Erin Franks, Rates Administrator
May 10, 2022
SFPUC
FY 2022-23
Wholesale Water Rates
1 Agenda
• Drivers of Wholesale Rate Increase
• FY 2022-23 Wholesale Water Rate
• FY 2022-23 Untreated Water Discount
• Historic and Projected Wholesale Rates
2 Drivers of Wholesale Rate Increase
1. Using up the Balancing Account
• $87M Balancing Account owed to wholesale customers
as of end of FY 2020-21
• Using half in FY 2021-22 ($43M)
• Using remaining half in FY 2022-23 ($44M)
2. Reduced wholesale water sales due to
conservation
• Rebalanced rates to prevent volatility
3. Increase in costs
• Debt service
• Operations & Maintenance 3
FY 2022-23 Rate Increase: 15.9%
• 5 years of stable rates; debt refinancing offset expense increases
• Wholesale sales volumes lower next 2 years: assumed
meeting water conservation budgets (113.7 MGD)
• Expenses increasing: debt service and operating
• Balancing Account projected to be repaid by year-end
FY 2022-23 Rates = ($302.6𝑀𝑀+(−$44.8𝑀𝑀+$14.1M))
113.7 𝑀𝑀𝑀𝑀𝑀𝑀
= $4.75/𝑐𝑐𝑐𝑐𝑐𝑐
𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤 𝑠𝑠 𝑒𝑒𝑒𝑒 𝑒𝑒 + (−𝑏𝑏 𝑏𝑏 𝑏𝑏 𝑎𝑎 𝑎𝑎 𝑢𝑢 + 𝑎𝑎𝑎𝑎 𝑎𝑎𝑎𝑎 𝑎𝑎 ) 𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤 𝑣𝑣
4 FY 2022-23 Untreated Water Discount
• Discount applied to the Wholesale Water Rate for
Coastside County Water District (CCWD) purchases of
untreated SFPUC water
• Based on the unit cost of capital and operating expenses for the Harry Tracy Water Treatment Plant (HTWTP)
• Untreated Wholesale Water Rate discount factor for
wholesale customers receiving untreated water = $0.43
per ccf
5 Historic and Projected Wholesale Rates
6 DEPARTMENT SFPUC Finance AGENDA NO. 10
MEETING DATE May 10, 2022
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Adopt Wholesale Water Rates for Fiscal Year 2022-2023
Regular Calendar
Project Manager: Charles Perl
Summary of
Proposed
Commission Action:
Consider and adopt the proposed Wholesale Water Rates for Fiscal Year 2022-2023, which will become effective for meter readings on or after July 1, 2022. The San Francisco Public Utilities Commission developed the proposed rates in accordance with the terms of the Water Supply Agreement between the City and County of San Francisco and its Wholesale Customers, which was approved on April 28, 2009 by Commission Resolution No. 09-0069, and amended and restated on December 11, 2018 by Commission Resolution No. 18- 0212, with subsequent approval by the Wholesale Customers. This action constitutes the Approval Action for the purposes of the California Environmental Quality Act (CEQA) pursuant to Section
31.04(h) of the San Francisco Administrative Code. The Planning Department has determined that this action is exempt from the CEQA.
If the item is approved, the Commission will rely on that determination to make its decision.
Background and
Description of
Proposed Action:
Background
The San Francisco Public Utilities Commission (SFPUC) sells water to retail customers inside the City and County of San Francisco (CCSF), as well as 27 wholesale customers in Alameda County, San Mateo County, and Santa Clara County (“Wholesale Customers”), who in turn establish local utility rates for the retail water customers that they serve in their respective jurisdictions.
The SFPUC establishes water rates applicable to the Wholesale Customers (“Wholesale Water Rates”) in accordance with the terms of the Water Supply Agreement between CCSF and the Wholesale Customers, which was approved on April 28, 2009 by Commission Resolution No. 09-0069, and amended and restated on December 11, 2018 by Commission Resolution No. 18-0212, with subsequent approval by the Wholesale Customers (WSA).
The WSA requires the Commission to consider annual adjustments to the Wholesale Water Rates, which are based on projected wholesalerelated costs and water deliveries to the Wholesale Customers, in coordination with the SFPUC’s financial planning and budget processes. The WSA also sets forth specific procedures that the SFPUC must follow if it intends to increase Wholesale Water Rates during the ensuing fiscal year.
As required by WSA section 6.03.A, the SFPUC sent a written notice Title: Wholesale Water Rates and Charges for FYE 2023
Meeting Date: May 10, 2022
of proposed adjustments to the Wholesale Water Rates for Fiscal Year (FY) 2022-2023 to all of the Wholesale Customers and the Bay Area Water Supply and Conservation Agency (BAWSCA), which
represents the Wholesale Customers, more than 30 days prior to this Commission meeting, on April 8, 2022. The SFPUC’s notice to the Wholesale Customers and BAWSCA included various required tables and schedules illustrating the calculation of the proposed increase in rates, including a revised Schedule W-25: Wholesale Use with LongTerm Contract (“Schedule W-25”), showing the rates that would be effective to the Wholesale Customers on or after July 1, 2022, more than 30 days after adoption by the Commission.
