2014 progressreport
epCor water serviCes inC.2012-2016 perFormanCe based regulation may 2015
EPCOR Water 2014 PBR Prog
1 EXECU
NET 1.1 CAPI1.2 OPE1.3 RATE1.4 NON1.5
2 PBR FR
ELEM2.1 RISK2.2
3 2014 P
CON3.1 FINA3.2
3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6
CAPI3.3 3.3.1 3.3.2
RATE3.4 WAT3.5
3.5.1 3.5.2 3.5.3
PBR3.6 3.6.1 3.6.2 3.6.3 3.6.4 3.6.5
4 2014 P
CON4.1 FINA4.2
4.2.1 4.2.2 4.2.3 4.2.4 4.2.5
CAPI4.3 RATE4.4 WAS4.5
4.5.1 4.5.2 4.5.3
Services gress Report
TIVE SUMMAR
INCOME AND RETITAL EXPENDITURRATIONAL PERFOES AND BILL COMN‐ROUTINE ADJUS
RAMEWORK ...
MENTS OF PBR ...KS AND INCENTIVE
PBR RESULTS ‐
NSUMPTION AND CANCIAL PERFORMA
Net Income Revenue ‐ InOperating COperating CDepreciationInterest Exp
ITAL EXPENDITURCity‐Driven COther Capita
E BASE AND RETUTER RATES AND B
In‐City WateWater Rate Water Bill Co
R OPERATING PERSystem ReliaWater QualiCustomer SeEnvironmenSafety Index
PBR RESULTS ‐
NSUMPTION AND CANCIAL PERFORMA
Net income Revenue .....Operating CDepreciationInterest Exp
ITAL EXPENDITURE BASE AND RETUSTEWATER TREAT
WastewaterWastewaterWastewater
RY ..................
TURN ON EQUITYES ...................RMANCE ...........
MPARISONS .........STMENTS ...........
......................
.......................S .....................
IN‐CITY WATE
CUSTOMER COUNANCE ................and Return onn‐City Water ...Costs ................Costs by Operatn Expense .......ense and Cost ES ...................Capital Projectal Projects ......URN ON EQUITY ..BILL COMPARISONer Rates ..........Structure by Comparisons toRFORMANCE MEAability Index ....ity Index .........ervice Index ....t Index ...........x ......................
WASTEWATER
CUSTOMER COUNANCE ................and Return on.......................Costs ................n Expense .......ense and Cost ES ...................URN ON EQUITY ..MENT RATES ANDr Treatment Rar Treatment Rar Bill Compariso
Tabl
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ER ..................
NTS ‐ IN‐CITY WA.......................n Equity ‐ In‐Cit..............................................tional Function.......................of Debt ..................................ts ...................................................................S ............................................
Customer Class Other Commu
ASURES .................................................................................................................................
R ...................
NT ........................................... Equity .................................................................................of Debt .........................................................D BILL COMPARISOates .................ate Structure bons to Other C
le of Conten
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ATER ........................................ty Water ..........................................................n ..........................................................................................................................................................................................................................................unities .............................................................................................................................................................
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May 2015
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EPCOR Water 2014 PBR Prog
WAS4.6 4.6.1 4.6.2 4.6.3 4.6.4 4.6.5
5 FUTUR
FINA5.1 5.1.1 5.1.2 5.1.3 5.1.4
CON5.2 ENV5.3 PRO5.4
5.4.1 5.4.2
APPENDIX A
APPENDIX AAPPENDIX A
APPENDIX B
APPENDIX BB‐1‐1: B‐1‐2: B‐1‐3:
APPENDIX BB‐2‐1: B‐2‐2: B‐2‐3:
APPENDIX C
APPENDIX CAPPENDIX C
APPENDIX D
APPENDIX DD‐1‐1: D‐1‐2:
APPENDIX DD‐2‐1 CD‐2‐2:
APPENDIX E:
APPENDIX EAPPENDIX E
Services gress Report
STEWATER PBR PSystem ReliaWastewaterCustomer SeEnvironmenSafety Index
RE PLANS AND
ANCIAL CHALLENGHigher than Non‐RoutineDeclining ReCost of Servi
NSERVATION INITIAIRONMENTAL INITVINCIAL AND FEDWater ........Wastewater
: HISTORICAL
A‐1: HISTORICAL A‐2: HISTORICAL
: HISTORICAL S
B‐1: FINANCIAL PNet Income anRevenue ‐ In‐COperating CosB‐2: FINANCIAL PNet Income anRevenue ‐ WaOperating Cos
: AFFILIATE TR
C‐1: AFFILIATE TRC‐2: AFFILIATE TR
: WATER AND
D‐1: WATER RAT Consumption Fixed MonthlyD‐2: WASTEWATEConsumption a Overstrength
: OPERATING P
E‐1: WATER SYSTE‐2: WASTEWAT
PERFORMANCE Mability Index ....r Quality Indexervice Index ....tal Index.........x ......................
CHALLENGES .
GES AND INITIATIVForecast Capie Adjustments fesidential Consice Study UpdaATIVES ..............TIATIVES ............ERAL GOVERNME.......................r ......................
CONSUMPTIO
CONSUMPTION ‐CONSUMPTION ‐
SUMMARY OF
PERFORMANCE – nd Return on ECity Water ......sts ‐ In‐City WaPERFORMANCE ‐ Wnd Return on Eastewater ........sts ‐ Wastewat
RANSACTIONS
RANSACTIONS SURANSACTIONS SU
D WASTEWATE
ES ...................Rates ‐ Water y Service ChargER TREATMENT Rand Fixed Montand Additiona
PERFORMANC
TEM SERVICE QUAER TREATMENT S
MEASURES ..................................x ............................................................................................
.....................
VES ...................tal Expenditurefor 2015 and Fsumption .........ate .................................................................ENT INITIATIVES .................................................
ON .................
‐ IN‐CITY WATER‐ WASTEWATER ..
F FINANCIAL PE
IN‐CITY WATER .Equity ‐ In‐City .......................ater .................WASTEWATER ....Equity ‐ Wastew.......................ter ...................
.....................
MMARY ‐ IN‐CITYMMARY ‐ WASTE
ER TREATMEN
.......................
.......................ges ‐ Water .....RATES ................thly Service Chal Overstrength
CE MEASURES .
ALITY MEASURESERVICE QUALITY
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.......................es ....................Future Years .........................................................................................................................................................................
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ERFORMANCE
.......................Water ....................................................................................water ..............................................................
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Y WATER ..........EWATER ............
NT RATES ........
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EPCOR Water 2014 PBR Prog
1 ExeThis reportfor water Services In31, 2014. Bylaw 158Performan
Net1.1
In the cuconsumptito control continued Administrahave also bissues and savings haWastewate12.6%, 2.4ahead of fmillion and
Net
1 2014 2 Rev3 Op4 Dep5 Inte 6 Net7 Ret8 2012‐9 Rev10 Op11 Dep12 Inte13 Net14 Ret
Services gress Report
ecutive t provides anservices anc. (“EWSI”) These servi816, the EPnce Based Re
t Income
rrent PBR ton (see Sectcosts. Theimpacts of Eation and Wbeen much lhigher thanve more thaer earned c4% greater tforecast, wid combined
Income and
venue erating costs preciation erest t Income turn on Equit‐2014 venue erating costs preciation erest t Income turn on Equit
Summn annual upd wastewatfor the yearces, referredPCOR Wateegulation (“P
and Retu
term, EWSItions 3.1 andese efforts EPCOR’s 201
Water Adminilower than fn forecast lean offset lowcombined nethan the PBth In‐City Wreturn on eq
Return on Eq
ty ‐ %
ty ‐ %
ary date to the ter treatmenr ended Deced to as “In‐Cer Services PBR”) for the
urn on Eq
has facedd 4.1). In rehave result13 corporateistration cosforecast, becvels of capitwer than foet income oR forecast (Water and Wquity of 10.5
In‐City WaNet Income
quity
1 of 59
City of Edmont services ember 31, 2City Water” and Waste
ese services
uity
a steeper esponse to thted in signife reorganizasts (see Sectcause of histtalized interrecast revenof $51.8 milsee Table 1Wastewater 5%, 1.0% gre
Table 1.1ater and Wae and Return($ millions)
A
In‐City Wate
172.8 (90.4) (20.0) (22.3) 40.1
13.3%
484.9 (267.9) (56.2) (62.7) 98.1
11.3%
onton on thprovided w2014 and forand “Wasteewater Treaover a five y
than antichis decline, ficant cost ation have retions 3.2.3 atorically lowest (see Secnues. As a llion, yieldin1.1). Financgenerating
eater than fo
astewater n on Equity
BActua
er Wastew
72. (44. (9. (7. 11.
10.
200 (124 (26 (21 27
8.
e operationithin Edmonr the three yewater”, areatment Bylayear term fro
cipated decEWSI has msavings in tesulted in reand 4.2.3). w interest ratctions 3.2.5 aresult, in 20ng combineial results focombined
orecast.
al water Com
6 244) (15) (20) (27 56% 1
0.1 64.9) (3.6) (8.4) (8.2 12.4% 1
al and finannton by EPCyears ended e provided paw, which om 2012 to
line in per ade substantwo areas. eductions in Second, intetes on 2012‐and 4.2.5). 014, In‐City d return onor 2012‐201net income
C PB
mbined C
45.4 34.8) 29.5) 29.3) 51.8 12.6%
85.0 92.8) 82.8) 84.1) 25.3 10.5%
May 2015
cial results COR Water December
pursuant to prescribes 2016.
customer ntial efforts First, the Corporate erest costs ‐2014 debt These cost Water and n equity of 14 are also of $125.3
D R Forecast
Combined
252.0 (144.9) (29.8) (34.1) 43.2 10.2%
713.8 (420.9) (84.1) (94.0) 114.8 9.5%
EPCOR Water 2014 PBR Prog
Cap1.2
In‐City Waforecast an
C
1 In‐City2 Waste3 Total C
As part of expenditurindividual delayed, ocapital promeet City forecast ca In 2014 anchanges tHypochloriexpenditurSouth‐East Over the 2PBR forecaexpenditurprojects ($ For Wastewdevelopmethat the coforecast. Acapital expfacility. Threplacemeresulted iexpenditurwithin $1.2
Services gress Report
pital Expe
ter and Wasnd $343.8 m
Capital Expen
y Water ewater Capital Expen
its PBR appres at the beprojects an
or changed. ograms to adrequiremenapital expend
nd for 2012o the timinite Generatres on City‐dt LRT extensi
2012‐2016 Past by $38.3res needed $21.8 million
water, higheent of Wastost of manyAccordingly,penditures ihe purpose nts needed n higher thres in 2012‐2 million of t
enditures
stewater’s cillion, or 6.8
nditures
nditures
lication, EWeginning of nd in aggreg As well, inddress the cnts. Accordiditures.
2‐2014, In‐Cng of expetor and thedriven projeion (see Sect
BR term, EW3 million (9.to accommo), and increa
er than foretewater’s cay projects in, EWSI delayn 2012 andof this revieto ensure phan forecas2013 and brthe 2012‐20
capital expen8% greater th
Capit
A
Actu 99. 37.137.
WSI provides each term. gate, will din some circchallenges ofingly, over t
City Water’senditures one Rossdale ects, primartion 3.3).
WSI projects6%). This iodate city gases in the c
cast capital apital progran Wastewateyed or defer 2013, whilew was to aplant reliabist capital eringing Was14 PBR forec
2 of 59
nditures werhan forecast
Table 1.2tal Expendit($ millions)
B 2014
al PBR
Forecast3 73.6 7 22.7 0 96.3
the City of Over the PBiffer from tumstances, f aging infrathe PBR ter
higher than significanLaboratory ily water m
that In‐Cityncrease is pgrowth and cost of the Ro
expendituream. In 2012er’s capital rred capital se it conducassess asset lity. The imexpendituretewater’s cucast (see Sec
re $137.0 mt for 2012‐20
tures
C 2012
t
Actual 269.2 74.6 343.8
Edmonton wBR term, acthe PBR forprojects wi
astructure, tm, differenc
n forecast nt projects, Building, aain relocatio
y Water’s caprimarily attto eliminateossdale Labo
es in 2014 r2, preliminaprogram wospending, cocted a compcondition a
mplementatios in 2014, umulative caction 4.3).
million in 201014 (see Tab
D 2‐2014
PBR Forecast 248.5 73.4 321.9
with a five ytual capital ecasts as pill be addedo better resces will aris
capital expeincluding t
as well as ons needed
pital expendtributable toe conflicts woratory Build
reflect the reary engineerould be signontributing tprehensive rand identify on of the reoffsetting
apital expen
14, 42.6% grble 1.2).
E 2012‐2
Current Projection 439.2 159.6 598.8
year forecastexpenditurerojects are d to or remspond to groe between
enditures rethe Rossdahigher tha to accomm
ditures will eo higher thawith City of ding ($13.8
e‐prioritizatiring analysisnificantly grto lower thareview of itsrepairs, upgevised capitalower than
nditures for
May 2015
reater than
F 2016
PBR Forecast 400.9 111.7 512.6
t of capital es, both on advanced, oved from owth, or to actual and
eflect both le Sodium n forecast modate the
exceed the an forecast Edmonton million).
ion and re‐s indicated eater than an forecast s Gold Bar grades and al program n forecast 2012‐2014
EPCOR Water 2014 PBR Prog
Over the 2forecast byasset condplant mainlevels of ca
Ope1.3
In‐City Waindices prperformanwith 100 bBonus poindoes not m In 2014, bperformanpoints.
P
1 Syste2 Wate3 Custo4 Enviro5 Safety6 Aggre
In 2014, InSection 3.6highlights Appendix E
Services gress Report
2012‐2016 Py $47.9 milldition assessntained. Basapital spend
erational
ater and Waescribed innce measurebase points ants are availameet the 100
both In‐City nce standard
erformance M
m Reliability r Quality Indeomer Service onmental Indy Index egate Points E
n‐City Water6 provides dof In‐City WE‐1 summari
PBR term, Wlion (42.9%)sment can bsed on the ring will also
Perform
astewater’s Schedule es. Performavailable if table for perf0 base point
Water (Tads, allowing
Wa
Measure Inde
Index ex Index dex
Earned (sum
r exceeded tetailed discuWater’s opeizes In‐City W
Wastewater’, so that thbe fully addresults of thbe required
ance
operational 3 of Bylawance under the standardformance abstandard.
ble 1.3‐1) aIn‐City Wat
2014 Perater System
ex ‐ In‐City W
of all indices
target perfoussions of therational peWater’s ope
3 of 59
’s capital exhe challengedressed and e asset condd in the next
performanw 15816 wieach index
ds for all fivebove standa
and Wastewter to earn
Table 1.3‐1rformance MService Qua
Water S
s)
rmance stanhe performaerformance, rational perf
xpenditures es of an agin the reliabidition asses2017‐2021
ce are eachith each in is measuree performanrds and fina
water (Table107.2 point
Measures ality Standa
A Index
Standard Points
25.0 25.0 20.0 15.0 15.0 100.0
ndards for aance measuras well as formance ov
are expecteng infrastruclity of the wsment, EWSPBR term (s
h measured ndex consisted independnce measureancial penalt
e 1.3‐2) excts and Wast
rds B
Total Actual Points
M
30.2 25.1 21.1 16.5 16.0
108.9
ll five of theres making uplanned p
ver the curre
ed to exceecture identiwastewater SI anticipateee Section 5
by the resuting of onedently on a pe indices areties are appl
ceeded PBR tewater to e
C Maximum Available Points
28.5 25.523.016.516.5
110.0
e performanup each of trocess imprent PBR term
May 2015
ed the PBR fied in the treatment s that high 5.1.1).
ults of five e or more point basis e achieved. ied if EWSI
operating earn 110.0
D Total Points Earned
28.525.121.116.516.0
107.2
nce indices. the indices, rovements. m.
EPCOR Water 2014 PBR Prog
In 2014, WThese indiup each inperformanperformanoperationa
Rat1.4
In accordaadjustmen2014 PBR fto water coa 5.8% rebAfter applmonthly coresidentialwas $14.21 EWSI undethat the Ccomparisocommunitithe customcomparisocompetitivsurvey.
P
1 System2 Waste3 Custo4 Enviro5 Safety6 Aggre
Services gress Report
Wastewater ces are simindex tailorence measurence, as well al performan
es and Bi
nce with Bylt plus speciaforecast rateonsumptionbasing adjusying these onsumption customer’s1 in 2014, co
ertakes annuity’s water ans were baies in the Edmer and inclns (see Secve and, in m
Performance
m Reliability Iewater Qualitmer Service Ionmental Indey Index gate Points E
Wastew
exceeded thilar to thosed to wastewes making as planned
nce over the
ill Compa
law 15816, Sal rate adjuse of 2.0% (sen rates for thtment for wadjustments of 16.2 m3
wastewateompared to $
ual bill compand wastewased on surdmonton meude fixed chctions 3.5.3 most cases lo
Measure Ind
ndex ty Index ndex ex
Earned (sum o
2014 Perwater Treatm
he performae of In‐City Wwater treatmup each od process im current PBR
arisons
Schedule 3, Sstments. In 2ee Section 3he Acceleratwastewater ts, the avera, was $37.2r treatment$13.19 in 20
parison survwater treatmrveys of Caetropolitan harges, consand 4.5.3)
ower, than r
ex ‐ Wastewa
of all indices)
4 of 59
Table 1.3‐2rformance Mment Service
ance standarWater with tment. Sectof the indicmprovementR term.
