- Okay, welcome to our public meeting regarding our rate case. Today, we are gonna go a little more in
- depth into the rate case. We are joined today by Jennifer Wilson, our consultant with Crow, who's gonna
- review our revenue requirements report. We are joined by consultants from Stantec, who will review our
- cost of service study and rate allocation. And we also have Mark Menafee, our capital projects engineer.
- and Matt Havy, our Assistant Director of Finance to help answer any questions people may have. With that,
- I'll hand it off to Jennifer. Thank you, Kat. I'm Jennifer Wilson with Crow, and I have served as the
- rate consultant to prepare the revenue requirement analysis for Bloomington Water Utility. Next slide, please.
- As part of our task, we go in and we look at 2022, 2023, and 2024
- and we look at the balance sheet and all the other financial statements of the utility. We use the year
- end 2024 as the test year, and we made adjustments to it for fixed known and measurable changes,
- which then computes to the revenue requirements of the operation and maintenance expenses, current and
- proposed debt and lease payments, and annual extensions and replacements, which is paying for capital
- items with cash. Next tab.
- Some of the key considerations out of doing the study is that you have $84 million worth of projects
- that need to be done. And we have proposed two bond issuances that will fund 54.5 million of those projects.
- The rest of it will be funded with cash on hand as the revenues come in year over year. And we're having that,
- that's called extensions and replacements. And that will be increased to $7.1 million of annual funding
- from revenues each year.
- Next slide. When we looked at the operation and maintenance expenses as compared to revenues, the first
- columns of lines there, the first one is 2022 and the revenues came in about $20 million and the expenses
- were 18.1.
- which meant that the utility had about $1.9 million of annual funding of capital improvements.
- And as I said before, we're gonna increase that up to $7.1 million. The set next year in 2023,
- it was a negative $1.9 million. And in 2024, there was $3.8 million as there was a rate increase in
- the beginning of the year 2024. Next slide.
- We've looked at the year of 2024 and made adjustments for fixed known and measurable items and then
- include the payment of shared services and pilot. So there was about $3.2 million worth of adjustments
- that we made from the test year to what a pro forma year is gonna be in 2025. Next slide. This graph
- shows operation and maintenance and taxes and what that
- a total of $14.9 million of operation and maintenance and taxes goes towards. So a majority of it, 42%,
- is going towards employee costs for salaries and wages and the related employee costs related to that.
- Purchase power is about 11% of that total. And you can see the other lines dividing out what those other
- expenses are. Next, Pam.
- As I said, there's a capital improvement plan of $84 million. We are funding $54 million with bonds
- and those two bonds will be done in 2026 and 2028. Our goal, which I'll show it here in the next slide
- is that we are doing capitalized interest when we fund those bonds so that we're not increasing debt
- service and we'll be utilizing the debt roll off and I'll show that in the next slide. But we are funding
- about 28 million
- with cash on hand over that four year time period. Next slide. The next one. There we go. This is the debt.
- And so currently the debt service is at $7.1 million and will continue that way until the year 2029.
- And then it drops down to $1.7 million. We're taking that opportunity to fund
- $54.5 million worth of projects by financing those projects through two series of bond issues so that
- the debt service goes back up to $7.1 million and is maintained at that level for a number of years.
- So basically we're filling in the reduction in debt service with the issuance of new debt and thus being
- able to get a lot of the improvements that Kat will talk about. Next slide.
- Here's the total revenue requirements. The big dark blue one is the operation and maintenance expenses,
- and that's at $14.4 million. Taxes is $475,000. Debt service, as I said, is at $7.1 million right now,
- and will continue that way after the issuance of debt. And then annual extensions and replacements,
- which is funding for capital projects with cash as it comes in each year, is gonna be set at 7.1 million.
- That's a total of $29.1 million of revenue requirements. We currently are bringing in 22.6 million.
- So that's a deficit of $6.5 million that needs to be made up with rates. So we're proposing a revenue
- increase of 30.5%. Now that does not mean everyone's bill will go up 30.5%. What that means is that
- we need revenues to go up 30.5%
- the next person that will be speaking, Stantec, they have prepared a cost of service study to allocate
- those expenses to the customer classes that are causing those expenses so that those that are causing
- the expenses will have a larger increase than 30.5 and those classes that are not, might not see a 30.5%
- increase. So that's a long way of saying that rates are determined by the cost of service study.
