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Home My WebLink About4 - Utility Rate Structure and Billing System EvaluationCITY OF BOULDER WATER R~SOURC~ ADVISORY BOARD AGENDA ITEM MEETING DAT~: September 15, 2003 SUBJECT: Staff and Consultant Presentation regarding the Utility Rate Structure and Billmg System Evaluation REQU~STING DEPARTM~NT: Ned Wilhams, Director of Pubhc Works for Utihhes Joanna Crean, Pubhc Works Administratoi Carol Lmn, Utihties Financial Manager BOARD ACTION REQUESTED: None at this time. FISCAL IMPACT: None at this hme. Tom Gould from Economic and Engmeering Services, Inc (EES) will be attendmg the meetmg to contmue the Water Rate Structure and Billmg System Evaluahon with the WRAB The presentation will include: review the prioritization of rate design goals; review the evaluation crrteria; review the process used to evaluate the rate structures; review the results of the evaluation process including the top scormg rate structures that will be evaluated in further detail. There will also be a brief update on the utilrty bilhng system evaluation. Attached are the materials that will be covered. Attachment A: Technical Memorandum 3- Evaluation of the Alternahve Rate Structures Attachment B: Handout of the PowerPoint Presentatron - Review of the EvaluaY~on of the Alternative Rate Structures CITY OF BOULDER Technicai Memorandum 3 Evaluation of the Alternative Rate Structures September 8, 2003 Prepared by: Economic and Engineering Services, Inc. Bellevue, Washington Introduction In order to evaluate the various alternative rate structures, the previously defined rate design attributes must be prioritized, the evaluation criteria developed and weighted based upon those prioritized attnbutes, and each rate structure must be evaluated and scored against those criteria. This techmcal memorandum will review each of these elements in the evaluation process. At the end of the evaluation process, the city should have narrowed down the possible rate structure alternatives from 22, to 3 to 5 that will be analyzed further. Prioritization of the Rate Design Attributes The first step of the evaluation process was to prioriUze the previously defined rate structure attributes As will be recalled, these attributes, also referred to as goals, were defined usmg James C Bonbright's Attributes of a Sound Rate Structure. These attributes can be found m BonbrighYs Principles of Public Utility Rates.l For purposes of tbis study, the ten attributes needed to be priorihzed. To accomplish this, city staff inembers and the individual members of the Water Resources Advisory Board (WRAB) were asked to hst their top 5 goals. Each mdividual was provided wiCh a wntCen list of the ten attribuCes and asked to place a"1" by their top goal, a"2" by their second goal, and so on, until they had selected their top 5 attributes. From each of the mdividual talhes, a final priontization list was created based upon the weighted number of "votes" each attribute received. Far a goal that received a top (ls`) priority, it received 5 pomts for each ls` place vote. For a second place vote, the attribute recerved four pomts, and so on. The points received for each attribute was summed and the attributes were then placed in a top to bottom order. Each of the rate attributes received at least one vote However, rt is interesting to note that both the WRAB and city staff selected the same top five priorihes, but not m the same order. For purposes of summanzing the priontized attrtbutes, the results are summarized between WRAB and city staff. Each party has a different and relevant perspecrive of the goals and ob~ectives m settmg the rates, and it was concluded by EES that neither parry's viewpomt should take precedence over the other. Provided below is a summary of priorirized attributes separated between WRAB and city staff. ~ James C Bonbright, Albert L. Damelsen and Davtd R Kamerschen, Prmc~~les orPublic Uulu~Rates, (Arlmgton, VA Publ~c Util~ues Report, Inc , Second Edrtion, 1988), p 383-384 ~apL Technlcal Memorandum 3- Evaluatlon oi the Altemative Rate Structure 2 C~' 7 City oi Boulder Discourage Was[eful Usc Dynamic Ab~hty to Respond To Changmg Supply & Demand CondUions Peir Allocation of Costs to Attam Equiry Revenue Stabil~ty and Pred~ctab~hty Yields Tolinl Revenue Reqmrements 1 Yields Total Revcnue Requirements 2 Revenue Stab~lity and Predictabihty 3 D~scourage Wasteful Use 4 Fair AllocaGOn of Costs to Attam Squity 5 Dynamic Abilrty to Respond to Changmg Supply and Demand Condi6ons In developmg the evaluation criteria, the top priority of both WRAB and city staff will be weighted equally and given 20 percent each of the fmal weighting. Each of the other eight remammg attributes will be given a lesser weighting in the evaluation piocess. Groen this prioritized list of attnbutes, the focus can shift to the development of the evaluation criteria that will be used to evaluate the various rate structures. Development of the Rate Structure Evaluation Criteria The next step in the rate structure evaluation process is to develop the evaluation criteria. The evaluahon criteria will be used to "judge" each of the various rate structures. The top scormg rate structures, using these evaluahon cnteria, will be considered for further review and analysis. In developmg the evaluation critena, the first step was to hst the relevant critena for each of the ten rate structure attributes. In some cases, this process created multiple sub-criteria for a smgle rate structure attribute For each criteria, a range of relationships was created as to how well the rate structure met that crrteria An example of the development of a criteria is shown below in Figure 1. //~mt,+ Technical Memorandum 3- Evaluatlon ot the Alternatlve Rate 8tructure ~~ ~'~`7 CI4y of Boulder pEVENUEpELATEDATTHI8UfE5 1 ERectlveneeeinyleltlingtotelrevenuerequlrementa ~eilnitlon The releeliucturevAllbatlevelopedta coverlheto~elcosisal Nllltyoparetlors,undere"ceshneeds epproech-aparetlnB~~Pllel tlebl seM~ carefage entl reeerves EYelustbnCrtterk • Pete SVUCNre IB deslgnetl to equal (tergel) the clty'e revenuereaNremente(le