THE ELECTRIC POWER BOARD OF CHATTANOOGA …ftpcontent2.worldnow.com/wrcb/pdf/093014MauldinJenkins...EXECUTIVE SUMMARY We have performed procedures to assist The Electric Power Board

THE ELECTRIC POWER BOARD OF CHATTANOOGA

CITY OF CHATTANOOGA STREET LIGHT BILLINGS

REPORT ON AGREED-UPON PROCEDURES

SEPTEMBER 19, 2014

EXECUTIVE SUMMARY We have performed procedures to assist The Electric Power Board of Chattanooga in evaluating the City of Chattanooga street light billings. The results of our work are:

1. The Electric Power Board of Chattanooga’s processes for street light billings are complex and involve many components

2. Several errors occurred in the application of the processes for City of Chattanooga street light billings

3. The analysis of the City of Chattanooga street light billings for eighty-nine months indicates a net overbilling of $17,049, as shown on the chart on the following page

J.Ed Marston

The Electric Power Board of Chattanooga City of Chattanooga Street Light Billings

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Ms. Vicky Gregg Audit Committee Chair The Electric Power Board of Chattanooga Page 2 The monthly charge for each component has its own unique set of processes which lead to the

compilation of inputs that are utilized to arrive at the amounts billed to the City. This report details

the procedures we performed related to each of these components, as well as our findings from

applying these procedures.

ENERGY USAGE CHARGES

EPB’s Process

Energy charges are billed to the City for all street lighting provided for the City by EPB. The billing

process utilizes a number of components to determine the energy usage charges. The City’s bill for

energy usage includes usage on EPB-owned lights located within the City and lights owned by the

City.

A specific amount of kilowatt hours (KWH) for each light type is used in the energy calculation.

The amount of KWH is determined by the manufacturer’s kilowatt hour usage specifications for the

light size and type, as provided by Tennessee Valley Authority (TVA). The kilowatt hour usage

specification for each light type is multiplied by the annual average burn time/estimate of hours. The

annual average burn time/estimate of hours is also communicated to EPB by TVA. The amount of

kilowatt hours for each light type is used for all non-metered street lighting as defined in the

metering section of the Outdoor Lighting Rate – Schedule LS (the “Rate Schedule”), which is

included in the TVA Power Contract.

The kilowatt hours are then multiplied by the applicable rate per kilowatt hour including any

applicable monthly rate adjustments as provided by TVA. The rate is determined by beginning with

the base rate as published by EPB and TVA, and is included in the current Outdoor Lighting Rate –

Schedule LS. As stated in this rate Schedule, the rate for the energy charge shall be increased or

decreased in accordance with the current Adjustment Addendum published by TVA. In addition, the

rate per kilowatt hour shall be increased or decreased to correspond to increases or decreases

determined by TVA under Adjustment 4 of the wholesale power rate schedule under contractual

arrangements between TVA and EPB. On a monthly basis EPB obtains the base rate and any

applicable adjustments from the Statement of Amount which is provided or published directly to

Ms. Vicky Gregg Audit Committee Chair The Electric Power Board of Chattanooga Page 3 EPB by TVA. The applicable rate per kilowatt hour as adjusted is multiplied by the kilowatt hours

and number of lights in service for each light type and size to determine the energy usage charge for

the month by each light size and type. In order to determine the quantity of each light size and type,

EPB’s billing department obtains a report from EPB’s system modeling & records department which

summarizes the quantity by light type for each municipality. EPB’s system modeling & records

department uses the Geographical Technology System (G-Tech) to run the report which it provides

to the billing department each month. Each month, the report from the system modeling & records

department is used by the billing department to update the light size and type counts when

calculating the energy charges.

The G-Tech system is designed to track the location and other details for EPB’s plant assets. The

components of the G-Tech system related to street lights are initiated and maintained as follows:

Lighting jobs are received in EPB’s system modeling & records department via job packs and CAD

(Computer Aided Dispatch) field reports. Under the current process, all lighting jobs are created in

PowerPlan (job costing software) and have an engineering design and estimate. Once a job has been

completed in the field, the job pack is forwarded to the system modeling & records department to

update G-Tech.

EPB’s system modeling & records technicians review reports in PowerPlan that lists discrepancies

between the estimates and the actual charges (material and labor) recorded in the job pack. For

significant discrepancies, system modeling & records technicians contact the foreman or supervisor

to determine the validity of the actual charges. Once discrepancies are resolved, system modeling &

records technicians update the records in G-Tech. If a new light was installed, the new pole number

and light type and size will be entered in G-Tech with a tax district assigned.