- That's my presentation. And at this point, I'm going to hand it over to Stantec, who prepared,
- who's the cost of service study expert. So Andy or Danica? Good evening, everyone. Danica Katz with Stantec.
- We also have Andy Burnham on from Stantec as well. As Jennifer mentioned, as well as Kat, this evening
- we're going to be presenting on the cost allocation and rate design
- component of this rate case and we'll step through each of those pieces. So next slide please. All right,
- I just want to highlight here some of the objectives of the cost of service analysis. So what we do
- is we utilize the revenue requirements that Jennifer just talked through as our test year and as defined
- by Crow, which ultimately flow into the cost of service analysis.
- And what we do is we utilize that to go through all of the expenses, things of that nature, and go through
- and functionalize those costs, and ultimately divvy those up by customer class. And the goal of that
- is to determine the cost to serve each class compared to the
- current revenues that are being collected by each of those classes. So ultimately, just to become consistent
- with the cost of providing service for each of those customer classes. As we go through the study,
- one of the big things I want to point out here is that for this pre-case, we've utilized city AMI or
- automated metering infrastructure, which has really allowed us to use data-driven
- data-driven customer data in order to come up with peaking factors that are specifically from that data.
- We've also used 2024 billing records as a basis for the analysis. And then just also want to highlight
- here that as we go through the cost of service process, this is very much along with AWWA industry guidance.
- as we approach the base extra capacity methodology for this cost allocation. Next slide, please.
- And so here's the cost of service summary that came out of our analysis. And as Jennifer mentioned,
- you can see in that top right corner as well as in the blue bars, that 30.5% overall increase.
- compared to the orange bar, which is the existing or current revenue for each of those customer classes
- along the bottom axis there. So what that would show is there's a 19.8% increase for residential,
- whereas general service may see slightly higher than that, at about 42%. It just shows that spread based
- on the findings from the cost of service.
- across those different customer classes. You can see public fire protection going down at that 17.2%.
- And to Jennifer's point there that not everyone is seeing that 30.5% based on the cost of service findings
- specific to those customer classes.
- And so once we get through the cost of service summary and get to the findings there by customer class,
- that ultimately drives the proposed rates that you're seeing here compared to the current rates that
- are in place. On the left-hand side, you'll see the charges specific to the fixed component.
- So the base charge that goes up by meter size.
- So what you'll see there is starting at that smallest 5 eighths meter, currently at that $6.50.
- And then you're seeing that proposed rate there on the right hand of that table at $8.16. And that scales
- up by those meter sizes.
- On the right hand side we showed the component for the usage or what's sometimes referred to as the
- volumetric per thousand gallons. And so we've shown each of the individual customer classes as well
- as their current and proposed rate. So you can see there for residential currently at that $4.38
- and then the $5.31 under the cost of service or proposed
- rates there and so forth, or IU master meter as well as wholesale general service and irrigation.
- And we'll also be pulling all of this together kind of into a summary that shows some of those impacts
- for some specific customers or more common customers for each of those classes. So we can jump to that
- next slide, which should show those.
- Oh, sorry, I forgot the public fire protection and private fire protection. So through the rate design,
- we've also gone ahead and done something very similar to what we did on the regular rates and go ahead
- and calculate those for the public from both inside city as well as outside city. And that leftmost
- table also by meter size. And you can see there that those rates are
- like decrease from the current rates and that is in line with the cost of service graph that you saw
- in a couple of the prior slides. And then on the right side, we've got our private fire connections
- or private fire lines by line size with the current rates there and then the proposed rate.
- We should have the customer impacts. Perfect. So we wanted to show here some monthly bill impacts for
- a residential customer at a five-case meter, that smallest meter size. So we've shown a handful of usages
- in thousand gallons on that leftmost column, as well as that current bill, which would include the fixed
- component, their volumetric usage charge,
- as well as the public fire protection charge. So you can kind of see all of those tables that we just
- looked at kind of all snapped together here to get the full picture of what those impacts would be.
- So for someone who's using maybe 1,000 gallons, a smaller residential user, we'll see a $2.32
- change for that monthly bill, which is about $17.8.
- And then you can see for some of those larger users, just a slightly higher impact there on the dollar change.