thetMelrevenuerequlrertente aretlMtledbytheblllingunlls wslanersantl~egeto equel ihe rete) [bmmenfd9aele /a Refing 4nleaNoRda~onsNp roIBeG eRav ulf Sorre fl018110nehl Good Re18110n6N1 Very5trag Reld~icn6fil 100°hRelsllonehlp ~OIhBRav ul! For each of the attiibutes, the criteria were listed and the basis foi a low to high score defined. In some cases, the criteria are sub~ective and will reqmre judgment on the part of the evaluator to determme a fair score. However, by creating a broad range to evaluate and score each rate structure, the sub~ective measures should be relative to each of the structures evaluated. The evaluation cnteria was reviewed by city staff and presented Co the WRAB pnor to undertakmg the evaluation process. Given the above framework, the evaluation criteria were developed for each of the rate structure attributes. Provided below m Table 2 is a summary of the evaluation criteria. ~~ Technlcal Memorandum 3- Evaluatlon of the Alfernatlve Rate Struc4ure City of Boulder 2 Revenue stability and predictability ^ Revenue withm the range of -5% to +10% of target revenue ^ From the city's perspective, rates are predictable ^ Rate revenues can be pro~ected with reasonable accuracy 3 Stability and predictaUility of the rates themselves ^ Compared to exishng rates• - Potenhal impacts to "conservmg" customers - Potential ~mpacts to "non-conservmg" customers ^ From the customer's perspective: - Stabihty (predicCabihry) of cusCOmec's bill m the wmter penod - Stabihty (predictabihty) of customer's bill in the summer period - SCability (predictabiliCy) of customec's bill from year-to-year 4 Discourage wasteful use, while promoting all justified types and amounts of use ^ Targets and encourages indoor water conservation ^ Targets and encourages outdoor water conservatron ^ Encourages peak use reduction ^ Uses positive incentives to encourage conservat~on ^ Uses penalhes or pumhve measures to d~scourage waste 5 Reflects all present and future costs (internalities and externalities) and bene~ts of providing utility service ^ Reflects, under all conddions, d~rect and mdirect costs ^ Reflects, m some manner, margmal costs or extemahhes 6 rair 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 8 Dynamic in its ability to respond to changing supply and demand conditions and/or environmental concerns 9 Simple and easy to understand; easy to administer ^ Bilhng method ~s easy for customer to understand and customer will respond accordmgly ^ Techmcal complexity of developmg the rate ^ Ease of ~mplementadon (b~llmg system constramCS, implementation issues and customer educahon) ^ On-gomg admmistratrve costs/issues ^ Provtde for on-gomg commumcation/feedback ^ Anhcipated pubhc accepCance (fair and reasonable~) 10 Preedom from controversy as to interpretation nyep~.+ Technlcal Memorandum S- Evaluatlon of the Altemative Rafe Sfrueture ~~~C~~ Ciky of Boulder 1 Effectiveness in yielding total revenue requirements 1 4 3 6 8 9 2 7 5 10 Atki~~bute l~e~eki~kf4~ Effectiveness m yielding total revenue requirements ........... . Discourage wasteful use, while promoting all ~ustified types and amounts of use ......... ......... ... ......... Revenue stab~hty and predictabihty. ........ . ...... Fair allocahon of total cost of service among the customer classes of service to attam equity ... . ...... Dynamic m its ab~hty to respond to changmg supply and demand condihons and/or environmental concerns Simple and easy to understand; easy to admm~ster ........... . Stability and predictab~lity of the rates themselves ........ Avoidance of undue discriminahon m rate relationships Reflects all present and future costs (mternalihes and 1't d b fits of rovidi utiht service ;, ,`V~'~~~7~t1~~ , .......... 20% ....... 20% ..... 15% ..... . 15% . ...... . . . 10% . ........ 8% ....... . 6% ......... ...... 3% externa i ies) an ene p ng y ............. Freedom from controversy as to mterpretation . .......... . ........ 2% ....... 1% Total Weighting ..................................................................................100% In viewing the above weightmgs, tt should be noted thaY Yhe "bottom 5" attributes were also prioritized and given different weightings. In prior discussions with WRAB, rt was mitially proposed that the "bottom 5" attributes would be weighted equally. After further thought, it was concluded that these attributes should also be prioritized and given different weightmg based upon the votes received in the prioritization process. By domg so, the "bottom 5" was prioritized and weighted usmg the same methodology as was used for the "top 5." Usmg the above percentage weightmg, maximum scores for each attribute were developed. The sum of the Yotal pomts for a"perPect" raCe structure was set equal to 400 points. The total of 400 points was then divided between the ten attributes based upon the weighting shown in Table 3. Therefore, as an example, a high score on the first attribute; effectiveness in yielding total revenue requirements, was set equal to 80 points (20% x 400 points = 80 pomts). Scormg the lowest ratmg would have the opposite impact and score; a-80 points. A score m the middle was considered to be neutral and set equal to 0(zero) points. Usmg this approach to scoring, a rate design may have very strong attributes in one area, but that positive attribute may be counter- balanced or ouYweighed by a negative attnbute All rate structures, and Cheir effecYiveness, are the sum or net of their positive and negat~ve atrributes. By usmg negahve scores for low ~/~ Technical Memorandum 3- Evaluatlon of the Alternative Rale Structure 6 ~~~ CIly of Boulder The final step of creatmg the evaluation criteria was to determme the relative weightmg that should be applied to each attribute. Table 3 provides a summary of the weighting by major attribute, placed m the order of importance (priorrty/weightmg). attributes, it provides the appropriate counter-balance withm the scormg to properly reflect the lower or negatrve atYributes. Process Used to Score and Evaluate the Rate Structures It was determmed that it would be most appropriate for EES to evaluate