1. Winchester Municipal Utilities 2009 Rate Plan April 9, 2009

2. Scope of Services Cost of Service Study –Water –Wastewater –Solid Waste –Wholesale Industrial Pretreatment Surcharges System Development Charges

3. Goals Address Capital Requirements Compress Rate Blocks Phase Implementation Customer Sensitive

4. Deliverables Cost of Service Reports Rate Model PSC Representation

5. Financial Forecast Basis: Capital Water System Improvements$55,000,000 Lower Howards Creek Sanitary Sewer Improvements $36,000,000 Total$91,000,000

6. Financing Cost Assumptions Water4.5% - 20 yrs Wastewater2.2%- 20 yrs

7. Financial Forecast Basis 5 year projection of Revenues and costs Revenue Capital Borrowing O&M

8. Rate Plan 4-Year Phased Increase Compressed Water Rate Blocks

9. Impact of Rate Plan – Water (City) Proposed Rates Bill Current Rates 2009201020112012 Minimum Bill (100 ft 3 ) (750 gallons) $3.46$4.10$4.83$5.69$6.75 Average Residential (700 ft 3 ) (5,250 gallons) $18.34$20.66$23.73$26.09$28.65

10. Impact of Rate Plan – Water (Outside City) Proposed Rates Bill Current Rates 2009201020112012 Minimum Bill (100 ft 3 ) (750 gallons) $4.49$5.32$6.27$7.38$8.76 Average Residential (700 ft 3 ) (5,250 gallons) $24.03$27.12$31.14$34.23$38.06

11. Impact of Rate Plan – Wastewater (City) Proposed Rates Bill Current Rates 2009201020112012 Minimum Bill (100 ft 3 ) (750 gallons) $3.61$4.35$5.22$5.86$6.55 Average Residential (700 ft 3 ) (5,250 gallons) $25.26$30.44$36.52$41.05$45.88

12. Impact of Rate Plan – Wastewater (Outside City) Proposed Rates Bill Current Rates 2009201020112012 Minimum Bill (100 ft 3 ) (750 gallons) $4.78$5.76$6.91$7.77$8.68 Average Residential (700 ft 3 ) (5,250 gallons) $33.46$40.32$48.39$54.38$60.78

13. Impact of Rate Plan – Solid Waste Proposed Rates Bill Current Rates 2009201020112012 Average Residential $15.42$18.57$21.72$24.85$25.37

14. Combined Impact of Rate Plan (City) Water, Wastewater, and Solid Waste Proposed Rates Bill Current Rates 2009201020112012 Minimum Bill (100 ft 3 ) (750 gallons) $22.49$27.02$31.77$36.40$38.67 Average Residential (700 ft 3 ) (5,250 gallons) $59.02$69.67$81.97$91.99$99.90

15. Combined Impact of Rate Plan (Outside City) Water and Wastewater Proposed Rates Bill Current Rates 2009201020112012 Minimum Bill (100 ft 3 ) (750 gallons) $9.27$11.0 8 $13.18$15.15$17.44 Average Residential (700 ft 3 ) (5,250 gallons) $57.49$67.4 4 $79.53$88.62$98.83

16. Results Rate Model System Development Charge Pretreatment Charges

17. Water System Development Charges Based on AWWA M-1 Manual methodology Source of Supply Source Water Transmission Treatment Facilities Pumping Transmission Mains Does not include Contributed Capital

18. Waste Water System Development Charges Based on AWWA M-1 Manual methodology Treatment Facilities

19. System Development Charge 5/8” Meter Water - $ 963 Wastewater - $ 5,345

20. Industrial Pretreatment Charges BODTSSNH3 Existing$0.11/lb$0.13/lb$0.41/lb Proposed$0.18/lb $0.25/lb

21. Summary Cost of Service Rates Phased Approach Wholesale Rate / PSC Decision on SDC