EPCOR White Rock Rate Application Revenue Requirement Application 2011, 2012, 2013 DRAFT FOR PUBLIC COMMENT December 2010

Regulatory Process for Water Rates Water rates regulated by the Comptroller of Water Rights, who works for the Ministry of Natural Resource Operations Comptroller issued a decision for 2008 to 2010 rates in 2008 - Approved projected capital and operating costs - Deferral accounts for consumption, property taxes, interest and income taxes - Direction to remove capital costs for Arsenic Treatment project until study completed New regulatory application is required for the 2011 to 2013 period prior to the end of the year

2011-2013 Proposed Rates Key Drivers Maintain aging infrastructure Maintain reliability, fire flow requirements and water quality Cross-connection control program (water quality) Inflation Modest customer growth and consumption trends Increases partially offset by operational efficiencies Two Components to Rate Changes General increase to cover costs to provide water services Rate rider to refund customers for deferral account balances

2011-2013 Forecast Operating Costs Forecast annual increase in operating costs of 3% on average due to: Increase in labour costs due to additional work related to cross connection control program and 3% salary escalation Increase in utilities costs based upon BC Hydro power price forecast Increase in general and administrative costs  ($ millions) 2010 Decision 2011 Forecast 2012 Forecast 2013 Forecast Total Operating Costs $1.52 $1.61 $1.63 $1.67

2011-2013 Forecast Capital Expenditures Capital upgrades of $2.64m are required to maintain reliability and water quality, meet fire flow requirements and replace aging infrastructure. Rate Base Capital includes: Water main upgrades Wells (assessment and rehabilitation) Annual programs (meter replacements, hydrant replacements) Galvanized piping replacements No Cost Capital includes: New water service installations  ($ millions) 2011 Forecast 2012 Forecast 2013 Forecast Total Rate Base Capital $1.06 $1.17 $1.07 $3.30 No Cost Capital (0.21) (0.22) (0.23) (0.66) $0.85 $0.95 $0.84 $2.64

2011-2013 Proposed Rate Increases Current rates are insufficient to recover expected costs, therefore, a rate increase is required Rate increases smoothed over 3 year period Proposed monthly rates and rate riders are:   2010 2011 2012 2013 Minimum Charge $ 14.38 $ 15.18 $ 16.02 $ 16.91 Additional Charge $ 5.17 $ 5.47 $ 5.78 $ 6.09 Rate Rider $ 0.82 - $ 0.15 - $ 0.14 Total $ 20.37 $ 20.51 $ 21.66 $ 22.86 Change (Monthly) $ 0.14 $ 1.16 $ 1.20 Note: Based on average residential consumption of 25 m3 per month

Monthly Bill of a Residential Customer (Comparison of proposed 2011 rates with neighboring communities’ 2010 rates) Note: Based on average residential consumption of 25 m3 per month Source: Delta – Bylaw No. 5781 Surrey – www.surrey.ca Richmond – Bylaw No. 5637 Vancouver – vancouver.ca Langley – www.city.langley.bc.ca

Stakeholder Engagement & Regulatory Process - Consultation with Customers - Feedback Regulatory Process – Next Steps - EWR to file application mid-Dec 2010 - includes application for interim refundable rates effective Jan 1, 2011 - Public Notice of Application

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