and score each of the rate structures using the evaluation criteria discussed above. To atd in this process and help assure a fair and balanced evaluarion process, EES retained Mr. Tom Chesnutt of A&N Techrucal Services, Inc. to panc~ipate in the evaluarion process. Mr. Chesnutt is nationally recognized for his work in the area of conservation-based water rates and his research and work with utilities in Califorma using water budgets.2 The evaluahon panel consisted of Tom Gould, EES Project Manager, Shawn Koorn, EES pro~ect rate analyst and Tom Chesnutt, A&N Techmcal Services. The process used to evaluate the rate structures was a"round table" discussion of each rate structure and the group's consensus on the scoring of each rate structure In other words, the rate structures were not scored by each individual evaluator, and the final results reflect the average evaluatron Rather, each rate structure was evaluated and scored based upon the discussion and general consensus of the evaluaCors. While different mdividuals may score the rate structures differently than shown withm this study, EES believes that the process used to score and evaluate the rate structures was conststent in both its application and the scores provided Summary of the Rate Structure Evaluation and Scoring Twenty-two (22) rate structures were evaluated m this study. The origmal list of iate structures for evaluation purposes, presented by EES to the WRAB, was twenty (20). The WRAB identified two additional rate structures to be evaluated. These have been Ydentified as rate structures 21 and 22. The first rate structure (21) uhlizes legal occupancy to determme the first block of consumphon. The second block is based on specific lot size and uses historical average monthly ET There is a third block that is for all excess use. The second rate structure the WRAB requested to be evaluated was based upon the usage assumptions contained within the city's plant mvestment fees. Under this rate structure, the first block could be based upon the assumed average day consumption used withm the city's plant mvestment fees. The second block could be based upon the assumed peak-use assumptions withm the fees. The thud block could be the "excessive use" block. The final component of this rate sriucture was the "loaning" of unused water Those individuals that did not use their allotment of water could loan or rent the water to other users. A summary overview of each of the rate structures evaluated is provided as an appendix to this memorandum. The order of each rate structure shown m the appendices is also used within the summarized scormg of the rate structures. Z David M Pekelney and Thomas W Chesrmtt, Landscape Water Conservahon Programs, Svaluation of Water Budget Based Rate Structures, Picpared for thc Metropolitan Water Distnet oP Southern Cahfomia, (A&N Techmcal Secvices, Inc , September 1997) ///epC Technical Memorandum 3- Evaluatlon o( 4he Alternative Rale Struclure 7 ~~~C~'~ Clty of Boulde~ Shown below in Table 4 is a summary of the ~i p 5 rate structures, as scored, usmg the evaluation criteria. I R (~ _ _ .....~ eli~~I_ ~~ - ~etl~.i~ ~~~i~I `~~e ~i~ ~ Ir~ ~~3~ i~~~' ii~ .. ~~ ~ ~ ~ I~ i~i~3~te ` _ i`{'i(~4Qix~ i i i ~ i ~ ~ i~~ ii i i ~ i ~iiee ~ ei' r ~~~v1?~A~k4!!~Q ~ - ~- ," 1„ _ ' ~`~~P~~~`qPG~ ~ _ ~ }~f1~IlItX~RF ~ ' , e_ , ~ ~~. ~ ~ ~ ~„ ~',~~4~C ~'~1PitLl11~ ~14~4'~~"!~?krtlll.' ~~_ ~ ~ ,- , , ' ~ , ~ ~ ~~~}, Itf.~u~'~{Q~~~ °„ _ 10 Top scorer of rate structures 1- 9(#5 Seasonal rates with fixed thresholds and a 2-block wmter ra,te), plus goal based mcentives. 213 5 Seasonal rates wrth fixed Chresholps and a 2-block wmter rate. 195 19 Top scorer of 11- 18 (#17 4-block water budget, block 1- fixed threshold, block 2-"typical" lot ize and irrigahon requirements, succeedmg blocks based on relatt nship to outdoor goal), with the target set and fixed each year Nq monthly ad~usCments for weather and ET 20 Top Scorer of 11- 19 (#19 4-block water budget; block 1- fixed Chreshold, block 2-"typical" IoC ize and ~rrigahon requirements, succeeding blocks based upon rel t~onship to outdoor goal Target is set and fixed each year No mo thly ad~ustment for weather and ET ), plus a discount for city appxoved ~rcigation systems with ram sensors and weather-based controllers. I 17 Indoor water use based upon a fixled threshold, with outdooc use determmed based upon an ass~amed "typical" lot size and ~rrigahon requirements. Succeeding blocks based upon relahonship to outdoor goaL B~llmg period g als are ad~usted for actual weather and ET Forward lookm~ goals are commurucated via the monthly b~lhng sCatement. 7 Seasonal rates with a fixed threshpld ad~usted based upon water supply availabilrty and a 2-block Pvmter xaYe 187 181 175 ]75 As can be seen from the above table, there a was a he for the fifth highest score, so both 5." In viewmg Table 4, three of the iaU structures and three are variations of season. that the rate structures shown above m Tabl~ the city. ; actually six rate structures in the "Top 5." There ate structures have been mcluded within the "Top structures are variations of "watei budgeY" rate rate structures. It is the recommendation of EES 4 be further analyzed for their appropriateness for In viewmg Table 4 and the results, it is important to understand and recognize that the top scorer does not imply the "best" rate structure, n r does the lowest scote imply the "worsP' rate structure. Each rate structure must be furth r analyzed, evaluated and judged based upon the city-specific applicadon or use of that rate st ucture Simply staCed, one rate structure that may work well for smgle-family residential custo ~ ars may not wark well or be appropriate foi multi- - ___ r ///~ Technical Memorandum 3- Evaluatli n of 4he Alternafive Rate Skructure ~~~ Clt of Boulder s family or commercial/industrial customers. At the same time, as these iate structures are being further evaluated, elements of those rate sCructures that are not mcluded m the "Top 5" may be utilized and mcorporated mto the "Top 5" to further enhance and improve a rate structure (e.g. legal occupancy as a method of estabhshing first block consumption for multi-family customers). ;~, L ~2 .. ~y „ , c i~, , _ ;, „`,t ~ ~ - = Rak~ Str'uatu~c~;1~~~Ce1pt~4d i ~~ ~~~ir ~~~ ~ ~ ~~nE ~ ~ i~ ~ v »i~~ ., 1 Current rate stmcture . ..... . . ....... .... .. ....... . ....... . 