Common use of Operation Expenses Clause in Contracts

Operation Expenses. 1. Chemicals Expense ISSUE: San Gabriel’s estimate for Chemicals Expense was $877,600, based on recorded 2010 costs escalated by non-labor inflation factor, and increased by the costs of replacement resin used in the treatment process at three facility sites. XXX’s estimate of $893,700 was based on the same methodology, but corrected an accounting error identified in San Gabriel’s application. The City also recognized an error associated with the cost of a carbon change-out at Plant F10 that led the City to recommend an adjusted Test Year chemicals expense of $674,700. RESOLUTION: In response to testimony by witnesses for DRA and the City, San Gabriel agrees to revise its estimate of Test Year Chemicals Expense to $690,600. The revised estimate removes the double counting of a carbon change-out cost at Plant F10 and corrects the recorded amount for 2010 Materials and Supplies subaccount. XXX accepts the corrected estimate. Issue SGV Direct SGV Rebuttal DRA Report Difference Settlement Chemicals $877,600 $690,600 $893,700 -$203,100 $690,600 REFERENCES: Exhibit SG-1, Table 5B; Exhibit SG-6 (XxXxxxxxx), pp. 19-20; Exhibit DRA-1 (Xxxxxx), p. 3-6 to 3-7; Exhibit SG-19-C (XxXxxxxxx), p. 4-5; Exhibit SG-9 (Xxxxx), p. 6; Exhibit SG-22 (Xxxxx), p 1; Exhibit CF-1 (Ramas), pp. 21-24.