PROPOSED WATER RATE RESTRUCTURE

Key Elements: The Department of Public Utilities is proposing an inclining block water rate structure as a tool to promote water conservation, reduce peak demand, extend the City’s water supplies, and delay future large water development projects.  The Public Utilities Advisory Committee (PUAC) approved the hiring of a consultant, and formed a 20-member group of citizens and representatives of special interest organizations to review the consultant’s analysis and make recommendations to the PUAC.  The citizen subcommittee held six meetings with the consultant between August and December 2002, with the PUAC receiving two briefings. After considering the recommendations of the citizen subcommittee, the PUAC forwarded their recommendation to Mayor Anderson for consideration, which he approved after minor revision. The new rate structure is proposed to become effective on June 1, in order to encourage water conservation beginning this irrigation season.  The Administration is proposing the following:
·         Restructure water rates for residential customers – Implement a three-tiered inclining price structure for April through October in which the per-unit cost would increase through three volume blocks, with a flat rate for winter-month consumption. 
·        Restructure rates for industrial and commercial accounts – Implement a three-tiered inclining price structure for April through October, where the first tier is set by average winter consumption, with the remaining tiers representing reasonable outdoor use and excessive outdoor use.  
·        Restructure rates for irrigation accounts – Set a target water budget based on various factors.  Irrigation rates would begin in Commercial Block 2, with the higher water rate of Block 3 for accounts exceeding the target budget. 
·       Eliminate water allotment included in the minimum charge– Eliminate the base allowance of 500 cubic feet of water that is currently included in the monthly minimum charge. 
·        Eliminate demand charge – Eliminate the monthly demand charge for customers with large water meters.
·        Reduce the monthly minimum charge– Through the elimination of the monthly demand charge, and by recovering only the cost of reading meters, providing customer service, and generating bills.
·        Adjust the deferential multiplier for water sales outside corporate limits – Adjust the multiplier outside of City limits from 1.5 times the in-City rates to 1.35 times the in-City rates, due to changes in the rate of return formula. 

Residential customers including Duplexes and Triplexes: The Water Rate Subcommittee recommended a summer inclining/fixed winter model. NOTE: 100 cubic feet equals 748 gallons.

Industrial and Commercial Customers – The Water Rate Subcommittee recommended an average winter consumption approach for industrial and commercial accounts (including condominium/apartment complexes).  NOTE: 100 cubic feet equals 748 gallons.

 Irrigation Only Accounts – The Water Rate Subcommittee recommended that irrigation users be charged in Block 2 up to a target amount which would equal the amount of irrigation required to sustain the vegetation on the property according to an evapotranspiration equations and other factors. Water used over the target amount would fall into the Block 3 rate category.