PROJ00337

• Contract/PO #: C153032
• Contractor Name: Hotchkiss, Town of
• Contract Type: Grant
• Water District: 0
• County: Delta
• Bill Number: XB 99-999
• Loan Projects - Doc Type: Feasibility Study

$12.00 a month for 7,000 gallons for conunercial users; with excess water used
being charged at the rate of $0.75 per thousand gallons. Out-of-town water
users pay $14.25 per month for the first 7,000 and $1.13 per thousand for
the overage. The exception to the out-of-town water rates is the Hanson
and Powell Mesa Water Company in which the town is under contract to sell
water at wholesale rates. The average income from the Hanson and Powell
wholesale water sale is approximately $287.80 per month. With the present
rates the Town of Hotchkiss can generate a revenue of $96,000.00 per year
for the sale of water.

Estimates of Project Costs

Based on the reconunendation and conclusions of this supplement the
cost estimates have been prepared for the construction of the waterworks im-
provements as reconunended. These esti,mates are based upon recent bid prices
of similar work, material quotations from manufacturers and suppliers, and
on local conditions effecting the proposed work. In preparing the estimated
project costs, an allmvance for engineering design and supervision, legal and
administrative work, and the usual antici.pated construction contingencies in
the amount of 25% of the estimated construction cost. The estimated project
costs are present day figures and any delay in construction may affect some
variants from these estimates.

Existing Power Costs

In 1980 the Hotchkiss Water Treatment Plant used an average of 2,940 KWH
per month at an average monthly cost of $250.00 (85 mills per KWH).

Revenue From Generated Power

The Public Utilities Conunission has ruled that Electrical Utility
Companies must purchase excess power from co-generators at a rate equal
to the "avoided costs" as determined by the Public Utilities Conunission.
For the next five years (1981 through 1985) the Public Utility Commission
has determined that the avoided costs average 17.4 mills per KWH. The
Town of Hotchkiss could realize a savings in electrical consumption by
generating their o'Vll electricity for use in the water treatment plant of
$170.00 per month. Should the Town of Hotchkiss elect to interface their
turbine generator with Delta-Montrose Electric Association an additional
$23,500.00 worth of equipment would be required as well as an experienced
operator. An operator of the calibar which 'lOuld be required to maintain
an electrical plant interfaced with DMEA transmission lines could demand a
salary of approximately $19,000.00 per year. The rate of 17.4 mills per'
KWH as determined by the Public Utili,ties Conunission is not sufficient revenue
to amortize the estimated annual debt and interest service for the additional
$23,500.00 worth of equipment which would be $1,360.00 per year based on a
30 year term at 4% interest or to provide a $19,000.00 annual salary.

The Town of Hotchkiss will still be required to pay for electrical
power used by the 40 horsepower backwash water pump which should average $80.00
per month in any given year.

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