MICHIGAN STATE UNIVERSITY

Transcription

1 2010 Great Lakes Water Rate Survey Janice A. Beecher and Jason A. Kalmbach INSTITUTE OF PUBLIC UTILITIES MICHIGAN STATE UNIVERSITY ipu.msu.edu Please do not distribute ib t by electronic or other means or cite without permission. MICHIGAN STATE UNIVERSITY

2 2010 Great Lakes Water Rate Survey Top ten water systems by service population lti from eight iht Midwestern states, tt by service population size as reported in EPA Consumer Confidence Reports Illinois, Indiana, Michigan*, Minnesota*, New York, Ohio, Pennsylvania, and Wisconsin (*no economic regulatory authority) Detailed data were mined from tariffs and websites and supplemented with personal communications. Nine water providers had no rate information available directly on the website Cautionary notes about interpretation Survey provides a snapshot in a very dynamic area Rates vary for a variety of reasons, including not limited to cost differences Rates alone cannot be used to draw conclusions about operational performance, including efficiency Beecher - 2

3 Great Lakes watershed map and systems in the sample Beecher - 3

4 Service population 7,000,000 System service population by state t 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 Smallest system Largest system Median 1,000,000, 0 Beecher - 4

5 System service populations State Smallest system Service population Largest system Service population Median Illinois Elgin 98,500 Chicago 2,896, ,000 Indiana American Water Johnson County 66,868 Fort Wayne 250,000 98,232 Michigan Dearborn 97,775 Detroit 899, ,624 Minnesota Eden Prairie 65,000 St. Paul 416,759 79,080 New York Yonkers 196,086 New York 6,552, ,000 Ohio Canton 122,000 Cincinnati 813, ,358 Pennsylvania Westmoreland County Authority 140,000 Philadelphia 1,600, ,960 Wisconsin Janesville 62,720 Milwaukee 647,290 82,500 All systems Janesville 62,720 New York 6,552, ,191 Beecher - 5

6 Sample characteristics Sample characteristics ti (number of systems) Beecher - 6

7 Effective date of tariff Reported effective date of tarriff (number of systems) 2010 (54%) (30%) (3%) (5%) (4%) (1%) (1%) (1%) 1 Unknown (1%) Beecher - 7

8 Billing cycles Billing cycle (percentage of systems) Monthly 43% 60% Bimonthly 6% 11% Residential Nonresidential Quarterly 28% 41% Other 5% 6% 0% 10% 20% 30% 40% 50% 60% 70% Beecher - 8

9 Billing combinations Water only, 20, 25% Water and other services, 27, 34% Water, wastewater, and stormwater, 8, 10% Water and wastewater, ater 25, 31% Beecher - 9

10 Tariff charges Charges specified ifid in tariff (number of systems) Water included in minimum usage (24%) 19 Fire protection specified as fixed charge (29%) 23 Connection charges specified (36%) 29 Account set-up fees specified (40%) Beecher - 10

11 Rate structures 60 Rate structure (number of systems) Residential Nonresidential * Included elsewhere Beecher - 11

12 Peaking-factor rate (Ann Arbor, MI) $10.00 Peaking-factor rate per ccf (commercial water customers, Ann Arbor, MI) $9.00 $8.90 $8.00 $7.00 $6.00 $5.00 $5.21 $4.00 $3.00 $2.85 $2.00 $1.00 $ Tier 1: peaking factor < = 5 Tier 2: peaking factor >5 <8 Tier 3: peaking factor > = 8 Beecher - 12

13 Rate structures by ownership 60 Rate structures t by ownership 50 Combined-block Increasing-block Uniform 20 Decreasing-block 10 0 Beecher - 13

14 Public fire-protection in fixed charges: average by meter size $ Average monthly fire-protection ti charges $ $ $ $ $ $80.00 $60.00 $58.93 $40.00 $20.00 $ $5.52 $ /8" meter 2" meter 4" meter 8" meter Beecher - 14

15 Public fire-protection in fixed charges: range by meter size Monthly public fire-protection charges by meter size (logged) $1, $ $10.00 $1.00 5/8" 2" 4" 8" Beecher - 15

