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equivalent residential units (ERU). The fixed charge per ERU provides for no minimum allowance of consumption. With the exception of utility and specific treatment and production costs, the majority of operating and capital costs (80%) could be considered fixed charges during a rate base period. A fixed charge guarantees the utility a major portion of its required revenues during periods of reduced customer usage. (2) Volume Charge - Recovers specific treatment/production costs established as a unit charge per thousand gallons. ANALYSIS: This analysis was performed with the following assumptions: (1) Actual 1991-92 sales units were used as the base period. (2) The 1992-93 rates were applied to the 1991-92 sales units for revenue projections. (3) Deductions to sales units were made for existing reserved capacity, projected seasonal units, and elasticity adjustment for a decrease in volume units to reflect the effect of a rate structure without a base facility charge. If a rate structure without a base facility charge was adopted, the loss of revenue from the reserved capacity units and residential seasonal units would result in the following: (1) Revenues from reserved capacity in the amounts of $394,159 (8.77% of 92-93 water revenues) and $959,489 (17.00% of wastewater revenues) would be recovered through the volume charge to existing customers. (2) The effect of the reduction of revenue from the reduced capacity units (development), residential seasonal units, and elasticity by removing the base facility charge and recovery of the revenues through the volume charge are projected as follows: REVENUE WATER 64 1AR - poor r" c �o Commercial Residential Reserved Totals 1992-93 $850,115 $31387,392 $394,159 $4,6311667 of Total 18.91% 75.34% 8.77% 100% W/O Base $1,096,285 $3,535,382 $0 $4,631,667 Facility 24.38% 78.63% 0% 100% Inc Doc $246,169 $147,990 ($394,159) $0 64 1AR - poor r" c �o