Alberta Central East (ACE) Water Corporation

Connection Policy and Water Charges

July 2012 Central East (ACE) Water Corporation Connection Policy and Water

September 2012

This report is prepared for the sole use of Alberta Central East Water Corporation. No representations of any kind are made by Urban Systems Ltd. or its employees to any party with whom Urban Systems Ltd. does not have a contract. 1

Alberta Central East Water Corporation Connection Policy And Water Charges

TABLE OF CONTENTS

1.0 OBJECTIVE ...... 1

2.0 WHO IS ALBERTA CENTRAL EAST (ACE) WATER CORPORATION? ...... 2

2.1 GUIDING PRINCIPLES ...... 2

3.0 ALBERTA CENTRAL EAST (ACE) REGIONAL WATER SYSTEM ...... 4

3.1 HOW DOES THE TRANSMISSION SYSTEM WORK? ...... 4

3.2 WATER RESERVOIR AND STORAGE IREMENTS...... 4

3.3 POINT OF DELIVERY ...... 4

3.4 LEVEL OF SERVICE ...... 5

4.0 WHO ARE THE CUSTOMERS? ...... 6

5.0 CONNECTION TO THE ACE REGIONAL WATER SYSTEM ...... 7

5.1 CONNECTION TYPES ...... 7

5.2 FUTURE CONNECTIONS...... 9

5.2.1 Application Process...... 10 5.2.2 Engineering Design and Cost Estimate ...... 10 5.2.3 ConstructioStage...... 10

6.0 OPERATION AND MAINTENANCE ...... 12

6.1 WHO IS RESPONSIBLE? ...... 12

6.2 METERING AND BILLING ...... 12

7.0 COST OF SERVICE, WATER RATE AND CONNECTION CHARGES...... 14

7.1 COST OF SERVICE...... 14

7.1.1 Capital Costs ...... 14 7.1.2 Replacement Costs ...... 14 7.1.3 Operation and Maintenance Expenses ...... 14 7.1.4 Management Fees ...... 14 7.1.5 Board of Directors Expenses ...... 15 7.1.6 Purchasing Cost ...... 15 7.2 UNIFORMWATER RATE STRUCTURE ...... 15 7.2.1 Water charges per m3 of water ...... 15 7.2.2 Fixed Charges ...... 16

Alberta Central East Water Corporation Connection Policy And Water Charges

7.2.3 Rate of Return ...... 16 7.2.4 Replacement Charges ...... 16 7.2.5 Work in Progress ...... 16 7.2.6 Charges to Account for Water Losses ...... 16

7.3 CONNECTION CHARGES ...... 17 .. 7.4 DISCONNECTION CHARGES ...... 17

7.4.1 Temporary Disconnection ...... 17

7.5 RECONNECTION CHARGES ...... 17

7.6 RATE STRUCTURE REVIEW PERIOD ...... 17

APPENDICES

Appendix A – Figure A: Service Area

Appendix B – Application Form for Future Connections

Appendix C – Schematic Drawings for Direct Connections to Main - Single Users

Appendix D – List of Approved Vendors

Appendix E – List of Approved Contractors

Appendix F – Allocation of Fixed Charges and Board of Directors Fees – Usage Charge – Other Charges

Alberta Central East Water Corporation Connection Policy And Water Charges

1.0 OBJECTIVE

This document is prepared to assist the Alberta Central East (ACE) Water Corporation in providing services to their customers when connecting to the Alberta Central East (ACE) regional water system.

It defines the ACE Water Corporation Guiding Principles for operating and managing the Corporation and the regional water system and will answer questions such as:

– How does a transmission line work?

– Who can connect?

– What are the different Connection Types?

– What are the requirements for connecting to ACE regional water system?

– Who will maintain and manage the connections?

– How much does it cost to connect?

– Who will pay?

– How will the billing work?

It categorizes the customers and the connection types and defines the level of service for each type. It also sets parameters for the ACE Water Rate Structure and provides an assessment of the costs associated with the provision of service. This document also outlines the process for future connection and defines the administration, engineering and operation requirements.

