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If you’re a reader of this blog, you will have noted that we often cite news articles showing how utility rates are being increased in different parts of the US. We track these stories because we feel it’s important for our clients, our readers, and our own staff to understand the political dynamics that make [...]
A pattern is definitely developing for American Water Co. We have been tracking their activities through news releases since earlier this summer. Already, we have blogged about the large increases requested of the utility commissions in Illinois, Indiana, and Missouri. Now, we can add the company’s Arizona affiliate to the list of suspects. Water rates [...]
It looks like American Water Co. is out to get back in the black on a national scale. We now have three examples, all within the last 30 days, of subsidiary companies of American Water seeking very large rate increases in different service areas. Add the Veolia case from Indianapolis, and we have four examples. [...]
The Illinois American water company serving about 10,000 customers in the Chicago area has asked the Illinois Commerce Commission to approve a 30% increase in water rates and a 50% increase in sewer rates. What the protesters probably don’t understand, and what everyone who thinks substituting public ownership of their water/sewer utilities with private (corporate) ownership needs to know is that the private utility owner has a constitutional right to charge rates that will allow it the opportunity to earn a reasonable profit.
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 [...]
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 [...]
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 [...]
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% [...]
StepWise Utility Advisors to release new ‘Rate Lock’ service tailored for water and sewer utilities’ rate setting needs. The service features customized approaches and scalable fees based on the number of customers served.
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