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<br />REVISED DRAFT <br /> <br />c. <br /> <br />Distribution of Functionalized Cost Components to Customer Groups <br /> <br />This is the final step in determining the revenue requirement of each individual group of <br /> <br />customers from the total revenue requirement of the water system as a whole. <br /> <br />The <br /> <br />functionalized cost factors are determined for each individual customer group on the basis of <br /> <br />each group's annual usage characteristics. <br /> <br />Due to the point-of-take of water for three of the four contract customers, transmission and <br /> <br />distribution costs were isolated. While the water treatment plant is used and useful in providing <br /> <br />service to all customers of the City, the same does not hold true for the treated water <br /> <br />transmission and distribution system. Campbell Soup and Tenaska III currently receive treated <br /> <br />water directly from transmission lines from the treatment plant, not from the City's distribution <br /> <br />system. LCWSD receives the bulk of their water purchases through the City's transmission <br /> <br />lines. In the absence of detailed distribution system analysis during peak hour flow conditions, <br /> <br />the treated water transmission and distribution system has been segregated by inch-feet into three <br /> <br />groups - lines less than 8 inches in diameter, lines between 8 inches and 24 inches in diameter, <br /> <br />and lines greater than 24 inches in diameter - for cost allocation purposes between the classes of <br /> <br />treated water customers. Table A-2 in Appendix A shows the percentages of inch-feet of treated <br /> <br />water transmission lines separated into the three pipe size groups. <br /> <br />D. <br /> <br />Treated Water Loss Allocation <br /> <br />No treated water loss has been prorated to water received by Campbell Soup, Tenaska III and <br /> <br />LCWSD. Table A-3 in Appendix A shows treated water allocation percentages to City's retail <br /> <br />Cif)! of Paris. Texas <br />Woterand Wastewaler Cost of Service Study <br />March 2003 <br /> <br />12 <br />