As discussed in further detail below, SFPUC Finance staff’s proposed adjustments include a new volumetric water rate of $4.75 per Ccf (1 Ccf = 748 gallons), based on the Wholesale Customers’ portion of the SFPUC Regional Water System’s capital and operating costs under the WSA, known as the Wholesale Revenue Requirement, the application of a Balancing Account repayment, and water sales assumptions. This new rate reflects a 15.9% increase from the current rate of $4.10 per Ccf. SFPUC Finance staff also proposes an increase in the Untreated Wholesale Water Rate Discount applicable to Coastside County Water District, the one Wholesale Customer that receives non-potable water from the SFPUC, rather than treated potable drinking water, and it treats at its own facilities.
In general, the WSA requires the Wholesale Customers to pay operating expenses and capital costs associated with the SFPUC’s “regional” assets, which serve both the Wholesale Customers and the SFPUC’s retail customers in San Francisco, based on proportional water use. The WSA allows the SFPUC to recover a portion of net annual debt service for new regional assets and to recover the Wholesale Customers’ share of revenue-funded regional capital costs.
The WSA also authorizes the SFPUC to collect the Wholesale Customers’ contribution to meet debt service coverage reserve requirements. Finally, the WSA directs the SFPUC to consider, when establishing Wholesale Water Rates, whether there is a positive balance in the Balancing Account maintained under the WSA (reflecting an amount that the SFPUC owes to the Wholesale Customers, based on actual costs incurred by the SFPUC and actual amounts of water used by wholesale and retail customers in previous fiscal years); the SFPUC may apply an amount from the Balancing Account to reduce Wholesale Water Rates for the immediately ensuing year.
Proposed Volumetric Water Rate Change
SFPUC Finance staff prepared an analysis of the SFPUC Water Enterprise’s projected revenues and revenue requirements for FY 2022-2023. Without the proposed adjustments, the current volumetric water rate applicable to the Wholesale Customers ($4.10 per Ccf) would generate $246.2 million in revenues, based on projected water deliveries, which the SFPUC would use to meet the costs of providing Wholesale Customer water service. As shown in the table below, however, the projected Wholesale Revenue Requirement for FY 2022- Title: Wholesale Water Rates and Charges for FYE 2023
Meeting Date: May 10, 2022
2023, which includes the Wholesale Customers’ proportionate share of operating expenses, debt service on bonds sold to construct or acquire new regional assets, and revenue funding for new cash-funded regional assets, totals a significantly higher number – $271.9 million – even with the application of $44.8 million dollars from the Balancing Account.
To account for this difference, SFPUC Finance staff recommends increasing the volumetric water rate applicable to the Wholesale Customers on or after July 1, 2022 by 15.9%, to $4.75 per Ccf, as shown on the revised Schedule W-25 (attached). As noted, the proposed rate would collect less than the Wholesale Customers’ share of costs under the WSA because the SFPUC would apply $44.8 million in Balancing Account funds that the SFPUC owes to the Wholesale Customers due to overcollection in prior fiscal years. With the application of these funds, SFPUC Finance staff projects that the Balancing Account will be exhausted after FY 2022-2023, and future fiscal years will require additional Wholesale Water Rate increases in line with the change in the Wholesale Customers’ share of expenditures.
Projected Wholesale Revenue Requirement ($ millions)
FYE 2023
Operating Costs $131.7
Capital: Pre 2009 Assets (K-5) 0.0
Debt Service 154.5
Capital: Revenue Funded 16.5
Balancing Account -44.8
Debt Service Coverage 14.1
Total Requirement $271.9
Projected Wholesale Sales 113.7 MGD
Untreated Wholesale Water Rate Discount Factor
The SFPUC’s April 8, 2022 notice also informed the Wholesale Customers and BAWSCA of a proposed increase in the Untreated Wholesale Water Rate Discount Factor applicable to Coastside County Water District (CCWD) for FY 2022-2023. Unlike the SFPUC’s other Wholesale Customers, who receive treated potable drinking water from the SFPUC, CCWD receives non-potable water from the SFPUC, which it treats to drinking water standards at its own facilities.
As required by Section 8 of the individual water sales contract between the SFPUC and CCWD under the terms of the WSA, SFPUC Finance staff commissioned an independent analysis in 2010 to evaluate the cost of service for untreated water. The analysis showed that an untreated water rate classification should be applied to the Wholesale Water Rates for CCWD purchases of untreated SFPUC Title: Wholesale Water Rates and Charges for FYE 2023
Meeting Date: May 10, 2022
water. The lower contract price of untreated water compared to treated water, which the SFPUC and the Wholesale Customers refer to as a “discount factor,” is based on the unit cost of capital and operating expenses for the SFPUC’s Harry Tracy Water Treatment Plant (“HTWTP”), which is not used to treat the “raw” water delivered to CCWD.