Alberta Central East Water Corporation Connection Policy And Water Charges

2.0 WHO IS ALBERTA CENTRAL EAST (ACE) WATER CORPORATION?

ACE Water Corporation is a body corporate, incorporated by its shareholders pursuant to the laws of the Province of Alberta, to effectively manage and operate the ACE regional water system. The shareholders are:

County of Minburn No.27 County of Two Hills No.21 County of Vermilion River Town of Two Hills Town of Vermilion Village of Dewberry Village of Innisfree Village of Kitscoty Village of Mannville Village of Marwayne Village of Myrnam Village of Paradise Valley Village of Willingdon

As per the Unanimous Shareholder Agreement, ACE Water Corporation is a municipality owned corporation. The member municipalities have received the necessary consents as required by the Municipal Government Act to be shareholders of ACE Water Corporation. The ownership of the corporation is proportionate to the shareholders’ population and allocated capacity. The details of classes and numbers of shares are presented in the Unanimous Shareholder Agreement.

2.1 Guiding Principles

The guiding principles of ACE Water Corporation are:

1. Shareholders are committed to providing safe, clean and reliable potable water to their residents:

The ACE Regional Water System is partially funded by the Province of Alberta as part of the Alberta Water/Wastewater Municipal Partnership – Regional Initiatives. This program is prepared in accordance to Alberta’s “Water for Life” strategy. As such, ACE Water Corporation has adopted the main goals of Water for Life Strategy. Through regional partnership and initiatives, the shareholders are committed to provide safe, reliable and quality potable water to their residents to support a sustainable economy in the region.

Alberta Central East Water Corporation Connection Policy And Water Charges

2. Shareholders are in it together:

Regardless of the geographic location of the transmission system and its facilities, the shareholders own the entire system together proportionate to their population. They are responsible to effectively manage and operate the corporation and maintain the integrity of the regional system. Any decision regarding the ACE regional water system should be made in fairness and benefit all the users the same. The decision making process is in accordance with the Unanimous Shareholder Agreement and ACE corporate bylaws.

3. Shareholders are committed to use water responsibly:

Considering the value of water and the fact that it is a limited resource, ACE shareholders are committed to use their water responsibly by developing a water conservation policy and implementing demand management strategies.

4. ACE Water Corporation is a sustainable business:

ACE Water Corporation will be managed as a sustainable business unit. The shareholder will make financial decisions considering the affordability of water services to the users while maintaining the viability of their utility corporation over the long term. By making decisions that are financially viable, the shareholders will enhance their ability to fulfill their commitment of providing safe, reliable, and quality potable water to their residents.

Alberta Central East Water Corporation Connection Policy And Water Charges

3.0 ALBERTA CENTRAL EAST (ACE) REGIONAL WATER SYSTEM

The Alberta Central East (ACE) Regional Water System is a regional entity that supplies drinking water to municipalities in the Counties of Minburn, Two Hills and Vermilion River.

The regional system is a transmission system that will include approximately 350 kilometres of pipeline, a water transfer station located near the Town of Vegreville, comprised of a storage facility and a pump station and multiple booster stations. ACE receives its water from the Capital Region Vegreville Corridor Water Services Commission (CRVCWSC). The source of water is the North Saskatchewan River, treated by EPCOR Utilities Inc. in their water treatment plants located in the City of Edmonton. The system delivers water to its member municipalities and customers. However, it does not provide pressure. Municipalities are responsible for distribution and delivery of the water to their residents.

3.1 How does the Transmission System Work?

ACE Regional Water System is a transmission system. It receives water from CRVCWSC at the Water Transfer Station, located near the Town of Vegreville. The main pump station, located in the Water Transfer Station, pumps water through the transmission pipeline and delivers water to the customers. Appendix A - Figure A shows the service Area and the transmission system components.

The transmission system has sufficient pressure to deliver the design maximum daily demand of each municipality to the designated point of delivery (refer to section 3.3) for the given municipality. It does not provide fire flows and pressure for distribution systems within each municipality. Municipalities are responsible for handling and distributing water to their residents.

3.2 Water Reservoir and Storage Requirements

The customers are required to provide a reservoir storage equivalent to at least two times of their average daily design demand to be able to receive water from ACE regional water system.

