HomeMy WebLinkAbout5 - Utility Rate Structure and Billing System EvaluationCITY OF BOULDER
WAT~R RESOURCE ADVISORY BOARD AGENDA ITEM
MEETING DATE: August 18, 2003
SUBJECT: Staff and Consultant Presentahon regarding the Utihty Rate Structure and Billmg
System Evaluauon
REQUESTING DEPARTMENT:
Ned Wilhams, Director of Pubhc Works for Utilities
Joanna Crean, Public Works Admmistrator
Carol Lmn, Utilities Financial Manager
BOARD ACTION REQUESTED: None at this time.
FISCAL IMPACT: None at this t~me.
Tom Gould from Economtc and Engmeermg Services, Ina (EES) w~ll be attending the meeting
to contmue Che Water Rate Structure and Billmg System Evaluation with the WRAB. The
presentation will mclude review of the prioritization of the rate design goals, rate design
terminology, proposed evaluation cr~teria and the rate structures that will be evaluated. Attached
are the materials that will be covered
Attachment A: Technical Memorandum 2- Review of the Rate Des~gn Terminology and the
Alternative Stmctures to be Evaluated
Attachment B: Water Rate Structure Evaluation Criteria
Attachment C. Rate Design Attributes - Summary of Prioritizahons
Attachment D: Handout of the PowerPomt Presentahon - Review of the Prioritization of Goals,
Development of the Evaluation Crrteiia and the Rate Structures to be Evaluated
ATTACHMENT A
CITY OF BOULDER
Technical Memorandum 2
Review of the Rate Design Terminology and the
Alternative Structures to be Evaluated
August 14, 2003
Prepared by:
Economic and Engineering Services, Inc.
Bellevue, Washington
Introduction
An important aspect of reviewmg and evaluating alternatrve water rate structures is
understandmg the termmology of rate stiuctures, the basic concepts of rate structures, and the
various alternative structures thaY may be developed from these basic concepts. Provided below
is a discussion of the basic rate structure terminology, and the possible alternat~ve strucYures that
will be reviewed as a part of this study
Rate Structure Terminology
A review of the rate structures from other water utilities across the U.S. reveals a wide variety of
structures and approaches in use today. While it may seem that there is an endless number of
different rate structures to be found, the realrty is that they are all
based upon a few basic rate design concepts It is how these basic
concepts are applied, modified and combined that create what
appears to be endless possibilities. Provided below is a brief
discussion of these basic rate design concepts.
The mitial startmg pomt m considermg a rate structure is the
relationship between fixed costs and variable costs. Fixed costs
do not vary with the productron or flow of water. Debt service is
an example of a fixed cost. In contrast, variable wsts tend to
"While it may seem
that there is an endless
nu-nber of defferent
rate structures to be
found, the reality is
that they are aCl based
upan a few basic rate
design cancepts."
change with the quanhty of water produced Examples of variable costs are the cost of
chemicals and electricity Most rate structures contam a fixed or mmimum charge, and a
volumetric consumption (commodity) charge.
Fixed costs are generally collected as a fixed charge on a monthly basis (e g. $5.00 per
month/meter). This charge may be called by various names (e g. customer charge, meter charge,
readiness to serve charge, etc ), but in all cases, it is intended to collect the fixed costs that the
utility incurs, regardless of the customer's level of consumption The most basic form of a fixed
customer charge is a meter chazge. While the charge is a fixed amount, regardless of
consumption, it Yypically varies (mcreases) by meter size.
The rate at which the meter chaige mereases is typically a function of either meter investment
(cost) or meter capacity. Provided m Table 1 is the "generally accepted" approach used to
estabhsh fixed meter charges based upon the safe operahng capacity of the meter for 5/8" meter
through a 12" meter. In this example, it assumes a$5.00/month charge for a 5/8" meter.
///AAl+ Technlcal Memorandum No,2 7
~~~c~7 CI4y oi Boulder
3/4" 30 1.00 $5.00/month
1" 50 1 66 8.30
I -1 /2" 100 3.33 16.65
2" 160 5.33 26.65
3" 300 10 00 50 00
4" 500 16 66 83.30
6" 1,000 33 33 166.65
8" 1,600 53 33 266.65
]0" 2,300 76.66 383.30
12" 3,375 112.50 562.50
(1] A W WA C-700-77 Cold Water Meders - Dasplacement Type
As Table 1 mdicates, the fixed metei charge mcieases m relahonship to the safe operatmg
capacity of the vanous meter sizes. Meter capacrty is an important concepC m that a customer
that has a 3" meter is regarded, from a capacity perspect~ve, as the equivalent of ten (10) 3/4"
customers. Another way of saying this is the customer with a 3" meter is, from a capacity
perspective, the equivalent of ten (10) customeis with 3/4" meters. Knowing that a large portion
of a typical utility's costs are related to meetmg capacity requuements, one can see the
importance of takmg mto account capacity in establishing rates for customers.
Fixed charges are typically used to collect, at a minimum, the costs associated with meter
readmg, bilhng, customer service and accountmg. It often includes a porhon of the cost of
mamtenance of the distribuhon system and capital/debt service costs In the city's case, the fixed
charges are designed to collect the customer related costs, plus 30% of the cost of the city's
improvement program.
While it was noted that there are different approaches that can be used to collect fixed charges,
the same can be said for variable or volumetric charges. Volumetric consumphon charges are
generally based upon metered consumption and charged on a$/unit cost. Although the urut of
measurement may vary, (e.g. gallons, thousands of gallons, cubic feet, hundreds of cubic feet,
acre feet, etc.) this is not a ciitical element m the development of the rates. This is because the
charge per unit is simply ad~usted to reflect the umts of ineasurement bemg used In other
words, ~f you are charging $2 00 per 1,000 gallons, and wanted to charge on a per gallon basis,
the rate would be $0 002/gallon. It is the structure of the variable charges where numerous
opYions exisC.
There ara four basic rate structures for vatiable charges; a uniform charge, a declmmg block
charge, mverted (mcreasmg) block charge and seasonal. Figure 1 provides an overview of each
of these variable charge rate structures.
//~e~+ Technical Memorandum No.2 2
~~ C~7 C14y o( Boulder
;" ~ Safe Maxi~um Qp~F: Eqaiu~le~t Meter Chak~es ~t ;~
° Meter Size CepacltY ~~'~ l~~ „ M@t4~C ~Rtio , PqpiVa~l~n~ ~adQ& '
Per UNINORM 12A'CL S'I'RUCTURT,
Uml The cost per un~d of cansumption under a un{form rate
Covt sdructure does not ancrease or decrease with addetional
unus of cansumptaon
Usage
Yee DRCIdNIN(7 131,OCK RATP STRDC'POR14
UmC The cost per unet of cansunaption under a decltntng block
Cast rate structure decreases with addatconal unats of
consumpdon
Usagc
Per INV1~.R1GU BLOCK RATti STRUCI ORI+.
Umt The cost per unit of consumption under an inverted block
Cost rate structure ~ncreases with addidonal unats of
consurnphon
Usage
Pe~ SL'ASONAL RA'Pls' S'PRUC7'URC
Umt Pcak Season The cosd per unit of consumpt~on under a seasonal rate
Cost structure changes weth time penads The peak season is
Non-Peak the ntost expensave nme peraod
Usa~e
Figure 1 illustrates that the basic philosophy of each of these variable charge iate structures
varies significantly Under a umform rate structure, the cost pei unrt does not change wtth
consumption. The uniform structure is a simple and straightforward approach from the
perspective of customer understanding and rate admmistration/billing. In contrast, the declmmg
block rate structure is a bit more complex. The number of blocks (e.g. 3 stepped blocks) and size
~~pC Technical Memorandum No.2
C~7 City of Boulder
of the blocks (e.g 0- 10,000 gallons) may vary. However, the number of blocks' should be
reasonable (i.e. 2- 5 blocks) for reasons of simplicity and admmistration. Declining block rates
may imply that there are ceitain economies of scale with additional consumption, or improved
capacity use, and not necessanly a"volume discount." Dependmg upon the utility, Chis may oi
may not be a true staCement An inverted (incieasmg or trered) block rate stivcture attempts to
send a price signal to consumers that their consumption costs more, as more water is consumed.
This may or may not be the proper price signal regarding the uhlity's watei resource costs. As
wrth the declining block iate sUucture, the number and size of each block may vary, but should
be ieasonable for puiposes of customer understandmg and rate administration. Finally, a
seasonal iate structure is a form of a time-differentiated rate structure. That is, the price varies
based upon the time of use. Under a seasonal iate structure, water consumed in the summer is
priced at a higher level than wmter water consumption. This rate structure attempts to reilect the
difference m costs associated with consumption dunng a peak period when water supply
resources may be constramed.
The rate structure concepts noted above may be combmed and used to form various different rate
structures As an example, a seasonal inverted block rate structure is developed by combmmg
the seasonal rate structure concept with the inverted block rate structure.
One of the rate forms that the city is mterested m reviewmg is the water budget rate sCructure.
Simply stated, a watei budget rate structure is a form of an mverted block rate structure The
mam difference between the water budget rate structure and a"typical" inverted block rate
structure is how the size of the blocks is determmed withm the water budget rate structure. Most
inverted block rate structures have fixed thresholds for block sizes (e g 0- 5,000 gallons, 5,000
gallons - 100,000 gallons, and all consumption over 100,000 gallons), which may be determined
using vaiious criteiia. Some of these criteria mclude essential (lifehne) needs, average customer
class usage (base usage), eta In the water budget rate structure, the block sizes are mdividually
estabhshed, and they may be establiehed usmg a number of different criteria and methods (e g
average wmter water use, number of people in the home, lot size, type of plantmgs,
evapotranspirahon (ET), etc.). The water budget rate structure attempts to establish a rational
basis for individually tailored "indoor" and "outdoor" consumption budgets (i.e. block sizes) In
addrtion, water budgets may reward customers for beating their budget goal, or penalize them for
going over their water budget.
It is mteresting to note that some people may view the crty's current rate as a simplified farm of
a water budget rate structure The irutial or first block of consumption is established based upon
the customer's average wmter consumption. The second block is determmed as a percentage of
the first block, and the lail block is all consumption ovei and above the second block Therefore,
in essence, each customei has individualized block sizes. The second block is considered the
"outdoor" amount, and the thud or tail block is the "excess use" block. Where there is a
disconnect fiom the more sophisricated examples of water budgets, is in the rational for the
estabhshment of the block sizes (i.e. indoor, outdoor and excessive use).
`"Blocks" or "ConsumpGon Bloeks" is used m a declmmg block or mverted block iate structuce and refers to [he
amount of cousumpGon allowed before thc price changes to a succeedmg price block Tl~e mitral block refers to the
f~rst pnce block (e g 0 to 5,000 gallons) The tail block refers to [hc last price block (e g. all usage over 5,000
gallons).
/~~AAl.+ Technical Memorandum No.2 4
~~ C~'~ Clty oi Boulder
Given this brief overview of rate design terminology, the focus shifts to the development of the
rate structure alternatives to be evaluated m the city's study. Prom this evaluation process, a
hmited set of rate shuctures will undergo further review and analysis.