16 Fixed charges and variable unit rates for 100 cf by usage level $20.00 Rate per 100 cf at various usage levels l $8.00 $18.00 $16.00 $14.00 $7.00 $6.00 Fixed charge at 0 cf $12.00 $10.00 $5.00 $4.00 Ra ate per 100 cf $8.00 $3.00 $6.00 $2.00 $4.00 $2.00 $1.00 $ CF 500 CF 1k CF 3k CF 50k CF 1,000k CF 2,000k CF $ Beecher - 16

17 Conservation and assistance policies Conservation and assistance policies (number of systems) Conservation information/tips (71%) 57 Payment assistance (26%) 21 Sample bill or "how to read" (21%) 17 Low-income discount (11%) 9 Senior discount (10%) 8 Budget billing (8%) Beecher - 17

18 Average charges by state $100,000 45,763 23,234 24,109 13,223 38,506 34,752 35,395 32,024 19,275 16,871 18,048 17,018 55,797 28,309 30,950 37,259 15,565 18,967 0 cf $10,000 $1,000 $100 $10 1,348 1, , ,054 1, , cf (3,740 gal.) 1,000 cf (7,480 gal.) 3,000 cf (22,440 gal.) 50,000 cf (374,000 gal.) 1,000,000 cf (7,480,000 gal.) 2,000,000 cf (14,960,000 gal.) $1 Illinois (10) Indiana (10) M ichigan (10) Min nnesota (10) Ne ew York (10) Ohio (10) Penns sylvania (10) Wis sconsin (10) All (80) Beecher - 18

19 Average charges by system characteristics $100, ,773 47,849 41,715 51,194 35,887 38,071 39,784 28,842 17,087 25,171 20,970 25,597 18,579 19,193 20,342 14,626 0 cf $10, ,613 1,199 1,287 1,911 1,173 1,079 1, cf (3,740 gal.) 1,000 cf (7,480 gal.) $1,000 3,000 cf (22,440 gal.) ,000 cf (374,000 gal.) 55 $ ,000,000 cf (7,480,000 gal.) $ ,000,000 cf (14,960,000 gal.) 4 $1 Municipal (56) Private (13) Authority (9) County (1) No ot-for-profit (1) Regulated (29) Not r regulated (51) Surfa ace water (61) Grou und water (19) Beecher - 19

20 Average charges for 0 cf (0 gal.) $ $18.00 $16.00 $14.00 $14.66 $12.00 $10.85 $10.00 $10.34 $8.00 $6.00 $8.59 $8.64 $8.09 $8.02 $7.93 $6.81 $6.38 $6.29 $4.00 $4.37 $4.33 $2.00 $0.00 $9.90 $10.26 $6.61 $8.00 $7.71 Illinois (10) Indiana (10) Michigan (10) Minnesota (10) New York (10) Ohio (10) Pennsylvania (10) Wisconsin (10) All (80) Municipal (56) Private (13) Authority (9) County (1) -for-profit (1) Regulated (29) Not regulated (51) Surface water (61) d water (19) Beecher - 20 Not- Groun

21 Average charges for 1,000 cf (7,480 gal.) $ $80.00 $70.00 $60.00 $55.13 $50.00 $50.47 $40.00 $30.00 $20.00 $36.01 $32.37 $26.91 $20.85 $31.16 $28.57$27.70 $26.44 $24.96 $33.96 $30.85 $42.05 $10.00 $0.00 $37.97 $27.29 $32.50 $26.86 Illinois (10) Indiana (10) Michigan (10) Minnesota (10) New York (10) Ohio (10) Pennsylvania (10) Wisconsin (10) All (80) Municipal (56) Private (13) Authority (9) County (1) Not-for profit (1) Regulated (29) Not regulated (51) Surface water (61) Ground water (19) Beecher - 21

22 Average charges for 50,000 cf (374,000 gal.) $3,000 $2,500 $2,000 1,911 1,665 1,613 $1,500 1,348 1,034 1,054 1,095 1,199 1,287 1,173 1,192 1,113 1,079 $1, $500 $0 Illinois (10) Indiana (10) Michigan (10) Minnesota (10) New York (10) Ohio (10) Pennsylvania (10) Wisconsin (10) All (80) Municipal (56) Private (13) Authority (9) County (1) Not-for-profit (1) Regulated (29) Not regulated (51) Surface water (61) Ground water (19) Beecher - 22

