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Determine Cost Basis - Existing System <br />The second methodological element in determining the system-wide unit costs shown in Tables <br />2 and 3 is to establish the SDC cost basis, or the total costs associated with serving growth. For <br />the existing system, this requires an analysis of the value of the existing system and, specifically, <br />the portion of the system that is associated with each capacity parameter. A portion of existing <br />system value is then allocated to growth based on the current available capacity projected to be <br />used by new development. Figure 2 shows schematically how this allocation process is <br />undertaken (as described in the SDC Methodology, also Figure 2). <br /> <br />Table 5 presents an allocation of existing system facility value to facility components and <br />capacity parameters. Breaking the system into facility components enables a structured basis <br />for analysis of facilities and allocation to system capacity parameters. Included in Table 5 are: <br /> <br />1. The inflated original cost of existing assets, classified by asset type or "facility <br /> components" <br /> <br />2. The allocation, by percentage, of these assets to the four capacity parameters (and to a <br /> support or indirect cost category, which is then allocated across the four parameters) <br /> <br />3. The allocation, in dollars, of current assets to the four capacity parameters <br /> <br />FIGURE 2--EXISTING SYSTEM ALLOCATION <br /> <br /> NO YES <br /> Reimbursement <br /> Fee Cosf Basis <br /> <br /> <br />