Overview of the Rate Structure Alternatives to Be Evaluated
Provided below is a hsting of the iate structures to be evaluated usmg the evaluation critena
developed by EES and reviewed by city staff As discussed above, a typical water rate design
contams both a fixed and variable charge. The focus of the ieview at this point is on the
structure of the rates, and not on the level of the rates, or the proportion of revenue to be
collected from the fixed versus variable charges. In Subtask 1.6, a more detailed evaluation and
analysis of the remaining rate stiuctures is undertaken. At that time, the level of the fixed and
variable charges will be reviewed.
Four additional items should be noted befoie reviewmg the descriphons below. First, the
descriphons below discuss the consumption charge portion of the rate. It is presumed that
regardless of the structure selected, it will contam a fixed monthly service (meter) charge that is
based upon meter size. Therefore, m the descriphons below, no mention is made of ihe fixed
charge portion of the overall rate structure, but all Pinal raCe designs will mclude both a fixed
monthly meler charge and a consumption charge. Next, the other important item to note is that
there could be endless permutahons of these rate structures (e.g. 2 blocks, 3 blocks, 4 blocks, 5
blocks, etc.) For this evaluation process, we have attempted to list a variety of structures that
provide a reasonable array of the choices available to the city. Based upon this evaluation
process, the city may discover that it hkes portions of two or three different iate structures bemg
reviewed, which, when taken together, may create a whole new structure. Any new rate
structure developed durmg the evaluahon process will be included and reviewed further Third,
rt is also presumed that any final rate structures will mcorporate drought surcharges or another
mechanism to reflect drought situations. That is, the rates will be segregated between typical
periods and drought stages 1-4. The rate structures shown below are for "non-droughY' periods,
and will m the fmal development of the rates be modified to deal with Che city's various drought
stages. Finally, the rate structures discussed below do not make any distmchon between class of
service (e.g. smgle-family, commercial, etc ). As the rate structures are narrowed down and
ehmmated via this screenmg piocess, the final 3-5 rate structuies will then be analyzed as to their
apphcabihry to the specific customer classes of services
Provided below are the descriptions of the rate structures to be ieviewed and evaluated usmg the
rate structure evaluahon criteria.
//'/ept+ Technical Memorandum No.2 5
~~~C~'~ Clky of Boulde~
RATE STRUCTUR~ 1- CURRENT RATE STRUCTURE
The current rate structure is individually tailored to the customer's indoor usage pattern and uses
average wmter consumption (AWC) to establish the first block of consumption The second
block is a&xed percentage m relation to the first block, and the third or tail block is all remaining
consumption
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Block 1 Based on AWC Inverted Block Price
Block 2 Set % of Block 1 Inverted Block Price
Block 3 All Usage Over Block 2 Inverted Block Price
RATE STRUCTUR~ 2- MODIFI~D CURRENT RATE STRUCTURE WITH SEASONAL RATPS AND A
UNIPORM WINTCR RAT~
Under this rate stiucture, the pricmg is split between the wmter and summer period. Pricing of
waYer m the wmtertime is uruform, and not subject to mverted block pricing Usage in Che
summer is an inverted block rate structure, and priced based upon summer period costs. The fiist
block is established based upon AWC
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Wtnter Period -
Block 1
All consumphon
Uruform Price for Wmter
Summer Perzod -
Block 1
Block 2
Block 3
Based on AWC
Set % of Block 1
All Usage Over Block 2
Same Price as Wmter
Inverted Block Price
Inverted Block Price
/~/ppC Technical Memorandum No.2 6
~~~~'~'~~ City o1 Boulder
RAT~ STRUCTURE 3- MODIrIED CURRF.NT RATE STRUCTURE WITH SEASONAI. RATF.S AND A
2-Br,ocx WixTEa RnTr
Undei this iate structure, the pricmg is agam split between the winter and summer period.
Pricmg of water m the wmter peiiod has two blocks. The first block is based upon AWC, with
the second block bemg all usage over and above the fiist block. In this pricmg scheme, iC is
presumed that summer usage m the second biock is higher Chan the wintertime price
1 i ,~, ; ,,, , , ,,,, ,; „_ { ~ ~ ,,; ,-' ~~5~~ ~~`~}t~ , ` r , '; ,' , , ,,, _ , „
~'<<,'~1ae~;=; „ „ „ ~~t~~xn~rii~~Hl~i~~~i~~ ', ; ~"~.~#$1~~~QY~~~t810~1~, ; „ '
„ ,,, „ „, ~
Winter Pertod -
Block 1
Block 2
Based on AWC
All Usage Over Block 1
InveiCed Block Winter Price
Inverted Block Wmter Price
Summer Per~od -
Block 1
Block 2
Block 3
RAT~ STRUCTURF. 4- SEASONAL RAT~S WITH FIXF.D THRF.SHOLDS AND A UNIFORM WINT~R
RATc
Under this rate structure, the pricmg is split between the wmter and summer period. Pricmg of
water m the wmter is uruform, and not subject to mverted block pricing. Usage m the summer is
an mverted block rate structure, and priced based upon summer period costs. The first block m
the summer period is a fixed threshold This threshold can be determmed m a number of
different ways (e g. class aveiages, fixture counts, etc )
Based on AWC
Set % of Block 1
All Usage Over Block 2
5ame Price as Winter
Inverted Block Summer Puce
Inverted Block Summer Price
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; ~`==a' ,€;'' `~ ~, , _ ._ , ; ;,,~~~i~ f~-r,~ , ; k ' ' , , u ' ; '; ' ;' ;
~ ,~ :`~.~ ~~ ~~~~ro~ . ~ ' ~' ~ - l~~t~x~,d~i~~~~~~n~~ ~~x~~ ~,'. , . ~'r~~~n~ ~~~' t~e ~lnic~~; ~ , ~' , ~
Wznter Period -
Block 1
All consumption
Umform Price for Winter
Summer Peraod -
Block 1
Block 2
Block 3
Fixed Threshold
Set % of Block 1
All Usage Over Block 2
Same Price as Wmter
Inverted Block Price
Inverted Block Price
///pp~ Technlcal Memorandum No.2 7
~~~~"~~ Clty oi Boulder
RAT~ STRUCTURE 5- SF.ASONAL RATES WITH FIXF,D THRrSHOLDS AND A 2-BLOCK WINTER
RnT~
Under this rate structuie, the pricmg is agam split between the winter and summer period.
Pricing of water m the wmter period has two blocks. The first block is based upon a fixed
threshold, with Che second block bemg all usage over and above the first block. In this pncmg
scheme, it is presumed that summei usage in the second block is higher than the wintertime
price.
a' , ,;, s~a~i~,~a~ ; ; ~ „ , ~ , ~ „ ;,~,~;,~"' '' ~
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Wanter Peraod -
Block 1 Fixed Threshold Inverted Block Winter Price
Block 2 All Usage Over Block 1 Inverted Block Wmter Price
Surnmer Period -
Block 1 Fixed Threshold Same Price as la~ Block Wmter
Block 2 Set % of Block 1 Inverted Block Summer Price
Block 3 All Usage Over Block 2 Inverted Block Summer Price
RATE STRUCTURI, 6- S~ASONAL RATE WITH AN AWC THRESHOLD BASED UPON WATER
SUPPLY AVAILABILITY AND A 2-BLOCK WINTER RATE
Undei this rate structure, the pricmg is again split between the wmter and summer penod
Pricing of water m the wmter period has two blocks The first block is a block size based upon
AWC, but the block size ad~usts based upon water supply conditions. Under drier or drought
conditions, the size of the first block would be reduced based upon a pre-determined shdmg
scale. By reducing the first block size, all succeeding blocks are also reduced accordmgly In
this pricing scheme, it is presumed that summer usage m the second block is higher than the
wmtertime price.
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Winter Period -
Block 1
Block 2
Based on Ad~. AWC~I~
All Usage Over Block 1
Inverted Block Winter Price
Inverted Block Winter Price
Summer Period -
Block 1
Block 2
Block 3
Based on Adj. AWC~'~
Set °~o of Block 1
All Usage Over Block 2
Same Price as ls~ Block Winter
Inverted Block Summer Price
Inverted Block Summer Price
~l~ AWC block size established annually, on the basis of supply availability, usmg a
predetermined and fixed shdmg scale
~~ Technical Memorandum No.2 8
CIly of Boulder
RATF. STRUCTURF. ~- SF.ASONAL RATES WITH A FIXED THRTSHOI.D ADJUSTED BASED UPON
WATF.R SUPPLY AVAILABII,ITY AND A 2-BLOCK WINTER RATE
This iate structure uses a&xed threshold to establish the first block, and similar to the pievious
alternative, is adjusted based upon water supply condit~ons.
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Winter Period -
Block 1
Block 2
Surrimer Peraod -
Block 1
Block 2
Block 3
Fixed Threshold~~~
All Usage Over Block 1
Fixed Thteshold~~~
Set % of Block 1
All Usage Over Block 2
P~IC~Ii~ Q~"~~C`~IU~~
Inverted Block Wmter Price
Inveirted Block Winter Piice
Same Price as ls` Block Wmter
Inverted Block Summer Price
Inverted Block 5ummer Price
~~~ Threshold size established annually, on the basis of supply availabiliCy, usmg a
predetermined and fixed shdmg scale
RATAl STRUCTURP 8- SPASONAL RATE WITH FOUR SUMMER PPRIOD BLOCKS~ USING AWC
AND A UNIFORM WINTER RATP
This rate strucCure is similar to Rate Structure 2, but has added a fourth block to the summer
period. The addihonal block is intended to provide two benefits The first benefit is that the 3"~
block consumption is penalized, but not at an overly "punitive" rate. The 4`h or tail block is
mtended for those useis who are clearly bemg excessive and should pay a punrtive rale The
additional block allows far a clearer and broader definition of excessive or wasteful use. An
example of how the blocks would be established is Block 2 is 200% of Block 1, and Block 3 is
201% through 400% of Block 1, and Block 4 is all consumphon over Block 3.
~ _ ,,~, „ _ _ ~ , „ , . , ,,~i~',~~5;? ~, ; ° ,, , `
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Wanter Peraod -
Block 1
Summer Peraod -
Block 1
Block 2
Block 3
Block 4
All consumption
Based on AWC
Set % of Block 1
% Range of Block 1
All Usage Over Block 3
Uruform Price for Wmter
Same Price as Wmter
Inverted Block Price
Inverted Block Price
Inverled Block Price
~AA! Technlcal Memorandum No.2 9
C~7 Cify of Boulder
RAT~ STRUCTURE 9- SEASONAL RATF. WITH FOUR SUMMER PERIOD BLOCKS~ USING A FIXF.D
THRESHOLD AND A UNICORM WINT~R RATE
This is similar to the prior rate structure, but uses a fixed threshold to establish the first block of
the summcr period Each of the following blocks m the summei period is derived from size of
the fiist block
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Wanter Period -
Block 1
Summer Peraod -
Block 1
Block 2
Block 3
Block 4
All consumption
Fixed Threshold
Set % of Block 1
% Range of Block 1
All Usage Over Block 3
, „ „ , , , ,,
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Umform Price for Winter
Same Price as Wmter
Inverted Block Price
Inverted Block Price
Inverted Block Price
RATE STRUCTURE 10 - TOP SCORER OF RATT STRUCTUR~S 1- 9, PLUS GOAL BASED
INC~NTIV~S
This alternative will take the top scorer from the first nme (9) rate structures and add a goal-
based mcenhve. That is, if the customer uses less than the block size, a discount will be
provided. The size of the discount is dependent upon their vatiance from the stated goal. The
discount would only apply in the summer time period
RATE STRUCTUR~ 11 - INDOOR WATER USE BASED UPON THG INDIVIDUAL'S AWC, WITH
OUTDOOR USF. DETERMINED BASED UPON CUSTOMER SPECIFIC LOT SIZE/IRRIGAl1LE ARF.A.