EPB’s system modeling & records department runs query reports bi-monthly and monthly for CAD

jobs. CAD is used to document field work that is highly repetitive and does not require an

individual job designed in PowerPlan. The query reports contain data from the field reports

completed in CAD, which includes sizes and types of lights removed and installed. From the query

reports, system modeling & records technicians update the records in G-Tech to reflect the new light

sizes and types.

Ms. Vicky Gregg Audit Committee Chair The Electric Power Board of Chattanooga Page 4 A monthly report of poles/lights in each tax district is reviewed by the system modeling & records

department. As municipality borders change, the system modeling & records department updates G-

Tech accordingly.

Monthly, the system modeling & records department runs a report that shows the number of lights

located in each tax district. This report is submitted to the billing department in order to calculate

energy charges for each tax district.

Procedures performed

The following procedures were performed during our engagement:

x Obtained all available City of Chattanooga street light billing summaries dating back to

January 2007, which comprised billing summaries for eighty-nine months. Due to EPB’s

records retention policy of 7 years, billing summaries prior to calendar 2007 were

unavailable. The billing summaries contained details of rates and quantity by light size and

type which were used to compute the energy usage portion of the monthly bill.

x Observed a sample of mercury vapor lights to test the physical observation of mercury vapor

lights completed by EPB in June 2014.

x Reviewed all eighty-nine monthly billings and noted the KWH for each light type and size

did not change during this period.

x Recalculated the rate charged for each of the eighty-nine monthly billings and compared this

rate to the rate provided by TVA.

x Traced KWH per light size and type to source documentation to determine if the KWH

agrees to the allowable amount and is calculated in accordance with specifications provided

by TVA to EPB. Recalculated the KWH used for every non-metered /non LED light size

and type for each of the eighty-nine months.

x Created a pro-forma bill for each of the eighty-nine months on which we revised the quantity

of mercury vapor lights by lumen size for the errors noted as a result of the physical

observation.

Ms. Vicky Gregg Audit Committee Chair The Electric Power Board of Chattanooga Page 5

x Calculated the net overbilling/underbilling to the City by month considering the impact of all

errors identified in our review.

Findings

x The light type quantities used within each monthly billing was incorrect. The replacements

of mercury vapor with another type of light caused errors in quantities by size and type of

light by as much as 5,700 lights in a substantial number of the monthly billings.

x 265 lights initially included in the City’s street light billings were not found in the physical

observation. Our inquiries of EPB in regard to this situation revealed this can occur when a

significant storm damages the light and the light/pole is removed. We did not attempt to

determine when the 265 lights were taken down by storms or otherwise removed. We

applied the effect of the error related to the missing lights to street light billings for all

eighty-nine months in the pro-forma billing calculation schedules.

x The effect on the energy usage billings of the revisions applied to light quantities for the

eighty-nine month period reviewed was overbillings of $1,539,274. These adjustments are

included in line A1 in attached Exhibit I.

x Our testing of all the components of the energy usage portion of the City’s street light

billings found that the KWH by light type and lumen size was not calculated correctly.

o Our review of the Rate Schedule to determine if the KWH used agreed to the

allowable amount noted that an additional 5% energy charge to reflect secondary

circuit losses had not been added to the energy used in the calculation as specified in

the Metering section of the Rate Schedule, which is identical to the applicable section

of the Power Agreement between EPB and TVA. This omission of the 5% energy

usage was applicable to the City’s street light billings for each of the eighty-nine

months reviewed.


o EPB had not updated its KWH calculations to agree to the wattages by light type and

burn hours communicated by TVA to all distributors. EPB has documentation of

specific schedules provided to EPB by TVA in 2006, 2007, and 2013. The

communication from TVA states that the distributors should use 4,377 as the burn

hours when calculating KWH. We noted that several of the wattages by light type

and size in the billing calculations did not agree to the TVA communication. The

calculation by EPB used 4,200 as the burn hours rather than the 4,377 specified by

TVA. The communication from TVA stated that if the distributors chose to use a

different calculation for non-metered lights that the distributor should provide their

calculations to TVA. We did not find evidence that EPB communicated to TVA any

departure from the TVA specified amounts. Therefore, based upon the best

information available, the departure from the amounts specified by TVA was not

appropriate.

o We recalculated the billed amount for the eighty-nine months factoring in the change

in KWH/YEAR per TVA and the correct wattages per the TVA communications and

the 5% secondary circuit loss. Our recalculated amounts compared to the amounts

billed for the eighty-nine months tested revealed a cumulative under-billing to the

City for KWH usage in the amount of $1,416,471. These adjustments are included in

line A2 in attached Exhibit I.

o We summarized the net impact on the energy usage portion of the City’s street light

billings due to overbillings related to light type and underbillings related to KWH

usage in the chart below.


