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The rate application consists of two worksheets. The Revenue <br />Requirement Worksheet is used to compute the gross revenue <br />requirement on an historical and projected basis. The years, on <br />both an annual and cumulat.ive basis are shown across the top of <br />the spreadsheet. The components of the revenue requirement are <br />shown vertically on the left of the spreadsheets. <br /> <br />The first page of the revenue requirement worksheet summarizes <br />the net operating costs eligible for profit: <br /> <br /> o franchised operating costs (A), .less <br /> o indirect revenues (B), less <br /> o special collection costs (D). <br /> <br />The second page of the revenue requirement worksheet summarizes <br />the components of the gross revenue requirement: <br /> <br /> o the net operating costs eligible for profit (from first <br /> page), plus <br /> <br /> o profit (F), plus <br /> <br /> o pass-through costs (G), plus <br /> <br /> o cost savings program (H4) <br /> <br />The Rate Adjustment Worksheet calculates the balancing account <br />and the rate adjustment required due to historical performance <br />and future projections. The balancing account is <br /> <br /> o the prior year's actual revenues (A), less <br /> <br /> o the prior year's actual revenues requirement (B). <br /> <br />The rate adjustment required is <br /> <br /> o the projected revenues for the rate year (F), less <br /> <br /> o the net revenue requirement (E). (The net revenue <br /> requirement is the difference between the gross revenue <br /> requirement, explained above, and the balancing account <br /> (C}.} <br /> <br />Exhibit IV presents the rate application format to be used by <br />the Company. Included in the exhibit are brief explanations of <br />the line items. <br /> <br /> 8 <br /> <br /> <br />