BILLING PF,RIOD GOALS ART ADJUSTED FOR ACTUAL WEATHTR AND ET. FORWARD
LOOKING GOALS ARE COMMUNICATED VIA THE MONTHLY BILLING STATCMCNT.
This rate structure allocates an amount of water for indoor and outdoor use. The mdoor
allocarion is based upon the mdividual's AWC. The outdoor allocation is determined based
upon customer specific lot size and irrigable area The irrigable area is assumed to be the highest
water using type of irrigable turf. As wrth the previous rate structuie, outdoor use is based upon
assumed "typical" weather and water supply condrtions. At billmg, the outdoor block sizes are
ad~usted based upon actual weather condihons and ET Performance against the previous
month's goals, and the goals for the commg month are commumcated via the billmg statement.
~ ,i ; ;,~'„ ; ~ , ~ ~ ~, .~ , ~ ?t~~'s~~'~?~:~~; ~~- ~ _ ~, _ ~ ~ : ; ',~ I
F,L ; .;~~u`c~~' ,,,,,,,, r,,,~~~irmi~n~~j~~~~~~i~~~,°. ,_ ~ „_ ~"~i~~ng,4~'k~i~;~lael~„'°r' ,~
Block 1 Indrviduahzed AWC Inverted Block Price
Block 2 Based on Specific Lot Size,
and Ad~usted for ET Inverted Block Price
Block 3 All Usage Over Block 2 Inverted Block Piice
!//AAN Technlcal Memorandum No.2 70
~~~C~`~ CIly oi Boulder
RATT STRUCTURC 12 - INDOOR WATER USE BAS~D UPON NUMBER OF OCCUPANTS~ WITH
OUTDOOR USE DETERMINED BASF,D UPON CUSTOMTR SPECIFIC LOT SIZE/IRRIGABLE AREA
AND TYP~ Or TURF PLANTING. BILLING PERIOD GOALS ARE ADJUSTF,D COR ACTUAL
WEATHrR AND ET. FORWARD LOOKING GOALS ARP COMMUNICATED VIA THC MONTHLY
BILLING STATEMTNT.
Under this rate structure, the customer is also allocated an amounC of water for mdoor and
outdoor use. The indoor allocation is based upon the number of occupants and multiplied by an
assumed per capita usage level. The outdoor allocation is determined based upon customer
specific lot size and irrigable area In addition, the type of turf planting is taken mto account
(e.g. buffalograss vs. bluegrass) Finaily, outdoor use is based upon assumed "typicaP' weathei
and water supply condrtions. At billmg, Yhe outdoor block sizes (block 2 and 3) are ad~usYed
based upon actual weather condihons for the month and ET. Perfoimance agamst the previous
month's goals, and the goals for the coming month are commumcated via the billmg statement.
i t{eii~i~iuLi ~ii ~ vi~tin i ~i y~~f1 ~~p ii¢i ni~iii~i i
" ~;,r'<a,-~ ~y~~-~p~,,, '~~i_„~' $f" l~,l',4,__ ' ~ '
~''
'~,;=i=«'`,`~'~E~~~,~~~~~!'`;`;,i~;i;°E~',,,`,,,,,;;~?~~~rr~i~1»i~~~~~~1t~i~~; i~i~~n~,a~~~#'~~u~l~°!~'~;,v,„';
Block 1 Based on # of Occupants Inverted Block Price
Block 2 Based on Specific Lot Size,
Turf Type & Adjusted for ET Inverted Block Price
Block 3 All Usage Over Block 2 Inverted Block Price
RATE STRUCTURE 13 - INDOOR WATER USE BASED UPON THE INDIVIDUAL'S AWC~ WITH
OUTDOOR USE DETERMIN~D BASED UPON CUSTOMCR SPF.CIFIC LOT SIZE/IRRIGABLE AREA.
SUCCEEDING BLOCKS BASED UPON RELATIONSH[P TO OUTDOOR GOAL. BILLING PERIOD
GOALS ARC ADJUSTF,D FOR ACTUAL WEATHER AND ET. FORWARD LOOKING GOALS ARE
COMMUNICATED VIA THE MONTHi,Y BILLING STATEMENT.
This rate structure is another variation of allocating an amount of water for mdoor and outdoor
use. The mdoor allocahon is based upon the mdividual's AWC. The outdoor allocahon is
determmed based upon customei specific lot size and iriigable area The irrigable area is
assumed to be the highest water usmg type of irrigable turf. Usage over and above the
customer's goal is penahzed with a higher rate The third block is considered "inefficienY' use,
and the fourth block is considered "Excessive or Wasteful " As wrth the previous rate structure,
outdoor use is based upon assumed "typical" weather and water supply conditions. At billmg,
the outdoor block sizes are adjusted based upon actual weather condrtions and ET. Performance
agamst the previous month's goals, and the goals for the coming month are communicated via
the billmg statement.
;i; ,.;;;i,i,,'; ;d't,' I„~„?„ , ' ~,_„ s"F~ , _ -- ~~,,,~, ~„ ~ ~ I
~ '~ „ ~~,a ~;,i' ,~rE , ;, ; t~~~l~r7i~~-~' ,~ ~~ ' ~~i
i„~ ~~~ii~ ~'~'~ ,,~i~, ~~I~~ _ - '1~~~~I,~i,C'1 - - :~ ',~x.~,- ~~` I~~';
°n;~°; „~;'~~#~~;;`,E,~:°~ ,-,~,,;'`_ ;~~teir~i~l~~~~~c~„~~~+~°„„~ , ~~~~fiii~n~;t#~;~~~~!~~~; e,,,
Block 1 Individualized AWC Inverted Block Price
Block 2 Based on Specific Lot Size
and Ad~usted for ET Inverled Block Pnce
Block 3 101% to 150% of Goal Inveited Block Price
Block 4 Over 150% of Goal Inverted Block Price
///~ Technlcal Memorandum No.2 71
~~~ Ciky ot Boulder
RATr STRUCTUR~ 14 - INDOOR WATER USE BASED UPON A FIXED THRCSHOLD~ WITH
OOTDOOR USE D~TERMINCD BASED UPON CUSTOMER SPECIFIC LOT SIZE/IRRIGABLE AREA.
SUCCEEDING BLOCKS BASED UPON RELATIONSHIP TO OUTDOOR GOAL. BILLING PERIOD
GOALS ARE ADJUSTF.D rOR ACTUAL WEATHTR AND ET. FORWARD LOOKING GOALS ART
COMMUNICATED VIA TH~ MONTHLY BILLING STATEMENT.
For this rate structure, mdoor allocahon is a fixed threshold. This is typically developed based
upon an assumed average number of occupants, multiplied by an assumed per capita use. The
outdoor allocahon and blocks are the same as the previous rate structure. Outdoor use is based
upon assumed "typical" weather and waCer supply condrtions. At billmg, the outdoor block s~zes
are ad~usted based upon actual weather conditions and ET. Performance agamst the previous
month's goals, and the goals for the coitung month are communicated via the billing statement.
_,; s,~,~ -~''_',,°'_~` „ , °~#~~~';~A~'' ,„, „ „,~ ~',
;;, - ;,;~~;1~,~~i~1~°;,,,,~ ,,,,,,, {~,~ , , ;~~~e~+ir'-#~irt~'~~t~~~;~~~,`; `~,'„ , ~'~'i~atn~~~~#~~~~a~~,`, ,,,,','„'_,,,
Block 1 Fixed Threshold Inverted Block Price
Block 2 Based on 5pecific Lot Size
and Ad~usted for ET Inverted Block Price
Block 3 101% to 150% of Goal Inverted Block Price
Block 4 Over 150% of Goal Inverted Block Price
RATG STRUCTURE 1S - INDOOR WATER USE BASED UPON THE INDIVIDUAL'S AWC~ WITH
OUTDOOR USE DETERMINF,D BASED UPON AN ASSUMED "TYPICAL" LOT SIZE AND
IRRIGATION REQUIREMENTS. SUCCEEDING BLOCKS BASED UPON RELATIONSHIP TO
OUTDOOR GOAL. BII.LING PERIOD GOALS ARE ADJUSTED FOR ACTI7AL WEATHER AND ET.
FORWARD LOOKING GOALS ARE COMMUNICATED VIA THE MONTHLY BILLING STATEMENT.
The indoor allocation for this rate structure is based upon the individuaPs AWC. The outdoor
allocahon is determmed based upon an assumed "typical" lot size for the type of customer (e.g ,
single fam~ly, etc.), and assumes the highest water usmg type of irrigable turf. Succeeding
blocks 3 and 4 are similar to the previous rate structure The 2"~ Block for outdoor use is based
upon assumed "typical" weather and water supply condihons. At billing, the outdoor block sizes
are adjusted based upon actual weather condrtions and ET. Performance agamst the previous
month's goals, and the goals for the commg month aie commurucated via the billing statement.
$i I,i~~ °I .~;,rs' "- _ 's;a~~~S~~+y+;~j', ~<<~_ " ~~i ~~~ `jt ~ .`d
~ i i i_'il iI"h~ ii Liik' ~ n V~ - ~~6in ~ ej.i i_ iIu ~ ~ i~~~" ~ .a~ I y
i`r''';';'` _,`';;°;~~i~;~~;,,~~~~ „ ,;~~ ',,,,; °'~~~~+~iii~i~ii~~~~~i~~i~+~~ , „ ; r,,,, ~~~~~i~~~n~'~~~~i~i~1~.;`, •'"=,,f
Block 1 Individualized AWC Inverted Block Price
Block 2 Based on "Typical" Lot Size/
Typical Weather/Water Supply
and Adjusted for ET Inverted Block Price
Block 3 101°~o to 150% of Goal Inverted Block Pnce
Block 4 Over 150% of Goal Inverted Block Price
/17e~l+ Technlcal Memorandum No.2 '~Z
~~~~'~'7 Cify of Boulder
RATF, STRUCTORF, 16 - FIRST BLOCK WA1TR USE BASED UPON THL CUSTOMF,R CLASS
AVERAGE WATER USF., WITH OUTDOOR US~ DETERMINF,D BASED UPON AN ASSUMF.D
"TYPICAL" LOT SIZ~ AND IRRIGATION REQUIREMTNTS. SUCCEEDING BLOCKS BAS~D UPON
RGLATIONSHIP TO OUTDOOR GOAL. BILLING PERIOD GOALS ARE ADJUSTTD rOR ACTUAL
WGATHCR AND ET. FORWARD LOOKING GOALS ARF. COMMUNICATED VIA THC MONTHLY
BILLING STAT~MENT.