FACILITIES CHARGES

EPB’s Process

Each monthly street light billing to the City includes a component for facilities charges. The

facilities charges are designed to recover the cost of installation and maintenance of EPB-owned

facilities dedicated to providing street lighting. The annual facility charge according to the Rate

Schedule is 12.3 percent of the installed cost. The monthly street light bill is computed at one-

twelfth of the 12.3 percent, or 1.025%.

The Rate Schedule also states that any costs reimbursed to EPB shall be adjusted from the facility

base. Further, it states that any facilities base reflected on the books of any municipality rather than

EPB should be removed from the facilities base for purposes of the calculation. Therefore, facilities

charges apply to all street light plant assets owned by EPB.

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The 12.3 percent facilities charge has been used by EPB (Distributor) since 1998. The Rate

Schedule allows EPB with agreement of TVA to determine when a change is necessary and make

such change. The Rate Schedule states under the caption of Revenue and Cost Review that

“Distributor's costs of providing service under Part A of this rate schedule are subject to review at

any time and from time to time to determine if Distributor's revenues from the charges being applied

are sufficient to cover its costs. (Such costs, including applicable overheads, include, but are not

limited to, those incurred in the operation and maintenance of the systems provided and those

resulting from depreciation and payments for taxes, tax equivalents and interest.) If any such review

discloses that revenues are either less or more than sufficient to cover said costs, distributor shall

revise the above facility charges so that revenues will be sufficient to cover said costs. Any such

revision of the annual facility charge provided for first above in section II of Part A of this rate

schedule shall be by agreement between Distributor and TVA.”

The installed cost of facilities (the facilities base) is calculated by EPB’s accounting department on a

monthly basis. The total of the street light plant account from the previous month is carried forward,

additions to the facilities base incurred throughout the month are added to the street light plant

account, while retirement and contribution amounts are deducted from the street light plant account

to arrive at the current month’s total street light facilities.

In order to determine the total installed cost for each municipality, EPB’s accounting department

utilizes statistics from G-Tech records which determine the percentage of total lights located in each

municipality that are owned by EPB. The percentages are then applied to the total installed cost to

determine the facilities base for each municipality. EPB’s accounting department then applies

1.025% to the total installed cost for each municipality. These amounts are then forwarded to the

billing department so they can be included on the monthly bill.

Ms. Vicky Gregg Audit Committee Chair The Electric Power Board of Chattanooga Page 9 Costs are accumulated in several ways. One method is by specific jobs, which are a minority of the

street lighting jobs. Costs for specific jobs are accumulated through the Job/Work Order as identified

in the job cost system as a Construction Request (CR#). For each individual CR#, all materials,

labor and overhead costs are accumulated or applied as designed until the job is completed and

closed. When the job is closed, it is entered into the general ledger from the job cost system. This

process is referred to as unitization of job costs. The costs recorded in general ledger accounts for

plant assets or operations and maintenance expense are driven by the job design.

The majority of street lighting costs are captured through annual blanket work orders. The street

lighting costs accumulated in these work orders are of a recurring and similar nature. A blanket

work order is set up for specific costs that are supposed to be charged. Below is a description of the

blanket work order process and the work orders currently in use.

Material and labor required to maintain street lights are charged to blanket work orders. These work

orders are listed and described below. Blanket work orders are used to capture material, labor and

equipment for highly repetitive work so that an individual CR does not have to be created for each

job.

o Lighting Supplies for EPB Owned Poles (Bulbs, Photocells, Globes, etc.)

o Lighting Fixtures for EPB Owned Poles (material only)

o Labor Blanket (Supplies) EPB Owned

o Labor Blanket (Fixtures) EPB Owned

o Lighting Maintenance – City of Red Bank (Red Bank owned)

o Lighting Maintenance – City of East Ridge (East Ridge owned)

o Lighting Maintenance – City of Collegedale (Collegedale owned)

o Lighting Maintenance – City of Rossville (Rossville owned)

o Lighting Maintenance – City of Chattanooga (City owned)

For the blanket work orders, overhead costs as determined by an engineering study as a percentage

of labor and materials are applied by accounting and reclassified from expense to plant assets for

street lighting when the blanket work order is closed out either on a monthly or annual basis.


