Our water utility uses the AWWA M-1 manual and the Base-Extra Capacity methodology in our annual rates workshop/study. This means we have base charges for system components that are necessary to deliver water to the customers service line; and volume charges dependent on the amount of water used. We do have an inverted block rate structure to incentivize conservation. A council member would like to see us move towards total volume-based rates, eliminating the base charge.
Are there utilities using only volume-based rates? How is that working for the utility? Does the utility have problems with revenue stabilization?
Response needed by
Wednesday, October 17, 2012