3.3 Point of Delivery

The Point of Delivery for each customer is where they receive water from ACE regional water system. It is also the location that ACE Water Corporation will transfer the ownership and operational responsibilities of the infrastructure to the customer/municipality.

The physical attributes and location of the Point of Delivery varies for users based on their connection type.

Alberta Central East Water Corporation Connection Policy And Water Charges

3.4 Level of Service

ACE regional water system will supply water that meets the Government of Alberta’s Environmental Protection and Enhancement Act, and Public Health Act, as well as the Guidelines for Canadian Drinking Water Quality. In instances where these standards are not being met, or where the standards evolve, ACE will plan and implement improvements designed to achieve the standards.

ACE regional water system has sufficient pressure to deliver the maximum daily demand of each municipality to the designated Point of Delivery for the given municipality (refer to section 3.3) at any given time up to its design capacity (currently the system is designed for the 2035 estimated water demands). ACE regional water system does not provide storage, fire flows and pressure for distribution systems within each municipality. Municipalities are responsible for handling and distributing water to their resident.

Alberta Central East Water Corporation Connection Policy And Water Charges

4.0 WHO ARE THE CUSTOMERS?

ACE Water Corporation has two types of customers:

A. Customers who have contributed to the capital cost of the project (member municipalities/shareholders)

B. Customers who have not contributed to the capital cost of the project

The member municipalities (named in section 3.0) have three major roles:

1. They are the shareholders of ACE Water Corporation

2. They are the customers of ACE Water Corporation

3. They are the distributors of water to their residents

Member municipalities are ACE Water Corporation’s direct customers. ACE wholesales water to member municipalities using the water rate (per cubic meter of water consumed by each member) determined by the shareholders and the Board of Directors. The water is metered at the Point of Delivery. ACE Water Corporation does not sell water directly to ratepayers and/or residents of each municipality. The only exception is for a Single Non-Residential Major User that uses more than 50% of the member municipality’s allocated capacity. In this case, according to the Unanimous Shareholder Agreement, the member municipality should refer the Single Non-Residential Major User to ACE to be considered as ACE’s direct customer. This customer will be Type B: non contributor to the capital cost.

ACE –Wholesale Member Municipalities –Retail Ratepayers/End Users –Wholesale Single Non-Residential Major User(s)

After receiving water from ACE, the member municipalities will distribute and provide water services to their residents. The final cost of water to the end user is therefore determined by each member municipality based on ACE’s water rate and the member municipality’s administration and distribution charges.

Alberta Central East Water Corporation Connection Policy And Water Charges

5.0 CONNECTION TO THE ACE REGIONAL WATER SYSTEM

The customers will receive water by connecting to the ACE watermain. At each connection point, there will be the required equipments to provide a pressure break, backflow prevention, communication to the Water Transfer Station and metering. The size and configuration of the above equipments vary based on the user type and demand. These connections will form the physical location of the Point of Delivery for each customer.

5.1 Connection Types

There are three types of connection to the ACE regional watermain:

A) Urban Connections (Fill Stations):

This type of connection refers to member municipalities with potable water reservoir and distribution systems. These communities can be Towns, Villages and Hamlets within the member municipalities.

For each connection, ACE will construct and operate a Fill Station. The Fill Station is the facility that fills the customers’ reservoirs and houses the required equipments for pressure break, backflow prevention and water meters. It might also include re-chloramination equipment if needed. Generally, the Fill Station will be located adjacent to the customer’s existing potable water reservoir. The Fill Station’s size, layout and configuration are sitespecifics and have to be designed in accordance with the engineering standards as set in the design stage by ACE Water Corporation.

The Fill Station will be the physical location of the Point of Delivery for this connection type. Please refer to Appendix C – Figure 1 for schematic drawing of this connection type.

B) Truck Fill Facilities:

Truck Fill Facilities can be constructed at different locations along the ACE watermain to provide access to the rural ratepayers. These facilities have to be designed by engineers and approved by ACE Water Corporation. Please refer to Appendix C – Figure 2 for schematic drawing of this connection type.