Section 1.0, 2014, the PB3.5.1). Spected Water Mtreatment fiage resident0 in 2014 ct bill, based 013.
veys with vaent rates aralgary, Vancarea. Theseumption chashow that rates in the
ater S
)
Measures es Quality St
rds for all fithe individution 4.6 proces, highlights. Append
rate increasBR inflation ial rate adju
Main Renewaixed and vartial customeompared toon average
arious cities re reasonabcouver and e comparisoarges, plus awater and communitie
A Index
Standard Points 15.0 40.0 5.0
20.0 20.0
100.0
tandards
ive performual performaovides detaihts of Wasdix E‐2 sum
ses are limitadjustment ustments incal program (riable charger’s water bo $36.20 in monthly co
and local cle and compWinnipeg,
ons are baseany applicabwastewatees included
B Total Actual Points
16.9 80.3 5.1
22.0 23.0
147.3
ance measuance measurled discussiotewater’s omarizes Wa
ed to the PBwas 1.9%, ccluded a 1.1(see Section ges (see Sectbill, based o2013 and thonsumption
ommunitiespetitive. Inas well as ed on the toble surchargr treatmentin the bill c
C MaximumAvailable Points 16.0 44.0 5.0
22.0 23.0
110.0
May 2015
ure indices. res making ons of the operational astewater’s
BR inflation close to the % increase 3.5.1) and tion 4.5.1). on average he average of 15.5 m3
s to ensure n 2014, bill four local
otal cost to ges. These t rates are comparison
D Total Points Earned 16.0 44.0 5.0
22.0 23.0
110.0
EPCOR Water 2014 PBR Prog
Non1.5
Under the non‐routinwhich are non‐routinimpact of t In review criteria outor wastew
Services gress Report
n‐Routine
PBR framewne adjustmenunusual, signe adjustmenthe non‐rout
of its 2014 tlined in Bylater treatme
e Adjustm
work, EWSI mnts from thenificant in sints are provtine adjustm
operations,aw 15816, Sent rates.
ments
may requeste City. Non‐rize or naturevided either ment on In‐C
, EWSI did Schedule 3,
5 of 59
adjustmentroutine adjue and beyonto the City Mity Water an
not identifySection 5.0
ts to In‐Cityustments ared the scopeManager or nd Wastewa
y any non‐rothat would
Water and We defined in of control oto City Couter’s revenu
outine adjueither incre
WastewaterBylaw 15816of EWSI”. Rencil, dependue requireme
stments thaease or decre
May 2015
r’s rates for 6 as “items equests for ding on the ents.
at met the ease water
EPCOR Water 2014 PBR Prog
2 PBRPBR is a mto inflatiomeasures decisions pframeworkpredictable
Elem2.1
• PBR RincrearebasiWateron a CIndex (CANSAnnua
EWSI aensureEWSI’sSectio
• PerforassurasacrificEWSI’sauditefor im
• Returncosts a
Risk2.2
The PBR frcost savingassumes tcosts, ensuEWSI’s stra • Water
fluctua
Services gress Report
R Framethod of can less an and return oprovide a bak encouragee rates, whil
ments of
Rates. Undses are limitng and for tr and WasteConsumer PrcomponentIM series Val Growth in
also undertae that the Cs customer ns 3.5 and 4
rmance Meaance to custced to keep s performaned performaprovements
n on Equity.and earn a fa
ks and Inc
ramework prgs through he risks assuring that cuategies to m
Consumptiotions in wat
ework lculating andefficiency fon equity. Talance betwes EWSI toe safeguard
PBR
er the PBR ted to inflatthe Accelerawater Treatice Index cois measure41694625) aAverage Ho
akes annual City’s water classes, rat
4.5.
asures. EWomers that rates low.
nce measurence measurs are shown
The regulaair return on
centives
rovides inceprocess imsociated witustomers areitigate them
on Risk. Unter consump
d setting utifactor. EWThis framewween operatio be more ing system r
frameworktion, less a 0ated Water tment Bylawmponent aned by Statistand the Laburly Earning
bill comparand wastew
te structure
WSI’s PBR frwater and wEWSI faces es are audite results, toin Section 3.
ted rates fon its investm
ntives for EWprovementsth water coe provided wm include:
nder PBR, EWption and w
6 of 59
lity rates usWSI’s PBR frwork is desigonal perforefficient,
reliability an
k for 2012‐20.25% efficieMain Renew
w defines infnd 35% on a tics Canada’bour Cost cogs for Alberta
ison surveyswater treats and resul
ramework iwastewater financial peted annuallogether with.6 and 4.6.
r In‐City cusment.
WSI to imprs and othernsumption,with stable a
WSI bears alwater quality
ing a formuramework ened to ensumance, rateproviding rd service qu
2016, waterency factor,wal programflation as a w Labour Coss Annual Gromponent isa (CANSIM S
s with varioument rates lts of bill co
ncludes pertreatment nalties if pey by an indh EWSI’s com
tomers are
rove operatir means. Uoperating cnd predictab
l of the risksy, as well as
la that adjusencompasseure that capies and returatepayers wuality.
r and waste plus speciam. For PBRweighted avt componenrowth in Alls measured Series V1603
us cities andare reasonomparison
rformance csystem serverformance mdependent ammentary o
designed to
onal performUnder this fcosts, finanble rate incr
s associateds the longer
sts utility raes rates, peital and opern on equitywith fair, s
ewater treatal rate adjus purposes, tverage rate nt. The Cons Items CPI fby Statistic3533).
d local commable and cosurveys are
criteria whicvice quality wmeasures araccounting on highlights
allow EWSI
mance whileframework, cing costs aeases. Thes
d with weathr‐term risks
May 2015
te changes erformance erating cost y. The PBR stable and
tment rate tments for the EPCOR based 65% umer Price for Alberta s Canada’s
munities to ompetitive. e shown in
ch provide will not be re not met. firm. The s and areas
to recover
e achieving EWSI also and capital se risks and
her‐related associated
EPCOR Water Services 7 of 59 May 2015 2014 PBR Progress Report
with declining consumption per customer. While EWSI expects the impacts of short‐term weather‐related volatility to even out over the five year PBR term, longer term declines are of greater concern (see Section 5.1.3). In the current PBR term, per customer consumption has been significantly lower than forecast, resulting in substantial revenue shortfalls. Accordingly, EWSI is reviewing its forecasting process, so that its forecasts will more accurately capture long‐term trends in water consumption.
• Operating Cost Risk. EWSI actively works to minimize fluctuations in input prices through long‐
term power contracts, chemical optimization processes, and continuous efforts to implement cost reduction strategies in all areas of its operations.
• Interest Risk. Fluctuations in short‐term interest rates, long‐term debt issue costs and in the level
of capitalized interest have significant impacts on EWSI’s net income and return on equity. EWSI mitigates interest risk through timing of long‐term debt issuances and optimizing working capital, so that short‐term debt is utilized effectively, and, where practicable, advancing or delaying capital projects.
• Capital Cost Risk. In‐City Water and Wastewater’s operations are capital intensive. Over the 2012‐
2014 period, EWSI has found that construction costs have increased at rates in excess of PBR inflation, that a much higher than forecast level of capital replacements are required at the Gold Bar Wastewater Treatment Plant to maintain plant reliability, and that City‐driven LRT water main relocates are also much greater than forecast. EWSI seeks to minimize these risks through comprehensive capital project and asset management programs, ensuring that new projects or changes to existing projects are justified and that there is an appropriate level of management, senior management and executive oversight over capital spending.
EPCOR Water 2014 PBR Prog
3 201 Con3.1
In 2014, al2.3% less tin the Resdifferences
1 Annu2 Res3 Mu4 Com5 Tot 6 Aver7 Res8 Mu9 Com10 Tot 11 Mon12 Res13 Mu14 Com
EWSI, like per customplacing greuse water promote wincreased term, the lower thanPBR term, for the rem
Services gress Report
4 PBR nsumptio
though custthan forecassidential cus in Commer
Custo
ual Consumptsidential ulti‐Residentiammercial tal
age Monthlysidential ulti‐Residentiammercial tal
thly Consumsidential ulti‐Residentiammercial
many othermer. At the seater demanefficiently awater conseuse of wateresulting den forecast rethe trend to
mainder of th
Resultsn and Cu
tomer countst (2.9% lessstomer clasrcial consum
omer Class
tion ‐ ML
al
Customer Co
al
ption per Cus
al
r water utilisame time, Ends on EWSInd has implervation. Rer‐efficient aecline in conevenues. Wowards declhe 2012‐201
s - In-Cstomer C
ts were esse for 2012‐20ss; differencmption.
InConsumptand Consu
ount
stomer ‐ m3
ities, is expeEdmonton’s ’s raw wateemented incesidential cappliances ansumption phile EWSI islining reside16 PBR term
8 of 59
City WatCounts ‐ I
ntially equa014). As Taces in Mult
Table 3.1n‐City Watetion, Customumption per
A
Actua
44,8 17,6 28,5 91,1
232,1 3,5 18,0253,7
16 418 132
eriencing a loverall grow
er supply. Aclining rate scustomers hand by reducer customer developingential consumand beyond
ter n‐City W
l to the PBRble 3.1 showti‐Residentia
er mer Counts r Customer
2014
al PB
Fore
876 47696 16572 29144 93
194 232522 3014 18730 253
6.1 8.7 42.2 1
long‐term dwth has increAccordingly, structures inhave responcing seasonr has been gg enhanced fmption per d (see Sectio
Water
R forecast, wws, this diffeal consumpt
B
BR ecast A
7,236 16,708 9,301 3,245 2
2,130 223,465 8,221 13,816 24
17.0 401.8 134.0
decline in reeased the toEWSI encoun the resideded to theal water usgreater thanforecasting customer ison 5.1.3).
water consumerence is contion essenti
C 2012‐20
Actual
31,815 51,758 86,002 69,575
26,621 3,466 17,843 47,930
16.2 414.8 133.9
sidential cootal demandrages its cuntial customse incentivee. In the cun forecast, rprocesses fos expected t
May 2015
mption was ncentrated ially offset
D 014
PBR Forecast
140,681 50,253 86,822
277,756
228,160 3,439
17,997 249,596
17.1 405.9 134.0
nsumption d for water, stomers to mer class to es through urrent PBR resulting in or the next o continue
EPCOR Water 2014 PBR Prog
Fina3.2
In‐City Waderived froEWSI also with regionservice agr EWSI operprotectionexpense anthese experegional wapplicable
N3.2.1
In 2014, colower conmillion gre13.3%, 2.4return on enet incomperforman
Ne
1 Reve2 Oper3 Depr4 Inter5 Net I6 Equit7 Retu
Over 85% consumpticapital‐inte
Services gress Report
ancial Per
ter’s net incom the provprovides wanal water sereement.
rates a fully share facilnd depreciatenses, calculater service Table. Capi
et Income
ontrol of opesumption oeater than it% greater thequity for th
me and retunce in 2012 (
et Income an
enue rating costs reciation rest Income ty portion of urn on Equity
of EWSI’s won can varyensive utility
rformanc
come includvision of waater serviceervice comm
integrated lities and setion, are prelated in accocommissiontal expendit
e and Retu
erating costsn revenue, ts forecast nhan its approhe three yeaurn on equsee Append
nd Return on
rate base (%)
water revenuy significantlyy with relat
ce
es the reveter servicess to surroun
missions, and
water systeervices (theesented and ordance witns and the Ctures and rat
rn on Equi
s and lower enabling Innet incomeoved returnars ended 20uity in 201ix B‐1).
InNet Income
Equity
ues are deriy in any singtively high f
9 of 59
nues, opera within Edmnding commd fire protect
em where Ine “total systanalyzed onh a cost of sity of Edmonte base are p
ity ‐ In‐City
than forecan‐City Waterand provid on equity o014 are also3 and 201
Table 3.2.1n‐City Watee and Return($ millions)
A
Actua 172.8 (90.4 (20.0 (22.3 40.1302.0
13.3
ived from cogle year becfixed costs,
ting costs, dmonton’s bomunities undtion services
n‐City Watertem”). Then a total systservice modnton, is showpresented a
y Water
ast interest cr to earn ning In‐City Wof 10.875% (o ahead of fo4 off‐settin
er n on Equity
B2014
al PB
Fore8 174) (90) (203) (21 330 303% 10
onsumptioncause of weathere can b
depreciationundaries. Bder bulk wats to the City
r, regional werefore, opetem basis. Indel developewn as a sepand analyzed
costs offset tet income Water with (see Table 3orecast, witng lower th
B
BR ecast A5.9 47.5) (0.0) 5.1) 3.3 6.6 0.9%
n charges (seather impacbe substant
n and intereBesides thester supply ay of Edmonto
water serviceerating costn‐City Watered jointly byarate line ited on a similar
the negativeof $40.1 ma return on.2.1). Net inh higher thahan forecas
C 2012‐20
Actual 484.9 267.9) (56.2) (62.7) 98.1 n/a 11.7%
ee Table 3.2cts and sincetial fluctuati
May 2015
st expense se services, greements on under a
es and fire ts, interest r’s share of y EWSI, the em on each r basis.
e impact of illion, $6.8 n equity of ncome and an forecast st financial
D 014
PBR Forecast 503.4 (284.1) (56.0) (69.1) 94.2 n/a
10.9%
2.2). Since e EWSI is a ons in net
EPCOR Water 2014 PBR Prog
income anevaluated
Re3.2.2
In‐City Wamillion (3.7related to customersforecast fo
1 Consu2 Resi3 Mult4 Com5 Tota
6 Fixed 7 Resi8 Mult9 Com
10 Tota
11 Total Reven
12 Other13 Total
PBR inflatirevenue. Ito temporaEdmonton
Services gress Report
d return onover the ent
evenue ‐ I
ater’s revenu7%) less for lower than , was withinor 2012‐2014
Revenue by
umption Revedential ti‐Residential
mmercial al Consumpti
Charge Revedential ti‐Residential
mmercial al Fixed Charg
Consumptionnue r revenue Revenue ‐ In
on (see SectIn‐City Wateary services in 2014.
n equity fromtire PBR term
n‐City Wat
ues in 20142012‐2014.forecast con $0.2 millio4 (see Table
y Customer Cl
enue
l
ion Revenue
nue
l
ge Revenue
n and Fixed C
‐City Water
tion 3.5.1) wer also had sand water p
m year to yem, rather tha
ter
4 were $3.1 As in 2012onsumption; on of the PB3.2.2).
InRevenue
lass
Charge
was within 0slightly highpermits, bot
10 of 59
ear. Accordan any single
million (1.82 and 2013, fixed charg
BR forecast
Table 3.2.2n‐City Watee by Custom($ millions)
A
Actu
85 26 32144
20 0 2 23
168
4 172
0.25% of foreer than foreh of which r
dingly, returne year within
8%) less thalower than
ge revenue, for 2014 an
er mer Class
2014
ual P
For
5.4 6.1 2.6 4.1 1
0.1 0.9 2.9 3.9
8.0 17
4.8 2.8 17
ecast and, thecast Other reflect high v
n on equity n the term.
an in the PBforecast revwhich variend within $0
B
PBR recast A
91.1 24.9 32.6
148.6
19.9 0.9 2.9 23.7
72.3
3.6 75.9
herefore, harevenue in 2volumes of c
is more app
BR forecast venues weres with the 0.1 million o
C 2012‐20
Actual
238.5 72.8 93.1 404.4
56.9 2.6 8.3 67.8
472.2
12.7 484.9
ad minimal i2014, primaconstruction
May 2015
propriately
and $18.5 e primarily number of of the PBR
D 014
PBR Forecast
260.4 71.9 92.6 424.9
56.9 2.5 8.3 67.7
492.6
10.8 503.4
impacts on rily related n activity in
EPCOR Water 2014 PBR Prog
O3.2.3
3.2.3.1 OTotal systemillion (5.0were allocthe PBR foProtection2012‐2014to that of t
1 Salar2 Corp3 EWSI4 Custo5 Powe6 Chem7 Cont8 Mate9 Vehic
10 Othe11 Franc12 Total13 In‐Cit14 In‐Cit
Actual to fo
• Corpor
Lower reorgandecreaheadcophase staff trSharedareas, process
Services gress Report
Operating C
Operating Cem operatin0%) less for ated to In‐Corecast. The (4.6%). Th4, is consistethe regional
Cost
ries and beneorate AdminiI Shared Servomer billing er micals ractors erials and supcles er chise fees l System Opety Water Shaty Water Sha
orecast diffe
rate Adminis
than forecanization undse in the oount reductioof this reorgansferred fr Services, inusing a costs. The net c
Costs
Costs by Cg costs in 22012‐2014 City Water ce remaining e slight decent with the water custo
t Category
fits istration ices
pplies
erating Costs re (%) are ($)
erences for 2
stration ‐ $7
st Corporatedertaken in verall level ons and fromganization, rom EUI withn turn, provt allocation ost savings f
ost Catego2014 were $(see Table 3customers thcosts were crease in thedecline in I
omers.
TaOperating C
2014 and for
7.4 million le
e Administra2013. The of Corporatm the transfEWSI establh EWSI’s Finvides these sprocess thafrom the cor
11 of 59
ory $8.2 million 3.2.3.1‐1). Inhrough the callocated toe costs allocn‐City Wate
able 3.2.3.1‐Costs by Cos($ millions)
A
Actua 40. 13. 9. 8. 8. 5. 6. 3. 2. (0 13. 109.
82.890.
r 2012‐2014
ess than fore
ation costs first phase te Administfer of staff alished a Shanance and otservices to at parallels trporate reor
(7.0%) less n 2014, 82.8cost of servo regional wcated to In‐Cer’s proporti
‐1 st Category
B2014
al PB
Fore.1 4.1 2.5 .8 .2 .6 .1 .0 .2 .7) .3 1.2 118% 8.4 9
4 for the Tota
ecast, $12.8
are attributof this reortration costsnd functionared Servicether adminisIn‐City Watthe Corporarganization a
than the PB8% of total svice model, cwater customCity Water iion of water
B
BR ecast A45.5 20.5
‐ 9.3 7.3 7.2 6.0 3.3 2.1 2.4
13.8 17.4 3.0% 97.5
al System in
million less f
able to an Erganization ps charged tos from EUI ts business ustrative stafer and to Eate Adminisare summari
BR forecast system opercompared tmers (12.6%in 2014, as r consumpti
C 2012‐20
Actual 128.1 47.4 12.2 26.7 23.1 15.8 18.0 8.7 5.9 0.8 37.3 324.0 82.7% 267.9
clude:
for 2012‐201
EPCOR‐wideprovided a po EWSI, botto EWSI. In tunit, consoliff and functiWSI’s othertration costized in Table
May 2015
and $16.9 rating costs o 83.0% in %) and Fire well as for on relative
D 14 PBR
Forecast 131.6 60.2 ‐ 27.2 21.5 21.3 17.4 9.4 6.3 6.6 39.4 340.9 83.3% 284.1
14
e corporate permanent th through the second idating the ons. EWSI r operating t allocation e 3.2.3.1‐2:
EPCOR Water Services 12 of 59 May 2015 2014 PBR Progress Report
Table 3.2.3.1‐2 Corporate Reorganization Impacts
($ millions) A B Corporate Reorganization Impacts 2014 2012‐2014
1 Reduction in Corporate Administration costs (7.4) (12.8) 2 Reduction in Salaries and Benefits (5.0) (5.0) 3 Reduction in Other expenses (0.9) (2.7) 4 Reduction in Operating Costs (13.3) (20.5) 5 EWSI Shared Services cost allocation 9.5 12.2 6 Net cost savings (3.8) (8.3)
• Salaries and Benefits ‐ $5.4 million less than forecast, $3.5 million less for 2012‐2014.