- And then next slide, we have something similar for the general service category, which includes
- your commercial customers, industrial, interdepartmental customers of that type. And so we're showing
- two different situations here at three-quarter inch meter, small, medium, and large, at that 1,000, 5,000,
- and 10,000 increment. So for that small three-quarter inch commercial meter, maybe seeing about a $3.30
- change there, or about a $22.
- and a little bit higher on those larger meters with a little bit larger usage. And then also wanted
- to show a one inch meter down below as well. Those are the two most common meter sizes for the general
- surface category. So we're showing a 15,000 gallon, a 20,000 gallon, and a 25,000 gallon user there.
- see that those charges are anywhere from $32.85 up to that $54. And these also contain the city public
- fire protection charge as well. And next slide, I think that was all that we had. So happy to answer
- any questions that may come up.
- Next question. Should I go up there? Sure. I don't have to. You don't have to. Can I go back to that,
- the graph slide you talked about, to set inches for each category? Yeah, absolutely. Glad you can hear me.
- One more. There we go. That one there, yep. OK. The first question is just in terms of terminology.
- I think we're used to seeing those commercial, industrial, interdepartmental broken out. And why is
- it that those are grouped into general service now? Yeah, great question. So one of the pieces to this
- analysis, specifically for the general service, with the AMI data that we have, we're able to go through
- pretty data-driven
- intense analysis on the AMI data and we're able to determine that the commercial and industrial classes
- behaved very similarly when it came to their demands, usage, things of that nature, as well as the fact
- that the industrial class is very small. I believe there's only 17 or 18 accounts specifically within
- that class. And so through discussions, we talked with the city about consolidating that
- Commercial and industrial into a general service class and so that's why you see those kind of rolled
- up here in this presentation If you were to look at the current rates versus the proposed rates That's
- the overall
- percent increase in revenue for that customer class, not specifically the rate increases, because those
- are dependent on the meter size and the usage and things of that nature. Right. Could we, sometime well
- before the September 8 meeting, see the
- percentage-wise increases in rates for the current rates versus these that are proposed. Yeah, absolutely.
- So on the tables that are on the next slide, I'd like to see the percent changes there. Yeah. Yeah.
- And I mean, this is a little bit of a bigger ask, but seeing the historical changes over our last few
- rates increases would be useful as well, I think.
- That's something that you wouldn't be responsible for, but maybe staff can do to show what's happened
- historically. Yeah, we can work with staff to show something like that in there. And then let's go back
- to that slide right before this one. Oh, sorry. So go back to that. I have one more question. I mean,
- one you just had. Yeah. So when you show the two current rates for general service,
- Are those the two for commercial and industrial? Correct. Yep. Yes, one of those represents the current
- rate for industrial and the current rate for commercial. OK. I mean, it might be useful just to break
- those out into two lines. General service used to be just two lines, I think, would be helpful for comparison
- purposes. Anyway, yeah.
- That's a lot. Thank you. Yeah, absolutely. Great question. And then, so I mean, I did this on my own
- based on current rates and the new increases and what the percentage increases would be.
- So if the residential rates are going up less than those of the other customer categories, is it
- reasonable to say that our residential customers have been subsidizing these other customer classes.
- I guess I'm being cautioned against drawing that kind of a conclusion because we really looked at a
- test year and the customer usage characteristics and cost in that year and it's very well recognized that
- We do these cost of service allocations. They are to a degree a snapshot in time. And so while we try
- to normalize the test here, there can certainly be variances and fluctuations from one year to the next.
- So I don't know that I'd necessarily draw a room for that conclusion, because we've not had a chance
- to do that analysis to see what's really transpired in those years. But if you had the data from all
- the years before, since the last rate increase, you'd be able to do that? I mean, in essence, you could
- go back and do
- a true up, if you will, based on actuals to say, well, how did our rates perform if we have the AMI
- information for those historical periods? And the cost in the appropriate degree of detail, that type
- of analysis could be performed. But there very well may be some data limitations in terms of the level
- of precision you can do that with from the AMI system. That data, I don't know how far back that goes
- to the last rate case, which was filed in 2021.
- Sure, and the level of effort involved, I understand. Absolutely. Good one as well. OK. Well, are there
- any instances where there's a proposed increase that doesn't fully account for the cost of any particular
- customer class at this time?