The discharge pipe into the water storage in the Truck Fill facility will be the Point of Delivery for this connection type.

Alberta Central East Water Corporation Connection Policy And Water Charges

C) Direct Connections to the ACE Watermain:

ACE will allow direct connections to its watermain for the users who are in the vicinity of the watermain, given that a pressure break is provided, and subject to engineering review and approval by ACE Water Corporation. It should be noted that although the ratepayers are directly connected to ACE watermain, ACE does not sell water directly to them. As mentioned in section 4.0, ACE will only sell water directly to its customers. In this instance, ACE will bill the member municipality that these ratepayers are located in based on the ratepayers’ water usages. The member municipality will be responsible for entering into a supply agreement with the ratepayers and billing them according to the municipality’s water rate structure. The only exception to this case is Single Non- Residential Major User(s), which as explained in Section 4.0 might be considered as the Type B customer to ACE Water Corporation.

1) Single User(s):

This Type of connection refers to a service line that delivers water to a single household adjacent to the ACE watermain. ACE will design and construct the “Connection Unit”, which includes the pressure reducing valve, backflow preventions, metering equipment and piping and required fittings. The “Connection Unit” will be located in the Municipality’s Right-of-way, adjacent to the ACE watermain. The ratepayer has to install a cistern (for potable water storage) and the pumping facility for their household and is responsible for extending water service from the “Connection Unit” to the cistern. A physical air gap should be provided between the service line and the cistern. Please refer to Appendix C – Figure 3 for schematic drawing of this connection type.

The “Connection Unit” will be the physical location of the Point of Delivery for this connection type.

2) Multiple Users and Co-ops:

This type of connection refers to a service line that delivers water to multiple users adjacent to the ACE watermain. These users can be multi-use subdivisions and/or users who have formed a co-operative to operate their water system. ACE will design and construct the “Connection Unit”. However, as the number of users and their demand varies, the “Connection Unit” for this type of connection has to be designed on a case by case basis. It has to be located in the Municipality’s Right-ofway, adjacent to the ACE watermain. The exact location of the “Connection Unit” will be determined at the design stage considering the location of the multiple users who are being serviced from this “Connection Unit”. From that point, it will be the

Alberta Central East Water Corporation Connection Policy And Water Charges

responsibility of the member municipality and/or the users to extend the water line to the ratepayers’ water storage facility(s) and enter into a supply agreement with the users based on the municipality’s water rate structure. A physical air gap should be provided between the service line and the storage facility. Please refer to Appendix C – Figure 4 for schematic drawing of this connection type.

The “Connection Unit” will be the physical location of the Point of Delivery for this connection type.

3) Single Non-Residential Major User(s):

Single non-residential major users refer to the customers who use more than 50% of the allocated capacity to the member municipality that the user is located in. According to the Unanimous Shareholder Agreement, the member municipality should refer the single non-residential major user to ACE to be considered as ACE’s direct customer.

If ACE shareholders grant approval (through a special resolution) to provide service to a single non-residential major user, a “Connection Unit” will be designed and constructed by ACE based on the single non-residential major user’s water demand and location. The “Connection Unit” should be located in the member municipality’s Right-of-Way. A service line will be installed from the “Connection Unit” to major user’s property line. The single non-residential major user is responsible for providing a water reservoir storage that equals two times of its annual maximum water usage. It is also responsible for installing and maintaining the water line from its property to the water reservoir storage and providing a physical air gap.

The “Connection Unit” will form the physical location of the “Point of Delivery” for this connection type. If ACE decides to accept this major user as its own customer, the billing and handling of water to the major user will be ACE’s responsibility.

5.2 Future Connections

This section refers to customers who will apply to receive water services by ACE Water Corporation after the ACE watermain is constructed and the regional system is operational. It describes the process that these customers need to follow to receive water services by ACE Water Corporation.