SFPUC Finance recommends increasing the discount factor applicable to CCWD in FY 2022-2023 to $0.43 per Ccf, an increase of $0.07 from the current rate, as shown on the revised Schedule W-25. The SFPUC calculated this discount factor by dividing the total projected costs and expenses for HTWTP in FY 2022-2023 by the total projected water deliveries to the Wholesale Customers in FY 2022- 2023. The proposed increase is due to lower projected water deliveries to the Wholesale Customers, which results in the excluded HTWTP costs and expenses being divided by a lower number.
Environmental
Review:
On April 26, 2022 the San Francisco Planning Department determined the Project to be statutorily exempt from environmental review under California Environmental Quality Act (CEQA) Section 21080(b)(8) and CEQA Guidelines Section 15273 (Rates, Tolls, Fares and Charges) (Case Number 2022-003582ENV) related to the
establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges. The exemption can be found here:
https://sfpuc.sharefile.com/d-s95af129d1ceb42319096a059b205c2e9 This action constitutes the Approval Action for the purposes of CEQA pursuant to Section 31.04(h) of the San Francisco Administrative Code.
Result of Inaction: A delay or denial in approving this agenda item will result in no rate adjustment for the Wholesale Customers as of July 1, 2022, and a significant revenue loss to the Water Enterprise in FY 2022-2023.
Recommendation: SFPUC Finance recommends that the Commission adopt the attached resolution.
Attachments: 1. Schedule W-25: Wholesale Use with Long-Term Contract
2. FY 2022-2023 Wholesale Water Rates Notice (with enclosures)
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
Resolution No.
WHEREAS, The San Francisco Public Utilities Commission (SFPUC) sells water to retail customers inside the City and County of San Francisco (“San Francisco”) as well as 27 wholesale customers in Alameda County, San Mateo County, and Santa Clara County (“Wholesale Customers”), who in turn establish local utility rates for the retail water customers that they serve in their respective jurisdictions; and
WHEREAS, The SFPUC establishes water rates applicable to the Wholesale Customers (“Wholesale Water Rates”) in accordance with the Water Supply Agreement between San Francisco and the Wholesale Customers, which was approved by Commission Resolution No. 09- 0069 on April 28, 2009, and amended and restated by Commission Resolution No. 18-0212 on December 11, 2018, with subsequent approval by the Wholesale Customers (WSA); and WHEREAS, The SFPUC proposes to adjust the Wholesale Water Rates for Fiscal Year (FY) 2022-2023 to include a new volumetric water rate of $4.75 per Ccf, which is a 15.9% increase from the current rate of $4.10 per Ccf, and a new Untreated Wholesale Water Rate Discount Factor of $0.43 per Ccf, which is an increase of $0.07 from the current rate and applies only to Coastside County Water District, the only Wholesale Customer that receives non-potable water from the SFPUC; and
WHEREAS, As required by WSA section 6.03, the SFPUC sent a written notice of proposed adjustments to the Wholesale Water Rates for FY 2022-2023 to all of the Wholesale Customers and the Bay Area Water Supply and Conservation Agency (BAWSCA) on April 8, 2022, and the Commission held a public hearing on May 10, 2022 to consider the proposed adjustments, which would take effect on July 1, 2022, more than 30 days after their adoption; and WHEREAS, A copy of the WSA, and a copy of the SFPUC’s April 8, 2022 notice to the Wholesale Customers and BAWSCA, which included among its attachments a revised Schedule W-25: Wholesale Use With Long-Term Contract, showing the proposed Wholesale Water Rates effective July 1, 2022, are on file with the Secretary of the Commission and incorporated in this resolution by reference; and
WHEREAS, The Commission approved the WSA after reviewing the Final Program Environmental Impact Report for the Water System Improvement Program, and adopted and incorporated by reference the California Environmental Quality Act (“CEQA”) findings contained in Commission Resolution No. 08-0200 dated October 30, 2008, and made additional findings pursuant to CEQA; and
WHEREAS, On April 26, 2022 the San Francisco Planning Department determined the Project to be statutorily exempt from environmental review under CEQA Section 21080(b)(8) and CEQA Guidelines Section 15273 (Rates, Tolls, Fares and Charges) (Case Number 2022- 003582ENV) related to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges; and
WHEREAS, This action constitutes the Approval Action for the purposes of the CEQA pursuant to Section 31.04(h) of the San Francisco Administrative Code; and WHEREAS, This Commission is securing revenue for purposes of meeting estimated FY 2022-2023 “Regional” operating and capital costs consistent with Article 5 of the 2009 Water Supply Agreement, including: (1) employee wages and fringe benefits; (2) purchasing or leasing supplies, equipment or materials; (3) meeting financial reserve needs and requirements; and (4) obtaining funds for capital projects necessary to maintain service within the Commission's existing water service area; now, therefore, be it
RESOLVED, This Commission determines that an increase in the volumetric water rates applicable to the Wholesale Customers is required for Fiscal Year 2022-2023 and hereby adopts the proposed 15.9% increase, as enumerated in the revised Schedule W-25: Wholesale Use With Long-Term Contract, attached hereto and incorporated by reference herein, which shall be uniform to the nearest dollar on service charges, and establishes a $4.75 per 100 cubic feet commodity charge, for all water delivered to the Wholesale Customers, on or after July 1, 2022; and, be it
FURTHER RESOLVED, This Commission hereby adopts the proposed Fiscal Year 2022- 2023 Untreated Wholesale Water Rate Discount Factor, as enumerated in the revised Schedule W-25, which shall be uniform to the nearest dollar on service charges and establishes a $0.43 per 100 cubic feet rate discount factor, for all untreated water delivered to Coastside County Water District, on or after July 1, 2022, and this rate shall remain in place until replaced or amended.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of May 10, 2022.