For the majority of the eighty-nine month period reviewed, the process for capturing labor related to

work performed under blanket work orders was not as described above. Prior to the current process

which was implemented at the beginning of fiscal year 2013, the policy was to capitalize 5% of the

labor incurred by department 21 (Operational Maintenance) as the labor costs incurred for street

lighting. Through a study done in 2006 of the productivity reports, it was determined that 5% of

department 21’s time was related to fixture installations which are considered costs that should be

capitalized as installation costs for street lights.

The process for capturing street light costs added to EPB’s street light plant assets directly impacts

the facilities base. Our review indicated the process has been changed by EPB at various points in

time. In 2006 a study was done to determine the percentages of jobs that had been incurred that

related to supplies versus fixtures and what percentages were street light jobs versus private lights.

The study determined that the blanket work order for fixtures should be designed to capture 65% of

the costs for street lights and the remaining 35% for private lights. The study also determined that

20% of the costs charged to the supplies blanket should be capitalized to the street light accounts and

a percentage should be recorded in the private light plant account. The remaining amounts are

charged to operational and maintenance expense accounts identified as street lights and private

lights. The blanket designs are evaluated on an annual basis by the appropriate engineer based upon

the work flow information provided by CAD. Prior to fiscal year 2007, the process for determining

which costs should be allocated to street light fixtures costs, street light supplies costs, private light

costs to be capitalized, or light costs to be expensed was very different. The process was highly

dependent on the crew members to assign the costs to the appropriate jobs. Management determined

during 2006 that the controls surrounding proper recording of street light costs were not effective.

Therefore, the studies discussed above were done and the new DCIS (job costing software used prior

to Power Plan) blanket work orders were created with the new job designs. Currently, the crew only

has to distinguish whether the job is a fixtures job or a supplies or maintenance job and the costs are

automatically allocated in the manner discussed above, or are billed separately as maintenance.


Two additional items impact the amount of installed costs:

x Contributions are recorded as a reduction to the facilities base. Contributions occur when the

lighting installation varies from the engineer’s job specifications due to special requests of

the customer. Receipt of the contribution is recorded as a reduction to the installed costs.

x Retirements are recorded as a deduction from the installed costs. In accordance with Federal

Energy Regulatory Commission (FERC) accounting manual guidelines, EPB uses a

composite method for retirements. Lighting replacement performed using specific CRs

include a deduction for the retirement of the light which is captured by the system as a result

of the job design. However, replacement work performed under the blanket work orders

does not capture retirements. Therefore, EPB’s accounting department has an annual process

referred to as life-auto retirements which retires the installation costs according to their in

service year (vintage). EPB management has estimated the useful lives of street lighting to

be twenty-five years. On an annual basis the accounting department’s process is to retire

street lighting costs incurred at the end of the twenty-fifth year.

Procedures performed

The following procedures were performed during our engagement:

Materials:

x Obtained from the general ledger street light inventory transactions for street light inventory

items/part #s that were issued/removed from the storeroom or returned/replaced to the

storeroom. The report provided covered the period from fiscal year 2004 through May 2014.

The information gathered was approximately 23,000 lines of transactions by date. We then

used computer aided techniques to segregate the transactions into those charged to a job and

those charged directly to general ledger accounts. We determined that all entries charged

directly to the general ledger were expensed. We inquired about the correct process and

determined street light inventory should not be charged directly to an expense account.


x Used computer aided techniques to group the transactions which were issued to a job by

CR#/job#/work order#/blanket#. Inventory was charged to 392 differrent CR#s. We scoped

our testing to cover inventory charges and credits to CR#s that were greater than $1,000. The

CRs selected for testing represented approximately $5.8 million of the $6.3 million of the

transactions, or 93%.