139 2 Cunent rate structure modified for seasonal rates; 1-block winCer ............ 146 3 Current rate structure modified for seasonal rates, 2-block wmter. . 143 4 Seasonal rates, fixed threshold, 1-block wmter. ........ .. ..... .. 156 5 Seasonal rates, fixed threshold; 2-block wmter .. ........ .. .... .. ..... 195 6 Seasonalrates, AWC threshold based upon water supply, with 2-block wmter ......... ..... . ......... ......... . ......... . .. 170 7 Seasonal rates, fixed threshold based upon water supply, with 2-block wmter.... . ........ ...... ........... ............. ............ ]75 8 Seasonal rates, 4-block summer, 1-block winter, uses AWC.... .. ....... 146 9 Seasonal rates, 4-block summer, 1-block winter, uses fixed threshold ......... 156 10 Top scorer of raCe stmctures 1- 9(#5), plus goal based mcenhves ...... 213 11 3-block water budget, block 1- AWC, block 2- customer specific lot size, ad~usted for weather and ET ........ . ............ ............. 154 12 Same as t 1, with addiuon oF customer spemfic turf type ..... .... . 139 13 4-block water budget, block 1- AWC, block 2- customer specif~c lot size, succeedmg blocks based upon relahonship to outdooi goal . 158 14 Same as 13, but uses a fixed threshold for block I ........... . ........ .. 161 15 4-block water budget; block 1- AWC, block 2-"typical° lot s~ze, succeedmg blocks based upon relat~onship to outdoor goal .......... 165 16 Same as 15, but uses class average usage to establish block 1 ........ ............ 170 17 Same as 15, but uses a fixed threshold to establish block 1 .. ..... . ........ 175 18 3-block water budget, indoor and outdoor is summed as block 1 ...... .. 123 19 Top scorer of 11 - 18 (#17), with the target set and fixed each year, no monthly ad~ustments for weather or ET ....... ...... . ... .. . 187 20 Top scorer of 11 - 19 (#19), wtth a d~scount for city approved imgation systems w~th ram sensors and weather-based controllers ........... ....... 181 21 3-block water budget, block 1 based upon legal occupancy, block 2- specific lot size and uses historical average monthly ET .. ......... ..... 163 22 3 block, blocks based upon PIF and meter s~ze, water can be "loaned"..... . 142 __ _ ~/e~+ Techntcal Memorandum 3- Evaluatlon of khe Alternatlve Rate Structure 9 ~~~«'~ Ciky of Boulder Provided below in Table 5 is a summary of the scormg for a11 twenty-two rate structures As can be seen from Table 5, the scores ranged from a low of 123 to a high of 213. The city's current rate structure was scored as 139. It received this low score not necessarily because of the structure, but rather because of the way m which it is bemg admmistered between classes of service and the questions surroundmg the equity of that application. In our opinion, the city's current rate strucCure is still a valid rate structure that can be improved via changes to the way it is apphed. Summary This techmcal memorandum has described the evaluation process used to review the twenty-two rate structure alternatives. From this process, six rate structures have been identified for further analysis, review and consideration. ~AM Technlcal Memorandum 3- Evaluatlon of the Alternatlve Rate Structure 10 `~'~ City of Boulder RATG STRUCTURE 1- CURRENT RATE STRUCTORE _ r~s,r;,,, ~~~y;~„~ c~~a,y,_a,~~ ,;~~ ~s„ ~~i,~ _ : - s - -__a~~° ' i ^ - - - '~~ii„d - ~ - - ,~d;'r~,' " u~I"~`ik=ri"d~ ' } p y~. u4n ,Li` __ ~i' ~FP~,~LI ~~~.n'E,h`,'~ ~ ~rd~ i~~~~ jE;~` 5 Qi' ,~~G`~ -+'~ i c ~~,A~~i4 ,m~.,r _ I'li;<<,'~e= ~~ r = - ,I`~±,~~~~E~u~ ~°,~ ~ ~~~6~5 ~~;_~ _ „r j~M„ .,~s~ `e~r~~Si~I`r ~ ~:i`` ' `~ ~i i ~f~~ i ,~f~_a,....~ y~ ~ a _ ' 4 `' ~'y:.I ; =~6~~~„~ I „d;r~;~`a'~~i~ (C~~~j~ y''ili;,,~~~F~-i ~rv~4~~~ '`~ x A't ~, n',~°n,;~ ~°i<ili.;,,~N~;n~''„ :~ ~ ~ `'.i1~;5, ;,~_ y~ ee ~ i~Lh,a-IL ~7= ~ ~~X {v ~ }~fuµ {~ ~~rG~Ii /~}yy '~ ~~y ~~~ F"~~( "E~~ ~sitit;iPi€iGMV~,~A~a7i±}}~r#~~:jf!7ai~(~~~"'.S~i;~ `~~~t~t~°P;;~k~~F~i~~~Yr„~~'"~~~~~Ai~'~~~i~~~.r i~~~~'f~4!4~f`~~T'*`~*~:~~~'ITiF~~[kN+e~A,i~„i , , _ __a, . G , pa u'3E r ~ ~t~t .. d _ [ . _ m t, In ~,si , r L, ,-r,i l ~,~ 3 , :~^ Block 1 Block 2 Block 3 Based on AWC Set % of Block 1 All Usage Over Block 2 Inverted Block Price Inverted Block Price Inverted Block Price RAT~ STRUCTURE 2- MODIFIED CORRENT RATE STRUCTORE WITH S~ASONAL RATES AND A UNIFORM WINTER RATE Summer Period - Block 1 Block 2 Block 3 Based on AWC Set % of Block 1 All Usage Over Block 2 Same Price as Winter Inverted Block Price Inverted Block Price RATE STRUCTORE 3- MODIFIF,D CURRENT RATE STRUCT[7RE WITH SEASONAL RATES AND A 2-BLOCK WINTER RAT~ Summer Penod - Block 1 Block 2 Block 3 Based on AWC Set % of Block 1 All Usage Over Block 2 Same Price as Wmter Inverted Block Summer Price Inverted Block Summer Price ///~ Technical Appendices - Summary Overvlew of the Rate Slructures 7 ~~~ Clty of Boulder WinCer Period - Block 1 All consumphon Uruform Price for Winter Winter Period - Block 1 Based on AWC Inverted Block Winter Price Block 2 All Usage Over Block 1 Inverted Block Winter Pnce RATE STRUCTURF, 4- S~ASONAL RATES WITH FIXPD THRESHOLDS AND A UNIFORM WINTER RnTr " _ ; _ ;~;; y ~, m„ ,~, , ~r-:,,~, € ~, ;i:';;;~cf„t~r;'„=; ~i,~;;t ' _;~~ ,`i,~`~ ~°; ' ~ 4•~'F i=; t'~' ' ' ' 4 ~ ' ~' ~ ., ~:~ ; % ° ~ ;^ ; ~,,;;;,,;; a ° , ~3' n ~ ~, .i2 ' = u, ~ ~ , . '~ a' _ , ~E~M"f~ d~, ~ ~ ~~ r ~ ~q~; „ ,, e ~ , _ , ,~~ k " ,?n , `V jI~/~i'~j~ i~.v~Mvry6' ;6~i a~N~iqi~'~ u ~ G ~ y'~/q ~ ~~ny~ , ¢pyy mi ~ ~ ~~1~ pn,. ~~ _ i}~l e ' ~~ F ~ ~ ~ ~ ~~ ,r f uel3 i i ~ p~}{pjy~p` $ ~yp" p .~~ryy p'n _ "~f ` ~ F 'dii#XAA# ~ wi ~~ X~l " ' }f i IQ i 7 ~ ~~~ , ~~FT~diY q~~~ ~t€ ~ ~ i Ga ~ , „uvu~ 2 M ~{. ~ rv bd ~ „ j i ~ ~ ..5~~ ,,, - ,-., ~~ ~ i ~ r' r i u~ . ,n .