In addition to the $5.0 million reduction in Salaries and Benefits from staff transferred to EWSI Shared Services in 2014, the net reduction in Salaries and Benefits also includes $1.0 million ($2.0 million for 2012‐2014) in net savings from various cost control initiatives. These savings were partially offset by additional incentive plan costs of $0.6 million ($3.5 million for 2012‐2014) as EWSI exceeded incentive plan targets for financial and operating performance.
• EWSI Shared Services ‐ $9.5 million greater than forecast, $12.2 million greater for 2012‐2014.
Charges from EWSI Shared Services are attributable to the corporate reorganization. To facilitate comparability with the PBR forecast, EWSI Shared Services are presented as a separate cost category in Table 3.2.3.1‐1.
• Chemicals ‐ $1.6 million less than forecast, $5.5 million less for 2012‐2014.
The decrease in chemical costs reflects savings from reduced chemical usage of $0.6 million in 2014 ($2.9 million for 2012‐2014) resulting from better than expected spring run‐off conditions and chemical optimization. As noted in 2013, in the PBR forecast, the costs of caustic soda and alum were based on a 0% dilution factor, instead of the normal dilution factor of 50%, resulting in lower annual costs of $0.8 million in each year of the 2012‐2016 PBR term. In June 2014, the use of the low dilution factor was reviewed with City Administration and it was determined that no further action would be required. The remainder of the actual to forecast variance in chemicals is related to lower than forecast chemical costs.
• Other ‐ $3.1 million lower than forecast, $5.8 million lower for 2012‐2014.
The $3.1 million decrease in Other operating costs is partly comprised of a $0.9 million ($2.7 million for 2012‐2014) reduction in Other costs which were transferred to EWSI Shared Services as part of the corporate reorganization (see Table 3.2.3.1‐2). Lower than forecast Other costs also reflect numerous small cost savings which, in aggregate, provide lower than forecast costs of $1.1 million ($0.1 million for 2012‐2014). The remainder of the decrease in Other costs results from higher than forecast capital overhead recoveries based on higher than forecast capitalized overhead costs of $1.1 million ($3.0 million for 2012‐2014) associated with higher levels of capital spending. EWSI accounts for capitalized overhead costs as a credit against Other expenses. The increase in the capitalized overhead credit, combined with cost reductions in the remaining expenses in the Other cost category, placed the Other cost category in a credit balance in 2014.
EPCOR Water Services 13 of 59 May 2015 2014 PBR Progress Report
• Franchise Fees ‐ $0.5 million less than forecast, ($2.1 million less for 2012‐2014).
Lower than forecast franchise fees in 2014 and in 2012‐2014 result from lower than forecast revenue.
• Actual to forecast differences in other cost categories are not significant, amounting to $0.3 million greater than forecast in 2014 ($0.6 million greater for 2012‐2014).
3.2.3.2 Operating Costs by Operational Function EWSI’s operating costs are analyzed on a functional basis, as well as a cost category basis. Actual and forecast total system operating costs by operational function are summarized in Table 3.2.3.2.
Table 3.2.3.2 Operating Costs by Operational Function
($ millions) A B C D
Operational Function 2014 2012‐2014
Actual PBR
Forecast Actual PBR
Forecast 1 Water Treatment Plants 30.8 33.1 89.1 96.4 2 Distribution and Transmission 23.9 22.7 67.6 65.8 3 Quality Assurance and Environment 4.5 5.0 13.7 14.5 4 Operations Support Services 4.7 8.8 19.8 26.6 5 Administrative Services 0.6 4.2 9.7 10.8 6 Customer billing 8.8 9.3 26.7 27.2 7 Corporate Administration 13.1 20.5 47.9 60.2 8 EWSI Shared Services 9.5 ‐ 12.2 ‐ 9 Franchise fees 13.3 13.8 37.3 39.4
10 Total System Operating Costs 109.2 117.4 324.0 340.9 Significant differences between 2014 actual and PBR forecast costs by Operational Function include: • Water Treatment Plants ‐ $2.3 million less than forecast, ($7.3 million less for 2012‐2014).
The variance for this function is primarily attributable to lower than forecast chemical costs of $1.6 million ($5.5 million for 2012‐2014). The remainder of the actual to forecast difference is made up of numerous small items, none of which are individually significant.
• Operations Support Services ‐ $4.1 million less than forecast, ($6.8 million less for 2012‐2014).
Lower than forecast costs for this function include $3.6 million ($5.0 million for 2012‐14) of savings related to the transfer of personnel and functions to EWSI Shared Services as part of the corporate reorganization. The remainder of the variance ($0.5 million in 2014 and $1.8 million for 2012‐2014) results from numerous small items, none of which are individually significant,
• Administrative Services ‐ $3.6 million less than forecast, ($1.1 million less for 2012‐2014).
Lower than forecast costs include $2.3 million ($2.7 million for 2012‐2014) of savings related to transfer of personnel and functions to EWSI Shared Services as part of the corporate
EPCOR Water 2014 PBR Prog
reorganthan foincentithis cat
• Actual are not2012‐2
• Actual Corpor
D3.2.4
In 2014, tgreater forrates are uIn‐City Wain water sregional w
1 Gross D2 Less: A3 Total S4 In‐City 5 In‐City
In3.2.5
In 2014, toforecast ($2012‐2014capitalizedthe propor0.6% greatrevisions to
Services gress Report
nization, as orecast capitve plan costtegory is ma
to forecast t significant,2014).
to forecastrate Adminis
epreciatio
otal systemr 2012‐2014unchanged fter through sales to regiater custom
Deprecia
Depreciation Amortization oSystem DepreWater ShareWater Share
nterest Exp
otal system $7.3 million l4 debt issued interest, rertion of EWSter than foreo the cost of
well as addital overheadts of $0.6 mde up of num
differences amounting
t differencestration are e
on Expense
net deprec4). This diffefrom the PBthe cost of ional water
mers’ share o
ation Expens
Expense of Contributioeciation Expe (%) e ($)
pense and
interest exess for 2012es and on elated to deSI interest execast. This df service mo
tional creditd costs (see illion ($3.4 mmerous sma
in other Quto $0.7 mill
es in Franchexplained in
e
ciation expeerence resulR forecast. service modcustomers f depreciatio
Depre
e
ons nse
Cost of De
xpense, net 2‐2014). Thishort‐term lays in compxpense allocdifference isdel (see Tab
14 of 59
ts of $1.1 miSection 3.2.million for 2all items, non
uality Assuraion greater
hise fees, C Section 3.2
ense is $0.2ts from slighThe proportdel is 0.6% loincreased aon.
Table 3.2.4eciation Exp($ millions)
A
Actu34.1 (8.425.7
77.820.0
ebt
of capitalizeis differenceborrowingspleting majoated to In‐Cs attributableble 3.2.5).
illion ($3.0 m.3.1). These2012‐2014).ne of which
nce and Wathan forecas
Customer bi.3.1 above.
2 million grehtly higher ation of net dower than foat higher th
pense
2014
ual P
For1 34) (7 28% 780 2
ed interest e results from, as well aor capital prity Water the to change
million for 20e savings we The remainare individu
ater Distribust in 2014 ($
illing, EWSI
eater than fasset balancdepreciationorecast, primhan forecast
B
PBR recast 3.4 7.9) 25.5 8.4% 20.0
is $3.8 millm historicallas higher throjects (see hrough the cs in allocatio
012‐2014) frere offset bynder of the vually significa
ution and Tra$1.0 million
Shared Se
forecast, ($0ces, since den expense amarily becaut rates, incr
C 2012‐20
Actual 96.4 (23.8) 72.6 77.4% 56.2
ion less thay low interehan forecastSection 3.3)cost of servicon processe
May 2015
rom higher y additional variance in ant.
ansmission greater for
rvices and
0.8 million epreciation llocated to use growth reasing the
D 014
PBR Forecast 94.8 (23.0) 71.8
78.0% 56.0
an the PBR est rates on t levels of ). In 2014, ce model is s following
EPCOR Water 2014 PBR Prog
Int
1 Interes2 Capital3 Interes4 Averag5 Averag6 Total Sy7 In‐City 8 In‐City
Cap3.3
EWSI provthe beginnprojects anchanged. Ato addressrequiremecapital exp Over half oprojects in
• Constru• Rehabi• Relocat
bridge • The Ac
The remain
• Addres• Meet h• Mainta
useful • Improv• Provide
Total systeprojections
Services gress Report
terest Expens
t expense ized interest t expense, nee Debt Balane Cost of Debystem IntereWater Share Water Share
pital Expe
ides the Cityning of eachnd in aggregAs well, in ss the challents. Accordpenditures.
of total systclude:
uction projelitation and tion of transwork; and celerated W
nder of In‐Ci
ss current anhealth and saain reliabilitylives; ve operatione general fac
em actual ans of total spe
se and Cost o
et of capitalizece bt st Expense (%)
e ($)
enditures
y with a five PBR term. gate, may dome circumenges of agdingly, over
tem capital
cts to accomrevitalizatiosmission and
Water Main R
ity Water’s c
nd upcomingafety requirey and manag
nal efficiencycilities that d
nd PBR forecending over
Interest Exp
of Debt
ed interest
e year forec Over the Pdiffer from tstances, proging infrastrr the PBR te
program ex
mmodate prion projects dd distributio
Renewal prog
capital progr
g regulatory ements; ge risk by reh
y and lower fdirectly affec
cast capital the 2012‐20
15 of 59
Table 3.2.5pense and C($ millions)
A
Actua 29.6 (1.3 28.3 567.0 4.99% 28.3
78.8% 22.3
cast of capitaPBR term, acthe PBR foreojects will beucture, to berm, differe
penditures
ivate develodriven by Cityn mains as r
gram.
ram includes
requiremen
habilitating
future costs;ct EWSI staff
expenditure016 PBR term
Cost of Debt
B2014
l PB
Fore 32) (0 320 570% 5. 32% 78
25
al expendituctual capitalecasts as pre added to obetter respences will ar
relate to Cit
opment growy departmenrequested b
s projects ne
nts;
or replacing
; and f.
es for 2014 am are summ
B
BR ecast A2.7 0.6) 2.1 0.9 .62% 2.1 8.2% 5.1
ures for the l expenditurrojects are aor removed ond to growrise betwee
ty‐driven ca
wth within thnts; y the City to
eeded to:
g existing ass
and 2012‐20marized in Ta
C 2012‐20
Actual 84.9 (3.0) 81.9
81.9 76.6% 62.7
total waterres, both onadvanced, dfrom capitawth, or to en actual an
apital projec
he city;
o accommod
sets at the e
014, as well ble 3.3.
May 2015
D 014
PBR Forecast 91.0 (1.8) 89.2
89.2 77.5% 69.1
r system at n individual delayed, or l programs meet City
nd forecast
ts. These
date LRT or
end of their
as current
EPCOR Water 2014 PBR Prog
1 City‐D2 Acc
Prog3 Rea4 Priv
T5 Wat6 Proj7 Sub
8 Other9 Ros
10 Ros11 Proa12 Wat13 Met14 Plan15 Proj16 Sub
17 Total
Ci3.3.1
Actual to P
• Accele2014 a
This prscheduon thisCity pa
• Reactivless ov
This prbased 2014 afor rep
Services gress Report
Capital Pro
Driven elerated Watgram ctive Renewavate DevelopmTransmission ter Main Relojects < $10 Mb‐total: City‐D
r sdale Sodiumsdale Laboratactive Renewter Main Cathter Change Ont Residuals jects < $10 mb‐total: Othe
Capital Expe
ity‐Driven
PBR forecast
rated Watend $0.6 mill
ogram suppuled to be res program ovving program
ve Renewal er the 2012‐
rogram invoon past brend for 2012
placement un
oject
ter Main Rene
al Program ment Mains ocations Million Driven
m Hypochlorittory Building wal Program hodic Protectuts
million r
nditures
Capital Pr
variances fo
r Main Reneion less over
ports the Cityhabilitated bver the 2012m plans.
‐ $1.4 millio‐2016 PBR te
olves the reak histories 2‐2014 resulnder this pro
Capital Ex
A
Actua
ewal 18.8
9.6 6.6
9.6 4.9 49.5
e 5.1 11.7
1.2ion 2.0
2.6 0.2 27.0 49.8
99.3
rojects
or City‐drive
ewal ‐ $1.2 r the 2012‐2
y’s request fby the City’s2‐2016 PBR
on less than erm).
ehabilitationand customt from feweogram. Tota
16 of 59
Table 3.3penditures ($ millions)
B 2014
al PBR
Forecas
8 20.0
6 11.0 6 5.2
6 2.2 2.5
5 40.9 ‐
7 ‐ 2.5
0 2.0 6 2.3 2.1
0 23.7 8 32.7
3 73.6
n capital pro
million less 2016 PBR ter
for EWSI to s Transportaterm are ex
forecast ($0
or replacemer service ier main breaal expenditu
by Project
C 201
st Actual
61.8
34.7 16.6
11.6 12.2 137.0
14.9 15.5 7.4 5.8 7.0 5.8 75.8
132.2
269.2
ojects in 201
than forecarm).
replace wattion Servicexpected to b
0.3 million le
ement of seinterruptionaks resultingures on this
D 12‐2014
PBR Forecast
60.0
35.0 15.4
7.8 7.4 125.5
17.0 12.3 7.5
6.0 6.9 4.8 68.4 122.9
248.5
14 and for 20
ast ($1.8 mi
ter mains unes departmebe close to f
ess for 2012
everely detens. Actual tog in fewer wprogram ov
E 2012‐
Current Projection
99.4
55.7 30.0
21.2 20.1
226.4
15.6 26.1 12.3 9.8
12.3 5.8
131.0 212.8
439.2
012‐2014 inc
llion greater
nder roadwant. Total exorecast, dep
‐2014 and $
eriorated wao forecast vwater mainsver the 2012
May 2015
F ‐2016
PBR Forecast
100.0
56.0 26.1
10.0 12.5 204.6
17.0 12.3 13.0 10.0
11.7 12.1 120.2 196.3
400.9
clude:
r for 2012‐
ys that are penditures pending on
$0.3 million
ater mains ariances in s qualifying 2‐2016 PBR
EPCOR Water 2014 PBR Prog
term aconditi
• Privatefor 201
EWSI anetworprivatecost ofanticipsubdivimatch
• Water 2014 a
These expansresult iwith pr
• City Drfor 201
These C
o Disand
o Waof l
o New
Higher of consreplacipurcha
O3.3.2
Significant include:
• Rossdaand $1
This prwater related
Services gress Report
re expectedons over the
e Developme12‐2014 and
and private drk to new sue developersf this prograated populaision plans; historical lev
Main Relocnd $11.3 mi
projects incsion. EWSI ein higher throjected cost
riven Capita12‐2014 and
City‐driven p
tribution Syd appurtena
ater Service ead services
w Water Me
than forecastruction acng lead sersed from US
Other Capit
actual to P
ale Sodium H.3 million les
oject includtreatment pd, because t
d to be on tae last two ye
ent Transmi$3.8 million
developers subdivisions. s to extend m is consistation growthas of April vels, with a s
ation Projecllion greater
clude the cexpects thatan forecast ts exceeding
l Projects < $7.6 million
projects con
ystem Modifnces to elim
Connections; and
eter Purchas
ast costs for tivity associrvice lines aS suppliers.
tal Projects
PBR forecas
Hypochloritess over the P
es the constplant. Highhis project w
arget, with ears of the P
ission Mainsn greater ove
share in the This projecthe transmitent with theh. EWSI cont2015 the paslight reduct
cts ‐ $7.4 mir over the 20
osts of watt the large ncosts to In‐g the 2012‐2
$10 Millionn greater ove
sist of three
fications, whinate conflic
ns for infill d
ses and Insta
these prograted with gand increas
s
st variances
e – $5.1 millPBR term)
truction of aher than forwas resched
17 of 59
the potentiaBR term.
s – $1.4 miller the 2012‐
e costs of exct representsission netwoe increase intinues to woace of subdtion in May
illion greate012‐2016 PB
ter main renumber of c‐City Water2016 PBR for
n ‐ $2.4 millier the 2012‐
main progr
hich includescts arising fr
evelopment
allations for
ams reflect growth in Edes in contr
for Other
lion greater
an on‐site sorecast expeduled from
al to be und
ion greater t‐2016 PBR te
xtending EWs the reimbuork to new n residentiaork with devdivisions bein2015.
r than forecBR term).
elocations nconflicts witover the rerecast by $1
on greater t‐2016 PBR te
ams:
s relocating rom City of E
ts or redeve
r new In‐City
several key dmonton’s practor and m
capital proj
than foreca
odium hypocnditures on2011‐2013 t
der target, d
than forecaserm).