- I think I'll let Danica speak to it a little more specifically, but I do believe for the irrigation
- and service classification, that does reflect the limitation of the increase for this particular case.
- Is that in the report that we can have access to and read? At present, the report hasn't been prepared.
- It will be developed as part of the application and filing materials.
- be putting kind of the narrative together about the cost of service outcomes, but it will certainly
- be identified in terms of what the full cost of service is for irrigation and what's been proposed this year.
- I'll say this is a substantial step towards cost of service, but it's stopping just short of that,
- recognizing the magnitude of the increase that's presented here. Thank you, sir. So just to clarify,
- even though irrigation as a customer class has a very large increase and still not
- enough to cover the entire cost of service. Yes. That's correct. Yes. Could someone maybe talk a little
- bit about what that customer class is? Because I think when people see irrigation, they think, oh,
- CBU knows that I'm using this water to water my lawn, which is, of course, not the case. That would be creepy.
- So what is irrigation as a customer class?
- Give us some examples so that we understand who these people are, whose rates are going to be increasing
- the most. Sure. So our irrigation customer class is a mix of residential, general service, and IU.
- We don't have any wholesale irrigation customers. This is based on irrigation meters. So there are specific
- meters that are
- irrigation only meters. And those meters are what are going to have these rates. So yes, CBU is not
- able to know whether or not you're using your garden hose at home to water your garden. And that's not
- what this is about. This is specifically for metered water that is specific to irrigation. So it's a
- little more large scale type of irrigation. So Indiana University has some meters
- that are irrigation meters. Yes. Those are built differently than Indiana University meters. Yes.
- As long as we're bringing up Indiana University, last time around they were an intravenor. This time
- around there were some required meetings that had to take place. I think the intent was to
- Increase the probability that potential interveners might be, I don't know, more coordinated or on the
- same page with the cost of service approach to avoid the need for an intervening case. Without speaking
- on behalf of Indiana University, is CBU optimistic that this case is going to proceed without the kind
- of intervention that we saw last time around?
- I'm going to actually offer Dave McGimsey to answer that question. He's been helping us through the
- legal process.
- We don't know.
- more for water here in Bloomington based on this proposed increase? We also had a few more slides to
- explain the rate increases a little bit more.
- to talk about our capital improvement projects. I didn't want to interrupt. There was good questions
- happening. So I think we can go forward with that and then we can take some more questions after that.
- All right. So just a little background on CBU. So we are a municipally owned water, wastewater and stormwater
- utility service. We serve the residents of Bloomington and the surrounding area.
- We operate under the guidance of a seven member utility service board and that board is appointed by
- both the mayor and city council. We're responsible for the treatment and distribution of drinking water
- for the city of Bloomington through the Monroe water treatment plant seen here. It has been owned and
- operated since its construction in 1967. We are also the sole provider of water to Monroe County.
- In addition to our water services, we also handle the collection, treatment, and disposal of wastewater
- through the ownership and operation of two wastewater treatment facilities, Dillman Road wastewater
- treatment plant and Blucher Pool wastewater treatment plant. This rate case is specifically for water though,
- and this is specifically a water rate case which is not associated with sewer.
- We also manage the collection and disposal of stormwater for the city of Bloomington. We currently employ
- approximately 195 full and part-time employees, and we all work diligently to provide water quality
- service to Bloomington residents, and our staff is very proud of the work that we do. So this is a slide
- that Stantec had. I added to the side here
- just to help with a little clarity what the difference between the current and proposed rates are for
- both the fixed charges and usage charges for our different customer classes. So you may notice in our
- fixed charges based on meter size, after one and one half meter and larger, the proposed rate actually
- goes down. And that again is based off of the information we got from the cost of service study.
- For our different customer classes, residential, we'll see their usage charge go up 93 cents. General service,
- which again, we talked about commercial and industrial, we'll see their charges go up $1.85 and $2.12
- respectively. Wholesale, we'll see an increase of $1.46 per unit. IU master meter, we'll see $1.77 increase.
- and their non-master metered charges will go up $1.85. And then irrigation, which we discussed a bit
- in our questions, will have an increase of $6 per unit. Again, a unit is 1,000 gallons of water.
