Cost of service and rate design study

1. Overton Power District #5 Non-Coincident Peak August 2011 Based on 2010 audited financials Cost of serviceandrate design study

2. A cost of service study determines as precisely as possible the District’s cost to provide electrical service to a customer. • Costs are separated into three groups: Consumer Cost Demand Cost Energy Cost

3. The consumer cost is composed of the expenses and plant items needed to provide the first KWH of electricity to the individual customer. • Meters • Transformers of the smallest size • Meter reading • Operation, Maintenance and Billing expenses Consumer cost

4. The Demand (or Capacity) charge consists of two components: • The demand charge from the power supplier • The $ value of the District’s system built to serve peak load • Items in this area include substations, transmission facilities and other related equipment Demand cost

5. The energy component consists of the energy costs billed by the power supplier plus an adder for margins. Fuel cost and purchased power cost are part of this function. Energy cost

6. ASSIGNMENT OF DOLLARSTORATE (CUSTOMER) CLASSES

7. ASSIGNMENT OF EXPENSES

12. COST BASED RATESANDRECOMMENDED RATES

16. THE END