Facility Lease Program

A.    For either economic or operational purposes, customers may prefer to lease PES facilities.  The lease arrangements usually apply to lighting facilities or to distribution facilities beyond a primary metering point, although other applications may be considered.  PES management may accept or reject facility lease requests based on availability of adequate financial resources to capitalize the proposed project.

B.    PES will provide the following services as a part of the facility lease program:

a.    Engineering and design.
b.    Construction and operational testing.
c.    Routine maintenance as required except for cases of abuse or vandalism.  For lighting projects, replacing bulbs as needed is included.
d.    Inventory spare small parts.

C.    PES will bill the customer an investment charge monthly.  The investment charge is calculated to recover PES costs and therefore render the rate base neutral to the project.  The investment charge is based on the value of capitalized assets, estimated O&M expenses, taxes payable by PES, depreciation and interest, and operating margin.  The investment charge is recomputed annually and is subject to change with changing cost conditions.

D.    The base from which the investment charge is computed (capitalized asset amount) remains fixed unless assets are added or removed.  For example, adding lights to an existing account raises the capitalized asset amount.  Additions or removals must be requested in writing.

E.    PES will provide investment charge estimates for proposed projects; however, actual cost will be used as the capitalized asset value.

F.    The customer may choose to terminate the Facility Lease Contract at any time.  The cost for contract termination is the average estimated depreciated plant value and actual removal costs.  If PES management finds the removed assets have value to ongoing PES operations, management may assess the value of the assets and credit the customer for the assessed value.