~ •u ~ . ~. p _ i+2 .fl S - ~ i i _ < <I , ~~ ~mq~.. _ w Winter Pef~iod - Block 1 All consumption Uniform Price for Winter Summer Period - Block 1 Block 2 Block 3 RATE STRUCTORE 5- SEASONAI. RATES WITH FIXED THRCSHOLDS AND A 2-BLOCK WINT~R RATT Fixed Threshold Set % of Block 1 All Usage Over Block 2 Same Price as Winter Inveited Block Price Inverted Block Price i~+~i~:W,° ass ii ii ~~~~ - mc s'C €ti n F E4°~u rtiy~ n~d~ [~ lu,it= ~ i' ~~ fq~ S- {a ~_ i~ i pi+b~ n•~{d' ~C un~ 4H. ~ ' i4 iii ~: ~3, t m ry _ ~i_'} A ;~ ~ E f ~ e°{ ~ ~ y' ~ ~ ~ ' ` ~ ~ ~ 'pp ix r'~'+ ~` nx i u~~ ~~ n St' ~~- 1 ~ i,~i i ~ ,~i, am ni_ R i~ eji °~i9iri ~ °~P - I ~ {@~ 9( "i~~ ~ ~~ , u~ ~ P i3 ~ ; e dn "iiA ~ N~ `',fi .. ~~~tlfll~ y~ ' 'A "u ~ _, p~„ ,x '?,i.~.. 'ti~;;G _ ~~i~~ ~ 4 ..,. ~i~a yn ;~~~<<~y. <~~:L~~ ,{~ 4~ -y_'.~`_~';a~,f • ~,i~ ~ {E~ - ~,"x~,`I '-"° ~' pt 7~ "I.. a Sui,. U~i. i 6~n ~ J~y~~.~~ xy '~d {. ~ ~ I i ~' ~ ~ ~ ~ ~~ ' , . 99 _ ~ i n 6 ~ ~i,i ~~ n y in ~ ,~~<<:'.,jj 'y ~ j,,, r~~~~~~~",.__,."~i-e~ iap,t~,yy{~ j~~~..°I.r=~l '''0~1~ '~ t °i_ ~ i~n i /~ TM~~r E ~ ~ ~ ~ f ~ v.,a aGIiI~ ~ ~ ~( y f ~i~~ . p /6~~~ p n fil~"' ~ ^ ~v!t.~T~i I4~ifiauiW'tY~i ~I~~ P.~C pi ~~ i R~I'~ ^i~?? ~ ^PR~~~~ ~ i ' p u i' _ . a fi ~~^,~~[J.MU`kRiY M ~Y ~~ E t ., ~ ~ ~ ~ ~ ~ ~ rv ~ ih~ ,~ _ u;S=7~ ~_ ~~ i1!~ ~c~~ma~ yL ~ e eL ~ ~ - „ ~ .,, i a,M - i ~ N~~~, , _~~.~y o ieu ~i' 1 ~ ~ i,o ~„ ~ ~~~ ~ + , n ~ n Winter Period - Block 1 Block 2 Summer Period - Block 1 Block 2 Block 3 Fixed Thieshold All Usage Over Block 1 Fixed Threshold Set % of Block 1 All Usage Over Block 2 Inverted Block Winter Price Inverted Block Winter Price Same Price as ls~ Block Winter Inverted Block Summer Price Inverted Block Summer Price RATE STRUCTURE 6- SEASONAL RATE WITH AN AWC THRESHOLD BASED UPON WATER SUPPLY AVAILABILITY AND A 2-BLOCK WINTER RATE Winter Period - Block 1 Block 2 Summer Period - Block 1 Block 2 Block 3 Based on Ad~ AWC~~~ All Usage Over Block 1 Based on Adj. AWC~I~ Set % of Block 1 All Usage Over Block 2 ,, ~ ~ ~, u,x~~~,,n~rz~`~ 6 ,=e,E'-~''"~~i ~ YiA nS^fl c'e 'ei ~iu{t 9~G' ll ~"gCEPPi~nxi 5~i{I~ ~nr `+Ei. ~~ ~r~ `~) M~ g'f i f ~~i~~~ ii~~ S ( ~`~~~~~?A~~~-~~i~~~~~~~~.~ ; ~ ~!'°~ 41'i Inverted Block Winter Price Inverted Block Winter Price Same Price as 18C Block Wmter Inverted Block Summer Price Inveited Block Summer Price ~l~ AWC block size established annually, on the basis of supply availability, usmg a predetermined and fixed sliding scale ///~ Technical Appendices - Summary Overvlew of the Rake Struckures 2 ~~~ City of Boulder RATE STRUCTORE 7- SEASONAL RATES WITH A FIX~D THRESHOLD ADJUSTF,D BASED UPON WATER SUPPI,Y AVAILABILITY AND A 2-BLOCK WINTER RATE ~ ..+`z~'~~~ ~~~.n~~~~~~~~i~a~ ~=a°-"„ _~ ~~t :"i~,: ~ ~ ~ ,,ra;f;;l - ~~n;I ` '`d~-.~,i ` ~_ _ ~ ~~5+`-' ,;`,1a~~~`h "~~'=t„_ „; „ ' ~G, ' ~ ~ °`''f, u ~~ '°_' i~ "~ 'Ir ~,, ~ ;_ i;r`i,°,,, , ;!~~~~~~?~~;!~~~~?!~;~~+R E~~,, ~ „~~,F;,, ~,,, _ `,.;, Winter Period - Block 1 Block 2 Summer Period - Block 1 Block 2 Block 3 F~xed Threshold~l~ All Usage Over Block 1 Fixed Threshold~~~ Set % of Block 1 All Usage Over Block 2 Inverted Block Wmter Price Inverted Block Wmter Price Same Price as lat Block Winter Inverted Block Summer Price Inverted Block Summer Price ~'~ Threshold size established annually, on the basis of supply availability, usmg a predetermined and fixed sliding scale RATE STRUCTURE S- SEASONAL RATE WITH FOUR SOMMER PERIOD BLOCKS~ USING AWC AND A UNIFORM WINTER RAT~ Sumrrter Period - Block 1 Based on AWC Same Price as Wmter Block 2 Set % of Block 1 Inverted Block Price Block 3 % Range of Block 1 Inverted Block Price Block 4 All Usage Over Block 3 Inverted Block Price RATE STRUCTURE 9- SEASONAL RATE WITH FOUR SUMMER P~RIOD BLOCKS, USING A FIXED THRESHOLD AND A UNIFORM WINTER RATE Summer Period - Block 1 Fixed Threshold Same Price as Winter Block 2 Set % of Block 1 Inverted Block Price Block 3 % Range of Block 1 Inverted Block Price Block 4 All Usage Over Block 3 Inverted Block Price _.__._ ///AA~+ Technical Appendices - 8ummary Overview of !he Ra4e Structures 3 ~~~C~7 City of Boulde~ Wtnter Period - Block 1 All consumption Uruform Price for Wmter Winter Per~od - Block 1 All consumption Umform Price for Wiuter RATE STRUCTORE 10 - TOP SCORER OF RATE STRUCTURCS 1- 9~ PLUS GOAL BASED INCENTIVF.S RATE STRUCTURE 11 - INDOOR WAT~R USE BASED UPON THF. INDIVIDUAL°S AWC~ WITH OUTDOOR US~ D~TERMINED BASED UPON CUSTOMER SPECIFIC LOT SIZF.RRRIGABL~ AREA. BILLING PERIOD GOAL5 ARE ADJUSTED FOR ACTUAL WEATHCR AND ~T. I+ORWARD LOOKING GOALS ARE COMMUNICATED VIA THE MONTHI.Y BILLING STATEMENT. -''+d~~ dL~z.m~§~t~I',I~u~ `E~ = il~; ~~a~~_ .y ,6'p3/;~~ry z " ..~j ~~"i" _~~_- _ ; ~'~ - -~ ,7e 'ij~~ua~~4~ _u~~f _;~~i`iiEiht~u€~~ °1~~E: ' .:"~,N~ ..~#MA,~`"'"~;~a~~~:a~s~,Ji=i~,e~~air~' t~=~ ,,, ~ ,~_~ "'~~i:.',;~~~ ` ~'It+~~t j~~~~~„~;a~~ _ -Li ~2~~~Y'~+ia~~i~+I,~i~oL u~~i~~tyi' ~aoi+~v~a ~~ 't 3~Ia{qL~ni' °=Ii I3E~ Iitdv^ii~i~:~ .. ~ tv ~ _ ~ ~yil ~hil ain~_ _ E= w~y ~~ ( J .t }t ~ µ y'~ 9» I i_~ ~~lU ~ ~I ~~. tI y~ .y ~ I+~I3~1 ~~i 4 i~` 4 r' 9 '~e ~n i ov~.4~z nt~i t^., b y ~y (? Ei i "i=i ~{y dy~}~ J~ .{ ~ ~x L,nc~'7`,u I _„'nf,~#~~R~iniA~an4Xi~~~~~iR ~:~~~*i`(~`F~~hh~lhk~'~;fy~~~}'G~F~~~~~Ei ~~:~rii ~~~~`R~~isAkk&~,~A~414$'~~1'E~i~~i~ ~'4n~ai i~i vi`~n~ ~„ 'L~ ~~,~ _ t , ei:° iL~-~ «, i a i .i. , ci ~ - -~ ~,o~, i ' .,.~, ~ _ ~ , ~ . ~=~ _ ., . ' _ Block 1 Individuahzed AWC Inveited Block Price Block 2 Based on Specific Lot Size, and Adjusted for ET InverCed Block Price Block 3 All Usage Over Block 2 Inverted Block Price RATE STRUCTURF, 12 - INDOOR WATER USE BASED UYON NUMBER OF OCCUPANTS~ WITH OUTDOOR USE DrTERMINED BASED UPON CUSTOMF.R SPECIFIC LOT SIZE/IRRIGABLE AREA AND TYPE OF TURP PLANTING. BILLING PERIOD GOALS ARC ADJUSTED FOR ACTUAL WEATHER AND ET. FORWARD LOOKING GOALS ARG COMMUNICATED VIA THG MONTHLY BILLING STATEMENT. Block 1 Based on # of Occupants Block 2 Based on Specific Lot Size, Turf Type & Adjusted for ET Block 3 All Usage Over Block 2 +° "~ ~uLi ~ - "r u riErnfuh~~~xiFU' 7i.1~i~~' ~~~i~t~~uJt~i~R~~~nIYU;K_f~u~~~rc 5 ~ tl'i ~`~~~3Q~°_~~~,~~~~r~ ;~°; ~ ~,~ , Inverted Block Price Inverted Block Price Inverted Block Price ~~mt+ Technical Appendices - Summary Overvlew of the Rafe Structures 4 ~'~7 City of Boulder RATE STRUCTURE 13 - INDOOR WATER USE BAS~D UPON THE INDIVIDUAL'S AWC, WITH OUTDOOR USE DETERMINF,D BASED UPON CUSTOMER SPECIFIC LOT SIZE/IRRIGABLE AREA. SUCCEEDING BLOCKS BASED UPON RELATIONSHIP TO OUTDOOR GOAL. BILLING P1;RIOD GOALS ARE ADJUSTED FOR ACTUAL WEATHER AND ET. FORWARD LOOKING GOALS ARE COMMUNICAT~D VIA TH~ MONTHI.Y BILLING STATEMENT. ~.