Alberta Central East Water Corporation Connection Policy And Water Charges

5.2.1 Application Process

The application process includes the following steps:

1) The potential ratepayer will contact their municipality (ACE shareholder) with their request to receive water from ACE regional water line. 2) The municipality will provide them with the application form. The application form includes information such as the requested demand, type of use, location and some other specific information regarding the applicant. Please see Appendix B for the sample application form. 3) The applicant will fill the application form and return it to the municipality. The municipality will submit the application form to ACE Water Corporation for their review. 4) ACE will review the application considering the procedures set in the Unanimous Shareholder Agreement, ACE Water Corporation bylaws and the Connection Policy. If all the requirements are met, ACE will approve the application for the new connection and proceed with the next step which is classifying the user based on the categories described in section 5.1. 5) ACE will inform the municipality of their decision. They will also provide them with information such as the designated connection type, the cost and associated water rate with that type, and the timing for the construction of “Connection Unit” and connection to the ACE watermain. 6) The municipality will provide the above information to the potential ratepayer. If the ratepayer is still in favour of receiving water from ACE, ACE will proceed with engineering design and construction stage of the “Connection Unit”. 7) The Connection fee is set to cover the administration, design and construction costs of the “Connection Unit”. The municipality will pay the connection fee in two installments. The first one is due prior to the design stage of the connection and the second one should be made prior to construction stage.

5.2.2 Engineering Design and Cost Estimate ACE will engage engineers to design the “Connection Unit” based on the information provided in the application form. The engineers will be responsible for providing a design package and cost estimate that is ready for tendering and construction. The engineers will coordinate with ACE, the member municipality and the applicant, should more information be required during the design process to complete the design.

5.2.3 Construction Stage After the design process is complete, ACE will proceed with tendering and construction of the “Connection Unit”. During the construction stage, ACE operator(s) has to be notified of the

Alberta Central East Water Corporation Connection Policy And Water Charges

timing and location of the construction so that there will be minimum impact on providing water service to other customers.

Appendix D provides a list of approved vendors and Appendix E provides a list of approved contractors by ACE, which can be used during the tendering stage and awarding the projects. These lists will be reviewed by ACE annually and updated if necessary.

Alberta Central East Water Corporation Connection Policy And Water Charges

6.0 OPERATION AND MAINTENANCE

The ACE Water Corporation will explore different operating models to achieve cost reductions and efficiency. These models can include operation by member municipalities, private sector firm(s), and other municipalities. Regardless of the operating model, ACE is committed to operate and manage the transmission system effectively and responsibly so that the customers will receive reliable high quality potable water.

6.1 Who is responsible?

ACE will be responsible for operation and maintenance of the Water Transfer Station, transmission watermain and the installed apparatus (valves, fittings, etc.), and Pressure Reducing Valves. For all connection types, ACE will operate and maintain the transmission system up to and including the “Point of Delivery”:

A) Urban Connections (Fill Stations):

ACE will be responsible for operation and maintenance of the Fill Station. The infrastructure downstream of the Fill Station (potable water reservoir, pump station and distribution systems) will not be operated by ACE.

B) Truck Fill Facilities:

ACE will be responsible for operation and maintenance of the water infrastructure that fills the Truck Fill Facility’s water storage. The infrastructure downstream of this point (water storage tank and outflow pipes) will not be operated by ACE.

C) Direct Connections to the ACE Watermain:

For all the direct connections to the ACE watermain, ACE will operate and maintain the transmission system up to and including the “Connection Units”. Any infrastructure downstream of the “Connection Units” is the responsibility of the municipality (customer).

6.2 Metering and Billing

ACE will be responsible for reading the water meters located at each “Point of Delivery”. This includes all the water meters for the ratepayers who are connected directly to the ACE watermain (water meters in “Connection Units”).

Based on the metered volumes and the water rates for each connection type, ACE will prepare monthly water bills and send them to its customers, i.e. member municipalities and potentially

Alberta Central East Water Corporation Connection Policy And Water Charges

Single Non Residential Major User(s). This indicates that although ACE is responsible for maintaining and reading the water meters within the “Connection Units” for ratepayers who are directly connected to ACE watermain; ACE will not bill the ratepayers directly. Their water bill will be sent to the member municipality that the respective ratepayer is located in and should be paid to ACE by the member municipality. The member municipality will be responsible for billing the respective ratepayer according to the municipality’s rate structure and policy.