- Our public fire protection, which I wanted to kind of simplify a little bit. When you talk about public
- fire protection, we're talking about
- You know, the service of our hydrants, the cost to maintain those, to make sure that our emergency personnel
- can reliably have that water when they need it. And so most customers have public fire protection.
- And so all of the public fire protection rates have actually gone down because of the data provided
- in our cost of service study.
- And then next, we'll talk about the private fire protection. These rates have gone up. And what private
- fire protection is is basically fire lines. So you imagine a building with a sprinkler system.
- This is what private fire protection is versus the public fire protection.
- Danica did a good job of looking at just kind of how your water bills would go up and looking at those
- percent changes. For those of you who were here on Monday, you may recognize this slide. This is my own bill.
- And so I just like to show how a regular single family residential users bill may change after this
- rate increase.
- And so my current charges for this past month with a small sanitation cart and using three units of
- water was 7101. After our rate increase, or after the proposed rate increase, it would change to 7535.
- The average for single-family residential usage is about 3.5 units.
- But really we see anywhere between three and five being pretty standard bills for a single family residential
- home. I also wanted to take a look at where our rates, where our proposed rates will put us in comparison
- to cities and towns in Indiana with over 25,000 people population.
- So our combined water and sewer rate is currently 24th out of these 39 cities and towns. The proposed
- changes to water will only take us up to potentially 23. You may note in this slide, apologies if it's
- hard to see, but every city or town that has a two next to it in parentheses, that means that there
- is a proposed rate change for that city or town in the future. So this may shuffle and will likely shuffle
- again lower in this list. Here's that same list, but now we're just looking at our water rate.
- So our water rate right now puts us at 30th of 39, so we're in the lower third. This potential rate
- increase for water will keep us still in that lower half of rates in the state of Indiana. All right,
- and now I'm gonna take a moment to look at some of our capital improvement
- plan projects. So I think one of the questions people ask is how much, and then the second question
- they're going to ask is what are you going to use it for? So I'd like to present some of the projects
- that we are planning to use these additional funds for. So first I'll start with water treatment plant
- projects. In total, we're planning on spending $30.7 million in projects just at our water treatment plant.
- These projects include electrical upgrades. These electrical upgrades will update our obsolete systems,
- increase resiliency and provide enhanced cybersecurity at our plants. We also have a project to rehabilitate
- our sedimentation basins. What this is and what this does is will restore critical water clarification
- equipment. This is gonna improve the efficiency of our early treatment processes.
- This project will enhance CB's ability to remove organic and inorganic materials from the raw water
- drawn from Lake Monroe, helping us to address seasonal taste and odor issues. We'll also do some chemical
- building improvements and feed line replacement. This addresses treatment reliability and staff safety,
- along with restoring a safe and sustainable fluoride system.
- We also have a project that will do high service pump rebuilds and variable frequency drives or VFDs.
- Our high service pump rebuilds will provide redundancy and increase resiliency in our treatment processes.
- The addition of these VFDs will help prevent service interruptions by preventing wear on the pipes at
- the plant and throughout our system. Essentially how that works is instead of an on-off, it's variable and so
- it's easier on our pipes. Additional water treatment plant projects include a maintenance project.
- So this has miscellaneous maintenance projects, but it's a combination of multiple maintenance projects,
- including the completion of an asset management system that will allow for our improved maintenance
- assessment and replacement practices. This is gonna improve the longevity of our equipment.
- We also have treatment plant water handling and delivery updates. What this does is it's gonna improve
- the air quality monitoring to improve our worker safety. We'll see maintenance to address leaks in the
- pipe gallery. There is also a replacement of a backwash header valve actuator. This will also provide
- funds for items required tank inspections and maintenance.
- And really a lot of this is about just maintaining, you know, a lot of this is repairs, a lot of this
- is replacement, but if we don't have our funds for maintenance, you know, what are we doing?
- So the last two projects here for water treatment.
- at our water treatment plant. There's a bypass pumping improvement project. What this will do is increase
- our resiliency by adding another way to withdraw from the lake should our main intake tower suffer a
- severe failure. So this ensures continued water production. And then we have our residuals project.
- This will increase generally the efficiency and consistency of our filter processes, helping us to maintain
- water quality in
- reliable treatment capacity. Next, we have projects that we are planning on doing in our distribution system.
