07-I Tenaska III Water Service Contract

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7.4 F or the Initial Period, PARTNERSHIP'S Maximum Day Demand shall be established at 1.5 MGD. 7.5 Each twelve (12) month period following the Initial Period, beginning June 1 and ending May 31 ofthe following year, shall be defined as a "Rate Year." 7.6 For cost of service studies following the Initial Period, historical data accumulated during each twelve-month period ending September 30 ofthe prior year, hereafter referred to as the "Test Year," shall be used. For the cost of service studies, the Maximum Day Demand will be the greater of the Maximum Day Demand from the historical Test Year or the amount requested by the PARTNERSHIP and accepted by the City. 7.7 Prior to the end ofthe Initial Period, a detailed Cost of Service Study will be performed by an independent utility rate consultant chosen by the CITY, such study to be performed in accordance with the methodology described in that excerpted portion of the R. W. Beck, Inc. study, May, 2005, attached as Exhibit 1. The Cost of Service Study shall be developed on an actual historical cost test year basis (for the Test Year) allowing for reasonable and necessary expenses of providing such water service and allowing for known and measurable adjustments, including satisfying the CITY'S obligations under current and future bond covenants. Thereafter, on an annual cycle, a detailed Cost of Service Study shall be performed by an independent rate consultant chosen by the CITY again using the same methodology as the excerpted portion of the Study in Exhibit 1, unless and until a different methodology is mutually agreed upon in writing by PARTNERSHIP and the CITY. CITY shall pay for the cost of each annual Cost of Service Study and allocate the cost across all customer classes. 7.8 During the Initial Period and any given Rate Year, should PARTNERSHIP'S actual Maximum Day Demand exceed the then current Maximum Day Demand established for the Initial Period or any given Rate Year, PARTNERSHIP will be assessed an excess demand charge of 1.5 times the Annual Demand Charge (per MGD) times the Excess Demand. Payment of the Excess Demand Charge shall be due thirty (30) days within receipt of invoice from the CITY. Beginning the month after this event, this event will also immediately change PARTNERSHIP'S current Maximum Day Demand and Monthly Demand Charge for this Agreement to the new actual Maximum Day Demand and adjusted Monthly Demand Charge. AS AN EXAMPLE, ADJUSTMENTS FOR AN INCREASE FROM A MAXIMUM DAY DEMAND OF 1.8 MaD TO A MAXIMUM DAY DEMAND OF 2.1 MGD ARE CALCULATED IN THE EXAMPLE GIVEN BELOW. Example: Maximum Day Demand Annual Demand Charge (per MGD) Total Initial Annual Demand Charge ($95,228 x 1.8 MGD) Monthly Demand Charge ($171,410/12 months) 1.8 MGD $ 95,228 $171,410 $ 14,284 Actual demand recorded Excess Demand (2.1 MGD - 1.8 MGD) 2.1 MGD 0.3 MGD Tenaska III Water Service Contract - Page 5 T- ._..- .....n......____......"._.M.T.