Secretary, Public Utilities Commission
SAN FRANCISCO PUBLIC UTILITIES COMMISSION
SCHEDULE W-25: Wholesale Use with Long-Term Contract,
Effective July 1, 2022
(Adopted May 10, 2022 by Commission Resolution No. ________) For service to municipalities, water districts and others who, under long-term contracts, purchase water for resale:
First: A Monthly Service Charge base on the type and size of the meter:
Meter
Size
Disc/Compound
Meters
Crest Meters Magnetic
Meters
Turbine Meters
5/8 in. $11 - - -
3/4 in. $18 - - -
1 in. $30 - - -
1 1/2 in. $43 - - -
2 in. $79 - - -
3 in. $158 - - -
4 in. $318 $353 - $577
6 in. $476 $685 - $1,256
8 in. $635 $1,335 $2,265 $1,875
10 in. $793 $1,732 - $3,391
12 in. $953 $1,840 $5,159 -
16 in. $1,270 $5,628 - $7,215
18 in. - $6,133 - -
20 in. - $6,349 - -
The service charge for a battery of meters installed on one service in lieu of one meter or for a special type of meter, shall be based on the size of single or multiple standard type meters of equivalent capacity.
Second: A charge for water delivered based on one-month’s meter readings:
$2,069.10 per acre-foot or $4.75 per 100 cu. ft.
Third: An Untreated Wholesale Water Rate Discount Factor for Wholesale Customers receiving untreated water, based on one-month’s meter readings:
($187.31) per acre-foot or ($0.43) per 100 cu. ft.
Services of the San Francisco Public Utilities Commission OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
April 8, 2022
Ms. Nicole Sandkulla
CEO/General Manager
Bay Area Water Supply & Conservation Agency
155 Bovet Road, Suite 650
San Mateo, CA 94402
Re: Fiscal Year 2022-23 Wholesale Water Rates Notice
Dear Ms. Sandkulla,
The San Francisco Public Utilities Commission (SFPUC) has determined that the Fiscal Year 2022-23 Wholesale Water Rates will be $4.75 per CCF, representing a $0.65 per CCF or 15.9% increase from the current rate for treated wholesale water effective July 1, 2022. As required by WSA Section
6.03.A, the SFPUC has scheduled a public hearing to consider the adoption of the wholesale water rate, as follows:
May 10, 2022, 1:30 PM
San Francisco City Hall
1 Dr. Carlton B. Goodlett Place, Room 400
San Francisco, CA 94102
Over the past five years, there were no wholesale rate changes – as the SFPUC optimized for rate stability and the spending down of the balancing account. As of June 30, 2021, there is $87 million in the balancing account that is owed to wholesale customers, of which SFPUC plans to fully repay the wholesale customers by the end of Fiscal Year 2022-23. To most accurately forecast the Fiscal Year 2021-22 year-end balancing account, the Fiscal Year 2022-23 rate was calculated based on actual Fiscal Year 2021-22 sales data through February of this year.
Since the Wholesale Customer Annual Meeting on February 17, 2022, several factors outside of our control have changed, presenting further financial challenges to the Water Enterprise. The rising interest rate environment has eliminated debt service savings that SFPUC planned to realize for Fiscal Year 2022-23 and beyond. Additionally, worsening drought conditions and further calls for conservation in the state are projected to lower revenues in the next two years as customers rise to the call for conservation. Finally, the SFPUC faces growing costs in this upcoming fiscal year, particularly debt service on previously issued bonds.
The SFPUC is required to generate sufficient revenues to pay operations and maintenance expenditures and debt service, and to meet SFPUC debt service coverage ratio policy minimums. While the financial picture has worsened for FY 2022-23, the SFPUC has maintained the projected wholesale rate increase of 15.9% presented at the Wholesale Customer Annual Meeting, and will continue to use various financial measures, including the spend down of the wholesale balancing account, to stabilize required rate increases.
Untreated Wholesale Water Rate Discount Factor
The Fiscal Year 2022-23 Untreated Wholesale Water Rate Discount will be $0.43 per CCF, an increase of $0.07 from the current rate, effective July 1, 2022. The discount factor is equal to the Harry Tracy Water Treatment Plant total projected cost. The discount is calculated by dividing the relevant cost by total wholesale water deliveries. The increase is primarily driven by lower wholesale volumes, which results in the excluded costs being divided by a lower number.