- These projects total $34.4 million and are in two main categories. The first category is our booster
- stations and our storage tanks. We're gonna do rehabilitations and upgrades there. In addition to these
- rehabilitations and upgrades, we're going to
- at emergency generators that will improve our preparedness and reliability during natural disasters,
- electrical grid issues, or other emergencies. Our second category is water main projects, maintenance,
- testing, and replacement. Essentially, this is just to improve and maintain our ability to replace our
- water mains, repair water mains, and
- do our hydrant maintenance and testing. And then finally, we have $18.7 million, which is the water
- funding portion for the proposed Winston Thomas Service Center. I think at multiple presentations this
- year and the past year, I have discussed the fact that we are outgrowing our current facilities.
- We are outgrowing them in regards to personnel, equipment, and adequate inventory storage. This will
- be a purpose-built service center to improve logistics for field crews, allowing faster deployment and
- better emergency response. It also allows for stronger protections of our capital assets, such as our
- specialized service vehicles, which are currently being stored in the elements.
- Building our service center that meets the utility's needs moving forward is an investment that will
- save our resources over time. By investing now, CBU is setting up for operational excellence,
- fiscal responsibility, and community resilience. And that is
- at the end of my presentation, so I'm happy to take additional questions. Again, we have our capital
- projects engineer here. If you have questions about capital projects, our assistant director of finance,
- Matt Havy. Happy to take any questions. I have a question about the slide that showed your bill.
- Three units of water, but two units of sewer.
- Yeah, so. Summer that they don't get charged for wastewater for that. Question about the capital improvement
- plan. At the current rate. Water main replacement
- How long would it take to replace the entire system? Or do you need to take advantage of those terms?
- That's a great question. I don't have a great answer for that. But I will say that our current water
- main replacement rate is not as high as we'd like it to be due to a lack of funding. And so I think
- it would take a very, very long time. Mark, you agree? A very long time.
- There are pipe systems out there that are 80, 90 years old that we're working to replace. But there's
- a certain limit on how much work you can actually do, right? So even with unlimited funding,
- there's just the physical challenge of, I mean, to complain that you were digging up the entire city.
- So the $19.8 million, if you
- realistically factoring in the limitations on how much could feasibly be done, what would be your desired
- amount of funding in a year to get us back on pace where we have some prospect of sort of getting on top of
- We analyze, we take different criteria, analyze the materials of the pipes, the age of the pipes,
- the frequency that the pipes in certain areas have had main breaks. And so we try and analyze.
- It's not always just the latest or the oldest pipe that gets replaced. It's a pipe that we've analyzed
- to figure out this is a likely
- spot for a main break. Exactly what that amount is, you know, there are limitations, just a number of
- employees and the amount of work that can get done in a year. Jennifer, you have it in front of you, yeah.
- So in the revenue requirements of that $7.1 million that we're building into annual extensions
- and replacements, in the later, in the beginning years, we are dividing some of those water main projects
- up between bond financing and
- revenue, but in the later years, we're trying to build it to about $5 million per year for water main
- projects. So $5 million out of the $7.1 million of annual extensions or replacements. That's the target
- we believe we need to accommodate a replacement that keeps us not going into infrastructure debt,
- just right at that line. Where did we come up? How did we determine that now?
- I came up with that number as we look at the total overall five year plan and what I try to do is pick
- out the items that are very costly. There are over $7 million. I'm trying to get to an average of $7
- million funding. It happens to work out that the water main projects ends up being the item that we're
- trying to build to in the later years. We'll be funding a lot of the big projects at the water treatment
- plant, the service center. Those million dollar projects will be funded through bonds
- Cause we have to spend that down, but we're trying to build up the 7.1 million and the water main projects.
- It happens to be the area that we're trying to build it up into as well. Yes. This is a five year plan
- starting 2025 going to 2029.
- but obviously the rates are not in place here in 2025. And so a lot of, yeah. So if the target's 5 million,
- then we're however many million short per year, and we're continuing to be, to increase in working debt.
- Correct. So in the first few couple of years, we've put about 3 million of that into the bond financing
- to get you started. And then we're trying to, and do other big projects
- But that is the part where we were trying to play between how much is funded ongoing through revenue
- each year and how much is being funded through the bonds. So for the next great increase in four years,
- it would be great to know exactly what we need, not exactly your best estimate of what we need to not
- to not go any further.