23 Average charges for 1 mil. cf (7.4 mil. gal). $60, $50,000 $40,000 $30, ,234 $20,000 13,223 $10,000 19,275 16,871 18,048 17,018 28,309 25,171 25,597 18,967 15, ,970 17,087 $0 18,579 19,193 20,342 14,626 Beecher - 23 Illinois (10) Indiana (10) Michigan (10) Minnesota (10) New York (10) Ohio (10) Pennsylvania (10) Wisconsin (10) All (80) Municipal (56) Private (13) Authority (9) County (1) No t-for-profit (1) Regulated (29) Not regulated (50) Surface water (60) Ground water (19)

24 Bill differentials for systems serving outside of boundaries 180% Inside-outside city service bill differentials (% at 1,000 cf) 153.8% 160% 140%.4% 71.7% 72.4% 80.3% 82.7% 89.2% 95.9% %.0% 110.0% 120% 100% 80% 1.6% 2.6% 3.1% 3.7% 4.3% 4.8% 8.1% 8.4% 14.9% 16.1% 19.1% 19.5% 20.0% 22.7% 23. 8% 25.0% 30.0% 30.1% 30.3% 30.7% 32.0% 32.6% 40.1% 41.2% 42.2% 43.0% 45.0% 47.1% 49.6% 49.6% 49.8% 50.0% 63 60% 40% 20% 0% -7.8% -20% Beecher - 24

25 Monthly bills by system size and ownership $90.00 Monthly bill estimates t for 1,000 cf f by system t service i population l and ownership $80.00 $70.00 $60.00 $50.00 Inside (n=29) Outside (n=27) Regional (n=11) Private (n=13) $40.00 $30.00 $20.00 $10.00 $ , , ,000,000 Water system service population (logged) Beecher - 25

26 Comparison to AWWA rate survey (2008) $100, $10,000 Great Lakes (80 systems 2010) Group A (49 systems, 2008) Group B (81 systems, 2008) $1,000 Group C (149 systems, 2008) National (279 systems, 2008) $100 $10 $1 0 CF 500 cf (3,740 gal.) 1,000 cf (7,480 3,000 cf (22,440 50, cf (374,000 1,000,000 cf gal.) gal.) gal.) (7,480,000 gal.) Beecher - 26

27 Water utility cost-trend analysis Data from the Wisconsin i Public Service Commission Period: Benchmarking analysis Annual financial reports Class AB water utilities N ranges from 72 to 94 Informative but not generalizable to other water systems Beecher - 27

28 Utility plant to revenue ratios (capital intensity) 20 Capital-intensity ratios for Wisconsin water utilities (Class AB) Gross plant per 1000 gal. sold 15 Gross plant per 1000 gal. sold (incl. contributed) Net plant per 1000 gal. sold 10 Net plant per 1000 gal. sold (incl. contributedl) Gross plant/total operating revenue 5 Gross plant/total operating revenue (incl. contributed) Net plant/total operating revenue (incl. contributed) (n=72) 2001 (n=79) 2002 (n=80) 2003 (n=81) 2004 (n=82) 2005 (n=83) 2006 (n=84) 2007 (n=84) 2008 (n=91) 2009 (n=94) Net plant/total operating revenue Beecher - 28

29 Utility plant investment by function 100% 90% 80% 70% 60% 50% Proportionate t plant in service by function for Wisconsin water utilities (Class AB) 7.4% 7.4% 7.5% 7.3% 7.2% 7.2% 6.8% 6.7% 6.6% 6.3% 6.4% 6.1% 6.0% 5.6% 5.6% 5.7% 7.2% 7.0% 6.6% 6.5% 9.3% 9.0% 9.1% 8.8% 8.7% 8.6% 8.3% 8.3% 8.7% 8.7% 20.4% 21.0% 20.5% 19.4% 18.7% 18.1% 18.4% 18.2% 17.7% 17.5% General and intangible Source of supply Pumping 40% 30% 20% 10% 0% 56.6% 56.5% 57.0% 58.8% 59.8% 60.4% 59.3% 59.7% 60.4% 60.9% (n=72) (n=79) (n=80) (n=81) (n=82) (n=83) (n=84) (n=84) (n=91) (n=94) Water treatment Transmission and distribution Beecher - 29

