Customer Construction Cost: Frequently Asked Questions (FAQs)
What is the Customer Construction Cost? You may have heard referred to as Contribution in Aid of Construction, or CIAC (“Kay-ak”)?
Just like commercial engineers, architects and others in the design and construction community, there are costs associated with the services CPS Energy provides to developers and others for non-standard building of new or upgraded service. CIAC ensures those costs are covered by the customers requesting the service as described by CPS Energy’s Line Extension Policy, which is the policy governing new construction and approved by the CPS Energy Board of Trustees.
How is Customer Construction Cost determined?
When a customer requests a new or upgraded service, CPS Energy calculates what materials and labor is needed to complete the installation. These calculations are based on the cost of materials, the cost of labor and the amount of time it takes to complete the work.
What is driving the increase in costs for installing new or upgraded services?
In the past several years, CPS Energy has absorbed some of the rising cost of construction; however, we are now at a point that we must update our fees to ensure we are recovering costs appropriately and our overall customer base is not paying for services of those with construction projects.
Contributing factors include:
- Systems and infrastructure growth and complexity
- Labor and associated cost
- Inflation over time – both normal and recent higher levels
- Utilization of contractors to help meet the growing demand in a timely manner
What will be the process/frequency of updating Customer Construction Cost estimates in the future?
We will conduct an annual review of Customer Construction Cost estimates and make updates accordingly to ensure our construction cost recovery stays in alignment with our actual costs.