June 18, 2013
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How to design a financially sustainable Rate Structure

This page will provide you with simple to use, yet effective, rate setting tools as well as information on how to address affordability at the household level and how to understand conservation price signals.

 
How to address affordability at the household level

One of the most common objections to raising utility rates is that services are becoming unaffordable. This is no wonder though, particularly in the context of rising prices for all kinds of consumer services and commodities. When the average household today is faced with rising food, transportation, energy, clothing and housing costs, the prospect of higher water and sewer bills can be worrisome. Any utility manager seeking to increase revenues for their system by raising water rates will have be able to address these concerns.

Andrew Westbrook from the EFC at UNC at Chapel Hill has provided more information to help decision-makers answer the question "What is affordable?".

 
Full Cost Pricing
On August 1st, 2007, in the middle of rush hour traffic, the I-35 bridge over the Mississippi River in Minnepolis collapsed sending 13 people to their death and injuring houndreds more. In the aftermath, major news media outlets devoted hours of coverage to the tragedy asking how this could have happened. If there was a silver lining, it was that the deterioration and underfunding of our national infrastructure was brought to public attention in a big way. Suddenly, community, state and national leaders were all asking questions about the state of our national infrastructure, demanding to know what we need to do to prevent something linke this from happening again.
To read the full report, click the title or here.
 
 
 Utility Rate Design with Rate CheckupTM
Link to Rate Checkup
Rate CheckupTM is a powerful, easy to use rate-setting and financial planning software for water utilities. The program automatically genterates rate schedules, and prepares a three-year budget and financial forecast. Developing user rates has never been easier!
Rate CheckupTM will:
  • lead you through the input of your customer, facility and budget data
  • lead you through the rate design process
  • develop a three-year budget forecast
  • develop a Base Charge and a Volume Rate for each customer group
  • provide design options, including:
    • mulitple customer groups
    • optional Seasonl Rate
    • optional Lifeline Rate
System Requirements:
  • IBM - compatible PC
  • Microsoft Windows 98 or later
  • Microsoft Excel 2000 or later
  • CD Drive (not necessary if downloading from website)
  • CAPFinanceTM
Incorporates CAPFinanceTM
Rate CheckupTM utilizes CAPFinance - an integrated capital asset inventory and reinvestment analysis software program.
 

 
 
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