From the archives, I found this article that I wrote a few years ago. It was first published in the Rocky Mountain Section of the AWWA/WEA magazine. The article speaks to how much the ratepayers of a utility should expect as a return for the equity they provide as part of a utility’s capital structure. We have since tied the notion of return on equity to the phenomenon we call “rate shock” (the negative reaction of ratepayers when faced with a sudden increase in user charges); StepWise has theorized that rate shock is largely a result of failing to meet the ratepayers (owners) expectations for return on investment. More on this topic to come in the days ahead. In the meantime, here’s the article.