Fiscal Year 2022-23 Billing
As in prior years, the following charges, unrelated to the Wholesale Revenue Requirement, will be effective July 1, 2022:
• BAWSCA Bond Surcharge: The monthly bills include the February 2013 prepayment of the Pre-2009 Assets surcharge for the repayment of BAWSCA issued bonds. The amounts of the surcharge are proportionate to water consumption and have been adjusted accordingly. The SFPUC bills and collects the surcharge on behalf of BAWSCA and remits these amounts to the trustee.
• Late Fees: As part of the response to the current pandemic, the SFPUC waived late fees on past due balances through July 1, 2023.
After this time, late payment penalties as specified in Schedule W-44 will once again be in effect. The SFPUC encourages Wholesale customers to sign up for electronic billing and payment services to make timely payments and to avoid late fees. Please sign up with our SFPUC BillPay service at myaccount-water.sfpuc.org to receive and pay your bills online. If you have any questions, please contact customer assistance at (415) 551-3000.
Enclosures
Per WSA Section 6.03.A, supporting documents are required if there is a rate increase. We are attaching the following:
• Attachment N-1: Balancing Account/Rate Setting Calculation: A table showing the change in the Wholesale Revenue Requirement and how the wholesale rate was calculated
• Attachment N-3: Schedule of Projected Water Sales, Wholesale Revenue Requirements and Wholesale Rates: A schedule showing projected Wholesale Customer water sales and rates for the proposed rate year and the following four fiscal years
• FY 2022-23 Calculation of Untreated Water Discount Factor • Schedule W-25: Wholesale Use with Long-Term Contract - Proposed Fiscal Year 2022-23 Wholesale Customer water rates
• Fiscal Year 2022-23 BAWSCA Bond Surcharge letter and schedule showing the bond surcharge for each member agency
If you have any questions, please contact me at 415-487-5227 or [email protected]
Sincerely,
Erin Franks
Rates Administrator
Enclosures
cc: Dennis Herrera, SFPUC, General Manager
Ronald Flynn, SFPUC, Chief of Staff
Steve Ritchie, SFPUC, Water Enterprise Assistant General Manager Charles Perl, SFPUC, Deputy CFO
Kristina Alagar Cordero, SFPUC, Director of Financial Planning Alison Kastama, SFPUC, BAWSCA Liaison
Catherine Malina, SF City Attorney
Christina Tang, BAWSCA, Finance Manager
Balancing Account / Rate-Setting Calculation Schedule N-1 Reference Section 6.03.A.3
Fiscal Year 2022-23
FY 2020-21 FY 2021-22 FY 2022-23
1. Actual Changes to Balancing Account for FY 2020-21
A. Balancing Account as of June 30, 2020 (unaudited) $ (63,393,776) B. Interest on Balancing Account and Coverage Reserve $ (1,139,197) C. Wholesale Revenues for Fiscal Year $ (275,113,885)
D. Wholesale Revenue Requirement for Fiscal Year $ 245,743,192 E. Net Change in Wholesale Revenue Coverage $ 2,431,211 F. Settlement Credits or Other Adjustments $ 4,382,469
G Balancing Account as of June 30, 2021 (unaudited) $ (87,089,986)
2. Projected Changes to Balancing Account for FY 2021-22 A. Balancing Account as of June 30, 2021 $ (87,089,986) B. Interest on Balancing Account and Coverage Reserve $ (617,562) C. Wholesale Revenues for Fiscal Year $ (246,152,161)
D. Wholesale Revenue Requirement for Fiscal Year $ 286,998,565 E. Settlement Credits or Other Adjustments $ -
F. Balancing Account as of June 30, 2022 $ (46,861,144) G. Net Change in Wholesale Revenue Coverage $ 2,278,271 H. Total Revenue Deficiency or (Surplus) $ (44,582,873)
3. Projected Changes to Balancing Account for FY 2022-23 A. Balancing Account as of June 30, 2022 $ (44,582,873) B. Interest on Balancing Account and Coverage Reserve $ (446,246) C. Wholesale Revenues for Fiscal Year $ (267,871,466)
D. Wholesale Revenue Requirement for Fiscal Year $ 302,588,214 E. Settlement Credits or Other Adjustments $ -
F. Balancing Account as of June 30, 2023 $ (10,312,372) G. Net Change in Wholesale Revenue Coverage $ 14,151,740 H. Total Revenue Deficiency or (Surplus) $ 3,839,368
