Archives › 2009 › September
Utility managers need to focus more effort on managing money if they are to be successful in asset management. Aging infrastructure costs are large and represent a major risk of rate shock for customers. Managing expectations means quantifying these impacts in a financial plan and keeping the asset management plan in line with financial capacity.
Utility managers should understand that you only get one chance to charge new customers connecting to your system for the capital costs of providing them the capacity they need for service. Connection charges (aka. system development fees, impact fees, tap fees, capacity charges, etc.) are the right way to ensure intergenerational equity between existing customers [...]
The following links will take you to PDF files for the 4-hour seminar on water and sewer rates. The seminar is a short course that we present from time to time with the targeted audience being elected officials and general managers. It’s not a hands-on course that teaches the ins and outs of utility rates [...]
Many times, elected officials have the wrong ideas about what a water or sewer rate consultant will bring to the table. In this example from Fort Smith, AK we see an elected body that questions why the city would spend so much on the consulting contract. Their rationale for going ahead? The consultant might find [...]
Live coverage from the Rocky Mountain Section of AWWA/WEA’s annual conference in Albuquerque, NM. This blog post will be updated periodically through Wed. September 17th.
Water and sewer rates sometimes can’t keep pace with the costs of regulatory actions. Small communities in particular are challenged to meet regulatory requirements with a limited number of customers to share the costs. We expect regulatory actions to increase during the current Administration.
The cost of equity is an often overlooked aspect of water and sewer rate setting. It isn’t always relevant to the rate setting situation, but when it is it is extremely important and most so-called experts get it wrong. This article explains the cost of equity, and some of our approach to quantifying it.
Intricate rate designs can be helpful in reaching certain community goals, but elected officials in particular should never underestimate the value of simplicity. In this example from Frankfort, KY (http://bit.ly/11h0OB) we see how customers can become easily confused with their utility bills and how that confusion can increase when multiple utilities are billed together. In [...]
Governor Schwarzenegger’s letter to Interior Sec. Ken Salazar is a telling story of the kind of frustration that comes with trying to balance environmental, agricultural, and municipal water supply interests of a state’s finite water resources. The situation in California is a serious one and you can see the Governor’s frustration in this letter. The [...]
Many water and sewer utility managers look to their closest consulting engineer as their “expert” on water and sewer rates. Usually, the query is because there is an emergency of some kind, as is the case in this Vermont example. What we see in this case is a community whose water and sewer demand rates [...]
Water and sewer rates can sneak up and damage your utility if you aren’t actively managing ratepayer expectations. Planning ahead, using projections of simple recurring costs like water and sewer rehabilitation and replacements is just one example. In this example, we see what happened to one community that didn’t plan: 122% sewer rate increase, 67% [...]