The fiist block is determmed based upon the class average water use. Note that this is a different
value than the class average winter water consumption. The outdoor allocation is determined
based upon an assumed "typical" lot size for the type of customer (e g smgle family, etc.), and
assumes the highest water using type of irrigable turf. This is simtlar to pievious iate structures.
At billing, the outdoor block sizes are ad~usted based upon actual weather conditions and ET.
Performance agamst the previous month's goals, and the goals for the coming month are
commumcated via the billmg sCatement.
°~ ;,°, ;, `4„c, ,'; ;,~ ; `~~,~i~~nc!, ,,,,,,, .,,,,; , „~ , , , , ,r . , ' ;,, ;;,,,
, ~ "Bl~ie~`;; ,,;! „,_ °I~etel~i~k~ffi~~~14~~°~~~e~°' , ~"~~iri~~afktue~lack , ,
Block 1 Class Average Water Use Inverted Block Price
Block 2 Based on "Typical" Lot Size
and Ad~usted for ET Inverted Block Price
Block 3 101% to 150% of Goal Inverted Block Price
Block 4 Over 150% of Goal Inverted Block Price
RATG STRUCTUR~ 17 - INDOOR WATER US~ BASED UPON A FIX~D THRESHOLD, WITH
OUTDOOR USE DETERMINFD BAS~D UPON AN ASSUMCD ~~TYPICAI.°D LOT SIZ~ AND
IRRIGATION RF.QUIRF.MENTS. SUCC~EDING BI.OCKS BASED UPON RELATIONSHIP TO
OUTDOOR GOAL. BILLING PERIOD GOAi.S ARE ADdUSTED FOR ACTUAL WEATHER AND ET.
FORWARD LOOKING GOALS ARF. COMMUNICAT~D VIA THE MONTHLY BII.LING STATEM~NT.
This rate structure simplifies the city's data requirements by establishmg a fixed indoor
threshold, and the outdoor block size is based upon an assumed "typical" lot size for the type of
customer (e g smgle family, etc.). It assumes the highest water usmg type of irrigable turf.
Succeedmg blocks 3 and 4 are similar to the previous rate structure. The 2"d Block for outdoor
use is based upon assumed "typical" weather and water supply condihons. At billmg, the
outdoor block sizes are ad~usted based upon actual weather conditions and ET. Performance
agamst the previous month's goals, and the goals for the commg month are commumcated via
the billmg statement It should be noted that this rate structuie most closely matches the rate
structure and approach used by Irvme Ranch Water District.
~ e i e .' I~~ ~ R'P~y~~~} y~ ! ~ i ~~~ _ I
`nI i~~ '~3~-rz i i{i~I' ii~ i~x ~I 411 ~.}~4 ~i.a i iiiii~
°`~
r ~!XQ~~'t ; ,
~@~B1'
~I1~Al~~
~Q4'~ ~~~
,
~ ~ _ r
s
I
Block 1 Fixed Thieshold
Block 2 Based on "Typical" Lot Size/
Typical Weather/Water Supply
and Adjusted for ET
Block 3 101% to 150% of Goal
Block 4 Over 150% of Goal
4 tIi ~
~[~~~'~~~'D~ ~AC~~I~Q'C~~ „ , i ; E
Inverted Block Price
Inverted Block Price
Inveited Block Price
Inverted Block Price
~~~ Technical Memorandum No.2 13
Clty of Boulder
RATE STRUCTURG IS - FIRST BLOCK IS THI; SUM OF INDOOR AND OUTDOOR ALLOCATION~
AND SUCCEEDING BLOCKS BASED UPON RELATIONSHIP TO FIRST BLOCK GOAL. BILLING
PERIOD GOALS AR~ AD,IUSTED FOR ACTUAL WEATH~R AND ET. FORWARD LOOKING GOALS
ARE COMMUNICATED VIA THE MONTHLY BILLING STATEMENT.
This rate structure simplifies the crty's data requirements by establishing a fixed indooi
thieshold, and the outdoor block size is based on an assumed "typical" lot size for the type of
customer (e.g. smgle fa~tuly, etc.), and assumes the highest water usmg type of irrigable turf.
The 2"d block size is adjusted for ET. Performance agamst the previous month's goals, and the
goals for the commg monYh aie commumcated via the billmg statement.
~ ~ ~ i~ ia _ ,$~g~i~,p~`~~~ „ ~, ~ ~ ~ a ~ _
ry;,;;,~ i°~;~~~~~~' `?',;;, ~?~t~r~n~~i~~ ~~~c~~~~;~,,;~ _, , , ~~riei~i~;,o~,t~e=~ilo,~M~;, ,
~ ~ ~ W ~° , , ~,
Block 1 Sum of Indoor & Outdoor Inverted Block Price
Block 2 101% to 150% of Goal Inverted Block Price
Block 3 Over 150% of Goal Inverted Block Price
RATE STRUCTURE 19 - TOP SCORER OP 11 - 18, WITH THE TARGET SF.T AND FIXED GACH
YEAR. NO MONTHi.Y ADJUSTMENTS FOR WEATHF.R AND ET.
This rate structure uses the top scorer of rate structure alternatives 11 - 18, and makes a
simphfymg assumption. That is, the targets are set and fixed at the start of the year (based upon
the criteria selected), and they are not ad~usted through the year for actual weather condihons and
ET
RAT~ STRUCTURE 20 - TOP SCORER Or 11 - 19, WITH A DISCOUNT POR CITY APPROVED
IRRIGATION SYSTEMS WITH RAIN SENSORS AND WEATHCR-BASED CONTROI.LERS.
This rate structure uses the top scorer of rate structure alternatives 11 - 19, and adds a discount,
or eliminaCes penalCies for customers with a ciYy-approved state-of-the-art irrigaYion system thaC
includes razn sensors and weather-based controllers. Under this rate stivcture, those customers
thaC do not have approved sysCems will pay the "sCandard" rate (top scorer of 11 - 19), but
customers with approved u•rigation systems will pay no penalties for usage over and above the
outdoor goal. The presumption is that these customers, by usmg efficient irrigation systems,
should meet or exceed their outdoor goal, and on those few occasions when they do not, they
should not be penalized smce they have made a sigruficant capital mvestment to attempt to be as
efficient as possible
Summary
This Technical Memorandum has provided a brief overview of the termmology and elements of
rate designs. In addition, twenty (20) rate structures have been identified for Yhe evaluation
piocess From these twenty iate structures, three (3) to five (5) will be considered for fuither
evaluation and analysis by the city
///ADl+ Technlcal Memorandum No.2 74
~~~CC~ CIly of Boulder
City of Boulder
Water Rate Structure Evaluation Criteria
REVENUE RELATED ATTRIBUTES
Effectrveness m yieltlmg total revenue reqmremerMs
Dehndion The ra[e struc[ure will be developetl to cover the tofal costs of
u41Ry opera6ons, under a"rash needs° appmach - opera4ng, raprtal,
debt service coverage and reserves
Evalua6on Crrtena
• Rate s[ructure is designed to equal (target) the Crtys
revenue reqwrements (i e the total revenue reqwrements
are divided bythe billing unrts - customers and usageto
equal the rate)
CommentsBasis for Ra6ng
Revenue stabi0ty antl pretlicfabihty
Definrtion The rate struc[ure will be developetl to eliminate svnngs in
revenue generaeon from year to year basetl on such factors as weaNer,
conservahon antl cus[omer usage changes Annual svnngs in planned
revenue should be no greaterthan -5% antl+10%
EvaluaGOn Crrtena
• Rate structure should produce annual revenues wRhin
the planned range of no greaterthan - 5% and+10% This
cntena should assume nortnal, wet and dry weather
pattems, antl the potenhal sxangs m 2venue
• Rates are pretlictable (NOte vanations m the rate
does not imply 2te change, rather struIXUred changes
in the rates such as block size based on AWC orthe level
of the rates due to changing supply/demand condrtions)
• For planning antl butlge4ng purposes, rate revenues
can be pro7ected wrth reasonable axuracy wrthin a year,
and fmm year to year
CommenlsBas~s for RaGngs-
I Mb or No qelatiw~sh Some Gootl Ve Stron 100 % Relat~onshi
'~ ~Y 9 P
lotheC~tysRev RequR Relanonship Relaeonsh~p Relatronship totheRev Requu
Typicaily Noi
in the Range 50 % of the Time
Typ~calry m Range 75°!0 of ihe Time 90 % of the Time
Typicalty in Aange I Typicaly ~n Range I Typ~cally Always
Wrthin the Range I
I
Vary Sgnficantly Vary by Season
Seasonalty&YeartoYear ANDYearmYear
Very DRficW[ to WGect I FaiAy CompLcatetl or
PMerRial Hgh Vanation Pass6k High Vanat~on
Vary by Season
OA Year to Year
EaSY to Prolect
Tolerable Vanazlce
Very ~ttle Vanation
By Season or Year
Fairty Easy to Prqeq
Some Mmor Vanarice
Do Not Vary By
ey Season or Year
Very Easy to Rq~
wl Very Lrt[le Vanar¢e
Page 1 of 7
~
y
H
~
~
x
~
~
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y
by
C~ty of Boulder
Water Rate SWcture Evaluation Criteria
STabilrty antl predictabdrty of the ra[es Memselves
Definmon The implemernanon of new rate structures should be consistent
wrth past u6lity rate sethng phtlosophy antl mmimrze wsiomenmpacts
dunng any change m rate struciu2 A typical customer, under "nortnal'
contlNOns and'nortnal' usage, should not have an ad~ustmeM greaterthan
10 % on an annual bas~s, unless based upon cost of service
Evaluahon Crrtena
• Potennal impacts to customers from the proposed rate
struc[ure, m companwn to thert ens6ng rate - assummg
°nortnal' condM1~ons
- Impacts ro an ewstinp "conservinp° customer
- Impacts to an e>as4np °non-conservinp" customer
• From the cus[omefs perspec6ve, the pred~ciabilrty
(stabilM1y) of the customer bills Qgnore rate atl~ustments)
Dunnp the vnnter penotl (season)
Dunnp the summer penod (season)
From year m year
CommentsBas~s /or Ranngs
6ver15% I 19l -15%
Mnuallmpact Annuallmpac[
Very U~2dctabie I Unpreo5ctable
TooVanabletoPre7c[ (USUally>525)
5%-9% I 1%-5%
Annuallmpact Annuallmpac[
SomevfiffiPred~ctable FaitlyPr2tl~Ct2ble
(USUaIIy WM1hin §16 S25j (USUaIty WM~n $5-515)
Less
Than 1 %
Very Prediciable
(USUaIty WMin $5)
Page 2 of 7
COST RELATED ATfRIBUTES
4 D~srnurege wasteful use, while promotmg all ~ushfietl types antl
amounfs of use
D~mtion The rete shuc[u2 should promote eHicient use of vmterand
discourage or penalrze in~aent uses
Eva/uahon Crifena
• Rate is designed to spec~icalty target, enwurage antl
3Cf112VQ IOd00f WdIZ~ COOSEN2i10~
. Rate is designetl m specificallyiarget, encourage and
achieve outdoor water conserva4on
• Rate is designed to specrfically encourage reduceons
in peak use dunng a peak use penod (e g a time-of-use
rate to shift usage w an off-peak penotn [Note for this
crrtena considerthe °system peak° reduchon benefit ]
• Rate uses posNve incentrves to encou2ge conservanon
(e g discounts for ezceetl~ng goals)
• Rate uses penalt~es or punitrve measures to encou2ge
conservation (e g excess use penalties)
CommentsBas~s for Rafmgs-
City of Boulder
Water Rate Structure Evaluation Cnteria
- a
Dces Not AUueve Achieves Mnimal AcMeves Motlerate Achieves Abov~AVe AcMeves High
IMOOrWffierCOrtserv IntloorCOrov IrWOOrCOfServ IntloorCoiserv IntloorCOrservahon
Does Not Acheve
Ou[tloor Watet Carserv Achn!ves Mimmal
Oultloor Casv I Acheves Motlerate
Outtloor Coreerv ' Achieves Abovc Ave
Ou[Qoor Coreerv I Acheves High
Ou[tloor Corserva4on I
I
Dces Not AChieve
Peak Retluceon
Has No
Incenbve5
Has No
Pe~alees
Page 3 of 7
Achreves Mimmal
Peak fietluc[ion
Small Incertlrves
FewBehavrorChanges
AcMeves Motlerate Ach~eves Abov~AVe Ach~eves Wgh
Peak Reduclion Peak ReOuction Peak Reduc[ion
Some Iricefrtrves Moderatelncentrves&
SomeBehav Change Belta~orChan9es
Small PenalGes I Some Penaities I Mode2te PenaiGes 8
FewBehaviorCham~as SomeBehav Charge BehaworChanges
Large InceMVes &
BehahorChanges
Large Penaines &
Behav'or Charges
CiLy of Boulder
Water Rate Structure Evaluation Cr~teria
ReFlects ail present and future eost (nterna64es and ertemalrtes) antl
benefits of prondmg uhliiy sernce
Defini6on The 2te structure should retlec[ all tratlRional intemal costs
(drtec[ antl ~ndirect) ffiat the Crty incurs, and under appropnate
siNations antl contlRions (e g severe tlrought) may also ~nclude
extemalNes of present antl future cos[s and bene5ts Q e
margmal cost anrllor value of water)
Eva/uaGOn Qrtena-
• Rates, under all contlRions, reflect the Crtys direct and
mdirect costs
• Rates, untler ail condRions, refiect in some manner, the
Crtys ma~gmal cosis or other e#emalrty costs
CommentsBasis for Rabngs.
