Tag: rates (Page 2 of 2)

Water Rate Increases Among 1,961 Utilities in Six States in the Last Decade

Shadi Eskaf is a Senior Project Director for the Environmental Finance Center at the University of North Carolina, Chapel Hill.

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Our research shows that water rates have been rising faster than CPI inflation in the past few years for hundreds of utilities, particularly after the financial crisis. In some states, however, there were also many utilities whose rates failed to keep pace with inflation.

From a rate-setting perspective, utilities that raised rates more frequently had a double advantage over utilities that raised rates only occasionally or rarely. First: the average annual rate increase was lower than the one-time rate increases of utilities that occasionally raised rates, reducing the rate shock that customers experienced when rates rose. Second: despite the lower average rate increases, utilities that raised rates more frequently accumulated, on average, a larger total increase in rates in a five-year period than utilities that raised rates only occasionally.

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Does Governing Structure Determine the Financial Health of a Water Utility?

Stacey Isaac Berahzer is a Senior Project Director for the Environmental Finance Center at the University of North Carolina, and works from a satellite office in Georgia.

Water utilities in the United States operate under a variety of organizational structures and governance models. The possibility of a utility adopting a given financial management option depends largely on the governance model of that utility. Ownership and governance of water utilities fall to state and federal government agencies, tribes, municipalities, counties, districts, authorities, not-for-profit water associations, investor-owned water companies, international and national corporations, individuals, homeowner associations, and more. While there are nuances even within each of these classes, according to the Environmental Protection Agency (EPA), water systems in the United States are almost evenly split between those owned by local governments (48%) and those owned by private organizations (47%).

Generally, in research under the Water Research Foundation’s “Defining a Resilient Business Model” project we have found little evidence that organizational structures have had a significant impact on the financial performance of utilities. However an analysis of detailed data from Georgia and North Carolina did show an interesting pattern where independent authorities/districts were concerned. Continue reading

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