x Determined if the CR# charged was a valid lighting CR#. We then determined the dollar

amount of fixtures and supplies that were recorded to a work order that was not a valid street

light work order. This amount represents errors in recording street lighting fixtures and

supplies that should have been included in the facilities base but were recorded in an electric

system account. The error was computed based on the allocation of street lighting versus

private lighting and capitalization percentage versus expense percentage in accordance with

the applicable fixture or supplies blanket design for the applicable year. We then allocated

the applicable amount to the City based on EPB’s allocation of facilities to the City for the

applicable period. We then tested the street light blanket work orders for capitalization of

non-street light inventory into street light accounts. We reconciled the inventory amounts

from the blanket work orders used in each year to the unitization of job costs and the

installed costs recorded in the facilities base. In addition, we chose a sample of unitization of

job costs during the period and we observed in detail the unitization process (including the

application of overhead costs), the related journal entries, and reconciliations to the general

ledger. These procedures furthered our understanding of the processes performed by EPB.

Labor:

x Tested the labor applied to street lighting costs by obtaining from the Enquesta general ledger

payroll data covering all payroll recorded for department 21 during the period. We

segregated the amounts by year through fiscal year 2012 and calculated 5% of the department

payroll, which was the EPB policy for labor charges assigned to street lighting. We then

compared our calculation to the amount which was capitalized to the street lighting plant

accounts.


x Performed a step-by-step observation of the procedures which currently capture labor

charges within the appropriate fixtures, supplies or maintenance blanket work order, and

traced the subsequent posting of the amounts to the appropriate plant accounts.

Blanket Design:

x Inspected the fixture and supply blanket work order designs approved by engineering for

each year in the eighty-nine month period reviewed. We compared the blanket designs for

each period to the 2006 job study for reasonableness.

x Compared the design to the annual unitization job costs when applicable to determine

whether or not the appropriate amounts are being capitalized verses expensed.

Retirements:

x Accumulated from EPB’s general ledger systems (Enquesta and manual accounting records)

the installation costs net of contributions which were recorded by month and year within the

plant assets ledgers from 1981 to current.

x Totaled the previous twenty-five years of the amounts recorded to the ledgers for installed

costs net of contributions to determine what the facilities base should have been in order to

determine whether or not the retirements recorded were accurate for each period.

Other:

x Calculated the net overbilling/underbilling to the City by month considering the impact of all

errors identified in our review.

Findings

Materials:

x Throughout the period many street lighting inventory issuances were recorded directly to

expense accounts rather than the appropriate work orders and were not properly capitalized.

The errors resulted in the expensing of amounts that should have been capitalized and

included in the facilities base throughout the period. These adjustments are included in line

B1 in attached Exhibit I.


x Street light inventory amounts were issued to work orders that were not related to street

lighting. The error caused amounts to not be properly included in the facilities base. These

adjustments are included in line B1 in attached Exhibit I.

x Amounts related to non-street lighting inventory were improperly coded to street lighting

work orders. The improper coding caused assets to be capitalized to street light accounts and

included in the facilities base when they should not have been. These adjustments are

included in line B1 in attached Exhibit I.

Labor:

x The amount of labor that was capitalized during the periods reviewed was not in accordance

with EPB’s policy. We determined that EPB did not capture sufficient labor as was specified

in the policy. These adjustments are included in line B1 in attached Exhibit I.

Blanket Design:

x Blanket work orders are designed to allocate street light costs between items capitalized and

items expensed. We noted no changes in allocation rates or the methodology since 2007.

EPB’s management is currently evaluating the allocations to determine if changes are

needed.

x The current process allocates the total installed cost of the facilities bases to the various

municipalities based on the relative number of EPB-owned lights within each municipality.

The process is not designed to adjust for unusual increases or decreases in activity within a

specific municipality.

x The 2009 street lighting supplies blanket was improperly designed and caused 65% of all

supplies entries to be capitalized to street lighting plant assets in error. We accumulated the

error based upon the appropriate blanket designs for street lighting supplies and determined

the effect of the error on the facilities base applicable to the City. These adjustments are

included in line B1 in attached Exhibit I.

Ms. Vicky Gregg Audit Committee Chair The Electric Power Board of Chattanooga Page 15 Retirements:

x The street lighting retirements recorded by EPB were not accurate for each period. These

adjustments are included in line B2 in attached Exhibit I.

MAINTENANCE CHARGES

EPB’s Process

Each month EPB sends a separate billing for maintenance charges on City-owned street lighting.

EPB specifically tracks job costs related to street lighting owned by the City. Crews assigned to

maintenance work on street lighting owned by the City identify time and materials and code these

items to the applicable maintenance blanket work orders. EPB’s accounting department accumulates

the details of the costs. From the City’s blanket work order, EPB’s accounting department

summarizes the charges and creates an invoice to the City.

