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HomeMy WebLinkAboutWestlake Rates Part 1 presentation Utility Rate Overview January 2010 1999 2 History of Westlake Utilities Utility Rate Overview Water and Sewer rate study conducted–2008 Explored second water source–2006 Adjusted water rates. Terminated AquaSource contract.–2004 Public Works Director hired.–2003 from City of Keller. AquaSource. Purchased infrastructure and customers Pump station and waterline constructed. Town hired –2001 Water rate study–2000 Water and Wastewater Master Plan– Part 1 3 Presented to citizensOBJECTIVES Utility Rate Overview Detailed examination of Westlake’s rates–Part 2 Fundamental concepts to rate making•Macro level approach – Utility Rate Overview 4 exemplifying the highest standards.–environmental stewards We are Owned Charter School and its corporate neighbors. -the Town…We are leaders. In education we are known for our innovative partnerships between Westlake Community Vision Utility Rate Overview VIDEOCONSERVATION WATER 5 “When the well is dry, we know the worth of 6 John F. Kennedy peace and one for science.”one for -will be worthy of two Nobel prizes “Anyone who can solve the problems of water Utility Rate Overview Ben Franklin water” “… water shortages and water crisis that afflict 7 Utility Rate Overview Miller, Benjamin, and North 2005 demand.”unable to accept the reality of the law of government officials who are unwilling or of droughts, but in fact are caused by various parts of the nation are not the result Supply and Demand?8 Utility Rate Overview Supply and Demand 9 interactive S&D curve Utility Rate Overview How does this relate to 10 Utility Rate Overview Westlake? Utility Rate Overview 11 Utility Rate Overview 12 •13 Utility Rate Overview Current Water Crisis in U.S.District v. OklahomaTarrant Regional Water •North Carolina v. South Carolina•Georgia v. Tennessee•Georgia v. Florida & Alabama Per Capita Use Chart 14 Gallons per Capita per DayWestlakeRegion C - 2060Region C - 2006TexasAWWA6004002000 590211197173101 UTILITY RATES 15 Westlake?How does this affect Utility Rate Overview STAKEHOLDERS 16 SocietyCommunityDevelopment VendorsMakersPolicy AgenciesRegulatoryLendersEmployeesTown Customers UtilitiesWestlake Utility Rate Overview •17 Utility Rate Overview of RatesCustomer’s Perspective communities?Are they competitive with neighboring •understand?Are the existing or proposed rates easy to •Are the existing or proposed rates affordable?•equitable?Are the existing or proposed rates fair and •18 Utility Rate Overview Utility’s Perspective of Rates standards?Is the process in accordance with accepted industry •purposes?Is the rate sound for planning and management •Does the rate meet revenue requirements? •19 Utility Rate Overview of RatesSociety’s Perspective Do rates capture negative externalities?•efficient water use?Do rates encourage resource preservation and•Do rates reflect proper valuation and priority uses?•efficiency?Does the rate structure promote economic What is Ratemaking?20 Utility Rate Overview follow several accepted courts, and policy analysts Water systems, regulators, •waterto customers via the price of allocating revenue requirements Ratemaking is the process of • Utility Rate Overview 21Source: AWWA service equitably…4. Water rate schedules should distribute the cost of water accounts …3. Every water utility should adopt a uniform system of unrelated to water utilities…accounts. Such funds should not be diverted to uses Water utilities should maintain their funds in separate 2.all capital costs. finance all operating and maintenance expenses and from water service and user charges to enable it to 1. Every water utility should receive sufficient revenues AWWA Policy Utility System Costs 22 Utility Rate Overview serviceutilityCost ofproductofPriceproductforDemanddesignsystemUtility Rate 23 Utility Rate Overview ObjectivesAssess Effectiveness of Addressing Pricing 5.Design Rate Structure4.Allocate Costs3.Identify Revenue Requirements2.Identify Financial and Pricing Objectives1.Setting Process Planning the Rate Structure 24 Utility Rate Overview impact on customersUnderstanding and communicating the 3.Evaluating the available alternatives2.structure. Defining the goals and objectives of the rate 1 Selecting a Rate Structure 25 Utility Rate Overview each classificationCharges or schedule of charges for •Frequency of billing•Classification of customers served•fees designed to recover the utility’s costs.The water rate structure is a fee or schedule of What are the Different 26 Utility Rate Overview Increasing Block•Seasonal Rate•Decreasing Block •Single / Uniform Block•Fixed / Flat Fee•Rate Structures? Utility Rate Overview 27 Cost of Service ConceptWestlake currently utilizes the •28 What Is Cost of Service?Cost of Service Concept Utility Rate Overview Includes fixed and variable charges •must be recovered from those customersThat is, the cost of providing service to the utility’s customers •derived from utility revenuesCost of service is the total annual revenue requirements to be Fixed charges include:29 Utility Rate Overview Water allotment charge•customer chargesService charges and •Meter charge• Variable charges reflect the 30 Cost of Service Concept Utility Rate Overview the customer consumes.based on the amount of water consumption charge and vary •31 Utility Rate Overview POLICY GOALS FOR RATE REVIEWreview and subsequent adjustments.informing the public of any rate The Council should plan for •understanding of the rate review.The Council should have a clear •current and future system needs.The rate review should address both Sources 32 Questions?33