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N�VIGANT <br />CONSULTING <br />December 21, 2004 <br />Ms. jeannette 011co <br />City of Colton Electric Department <br />150 S.10� Street <br />Colton, CA 92324 <br />Dear Ms. 011co: <br />225 West Broadway, Suite 400 <br />Giendale CA 91204 <br />818.662.5720 phone <br />818.637.7902 fax <br />Navigant Consulting, Inc. (NCI) is pleased to offer its proposal for performing an <br />Electric Cost of Service Study and Rate Design for the City of Colton Electric Utility <br />Department (Colton Electric). <br />With the addition of local generation in 2003 to its current mix of resources, Colton <br />Electric has decided it is appropriate to re-examine its electric rate structure. NCI <br />believes its project team possesses a combination of knowledge and experience that <br />makes it well suited to perform this assignment. NCI's project team will be headed by <br />Mr. David Cohen who has over 29 years experience in the design of electric rates and <br />cost-of-service analyses from both a marginal and embedded cost perspective. Mr. <br />Cohen will be assisted by Mr. Ron Stassi and Mr. Larry Riegle. Mr. Stassi will contribute <br />to Tasks 1(review and update the current segmentation of customers) and 6(prepare <br />and present a final report), as well as serve as a local liaison to Colton Electric. He has a <br />strong familiarity with Colton Electric as a result of having previously assisted the city <br />and the Southern California Public Power Authority with related consulting projects. � <br />Mr. Riegle will be responsible for Task 3( performing a marginal cost study), a <br />responsibility that he filled for recent rate design projects done for the Cities of Roseville <br />and Shasta Lake, CA. Both Mr. Stassi and Mr. Riegle have previously worked for <br />municipal/governmental electric utiliiies and are familiar with the considerations faced <br />by cities when contemplating decisions relating to electric rate and pricing alternatives. <br />Mr. Cohen was the project manager for a similar electric rate study performed by NCI <br />for the City of Roseville in 2002. Colton's rate study presents many of the same <br />