30 Ratio of value of plant additions to retirements 18 Ratio of value of additions to value of retirements t for Wisconsin water utilities (Class AB) Services (n=81) 2004 (n=82) 2005 (n=83) 2006 (n=84) 2007 (n=84) 2008 (n=91) 2009 (n=94) Mains Hydrants Meters Beecher - 30

31 Operating revenues and expenses per water sold $3,200 $2,800 $2,400 $2,000 $1,600 $1,200 $800 $400 $0 Operating revenues and expenses per millon gallons sold Wisconsin water utilities (Class AB) (n=72) (n=79) (n=80) (n=81) (n=82) (n=83) (n=84) (n=84) (n=91) (n=94) Total operating revenues Total operating expenses Total operation and maintenance Depreciation and amortization (no deprec. of contrib. plant > 2002) Transmission and distribution Administrative and general (including sales) Taxes Customer accounts Beecher - 31

32 Operating expenses per water sold $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 Operating expenses per millon gallons sold Wisconsin water utilities (Class AB) (n=72) (n=79) (n=80) (n=81) (n=82) (n=83) (n=84) (n=84) (n=91) (n=94) Depreciation and amortization (no deprec. of contrib. plant > 2002) Transmission and distribution Administrative and general (including sales) Taxes Customer accounts Beecher - 32

33 Operating expenses by water source $2,000 $1,800 $1,600 $1,400 Expenses per million gallons sold by water source for Wisconsin water utilities (Class AB) Purchased: total Purchased: source Ground: total Surface: total $1,200 Surface: treatment $1,000 Ground pumping $800 $600 Ground: source Surface: pumping Purchased: pumping $400 Ground- treatmentt t $200 Purchased: treatment $ (n=72) 2001 (n=79) 2002 (n=80) 2003 (n=81) 2004 (n=82) 2005 (n=83) 2006 (n=84) 2007 (n=84) 2008 (n=91) 2009 (n=94) Surface: source Beecher - 33

34 Pumping statistics 20.0% Pumping statistics ti ti for Wisconsin water utilites (Class AB) % 16.0% 14.0% % 10.0% 9.0% 9.0% 10.0% 11.0% 10.0% 11.0% 10.0% 11.0% 10.0% 10.0% % 8.0% 6.0% 4.0% 2.0% Unaccounted for water Average kwh per 1,000 gallons sold % (n=72) (n=79) (n=80) (n=81) (n=82) (n=83) (n=84) (n=84) (n=91) (n=94) 0.00 Beecher - 34

35 Revenue trends by customer class $3.75 Revenues per 1,000 gallons sold by customer class for Wisconsin water systems (Class AB) $3.25 $3.05 $3.29 $3.45 Residential revenues per 1,000 gal. sold $2.88 $2.75 $2.25 $1.75 $1.25 $2.21 $1.56 $1.20 $0.97 $2.28 $1.61 $1.26 $1.01 $2.40 $1.71 $1.36 $1.06 $2.64 $2.67 $2.52 $1.83 $1.87 $1.91 $1.43 $1.46 $1.49 $1.14 $1.18 $1.23 $2.03 $1.54 $1.29 $2.18 $1.72 $1.40 $2.35 $1.82 $1.52 $2.47 $2.03 $1.63 Commercial revenues per 1,000 gal. sold Public authority revenues per 1,000 gal. sold Industrial revenues per 1,000 gal. sold $ (n=72) 2001 (n=79) 2002 (n=80) 2003 (n=81) 2004 (n=82) 2005 (n=83) 2006 (n=84) 2007 (n=84) 2008 (n=91) 2009 (n=94) Beecher - 35

36 Trends in residential water sales and revenues 1,000 Trends in residential water sales and revenues for Wisconsin water utilities (Class AB) Total residential customers (thous.) Residential revenue per residential customer Gallons sold per residential 49 customer (thous.) Total gallons sold to $173 $170 $180 $180 $190 $196 $201 residential 200 $153 $159 $ customers (bil.) $2.21 $2.28 $2.40 $2.52 $2.64 $2.67 $2.88 $3.05 $3.29 $ (n=72) 2001 (n=79) 2002 (n=80) 2003 (n=81) 2004 (n=82) 2005 (n=83) 2006 (n=84) 2007 (n=84) 2008 (n=91) 2009 (n=94) 10 0 Residential revenues per 1,000 gal. sold Beecher - 36