WSI’s distribuursement ofsubdivisionsl developmevelopers to idng submitte
cast ($3.8 mi
eeded to ah existing tremainder of 1.3 million.
than forecaserm).
or modifyinEdmonton pr
elopments, a
y Water cust
factors, inclpopulation, material co
jects in 201
st ($2.1 mill
chlorite genn this projecto 2011‐201
depending o
st ($1.3 milli
ution and traf the costs is. The increent needed dentify theired for desig
illion greate
ddress the ransmission the current
st ($4.9 milli
g existing wrojects;
as well as re
tomers.
uding the hian increasests, especia
14 and for
lion less for
erator at thct in 2014 14, so that e
May 2015
on weather
ion greater
ansmission ncurred by ease in the to address r upcoming n approval
r for 2012‐
City’s LRT mains will t PBR term
ion greater
water mains
eplacement
igh volume d focus on ally meters
2012‐2014
2012‐2014
e Rossdale are timing experience
EPCOR Water 2014 PBR Prog
gained expects
• Rossda2014 a
This prpersonof this million
o DisarcImpAlb
o Soirem
o Addaddres
• Proactiless ov
This prwater water q2012‐2advancexpecte
• Plant R$6.3 m
This prplants. Develoreducinexpend
• All Othand $1
Rat3.4
In 2014, tforecast (sexpenditurrate base i
Services gress Report
from similas that, when
ale Laboratond $13.8 mi
oject includenel. The scoproject, nogreater tha
covery of hiheological fpact Assessmberta Culture
l conditions mediation wo
ditional deladitional stafulted in incr
ive Renewaer the 2012‐
roject is vermains in oldquality, fire 2013 result fced to 2012 ed to be clos
Residuals – illion less ov
rogram cons EWSI has r
opment (AESng alum resditures on th
her Projects 0.7 million g
e Base an
he total syssee Table 3res describeis projected
ar work at n completed
ory Building llion greater
es the constope of this pow expectedn forecast.
storical artiffieldwork anments Repoe.
were muchork, which in
ays as EWSIfing movemreases in floo
l ‐ $1.3 millio‐2016 PBR te
ry closely tieder areas wprotection, from timing and 2013. Tse to target.
$1.9 millionver the 2012
sists of alumreviewed treSRD) and ididuals impahis program
‐ $3.3 milliogreater over
nd Return
stem net ra3.4‐1). EWed in Sectionto exceed t
E.L. Smith c, the total co
‐ $11.7 milr for the 201
ruction of a project has cd to be comDelays in pr
facts on thend consultatort could be
h different frncreased cos
identified ments resultor space and
on less thanerm).
ed to Reactwhere waterand systemdifferencesTotal expend.
n less than t2‐2016 PBR t
m sludge treeatment optdentified dicts on the rby $6.3 milli
on greater tthe 2012‐20
n on Equi
te base waWSI’s currenn 3.3 will ache PBR fore
18 of 59
could be levost of this pr
lion greater 12‐2016 PBR
new laboratchanged signmpleted in 2oject comple
e site prior totion with ine completed
rom what hsts and furth
and assesseing from thd correspond
forecast ($0
tive Renewa mains do n
m reliability. s; work origiditures on th
he PBR foreterm).
eatment andtions with Alirect filtratiriver. The uion over the
han the PBR016 PBR term
ity
s $957.2 mt projectionccelerate capecast by $40
veraged to rroject will be
than forecaR term).
tory buildingnificantly fro2015, is projetion and ch
o the planneterest groud and Appr
had been exher delayed
ed options fhe corporateding increase
0.1 million le
al and includnot conform Actual to finally forecahis program
ecast ($1.0 m
d de‐chlorinlberta Enviroon as the use of directe 2012‐2016
R forecast ($m).
million, within is that thpital spendi0.7 million (3
reduce totae $1.3 millio
ast ($3.2 mi
g with officeom the forejected to behanges in sco
ed start of cps, before aroval to Con
pected, resuconstruction
for construce reorganizaes in project
ess for 2012
des replacem to currentforecast variast for 2014over the 20
million great
nation of waonment andmost cost‐t filtration hPBR term.
$7.4 million
n $2.7 millihe proposeng in 2015 3.8%) at the
l expendituon less than f
llion greater
e space for scast and thee $26.1 milope reflect:
constructiona Historical nstruct rece
ulting in unan of the base
ction to accoation. Thest costs.
‐2014 and $
ments or ut design staiances in 20 and future 012‐2016 PB
ter for 2012
aste streamsd Sustainable‐effective sohas reduced
greater for
ion (0.3%) oed increase and 2016, send of the
May 2015
res. EWSI forecast.
r for 2012‐
ome water e total cost lion, $13.8
n, requiring Resources eived from
anticipated ement.
ommodate se changes
$0.7 million
pgrades of ndards for 014 and for years was
BR term are
2‐2014 and
s from the e Resource olution for d projected
2012‐2014
of the PBR in capital
so that the 2012‐2016
EPCOR Water Services 19 of 59 May 2015 2014 PBR Progress Report
PBR term. Since In‐City Water’s share of the 2016 rate base is expected to be lower than forecast, because of relatively higher consumption growth for the regional water customers, the overall impact of the increase in capital spending on In‐City Water is not expected to be significant (see Section 5.1.1), amounting to a 1.2% increase in the 2016 rate base allocated to In‐City Water.
Table 3.4‐1 Rate Base – Net of Contributions
($ millions) A B C D
Mid‐Year Rate Base 2014 2016
Actual
PBR Forecast
Current Projection
PBR Forecast
1 Property, Plant and Equipment, opening balance 1,214.7 1,232.7 1,402.6 1,371.1 2 Additions 92.1 74.4 76.0 83.0 3 Retirements/Transfers (5.4) (3.5) (9.6) (3.6) 4 Property, Plant and Equipment, closing balance 1,301.4 1,303.6 1,469.0 1,450.5
5 Accumulated Depreciation, opening balance 311.0 313.5 348.1 358.1 6 Depreciation Expense 25.7 25.5 29.5 27.2 7 Retirements/Transfers (5.2) (3.5) (9.6) (3.5) 8 Accumulated Depreciation, closing balance 331.5 335.5 368.0 381.8
9 Mid‐Year Property, Plant and Equipment 1,258.1 1,268.2 1,435.8 1,410.8 10 Mid‐Year Accumulated Depreciation (321.3) (324.5) (358.1) (370.0) 11 Mid‐Year Net Property 936.8 943.7 1,077.7 1,040.8
12 Add: Working Capital 18.0 14.4 18.9 15.6 13 Add: Average Materials and Supplies 2.4 1.8 2.4 1.9
14 Total System ‐ Mid‐Year Rate Base 957.2 959.9 1,099.0 1,058.3 15 In‐City Water Share (%) 78.3% 79.9% 78.4% 80.5%16 In‐City Water Share ($) 749.4 766.7 862.1 852.3 Total returns on In‐City Water’s rate base are shown in Table 3.4‐2. In 2014, the total return on In‐City Water’s rate base was $4.0 million greater than in the PBR forecast. This difference reflects higher than forecast net income (see Section 3.2.1), partially offset by lower cost of debt (see Section 3.2.5).
EPCOR Water 2014 PBR Prog
1 Mid‐ye
2 Capita3 Capita
4 Cost o5 Cost o6 Weigh 7 Return8 Return9 Return
Wat3.5
In3.5.1
In‐City Wawith the Elimited to over 2013.special ratservice charate adjust
1 Curre2 Con3 Lab4 We5 Less6 Curre7 Prior y8 PBR In
Services gress Report
ear Rate Base
l Structure ‐ Dl Structure ‐ E
f Debt f Equity ted Average
n on Mid‐yearn on Mid‐yearn on Mid‐yea
ter Rates
n‐City Wat
ter rates coEPCOR Wateinflation plu. This increate adjustmearge increasetments appli
nt year forecnsumer price our ighted inflatios: Efficiency fnt year forecyear forecast nflation Adju
Return on
Return o
e Allocated to
Debt (%) Equity (%)
Cost of Capit
r Rate Base Fir Rate Base Fir Rate Base
s and Bill
er Rates
nsist of coner Services aus special ratase includesnt for the Aes were limiicable to fixe
Impact o
PBR Infla
cast inflation index
on factor cast inflation to actual inflstment for 20
n In‐City Wa
on Rate Base
o In‐City Wate
al
inanced by Dinanced by Eq
Compari
sumption chand Wastewte adjustmes the 2014 PAccelerated ted to the 2ed monthly s
of PBR Inflat
ation
lation adjustm014
20 of 59
Table 3.4‐2ater Share of($ millions)
er
ebt quity
sons
harges and fwater Treatmnts. In 2014PBR inflationWater Main014 PBR inflservice charg
Table 3.5.1ion on 2014
ment
f Mid‐Year R
fixed monthment Bylaw,4, water conn adjustmenn Renewal plation adjustges in 2014.
4 In‐City Wat
We
63
Rate Base
A
Actu749
5940
4.913.28.3
224062
hly service ch, annual wansumption rat of 1.9% (sprogram of tment, since.
ter Rates A
eight Ac
65% 135% 3 2 0 2 ( 1
A 2014
ual PB9.4
9.7% 0.3%
99% 28% 33%
2.3 0.1 2.4
harges. In aater rate incates increaseee Table 3.51.1%. Fixe
e there were
B 2014
ctual PBR
1.80% 3.10 2.26 0.25 2.01 (.07) 1.94%
May 2015
B
BR Forecast 766.7
60.0% 40.0%
5.46% 10.88% 7.63%
25.1 33.3 58.4
accordance creases are ed by 3.0% 5.1), plus a ed monthly e no special
c
R Forecast
1.96% 3.56 2.52 0.25 2.27 ‐
2.27%
EPCOR Water 2014 PBR Prog
W3.5.2
In‐City Wat • Reside
with thconserv
• Multi‐Rrate strindividincreasAccord
• Commechargewide ra
W3.5.3
Water bill four local fixed charg
3.5.3.1 RFigure 3.5consumpticonsumpti
Services gress Report
Water Rate
ter has three
ntial Customhree consuvation and p
Residential ructure withual multi‐reses. As wellingly, a decl
ercial Custod based on ange of aver
Water Bill C
comparisoncommunitieges, consum
Residential .3.1 provideon of 16.2 on per custo
Structure
e customer c
mer Class. Rmption blocprovide ince
Customer Ch three consesidential c, there is a wining rate st
omer Class. a declining
rage consum
Compariso
s for 2014 aes. These biption charge
Water Billes a comparm3 per monomer in Edm
by Custom
classes. The
Residential ccks. The intives for re
Class. Multisumption blocustomers dwide range tructure best
Similar to g rate structmption volum
ns to Othe
are based onll comparisoes and any o
s rison of resnth. This lemonton over
21 of 59
mer Class
ese classes a
ustomers arnclining ratesidential cus
‐residential ocks. EWSI declines as of consumpt reflects the
multi‐resideture, but wimes within th
er Commu
n surveys ofons represenother applica
idential houevel of consthe 2012‐20
and their rate
re charged bte structurestomers to u
customers has found tthe size o
ption volumee cost chara
ential custoth five conshis customer
nities
f Calgary, Vant the total able surchar
usehold watsumption is 014 period (
e structure i
based on an ie is intendeuse water ef
are chargedhat the costof the mules for multi‐cteristics of
omers, commsumption blr class.
ancouver ancost to the ges.
ter bills for equal to thsee Section
include:
inclining rateed to promfficiently.
d based on at of providinlti‐residentia‐residential cthis custom
mercial custlocks to rec
d Winnipeg,customer a
residential he average 3.1).
May 2015
e structure mote water
a declining ng water to al building customers.
mer class.
tomers are ognize the
, as well as and include
household Residential
EPCOR Water Services 22 of 59 May 2015 2014 PBR Progress Report
Figure 3.5.3.1 Average Edmonton Monthly Residential Water Bill in 2014
(16.2 m3/month)
Figure 3.5.3.1 shows that Edmonton’s residential water bills are competitive with surrounding communities and other major cities in western Canada. Further:
• Edmonton has the challenge of a poor raw water source compared to some other cities and must conduct additional treatment. For example, Vancouver only disinfects water with chlorine which results in lower water treatment costs.
• Different water rate structures also affect bill amounts. For example, EWSI pays an 8% franchise fee to the City of Edmonton, whereas St. Albert has no franchise fees.
3.5.3.2 Commercial Water Bills Table 3.5.3.2 provides a comparison of the water bills for typical commercial customers in each of In‐City Water’s five consumption blocks. This table shows that water bills for EWSI’s commercial customers are competitive with those of surrounding communities and other major cities in western Canada.
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
$/m
onth
Tax Levy
EPCOR Water 2014 PBR Prog
1 Mont
2 Avera3 Van4 Edm5 Win6 St. A7 Calg8 Stu9 She
10 Spr1 Reflects weig
PBR3.6
Water Systtracking ofPBR regulabasis with achieved. applied if Emain breameasures, Accordinglthe actual worse than
Services gress Report
Commun
thly Consump
age Bill ‐ $ pencouver1 monton nnipeg Albert gary rgeon Countyerwood Park uce Grove ghted average of
R Operati
tem Service f these five iatory enviro100 base p Bonus poinEWSI does naks, a lowesuch as thy, to provideoutcome w
n the standa
Comm
nity
ption ‐ m3
er month
y
f seasonal water
ng Perfo
Quality is mndices is int
onment. Pepoints availants are avainot meet ther‐than‐standhe Planned e for greatewas better trd.
Tmercial Mon
($
ConveSt
1
2
r rates
rmance M
measured bytended to enrformance uable if the ilable for pee 100 base pdard score Constructior clarity, actthan the sta
23 of 59
Table 3.5.3.2nthly Water$ per monthA enience tore
RS
10 18 21 23 25 33 26 28 26
Measures
y the resultsnsure that syunder each standards foerformance point standarepresents n Factor, a ual outcomeandard or “B
2 r Bill Compah) B
Retail Store Re
50
60 76 80 89
102 106 117 128
s
s of five indiystem servicindex is meor all five pabove stanrd. For somperformanhigher sco
es have beeBelow Stand
rison
C
staurant
250
280 350 367 409 365 636 569 638
ices prescribce quality is easured indeperformancedards and f
me performace above sre indicatesn noted as “dard”, if the
D
Hotel
2,000
2,191 2,489 2,741 3,209 2,116 4,923 4,496 5,100
bed in the Bmaintained ependently e measure ifinancial pence measurstandards. s better per“Exceeded Se actual out
May 2015
E
Hospital
10,000
9,211 9,511
13,221 16,009 10,086 23,323 22,016 25,500
Bylaw. The within the on a point indices are nalties are res, such as For other rformance. tandard” if tcome was
EPCOR Water 2014 PBR Prog
Sy3.6.1
The Systemof the watmeasures i
PerformaMeasur
Water MainBreak Facto
Water MainBreak DuratFactor
Planned ConstructioFactor
Water PresFactor
Water Loss Factor
2014 Highl
• Water resultebelow prografuture
Services gress Report
ystem Reli
m Reliability erworks systin this index
nce re n or
The nubreaksreport
n tion
The pebreaksfrom toff
on The nucomplconstrprocedconstrpercenconstr
sure The nuyear wis beloconsecWaterInfrastperforquantidistribfor thelosses
lights
Main Breaked in an overthe PBR sms. These years.
iability Ind
Index is a mtem. In 201.
PBR Measuumber of wates that occurredting period ercentage of ws repaired withthe time the wa
umber of timesies with requirruction notificadures and met ruction timelinntage of the toruction events umber of incidwhere the wateow 20 psi for twcutive 15‐minur loss is measurtructure Leak Irmance indicatifying how welbution system ie control of rea
k Factor. Altrall increase standard, hiprograms a
dex
measure of t14, In‐City W
System
ure r main d in the
water main hin 24 hours ater is shut
s that EWSI red ation
es as a otal planned
ents per er pressure wo or more ute periods red by the ndex, a or l a water s managed al water
though the hin water maighlighting are expected
24 of 59
the confidenWater exceed
Table 3.6.1m Reliability
Standard
574
93.7%
95%
5
3.0
M
high numberain breaks ovthe effectivd to continu
nce that cusded standard
y Index
ActualScore
392
91.2%
96.4%
1
1.27
Index StanAvailable B
Maximum AvaiTotal ATotal Po
r of water mver 2013, waveness of Eue to reduc
stomers can ds for four o
Actual Outcome
Exceeded standard
Below standard
Exceeded standard
Exceeded standard
Exceeded standard
ndard Points Bonus Points ilable Points Actual Points oints Earned
main breaks iater main brEWSI’s watece the numb
place in thef the five pe
AvailablePoints
5.0
5.0
5.0
5.0
5.0
25.0 3.5
28.5
in February reaks in 2014er main reber of main
May 2015
e reliability erformance
Actual Points
6.6
4.9
5.1
5.8
7.9
30.328.5
and March 4 were still eplacement n breaks in
EPCOR Water 2014 PBR Prog
• Plannetrackinfor this
• Water 3.0 stawithin unaccounders
Areas for I
• Water 2014) toccurrewithin hours, suppor20 houdue to field stbreakswinter
W3.6.2
The Waterexceed In‐the standaGuidelinesWater exce
PerformanMeasur
Water QuaIndex
Services gress Report
ed Construcg practices s factor. The
Loss Factor.andard. Thithe distribuounted for tand trendin
mprovemen
Main Breakthat occurreences where24 hours, 2.EWSI providrt affected cuurs repair duthe potentitaff to suppo. EWSI will weather eve
Water Qual
r Quality IndCity Water’sards set out for Waterweeded the st
nce e
lity The pewater qEWSI’sregulat
ction Factorand proceduese efforts w
. In 2014, EWs result wastion systemwater losseng data.
nt
k Duration ed during exte repair dura.5% lower thdes temporaustomers. Euration to deal for the reort performcontinue toents.
lity Index
dex is calcus internal win Alberta Eworks Systemtandard for t
PBR Measu
ercentage of Edquality tests ths internal standtory measures
r. Enhanceures continuwill be contin
WSI’s Infrasts achieved t. EWSI will es to furth
Factor. Thetreme cold wations exceehan the stanary water taEWSI also haetermine if aepair timelinance of exiso assess seas
lated as theater quality nvironmentms, and Schthis index.