~E~e ~~roJ`"iK2~[~~~iyi: ;o~, ~i.i~~I,~~a~~~~nui7~S7~s~~ 's~ '1~t ~±~ ~F i;van; ~ F~,~ a' r~,{~_4iy~~ ~~4;`_ '=ln~e„~ei~~`r~ -,-'.~al ~ "~h. ,(I ~ielE~ I(a~ ~~t ~Pi ~~ fi~{ ~ iui~~ ni~~ ~~~t~ii~_ ~e '~iteu G~ ~e~iC~m~ ~''''ii~~5~~a=~~'~(s"yd,k~.~~,n=rii~:'ih_`: >e6`?.,~°q~_Fi,-+,~~~~~~~~~k~~~~I~iawti~aj~'p~,~'i~~a`«~Eau~fi'.~, ,Ii+~=g~`~T'a ildN'ao~~~~~qi"~~,,lT4,i.'.LG~J=~~,i`n'y~;-i ~~'I' ~~ _~;yy'~,a jp~ t- „jaNF='~ , ~ ; F i qjWi y _~t~,~}y~i ~}y~q { , Idi~~'Id°,`i"'-°; i,7~& q„p .~~r y "'f,E", ~ ~a.~'~Ii~~p17~~~i~E~~.~IA~.M~~°~,~ij'l,iyg'i~ ~F`~S;°e~r~i~~'R,4~~k,'~"~A~~"c~l~}a,~~~NiAfn~rir5~41~;i~~4' ro `.,,5~~~1~#pp;c{'.~f,A+~7E~~~~~tFlA;EII~r-':"tcy~', 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 RATE STRUCTURE 14 - INDOOR WATF.R USE BASED UPON A FIXF.D THRCSHOLD~ WITH OUTDOOR UST DETERMINED BASED UPON CUSTOMER SPECIFIC LOT SIZE/IRRIGABLE AREA. SUCCEEDING BLOCKS BASED UPON RELATIONSHIP TO OUTDOOR GOAL. BILLING PERIOD GOALS ARE ADJUST~D FOR ACTUAL WEATHER AND ET. FORWARD LOOKING GOALS ARE COMMUNICATED VIA THE MONTHLY BILLING STAT~MENT. RAT~ STRUCTUR~ 15 - INDOOR WATER USE BASED UPON THE INDIVIDUAL'S AWC~ WITH OUTDOOR UST DETERMINED BAS~D UPON AN ASSUMED "TYPICAL" LOT SIZG AND IRRIGATION REQUIREMGNTS. SUCCEEDING BLOCKS BASED UPON RELATIONSHIP TO OUTDOOR GOAL. BILLING PERIOD GOALS ART ADJUSTED FOR ACTUAL WEATHER AND ET. I+ORWARD LOOKING GOALS ARE COMMUNICATED VIA THE MONTHLY BILLING STATEMENT. Block 1 Individuahzed 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% to 150%o of Goal Inveited Block Price Block 4 Over 150% of Goal Inverted Block Price ~/~ Technical Appendices - Summary Overvlew of the Rafe Skructures 5 ~~~ CIly ot Boultler Block 1 Fixed Threshold 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 Ovei 150% of Goal Inverted Block Price RATE STRUCTURE 16 - FIRST BLOCK WATER US~ BASED UPON THE CUSTOMTR CLASS AVERAG~ WATF.R USE~ WITH OUTDOOR USF. DET~RMINED BASED UPON AN ASSUMED "TYPICAL" LOT SIZE AND IRRIGATION REQUIREMENT5. SUCCE~DING BLOCKS BASED UPON RELATIONSHIP TO OUTDOOR GOAL. BILI.ING PERIOD GOALS ARE ADJUSTF,D FOR ACTUAL W~ATHF.R AND ET. FORWARD LOOKING GOALS ARE COMMUNICATED VIA THE MONTHLY BILLING STATEMF.NT. ~~7 ~7_~,i ~~~~ „EPl~~~ 4 -~oLi"~_~~p_i_e ie ~~p Isj' `~ui~~~~i~rz _i.ni ~.ci~^ ~d4 ' y~~ in~ r~°S;~~%~ ai„-~ t,I`lu'.,v~~~n,`, =v,~{'{~~~~ n'a~„d~~~v ,~}a~r Qy;yG~~'+5~W~~~~y7~ iv;,, I i ~eIH~~S.r ` ;~i,~~ ~ i~~F;S,~~ ~;.m,i ~s~ `'`~t; ~ ~ : ~ui+i~'o,2(~v"yn`4~ ~iN'~`it=.~~~i~zF ~i~ry'I~I~i~ti~ I..»}a.~ ~iy'.j ;l~i~" ~jdiyy>>~~~~~~~~e~i~~E'~":~..~ ,~u~7} {~'~~_ I;P;,I~irF~+.~'~a=."~M~~~t~` ~(~~~,~~~2"~~r'~a7~~~~,~+G~y~1k,6k~~RM1 'J7F ~y~i:~n AHY„~sE~~:~I~~,"j~~P_-,~"~r~~'~f"~~kA+~ _ ,.,,k I ~I, M ~„ ~ 1~+_h~ , Block 1 Class Average Water Use Inverted Block Price Block 2 Based on "Typical" I.ot 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 RATE STRUCTURE 17 - INDOOR WATER US~ BASED UPON A FIXED THRESHOLD~ WITH OOTDOOR USE DETERMINED BASED UPON AN ASSOMED "TYPICAL" LOT SIZE AND IRRIGATION REQUIR~M~NTS. SUCCL~DING BLOCKS BASFD UPON RELATIONSHIP TO OUTDOOR GOAL. BILLING PERIOD GOALS ARE ADJUSTED FOR ACTUAL WEATHER AND ~T. FORWARD LOOKING GOALS ARF. COMMONICATED VIA THE MONTHLY BILLING STATEMF.NT. Block 1 Fixed Threshold Inverted Block Price Block 2 Based on "Typical" Lot Size/ Typical Weather/Water Supply 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 * This rate structure most closely matches the rate structure and approach used by Irvme Ranch Water District. RATE STRUCTURE 18 - FIRST BLOCK IS THE SUM OF INDOOR AND OUTDOOR ALLOCATION, AND SUCCEEDING BLOCKS BASED UPON REI,ATIONSHIP TO FIRST BLOCK GOAL. BILLING PERIOD GOALS ARF. ADJUSTED FOR ACTUAL WEATHER AND ET. FORWARD LOOKING GOALS ARE COMMUNICATED VIA THE MONTHLY BILLING STATEMENT. /J]'DAl~ Technical Appendices - Summary Overvlew of the Rate Structures 6 ~~~~~"~ City of Boulder 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 Puce RATE STRUCTURE 19 - TOP SWRER OF 11 - 1H~ WITH TH~ TARGET SIST AND FIXGD EACH YTAR. NO MONTHLY ADJUSTMENTS FOR WEATH~R AND ET. RATE STRUCTURE 20 - TOP SCORER OF 11 - 19~ WITH A DISCOUNT FOR CITY APPROVED IRRIGATION SYSTEMS WITH RAIN SENSORS AND WEATHER-BASED CONTROLL~RS. Block 1 Based on L,egal Occupancy Block 2 Based on Specific Lot Size and Uses Historical Average Monthly ET Block 3 All Usage over Block 2 Inverted Block Price Inverted Block Price Inverted Block Price RATE STRUCTURE 22 - FIRST BLOCK IS A FIX~D THRESHOLD BASED UPON "AVERAGE DAY" CONDITIONS USED WITHIN THE CITY'S PLANT INVESTMENT FEES (PIF)~ AND TOR THE SIZE OF THE METER OF THE CUSTOMER. THE SECOND BLOCK IS BASED UPON THE "PEAK DAY" ASSUMPTIONS CONTAINED IN THE CITY'S PIF. UNUSED WATER (BF,LOW GOAL USAGF,) CAN llE "LOAN~D" OR "RENTED TO OTHER WATER USERS. l//~~+ Technlcal Appendlces - Summary Overvlew oi the Rate Struclures ~~~C~i7 Clty o( Boulder RAT~ STRUCTURE 21- FIR5T BLOCK IS BASF.D UPON THE LEGAL OCCUPANCY~ AND ASSUMED PGR CAPITA USE. THE SECOND BLOCK IS DETERMINED BAS~D UPON CUSTOMTR SPECIrIC LOT SIZE/IRRIGABLE AREA. BILLING PERIOD GOALS USES HISTORICAL MONTHLY ET. FORWARD LOOKING GOALS AR~ COMMUNICATED VIA THE MONTHLY BILLING STATEMENT. Block 1 Fixed Threshold - Ave. Day Inverted Block Price Block 2 Fixed Threshold - Peak Day Inverted Block Price Block 3 All Usage over Block 2 Inverted Block Price ~ ~ ~ ~ 3 O 00 ~ O ~ ~~ ~ ~ ~ ~ m ~ ~ ~_ ~ ~ H V ~ ~ ~ L ~ ~ ~ ~ ._ a~ a~ ~ ^~ ~ ~ ~ ~ ~ .t ~ ~ ~ = L ~ ~ .r ~ ~.. ~ s= ~ L ~ / W ~ ' a' M ° .L *+ ~ o N - sa ' 11.. ~ " LA ~ ~ '~ ~ ~ ~ ~ ~ d 3 d ~ ~ ~ ~° ~ ~ o ,_ y d ~ ~ ~ a N ~ '4 N 0. 