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City of Pleasanton <br />2025 Water Rate Study <br /> <br />Water Resources Economics <br />62 <br />4.3 PROPOSED BI-MONTHLY FIXED CHARGES <br />ZONE 7 FIXED SUPPLY COST <br />Table 4-1 shows the calculation of Zone 7 fixed supply unit cost. Zone 7 fixed supply costs are billed to <br />the City regardless of imported water purchases. The total Zone 7 fixed charge is equal to the Zone 7 fixed <br />charge in FY 2025 (Line 1; from Table 2-13, Line 7). Based on input from City staff, PWAG, and City <br />Ciuncil, the City will shift from collecting 32% of Zone 7 costs on bi-monthly fixed costs to collecting <br />100% of Zone 7 fixed costs (Line 2). This will enhance revenue stability for the City and reduce the City’s <br />financial risk related to Zone 7 water supply in case of decreased future water consumption. <br /> <br />The total Zone 7 fixed cost (Line 3) is calculated by multiplying the Zone 7 fixed cost in FY 2025 (Line 1) by <br />the percentage of Zone 7 fixed costs to be recovered by fixed charges (Line 2). The unit cost (Line 5) is <br />calculated by dividing the total cost (Line 3) by the units of service for meters (Line 4; from Table 3-12, <br />Line 1). <br /> <br />Table 4-1: Zone 7 Fixed Supply Cost <br />Line Zone 7 Fixed Supply Cost FY 2025 <br />1 Zone 7 Fixed Cost $10,455,015 <br />2 Recovered by Fixed Charges 100% <br />3 Total Zone 7 Fixed Cost $10,455,015 <br />4 Equivalent Meters 251,283 <br />5 Unit Cost ($/equiv. meter) $41.61 <br /> <br />REVENUE NEUTRAL RATES <br />Table 4-2 shows the revenue neutral bi-monthly fixed charge calculations. The Meter and Customer unit <br />costs are from Table 3-13 (Lines 1-2). The Zone 7 Fixed Charge unit cost is from Table 4-1 (Line 5). Meter <br />and Zone 7 Fixed Charge unit costs are multiplied by the meter capacity ratio; Customer costs do not vary <br />based on meter size and thus are the same for all meter sizes. The revenue neutral rate represents the <br />cost-of-service analysis for FY 2025 but does not include the proposed revenue adjustments for the first <br />year of rates in FY 2026. <br /> <br />Table 4-2: Revenue Neutral Combined Bi-Monthly Fixed Charges <br />Line Meter <br />Size <br />Meter <br />Ratio <br />Number of <br />Meters <br />Meter <br />Charge <br />(City) <br />Customer <br />Charge <br />(City) <br />Zone 7 Fixed <br />Charge <br />(Zone 7) <br />Revenue Neutral <br />Rate <br />(Combined) <br />1 5/8" 1.00 15,356 $3.20 $5.91 $41.61 $50.72 <br />2 3/4" 1.50 4,867 $4.80 $5.91 $62.41 $73.12 <br />3 1" 2.50 3,527 $8.00 $5.91 $104.02 $117.93 <br />4 1 1/2" 5.00 643 $16.01 $5.91 $208.03 $229.95 <br />5 2" 8.00 527 $25.61 $5.91 $332.85 $364.37 <br />6 3" 17.50 84 $56.02 $5.91 $728.12 $790.05 <br />7 4" 31.50 20 $100.84 $5.91 $1,310.61 $1,417.36 <br />8 6" 65.00 7 $208.08 $5.91 $2,704.43 $2,918.42 <br />9 8" 140.00 3 $448.18 $5.91 $5,824.93 $6,279.01 <br />10 10" 210.00 0 $672.26 $5.91 $8,737.39 $9,415.56