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<br />REVISED DRAFT <br /> <br />functions. A customer class should include only those customers who; (a) are in similar location <br /> <br />in relation to the utility, (b) use the same or similar facilities of the utility, (c) receive similar <br /> <br />service from the utility, and (d) place similar demands of the utility. It is important to note that <br /> <br />makeup of the customer class can change depending upon the particular asset that is being <br /> <br />allocated. A customer class that is appropriate for allocation of one type of cost, e.g., water <br /> <br />treatment costs, max include customers that would not be appropriate to the class when another <br /> <br />type of cost of assets is allocated, e.g., treated water distribution costs. The objective of cost <br /> <br />allocation and ultimate distribution to customer groups is to avoid cross-subsidization, and it is <br /> <br />important with that objective in view, differences in service commitment and service <br /> <br />requirement be given full consideration in determining customer classes. <br /> <br />D. <br /> <br />Determination of Customer Classes <br /> <br />The City's water utility serves residential, commercial and industrial customers. Besides these <br /> <br />customers, the City has four treated water contract customers, Campbell Soup, Tenaska III, <br /> <br />LCWSD, a municipal utility district that retails to its own customers, and Marvin-Jennings <br /> <br />Clardy WSC, a water supply corporation that retails to its own customers. In addition, the City <br /> <br />has a contract to provide raw water to Lamar Power Partners. Small industrial customers have <br /> <br />been grouped with commercial customers to correspond to the City's current rate structure. The <br /> <br />following lists the treated water customer classes isolated in the report. <br /> <br />a. <br /> <br />Residential customers <br /> <br />b. <br /> <br />Commercial customers (including small industry) <br /> <br />c. <br /> <br />Campbell Soup <br /> <br />d. <br /> <br />Tenaska III <br /> <br />Cityo/Paris. Texas <br />Water and Wastewater Cost D/Service Study <br />March ZO03 <br /> <br />9 <br />