Schedule of Projected Water Sales, Wholesale Revenue Requirements, and Wholesale Rates Schedule N-3 Reference Section 6.03.A.3
Fiscal Year 2022-23
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 Water Enterprise
Operations & Maintenance Expenses
Source of Supply $ 17,789,221 $ 18,273,114 $ 18,593,691 $ 19,432,883 $ 21,101,621 $ 21,712,498 Pumping $ - $ - $ - $ - $ - $ -
Treatment $ 35,859,193 $ 36,834,618 $ 37,480,831 $ 39,172,459 $ 42,536,271 $ 43,767,666 Transmission & Distribution $ 19,973,195 $ 20,516,496 $ 20,876,430 $ 21,818,649 $ 23,692,257 $ 24,378,131 Customer Services $ 243,983 $ 250,619 $ 255,016 $ 266,526 $ 289,413 $ 297,791 Total Operations & Maintenance Expenses $ 73,865,591 $ 75,874,848 $ 77,205,968 $ 80,690,517 $ 87,619,563 $ 90,156,086 Administrative & General Expenses
Countywide Cost Allocation Plan (COWCAP) $ 1,454,767 $ 1,494,338 $ 1,520,554 $ 1,589,182 $ 1,725,648 $ 1,775,604 SFPUC Bureaus $ 17,230,525 $ 17,699,222 $ 18,009,730 $ 18,822,566 $ 20,438,895 $ 21,030,587 Compliance Audit $ 108,405 $ 111,354 $ 113,307 $ 118,421 $ 128,590 $ 132,313 Other Administrative & General $ 8,313,398 $ 8,539,535 $ 8,689,349 $ 9,081,527 $ 9,861,375 $ 10,146,854 Total Administrative & General Expenses $ 27,107,095 $ 27,844,449 $ 28,332,941 $ 29,611,696 $ 32,154,508 $ 33,085,358 Property Taxes $ 1,582,139 $ 1,625,175 $ 1,653,687 $ 1,728,323 $ 1,876,737 $ 1,931,067 Capital Cost Recovery
Pre-2009 Assets (K-1 to K-4) $ - $ - $ - $ - $ - $ -
Pre-2009 Assets (K-5) $ - $ - $ - $ - $ - $ -
Debt Service on New Assets $ 159,474,548 $ 168,034,980 $ 167,208,108 $ 169,878,841 $ 175,167,792 $ 174,682,616 Revenue Credit for BABs Subsidy $ (14,203,277) $ (13,559,130) $ (13,119,799) $ (13,060,270) $ (12,972,112) $ (12,650,242) Revenue Funded Capital $ 13,553,940 $ 16,452,500 $ 16,255,000 $ 16,547,500 $ 16,835,000 $ 16,857,500 Total Capital Cost Recovery $ 158,825,211 $ 170,928,351 $ 170,343,309 $ 173,366,071 $ 179,030,681 $ 178,889,874 Hetch Hetchy Water & Power
Operations & Maintenance Expenses $ 21,897,738 $ 22,493,390 $ 22,888,006 $ 23,921,014 $ 25,975,156 $ 26,727,118 Administrative & General Expenses
Countywide Cost Allocation Plan (COWCAP) $ 346,990 $ 356,429 $ 362,682 $ 379,051 $ 411,600 $ 423,516 SFPUC Bureaus $ 3,623,344 $ 3,721,905 $ 3,787,200 $ 3,958,129 $ 4,298,021 $ 4,422,445 Other Administrative & General $ 4,164,223 $ 4,277,496 $ 4,352,539 $ 4,548,983 $ 4,939,613 $ 5,082,611 Total Administrative & General Expenses $ 8,134,557 $ 8,355,829 $ 8,502,421 $ 8,886,162 $ 9,649,234 $ 9,928,572 1 Schedule of Projected Water Sales, Wholesale Revenue Requirements, and Wholesale Rates Schedule N-3 Reference Section 6.03.A.3
Fiscal Year 2022-23
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 Property Taxes $ 208,557 $ 214,231 $ 217,989 $ 227,827 $ 247,391 $ 254,553 Capital Cost Recovery
Pre-2009 Assets (K-1 to K-4) $ - $ - $ - $ - $ - $ -
Pre-2009 Assets (K-5) $ - $ - $ - $ - $ - $ -
Debt Service on New Assets $ - $ - $ - $ - $ - $ -
Revenue Funded Capital $ - $ - $ - $ - $ - $ -
Total Capital Cost Recovery $ - $ - $ - $ - $ - $ -
Wholesale Revenue Requirement $ 286,998,565 $ 302,588,214 $ 304,312,964 $ 313,382,199 $ 331,070,256 $ 335,330,885 Balancing Account as of June 30 (Beginning of Year) $ (87,089,986) $ (44,582,873) $ 3,839,368 $ 12,058,757 $ 9,115,621 $ 3,446,599 Balancing Account Deferral $ 44,582,873 $ (3,839,368) $ (12,058,757) $ (9,115,621) $ (3,446,599) $ 2,562,368 Interest on Balancing Account and Coverage Reserve $ (617,562) $ (446,246) $ (215,621) $ (209,561) $ (226,713) $ (269,426) Settlement Credits and Other Adjustments $ - $ - $ - $ - $ - $ - Wholesale Debt Service Coverage Reserve $ 2,278,271 $ 14,151,740 $ (135,640) $ 1,110,517 $ 4,636,444 $ 78,583 Wholesale Revenues Before Rate Change
Volumetric Charges $ (241,838,161) $ (227,491,708) $ (263,673,236) $ (312,912,291) $ (336,835,009) $ (336,835,009) Excess Use Charges / Minimum Purchase $ - $ - $ - $ - $ - $ - Service Charges $ (4,314,000) $ (4,314,000) $ (4,314,000) $ (4,314,000) $ (4,314,000) $ (4,314,000) Total Wholesale Deficiency or (Credit) $ (0) $ 36,065,759 $ 27,755,078 $ - $ - $ - Wholesale Deficiency or (Credit) as a Percent of Volumetric Charges 0.0% 15.9% 10.5% 0.0% 0.0% 0.0%