Wat
ure
dmonton hat meet dards and
25 of 59
ements to ue to contribnued in 2015
tructure Leathrough exccontinue to her improve
e high numbweather in Feded 24 houndard of 93.7nks and delis a triage pradditional sune to exceedsting crews asonal staffin
e percentagstandards.
t and Sustainedule 3 of E
Table 3.6.2er Quality In
Standard
99.6%
M
planned cobute to EWS5 for the con
ak Index wascellent man explore opte its Infrast
ber of wateFebruary anrs, resulting7%. If mainivers water rocess for allupport is red 24 hours. and improveng levels to
ge of water At a minimnable ResouEWSI’s Appr
ndex
Actual Score
99.8%
Index Stan
Available BMaximum Avai
Total ATotal Po
nstruction SI’s ability tonstruction pr
s 1.27, signifagement antions to helptructure Le
er main breand March, 20g in 91.2% ofn break repajugs to propl water mainquired for tIn 2015, EWe the timelymore effect
quality testmum, these surce Developroval to Ope
Actual Outcome
Exceeded standard
ndard Points
Bonus Points ilable Points Actual Points oints Earned
notification o exceed throjects unde
ficantly bettend tracking p identify aneak Index a
aks (147 of 014 resultedf main breakir duration eperties as nen breaks thahe affected WSI will hirey repair of wtively addres
t results thastandards arpment’s Stanerate. In 20
Available Points
25
25.0
0.5 25.5
May 2015
and time e standard ertaken.
er than the of leakage nd quantify and better
the 389 in d in eleven ks repaired exceeds 24 ecessary to t approach customers additional water main ss extreme
at meet or re equal to ndards and 014, In‐City
Actual Points
25.1
25.125.1
EPCOR Water 2014 PBR Prog
2014 Highl
In 2014, radiochemconductedand of thotests, enhaimplementtraining. T
Cu3.6.3
The CustomWater’s ovperforman
PerformaMeasur
Post ServiceAudit Facto
Response TFactor
Home SniffFactor
2014 Highl
• Homeimprovattribuin parpotentstrateg
Services gress Report
lights
EWSI met mical, chemic, only 91 didse, only threanced trainted in 2014 Training is co
ustomer S
mer Serviceverall level nce measure
nce re e or
The pecustomserviceDispatstaff a“comp
Time The avto cononce adispat
ing The pecommfavourodour season
lights
Sniffing Facving performuted to the erticular addrtial precursogies accordin
Guidelines cal and physd not meet tee did not ming for samfor all waterontinuing in 2
ervice Ind
Index is a of service. s in this Inde
PBR Measercentage of sumers who ratede experience wtch personnel as “very satisfiepletely satisfiedverage numberfirm a water ma call is receivech office ercentage of vounity memberrably assess drduring the sprn
ctor. In 201mance fromeffective useressing the ors of chloringly.
for all Cansical paramethe requiremmeet Approvmpling technr samplers. 2015 for all
ex
measure of In 2014, Iex.
Custom
sure urveyed d their with Water and/or field ed” or d” r of minutes main break ed by the
olunteer rs who inking water ring run‐off
14, EWSI excm 94.8% in e of carbon chlorinous nous odour
26 of 59
nadian Drinketers. Of thments of EWal to Operatniques and By the end new sample
f the level on‐City Wate
Table 3.6.3mer Service
Standard
74.0%
25
93.8%
Ma
ceeded the 2013 to 95dosing to imodours notes on a daily
king Water e 55,784 ap
WSI’s internate standardsselection ofof the year ers.
of satisfactioer exceeded
Index ActualScore O
73.6% S
21 Es
95.7% Es
Index StandaAvailable Bon
aximum AvailaTotal ActTotal Poin
standard fo5.7% in 201mprove the ed in 2013y basis and a
Quality hepplicable waal lab qualitys. Followingf appropriatover 120 sa
on that custd standards
Actual Outcome
A
Below Standard
Exceeded standard
Exceeded standard
ard Points nus Points ble Points tual Points nts Earned
or this perfo14. These itaste and odthrough anadjusting sp
ealth‐based ater quality y managemeg review of tte sample pamplers com
omers placefor two of
AvailablePoints
6.66
6.67
6.67
20.0 3.0 23.0
ormance meimprovemendour of trean initiative tring run‐off
May 2015
limits for tests EWSI ent system, hese failed points was mpleted the
e in In‐City the three
Actual Points
6.62
7.71
6.81
21.221.2
asure, also nts can be ated water, to monitor treatment
EPCOR Water 2014 PBR Prog
Areas for I
• Post SemeasuexperiecompleenableimprovOperat
En3.6.4
The Envirocontribute2014, In‐Ci
PerformanMeasur
Emergency Response Training
Completeneand Timelinof ReportinEnvironmenIncident ManagemeWater ConservatioFactor
Watershed Program Activity
Services gress Report
mprovemen
ervice Auditre. EWSI ence surveyetion of worresources t
vement. Thtors are expe
nvironmen
onmental Inds to the Cityity Water me
nce e
The nuexercisyear
ess ness g
The pereport
nt
nt
The nuprevenincide
on The 10water Edmonhouse# of de
nt
t Factor. In has since y timing tork and by imo be focusedhese initiatiected to imp
nt Index
dex measurey’s ten‐year set or exceed
PBR Measu
umber of practses undertaken
ercentage of ints completed
umber of reporntable environnts 0 year average consumption nton residentiahold eliverables com
2014, EWSI implementeo ensure thmproving mod on the woves, togethprove custom
es In‐City Wstrategic goaded all stand
Envir
re
tice n in the
ncident
rtable and mental
monthly in m3 per al
mpleted
27 of 59
was margined two prohat survey onitoring anrking groupsher with immer service i
Water’s effortal to “Preserards in this
Table 3.6.4ronmental In
Standard
4
100%
7
19.0
5
Ma
nally below tocess improproviders
nd analysis os that most
mproved traiin 2015.
ts to limit itrve and Sustindex.
ndex Actual Score
5 Es
100.0% s
5 Es
17.5 Es
7 Es
Index StandaAvailable Bonximum Availa
Total ActTotal Point
the standardovements byare contacof negative need customining and f
ts impact ontain Edmont
Actual Outcome
Exceeded standard
Met standard
Exceeded standard
Exceeded standard
Exceeded standard
ard Points nus Points ble Points tual Points ts Earned
d for this pey adjusting ting customcustomer femer service efeedback fo
n the environton’s Environ
Available Points
3.75 (0.75
available bonus points)
3.75
3.75
1.5
2.25 (0.75
available bonus points) 15.0 1.5 16.5
May 2015
erformance customer
mers upon eedback to experience r Dispatch
nment and nment”. In
Actual Points
4.50
3.75
3.75
1.5
3.00
16.516.5
EPCOR Water 2014 PBR Prog
2014 Highl
• EnvironEnvironincludeand cotrainingcontinu
• Water on rolliforecas
• WatersincludetechnicEPCOR IndustrWater
Sa3.6.5
The Safetyculture andactivity‐bainspectionsinjury sevein this inde
PerformanMeasure
Safety Meetings Formal SafeWork Plans(SWP)
First Aid Training
Work Site InspectionsObservatio
Services gress Report
lights
nment Incidnmental Maed introduciorrective actg to furtheruing to impr
Conservatioing averagesst decline in
shed Prograed financial scal committeis also en
rial HeartlanProtection r
afety Index
y Index measd encouragised performs) and outcerity). In 201ex, with only
nce e
Numberconduct
e s
NumberPlans eaidentify,communPercentemployea valid SCertifica
s / ons
Number/ Observyear to faccident
dent Manaanagement ng new protion, with cer reduce theove incident
on Factor. Ss to emphasResidential
am Activity. support andees of the Nngaged withnd Water Mrisks related
x
sures In‐Cityng staff awa
mance measuome‐based 14, In‐City Wy the Lost Tim
PBR Measurr of safety meeted during the r of Formal Safach calendar ye, control and nicate hazardsage of permanees at year‐endStandard First Aate r of Work Site vations each cafind problems ts before othe
gement. System Cer
ocedures forertification ee already lowt investigatio
Standard ansize long‐terconsumptio
In 2014, EP representaorth Saskatch Alberta EManagementto spills and
y Water’s proareness and ures (safety performanc
Water exceedme Frequenc
S
re etings year fe Work ear to
nent d who hold Aid
Inspections alendar and assess r losses
28 of 59
In 2014, EWrtification for legal compexpected inw number oon and corre
nd actual scom results. Ton discussed
PCOR maintation on the chewan WatEnvironmentt frameworkd releases in
ogress towaengagemenmeetings, sace measuresded standarcy Rate mea
Table 3.6.5Safety Index
Standard AS
36
3,100 1
33% 5
800 1
WSI workedor the watepliance, envi 2015. EWof reportablective action
ores for thisThe decreas in Section 3
ained strongboard of dirtershed Alliat and Sustak. In 2015, the North S
ards its commnt in safety aafe work plas (lost time ds for six of asure below
x
ActualScore
AcOut
42 Excestan
14,059 Excestan
55.3% Excestan
1,297 Excestan
d towards er treatmenironmental
WSI also incrle environmn processes i
s performanse in 2014 re3.1.
g watershedrectors, execance and othainable Res, EPCOR wilSaskatchewa
mitment of activities. Thans, first aid frequency,the seven pstandard.
ctualcome
A
eededndard
eeded ndard
eeded ndard
eeded ndard
achieving Int plants. incident inveased wate
mental incidein 2015.
ce measureeflects the h
d program acutive commher watershsource Devell be assessan River.
achieving a his index inctraining, and injury freqperformance
Available Points
1.5
3.75
3.0
3.0
May 2015
ISO 14001 This work
vestigation, r sampling ents and is
are based higher than
ctivity that mittees and hed groups. elopment’s ing Source
zero injury cludes both d work site uency and e measures
Actual Points
1.5
3.75
3.0
3.0
EPCOR Water Services 29 of 59 May 2015 2014 PBR Progress Report
Performance Measure PBR Measure Standard
ActualScore
ActualOutcome
Available Points
Actual Points
occur Lost Time Frequency Rate
A measure of the effectiveness of a safety program – the frequency of injury rate per unit of exposure
0.59 0.67 Below standard
0.75 (0.375 available bonus points)
0.66
All Injury Frequency Rate
A measure of the frequency of disabling injuries and medical aid injuries per unit of exposure
2.40 1.57 Exceeded standard
1.5 (0.562 available bonus points)
2.06
Injury Severity Rate
A measure of the seriousness of injuries and illnesses – ratio number of disability days to the number of employee exposure hours in a calendar year
8.92 5.17 Exceeded standard
1.5 (0.562 available bonus points)
2.06
Index Standard Points 15.0 Available Bonus Points 1.5
Maximum Available Points 16.5 Total Actual Points 16.0
Total Points Earned 16.0
2014 Highlights
• In 2014, EWSI met or exceeded the standards for all activity‐based performance measures including Safety Meetings, Formal Safe Work Plans, First Aid Training and Work Site Inspections & Observations, reflecting EWSI’s commitment to a zero injury culture.
Area for Improvement
• Lost Time Frequency Rate. Although the Injury Frequency Rate and Injury Severity Rate both exceeded the PBR performance standard, the Lost Time Frequency Rate was below standard as a result of three incidents. These incidents were reviewed and corrective actions taken to prevent similar incidents from occurring in the future.
EPCOR Water 2014 PBR Prog
4 201 Con4.1
Wastewateactual custare not tieand total differences
1 Annu2 Res3 Mu4 Com5 Tot
6 Aver7 Res8 Mu9 Com
10 Tot 11 Mon12 Res13 Mu14 Com
Fina4.2
N4.2.1
Wastewatecost savingconsumptirate base (return on approved r
Services gress Report
4 PBR nsumptio
er customertomer countd into the Cannual cons caused by
Cu
ual Consumptsidential ulti‐Residentiammercial tal
age Monthlysidential ulti‐Residentiammercial tal
thly Consumsidential ulti‐Residentiammercial
ancial Per
et income
er earned ngs and lowon on reven(see Section equity. Foreturn on eq
Resultsn and Cu
r counts andts between ICity’s drainagsumption athe same fa
Custoand
ustomer Class
tion ‐ ML
al
Customer Co
al
ption per Cus
al
rformanc
e and Retu
et income oer than fornue. Waste4.4), yielder 2012‐2014quity (see Ta
s - Wasstomer C
d consumptIn‐City Watege system. Are also simctors describ
omer Countd Monthly C
s
ount
stomer ‐ m3
ce
rn on Equi
of $11.7 milrecast intereewater’s higd a return o4, Wastewable 4.2.1).
30 of 59
stewateCount
ion are simer and WasteAccordingly,
milar to thosbed in Sectio
Table 4.1, Total Annuonsumption
A
Actua
42, 17, 25, 85,
232 3 15 251
4 1
ity
lion in 2014est expenseher than foron equity of ater’s return
er
ilar to thoseewater relat, average mse of In‐Cityon 3.1.
ual Consumpn per Custom
2014
al PB
Fore
,773 45,704 16,126 25,603 87
2,086 231,522 3,573 15
1,181 251
15.4 418.9 4134.5 1
4 ($27.2 mile offset therecast net i10.6% in 20n on equity
e of In‐City te to “wateronthly consy Water, w
ption mer B
BR ecast A
5,297 6,708 5,496 7,501
1,996 3,465 5,671 1,132
16.3 401.8 135.6
llion for 201e impacts ofncome and 014, 2.2% higwas 8.4%,
Water. Diffr‐only” custoumption pe
with actual t
C 2012‐20
Actual
126,042 51,747 75,834 253,623
226,458 3,466 15,431 245,355
15.5 414.7 136.5
12‐2014), asf lower thaa lower thagher than its2.3% greate
May 2015
ferences in omers who r customer to forecast
D 014
PBR Forecast
134,835 50,254 75,549 260,638
228,027 3,439 15,478 246,944
16.4 405.9 135.6
s operating an forecast an forecast s approved er than its
EPCOR Water 2014 PBR Prog
N
1 Reven2 Opera3 Depre4 Intere5 Net In6 Equity7 Retur
Re4.2.2
In 2014, W(4.9%) millis primarilyActual and
1 Consu2 Resi3 Mul4 Com5 Tota
6 Fixed 7 Resi8 Mul9 Com
10 Tota
11 Total 12 Other13 Total
Services gress Report
et Income an
nue ating costs eciation expeest expense ncome y portion of Rrn on Equity (
evenue
Wastewater’ion less for y attributabl PBR forecas
Revenue by
umption Revedential ti‐Residential
mmercial al Consumpti
Charge Revedential ti‐Residential
mmercial al Fixed Charg
Wastewater r revenue Revenue
nd Return on
nse
Rate Base (%)
s revenues 2012‐2014. e to the longst revenue f
y Customer Cl
enue
l
ion Revenue
enue
l
ge Revenue
Treatment R
Net Income
Equity
were $3.5 This differeg‐term declior 2014 and
Revenue
lass
Revenue
31 of 59
Table 4.2.1e and Return($ millions)
A
Actua 72.6 (44.4 (9.5 (7.0 11.7109.9
10.6
million (4.6ence is conceine in per cud 2012‐2014
Table 4.2.2e by Custom($ millions)
A
Actua
29.012.016.257.2
10.0 0.2 0.710.9
68.1 4.5 72.6
n on Equity
B2014
al PB
Fore6 764) (475) (90) (97 99 1186% 8
6%) less thaentrated in tustomer consare summa
mer Class
B2014
al PB
Fore
0 30 12 12 6
0 12 7 9 1
1 715 46 76
B
BR ecast A6.1 27.4) (19.8) 9.0) 9.9 8.8 8.4%
an in the PBthe Residentsumption dirized in Tabl
B
BR ecast A
31.7 11.7 16.7 60.1 1
10.2 0.2 0.7 11.1
1.2 14.9 6.1 2
C 2012‐20
Actual 200.1 124.9) (26.6) (21.4) 27.2 n/a 8.4%
BR forecasttial customescussed in Sle 4.2.2.
C 2012‐20
Actual
79.3 32.4 45.1 156.8
27.3 0.4 1.8 29.5
186.3 13.8 200.1
May 2015
D 14
PBR Forecast 210.4 (136.8) (28.1) (24.9) 20.6 n/a
6.1%
and $10.3 er class and Section 3.1.
D 14
PBR Forecast
87.5 32.6 46.0 166.1
27.9 0.4 1.9 30.2
196.3 14.1 210.4
EPCOR Water 2014 PBR Prog
O4.2.3
4.2.3.1 OTotal operActual and
1 Salar2 Corp3 Custo4 Powe6 Cont7 Mate8 Othe9 Franc
10 Total Actual to P
• Salarie
In 2014incenticost sacomple
• Corpor
As withcorpora
• Other ‐
In 2014cost renumero
• Franch
Actual
• Actual and Co2014 ($
Services gress Report
Operating C
Operating Crating costs forecast co
Cost
ies and beneforate adminisomer billing er and other uractors and cerials and supr chise fees l Operating C
PBR forecast
es and Benef
4, incentive ve plan targavings of $eted in 2012
rate Adminis
h In‐City Waate reorgani
‐ $0.3 million
4, $0.9 millioecoveries frous small ite
ise Fee ‐ $0.
to PBR forec
to forecast dontractors an$1.7 million
Costs
Costs by Cfor 2014 arsts by cost c
t Category
fits stration
utilities onsultants pplies
Costs
differences
fits ‐ $0.5 mi
plan costs wgets. For 201$2.6 million and the cor
stration ‐ $1
ater, lower tization, desc
n less than f
on of the actom non‐utiems, none of
.4 million (8%
cast variance
differences nd consultanless for 2012
ost Categore $3.0 milliocategory are
TOperating C
in operating
illion greate
were $0.5 m12‐2014, incfrom the
rresponding
1.8 million le
than forecascribed in Sec
orecast ($2.
tual to foreclity operatiof which are i
%) less than
es in franchi
in Power annts are not s2‐2014).
32 of 59
ory on less thansummarized
Table 4.2.3.1Costs by Cos($ millions)
A
Actua17.4.4.4.4.2.1.5.
44.
g cost catego
r than foreca
million greatcreased incerestructurinheadcount
ess than fore
st Corporatection 3.2.2.
5 million les
ast varianceons. The rindividually
forecast ($1
se fees resu
nd other utilisignificant, a
n forecast ($d in Table 4.