- Yes, absolutely. And I also think, you know, going back to what Mark said about how we
- have been doing more and more analysis on the pipes so that we can have a more strategic approach to
- how we're doing main replacement instead of just saying, hey, this is really old. Let's replace it.
- Maybe this really old pipe has never had a main break. It was made out of an excellent material.
- And it's been reliable. In a stable area. In a stable area. And so as we use
- do this analysis we're actually creating you know a criticality scale and we're trying to knock those
- ones that are at that top of that criticality scale we're trying to get those first and you know once
- we actually are able to have more funds in our water main replacement we'll be able to see how much
- we can do both in-house with our crews but also how much we will be able to contract out as well.
- Glad we're thinking that way and planning that way. Thank you. Any other thoughts, questions? So within
- the next two weeks, will we be receiving additional information about
- the cost of services study, will we have access to these briefings? Okay. I got a question for Danica.
- If you're still there, Danica. I sure am. Or your cohort. So if we can go back to the slide that had the
- the rates by customer class. It's the one right after that percentage-wise revenue increase by customer class.
- The first time we show the rates. Yeah, that's fine. So looking at this, like our wholesale cost to provide,
- well, our rate for wholesale in Indiana University Master is really, really similar, right? Right about
- $3 per 1,000 gallons.
- So if that cost were correct, we would say that it costs about the same to provide a wholesale customer
- a water as it does Indiana master meter. And the increases are ballpark pretty close, right? One's 50%
- and the other's short of 60%.
- So knowing that the plant's the plant and that the 36 inch mains coming in, that's all fixed.
- Nothing differs there. Are the costs then attributable solely to the distribution system and pipes and
- any pumps that provide those customers? Is that how we come up with the costs? I don't know much about how that
- the service study is conducted. Sure, yes. You're talking about the differences in wholesale and IEU
- as far as the cost goes, the cost allocation? Yeah, any customers. I mean, generally, but I'm interested
- in those two because they're so close together, or were. They must have been, it was decided that they were
- It was the same cost basically, the same amount of infrastructure in the ground to provide them that water.
- And now it's just slightly different, but still very, very similar. Yeah, well, I think as Andy mentioned
- earlier, this is a snapshot in time, right? And so when you see those rates similar, it's based on the
- demand data that we discovered through the
- AMI analysis and how those costs get distributed based on the way that they use the system. So at this
- point in time, for this test year specifically, what we would say is that, you know, based on the findings
- from the AMI that those two customer costs behave in a similar manner. You know, after that, too, Danica,
- if it goes to the question, is that, you know, for the interconnection points in the nature of the distribution,
- slash transmission system that's being used, you know, there is consideration and recognition that wholesale
- customers have limited points of interconnection as does Indiana University Master Meter customers.
- And they time more in at the transmission system because they have their own distribution networks, you know,
- whether they're wholesale customers, you know, and or additional on, you know, on property distribution
- systems like in the case of Indiana University. So those are the
- The two big drivers are just the peaking characteristics that they each have as evidence in the ANI data,
- then the nature of the types of costs that are included based upon their service characteristics,
- how they tie into the system. Those are the two big drivers for the rates for Indian University and
- wholesale as compared to the other customer classes. Yeah. Thank you. I got a lot to learn on this.
- I'm looking forward to seeing the study. Thank you.
- Questions or comments? I see one formulating. Yeah. Traditionally, this time of year, the water starts
- tasting really bad and smelling really funky. How are things looking this year from a CPU's point of view?
- How are things looking? We have had some elevated readings of Geosmin and MIB. Those are responsible
- for taste and odor. We've switched over to our coconut-based carbon, and so we're hoping that we can
- mitigate it with that. Also, the
- Lower temperatures that we're seeing now and all the rain that we've gotten, I'm hoping will also help
- to mitigate that because typically you see that after longer periods of drought and high temperatures.
- So our shields have been engaged. Yes, our shields have been engaged. It seemed like about three weeks
- ago we had a little bit of taste issue and then it was gone. Did anyone else experience this?
- When did we implement the switch over to coconut? I believe that was today. Oh, OK. Yeah. Right, Hector? Yep.
- Are there any questions on Zoom or anyone on Zoom? Okay. Okay, well, hearing none, everyone have a lovely
- three day weekend. Thank you.