2006-075-RES-LAMAR CO. WATER SUPPLY DISTRICT

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DRAFT REPORT Due to the point -of-take of water for the treated water contract customers, transmission and distribution costs were isolated. While the water treatment plant is used and useful in providing service to all customers receiving treated water service, the same does not hold true for the treated water transmission and distribution system. Campbell Soup and Tenaska III currently receive treated water directly from transmission lines from the treatment plant, not from the City's distribution system. LCWSD receives the bulk of their water purchases through the City's transmission lines. In the absence of detailed distribution system analysis during peak hour flow conditions, the treated water transmission and distribution system has been segregated by inch- feet into three groups -lines less than 8 inches in diameter, lines between 8 inches and 24 inches in diameter, and lines greater than 24 inches in diameter - for cost allocation purposes between the classes of treated water customers. Table A-2 in Appendix A shows the percentages of inch- feet of treated water transmission lines separated into the three pipe size groups. D. Treated Water Loss Allocation No treated water loss has been prorated to water received by Campbell Soup, Tenaska III, and LCWSD due to the location of their point of take from the City's transmission system. Table A- 3 in Appendix A shows treated water allocation percentages to City's retail customers, Campbell Soup, LCWSD and Tenaska III, including treated water losses allocated to the retail customers of the City. E. Treated 'Vater Use and Capacity Requirements of Customer Classes To distribute functionalized system component costs to customer classes - Residential class, Commercial class, Campbell Soup, LCWSD and T enaska III, assumptions had to be made as to peak-day demands of Residential and Commercial classes of customers. As a result of the fluctuations in water purchases by LCWSD, a four-year average of actual purchased volumes was used as an estimate of its average day and peak day consumption. Campbell Soup's contract requires a maXimum day estimation for each upcoming year. Campbell Soup estimated a maximum day of 6.0 million gallons. Also, because Campbell Soup's consumption has been declining over the past few years, Campbell Soup's lowest annual consumption over the past four fiscal years (FY 2003-2004) was used for its average day detennination. Tenaska III has experienced a significant reduction in water consumption due to operational changes. Tenaska City of Paris, Texas Water and Wastewater Cost of Service Study May 2005 9