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Procedures

x Selected thirty monthly billings from the 119 months available from the last ten fiscal years.

We obtained the billings and agreed them to the supporting details noting no exceptions.

Findings

x As a result of the testing performed on facilities charges we determined that during fiscal

year 2004 through May 2014 department 46 (Construction) charged $21,800 of street

lighting inventory directly to general ledger expense accounts rather than the appropriate

blanket work order. Substantially all street lighting work performed by department 46

represents maintenance work on City or municipality owned street lights. These errors

caused maintenance underbillings to the City of approximately $20,000. These adjustments

are included in line C1 in attached Exhibit I.

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We were not engaged to, and did not perform an audit, the objective of which would be to express an

opinion on the specified elements, accounts, items, or other information. In addition, the procedures

mentioned in this report do not constitute a study and evaluation for the purpose of expressing an

opinion on the effectiveness of EPB’s internal controls. Accordingly, we do not express such an

opinion. Had we performed additional procedures, other matters might have come to our attention

that would have been reported to you.

This report is intended solely for the information and use of EPB and the City of Chattanooga and is

not intended to be and should not be used by anyone other than these specified parties.

Chattanooga, Tennessee September 19, 2014

Exhibit 1

FY FY FY FY FY FY FY FY2007 2008 2009 2010 2011 2012 2013 2014 Totals

ENERGY USAGE BILLINGS:

Net energy usage under/(over) billing (11,431)$ (29,412)$ (40,854)$ (39,823)$ (44,663)$ (46,576)$ (11,119)$ 101,075$ (122,803)$

FACILITIES CHARGE BILLINGS:

Net facilities charge under/(over) billing 7,954 13,986 18,171 (467) 6,178 17,059 11,945 20,282 95,108

MAINTENANCE BILLINGS:

Net underbilling error identified 14 2,340 3,074 1,331 1,499 2,243 - 145 10,646

Net under/(over) billing (3,463)$ (13,086)$ (19,609)$ (38,959)$ (36,986)$ (27,274)$ 826$ 121,502$ (17,049)$

THE ELECTRIC POWER BOARD OF CHATTANOOGASUMMARY ANALYSIS OF CITY OF CHATTANOOGA STREET LIGHT BILLINGS

FOR THE PERIOD BEGINNING JANUARY 2007 THROUGH MAY 2014

- 18 -

Exhibit 1

July August September October November December January February March April May June2006 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007 2007 Totals


A1 Overbilling due to light type errors -$ -$ -$ -$ -$ -$ (17,628)$ (15,901)$ (15,901)$ (16,141)$ (16,141)$ (16,142)$A2 Underbilling due to KWH errors - - - - - - 15,856 14,103 14,059 14,218 14,143 14,044

Net energy usage overbilling - - - - - - (1,772) (1,798) (1,842) (1,923) (1,998) (2,098) (11,431)$


Facilities base - - - - - - 6,652,533 6,634,805 6,635,144 6,646,834 6,654,147 6,665,120

B1 Net adjustments due to capitalization errors 451,448 451,448 451,448 451,448 451,448 451,448B2 Net adjustments due to asset retirement errors (323,940) (323,940) (323,940) (323,940) (323,940) (323,940)

Adjusted facilities base - - - - - - 6,780,041 6,762,313 6,762,652 6,774,342 6,781,655 6,792,628Facilities charge rate - - - - - - 1.025% 1.025% 1.025% 1.025% 1.025% 1.025%

Recalculated facilities charge - - - - - - 69,495 69,314 69,317 69,437 69,512 69,624Facilities charge billed 68,077 68,007 68,010 68,130 68,205 68,317

Net facilities charge underbilling - - - - - - 1,418 1,307 1,307 1,307 1,307 1,307 7,954


C1 Under/(over) billing error identified - - - - - - (41) (166) 295 (261) 220 (33) 14

Net overbilling -$ -$ -$ -$ -$ -$ (395)$ (657)$ (240)$ (877)$ (471)$ (824)$ (3,463)$

