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-I BdQK '5 v � � 7 (1) Obtained from review of original contracts for construction and construction summary from original design engineer. (2) This is an item fundable from a renewal replacement account and has not been installed. Therefore, can not be included as part of rate base. (3) Accumulated depreciation according to PCS for a small utility should average three (3%) percent per year, therefore, the depreciation schedule is as follows: Utility plant at original cost less land cost is $150,699. (Note: Land is not a depreciating item for rate making.) Original construction year 1974. Year Utility Value Depreciation 0 $ 150,699.00 $ - 1975 146,178.05 4,520.97 1976 141,792.65 4,385.34 1977 137,538.91 4,253.78 1978 133,412.74 4,126.17 1979 129,410.36 4,002.38 1980 125.528.05 3,882.31 1981 121,762.21 3,765.84 1982 118.109.34 3,652.87 1983 114,566.06 3,543,28 Depreciated utility Accumulated depre- value less land cost ciation on capital through proforma yr. $ 114,566.06 assets thru '83 $36,132.94 (4) We are of the opinion the water and wastewater systems are on demand for service, are requiring greater than 50% of the capacity of the system and is therefore 100% used and useful. This has been concurred by the Public Service Commission. (5) Working Capital Allowance should equal approximately one-eighth (1/8) of the yearly operating and maintenance expense. This has been concurred by the Public Service Commission. We accept the rate of return requested by the Utility as being consistent with rates of return allowed by the PSC. We have removed, modified qr footnoted expenses associated with this utility and, subsequently, have arrived at an operation and maintenance expense which now represents a revised proforma prepared by Mosby -Robbins and Associates, Inc. We have performed a tax calcu- lation for the purpose of presenting a revised proforma, however, we do recognize the tax calculation could and most likely will change. We are of the opinion the revised proforma presented below is consistent with good utility engineering and we will use the Revised Proforma for calculation of a proposed rate structure. Mr. Robbins pointed out the "Net utility at original cost" figure of $121,596.46 and noted that they accept the Utility system at 100% "used and useful". They also accept the CIACs, their amortization, the imputed CIRC, the amortization of the Imputed CIAC, giving an "Net Utility Plan Used and Useful figure $68,417.46. They used one-eighth of operation and maintenance expense for working capital allowance and came up with a rate base of $70,969.25, and noted that the Utility has requested a 24