Attachment

ATTACHMENT #1 Joint Committee Meeting of 12/11/2006 City of Dover Electric Revenue Fund Budget & Electric Rate Review and Recommendations December 11, 2006 1

2

Electric Revenue Fund Revenue, Expense & Margin Trends 3

Electric Revenue Fund Debt Requirements (in 000’s) 4

Electric Revenue Fund Transfers as a Percentage of Fund Revenue 5

Electric Revenue Fund Revenue & Transfer Trend – General & Electric Funds 6

Electric Revenue Fund Annual Kilowatt Hour Sales Trend 7

Electric Revenue Fund Monthly Kilowatt Hour Sales Trend 8

9

Electric Revenue Fund Future Debt Requirement „ Current Capital Project Plan $44.5M (excluding vehicles & plant) „ Planned bond issue in 2008 - $20.0M „ Increased debt service therefore increases margins to cover covenant 10

Electric Revenue Fund Assumptions Across All Alternatives „ Net Margin positive in all years „ Debt Service Coverage is greater than 1.25 in all years „ 2008 – 2011 includes $3.0M to partially fund capital projects „ 2008 – 2011 includes 6.5% transfer to General Fund „ 2008 – 2011 assumes power supply and Pace Management Fee stays at $84 megawatt hour „ Pace Incentive Fee of $1.24 mgw in all years „ Net Expense of Plant stays $3.9M in all years 11

Electric Revenue Fund Alternative 1 „ Rate increase in January 2007 – 21%; No rate increase in July 2007; „ Sales of emission credits as estimated by PACE Global „ Duke Rebate – estimate provided by Duke „ Interest on reserves not included in earlier forecast „ Plant budget reduction for FY07 as provided by NAES „ Additional Margin $3.4M 12

Electric Revenue Fund Alternative 1 – Revenue, Expense & Margin Projections 13

Electric Revenue Fund Alternative 2 „ Rate increase in January 2007 – 8%; Rate increase in July 2007 – 12%; „ Sales of emission credits as estimated by PACE Global „ Duke Rebate – estimate provided by Duke „ Interest on reserves not included in earlier forecast „ Plant budget reduction for FY07 as provided by NAES „ Additional Margin $3.3M 14

Electric Revenue Fund Alternative 2 – Revenue, Expense & Margin Projections 15

Electric Revenue Fund Alternative 3 „ Rate Increase in January 2007 – 8%; Rate increase in July 2007 – 12%; „ Budget reductions – Transfer to General Fund $1.8M; Operating Exp. $.9M; „ Additional Revenue – Electric Fund $2.7 (reserve interest, FY06 Est. Duke Rebate, & Emission Credits) „ Net Margin Increase - $5.4M 16

Electric Revenue Fund Alternative 3 – Revenue, Expense & Margin Projections 17

Electric Revenue Fund Alternative 4 „ Rate increase in January 2007 – 3%; Rate increase in July 2007 – 17% „ Budget reductions – Transfer to General Fund $1.8M; Operating Exp. $.9M; „ Additional Revenue – Electric Fund $2.7 (reserve interest, FY06 Est. Duke Rebate, & Emission Credits) „ Net Margin Increase - $5.4M 18

Electric Revenue Fund Alternative 4 – Revenue, Expense & Margin Projections 19

Electric Revenue Fund Alternative 5 „ No rate increase January 2007; Rate increase July 2007 – 21%; „ Budget reductions – Transfer to General Fund $3.7M; Operating Exp. $.9M; Reductions in service and layoffs; „ Additional Revenue – Electric Fund $2.7 (reserve interest, FY06 Est. Duke Rebate, & Emission Credits) „ Net Margin Increase $7.3M 20

Electric Revenue Fund Alternative 5 – Revenue, Expense & Margin Projections 21

Electric Revenue Fund Recap of Alternatives – Covenant & Rate Increase 22

23

Electric Revenue Fund Rate Impact – Samples by Customer Class For Scenarios 2 & 3 24

Electric Revenue Fund Rate Impact – Samples by Customer Class Scenario 4 „ Scenario 4 rates were not received from the Consultant in time for inclusion in the packet. We will forward this slide as soon as available. 25