THE ELECTRIC POWER BOARD OF CHATTANOOGAANALYSIS OF CITY OF CHATTANOOGA STREET LIGHT BILLINGS

FISCAL YEAR 2007

- 19 -

Exhibit 1



A1 Overbilling due to light type errors (13,955)$ (16,791)$ (16,791)$ (17,909)$ (17,909)$ (17,910)$ (17,390)$ (17,377)$ (17,377)$ (19,142)$ (19,142)$ (19,142)$ A2 Underbilling due to KWH errors 11,641 14,490 14,489 15,481 15,459 15,449 14,993 14,977 14,967 16,517 16,514 16,446

Net energy usage overbilling (2,314) (2,301) (2,302) (2,428) (2,450) (2,461) (2,397) (2,400) (2,410) (2,625) (2,628) (2,696) (29,412)$


Facilities base 6,954,774 6,969,088 6,974,524 7,036,964 7,030,245 7,077,640 6,851,221 6,879,531 6,889,032 6,898,483 6,907,688 6,925,149

B1 Net adjustments due to capitalization errors 512,913 512,913 512,913 512,913 512,913 512,913 512,913 512,913 512,913 512,913 512,913 512,913 B2 Net adjustments due to asset retirement error (323,940) (323,940) (323,940) (323,940) (323,940) (323,940) (446,869) (446,869) (446,869) (446,869) (446,869) (446,869)

Adjusted facilities base 7,143,747 7,158,061 7,163,497 7,225,937 7,219,218 7,266,613 6,917,265 6,945,575 6,955,076 6,964,527 6,973,732 6,991,193 Facilities charge rate 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025%

Recalculated facilities charge 73,223 73,370 73,426 74,066 73,997 74,483 70,902 71,192 71,290 71,386 71,481 71,660 Facilities charge billed 71,488 71,635 71,690 72,129 73,215 72,546 70,163 70,515 70,613 70,709 70,804 70,983

Net facilities charge underbilling 1,735 1,735 1,736 1,937 782 1,937 739 677 677 677 677 677 13,986


C1 Under/(over) billing error identified 103 405 698 (260) 325 84 643 177 165 - - - 2,340

Net under/(over)billing (476)$ (161)$ 132$ (751)$ (1,343)$ (440)$ (1,015)$ (1,546)$ (1,568)$ (1,948)$ (1,951)$ (2,019)$ (13,086)$


FISCAL YEAR 2008

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Exhibit 1






Facilities base 6,924,869 7,080,581 7,472,716 7,630,330 7,644,124 7,671,028 7,391,828 7,406,914 7,415,803 7,431,256 7,444,178 7,457,095

B1 Net adjustments due to capitalization errors 527,187 527,187 556,136 556,136 556,136 556,136 556,136 556,136 556,136 556,136 556,136 556,136 B2 Net adjustments due to asset retirement errors (446,869) (446,869) (446,869) (446,869) (446,869) (446,869) (344,290) (344,290) (344,290) (344,290) (344,290) (344,290)



Net facilities charge underbilling 904 904 1,120 1,120 1,120 1,120 1,599 1,598 2,171 2,172 2,171 2,172 18,171


C1 Under/(over) billing error identified 82 934 253 624 (88) 406 13 96 238 30 (124) 610 3,074

Net overbilling (1,844)$ (1,040)$ (1,527)$ (1,686)$ (2,632)$ (2,261)$ (1,967)$ (1,947)$ (1,257)$ (1,258)$ (1,449)$ (741)$ (19,609)$


FISCAL YEAR 2009

- 21 -

Exhibit 1






Facilities base 7,694,708 8,010,319 7,993,028 8,004,976 8,014,564 8,028,426 8,010,490 8,039,599 8,058,568 7,881,384 7,907,664 7,961,844




Net facilities charge under/(over) billing 252 770 770 770 770 770 (1,061) (1,062) (611) (611) (612) (612) (467)


C1 Under/(over) billing error identified (1,182) 192 149 701 68 116 45 174 279 174 393 222 1,331

Net overbilling (4,340)$ (2,482)$ (2,535)$ (1,816)$ (2,405)$ (2,183)$ (4,058)$ (3,936)$ (3,558)$ (3,879)$ (3,709)$ (4,058)$ (38,959)$


FISCAL YEAR 2010

- 22 -

Exhibit 1






Facilities base 8,185,329 8,196,578 8,210,332 8,253,930 8,271,111 8,290,606 8,290,804 8,303,676 8,316,431 8,409,254 8,425,010 8,432,829




Net facilities charge underbilling 65 66 66 162 162 161 818 819 965 964 965 965 6,178