Fa~r allocahon of total cos[ of sernce among ihe customer classes
of sernce to attam equrty
Definmon The rates and the rate shuciure shall be based upon a°faif
allocaeon of tofal cos[ of service among tlie cus[omer classes
of service by use of a°gene211y accepted' cost of service
such as defined ~n the AW WA M1 manual
Evaluat~on Crrtena
• Rate are developetl based upon "generally accepted°
cost of semce pnnaples, using a cost of service
analysis to estaUl~sh allocahons to each class of service
and average unrt cosGs
Commenfs/Bass for Ranng
I Rela[~wshBptoCOStS I AelatfwshptoCOS[s I UrWe Mos[~Corrfihons I Untle Mos[COritl iWSR I UnderAllC om ns I
I I
No~~mmal~ Patem I In bdre e Con1~[ioas I RinflTait BImJ¢~ I L1Me Most Coer~as I UMer All Cond~bore
Not Basetl On Cost I Some GOS Pnnc~ples I Uses Mo~ of G0.S arW I Pnmanly Uses Cost ~.4lways $asetl on Cost
oFSemce Pn~ples Mc6tly Non G6S Non G4S Pnnciples of Semce Pnnraples of Service Pnriaples
Page 4 of 7
City of Boulder
Water Rate Structure Evatuation Cnteria
7 Avo~dance of untlue disrnmmation m ra[e relanonships
D~nihon The rete structures should avoid mierclass subadies whenever
possible to ensure each class pays its fuil cos[ of service
Evaluahon Crrtena
• in the development of the rdtes, the rates are eqmtable
and cost-based across all classes of service
• Rates are legally defendable
Comments~Bas~s for Rahngs
Dynamic m rts abdity to respond to changmg suppty and demantl
contlfions and/or environmeMal wncems
Definrtion The rate s[ruc[ure should be developed such ffiat R
eRher responds appropnately and directly to changes in supply,
demantl, etc, or aRemaLVely, contains the flebbilrty to allowthe
u6hty to respond m the changmg needs as a resuft of suppty,
demantl, and/or environmental concems (e g drought condihonsj
Evaluahan Crrtena
• Rate is developed to antic~pate the potential for chang~ng
supply/demantl condi4ons and ad~usts accord~ngly
[NOte All supply condmons mdutle both tlrought and
plentiful supply contlmons ]
CommentsBas~s for RaGng
Not Eqllltable and
Cost-Basetl
Not
Defendable
SomewhatEqurtable f GenerallyEqurtsble ~ PnmanlyEqurtable
and CosRBased and Cost-Based and CoshBased
Queshonable and QuesGOnabie and QuesGOrable, Bul
Possb7yNOtDeferM aTos-Up ProbabtyDefentlable
Always Equrtable
and Cost-Based
Legaily
Defentlable
SmglecConSibon I ~ oa ~ra~9m ConcNOnls I Mhc~pates az~tl Ad Onty I
to DraugM Cmidtiore MbaP~es antl Atll ~
to Mos[ Cor~tlNOns t AN~I SuPPN Coridmms I
I _
Page 5 of 7
Cily of Boulder
Water Rate Structure Evaluation Criteria
PRACTICAL RELATED ATTHIBUTES
9 Simple and easy to untlersfand, easy to atlmmister
Definrton Fmm Me customefs perspec6ve, the rate s[ructure should be
s~mpie to undersfand, such that the customerran easily
understand [he btll From llie uhlrty's perspec6ve, the rate struc[u2
shoultl be easyto admmisterand collect Finally, Ne rate
structure should have acceptance by the ma~ortry of the customers
that the rate struc[ure and resulhng bills are Yair and equrtable'
Evaiuanon Crrtena
• Rate (billing meihotl) is easy forthe customerto
understand antl customerwill respontl to the pnce signal
appropnatety
• Technical complewty of developing the rates
[Note Ease ortlhficulty is a funcrton of the tlaW reqwred
to calculate the rates, e g bill frequency, total landscaped
area, planitypes, evapotraspi24on, etc )
Ease of Implementation [Considers billing sysiem
const2ints, implementahon needs/data issues and
astomer educanon issues]
• On-Going Administratrve Costs and Issues, Need for
cusromerfeetlback and commumcanon (e g# of
occupants, lot s¢e, etc )
• Availability of infortnaLOn to the cus[omer- Provides for
constant or ongoing customer feed-back and
communira4on (e g commumcation of butlgetetl water goals)
[Note b~lling using non-goal based orfixed th2sholds
is not considered'feetlback" for purposes of this crrtena]
• PubhcACCeptance[NOte wstomermayfullyuntlerstand
the rate structure and billing approach, but do we anncipate
that they will accept d as Yai~' and reasonable~]
CommentsBas~s for Rabngs
Very Co~sug I Confisrtg I Somevfiat Compiex I U~Merstanaable, Many Wul I Very Easy to Understand
Lndear Response Maed Resporse Gootf Response Respond Appropnately Appmpnaie Respo~se
Very I Somewhat I ~ I p¢ry
DrfficuR DdficuH Average Easy Easy
Im( ~e~~V~' ~ h I Ve H ghfiCost~ I Affoo tlable Cost I Low Cost I Very LowFto NoCOSt
Im( ~~~~orU'VeJ Cos[ h I VQ H gh Cosl~a ~ AffwEable C~sl 1 Low Cos[ I Very Lowt No Cosl
I ProwtleS~NtlbCOmm I Provitles SeQaUa~ m I M~acka nnuaOr I Fec~ra k(qNSeasor~al) I Com & Feetlbxck~(mMty) I
A~NCipate Unrversal
Low Acceplarice
AriOapate Mhc~pa[e Mixetl Mticipaze Mhapate Very
Low ACceptanCe Aaeptar~Le Gootl Accepiance High ACceptance
Page 6 of 7
City of Boulder
Water Rate Structure Evaluation Criteria
10 Freedom from Controversy as to nnerpreta4on
Definrton The ra[e struc[ure should not be ambiguous m Rs [ertnmology
and s[ructure It should be simple to e~lain antl understand by
the average cus[omerto minim¢e any mis~nierpretahon
regartling the cus[omer's bill and the overdll goals thai Nie rate
shucture has been developetl to meet
Eva/uat~on Crrtena-
• Potential for cus[omer misunderslandmg orbilhng
disputes(eg bassforthebtllmg)
CommentsBass for Rahng
Arrtiapate Sgn~ficar~t MLnpate Lorg-Tertn
LT MisurWerstandmg MrswtlerslarnLng
Arnxipate Shat-tertn i Miiapate Some Stroh- I MLOpate Lmle or
M~surWerstan[I'mg I TertnM~SUrWeStandmg NoMisuMers[ar~ng
Page 7 of 7
ATTACHMENT C
I am rezlly not that concerned aboul [his
attribute ae thc ratcs ca~ bc tweaked to gct
the revenuc we need, whatever the
s[ruc[ure of the ra[es This has not bcen a
problem m lhe pns[ and we are carrymg a
very large reserve [hat can carry us [hrough
some uneertamty as we change strucWres
Must be able to fund opera[tons and bc
able to mee[ legally ~equired debt servtce
coverage and other requved reservcs
2. Revenue stability und predictability. 2nd - 1 2"d - 4 Th~s must be donc, and dluetrates [hc
fuGlity of trying to pnor~hzc thmgs that arc
g~~ _ ~ essenGally equal pnonly
S~i~ _ 1 It would be mce to have a bit moce ~evenue
s[ability and predictabilriy The rale
structure we had m place lasl year d~d not
do nn adequatc~ob d~nng the drought
Watcr budgcts would have g~ven us much
be[[er pred~ctnb~hty and stabdity
Must be able to forecast revenues m u
rchablc manner for financtal momtormg
and plannmg purposes
Lookmg for a system that works on pncmg
[he service dehvered, no[ [he volume
3. Stability and predictability of the rates 1a`- 1 Our customers need stabdrty and
themselves. predictabil~ty, though they w~ll tolerate
S~h _ 1 somc unccrtamty m h drought Water
bankmg, which ~s available w~th water
budgets, co~ld lend more stabd~ty to the~r
paymen[s
il helps lhe ~dlity do long range plannmg
and can wcathcr ups and downs
1. Effectiveness in yieldmg tMal revenne 1"- 1 vote 1"- 4 vo[es Th~s musl be done, and ~llustrates the
reqniremente. CuGlity of trymg to prmnhze thmgs that aie
4~~- 1 5~~- 1 essenhally equal puority
..i~~. ~ ~~,~,~ ~=,~~e~$.,~!~4~', ,'~i'ri _ , ~~„„ ~4d~ F,",rd'
- '~''`%, "'d~"U~~~[°4xE°~ ~.i=;~'0' ','~„ ~ ~ f ~ y~ ~~f~MA'af~ - - ~'i~~l~~t}y,',u:'a'~~~-r'm"p <;`+ai~~n
,q{~,,y~td~ct. y,,{,5~ ,z,° ~; &. ~~~~,, ~ r I ~'a ~ "'' =~s;'~<<~ ~y x ~~
~~~+~~v~?ii~~,u~~M~f ~ ~ ~H~ P+,, ~°_INa~~LLi' x p L~~~ j~~4 ~ ~'a`;~~~ n1j~~ ' d'~~i~tm ~~41i`'+'f'`~rt ~"~~ $`, u,;.
