SUPPLEMENTAL - Laserfiche WebLink

SFR ai-Monthly 3,3 2omparison win,1 rc meotal Consumption Commer—i&-Monthly&II Companson with incremental Consumption [o 80 CCF) (0-30 CCF) su�uo �w i • A 201S court ruling that struck down a specific tiered pricing structure (in the City of San Juan Capistrano) prompted many utilities (including DSRSD) to revise and simplify the tariffs, often adopting a uniform rate to comply and avoid such anomalies. If one of the objectives is "customer understandability," then wouldn't it be better addressed by simplifying the variable charges while the fixed charges are being overhauled significantly? • The methodology used in revising the fixed charges is also perplexing and creates more anomalies. For example, consider the text that precedes Table 3.14 in the report on Zone 7 cost allocation. Table 3-14 shows the way that Zone 7 costs were allocated to the proposed Zone 7 Fixed and Variable rates. Zone 7 costs are approximately 40°o fixed and 60%variable.In the current rates structure. 100%of Zone 7 costs are being recovered through a variable rate.The City wanted to move a portion of the Zone 7 costs to be recovered through a fixed rate to allow for more revenue stability.Column D shows that 22%of Zone 7 costs will be recovered through a fixed charge,while the remaining 78%will be recovered through the Zone 7 component of the water usage charge. This was done in order to keep the fixed and variable revenue recovery for the water utility as a whole approximately the same as it is under the current rates.The City collects approximately 14%of its revenue through fixed charges. o The decision to maintain the fraction of cost recovery through fixed charges at 14% of total revenue seems arbitrary and not motivated by the city's need to improve its reserves and financial (cash flow) stability. o A comparison of Pleasanton's rates with neighboring cities (Livermore, Cal Water, DSRSD, Fremont) shows that the bills for many classes are lower because of its significantly lower fixed charges for nonresidential customers. o My preliminary analysis shows that some commercial customers will see a decrease in their fixed charges, particularly for the Pleasanton portion, by significant amounts. It would be helpful to ensure this is not the case, as it would be hard to justify.