Base Charge on a Water Bill
Base charges are critical for water utilities’ finances given that the majority of utility expenses are fixed in the short term and require a stable revenue source to pay for them despite decreasing demands. The most common practice is for utilities to set a constant base charge for each customer class or vary the base charge by meter size. Yet, this assumes that every residential customer with a 5/8″ meter places the same fixed costs on the water system. A few utilities have determined that this was not the case and have structured base charges more creatively, resulting in varying base charges among customers of the same customer class. This post describes some of the less common structures of base charges.
Big News in the World of Innovative Water Rate Design
Last week, one of the most interesting water rate structures we’ve seen recently was narrowly voted down in a referendum vote. After several years of debate and campaigns to win the hearts and minds of rate payers, voters in the City of Davis, California very narrowly (51% versus 49%; only 264 votes apart) passed a measure that repeals changes to their water rates. One of the key features of the rate structure that would have otherwise been implemented was a Consumption-Based Fixed Rate.
Today we feature a guest post from The Pollution Finance Center (PFC).
Author’s Note: If you find puns pungent, wade no further into this blog since it dives so deep into pollution finance that you will probably be drowning after the first paragraph.
In order to help finance pollution to the greatest extent possible, the Pollution Finance Center strongly recommends always setting rates for crucial environmental services as low as possible. Thus we can ensure that our water and wastewater systems will collapse with a loud “plop!” maximizing toxic discharges into the water, air, and soil. Then things will go swimmingly for polluters everywhere!
Growing up in a country where school uniforms were mandatory, I viewed uniforms as, well …, “boring!” At least that was the way I felt in high school. One of the most engaging classes I can recall was when the English teacher suggested school uniforms as the topic for our oral debate class. No one wanted to be on the team that had to argue in favor of uniforms. But, even though uniforms are a little plain, I can now admit to seeing many benefits to the students who wear them. Similarly, I feel that uniform water rate structures in the United States may have suffered some shunning, partly due to their “plain” nature. Continue reading