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****PRELIMINARY AND TENTATIVE FINDINGS**** Table 5 Fiscal Year Demand Energy Transmission Charge Charge (1) (1) (1) 2015 (Budgeted) $ 22.46 $ 32.62 $ 2.60 2014 22.45 32.11 2.71 2013 21.70 32.44 2.43 2012 19.92 49.09 2.28 2011 18.84 47.90 2.08 2010 17.52 56.65 1.56 2009 15.00 59.95 1.72 2008 13.45 58.65 1.50 2007 11.10 55.00 1.65 2006 11.10 55.00 1.65 Notes: (1) Per Megawatt hour Source: FMPA Records As shown in Table 5, the demand and energy charge components are the two largest components on ARP member billings. Since the 2005-06 fiscal year, the energy charge, which represents the cost of purchased fuel, decreased from $55 per M\Vb to $32.62 per M\X'h, a decrease of 41 percent. In contrast, the weighted average demand charge has increased from $11.10 per h'1\V1 to $22.46 per MWh, a 102 percent increase, over the same time period. The demand charge is composed of fixed costs allocated to members based upon a member's peak demand during the peak hour of the peak day of the ARP monthly coincident peak demand (i.e., the peak demand for the ARP system as a whole). The largest component of the demand charge is for debt service principal and interest payments, the total of which were budgeted at $108.3 million during the 2014-15 fiscal year, an increase of $88.5 million, or 447 percent, over $19.8 million in the 2005-06 fiscal year. Much of the increase in debt cost is attributable to the recently constructed Treasure Coast and Cane Island Units. Demand cost allocation among members may fluctuate, but total demand costs for the ARP as a whole do not increase or decrease based upon the amount of electricity generated by the FMPA. As Table 6 shows, electricity demand has decreased steadily from the 2008-09 fiscal year to the proposed budget for the 2014-15 fiscal year. Specifically, average monthly billed MW has decreased by 18 percent from 13,919 to 11,455 MW over the past six years primarily due to a weaker economy, energy conservation programs, and the cessation of ARP power delivery by the Cities of Vero Beach and Lake Worth in January 2010 and January 2014, respectively. Consequently, increased fixed demand costs are being allocated to a decreasing number of billed MW, which increases member billing rates. Table 6 Fiscal Year 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 (Proposed Budget) MW Billed - Demand 13,919 12,739 12,157 12,379 12,218 11,331 11,455 Source: FMPA Records Insofar as the FMPA must recover all costs of providing power to members through billings, decisions as to the level of spending and the nature of specific activities undertaken, such as hedging, investment, and debt issuance activities, 7 9