1~ d = v F ~o _ .R v ~ ~ ~O d ~ ~ H £, =o ~~ a W ~ _ 'o ~~ ~ ~o = _~ W m ~ Overview of the Presentation ^ Review of the Final Prioritization of Rate Design Goals (Attributes) ^ Review the Final Evaluation Criteria ^ Review the Process Used to Evaluate the Rate Structures ^ Review the Results of the Evaluation Process ^ Ne~ Step ~(C~5 2 ~ ~ 1* ~ ~ ~~ ~ v ~, ~~ y~ N ~ ~ ~ ~. ~ O O = ~ •~i, y w Prioritization of Attributes By WRAB and By Staff WRAB Prioritization Discourage Wasteful Use Fair Allocation of Costs to Attain Eqwty Dynamic Abiliry to Respond to Changing Supply and Demand Conditions Yields Total Revenue Requirements Stability & Predictabdity of the Rafes L~l~ Rank Staff Prioritization 1 Yields Total Revenue Requirements 2 Stability & Predictability of #he Rates 3 Discourage Wasteful Use 4 Fair Allocation of Costs to Attain Equity 5 Dynamic Ability to Respond to Changing Supply and Demand Conditions 4 The Need to Prioritize the Remaining 5 Attributes ^ "Top 5" attributes were deemed most important ^ '~Bottom 5" are less important, but were not all equal - Determined the need to prioritize the ~~Bottom 5" ~ Placed in order on the basis of votes - same process as used for the "Top 5" ~~t~ 5 Priori#y of the Remaining Five A#tributes ^ Remaining five attributes were placed in order 6. Simple and easy to understand and administer 7. Stabil~ty and predictability of the rate themselves 8. Avoidance of undue d~scrimination in rate relationships 9. Reflects all present and future costs (internalities and externalities) and benefits of providing utility service 10. Freedom from controversy as to interpretation tLE~S 6 ~ s ~ ~. 0 ~ ~ a~ ~ ~. 0 - a~ > 4~ ~ ~ ~i ~ ~ ,_ ~. t~ _ a ... ~ ~ ~ - ~ > W ~ ~ ~ ~~ ~ ti ~ Purpose of Evatuation Criteria ^ Evaluation criteria was used to "judge" the various rate structures ^ Criteria is "weighted" for scoring purposes based upon the city's prioritized goals and objectives ^ EES conducted the evaluation of the rate alternatives lttC~S $ Exampie of the Overall Approach and Evaluation Criteria REVENUE RELATFD ATTRIBUTES Effect~veness m yieldmg tofal revenue reqmremems Defint6on The rate strtKture will be devdoped to cover the total costs of utdrty operatior~s, under a"cash needs" approach - opefatm9, capte~, debt sernce coverage and reservEs EvaWatiar p'itena: • Rate structure is des~gned to equal (target) the crtys revenue reqwremerrts f e the toral revenue requirements are dmded by the b~lling uruGS - custaners and usage to equal the rate) Cornmer~Basis for Rahng: !^~~ LM1tle or No RdaLOnship totheQylsRevAequir Sane Relationsh~ C~,ood RelffiiorvsM l/ery Strong Relationshi ~ 00°h Relazionship totheRev wr 9 Overview of the Evaluation Criteria 1 Effectiveness in yielding total revenue requirements 2 Revenue stability and predictability • Revenue within range of -5% to ~10°/a of target revenue • From the City's perspective, rates are predictable • Rate revenues can be projected with reasonabie accuracy 3 Stability and predictability of the rates themselves • Compared to Exis#ing Rates: - Potentiat Impacts to a"Conserving" Customer - Potential Impacts to a"Non-Conserving" Customer • From the customer's perspective: - Stability (predictability) of customer`s bill in the winter period - Stability (predictability) of customer's bill in the summer period - Stability {predictability) of customer's bill from year-#o-year (/~~ 10 Overview of the Eva~uation Criteria (continued) 4 Discourage wasteful use, while promoting all justified types and amounts cf 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 was#e 5 Reflects atl present and future cost (internalities and e~ernalities) and benefits of providing utility service • Reflects, under all conditions, direct and indirect cos#s • 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 reiationships. • Equitable and Cost Based Across All Classes of Service • Legal and Defendable L,~~ 11 Overview of fhe Evaluation Criteria (continued) 8 Dynamic in its ability to respond to changing supply and demand condi#ions and/or environmental concerns. 9 Simple and easy to understand; easy to administer. • Billing method is easy for customers to understand and customer will respond appropriately • Technical complexity of developing the rate • Ease of implementation (billing system constraints, implemenfation issues and customer education) • On-going administrative costs/issues - Need fior customer feedback • Provide on-going communication/feedback • Anticipated public acceptance (fair and reasonable?) 10 Freedom from controversy as #o interpretation (~ l~ 12 1Neighting of the Evaluation Criteria for the Te~ Attributes 1 Effectiveness in yielding total revenue requirements 4 Discourage wasteful use, while promoting all justified types and amounts of use 3 Stability and predictability of the rates themselves 6 Fair allocatior- of total cost of service among the customer classesof service to attain equity. 8 Dynamic in its ability to respond to changing supply and demand conditions and/or environmental concerns. 9 Simple and easy to understand; easy to administer. 2 Reveoue stability and predictabiiity 7 Avoidance of undue discrimination in rate relationships. 5 Reflects all present and #uture cost {internalities and- externalities) and benefits of providing utility service 10 Freedom from controversy as to interpretation /^l~ Criteria Weiahtina 20% 20°/a 15°l0 15% 10% 8% 6% 3°/e 2% 1% 73 Approach to Scoring ^ Using the weighted criteria, maximum scores for each attribute were developed - 400 points - perfect score (sum of maximum score for all 10 attributes) - Establish the maximum points for an attribute (evaluation criteria) ~ Maximum points x weighting = maximum for an attribute ~ for example, 400 pts x 20% = 80 points maximum for attribute #1 - Scoring the lowest on a criteria would have an opposite or negative scoring impact (e.g. - 80 pants) - A mid-pant score of the evaluation range was deemed to be neutral and scored zero (0) points ~ A rate structure may be very strong in one area (e.g. conservation) and score high positive points, but it may also score low or negative points in other areas (e.g. simple and easy to administer) ,~ ~inal scores reflect this balancing of positive and negative attributes (scoresj ~~~ 14 The Evaluators & the Process Used to Evaluate the Rate Structures ^ Three evaluators - Tom Gould, EES - Shawn Koorn, EES - Tom Chesnutt, A&N Technical Services ^ Used '~round table" discussion to evaluate the structures ftC'~5 ^ The process used was consistent in its approach and the scores it created 15 H ~ L y. t~ O t~ ~ _ ~ ,O ~ ~ ~ ~ ~ ~ tA > W ~ ., I ~ ~ ~ ~ ~ e~ ~ ~ 1 ~ ~ ~ - Evaluat~on of the Rate Structures ^ EES originally presen~ed twenty (20) alternative rate structu res to W RAB - WRAB requested two additional rate structures be evaluated -#21- Uses legal occupancy to establish 1~ block size. 2na block based upon specific lot size and uses historical average monthly ET. 3rd block is excessive use. -#22 - Uses assumptions of the plant investment fees and meter size to establish blocks ~ 1~ block is based upon average day assumptions ~ 2na block is based upon peak day assumptions ~ 3ra block is all excess usage ~ Unused water can be "loaned" or "rented" to other water users ~~~ ', , 17 "Top 5" Rate Structures Rate Structure Final Score Number Rate Structure Description (Out of 400) 10 Top scorer of rate structures ~- 9(#5 Seasonal rates with fixed thresholds and a 2-block wmter rate), plus goal based ~ncentives 2t3 5 Seasonal rates with fixed thresholds and a 2-block winter rate 195 19 Top scorer of 11 -18 (#17- 4 block water budget; block 1- fixed threshold, block 2-° typicaP lot s¢e and imgation reqwrements, succeeding blocks based on relationship to outdoor goal), with the target set and fi~ced each year, No monthly ad~ustments for weather and ET. 187 26 Top Scorer of 11 -19, {#19 - 4 block water budget; block 1- fixed threshold, block 2-"typical" lot size and irngation requirements, succeeding blocks based on relatwnship ta outdoor goal. Target is set and fixed each year No monthly adjustments for weather and ET.) Discount for ci#y approved irrigaiion systems with rain sensors and weather-based controllers 181 17 Indoor water use based upon a fiixed threshold, w~th outdoor use determined based upon an assumed `Yypical° lot size and irrigation reqwrements. Succeeding blocks based upon relationship to outdoor goal Bdling period goals are ad~usted for actual weather and ET Forvvard looking goals are communicated via the monthly billmg statement 175 7 Seasonal rates with a#ixed threshold adjusted based upon water supply availabiiity and a 2-btock winter rate 175 ~~~ 18 Observations of the ~~Top 5" ^ There are actuaily 6 rat~ structures - Tie for 5t~ place; include~ both in the ~~Top 5" ^ Top 5 by rate structure type - 3 variations of seasonal rate structures - 3 variations of water budget ra~e structures ^ The top scorer does not imply "best" and low scorer imply'~worst" - Application of the rate structure to a specific class of service determines `~best" and '~worst" fit 1~~~ 19 Status of the Other 1 ~ Rate Structures ^ The 16 rate structures that did not make the "Top 5" are not totally eliminated ^ May use elements or ideas from them to enhance and improve the ~~Top 5" as they are applied to a specific class of service (e.g. legal occupancy) ^ City's existing rate structure is the '~base case" that other rate structures will be compared to ~~~ Zo Summary of the Scoring of the 22 Rate Structure Alternatives Rate Struc#ure Final Score Number Rate Structure Description (Out of 400) 1 Current rate struc#ure 139 2 Current rate structure modified for seasonal rates, 1-biock winter '146 3 Current rate structure modified for seasonal rates; 2-block wnnter 143 4 Seasonal rates, fixed threshold, 1-blocicHnnfer 'i56 5 Seasonal rates, fixed threshold; 2-block wi~ter 195 6 Seasonal rates, AWC threshold based upon water supply, with 2-block ~nnnter 7 Seasonal rates, fixed threshold based upon water supply, with 2 block vinnter 8 Seasonal rates, 4-biock summer, 1-block winter, uses AWC 146 9 Seasonal rates, 4-block summer, 1-block ~nnnter, uses fixed threshold 156 10 Top scorer of rate structures 1- 9, {#5) plus goal based incentives 213 ~i ~~ 21 Summary of the Scoring of the 22 Ra#e Structure Alternatives (con#inued) Rate Structure final Score Number Rate Structure Description (Out of 400) 11 3-block water budget, block 1- AWC, biock 2- customer specific lot size, ad~usted for weather and E"f 154 12 Same as ~l 1, wrth addit~on of customer specific turf type 139 13 4-block water budget, block 1- AWC, block 2- cusiomer speafic lot size, succeedmg blocks based upon relationship to outdoor goal 158 14 Same as 13, but uses a fixed threshoid for block i 161 15 4-block water budget, block 1- AWC, biock 2-"rypical" lot size, succeeding blocks based upon relationship to outdoor goal 165 16 Same as 15, but uses class average usage to establish block 1 170 17 Same as 15, but uses a fixed threshold #o establish block 1 175 18 3-block water budget; indoor and outdoor is summed as block 1 123 19 Top scorer of 11 - y 8, (#17) wdh the target set and fixed each year, no monthly adjustments for weather or ET 187 20 Top scorer of 11 -19, (#19) with a discount for city approved irrigation systems wiih rain sensors and weather-based controAers 181 21 3-block water budget ; block 1- established based upon legal occupancy, 163 block 2- specific lot size, uses h~s#orical average monthly ET 22 3 block; blocks based upon PIF and meter s~ze, water can be "loaned" 142 /!~~ 22 Observations of the Scoring ^ Range of scores - 123 to 213 ^ City's current rate structure - 139 ~ Scored low, not because of the structure, but rather the lack of equity in how it is currently being administered between classes of service - Gty's current rate structure is still a valid rate structure that can be improved via changes in the way it is appiied f((C'~S 23 Using The Findings This Process ^ Developed a~~Top 5" (6) rate structures (see page ~8) ^ In-depth analysis is the ne~ step ~ Analyze rate structures by classes of service ~ Which rate structures appear to be best suited for a particular customer class of service? ~ How do they compare to the city's existing rate structure? ~ How can the `~Top 5" be improved to create the best fit? ~~~ 24 Moving Forward - Next Steps ^ Task 1 ~6 - Detailed Analysis and Evaluation of the Rate Structure Alternatives - October WRAB Meeting ~ Billing system evaluation - November WRAB Meeting ~ Review the in-depth analysis of the rate structures and our final recommendations ~t~ 25