Cost of Service Study

UFS will complete a comprehensive cost of service study to identify the cost of providing service to each customer class of the telecommunications department and compare those costs with current revenues anticipated from each class of customer. The study will provide the following:

  • Review each rate class and provide assistance on identifying the need for new rate classes
  • Identify the potential need for new classes including the following:
    • Evaluation of the need and value in adding a new class of service to large customer categories
    • Develop rates for customers with multiple locations within a city's telecommunications service territory to adjust for the diversity between the accounts
  • Unbundle the telecommunications rates into the components necessary to identify rates for customers taking service at various service levels
  • Using cost of service and unbundled cost results to identify time-of-use rates

Rate Design Model

Following the cost of service study, UFS will propose adjustments to current customer charges with an agreed rate increase that works each customer towards Cost of Service. The Rate Model will be completed in a Microsoft Excel format that is functional and can be utilized in future rate adjustments as required. The model will provide:

  • Summary of changes in projected revenues and proposed revenues for each customer class
  • Detailed report on each customer class to identify any rate adjustment against several levels of usage

Financial Projection

UFS will develop a long-term financial planning model to identify current (test year) and future telecommunications revenue requirements over a five-year planning horizon.
Provide timing options for package changes

  • Project future sales to customers and corresponding revenue and changes in franchise supply costs
  • Development of pro-forma income statement and statement of cash flows
  • Development of financial targets for the following:
    • Minimum Cash Reserves
    • Debt Coverage Ratios
    • Target Operating Income
  • Incorporate current and future capital improvements
  • Review the impact on operating revenues and expenses of net package rates
  • Identify the need for future bonding requirements to fund capital improvements

Other Telecommunications Services

UFS offers other services that are similar in scope and allow us to provide

  • Indirect cost allocation review
  • Developing policies and procedures
  • Software selection
  • Econometric forecasting of sales and load growth
  • Cost reduction strategies
  • Benchmarking analysis
  • Strategic planning