Alberta Central East Water Corporation Connection Policy And Water Charges

7.0 COST OF SERVICE, WATER RATE AND CONNECTION CHARGES

ACE will adopt an equitable approach based on the “user-pay principle” for recovering costs associated with purchasing water and constructing, operating and managing the ACE transmission system.

7.1 Cost of Service

The cost of constructing the ACE regional water system and operating and maintaining it to provide services to its customers are as follows:

7.1.1 Capital Costs Currently, the construction of ACE regional water system is planned to be completed in 5 phases. The engineering, land and construction cost of the transmission system through the provincial grants and shareholder loans (member municipalities’ contribution). For the first three phases of the project, ACE is not assuming in debt financing of the capital.

7.1.2 Replacement Costs These are the annual cost of replacing the system when the current infrastructure has arrived at its design age. This does not include regular maintenance costs. ACE has agreed on only accounting for the municipal portion of the capital cost in their annual contribution to replacement funds. This is to ensure that water is still affordable for the end user. The contribution to replacement funds considers the fact that the construction of the ACE system occurs in phases. Therefore, funds for each phase are only allocated when the construction of each phase is completed.

7.1.3 Operation and Maintenance Expenses The annual operation and maintenance expenses are necessary costs to operate and maintain the ACE regional water system, including its pumping facilities, Fill stations, Truck Fill Facilities, Service Connections and Connection and the transmission main, valves etc..

7.1.4 Management Fees The annual management fees are the cost to cover the administrative, customer service, accounting, invoicing and billing and general expenses related to managing ACE regional water system.

Alberta Central East Water Corporation Connection Policy And Water Charges

7.1.5 Board of Directors Fees and Expenses

The annual Board of Directors expenses are costs to cover the Directors wages and expenses as approved and agreed upon by the Board of Directors for attending the regular board meeting and any other required meeting to perform their duties as outlined in the ACE Unanimous Shareholder Agreement.

7.1.6 Purchasing Cost

This is the cost per cubic meter of water purchased from the Capital Region Vegreville Corridor Water Services Commission (CRVCWSC) who supplies ACE with treated water at the ACE water transfer station. The purchasing cost is set in accordance with the terms and conditions of ACE and CRVCWSC water supply agreement.

7.2 Uniform Water Rate Structure

The rate structure will implement a Utility Based approach as recommended by the American Water Works Association (AWWA). It will reflect the customer type (section 4.0) and the level of service provided to each Connection Type (section 5.1).

A Uniform rate structure comprises of variable charges or consumption charges and fixed charges in a given time period. Variable charges incorporate a constant cost per m3 of water produced and delivered to customers. Fixed charges are based on the level of service provided to each Connection Type regardless of the amount of water the customer uses.

As mentioned in previous sections, ACE will have customers who are the shareholder (owner) of the utility (Customer A) and customers who have not invested in the system (Customer B – non owner). The owners bear the risks and responsibilities of owning a water utility. Therefore, Customer B – non owners bear a different responsibility for costs than do owner customers.

The Utility Based approach will allow ACE to differentiate between these two types by charging Customer B an appropriate rate of return on the value of the regional system devoted to serving them.

7.2.1 Water charges per m3 of water

This will include charges to cover the purchasing cost of water from the Capital Region Vegreville Corridor Water Services Commission (CRVCWSC) and cost of power and chemicals incurred by ACE to deliver water to its customers. The water charges are based on actual usage and will be charged to each customer according to meter readings at the end of each billing period.

Alberta Central East Water Corporation Connection Policy And Water Charges

7.2.2 Fixed Charges

Fixed charges comprise of management (administration, billing, accounting, etc.) and operation and maintenance fees that ACE incur regardless of water usage within a billing period. The fixed charges are distributed among the customers based on the level of service provided to each connection type. The details of this allocation are described in Appendix F.

7.2.3 Rate of Return

The return component of a utility is intended to pay the annual interest cost of debt capital and/or provide a fair rate of return for the equity capital employed to finance the regional system. It also can be used to differentiate between the owner customers and non-owner customers as explained above.

For non-owner customers (Customer B), the rate of return and the base equity of which this rate will apply to should be determined according to the portion of the system allocated to service the given customer.