3F'~,i~~'r~,'lya~ ,~i~,"~,~ ,,~, ~RA~*~ k4t' t?~ ji, 'P$n„ ~~~„~ ,i ~ ~ ~~t ~i °°~s ,, _?,rt ~~, J a y
~ i v ,~~~ , ~ ° r"~~;';,Yy ~"~; ~ , ti
~~t~j~t6"v~~{~u'ItI~s3'E~~r~t;,,,pi=~bi,~„i;i'„~~~~~~~,I~i3a~,ai2pY~vy~~~<i ~~ru;y,~ar.~itY~nhS°„i~=.,~pi',~„~i~, ~ -,f;iV`"~~it~~ ~f~A~( '~Nl3~,~iry~
~p lt{'` ~
`~' .(tsii` i ~ ~ ~~ ~ 7<~`'I": ~ ~~°" l~;a li, x,'~~ a a~ ~ ..y, ~' t ~ ~~.~ ~~ ~ . ~ ~" ~`,!`~
£~~s~ ~i '~ri ida ~~ ~: ~~t~3;~~ t ~'
~~s~t~ ' ~' ,u~r#d iti „k~i' ~ P~~ ''~ i= ',"~-i~~i "n"s~~'S_~3,~'M'{nt'b .mn~...., i~~~~-,~~~vu~u.=~ h 4~SL~i~s"
` ~~ttn~_~_~u=' "
A. Discourage wnsteful use, whilc 1"- 3 1" - i I don'l know what "promohng all ~asG6ed
promoting all justiGed types nnd types and amounls," means Bu[, I place
amounts. g« _ 1 g~d _ 2 h~ghest pnonty on conservaGon, because
that has been the biggest problem to date
4`"-2
This ~s ieally why we are domg the sludy
The cuirent rate atmewee does noC
discourage wasteful mdoor use o~ wasteful
use by C/I customers
Mus[ discourage was[eful use and no[
penalize foi "~uvtifled" u9es
Looking for a system lhat will give a clear
s~gnal to customer of'target' usage
gmdelmes promoted by the ntil~ty
I thmk it helps to have people realize that
we Lve m a sem-arid climate Most pcople
~ust want to know they w~ll have water
when they turn on the tap
5. ReOect all present and future costs 4`h - 1 '17us is an ~ssue, but not the reason we are
(internalities and externalitice) aud domg lhe rale study We curren[ly do a
beneCts of providing utility service. pre[ty good ~ob at this and can condnue to
do so wilh whatever strneWce we use
6 Fair allocution of total cost nf scrvice 2nd - 1 3"~ - 2 Currenl system penahzes smgle fam~ly
among the customer classes of service to residcnt~al vrignGOn, and favors all other
nttam eryuity. ~{~~ _ 2 ¢~h _ 1 classes Th~s is not consis[cnt w~th faimess
and leg~Gmate needs
4a~ _ 1
Th~s ~s ~mportant for Tairneas between
cus[omer groups My concern ~s that we
are curren[ly pu[tmg too much burden on
s~ngle family eustomecs and not enough on
mulG-fam~ly and GI
Pees must be legally dcfens~ble, customers
should pay bascd on cos[ of providmg
sernce to avo~d arbi[ranness and
capr~c~ousness m sethng ra[es
Important to all our cusCOmers, whe[her
residcnt~al or commerc~al
7. Avoidance of undue diecrimination in 4'h - 1 Th~s ~s zlso ~mpoitant for creatmg a rate
rate relationships. strncmrc thnt is equitable We need to
q~n _ ~ have some publ~c d~se~ssion on lhe value
of watcr dnrmg a drought and dunng wct
vears Oncc we do Lhis, we can look [o fix
~„~,
;~i;;=°~~
any Rtr~clural problems that may be
preventmg ~s fcom collectmg thc conect
publ~c valuc for our wzter
S. Dynamic in its aUility to respond to
changinF supply and demand cnnditions
and/or environmental concerns.
2n° - 3 9"~ - 1 Current system ~s [oo crude hmmg of
sprmklers enforoed wrth wa[cr cops ~s a
S°i _ 1 q°~ _ 2 ternble way [o handle emergenc~es
Current pricmg allows nch to buy all water
Sih _ 1 leavmg dus[ foi everyone else
This ~s nnolher of the cen[ral reasons tha[
the s[udy ~s hemg done We need to have a
structure [hat handles a droaght mo~e
eqwtably and results m clrought cu[backs
being spread more evenly over all uses
Agam, lookmg ta piomote the service
dchvered, not the volumc This may help
reduce the impact of s~pply fluctualmns
We don't know when the next B[G diought
wdl come Havmg a t~ered stivc[ure for
billmg helped m las[ drought
9. Simple and easy to understand; easy to 3`~ - 1
admmister.
4~e _ 1
5°i - l
2"° - 1 We should not Iet this attribute be an
exwse to mamtam a s~mplistic rate
S~n _ 2 sUUCtare AdmmistraGOn of a new
strucWre may seem d~~cult to admmister
at first, but may become easy wIIh Gmc
Thcre are really two parts to th~s aUub~te
nnd we might cons~der breakmg them
apart A structure that is s~mple and easy
to understand may not be easy [o
1dmm~s[eq and v~ce verse
Acceptance by the ma~or~ty of the
customers that the ra[e structure and
resulG~g b~lls are fair and eqwtable, simplc
to imderstand so thn[ [hey can ad~ust their
behavmr to ~mpnct bdls
Most people dodC want complicated bllls,
so [h~s is important for everyone - Ihe user
and the supplier
10. Freedom from controversy ns to S~h - 1 I[hmk any s[ructure can be made
interpretation. unambiguous I[hmk any sGUCluce w~ll
have conuove~sy m the begmmng, but with
ed~cadon and famil~anty, wdl become
unders[andable
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Priorit~zation Process
^ Reviewed Bonbright's list of attributes at the
last WRAB meeting
^ Requested WRAB and stafF to select the ~~Top
5" attributes - listed as 1 through 5
^ All attributes received a vote by either WRAB
or stafF
^ Both WRAB and StafF selected the same Top
5 ~ttributes, but . , .
~l'(C~S
4
Prioritization of Attributes By
WRAB and By Staff
WRAB Prioritization
Discourage Wasteful Use
Dynam~c Ability to Respond to Changing
Supply and Demand Conditions
Fair Allocation of Costs to Atta~n Eqwty
Revenue Stabdity & Predictability
Yields Total Revenue Requirements
/^\vv~i
Rank S#aff Prioritization
1 Yields Total Revenue Requirements
2 Revenue Stabtlity & Predictabdity
3 Discourage Wasteful Use
4 Fair Allocation of Costs to Attain Equity
5 Dynamic Abdity to Respond to Changing
Supply and Demand Conditions
5
How the Pr~orities Wi II Be Used
^ The selected priorities will be used
in the evaluation process to weight
the ~~scoring" sheet
^# 1 of both W RAB and StafF wi I I be
given top consideration
- Each is worth 20% of total
possible score
^ Remaining attributes will be
weighted somewhat less
~(' '
6
Preliminary Weighting of Attributes
Rate Design Attribute Weight
Discourage Wasteful Use 20%
Yields Total Revenue Requirements 20%
Revenue Stabihty & Predictabd~ty 15%
Fair Allocation of Costs to Attain Equity 15%
Dynamic Abdity to Respond to Changing
Supply and Demand Conditions 10%a
Stabdity and Predictabdity of the Rates 4%
Reflect all Present and Future Costs (internalities
and externalities} and Benefits 4%
Avoidance of Undue Discrimination 4%
Simple and Easy to Understand 4%
Freedom from Controversy as to interpretation
~~~ 4%
100%
7
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Basic Concepts
^ There appear to be a wide variety of difFerent
rate structures for utilities across the U.S.
- Appears to be endless s~ructures
- Reality - they are all based upon a few basic
concepts
^ Starting point - Fixed and variable charges
- Fixed charges collect ~~fixed" costs, regardless of
the cus~tomer's level of consumption
- May be called meter charges, customer charges,
readiness to serve, etc.
lL- -S
9
Developing Fixed Meter Charges
on the Basis of Capacity
~ . . .
~ ~ ~
~ .
~ .l ~~ l-1 , I~~S~l.l E4-f ~1~'~1- j~ -1 ~ ~l ~ hl ~ 1 :
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~x~e ~~,~~~~~~~~~ ~~~ ~~ ~~~~~~~~
3/4" 30 1.00 $5.00/month
1" 50 1.66 8.30
1-1/2" 100 3.33 16.65
2" 160 5.33 26.65
3" 300 10.00 50.00
4" 500 16.66 83.30
6" 1,000 33.33 166.65
8" 1,600 53.33 266.65
10" 2,300 76.66 383.30
12" 3,375 112.50 562.50
[I] A W WA G700-77 Cold Water Meters - Displacement Type
~`\~
70
Types of
Consumption Charges
Per
Unit
Cost
UNIFORM RATE STRUCTURE
The cost per unit of consumption under a uniform rate
structure does not increase or decrease with additional
units of consumption
Usage
Per
Unit
Cost
DECLINING BIACK RATE STRUCTURE
The cost per unit of consumptaon under a declining block
rate structure decreases wath additional units of
consumptaon
Usage
rrcees
11
Types of
Consumption Charges
(con~tinued)
Pei
Unit
Cost
Usage
Per
iJnit
Cost
INVERTED BLOCK RATE STRUCTURE
The cost per unzt of consumption under an inverted block
rate structure increases with additional unats of
consumptzon
SEASONAL RATE STRUCTURE
~eason The cost per unit of consumption under a seasonal rate
st~-ucture changes wzth time periods. The peak season is
pe~ the most expensive tame penod.
Usage
/^~~
12
Using the Basic Concepts to
Greate Rate Structures
^ AI I rate structu res m ust ba la nce the
complexity of the design to the goals of the
city and the administration of the design
^ Basic rate structure concepts may be
combined to create new structures, e.g.
seasonal inverted block rate structure
^ AII concepts noted above have their
appropriate application and use
- No single structure is dominantly used
lt~
73
Water Budget Rate Structure
~
^ Water budgets are a
structure of interest to the
' C1~/
^ In simplified terms, it is
simply an inverted block rate
structure
^ Major difference is how the
block thresholds are defined
and the criteria used to
establish the blocks
~"L - .
