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Section 4
<br /> Table 4-2
<br /> Projected Cash Reserves
<br /> Proposed Rates
<br /> Year 2016 2017 (1) 2018 2019 2020
<br /> Beginning Balance $12,685,126 $10,810,388 $9,663,103 $8,910,410 $4,479,671
<br /> Plus Change in Net Position 69,791 558,845 (120,623) (1,629,070) (2,668,811)
<br /> Plus Depreciation 2,325,000 2,375,000 2,425,000 2,497,750 2,572,683
<br /> Plus Bond Proceeds 10,000,000 10,000,000
<br /> Less Capital Improvements (13,756,468) (2,531,100) (11,901,122) (3,961,144) (3,731,167)
<br /> Less Loss of Revenue Pmts (31,754) (373,191) (465,916) (476,136) (486,356)
<br /> Less Debt Principal (481,307) (901,216) (918,252) (1,094,217) (1,138,385)
<br /> Ending Balance $10,810,388 $9,938,726 $8,957,813 $4,294,996 $(1,157,041)
<br /> Reserve Goal $6,460,731 $6,568,436 $7,410,265 $7,673,218 $7,927,883
<br /> Reserves as %of Goal 167% 151% 121% 56% -15%
<br /> (1) Rate increase assumed effective 1/1/2017.
<br /> Other Rate Considerations
<br /> Demand Billing Threshold
<br /> ERMU's current threshold for demand billing commercial customers is 50 kW. Many
<br /> utilities demand bill customers with lower demands. Billing for both demand and energy
<br /> sends a pricing signal to customer encouraging them to increase their ratio of energy
<br /> used per kW of demand. Customers with a high ratio of energy to demand are said to
<br /> have a high low factor. The cost to serve these customers on a per kWh basis is lower
<br /> because they spread fixed wholesale power and system costs over more energy units.
<br /> ERMU has been considering a reduction in the demand billing threshold from 50 kW to
<br /> 25 kW. The proposed level would extend demand and energy billing to more
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