1 st Category
B2014
al PB
Fore.6 1.0 .5 .6 .2 .5 .7 .3 .4 4
ories for 201
ast ($1.3 mi
ter than forentive plan cng of Wastreductions.
ecast ($5.1 m
e Administra
ss for 2012‐2
e ($2.6 millioremainder osignificant.
1.2 million le
ult from lowe
ities, Materiamounting to
$11.9 millio.2.3.1.
B
BR ecast
A
17.1 5.8 4.5 5.4 3.7 3.2 2.0 5.7
47.4
14 and 2012
llion less for
ecast as Waosts of $1.3 tewater’s te
million less fo
ation costs a
2014)
on for 2012‐2of the diffe
ess for 2012‐
er than forec
ials and Supo $1.0 millio
n less for 2
C 2012‐20
Actual
48.3 12.0 13.5 14.2 11.6 7.3 3.4
14.6 124.9
2‐2014 includ
r 2012‐2014)
stewater exmillion wer
echnical ser
or 2012‐201
are attributa
2014) relateerence is m
‐2014).
cast revenue
plies, Customon less than
May 2015
012‐2014).
D 14 PBR
Forecast 49.6 17.1 13.1 15.2 11.1 9.0 5.9
15.8 136.8
de:
).
xceeded its re offset by rvices area
4).
able to the
es to higher ade up of
es.
mer billing, forecast in
EPCOR Water Services 33 of 59 May 2015 2014 PBR Progress Report
4.2.3.2 Operating Costs by Operational Function In addition to analysis of operating costs by cost category, Wastewater operating costs are also analyzed on a functional basis. Actual and forecast operating costs by operational function are summarized in Table 4.2.3.2.
Table 4.2.3.2 Operating Costs by Operational Function
($ millions)
A B C D
Operational Function 2014 2012‐2014
Actual PBR
Forecast Actual PBR
Forecast 1 Wastewater Treatment Plant 18.9 20.9 55.1 59.7 2 Quality Assurance and Environment 3.1 2.8 8.3 8.2 3 Operations Support Services 3.9 4.3 10.0 12.9 4 Administrative Services 4.7 3.4 11.4 10.0 5 Customer billing 4.5 4.5 13.5 13.1 6 Corporate Administration 4.0 5.8 12.0 17.1 7 Franchise fees 5.3 5.7 14.6 15.8 8 Total Wastewater Operating Costs 44.4 47.4 124.9 136.8
Actual to PBR forecast differences by operational function for 2014 and 2012‐2014 include: • Wastewater Treatment Plant ‐ $2.0 million less than forecast ($4.6 million less for 2012‐2014).
Lower than forecast costs include $0.9 million of cost recoveries from non‐utility operations ($2.6 million for 2012‐2014). The remainder of the actual to forecast difference includes: $0.7 million of savings ($1.0 million for 2012‐2014) in digester operating costs; and $0.6 million ($1.0 million for 2012‐2014) of savings from lower than forecast chemical usage.
• Operations Support Services ‐ $0.4 million less than forecast ($2.9 million less for 2012‐2014).
In 2014, $0.6 million of the actual to forecast variance ($2.2 million in 2012‐2014) relates to a restructuring of technical services in 2012 which continues to provide substantial benefits. The remainder of the variance in this category is attributable to cost savings throughout operations support services, primarily related to reductions in head count, and in‐sourcing functions, such as project engineering, which had previously been performed by contract employees.
• Administrative Services ‐ $1.3 million greater than forecast ($1.4 million greater for 2012‐2014)
Higher than forecast Administrative services costs are attributable both to additional incentive plan costs of $0.5 million in 2014 ($1.3 million for 2012‐2014), and additional charges for EWSI Shared Services related to the corporate reorganization.
• Actual to forecast differences for Quality Assurance and Environment are not significant, amounting to $0.3 million greater than forecast in 2014 ($0.1 million greater than forecast for 2012‐2014).
EPCOR Water 2014 PBR Prog
• Actual explain
D4.2.4
In 2014, Wmillion lessand capitaTable 4.2.4
1 Depre2 Less: 3 Net D
In4.2.5
In 2014, W2014). Thiand on shcontribute
Int
1 Interes2 Capital3 Interes4 Averag5 Averag8 Interes
Services gress Report
to forecast ned in Sectio
epreciatio
Wastewater’s for 2012‐2al additions 4.
Depreciat
eciation ExpeAmortization
Depreciation E
nterest Exp
Wastewater’ss differencehort‐term dd to lower t
terest Expens
t expense ized interest t expense, nee Debt Balane Cost of Debst Expense
differences on 4.2.3.1 ab
on Expense
s net depre014). This v(see Section
tion Expense
nse n of ContributExpense
pense and
s interest ex is primarilydebt. Lowehan forecast
se and Cost o
et of capitalizece bt
in Franchisebove.
e
eciation expvariance is an 4.4). Actu
Net Dep
tions
Cost of De
xpense was $ attributableer debt bat interest co
Interest Exp
of Debt
ed interest
34 of 59
e fees, Custo
ense was $ttributable tual and fore
Table 4.2.4preciation E($ millions)
A
Actual 10.4 (0.9) 9.5
ebt
$2.0 million e to lower thlances resusts (see Tab
Table 4.2.5pense and C($ millions)
A
Actua8.(1.7.
177.3.93
7.
omer billing
$0.3 millionto lower thaecast deprec
Expense
B2014
PBForec
10) (0 9
less than fohan forecastulting from ble 4.2.5).
Cost of Debt
B2014
l PB
Fore5 5) 0 9 183% 40
and Corpora
less than tan forecast ociation expe
R cast A0.7 0.9) 9.8
orecast ($3.5t interest ratdelays in
B
BR ecast A9.6 (0.6) 9.0
83.5 4.90% 9.0
ate Adminis
he PBR foreopening asseense is sum
C 2012‐201
Actual 29.3 (2.7) 26.6
5 million lesstes on new bcapital spe
C 2012‐20
Actual 23.7 (2.3) 21.4
4.44% 21.4
May 2015
tration are
ecast ($1.5 et balances marized in
D 14
PBR Forecast 30.8 (2.7) 28.1
s for 2012‐borrowings nding also
D 014
PBR Forecast
26.7 (1.8) 24.9
4.91% 24.9
EPCOR Water 2014 PBR Prog
Cap4.3
WastewatePBR term.transferredestimates that the coPBR forecaforecast caBar facilityreplacemethan forecreplacemethat Wasteexpenditurexpenditur5.1.1.
Capital P
1 Digest2 Solids 3 Clover4 Base R5 Total
Wastewateforecast di • Digeste
$1.5 m
This caAlthougdigestetotal ex
• Solids $8.5 m
Services gress Report
pital Expe
er provides t The capitd from the based on deost of many ast. Accordapital expen. The purponts needed cast for indnts were reewater’s totres by $47res on Wast
Program Cate
ter Reliability Handling Relr Bar ReliabilitReliability
er’s revised fferences by
er Reliabilityillion less ov
tegory inclugh the costser capacity hxpenditures
Handling Reillion less ov
enditures
the City wittal plan for City in 2009etailed engiprojects in Wdingly, EWSIditures in 20ose of this reto ensure pdividual capequired thanal capital ex.9 million (tewater’s ra
egory A
iability ty
3
capital proy category a
y – $2.8 miver the 2012
udes upgrades to upgradehave decreain this categ
eliability – $ver the 2012
h five year fwastewate9. As a resuneering desWastewaterI delayed or012 and 201eview was toplant reliabilpital projecn had been axpenditures o(see Table te base, ret
Capit
A 2014
Actual Fo 8.8 8.2 6.4 14.3 37.7
gram is orgre as follows
llion greate2‐2016 PBR t
es to the dige each digessed the numgory will be $
$3.0 million 2‐2016 PBR t
35 of 59
forecasts of r was deveult, projectssigns. In 201’s capital pror deferred c13, while it co assess asseity. This revcts, but thaanticipated over the 2014.3‐1). Thturn on equ
Table 4.3‐1tal Expendit($ millions)B
PBR orecast 6.0 11.1 0.3 5.3 22.7
ganized intos:
r than forecerm).
gesters and ster are highmber of dige$1.4 million
less than foerm).
capital expeeloped soons identified 12, preliminaogram woulcapital spenconducted a et condition view showeat significanin the PBR 12‐2016 PBRhe impacts uity and futu
tures
C 2012‐20
Actual F18.6 18.2 7.5 30.3 74.6
o four broad
cast ($3.5 m
gas room toher than foresters requirless than th
orecast ($12
enditures at after the were not bary engineeld be significnding, contrcomprehenand identifyed that not ontly more cforecast. EWR term will eof higher
ure rates ar
D 014
PBR Forecast P15.0 30.6 8.9 18.9 73.4
d reliability
million great
o improve crecast, EWSIring upgradehe 2012‐2016
2.4 million le
the beginniGold Bar asased on dering analysiscantly greateributing to lnsive review y repairs, upgonly were cocapital upgWSI currentexceed forecthan forecae discussed
E 2012‐2
Current Projection
20.6 43.1 17.8 78.1 159.6
categories.
ter for 2012
capacity andI’s efforts toes. EWSI ex6 PBR foreca
ess for 2012
May 2015
ing of each ssets were tailed cost s indicated er than the ower than of its Gold grades and osts higher rades and tly projects cast capital ast capital in Section
F 2016
PBR Forecast 22.0 51.7 8.9 29.1 111.7
Actual to
2‐2014 and
d reliability. o maximize xpects that ast.
2‐2014 and
EPCOR Water 2014 PBR Prog
This cahead‐wreviewto revistotal ex
• Clover $8.8 m
This prrecoveEdmonreleaseestimatEWSI e
• Base Rmillion
This caor impcosts irepreseTable 4
Ba
1 Bu2 St3 M4 El5 In6 Ge7 To
Rat4.4
In 2014, emillion was2013. ByWastewateof the inc
Services gress Report
ategory incluworks flow ced several dsed designs xpenditures
Bar Reliabilillion greate
oject categor phosphorton Waste e fertilizer. tes and the xpects that
eliability – $greater ove
tegory consrove reliabin this categent the cap4.3‐2 below:
se Reliability
uildings and structural Mechanical ectrical strumentatioeneral plant aotal
e Base an
even with his still $19.6 y 2016, thiser’s rate bascrease in c
udes upgradontrol, and design optionand a highein this categ
lity – $6.1 mer over the o
ory includes us and nitrManagemenThe cost ostart of thithe total cos
$9.1 million er the 2012‐2
ists primarilylity and safegory reflect ital costs ne
Capi
y Sub‐Categor
site
on and controand process
nd Return
igh levels omillion less ts situation se by the enapital expe
des to grit solids handlns for handler focus on pgory by $8.5
million greatever the 2012
the Ostara Nogen from nt Centre anf this projes project wst of this pro
greater than2016 PBR te
y of life‐cyclety of plantthe results
eeded to en
ital Expendit
A
ries Act 2 26. 1
ols 1.
14
n on Equi
f capital exthan the PBwill be revd of the curenditures, b
36 of 59
removal anling processing increaseprocess opti million ove
er than forec2‐2016 PBR
Nutrient Recthe Clover
nd transformect in the Pas delayed toject will be
n forecast ($rm).
e replacemet operationss of EWSI’s nsure plant
Table 4.3‐tures ‐ Base($ million
A B2014
tual
PBRForeca
.0 1.5
.6 1.1.9 1.3.1 0.4.7 0.7‐ 0.24.3 5.2
ity
penditures, R forecast, bersed as prent PBR terecause a la
nd screeninges. EWSI haed solids to tmization, wr the 2012‐2
cast ($1.4 mterm).
covery ProjeBar biosolid
ms these nuPBR forecastto allow EW$8.9 million
$11.4 million
ents and adds. Higher thcomprehenreliability.
‐2 e Reliability Ps)
C 201
R ast
Actual
5 4.4 1 6.6 3 11.7 4 3.2 7 4.2 2 0.1 30.3
Wastewatebecause of lorojects are rm is expectarge propo
g, sludge stas completethe plant. Twhich EWSI e2016 PBR ter
million less th
ect, which utds settling ltrients into t was basedWSI to confirn greater tha
n greater for
ditional assehan forecastnsive asset These resu
Projects
D 12‐2014
PBR
Forecast 6.7 3.1 4.5 1.2 3.4 0.5 18.9
er’s mid‐yeaower capitacompleted
ted to be lesrtion of th
orage and ted detailed shese changeexpects will rm.
han for 2012
tilizes a new agoons locaan eco‐fried on prelimrm costs anan forecast.
r 2012‐2014
ets needed tt actual andcondition rlts are sum
E 2012
Current Projection
14.7 14.5 28.4 6.6 6.7 7.2 78.1
r rate base l spending in. The net ss than the fhe increase
May 2015
thickening, studies and es have led reduce the
2‐2014 and
process to ated at the ndly, slow‐
minary cost d benefits.
4 and $49.0
to maintain d projected review and marized in
F 2‐2016
n PBR
Forecast9.6 5.3 7.2 2.1 4.9 0.6 29.1
of $269.7 n 2012 and effect on ull amount in capital
EPCOR Water Services 37 of 59 May 2015 2014 PBR Progress Report
expenditures relates to life‐cycle replacements, so asset retirements are also expected to increase (see Table 4.4‐1).
Table 4.4‐1 Rate Base – Net of Contributions
($ millions) A B C D
Mid‐Year Rate Base 2014 2016
Actual PBR
Forecast Current
Projection PBR
Forecast 1 Property, Plant and Equipment, opening balance 356.1 383.0 431.2 440.8 2 Additions 28.9 28.8 49.2 19.7 3 Retirements/Transfers (6.0) ‐ (6.8) ‐ 4 Property, Plant and Equipment, closing balance 379.0 411.8 473.6 460.5
5 Accumulated Depreciation, opening balance 96.1 103.2 106.5 123.5 6 Depreciation Expense 9.4 9.8 10.4 11.0 7 Retirements/Transfers (5.8) ‐ (6.8) 8 Accumulated Depreciation, closing balance 99.7 113.0 110.1 134.5
9 Mid‐Year Property, Plant and Equipment 367.6 397.4 452.3 450.6 10 Mid‐Year Accumulated Depreciation (97.9) (108.1) (108.2) (128.9) 11 Mid‐Year Net Property 269.7 289.3 344.1 321.7
12 Add: Working Capital 5.6 5.4 7.1 5.1 13 Add: Average Materials and Supplies 1.4 0.8 1.4 0.8 14 Mid‐Year Rate Base 276.7 295.5 352.6 327.6
In 2014, the total return on Wastewater’s rate base was $0.2 million less than in the PBR forecast. This result reflects lower than forecast debt costs (see Section 4.2.5) and significantly higher net income (see Section 4.2.1). These results are shown in Table 4.4‐2.
EPCOR Water 2014 PBR Prog
1 M
2 C3 C
4 C5 C6 W
7 R8 R9 R
Wa4.5
W4.5.1
Wastewateaccordanceadjustmenincludes th5.8%.
W4.5.2
Wastewateseparate rwater custstructure ftreatment ResidentiaCommerciarecognize tIn additionfor each wastewate Wastewate2012, 2013
Services gress Report
Mid‐year Rate
Capital StructCapital Struct
Cost of Debt Cost of EquityWeighted Ave
Return on MidReturn on MidReturn on Mi
stewater
Wastewate
er treatmene with the Bts. In 2014he 2014 PBR
Wastewate
er has two crates for muomers are sfor residentare very sil customers al customerthat there an, commercikilogram ofer that excee
er Treatmen3 and 2014 a
Return o
e Base Allocat
ture: Debt (%)ture: Equity (%
y erage Cost of
d‐year Rate Bd‐year Rate Bid‐year Rate B
r Treatme
r Treatme
nt rates consBylaw, annua4, wastewa inflation ad
r Treatme
customer claulti‐residentubject to thetial and mumilar for reare based o
rs are basedre economieial customerf certain preds the conc
nt Rates, Ovare shown in
Return on R
on Rate Base
ted to In‐City
) %)
f Capital
Base FinancedBase FinancedBase
ent Rates
nt Rates
sist of consal wastewatter treatmedjustment of
nt Rate St
asses: Resideial customee same ratesulti‐residentiesidential anon a flat ratd on a deces of scale inrs are chargrescribed mcentrations s
verstrength n Appendix D
38 of 59
Table 4.4‐2Rate Base ‐ W($ millions)
y
d by Debt d by Equity
s and Bill
umption chater rate increent rates inf 1.9% (see S
ructure by
ential and Crs. Insteads as residential customend multi‐rese structure lining rate sn wastewateged overstrematerials (“sshown in Sec
Surcharges D‐2.
Wastewater
Compari
arges and feases are limcreased by Section 3.5.1
y Custome
ommercial.d, customerstial wastewars recognizesidential cuswith a singlstructure wer treatmentength and adsurchargeabction 4 of Sc
and Additio
r
A
Actua 276.7
60.3039.70
4.2010.656.76
7.0 11.7 18.7
sons
fixed monthmited to infl7.7% from
1), plus spec
er Class
Unlike In‐Cis who woulater customes that thestomers. Acle consumptwith three cot for larger cdditional ovble matter”)chedule 1 to
onal Overst
2014 al PBR7 2
% 5% 4
% % %
0 7 7
ly service chlation plus s 2013. Thiial rate adju
ty Water, thld be multi‐ers. The com costs of wccordingly, tion block. onsumptioncommercial cverstrength ) per cubic the Bylaw.
rength Surc
May 2015
B
R Forecast 295.5
59.78% 40.22%
5.10% 8.35% 6.41%
9.0 9.9 18.9
harges. In special rate is increase stments of
here are no ‐residential mmon rate wastewater charges to Charges to n blocks to customers. surcharges metre of
charges for
EPCOR Water 2014 PBR Prog
W4.5.3
Unlike moWastewateand maintcompariso Wastewatefour local cfixed charg
4.5.3.1 RFigure 4.5.residentialresidentialcomparisoEWSI Wast Figure 4.5.Average Ed(15.5 m3/m
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
$/m
onth
Services gress Report
Wastewate
ost communer is only restenance of tns are based
er bill compacommunitiesges, consum
Residential 3.1 provides household’ customers n sample. Etewater’s ch
.3.1 dmonton Mmonth)
r Bill Comp
ities where sponsible fothe collectiod on blended
arisons for 2s. These bill ption charge
Wastewats a compariss 2012‐2014have lower Edmonton’s arge of $15.
onthly Resid
parisons to
drainage aor wastewateon system, d EWSI wast
2014 are bascomparisones, plus any
ter Bills son of reside4 average wathan averagresidential .28 per mon
dential WasEPC
OR
Drainage
39 of 59
o Other Co
nd wastewaer treatmentare providetewater trea
sed on survens are based surcharges.
ential houseastewater coge wastewawastewaterth and the C
tewater Bill
ommunitie
ater treatmt. Drainage ed by the Catment and C
eys of Calgaron the tota
hold wastewonsumptionater bills comr bill is baseCity’s draina
l
Levy
es
ent services services, inity. AccordCity drainage
ry, Vancouvel cost to the
water bills ba of 15.5 m3 pmpared to oed on a blenge charge of
s are combicluding the dingly, wastee rates.
er, Winnipege customer a
ased on the per month. other customnded rate cof $22.82 per
May 2015
ined, EWSI operations ewater bill
g as well as and include
Edmonton Edmonton
mers in the onsisting of r month.