14
1lVater Budget Rate Structure and
City's Existing Rate Structure
^ Some may view the city's
current rate as a simplified
form of a water budget
- Attempts to define indoor,
outdoor use and excess use
- Each customer has individualized
block sizes
^ Issue: Criteria, rational and
equity of the current approach
^ Is there a sharper tool in the
shed?
l(~5
75
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Purpose of Evaluation Criteria
^ Evaluation criteria will be used to ~~judge" the
various rate struc~ures
^ Criteria is "weighted" for scoring purposes
based upon the c~ty's prioritized goals and
objectives
^ Some of the evaluation criteria is of a
subjective nature (e.g. simple and easy to
understand)
^ EES will conduct the evaluation of the rate
alternatives
l(C'~S
77
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Overview of the Evaluation
Criteria
i Effectiveness in yielding total revenue requirements
2 Revenue stability and predictability
• Revenue v~nthin range of -5% to 10% of target revenue
• From the City's perspective, rates are predictable
• Rate revenues can be projected wi#h reasonable accuracy
3 Stability and predictability of #he rates themselves
• Compared to Existmg Rates:
- Potential Impacts to a"Consenring" Customer
- Potential Impacts to a"Non-Conserving" Cusiomer
• From the customer's perspective:
- Stability (predictability) of customer's bill in the wmter period
- Stability (predictability) of customer's bdl in the summer period
- Stabili#y {predictabdity) of customer's bdl from year-to-year
~l~
19
Overview of the Evaluation
Criteria
{continued)
4 Discourage wasteful use, while promoting all
justified types and amounts of use
• Targets and encourages indoor water conservation
~ Targets and encourage outdoor water conservation
• Encourages peak use reduction
• Uses positive incentives to encourage conservation
• Uses penalties or punitive measures to discourage waste
5 Reflects all present and future cost (internalities and
e~ernalities) and benefits of providing utility service
• Reflects, under all conditions, direct and indirect costs
• Reflects, in some manner, marginal costs or externalities
6 Fair allocation of total cost of service among the
customer classes of service to attain equity.
7 Avoidance of undue discrimination in rate relationships.
• Equitable and Cost Based Across All Classes of Service
• Legal and Defendable
L/~~
20
Overview o# the Evaluation
Criteria
(continued)
8 Dynamic in its ability to respond to changing supply
and demand conditions and/or environmental concerns.
9 Simple and easy #o understand; easy to administer.
• Billing method is easy for customers to understand and
they will respond appropriately
• Technical complexity of developing the rate
• Ease of implemer~tation (billing system constraints, implementation
issues and customer education)
• On-go~ng administrative costs/issues
~ Provide on-going communication/feedback
• Anticipated public acceptance (fair and reasonable~)
10 Freedom from controversy as to interpretation
~~~
21
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Overview of the Approach
^ EES has developed twenty (20) rate structures for
evaluation purposes of which ten (10) are variations of
water budget rate structures
^ Key Assumptions
- All rates are presumed to have a fixed charge - this discussion
is focused on the consumption charge rate structure
- Endless possibilities, permutations and combinations - the city
may discover another alternative that combines the elements
of the alternatives reviewed
- Appropriateness of each structure for specific classes of service
will be reviewed in the next step of the detailed
evaluation/analysis process
- Final rate structures will incorporate an approach for drought
situations
l~~
23
Overview of the Rate Structures
RATE STRIICTURE 1- CURRENT RATE STRUCTURE
- - 0 _ ' $:1S~IS ~T , - - ° _
_, - ,
,~~
m=u=- _ _° ` -
=~~.
.~ -
~ _ , ~~
_
==' =~~ek~=~ =,"_ ``__' = ~er~ii~i~g$~aliC~C~S~;7R- _ = i~Hie$3ec~
,-- - _ ° - - -
_ _ _ _ - ~_ - - - - ~
Block 1 Based on AWC Inverted Block Price
Block 2 Set % of Block 1 Inverted Block Price
Block 3 All Usage Over Block 2 Inverted Block Price
RATE STRUCTURE 2- MODITIED CURRENT RATE STRUCTURE WITH SEASONAL RATES AND A
UIVIFORM WIN'1'ER RATE
° _ - ,~~` " _ - -
_ _ __-_ $.~4~-_ _ _ _ ,-- __~~Cf~~lCt71lI1i~~~.~~PfR~ -; . ,. _ _-=-~~#>~~1~'$~~OC~- _ --__- -
Wtnter Period -
Block 1
Summer Period -
Block 1
Block 2
Block 3
~~~
All consumption
Based on AWC
Set % of Block 1
All Usage Over Block 2
Uniform Price for Winter
Same Price as Winter
Inverted Block Pnce
Inverted Block Price
24
Overview of the Rate Structures
(continued)
RaTE STaucivxE 3- Nion~n Cuax~iv~r RaxE S~uc~r[7~ WrrF[ SEnsoxni, RnTES a~~n a
2-BLOCK WI,~'TER RATE
"==~~i~Gl[ ~ _ °`#jCk#.'j ~ ~a.5~~}21UCTC.SIZe '" - "~~ m = - - _ ~ _ "
-? ` ~ ~=-==,~- ~-
~ _ __ - = ~~ . `~a~ ~-~
Wznter Penod -
Block 1
Block 2
Summzr Peraod -
Block 1
Block 2
Block 3
Based on AWC
Al] Usage Over Block I
Based on AWC
Set % of Block 1
All Usage Over Block 2
Inverted Block Wmter Price
inverted Block Wmter Pnce
Same Pnce as Wmter
Inverted Block Snmmer Pnce
Inverted Block Sntnmer Pnce
RnTE S~ucroxE 4- SEnsoxai. RaTES Wrra F~n Txi~saoLns nrm n Urr~o~ Wu~-rEx
RATE
.. .__ - -• -- ~ -
-_ , ~ ~~"or = ~ _ =- `~° ~ ' - V- __- _
'=B~ect~ , t _ _ _ ~teamiainglilarc~~aeV -_ -_ - y~rici~ ~~ Biiuclc-_ -_
Winter Penod -
Block 1
Summer Penod -
Block 1
Block 2
Block 3
/^l~
All consumphon
Fuced Threshold
Set °10 of Block 1
All Usage Over Block 2
Umform Pnce for Wmter
Same Price as Winter
Inverted Block Price
Inverted Block Price
25
Overview of the Rate Structures
(continued)
RATE STRUCTURE 5- SEASONAL RATES WTTH FIXED THRESHOLDS AND A 2-BLOCK WINTER
RATE
__ ° _ -- -- - - - • -- ----
_" _ e~~S'IS=~O~' ~-- ` - _ - ~ - ---
' ="'~ '~ „° _; - _`- - '_
~ -- =` ~~~ =~~ = _ -_' `= = == :~(!~2~ ~ ~
-- ~ r,- _- ~ _- - ,_ , ~- ., ,~ - , -- ~~`1C~lig ~f-~~~tiC~
Winter Period -
Block 1 Fixed'I'hreshold Inverted Block Winter Price
Block 2 Ail Usage Over Block 1 Inverted Block Winter Price
Summer Period -
Block 1
Block 2
Block 3
~~1~
Fixed Threshold
Set % of Block 1
All Usage Over Block 2
Same Price as lst Block Winter
Inverted Block Suminer Price
Inverted Block Summer Price
26
Overview of the Rate Structures
(continued)
RATE STRUCT[JRE 6- SEASONAL RATE WTTH AN AWC THRESHOLD BASED UPON WATER
SUPPLY AVAILABII,ITY AND A~BLOCK WIlVTER RATE
` _ =m -__- _$~~~~`, -= _ '° _ _ " - _~_ -
~. :- ---
_ _ ~_ 1 a
~ ,~ ~_._,
~31~±~~ _- ~t~eriirinini~ ~l(iC~e~l~'== - - ° =~ (f~ ~Ie ~i~tiC~ = ° -
_ ~ _
- ~ - - ~ - -,---,_'-,-~_ -- _ - ,
-- ~
Winter Period -
Block 1
Block 2
Summer Peraod -
Block 1
Block 2
Block 3
Based on Adj. AWC~I~
All Usage Over Block 1
Based on Adj. AWC~I~
Set % of Block 1
All Usage Over Block 2
Inverted Block Winter Price
Inverted Block Winter Price
Same Price as 15C Block Winter
Inverted Block Summer Pnce
Inverted Block Sumtner Pnce
I'~ AWC block size established annually, on the basis of supply availability, using a
predetermined and fixed sliding scale
~l~
27
Overview of the Ra#e Structures
(continued)
RATE STRUCTURE 7- SEASONAL RATES WITA A FIXED THRESHOLD ADJUSTED BASED UPON
WATER SUPPLY AVAII,ABILITY AND A 2-BLOCK WINTER RATE
__ : ____ _ `$~~''' ° -
~~'- _ _ °- __ _ ,=~G~N1I1~~~i~~"~ ' ,_- ~ ; -'s~ii~#-~~~~~ _ _ -_
Winter Period -
Block 1
Block 2
Summer Period -
Block 1
Biock 2
Biock 3
Fixed Threshold~l~
All Usage Over Block 1
Fixed ~hreshold~i~
Set % of Biock 1
All Usage Over Block 2
Inverted Block Winter Price
Inverted Block Winter Price
Same Pnce as 1S` Block Wmter
Inverted Block Summer Price
Inverted Block Summer Price
~l~ Threshold size established annually, on the basis of supply availabihty, using a
predetermined and fixed sliding scale
/^l~
28
Overview of the Rate Structures
(continued)
RATE STRUCTURE $- SEASONAL RATE WTl'H FOTR SUMMER PERIOD BLOCKS~ USING AWC
AND A UNIFORM WINTER RATE
- 3'= _=_ _ _-°_ _ _ =:~ =m -___ . - °_
- = -- - --~~~5 c° _ - _"_-``~ '
_, _r , -_ __, _ _ ._
= ~ ~~~£ ` ~ ~I~~~ ~tlC~~~C` _- _ _ =~~~aA~~~~~#)£~- -
Winter Period -
Block 1
Summer Period -
Block 1
Block 2
Block 3
Block 4
1^l~
All consumption
Based on AWC
Set % of Block 1
% Range of Block 1
All Usage Over Block 3
.
Uniform Price for Winter
Same Price as Winter
Inverted Block Price
Inverted Block Price
Inverted Block Price
29
Overview of the liate Structures
(continued)
RATE STRUCTURE 9- SEASONAL RATE WITH FOUI2 SUMDZER PERIOD BLOCKS~ Usmrc n Fr~n
TF~RESHOLD AND A UNIFORM WINfiER RATE
___ __~ _
_= = mm- = _ _ " ~ ~'IS ~ _ - ` _ ° »
_ '" -- ` - ~'_ ~_ - _
- _ °_~~~t'° __ __ _ --_ ~~'3~U -'~~ ~3~ - ~~£~~iiC~ _
--"_ := ~,__~_,_„ - -` -_-_ ~~ ~__~~ --_ _° --_ ~~ - - ~ - -
4[~inter Period -
Block 1
Summer Period -
Block 1
Block 2
Block 3
Block 4
All consumption
F~ed Threshold
Set % of Block 1
% Range of Block 1
All Usage Over Block 3
Uniform Price far Winter
Same Price as Winter
Inverted Block Price
Inverted Block Price
Inverted Block Price
RATE STRUCTIJRE IO - TOP SCORER OF RATE STRUCTURES 1- 9~ PLUS GOAL BASED
INCENTIVES
If user is below their goal, they receive a discount. Size of the discount is dependent upon their
variance from the stated goal. Discount woutd only apply to the summer period.