The Alberta Utility Commission (AUC) typically allows a return on equity of 6 to 10%, assuming 65% debt financing of the capital. ACE will aim to achieve a target return rate within the above range to be applied to the portion of the system allocated to service a non owner customer (Customer B).

7.2.4 Replacement Charges

These charges are to cover the cost of replacing the system when the current infrastructure has arrived at its design age. These charges only apply to owner customers and can be assigned annually.

7.2.5 Work in Progress

The Work in Progress presents the operation liquidity that ACE faces. It will allow ACE to meet its short term liabilities and cash flow requirement. It is to ensure that within the time period of reading the meters, processing the bills, invoicing and receiving the payments, ACE has sufficient funds to pay the bills and employee’s wages.

7.2.6 Charges to Account for Water Losses

ACE’s revenue is generated through sales of water to its customer. The volume of the water is measured at the point of delivery for each customer. However, due to the nature of the system, some of the water pumped from the water transfer station might be lost before reaching the point of delivery. This fact will result in the loss of revenue for ACE. To account for this loss of

Alberta Central East Water Corporation Connection Policy And Water Charges

revenue, a reasonable rate of loss is added to the water charges. As ACE is a newly constructed system, this loss is estimated to be minimal and in the range of 5%.

7.3 Connection Charges

Connection Charges are one-time fee that will be charged to each customer upon connection to ACE watermain after ACE watermain construction is completed (customers who request to connect to ACE after the system is commissioned). It is set to cover the engineering, administration and construction cost associated with each connection type (Fill Stations, Truck Fill Facilities, Connection Units). The Connection Fee is different for each Connection Type.

7.4 Disconnection Charges

Disconnection Charges are a one-time fee that will be charged to a customer requesting for discontinuation of service from ACE regional system. It is set to cover the administration fees to revise the billing system and operation costs to physically disconnect the customer.

7.4.1 Temporary Disconnection

ACE will allow temporary disconnection. A one-time Disconnection fee will be applied to the customer. Fixed charges will still apply to the customer during the temporary disconnection period.

7.5 Reconnection Charges

Similar to Connection Charges, Reconnection charges are a one-time fee that will be applied to the disconnected customers who reinstate receiving service from ACE. It is set to cover the administration fees to revise the billing system and operation costs to physically reconnect the customer.

7.6 Rate Structure Review Period

ACE is a newly established municipality owned corporation that will begin servicing its customers in the year 2012. Therefore information on water usage, actual cost of operation and management of the regional system allocated to each component of the system, number of Direct Connection customers, number of Customer B and their demand are not yet available. Having access to this information plays a significant role in drafting a rate structure that is fair and equitable and reflects ACE’s values and guiding principles. Appendix F provides an estimated cost of service, cost allocation to customers and shareholders receiving water in the first year of operation and water rates for the same year.

Alberta Central East Water Corporation Connection Policy And Water Charges

It is recommended that following the first year of operation and using the data gathered during this time, ACE review the rate structure and revise as needed. This will enable the rate structure to employ methods such as seasonal rates or demand rates to encourage water conservation.

Alberta Central East Water Corporation Connection Policy And Water Charges

APPENDIX A

Figure A – Service Area

Alberta Central East Water Corporation Connection Policy And Water Charges

ACE Regional Water Line Entire Alignment

Alberta Central East Water Corporation Connection Policy And Water Charges

APPENDIX B

Application Form for Future Connections

Alberta Central East Water Corporation Connection Policy And Water Charges

APPENDIX C

Schematic Drawings for Direct Connections to Main - Single Users

Alberta Central East Water Corporation Connection Policy And Water Charges

APPENDIX D

List of Approved Vendors

Alberta Central East Water Corporation Connection Policy And Water Charges

APPENDIX E

List of Approved Contractors

Alberta Central East Water Corporation Connection Policy And Water Charges

APPENDIX F

Usage Charges

Connection Charges

Alberta Central East Water Corporation Connection Policy And Water Charges

1.0 FIXED CHARGES

1.1 Fixed Charges Allocation

Fixed charges comprise of management (administration, billing, accounting, etc.) and operation and maintenance fees that ACE incurs regardless of water usage within a billing period. There are two major factors in the availability of the service to each customer:

a) Connection to the Regional System

The customers need to connect to the regional system in order to receive water service. This indicates that only connected customers at each phase should pay the fixed charges.