C1 Under/(over) billing error identified 750 68 124 333 99 - 211 (29) 327 205 100 (689) 1,499

Net overbilling (2,955)$ (3,712)$ (3,498)$ (3,447)$ (3,484)$ (3,452)$ (2,624)$ (2,780)$ (2,529)$ (2,524)$ (2,613)$ (3,368)$ (36,986)$


FISCAL YEAR 2011

-23 -

Exhibit 1






Facilities base 8,594,697 8,692,314 8,703,720 8,741,151 8,731,422 8,743,454 9,019,394 9,033,994 9,043,508 9,078,398 9,136,251 8,955,122




Net facilities charge underbilling 1,496 1,496 1,798 1,798 1,798 1,798 792 1,217 1,217 1,216 1,216 1,217 17,059


C1 Under/(over) billing error identified 196 629 485 565 467 24 16 219 78 (918) 370 112 2,243

Net overbilling (2,277)$ (1,875)$ (1,666)$ (1,070)$ (1,617)$ (2,193)$ (3,089)$ (2,345)$ (2,462)$ (3,594)$ (2,399)$ (2,687)$ (27,274)$


FISCAL YEAR 2012

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Exhibit 1




Net energy usage under/(over)billing (4,086) (3,977) (4,047) (4,106) (4,187) (4,236) (2,306) (496) 1,961 2,967 3,997 7,397 (11,119)$


Facilities base 9,005,552 9,247,124 9,243,716 9,245,297 9,257,114 9,258,646 9,229,180 9,226,702 9,232,481 9,234,965 9,251,428 9,172,111




Net facilities charge under/(over) billing 1,818 1,815 1,815 1,815 1,816 1,815 (87) 227 227 228 228 228 11,945


C1 Under/(over) billing error identified - - - - - - - - - - - - -

Net under/(over)billing (2,268)$ (2,162)$ (2,232)$ (2,291)$ (2,371)$ (2,421)$ (2,393)$ (269)$ 2,188$ 3,195$ 4,225$ 7,625$ 826$


FISCAL YEAR 2013

- 25 -

Exhibit 1



A1 Overbilling due to light type errors (3,716)$ (2,118)$ (1,545)$ (2,173)$ (2,187)$ (2,205)$ (2,251)$ (2,269)$ (2,441)$ (2,464)$ (2,411)$ -$ A2 Underbilling due to KWH errors 13,381 12,461 11,444 10,782 10,350 10,713 10,996 11,075 11,905 12,008 11,740 -

Net energy usage underbilling 9,665 10,343 9,899 8,609 8,163 8,508 8,745 8,806 9,464 9,544 9,329 - 101,075$


Facilities base 9,013,852 9,101,167 8,437,479 8,282,138 8,182,985 7,947,393 7,980,617 8,057,248 8,070,076 8,103,485 6,935,642 -

B1 Net adjustments due to capitalization errors 718,900 718,900 718,900 718,900 718,900 718,900 718,900 718,900 718,900 718,900 718,900 - B2 Net adjustments due to asset retirement errors (612,326) (612,326) (612,326) (612,326) (612,326) (612,326) (622,306) (622,306) (622,306) (622,306) 234,070 -

Adjusted facilities base 9,120,426 9,207,741 8,544,053 8,388,712 8,289,559 8,053,967 8,077,211 8,153,842 8,166,670 8,200,079 7,888,612 - Facilities charge rate 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025% 1.025%

Recalculated facilities charge 93,484 94,379 87,577 85,984 84,968 82,553 82,791 83,577 83,709 84,051 80,858 - Facilities charge billed 92,392 93,287 86,484 84,892 83,876 81,461 81,801 82,587 82,718 83,061 71,090 -

Net facilities charge underbilling 1,092 1,092 1,093 1,092 1,092 1,092 990 990 991 990 9,768 - 20,282


C1 Underbilling error identified - - - 16 - - - 105 - 24 - - 145

Net underbilling 10,757$ 11,435$ 10,992$ 9,717$ 9,255$ 9,600$ 9,735$ 9,901$ 10,455$ 10,558$ 19,097$ -$ 121,502$


FISCAL YEAR 2014

- 26 -

Documents

THE ELECTRIC POWER BOARD OF CHATTANOOGA …ftpcontent2.worldnow.com/wrcb/pdf/093014MauldinJenkins...EXECUTIVE SUMMARY We have performed procedures to assist The Electric Power Board