(/i\rvi.i
30
Overview of the Rate Structures
(continued)
Ra~ STxucru~ 11 - Iivnoox WATEx UsE BASID UroN ~ Irmivlvu.~,'s AWC, Wr~
OUTDOOR USE DETERMIlVID &ASID UPON CUSTOMER SPECIFIC LOT SIZE/IRRIGABLE AREA.
Bu,i.nvc PEiuoD Gonrs a~ AnJUSTEn Fox Ac~ruai. W~~ .~vv ET. FoxwAxn
LooxnvG Gonr,s A~ Co~~invicn~v Vin ~ MoNTxr.Y Bu.LUVC STn~n~rr.
::-- - --- - - -- -
~ ~,~ ~ ° - _ -__-_--
_ °
- _ c4i2 -_ - _ __ ~~~_ ___ _ _ __ ___ ___ __ _ _ _
' -: m ~~~°=~===a =_ -- °~~ _ __ --_ ~~~~£ - - __--- - ~ ~11~,~+'~~G~IiC~-°--- ` -
Block 1 Individual~zed AWC
Block 2 Based on Specific Lot Size,
and Adjusted for ET
Block 3 All Usage Over Block 2
~^~~
Inverted Block Price
Inverted Block Price
Inverted Block Price
31
Overview of the Rate Structures
(continued)
RATE STRUCTURE 12 - INDOOR WATER USE BASED UPON NiJB~ER OF OCCUPANTS, WITH
OUTDOOR USE DETERMINID BASID UPON CUSTOMER SPECiFIC LOT SIZE/IRRIGABLE AREA
AND TYPE OF TURF PLANTTNG. BILLING PERIOD GOALS ARE ADJUSTED FOR ACTUAL
WE.ATHER AND ET. FORWARD LOOKING GOALS ARE COMMIJNICATED VIA THE MONTHLY
BILLING STATEMENT.
,,,,, - - _-=~ - -- -
~ t_-,=°;,m==',"~,t"° - =- =-~ -
= " ' - _ - - - -i B~siS~eb€=: _ _ - _ _ _ _ _ =
"" """ m'.1i7:~ "" " "~ _"" - ` ~` ~ '
- -- --- -- -~ - -". - _ --- ~ - ~ - ___ _ _ =~~t1C~'~3L~ ; Y - _ _~I3C#Ii~mO~ ~~1C=$IS-G~ _- ~ _
Block 1 Based on # of Occupants
Block 2 Based on Specific Lot Size,
Turf Type & Ad~usted for ET
Block 3 All Usage Over Block 2
~1~
Inverted Block Price
Inverted Block Price
Inverted Block Price
32
Overview of the Rate Structures
(continued)
Rn~ STxucTUxE 13 - INVOOx Wn~~ UsE BnsEU UroN ~ IlvnivivuaL's AWC, Wrrg
Otrrnoox Us~ DET~hmvEn BASEn UroN CusTOh~ SrEC~c LoT S~/IiuuGnsLE A~n.
SUCCEEDING BLOCKS BASED UPON RELATIONSHIP TO OUTDOOR GOAL. BILLING PERIOD
GOAIS ARE ADJiJSTID FOR ACTUAL WEAT~R AND ET. FORWARD LOOHING GOALS ARE
Co~vNicn~n Vir, ~ Moriz~,Y BII.LUVC STa~~ntz•.
~ _ _ , _ _ _ ~ ~ „ ~ _
_ _ ° _ _ ~~~ariE;=j =_ =-- -
~ = .e ~ ~ __ _ - ~_ ~~ ~ , _
m ~,
_=, - - - __ _ -
• --, - ~ - `~ _ - _
~iek °; . = _ ,_ '= l3e'~e~~,~ie~C ~ : =~emg iif~~ie ~nek _
Block 1 Individualized AWC Inverted Block Price
Block 2 Based on Specific Lot Size
and Adjusted for ET Inverted Block Price
Block 3 101% to 150% of Goal Inverted Block Price
Block 4 Over 150% of Goal Inverted Block Price
~~~
33
Overview of the Rate Structures
(continued)
RATE STRUCTLTRE 14 - INDOOR WATER USE BASED UPON A FAED THRFSHOLD~ WITH
OUTDOOR USE DETERNIINED BASID UPON CUSTOMER SPECIFIC LOT SIZE/IRRIGABLE AREA.
SUCCEEDING BLOCKS BASED UPON RELATIONSHIP TO OUTDOOR GOAL. BILLING PERIOD
GOALS ARE ADJUSTID FOR ACTUAL WEATHER AND ET. FORWARD LOOHING GOALS ARE
COMMUNICATED VIA THE MONTHI,Y BILI,ING STATEMIIVT.
_ _ __ _ = _ _- _ _ ` - m:~~~~'_; , ° = == ~~ - `_ - - -_ "_
; _ '_ `~ili~ " - _ ; _ ~E~!CTI~lIA~I~ ~~[IC~ ~7Z+C = - - _ ~!t'~~it~ ~ ~~ =
mm m - -
Block i Fixed Threshold Inverted Block Price
Block 2 Based on Specific Lot Size
and AdjusYed for ET
Block 3 101% to 150% of Goal
Block 4 Over 150% of Goal
~~~
Inverted Block Price
Inverted Block Pnce
Inverted Block Price
34
Overview of the Rate Structures
(continued)
RA~ SrxucTUxE 15 - Ixvoox WaT~ UsE Bas~n UroN ~ Ilvnivrouai,'s AWC, Wrizi
OUTDOOR USE DETERMINED BASED UPON AN ASSUMED "TYPICAL" LOT SIZE AN~
IRRIGATION REQUIREMINTS. SUCCEEDING BLOCKS BASED UPON RELATIONSffiP TO
OUTDOOR GOAL. BILLING PERIOD GOALS ARE ADJUSTED FOR ACTUAL WEATAER AND ET.
FORWARD LOO%ING GOALS ARE COMMiJNICATED VIA THE MONTI~LY BILLING STATEMIIVT.
" _- -___-= _- --_ __ € _-_ ~_` _==~~~3'_ ~-- _ -_ _ --=m - --- -- - -----=- -m --
- _ -- n°~r-°- _
- _ ~~~~. ~_ , ~, = __- - m ~~r#171~~~~Q~~. ~T~C _~ _-_ _ p ° -_ - ` ~~13iL9Ilj~y'-il~~~1'C~8['~i _ " m
Block 1 Individualized AWC Inverted Block Price
Block 2 Based on "I'ypical" Lot Size/
Typical Weather/Water Supply
and Adjusted for ET Inverted Block Pnce
Block 3 i01% to 150% of Goal Inverted Block Price
Block 4 Over 150% of Goal Inverted Block Price
/^i~
35
Overview of the Rate Structures
(continued)
RATE STRUCTURE IC - FIRST BLOCK WATER USE BASED UPON 'PHE CUSTO~R CLASS
AVERAGE WATER USE~ WITH OUTDOOR USE DETERNIINED BASED UPON AN ASSLIMED
"Ti'PICAL" LOT SIZE AND IRRIGATION REQIIIREMENTS. SUCCEIDING BLOCKS B~,SED UPON
R~[.nTTONS~ To Ouivoox Goar,. Bu.LmrG PEiuov GoaLS ~ Av,T[JSTEn Fox Ac~ai.
WEATHII2 AND ET. FORWARD LOOKIlVG GOALS ARE COMMIINICATED VIA THE MOl~'THLY
BILLING STATEMENT.
_ m$~~lC~
Block 1
Block 2
Block 3
Block 4
~~ees
~~ ~#)I`
~3E#£' _~i~lg ~18ck_~ize =
Class Average WaterUse
Based on "I'ypical" I.ot Size
and Adjusted for ET
101% to 150% of Goal
Over 150% of Goal
` m =
~ d_ m mm
_
_ ~iciug ~t=ihe ~~cl~
Inverted Block Price
Inverted Block Pnce
Inverted Block Price
Inverted Block Price
36
Overview of the Rate Structures
(continued)
RATE STRUCTURE 17 - INDOOR WATER USE BASED UPON A FIXED THRESHOLD~ WITH
OUTDOOR USE DETERMINED BASED UPON AN ASSUMED "TYPICAL" LOT SIZE AND
IRRIGATION REQIJIItEMENTS. SUCCEEDING BLOCKS BASED UPON RELATIONSffiP TO
OUTDOOR GOAL. BII,LING PERIOD GOALS ARE ADJUSTED FOR ACTUAL WEATAER AND ET.
FORWARD LOOKING GOALS ARE COMMiIlVICATED VIA THE 1VIONTfII.Y BILLING STATEMENT.
, , ,- _„- ~ n.. ; _
-=- -_-- --_- " -=- --- - ----- -`-_"-~=.~.'~15~~.`,'"='__~ __ -° _-_-`-=-- - - - - - _ -__ - _--
- - - - f~ v - m_ ,z__-- ms~,- - - ---- - -- --
'_~ _=G - --- =° - - °_-_ ---- ° __ --- - --- - -- -
--'----~~~~;~5•_ .w.=~_" _--~~1~~~y~~C~-.~f'17R,=~--- -- --`~'tLII1~~~~~C~~~~i~C~ -- -
Block 1 Fixed Threshold Inverted Block Price
Block 2 Based on `°Typical" Lot Size/
Typical Weather/Water Supply
and Adjusted for ET Inverted Block Pnce
Block 3 101% to 150% of Goa1 Inverted Block Pnce
Block 4 Over 150% of Goal Inverted Block Pnce
* This rate structure most closely matches the rate structure and approach used by
Irvine Ranch Water District.
L^ l~~iri
37
Overview of the Rate Structures
(con#inued)
RATE STRUCTURE 18 - FIItST BLOCK IS THE SUM OF INDOOR AND OUTDOOR ALLOCATIOlr,
AND SUCCEEDING BLOCKS BASED UPON RELATIORSHIP TO FIItST BLOCK GOAL. BILLING
PERIOD GOALS ARE ADJUSTED FOR ACTUAL WEATHER AiVD ET. FORWARD LOOKING GOALS
A~ CoMntuNica~v ViA ~ Mo~L~ Bu,r,inG STA~~Eiv~r.
,., ~~
m~- ~ _ ,
- _ " - ~+is~i~r ° _ _ - _ _=__~ ° m m
, - -- --- - ~ ~ m - - _
~_-~ ,~=
' =~' _° ~ae~€ - ; ' =3 = =#~te~~ ~~~k~Si~ = c° _ _ ~~o~~h+eBinc~
-- - : - - _ _ ~~ - - - -_ _ _
Block 1 Sum of Indoor & Outcloor Inverted Block Pnce
Block 2 101% to 150% of Goal Tnvertecl Block Pnce
Block 3 Over 150% of Goal Invertecl Block Pnce
/~l~
38
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Moving Forward - Next Steps
^ Task 1.5 - Conceptual
Review of Alternative Rate
Structures
- September WRAB Meeting
- Bring back the 3- 5 rate
structures for further review
and analysis
~~~
40