Levy
EPCOR Water 2014 PBR Prog
4.5.3.2 CTable 4.5.2monthly ware compeis substantcomparisotreatment
1 Mont
2 Avera3 Van4 Edm5 Win6 St. A7 Calg8 Stu9 She
10 Spr
Wa4.6
WastewatePerformanavailable ifavailable fthe 100 baoutcome wstandard.
Sy4.6.1
The Systemof Wastew
Services gress Report
Commercia2.2 provides wastewater cetitive with stial variationns, commeand City dra
Commu
thly Consump
age Bill ($ perncouver monton nnipeg Albert gary rgeon Countyerwood Park uce Grove
stewater
er System Sence under ef the standaor performaase point stawas better th
ystem Reli
m Reliability water Treatm
l Wastewaa comparisoconsumptionurrounding n in monthlyrcial wastewainage rates
Comme
nity
ption ‐ m3
r month)
y
r PBR Per
ervice Qualiach index iards for all ance above andard. Acthan the stan
iability Ind
Index is a mment Services
ater Bills on of the wan. This tablecommunitiey wastewatewater bill c.
Trcial Month
ConvS
formance
ty is measurs measuredfive performstandards aual outcomendard or “Be
dex
measure of ts. In 2014, W
40 of 59
ater bills for e shows thates and with mer bills for cocomparisons
Table 4.5.3.2ly Wastewa
Avenience Store
10
19 28 22 40 36 49 32 19
e Measur
red by the rd independemance measnd financiales have beeelow Standar
the confidenWastewater
commercialt water billsmajor cities ommercial cs are based
2 ater Bill Com
BRetail Store R
50
95 89 111 164 78 171 87 94
res
results of fivently on a psure indices penalties aen noted as rd”, if the ac
nce that cusexceeded th
l customers for EWSI’s cin western Customers. Ad on blend
mparison
C
Restaurant
250
477 436 553 784 289 800 519 470
ve indices prpoint basis s are achievare applied i“Exceeded Sctual outcom
stomers can he standard
with differincommercial Canada. OveAs with Resided EWSI w
D
Hotel
2,000
3,812 3,556 4,420 6,205 2,138 6,179 2,822 3,762
rescribed in with 100 bed. Bonus f EWSI doesStandard” ifme was wors
place in thefor this inde
May 2015
ng levels of customers erall, there idential bill wastewater
E
Hospital
10,000
19,060 12,133 22,100 30,989 10,588 30,683 13,151 18,810
the Bylaw. base points points are s not meet f the actual se than the
e reliability ex.
EPCOR Water 2014 PBR Prog
PerformaMeasu
Enhanced PTreatment
2014 Highl All planneavailabilitystandard fo
W4.6.2
The Wasteplant’s actWastewate
PerformaMeasu
WastewateEffluent LimPerformancIndex (WEL
2014 Highl
On‐going ethe standa
Services gress Report
ance ure Primary (EPT)
EPT in pefaciliweatinfluthe E
light
d EPT faciliy of the facor this perfo
Wastewate
ewater Qualtual final efer exceeded
ance ure
r mit ce PI)
The dischparawastfinal
lights
efforts to imrd for this p
PBR Measperformance, ercent, where tity operated duther events whent flow rate eEPT event thre
ity maintenility during ormance mea
r Quality I
ity Index is affluent qual the standar
PBR Meas
percentage of harge limit for meters in the tewater treatmeffluent
mprove soliderformance
System
sure measured the EPT uring wet hen the exceeded shold
ance was cwet weatheasure.
ndex
a measure olity relative rd in this ind
Wastew
sure
the five Gold Bar ment plant’s
ds handling a measure.
41 of 59
Table 4.6.1m Reliability
Standard AS
75.0% 8
InAv
Maxim
completed der periods,
of the perceto its disc
dex.
Table 4.6.2water Qualit
Standard
46.0%
InAv
Maxim
and nutrient
y Index ActualScore
ActOutc
84.3% Excestan
ndex Standard vailable Bonus mum Available
Total Actual Total Points E
during dry wcontributing
entage of thharge limits
ty Index ActualScore
AcOut
22.9% Excsta
ndex Standard vailable Bonus mum Available
Total Actual Total Points E
t removal p
tualcome
AvP
eeded ndard (1.0
bon
PointsPoints Points PointsEarned
weather peg to EWSI’s
e Gold Bar ws for five p
ctualtcome
AvP
eeded ndard
PointsPoints Points Points Earned
processes all
vailable Points
15.0 available us point)
15.0 1.0 16.0
riods, maximability to e
wastewater parameters.
vailable Points
40.0
40.0 4.0 44.0
lowed EWSI
May 2015
Actual Points
16.9
16.916.0
mizing the exceed the
treatment In 2014,
Actual Points
80.4
80.444.0
to exceed
EPCOR Water 2014 PBR Prog
Cu4.6.3
The CustoWastewateindex.
PerformaMeasu
Customer Inquiries Responses
2014 Highl
In 2014, attributed steps to mclosed to biogas flar
En4.6.4
The EnviroIn additionstrategic gexceeded t
PerformaMeasu
Emergency Response Training
Completeneand TimelinReporting
EnvironmenIncident
Services gress Report
ustomer S
omer Servicer’s overall
ance ure
Percrespof re
lights
Wastewaterto the wast
minimize releimprove thee.
nvironmen
onmental Indn, the Envirogoal to “Prethe standard
ance ure
The Respwithcomeach
ess ness of
Achirepoand subm
nt The and
ervice Ind
e Index is level of cus
PBR Measentage of custonded to witheceipt
r engaged tewater treaease of odoe effectiven
ntal Index
dex measurenmental Indeserve and ds for each o
PBR Meas
number of Emponse Training an environmeponent conduch calendar yearevement in meort submission complete repomissions number of reppreventable
ex
a measuretomer servi
Custom
sure omer issues in 24‐hours
additional atment planours, such aess of the o
es Wastewatdex contribuSustain Edmof the perfor
Envir
ure
ergency exercises ental cted in r eeting deadlines ort
portable
42 of 59
of the levce. In 2014
Table 4.6.3mer Service
Standard 90.0%
InMaxim
managemennt. Wastews ensuring todour contr
ter’s activitites to the Cmonton’s Enrmance mea
Table 4.6.4ronmental In
Standard
1
100%
18
vel of satis4, Wastewat
Index ActualScore
AcOut
92.3% Excsta
ndex Standard mum Available
Total Actual Total Points E
nt staff to water’s operathat outsiderol systems,
es for limitinity’s measurnvironment”asures makin
ndex ActualScore
AcOut
2 Excsta
100% Msta
6 Excsta
sfaction thater exceede
ctualtcome
AvP
eeded ndard
PointsPoints PointsEarned
respond toations teame doors in o and optim
ng its impacre of progres”. In 2014ng up this ind
ctualtcome
AvP
ceeded ndard (2.0
bonu
Metndard
ceeded ndard
t customered the stand
vailable Points 5.0
5.0 5.0
o customerm also proacoperations aizing operat
ct on the envss towards i, Wastewatdex.
vailable Points
6.66 available us points)
6.67
6.67
May 2015
s place in dard in this
Actual Points 5.1
5.15.0
r concerns tively took areas were tion of the
vironment. ts ten‐year ter met or
Actual Points
8.66
6.67
6.67
EPCOR Water 2014 PBR Prog
Manageme
2014 Highl
• Compleprocessreports are expsupport
• EnvironreceivedCertificainvestigenvironProtectienviron
Sa4.6.5
The Safetyencouraginactivity‐baand observand injury
Services gress Report
nt envir
lights
eteness and es reducedsubmitted p
pected to det efforts to m
nment Incidd ISO 14001ation, Wastgation, and cmental inciion and Enmental com
afety Index
y Index meng staff awased performvations) andseverity). In
ronmental inci
Timelinessreport pre
prior to requecrease sammeet this per
ent Manag1 Environmewater estacorrective adents. Durnhancement mpliance will
x
easures Wasareness andmance measud outcome‐bn 2014, Wast
idents
of Reportieparation anuired deadlimple retestinrformance s
ement. In ental Manaablished proaction. Thesring 2015, GAct Operabe required
stewater’s d engagemeures (safety based perfotewater met
43 of 59
InAv
Maxim
ng. Improvnd compilatnes. On‐gong and shortandard.
early 2014gement Sysocedures fose efforts coGold Bar isating Appro to maintain
progress toent in safetymeetings, srmance meat or exceede
ndex Standard vailable Bonus mum Available
Total Actual Total Points E
vements in tion time, roing refinemrten analysis
4 the Gold stem Certifior legal comontributed ts expected oval. Contin the low nu
owards achiy activities. safe work pasures (lost ed all standa
PointsPoints Points PointsEarned
data validaresulting in ents in the s and valida
Bar wastewcation. In mpliance, ento the low to receive inued diligember of env
eving a zer The Safetylans, first aitime freque
ards in this in
20.0 2.0 22.0
tion and w100% comquality contation times
water treatmorder to acnvironmentanumber of a new Envience and avironmental
ro injury cuy Index incld training, iency, injury ndex.
May 2015
22.022.0
eb posting mpletion of trol system to further
ment plant chieve this al incident reportable ironmental focus on incidents.
ulture and ludes both nspections frequency
EPCOR Water Services 44 of 59 May 2015 2014 PBR Progress Report
Table 4.6.5 Safety Index
Performance Measure PBR Measure Standard
ActualScore
ActualOutcome
Available Points
ActualPoints
Safety Meetings Number of safety meetings conducted during the year 12 12 Met
standard 2.0 2.0
Formal Safe Work Plans (SWP)
Number of Formal Safe Work Plans each calendar year to identify, control and communicate hazards
1,100 8,758 Exceeded standard 5.0 5.0
First Aid Certified
Percentage of permanent employees at year‐end who hold a valid Standard First Aid Certificate
33.0% 72.7% Exceeded standard 4.0 4.0
Work Site Inspections / Observations
Number of Work Site Inspections / Observations each calendar year to find problems and assess accidents before other losses occur
270 908 Exceeded standard 4.0 4.0
Lost Time Frequency Rate
A measure of the effectiveness of a safety program – the frequency of injury rate per unit of exposure
0.81 0.00 Exceeded standard
1.0 (0.6 available bonus points)
1.6
All Injury Frequency Rate
A measure of the frequency of disabling injuries and medical aid injuries per unit of exposure
2.42 0.00 Exceeded standard
2.0 (1.2 available bonus points)
3.2
Injury Severity Rate
A measure of the seriousness of injuries and illnesses – ratio number of disability days to the number of employee exposure hours in a calendar year
8.88 0.00 Exceeded standard
2.0 (1.2 available bonus points)
3.2
Index Standard Points 20.0 Available Bonus Points 3.0
Maximum Available Points 23.0 Total Actual Points 23.0Total Points Earned 23.0
2014 Highlights In 2014, Gold Bar met or exceeded the standards for all performance measures in the Safety Index and, as in 2013, had no Lost Time or Medical Treatment Injuries.
EPCOR Water 2014 PBR Prog
5 Futu Fina5.1
H5.1.1
EWSI’s curthe 2012‐2Sections 3.almost $50In order taccelerate Since projebeen compsignificant Subsequenhigher thainflation. likely to beanticipateddetermine The impacWater as continuingimpacts aryears.
N5.1.2
As noted inon‐routin2014, City‐on In‐City Wfor the Soestimated non‐routinIn‐City WaAccordinglthese proje
Services gress Report
ure Plaancial Ch
igher than
rrent project2016 PBR te.3 and 4.3, w0 million, is o achieve tspending in
ect costs arepleted, EWSimpacts on
nt to 2016, dn forecast aAs well, sine additional d. Since plad.
ct of additiofor Wastew
g to quantifyre fully refle
on‐Routin
n Section 1ne adjustme‐driven projeWater’s caputh East LRcost of thes
ne adjustmeater to meety, EWSI is nects.
ans andallenges
n Forecast
tion is that Irm will be mwhile over $needed to ahis level of the remain
e not addedI does not exIn‐City Wate
depending oadditions tonce much ofimpacts on danning for th
onal capital water, simpy the impaccted in plan
ne Adjustm
.5, EWSI maents from thects, especiaital expenditT and otherse projects nt treatment or exceednot requesti
d Challeand Initia
Capital Ex
In‐City Watemore than $820 million oaddress the cspending bder of 2015
d to In‐City Wxpect that iner and Wast
on the level Wastewatef the additiodepreciationhe next PBR
spending is ly because cts of projecnning for the
ments for 2
ay request ahe City. Altally water mture programr water maito $21.2 mint, EWSI has its target rng non‐rout
45 of 59
enges atives
xpenditure
er and Wast86 million grf this increachallenges oby the end and into 20
Water and Wncreases in cewater’s ret
of capital sper’s rate basonal capital n expense frR term is sti
not expectIn‐City Watcted in cape remainder
2015 and F
adjustments though no nmain relocatim. EWSI estn relocationillion. Altho been able treturn on eqtine adjustm
es
tewater’s coreater than ase is City‐drof aging infraof the 20116.
Wastewater’capital spendturn on equi
pending reqse could resrelates to l
rom assets bll on‐going,
ted to be aster has a mital expendir of the curr
uture Yea
to In‐City Wnon‐routineions, are exptimates thatn projects isough this prto achieve oquity, even ment treatm
ombined capthe PBR forriven, the maastructure a2‐2016 PBR
’s rate baseding in 2015ity in the 201
uired in thesult in rate life‐cycle rebeing retiredthese impa
s significantmuch largeritures and wrent PBR ter
rs
Water and W adjustmenpected to hat the total ins $11.2 milliroject could operating cowith additi
ment for the
pital expendrecast. As dajority of that the Gold BR term, EWS
s until the p5 and 2016 w12‐2016 PBR
e 2017‐2021 increases inplacements,d earlier thancts have no
an impact r rate basewill ensure rm and for s
Wastewater’ts were ideave significancrease in prion, bringingpotentially
ost savings tonal capitalcosts assoc
May 2015
itures over iscussed in e increase, Bar WWTP. SI plans to
project has would have R term.