b) Allocated Capacity

Upon connection to the regional system, each customer will be able to receive water service up to their allocated capacity incorporated in the design of the regional system. The allocated capacity has been agreed to in the Unanimous Shareholder Agreement (USA) and should be available to each customer/member municipality upon request. The Water Service Agreement between ACE and the member municipality compels ACE to provide water services to the member municipality based on their allocated capacity as agreed to in the USA. This process reflects the request for service by the municipality and ACE’s agreement of the provision of the service to the municipality. Therefore, ACE is entitled to charge the municipality for the provision of this service.

Based on the above concept, when all the municipalities are connected, the fixed charges are distributed between the customers/municipalities as per consumption. However as construction of the system occurs in phases, a pro-rated cost is calculated to only charge the connected municipalities. Upon connection, fixed charges are payable based on consumption by the municipalities connected at that time.

Alberta Central East Water Corporation Connection Policy And Water Charges

1.2 Board of Directors Expenses

The Board of Directors run the utility in accordance to the USA. Their decision making impacts all members, regardless of connection to the regional system. Members benefit from the Board of Directors equally and therefore should bear the cost accordingly. The Board of Directors expenses are charged equally to member municipalities (total cost divided by the total number of member municipalities – 13).

Alberta Central East Water Corporation Connection Policy And Water Charges

2.0 USAGE CHARGE

This will include charges to cover the purchasing cost of water from the Capital Region Vegreville Corridor Water Services Commission (CRVCWSC) and cost of power and chemicals incurred by ACE to deliver water to its customers. The usage charge is based on actual usage and will be charged to each customer according to meter readings at the end of each billing period.

Alberta Central East Water Corporation Connection Policy And Water Charges

3.0 OTHER CHARGES

Connection Charges

Connection Type Charges Notes

Urban Connections (Fill Stations) $ - Included in the construction costs and grant program

Truck Fill Facilities – 1 $ - For the Truck Fill Facilities included in the approved project for the provincial grant and constructed with the pipeline Truck Fill Facilities -2 Full Cost For Facilities not approved for the provincial grant -Full cost of design, engineering and construction will be charged to the customer who has applied for it

Direct Connection to ACE main

Single Users-adjacent to main $ 1,500.00 For users who are impacted by pipeline construction - the Connection Unit should be constructed as part of the pipeline projects

Single Users $ 18,000.00 The cost include, engineering, design and construction of the connection Unit - It also includes Administration and Operation Requirements

Multiple Users Full Cost The Connection Unit size and cost will vary based on the number of the users – Full Cost of design, engineering and construction will be charged to the Customer (member municipality)

Single Non-Residential Major Users Full Cost The Fill Station size and cost will vary based on the demand - Full Cost of design, engineering and construction will be charged to the Customer (Single major user)

Disconnection Charges

Connection Type Charges Notes

Urban Connections (Fill Stations) $ 1,500.00 Includes operators time to disconnect the system, cost of SCADA modifications and revisions of Admin and Billing

Truck Fill Facilities $ 1,500.00 Includes operators time to disconnect the system, cost of SCADA modifications and revisions of Admin and Billing Direct Connection to ACE main

Single Users $ 250.00 Includes operators time to disconnect the system and revisions of Admin and Billing

Multiple Users $250 if modifications to SCADA system is not required - $1500 if modification to SCADA system is required

Single Non-Residential Major Users $250 if modifications to SCADA system is not required - $1500 if modification to SCADA system is required

Reconnection Charges

Connection Type Charges Notes

Urban Connections (Fill Stations) $ 1,500.00

Truck Fill Facilities $ 1,500.00

Direct Connection to ACE main Single Users $ 250.00 Multiple Users $250 if modifications to SCADA system is not required - $1500 if modification to SCADA system is required Single Non-Residential Major Users $250 if modifications to SCADA system is not required - $1500 if modification to SCADA system is required.