Projected Water Sales (MGD) 120.9 MGD 113.7 MGD 113.4 MGD 122.1 MGD 131.5 MGD 131.5 MGD Projected Water Sales (CCF) 58,984,917 55,485,782 55,510,155 59,602,341 64,159,049 64,159,049 Wholesale Deficiency or Credit ($/CCF) $0.00 $0.65 $0.50 $0.00 $0.00 $0.00 Wholesale Rate ($/CCF) $4.10 $4.75 $5.25 $5.25 $5.25 $5.25 Projected Service Charge Revenues $ 4,314,000 $ 4,314,000 $ 4,314,000 $ 4,314,000 $ 4,314,000 $ 4,314,000 Projected Volume Charge Revenues $ 241,838,161 $ 263,557,466 $ 291,428,314 $ 312,912,291 $ 336,835,009 $ 336,835,009 Total Wholesale Revenues After Rate Change $ 246,152,161 $ 267,871,466 $ 295,742,314 $ 317,226,291 $ 341,149,009 $ 341,149,009 2 Calculation of Untreated Water Discount Rate for Coastside County Water District Rate-Setting for Fiscal Year 2022-23
Wholesale Share of HTWTP Expenses to be Removed
Operations & Maintenance $ 11,120,823
Cash Funded Capital $ -
Debt Service $ 12,917,533
Total HTWTP Expense to be Removed $ 24,038,355
Total Wholesale Water Consumption (CCF) 55,485,782
Untreated Water Rate Discount ($/CCF) $ 0.43
Untreated Water Rate Discount ($/acre foot) $ 187.31
Impact on Wholesale and Retail Customers
Untreated Water Rate Discount ($/CCF) $ (0.43)
Projected Coastside County Water District Annual Consumption (CCF) 512,085 Net Impact of Untreated Water Rate Discount $ (220,197) Wholesale Retail
Proportional Annual Use 65.81% 34.19%
Allocation of Untreated Water Rate Discount $ (144,911) $ (75,285) Projected Annual Treated Water Usage (CCF) 54,973,697 26,358,149 Average Wholesale Rate Impact ($/CCF) $ (0.0026) $ (0.0029)
SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Effective July 1, 2022
SCHEDULE W-25: Wholesale Use with Long-Term Contract
For service to municipalities, water districts and others who, under long-term contracts, purchase water for resale:
First: A Monthly Service Charge base on the type and size of the meter:
Meter
Size
Disc/Compound
Meters
Crest Meters Magnetic
Meters
Turbine Meters
5/8 in. $11 - - -
3/4 in. $18 - - -
1 in. $30 - - -
1 1/2 in. $43 - - -
2 in. $79 - - -
3 in. $158 - - -
4 in. $318 $353 - $577
6 in. $476 $685 - $1,256
8 in. $635 $1,335 $2,265 $1,875
10 in. $793 $1,732 - $3,391
12 in. $953 $1,840 $5,159 -
16 in. $1,270 $5,628 - $7,215
18 in. - $6,133 - -
20 in. - $6,349 - -
The service charge for a battery of meters installed on one service in lieu of one meter or for a special type of meter, shall be based on the size of single or multiple standard type meters of equivalent capacity.
Second: A charge for water delivered based on one-month’s meter readings:
$2,069.10 per acre-foot or $4.75 per 100 cu. ft.
Third: An Untreated Wholesale Water Rate Discount Factor for Wholesale Customers receiving untreated water, based on one-month’s meter readings:
($187.31) per acre-foot or ($0.43) per 100 cu. ft.
155 Bovet Road, Suite 650, ⚫ San Mateo, CA 94402 ⚫ ph 650 349 3000 ⚫ fx 650349 8395 ⚫ www.bawsca.org March 22, 2022
Ms. Erin Franks, Rate Administrator
San Francisco Public Utilities Commission
525 Golden Gate Avenue, 4th Floor
San Francisco, CA 94102
Subject: BAWSCA FY 2022-23 Bond Surcharge Schedule
Dear Erin:
Pursuant to Section 3.01 (a) of the Prepayment and Collection Agreement between the Bay Area Water Supply and Conservation Agency (BAWSCA) and the City and County of San Francisco (San Francisco), dated January 1, 2013 (Agreement), BAWSCA shall deliver a written schedule to San Francisco at least 45 days prior to the beginning of each fiscal year showing the amount of the surcharge that BAWSCA seeks to impose for such fiscal year.
Table 1 includes BAWSCA’s FY2022-23 annual and monthly bond surcharge for each member agency that was adopted by the BAWSCA Board on March 17, 2022. Pursuant to Section 3.02 (a) of the Agreement, San Francisco shall include the identified monthly surcharge in the first wholesale water bill for the largest amount delivered to BAWSCA’s member agencies each month, effective July 1, 2022.