PBR term, n excess of , there are n had been ot yet been
for In‐City . EWSI is that these subsequent
’s rates for entified for ant impacts roject costs g the total qualify for hat enable l spending. ciated with
EPCOR Water 2014 PBR Prog
D5.1.3
As noted downwardconsumptihave beencurrent PBactual andresearchinidentified a
Co5.1.4
EWSI, togeto reflect developedEWSI costrequiremeincorporaton a comphistorical rservice mo
15.0
16.0
17.0
18.0
19.0
20.0
21.0
m3 pe
r customer per m
onth
Services gress Report
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EPCOR Water Services 49 of 59 May 2015 2014 PBR Progress Report
Appendix A: Historical Consumption Appendix A‐1: Historical Consumption ‐ In‐City Water
A B C Consumption and Customer Counts ‐ Water 2012 2013 2014
1 Annual Consumption by Customer Class (ML) 2 Residential 43,317 43,622 44,876 3 Multi‐Residential 16,900 17,162 17,696 4 Commercial 28,768 28,662 28,572 5 Total 88,985 89,446 91,144 6 Average Monthly Customer Count 7 Residential 221,444 226,226 232,194 8 Multi‐Residential 3,407 3,470 3,522 9 Commercial 17,597 17,917 18,014 10 Total 242,448 247,613 253,730
11 Average Monthly Consumption per Customer (m3) 12 Residential 16.3 16.1 16.1 13 Multi‐Residential 413.4 412.1 418.7 14 Commercial 136.2 133.3 132.2
Appendix A‐2: Historical Consumption ‐ Wastewater
A B C Consumption and Customer Counts ‐ Wastewater 2012 2013 2014
1 Annual Consumption by Customer Class (ML) 2 Residential 41,346 41,924 42,773 3 Multi‐Residential 16,936 17,107 17,704 4 Commercial 25,378 25,331 25,126 5 Total 83,660 84,362 85,603 6 Average Monthly Customer Count 7 Residential 221,170 226,118 232,086 8 Multi‐Residential 3,406 3,470 3,522 9 Commercial 15,231 15,488 15,573 10 Total 239,807 245,076 251,181
11 Average Monthly Consumption per Customer (m3) 12 Residential 15.6 15.5 15.4 13 Multi‐Residential 414.4 410.8 418.9 14 Commercial 138.8 136.3 134.5
EPCOR Water Services 50 of 59 May 2015 2014 PBR Progress Report
Appendix B: Historical Summary of Financial Performance Appendix B‐1: Financial Performance – In‐City Water
B‐1‐1: Net Income and Return on Equity ‐ In‐City Water
A B C Net Income and Return on Equity ‐ Water 2012 2013 2014
($ millions) 1 Net income 2 Revenue 150.4 161.7 172.8 3 Operating Costs (90.3) (87.2) (90.4) 4 Depreciation (17.2) (19.0) (20.0) 5 Interest Expense (19.8) (20.6) (22.3) 6 Net Income 23.1 34.9 40.1 7 Rate Base and Return on Equity 8 Mid‐Year Rate Base 836.8 894.2 957.2 9 In‐City Share of Mid‐Year Rate Base 77.8% 77.9% 78.3%
10 Rate Base (In‐City) 651.3 696.5 749.4 11 Equity Ratio 40.35% 39.59% 40.30% 12 In‐City Rate Base financed by Equity 262.8 275.8 302.0 13 Return on Equity ‐ % 8.8% 12.7% 13.3%
14 Capital Expenditures 84.1 85.9 99.3
B‐1‐2: Revenue ‐ In‐City Water
A B C Revenue - In-City Water 2012 2013 2014
($ millions) 1 Consumption Revenue 2 Residential 73.9 79.2 85.4 3 Multi‐Residential 22.4 24.3 26.1 4 Commercial 29.3 31.2 32.6 5 Total Consumption Revenue 125.6 134.7 144.1 6 Fixed Charge Revenue 7 Residential 17.7 19.1 20.1 8 Multi‐Residential 0.8 0.9 0.9 9 Commercial 2.6 2.8 2.9
10 Total Fixed Charge Revenue 21.1 22.8 23.9 11 Total Consumption and Fixed Charge Revenue 146.7 157.5 168.0
12 Other revenue 3.7 4.2 4.8 13 Total Revenue 150.4 161.7 172.8
EPCOR Water Services 51 of 59 May 2015 2014 PBR Progress Report
B‐1‐3: Operating Costs ‐ In‐City Water
A B C Operating Costs ‐ In‐City Water 2012 2013 2014
($ millions) 1 Operating Costs by Cost Category 2 Salaries and benefits 45.1 42.9 40.1 3 Corporate administration 20.3 14.0 13.1 4 EWSI Shared Services ‐ 2.7 9.5 5 Customer billing 9.1 8.8 8.8 6 Power 7.7 7.2 8.2 7 Chemicals 4.6 4.6 5.6 8 Contractors 5.8 6.1 6.1 9 Materials and supplies 3.0 2.7 3.0
10 Vehicles 1.8 1.9 2.2 11 Other 0.2 1.3 (0.7) 12 Franchise fees 11.6 12.4 13.3 13 Total Operating Costs by Cost Category 109.2 105.6 109.2
14 Operating Costs by Operational Function 15 Water Treatment Plants 28.5 29.8 30.8 16 Distribution and Transmission 21.7 22.0 23.9 17 Quality Assurance and Environment 4.5 4.7 4.5 18 Operations Support Services 8.0 7.1 4.7 19 Administrative Services 5.4 3.7 0.6 20 EWSI Shared Services ‐ 2.7 9.5 21 Customer Billing 9.1 8.8 8.8 22 Corporate Administration Costs 20.4 14.4 13.1 23 Franchise Fees 11.6 12.4 13.3 24 Total Operating Costs by Operational Function 109.2 105.6 109.2 25 In‐City Water Share of Operating Costs ‐ % 82.8% 82.6% 82.8% 26 In‐City Water Share of Operating Costs ‐ $ 90.3 87.2 90.4
EPCOR Water Services 52 of 59 May 2015 2014 PBR Progress Report
Appendix B‐2: Financial Performance ‐ Wastewater
B‐2‐1: Net Income and Return on Equity ‐ Wastewater
A B C Net Income and Return on Equity ‐ Wastewater 2012 2013 2014
($ millions) 1 Net income 2 Revenue 61.1 66.5 72.6 3 Operating Costs (40.2) (40.2) (44.4) 4 Depreciation (8.5) (8.7) (9.5) 5 Interest Expense (7.3) (7.1) (7.0) 6 Net Income 5.1 10.5 11.7
7 Rate Base and Return on Equity 8 Mid‐Year Rate Base 263.2 266.3 276.7 9 Equity Ratio 40.46% 40.50% 39.70%
10 Mid‐Year Rate Base financed by Equity 106.5 107.8 109.9 11 Return on Equity ‐ % 4.79% 9.74% 10.65%
12 Capital Expenditures 11.8 25.1 37.7
B‐2‐2: Revenue ‐ Wastewater
A B C Revenue - Wastewater 2012 2013 2014
($ millions) 1 Consumption Revenue 2 Residential 24.0 26.3 29.0 3 Multi‐Residential 9.8 10.6 12.0 4 Commercial 13.8 15.1 16.2 5 Total Consumption Revenue 47.6 52.0 57.2 6 Fixed Charge Revenue 7 Residential 8.1 9.2 10.0 8 Multi‐Residential 0.1 0.1 0.2 9 Commercial 0.6 0.5 0.7
10 Total Fixed Charge Revenue 8.8 9.8 10.9 11 Total Consumption and Fixed Charge Revenue 56.4 61.8 68.1
12 Other revenue 4.7 4.6 4.5 13 Total Revenue 61.1 66.4 72.6
EPCOR Water Services 53 of 59 May 2015 2014 PBR Progress Report
B‐2‐3: Operating Costs ‐ Wastewater
A B C Operating Costs ‐ Wastewater 2012 2013 2014
($ millions) 1 Operating Costs by Cost Category 2 Salaries and Benefits 15.2 15.5 17.6 3 Power Costs and Other Utilities 4.4 3.6 4.0 4 Franchise Fees 4.5 4.5 4.5 5 Customer Billing 4.8 4.8 4.6 6 Contractors and Consultants 3.7 3.7 4.2 7 Corporate Service Charges 2.3 2.5 2.5 8 Materials and Supplies (including chemicals) 1.0 0.7 1.7 9 Other 4.5 4.8 5.3
10 Total Wastewater Operating Costs 40.4 40.1 44.4
11 Operating Costs by Operational Function 12 Wastewater Treatment Plants 17.6 18.6 18.9 13 Quality Assurance and Environment 2.5 2.7 3.1 14 Operations Support Services 3.3 2.8 3.9 15 Administration Services 3.6 3.1 4.7 16 Customer Billing 4.5 4.5 4.5 17 Franchise Fees 4.4 3.6 4.0 18 Corporate Service Charges 4.5 4.8 5.3 19 Total Wastewater Operating Costs 40.4 40.1 44.4
EPCOR Water Services 54 of 59 May 2015 2014 PBR Progress Report
Appendix C: Affiliate Transactions Appendix C‐1: Affiliate Transactions Summary ‐ In‐City Water
A B C Affiliate Transactions ‐ Water 2012 2013 2014
($ millions) 1 Transactions with EUI and its Subsidiaries 2 Interest expense (EUI) 23.9 25.8 27.8 3 Corporate administration (EUI) 23.9 18.0 13.1 4 Water shared services (EWSI) ‐ 2.6 9.5 5 Customer billing services (EEAI) 7.2 6.9 6.8 6 Meter reading services (EDTI) 4.5 4.5 4.6 7 Hydrovac charges and space rent (ETECH) 3.7 4.0 4.1 8 Soil/water dumping, locates & asset use charges (EDTI) 0.4 0.3 0.3 9 Technical training services (EDTI) 0.6 0.6 ‐
10 Water sales (Wastewater) (0.3) (0.3) (0.3) 11 Meter reading services recoveries (Wastewater) (1.7) (1.7) (1.8) 12 Water administration recoveries (non‐regulated operations) (3.0) (4.3) ‐ 13 Corporate administration recoveries (non‐regulated
operations) (3.7) (3.9) ‐
14 Total 55.5 52.5 64.1
15 Fees for Services Provided by Capital Power Corporation 16 Power charges 7.7 7.2 8.2 17 Total 7.7 7.2 8.2
18 Taxes and Fees for Services Provided by the City 19 Franchise fees 11.6 12.4 13.3 20 Property and business taxes 0.2 0.2 0.2 21 Paving & barricades 1.4 1.3 1.2 22 Customer services 2.0 2.3 3.0 23 Mobile equipment services 1.3 1.4 1.7 24 Interest expense* 1.5 1.3 1.2 25 Other services ‐ 0.3 0.1 26 Cost recoveries from City of Edmonton Transportation (MAP
Services) ‐ (1.3) (0.3)
27 Total 18.0 17.9 20.4
28 Sales and Recoveries for Services Provided by EWSI to the City 29 Water sales for City of Edmonton parks and facilities 1.9 2.1 2.4 30 Miscellaneous sales 0.2 0.4 0.3 31 Meter reading services recoveries 1.7 1.7 1.8 32 Total 3.8 4.2 4.5
* Includes 5 basis point administration fees.
EPCOR Water Services 55 of 59 May 2015 2014 PBR Progress Report
Appendix C‐2: Affiliate Transactions Summary ‐ Wastewater
A B C Affiliate Transactions ‐ Wastewater 2012 2013 2014 ($ millions) 1 Transactions with EUI and its Subsidiaries 2 Corporate administration (EUI) 4.4 3.6 4.0 3 Customer billing (EEAI) 2.6 2.5 2.5 4 Interest expense (EUI) 1.4 2.0 3.6 5 Meter reading services (Water) 1.7 1.7 1.8 6 Water purchases (Water) 0.3 0.3 0.3 7 Administrative services (Water) 0.7 1.4 2.6 8 Other 0.1 0.2 0.1 9 Total 11.2 11.7 14.9
10 Fees for Services Provided by Capital Power Corporation 11 Power charges ‐ 1.0 4.0 12 Total ‐ 1.0 4.0
13 Taxes and Fees for Services Provided by the City of Edmonton 14 Franchise fees 4.4 4.8 5.3 15 Property and business taxes 0.5 0.4 0.5 16 Power charges (recoveries for Drainage Services) 4.1 3.2 ‐ 17 Regulatory chargebacks from Drainage Services 0.9 0.9 0.9 18 Other 0.2 0.2 0.1 19 Interest expense* 4.9 4.6 4.3 20 Total 15.0 14.0 11.1
21 Sales and Recoveries for Services Provided by EWSI to the City of
Edmonton
22 Wastewater sales 0.5 0.7 0.8 23 Miscellaneous sales 0.2 0.2 0.2 24 Miscellaneous cost recoveries 0.2 0.1 0.1 25 Total 0.9 1.0 1.1
* Includes 5 basis point administration fee.
EPCOR Water Services 56 of 59 May 2015 2014 PBR Progress Report
Appendix D: Water and Wastewater Treatment Rates Appendix D‐1: Water Rates
D‐1‐1: Consumption Rates ‐ Water
A B C
Consumption Block 2012 Rate ($/m3)
2013 Rate ($/m3)
2014 Rate($/m3)
1 Residential 2 0.0 m3 to 10.0 m3 1.6435 1.7469 1.7990 3 10.1 m3 to 35.0 m3 1.7955 1.9084 1.9653 4 Over 35.0 m3 2.2691 2.4117 2.4837 5 Multi‐Residential 6 0.0 m3 to 100.0 m3 1.5948 1.6951 1.7457 7 100.1 m3 to 1,000.0 m3 1.3343 1.4182 1.4605 8 Over 1,000.0 m3 1.1025 1.1718 1.2067 9 Commercial 10 0.0 m3 to 25.0 m3 1.2508 1.3296 1.3693 11 25.1 m3 to 100.0 m3 1.2508 1.3296 1.3693 13 100.1 m3 to 1,000.0 m3 1.1537 1.2263 1.2629 14 1,000.1 m3 to 5,000.0 m3 0.9131 0.9706 0.9995 15 Over 5,000.0 m3 0.7351 0.7813 0.8046
D‐1‐2: Fixed Monthly Service Charges ‐ Water
A B C Meter Size 2012 Rate
($) 2013 Rate
($) 2014 Rate
($) 1 15 mm 6.55 6.90 7.03 2 20 mm 8.99 9.46 9.64 3 25 mm 12.74 13.41 13.67 4 40 mm 22.26 23.43 23.88 5 50 mm 29.66 31.22 31.83 6 75 mm 58.88 61.98 63.18 7 100 mm 107.57 113.23 115.43 8 150 mm 201.32 211.93 216.04 9 200 mm 319.83 336.68 343.21
10 250 mm 747.41 786.79 802.04 11 300 mm 747.41 786.79 802.04 12 400 mm 893.52 940.61 958.84 13 500 mm 962.18 1,012.88 1,032.52
EPCOR Water Services 57 of 59 May 2015 2014 PBR Progress Report
Appendix D‐2: Wastewater Treatment Rates
D‐2‐1 Consumption and Fixed Monthly Service Charges ‐ Wastewater
A B C
Consumption and Fixed Monthly Service Charges 2012 Rate ($)
2013 Rate ($)
2014 Rate ($)
1 Consumption Charge per m3 2 Residential1 3 All consumption 0.5955 0.6361 0.6855 4 Commercial 5 0.0 m3 to 10,000.0 m3 0.5955 0.6361 0.6855 6 10,000.1 m3 to 100,000.0 m3 0.4607 0.4921 0.5303 7 Over 100,000.0 m3 0.2403 0.2567 0.2767 8 Fixed Monthly Service Charge per Meter 9 All Customers 3.12 3.33 3.58
D‐2‐2: Overstrength and Additional Overstrength Surcharges
A B C
Surchargeable Matter 2012 Rate ($/kg)
2013 Rate ($/kg)
2014 Rate ($/kg)
1 Overstrength Surcharges 2 Biochemical Oxygen Demand (BOD) > 300 mg/L 0.3730 0.3984 0.4294 3 Chemical Oxygen Demand (COD) > 600 mg/L * 0.3730 0.3984 0.4294 4 Oil and grease > 100 mg/L 0.3262 0.3484 0.3755 5 Phosphorous > 10 mg/L 3.1038 3.3152 3.5731 6 Suspended solids > 300 mg/L 0.3386 0.3617 0.3898 7 Total Kjeldahl nitrogen (TKN) > 50 mg/L 0.7922 0.8461 0.9119 8 Additional Overstrength Surcharges 29 Biochemical Oxygen Demand (BOD) > 3,000 mg/L 0.3730 0.3984 0.4294 10 Chemical Oxygen Demand (COD) > 6,000 mg/L * 0.3730 0.3984 0.4294 11 Oil and grease > 400 mg/L 0.3262 0.3484 0.3755 12 Phosphorous > 75 mg/L 3.1038 3.3152 3.5731 13 Suspended solids > 3,000 mg/L 0.3386 0.3617 0.3898 14 Total Kjeldahl nitrogen (TKN) > 200 mg/L 0.7922 0.8461 0.9119
EPCOR Water Services 58 of 59 May 2015 2014 PBR Progress Report
Appendix E: Operating Performance Measures Appendix E‐1: Water System Service Quality Measures
A B C D
Index and Performance Measures ‐ Water Performance Standard 2012 2013 2014
1 System Reliability Index 25.0 28.5 28.5 28.5 2 Water Main Break Factor 574 370 278 392 3 Water Main Break Repair Duration Factor 93.7% 94.6% 94.9% 91.2% 4 Planned Interruption Factor 95.0% 95.6% 95.6% 96.4% 5 Water Pressure Factor 5 1 0 1 6 Water Loss Factor 3.0 1.46 1.29 1.27
8 Water Quality Index 25.0 25.1 25.1 25.1 9 Water Quality Index 99.6% 99.8% 99.8% 99.8%
10 Customer Service Index 20.0 22.5 22.8 21.2 11 Post Service Audit Factor 74.0% 72.3% 77.8% 73.6% 12 Response Time Factor 25 16 16 21 13 Home Sniffing Factor 93.8% 97.0% 94.8% 95.7%
14 Environmental Index 15.0 16.2 15.8 16.5 15 Emergency Response Training 4 5 4 5 16 Completeness and Timeliness of Reporting 100% 92.1% 100.0% 100.0% 17 Environment Incident Management 7 5 4 5 18 Water Conservation Factor 19.0 18.2 17.8 17.5 19 Watershed Program Activity 5 7 7 7
20 Safety Index 15.0 14.1 14.6 16.0 21 Safety Meetings 36 36 36 42 22 Formal Safe Work Plans 3,100 12,863 12,417 14,059 23 First Aid Training 33% 66.6% 55.5% 55.3% 24 Work Site Inspections / Observations 800 1,127 998 1,297 25 Lost Time Frequency Rate 0.59 0.96 0.46 0.67 26 All Injury Frequency Rate 2.40 1.68 0.46 1.57 27 Injury Severity Rate 8.92 40.80 41.76 5.17
28 Aggregate Points Earned 100.0 106.4 106.8 107.2 29 Points Above / (Below) Performance Standard 6.4 6.8 7.2
EPCOR Water Services 59 of 59 May 2015 2014 PBR Progress Report
Appendix E‐2: Wastewater Treatment Service Quality Measures
A B C D
Index and Performance Measures ‐ Wastewater Performance Standard 2012 2013 2014
1 System Reliability Index 15.0 16.0 16.0 16.0 2 Enhanced Primary Treatment 75.0% 91.8% 89.2% 84.3%
3 Wastewater Quality Index 40.0 44.0 44.0 44.0 4 Wastewater Effluent Limit Performance Index 46.0% 20.7% 20.7% 22.9%
5 Customer Service Index 5.0 5.0 5.0 5.0 6 Customer Inquiries Response 90.0% 96.4% 96.3% 92.3%
7 Environmental Index 20.0 21.3 19.3 22.0 8 Emergency Response Training 1 2 1 2 9 Completeness and Timeliness of Reporting 100% 88.9% 88.9% 100%
10 Environment Incident Management 18 7 8 6
11 Safety Index 20.0 23.0 23.0 23.0 12 Safety Meetings 12 12 12 12 13 Formal Safe Work Plans 1,100 7,283 8,283 8,758 14 First Aid Certified 33.0% 59.4% 71.5% 72.7% 15 Work Site Inspections / Observations 270 960 685 908 16 Lost Time Frequency Rate 0.81 0.00 0.00 0.00 17 All Injury Frequency Rate 2.42 0.94 0.00 0.00 18 Injury Severity Rate 8.88 0.00 0.00 0.00
19 Aggregate Points Earned 100.0 109.3 107.3 110.0 20 Points Above / (Below) Performance Standard 9.3 7.3 10.0