2014 progress report...progress report epCor water serviCes inC. 2012-2016 perFormanCe based...

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

.....................

...................................................................................................................

.....................

.......................

.......................

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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.......................ONS .........................................y Customer Cla

Communities ....

nts

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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


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 .........................................................................................................................................................................

.....................

.............................................

ERFORMANCE

.......................Water ....................................................................................water ..............................................................

.....................

Y WATER ..........EWATER ............

NT RATES ........

.......................

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.......................arges ‐ Wastewh Surcharges ....

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......................MEASURES .......

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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


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%


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


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


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


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.


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


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


Non1.5

Under the non‐routinwhich are non‐routinimpact of t In review criteria outor wastew


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


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


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.


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


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


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


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


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


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


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


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:


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.


• 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


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


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


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


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


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


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


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


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


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


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


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


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).


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


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%


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


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


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


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


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


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


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


• 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


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


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


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


Areas for I

• Post SemeasuexperiecompleenableimprovOperat

En3.6.4

The Envirocontribute2014, In‐Ci

PerformanMeasur

Emergency Response Training

Completeneand Timelinof ReportinEnvironmenIncident ManagemeWater ConservatioFactor

Watershed Program Activity


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


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


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


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


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



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.


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


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


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


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


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 ($


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


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).


• 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


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


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


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


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


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


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


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.


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


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


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


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


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


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.


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


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



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


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


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


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


Manageme

2014 Highl

• Compleprocessreports are expsupport

• EnvironreceivedCertificainvestigenvironProtectienviron

Sa4.6.5

The Safetyencouraginactivity‐baand observand injury


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



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


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



1.6

All Injury Frequency Rate

A measure of the frequency of disabling injuries and medical aid injuries per unit of exposure



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



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.


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


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


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


eclining Re

in Section d pressure on into the n greater thaBR term. Thd forecast cg best pracand impleme

ost of Serv

ether with thsystem gro. The new cs allocated nts for thee “dual‐reguplaint basis,regulatory dodel utilizes

2005

esidential

3.1, declinon EWSI’sPBR forecasan anticipate greater thconsumptionctices in waented well in

Re

vice Study

he regional wowth and ocost of servito each cu next PBR ulation”, res wholesale decisions. Athe regulato

2006 20

Consumpt

ning residens revenues. sts for 2007‐ted and are han expectedn per resideter forecastn advance o

esidential Co2

Update

water customoperational ice model eustomer groapplication

sulting from water rates

As well, simiory basis of a

007 2008

46 of 59

tion

ntial consum Although

‐2011 and foexpected tod decline is ential customting, so thaf the next PB

Figure 5.1.3onsumption2005 to 2014

mers and thchanges sinstablishes thup, support. The revthe Albertas charged tolar to the oaccounting,

2009

mption perh EWSI inor 2012‐201o challenge illustrated inmer from 2at forecastinBR term.

3 per Custom4

he City, havence the prehe methodoting the devvised cost oa Utilities Coo the regionold cost of swhich differ

2010 20

r customer corporated 16, actual de EWSI over n Figure 5.12005 to 201ng process i

mer

e revised theevious cost ology for detvelopment of service mommission junal water cservice modrs from the

011 2012

is placing declining

eclines in cothe remain

1.3 below wh14. EWSI isimprovemen

e cost of servof service termining thof rates anmodel is deurisdiction toustomers anel, the revisInternationa

2013

Actua

Forec

May 2015

significant residential nsumption nder of the hich shows s currently nts can be

vice model study was he share of nd revenue esigned to o regulate, nd reflects sed cost of al Financial

2014

al

cast


Reporting separate Irequireme

Con5.2

EPCOR’s cocustomer c • Partne

event pEPCORwater c

• Partnesuch asother p

• Continu

• Promotefficien

Env5.3

EWSI strivfounding stakeholde EWSI contResource based Albeand a ten‐initiatives approval‐tostewardshpublic by J

Pro5.4

W5.4.1

Health CanEPCOR keeany changyears.


Standards FRS and Rents.

nservatio

onservation classes or gr

rship betwepromotes th’s participatconservation

ring with gos: The Way Wprograms;

uing sponso

ting conservncy informat

vironmen

es to ensurmember ofer Integrated

tinues to mDevelopmenerta Environ‐year stewarEWSI has co‐operate fip commitmune 30.

vincial an

Water

nada continueps track of ges to guidel

used by EWegulatory fi

n Initiativ

platform fooups. Some

en the City e use of wation in this en.

overnment aWe Green Sp

rship of Albe

vation and wtion and too

tal Initiat

re that it suf the Northd Manageme

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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


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


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


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


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


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.


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.


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


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


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


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

2014 progress report...progress report epCor water serviCes inC. 2012-2016 perFormanCe based...

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