As a heads up, BAWSCA expects to notify the SFPUC for a revised FY 2022-23 monthly surcharge schedule, as shown in Table 2, after BAWSCA’s settlement of the 2023A refunding bonds in January 2023. Assuming the settlement is completed on January 5, 2023, the monthly surcharges in Table 1 would be collected through the February 2023 billings and the reduced monthly surcharges would apply to the March – June 2023 billings, as shown in Table 2. The Agreement allows BAWSCA to revise bond surcharges as of the first day of the calendar month which is at least 45 days after notice of such reduction is provided by BAWSCA to SFPUC. If such notice is not provided to the SFPUC, the monthly surcharges stated in Table 1 will remain in effect.
If you have any questions about the billing of BAWSCA’s surcharges, please contact me at (650) 421-3448.
Sincerely,
Christina Tang
Finance Manager
Attachments:
Table 1. BAWSCA FY 2022-23 Bond Surcharges Effective July 1, 2022 Table 2. Revised BAWSCA FY 2022-23 Bond Surcharges Effective March 1, 2023 cc: Charles Perl, SFPUC
Kristina Cordero, SFPUC
Nicole Sandkulla, BAWSCA
Allison Schutte, BAWSCA Legal Counsel
Attachments
Table 1. BAWSCA FY 2022-23 Bond Surcharges Effective July 1, 2022 Agency
Annual
Bond
Surcharge
Monthly
Bond
Surcharge
Agency
Annual
Bond
Surcharge
Monthly
Bond
Surcharge
Alameda County WD $1,962,564 $163,547 Mid Pen WD $461,616 $38,468 Brisbane Water $73,668 $6,139 Millbrae $295,272 $24,606 Burlingame $522,816 $43,568 Milpitas $949,680 $79,140
Coastside County WD $307,044 $25,587 Mountain View $1,455,288 $121,274 CWS - Bear Gulch $2,497,308 $208,109 North Coast WD $500,688 $41,724 CWS - Mid Peninsula $2,369,496 $197,458 Palo Alto $1,726,200 $143,850 CWS - South SF $756,756 $63,063 Purissima Hills WD $382,824 $31,902 Daly City $610,404 $50,867 Redwood City $1,537,836 $128,153 East Palo Alto WD $256,368 $21,364 San Bruno $181,500 $15,125 Estero Municipal ID $779,532 $64,961 San Jose (North) $687,600 $57,300 Guadalupe Valley $20,256 $1,688 Santa Clara $571,392 $47,616 Hayward $2,561,736 $213,478 Stanford University $212,628 $17,719 Hillsborough $538,608 $44,884 Sunnyvale $1,825,332 $152,111 Menlo Park $519,240 $43,270 Westborough WD $130,620 $10,885 Total $24,694,272 $2,057,856
Table 2. Revised BAWSCA FY 2022-23 Bond Surcharges Effective March 1, 2023* Agency
Monthly
Surcharge
Jul 2022
- Feb 2023
Monthly
Surcharge
Mar 2023
- Jun 2023
Adjusted
Annual
Surcharge
Agency
Monthly
Surcharge
Jul 2022
- Feb 2023
Monthly
Surcharge
Mar 2023
- Jun 2023
Adjusted
Annual
Surcharge
Alameda County WD $163,547 $119,254 $1,785,392 Mid Pen WD $38,468 $26,312 $412,992 Brisbane Water $6,139 $4,179 $65,828 Millbrae $24,606 $15,954 $260,664 Burlingame $43,568 $28,157 $461,172 Milpitas $79,140 $54,141 $849,684 Coastside County WD $25,587 $18,772 $279,784 Mountain View $121,274 $84,440 $1,307,952 CWS - Bear Gulch $208,109 $152,516 $2,274,936 North Coast WD $41,724 $29,595 $452,172 CWS - Mid Peninsula $197,458 $136,762 $2,126,712 Palo Alto $143,850 $98,156 $1,543,424 CWS - South SF $63,063 $41,635 $671,044 Purissima Hills WD $31,902 $23,001 $347,220 Daly City $50,867 $34,058 $543,168 Redwood City $128,153 $88,239 $1,378,180 East Palo Alto WD $21,364 $14,269 $227,988 San Bruno $15,125 $10,659 $163,636 Estero Municipal ID $64,961 $44,899 $699,284 San Jose (North) $57,300 $37,700 $609,200 Guadalupe Valley $1,688 $755 $16,524 Santa Clara $47,616 $32,758 $511,960 Hayward $213,478 $145,701 $2,290,628 Stanford University $17,719 $11,418 $187,424 Hillsborough $44,884 $32,225 $487,972 Sunnyvale $152,111 $106,803 $1,644,100 Menlo Park $43,270 $29,529 $464,276 Westborough WD $10,885 $7,232 $116,008 Total $2,057,856 $1,429,119 $22,179,324
* Subject to the settlement of the 2023A Bonds on January 5, 2023 and notification thereof by BAWSCA to SFPUC