Original Date: 06/23/1997
Revision Date: 01/18/2007
Information : Fully Burdened Utility Rate
Letterkenny Army Depot’s (LEAD’s) Directorate of Public Works (DPW) established a single rate schedule for sale of utility services on all contracts with tenants to recover the cost of providing electric, water, and sewer utilities.
The DPW is responsible for buying and distributing electric, water, and sewer service for the LEAD programs and tenants. The DPW provides all capital improvements and maintenance required on the Depot property to deliver these utilities to the user. Prior to 1993, utility rates charged to the user were prepared under guidance contained in Army Regulation 420-41. However, this guidance did not allow adequate provisions to recoup costs. The DPW utilizes the Army Working Capitol Fund; therefore overhead is not a funded expense which resulted in undercharging on utility contracts with tenants and programs.
Using Activity Based Costing analysis, the DPW is now recouping the fully burdened cost from the user. Utility billing is based on metered (actual units consumed times prevailing rate) and unmetered (engineering estimates of yearly units consumed times prevailing rates) computation. Rate development for electricity is based on the combined total of the purchased electricity from the power company, the amortized capital improvements over five years, the normal budget amounts for maintenance and repairs, and the pro-rated share of DPW overhead divided by the estimated units of electricity consumed. Water and sewer rates are based on the combined total of the operation cost of pumping stations, the water treatment plant, the waste treatment plant, the normal cost of maintenance and repair, the amortized capital improvements, and the pro-rated share of overhead divided by the total gallons consumed. Sewer usage is based on 75% of water consumed, and water consumption is based on 50 gallons per person per day plus process demands. Through these actual and estimated usages, a single rate is computed yearly for electricity, water, and sewage usage charged to each tenant, program, and activity.
The practice of developing a single burdened utility rate for reimbursement of utility service has been in effect since 1994. The practice has provided competitive and reliable utility service for the continued operations and performance of LEAD and its tenants.
For more information see the
Point of Contact for this survey.