fort Collins
Plant Investment Fee Review
C/ly Cound/Bde/!ny
MOM ia,Zoos
Agenda unrt.
■Plant Investnent Fees(%F)
■Water
■wastewater
■Suwmater
■Mu;i-pty Fee Canpoison
■Questlons and Corms is
.Costs Fundable By PIFs
o e..0 l y b Fl.wwo
PIF Objective:
Growth Pair Its Way
■Supp"b/e PIF is:
■ Defensible
■ Equitable
■ Easy to understand and Implement
■ Compliant with Colorado legislation
PIF must be sunident to: Meet cash flow needs
through 2020 study period
Fund Growth CIP
Meet reserve requirements
JL Water PIF
■Considerations
■Capacity to serve future astonKrs
■Treabnent plant has oparay to serve bundMA denend
■No treatment plant expansion projects
■Nominal amount of growth-related projects on
planning horizon
- ■Assess PIFs for new customers at same equity
position as ads0ng custorners
■Selected Methodology: Equ tyetq«kr
r.s..4.wwirera..
Water PIFs
Unit Cost Comparison
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006 Proposed Multi-family Residential
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7006 Proposed Commerdal
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3
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`i Comparison of Existing to 2006 Proposed
am WON EMMUM Q�
Snt-0R1wR $610 $710 2656
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Wastewater PIF
■Considerations
■Available treatment capacity to serve
future connections
■Significant amount of growth-related
treatment plant projects on planning
horizon
■Assess PIFs for new customers at same
equity position as existing customers
■Selected Methodology: Hybrid
Wastewater PIFs
'` Unit Cost Comparison
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4
Wastewater PIFs
006 Proposed Single Family Residential
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At.Comparison of Existing to 2006 Proposed
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MIN■Considerations
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■Assess PIFs for new customers at same equity
position as existing customers
■Uniform fee for all basins
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Stormwater PIFs
JL Unit Cost Comparison
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6
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7006 Proposed Single Family Residential
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" Questions and Discussion
For Additional Information
,,,,,Contact
Rick Glardins OR Todd Cristleno
Red Oak Consurdng
3300 S.Padw Road,Sub 305
Aurora,CO 80014
303-369.3535
303-369-3540(fax)
rolardinefolmle.com talstlan pimle.com
9
ATTACHMENT2
Proposed 2006
Electric Development Fees&Charges
PrMaMW by Bill JIM
El*VW Pb MMp&Er4IM•Mla services
Fort Collins City Council Work Session-"uvt 23,2005
Electric Development Fees &Charges
• Underlying Philosophy
• Proposed Changes for 2006
✓Residential
✓Non-residential (commercial)
Electric Development Fees&Charges
Urdedying Philosophy
• Development charges are cost based and reflect
both allocated and actual cost to the utility for
each development(hybridl.
• Charges are made up of two components:
1) Electric Capacity Faes(ECG-an allocated
portion of the off-site electric system based on a
standardized distribution model(equity buy-in)
2) Building Site Charges(BSC)-actual onsife
costs(marginal costs)
1
Electric Dev.Fees-Basic Electric System
.:;
{ Mein Primry
pmuft
7SUW:W*M�' +. nrmry�GwwmkWSupply Second"'(PRPA)
Electric Develeprrant Fees—Supplycosts amp
in
. :
_y'•.
ro
GonmU*nl$uppiy
(PHPA)
—1st parson al the ElecMc CepedN Fees
I EM re Mlacsom an Po.•a propeM➢Dtl lms iacapa aorq toaft"
Main Prbmry
cacuim
-^ Branch Mrnwy
cireum
e r
2
Electric Development Fave-2i0 portion of the ECF Is eased on
customera eleabla Dapwfiymquilsrems(pmel elm) -
sy4 =k
I
9utfalsllarr
Transformer Sw
r�r
ti'y I
tl H
DlslmWuen
Transformer '. I
Electric Dewbomeat Fes-Bulling She Charges(BBC)are baled
on 4YlalprlMl aorutl"onells"Deals to eHend service.
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Electric Development Fees&Charges
Proposed Changes for 2006
Cost Factor Residential Nw-
Residential
2 years of cost increases ✓ ✓
New standard for larger ✓
residardial servke wire
Final 25%of srrbsrafion ✓ ✓ -
tranafomrer allocation
Flrta125%of dfs ✓
tramfonner
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Electric Development Fees&Charges
Residential
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WF I
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,2*xmultl a1,eN t1111 0%
1N $413 1436 0%
4M 3554 ab73 3%
me 350 3m N3aN3%
1Nmo0W $3104M m.W. SM iM!
Electric Development Fees&Charges
Typical Single Family
Aeaumptions MUMS 2005
Owl*
53R Gonm94
150Amp panel
410 SeMce Wks
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Electric Development Fees&Charges
Typical Single Family
Assumptions 20D4105 2006
AJUNIV, $292
83 tt.f a toga $501
150AnIDPawl $wl
4/0 Service Wire $553
Total $2,340
4
Electric Development Fees&Charges
Typical Single Family•
AwurWfi n 2004/05 2006
`93:¢lrentapA: --$e34 - $611
150Amp'P*tW $EM $952
4/0 Service Ware SM $573-
1
Total $2,340 $2,448 4.5%
Electric Single Family Off Site Charges
Compared to Inflation
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Electric Residential Development Fees*:
How do we compare?
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Electric Development Fees&Charges
Non-Residential(commercial)
2aorngos ,`.aP4s itpn'..
faag2is'..$Jm7l2ti' 7%
Piri"aawf" 626Jr , 11M6'f 2%
zawign ttllM Sete 33%
ECF Senks 2 1-0 $121 OW 32%
( ,2W 3`Ph i1u2 $1,W 32%
WTW 2 3:Ph $1246 i1 M 33%'
$2466'... $3,216 32%
PnnMq CNCWI(t'Ph) l632 - 66.61 2%
B8C PnnuryChoult(3-0) WIM11 911.12 2%
Tnirennap W. 617u $116m 1%
Electric Development Fees&Charges
Summary
e 30+year history of development fees
that are equitable and based on system
impact
e Proposed 4.6%net increase to new
residential customers
e Net commercial increase varies with
development
e Comparable to neighboring utilities
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