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18
City of Pleasanton
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CITY CLERK
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2023
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071823 SPECIAL
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CITY CLERK
CITY CLERK - TYPE
AGENDA REPORT
DOCUMENT DATE
7/18/2023
DESTRUCT DATE
15Y
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3.4• Cost Components <br /> The next step in the COS analysis involves allocating the functionalized operating and capital costs to each of the <br /> cost causation components (also called cost components). The cost components represent the link between the <br /> costs of the various system functions and the reason why those costs are incurred.The cost components used in this <br /> Study include: <br /> • Meter: represents the costs of purchasing, servicing, and replacing meters <br /> • Customer: represents the costs of providing customer service and billing customers <br /> • Base (Average Delivery): represents the costs of delivering water to customers under average demand <br /> conditions <br /> • Maximum Day(Max Day): represents the costs of delivering water to customers on the day with the <br /> highest demand <br /> • Maximum Hour(Max Hour): represents the costs of delivering water to customers on the hour with the <br /> highest demand on the day with the day with the highest demand <br /> • Recycled Water: represents the costs of distributing recycled water <br /> • Recycled Water Surcharge: represents the capital costs going toward the recycled water system. <br /> Before allocating functionalized costs to each cost component, we must determine the allocation basis for certain <br /> components. These allocations are derived in the following subsections. <br /> 3.5• Peaking Factors <br /> Peaking factors represent water demand during peak times of use. As customer classes peak demands increase, so <br /> must the size of facilities and pipelines to meet their demands. The larger facilities cost more to construct, <br /> maintain, and replace. The point of identifying peaking factors is to charge each class in proportion to the peak <br /> demands they place on the water system. Functionalized costs are then allocated to the Base, Max Day, and Max <br /> hour cost components using the allocation bases derived from the peaking factors, shown in Table 3-6. <br /> City staff provided the Max Day and Max Hour peaking factors(Column B, Lines 2-3) for the water system, <br /> normalized to average day(Base) demand. The allocation bases(Columns C to E) are calculated using the <br /> equations outlined in this section. Columns are represented in these equations as letters and rows are represented as <br /> numbers. For example, Column C, Line 2 is shown as C2. <br /> The Max Day allocations are calculated as follows: <br /> • Base: B1 /B2 x 100% =C2 <br /> • Max Day: (B2—B1) / B2 x 100% = D2 <br /> The Max Hour allocations are calculated as follows: <br /> • Base: B1 /B3 x 100% = C3 <br /> • Max Day: (B2—B1) / B3 x 100% = D3 <br /> • Max Hour: (B3—B2) /B3 x 100% =E3 <br /> Average Max Day/Max Hour allocations(Columns C to E, Line 4) are equal to the average of the two allocation <br /> bases derived above. These allocations are used when system costs are not distinguished between a Max Day or <br /> Max Hour function; for example, transportation and distribution(T&D) costs are allocated based on this average. <br /> WATER AND RECYCLED WATER RATE STUDY REPORT 37 <br />
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