Contents. List of Figures, ix. List of Tables, xi. Foreword, xv. Acknowledgments, xvii. Introduction, xix. Section I Revenue Requirements, 1

Transcription

1 Contents List of Figures, ix List of Tables, xi Foreword, xv Acknowledgments, xvii Introduction, xix Section I Revenue Requirements, 1 Chapter 1 General Concepts Adequacy of Revenues, 3 Approaches to Projecting Revenue Requirements, 4 Test Year, 8 Chapter 2 Revenues Sources of Revenue, 11 Unbilled Revenues, 14 Cash Versus Accrual Revenues, 14 Projecting Revenue, 14 Example, 16 Chapter 3 Operation and Maintenance Expenses Classifying O&M Expenses, 20 Identifying Nonrecurring O&M Expenses, 20 Identifying Capitalized O&M Expenses, 21 Identifying Special Considerations for Government-Owned Utilities, 21 Estimating O&M Expenses, 22 Chapter 4 Taxes Local Taxes, 25 State Taxes, 26 Federal Taxes, 26 Tax Issues in Rate Cases, 28 Chapter 5 Capital-Related Costs Cash-Needs Approach, 33 Utility Approach, 35 Rate of Return, 40 Capital Structure, 41 Chapter 6 Examples of Revenue Requirements Government-Owned Utilities, 43 Investor-Owned Utilities, 44 iii

2 Section II Cost Allocation, 47 Chapter 7 Allocating Costs of Service to Cost Components Base-Extra Capacity Method, 51 Commodity-Demand Method, 57 Special Considerations, 59 Chapter 8 Distributing Costs to Customer Classes Customer Classes, 63 Units of Service, 66 Unit Costs, 69 Distributing Costs to Customer Classes: Base-Extra Capacity Method, 71 Distributing Costs to Customer Classes: Commodity-Demand Method, 74 Section III Rate Design, 77 Chapter 9 Selecting Rate Structures Planning the Rate Structure Study, 79 Rate Structure Variables and Considerations, 82 Summary, 83 Chapter 10 Uniform Rates General Considerations, 85 Historical Perspectives, 86 Advantages and Disadvantages, 87 Example, 88 Summary, 88 Chapter 11 Declining Block Rates General Considerations, 91 Historical Perspectives, 92 Advantages and Disadvantages, 93 Determining Declining Block Rates, 94 Example, 95 Summary, 97 Chapter 12 Increasing Block Rates General Considerations, 99 Historical Perspectives, 100 Advantages and Disadvantages, 100 Examples, 101 Summary, 102 Chapter 13 Seasonal Rates General Considerations, 103 Historical Perspectives, 105 Advantages and Disadvantages, 105 Determining Seasonal Rates, 107 Examples, 109 Summary, 110 iv

3 Chapter 14 Fixed Versus Variable Charges General Considerations, 113 Historical Perspectives, 117 Example, 118 Summary, 118 Chapter 15 Marginal Cost Pricing General Considerations, 119 Historical Perspectives, 121 Advantages and Disadvantages, 121 Examples, 121 Summary, 124 Section IV Customer-Specific Charges, 127 Chapter 16 Low-Income Affordability Rates General Considerations, 129 Historical Perspectives, 130 Policy Issues, 131 Advantages and Disadvantages, 132 Example, 132 Summary, 134 Chapter 17 Negotiated Contract Rates General Considerations, 135 Historical Perspectives, 136 Advantages and Disadvantages, 136 Example, 137 Summary, 138 Chapter 18 Economic Development Rates General Considerations, 139 Historical Perspectives, 142 Advantages and Disadvantages, 142 Example, 143 Chapter 19 Standby Rates General Considerations, 145 Historical Perspectives, 146 Advantages and Disadvantages, 146 Example, 147 Summary, 148 Section V Alternative Rates, 149 Chapter 20 Demand-Side Management General Considerations, 151 Historical Perspectives, 152 Advantages and Disadvantages, 152 Example, 153 Summary, 155 v

4 Chapter 21 Price Elasticity General Considerations and Policy Issues, 157 Historical Perspectives, 158 Examples, 159 Summary, 160 Chapter 22 Value-of-Service Pricing General Discussion, 161 Historical Perspectives, 162 Advantages and Disadvantages, 162 Examples, 163 Summary, 164 Chapter 23 Drought Pricing General Considerations, 165 Historical Perspectives, 168 Advantages and Disadvantages, 168 Example, 168 Summary, 170 Chapter 24 Rate Surcharges General Considerations, 171 Historical Perspectives, 173 Advantages and Disadvantages, 173 Determining Rate Surcharges, 174 Summary, 174 Chapter 25 Indexed Rates General Considerations, 175 Historical Perspectives, 176 Advantages and Disadvantages, 176 Example, 177 Summary, 178 Section VI Capacity and Development Charges, 179 Chapter 26 Connection and Customer Facility Fees Allocating Costs, 183 Capital Cost Component, 184 Calculating Connection and Customer Facility Fees, 185 Examples, 186 Chapter 27 Policies and Procedures for Water Service Extension General Considerations, 190 Extensions for New Development, 191 Designing and Constructing Water Mains for Redevelopment, 194 Extensions to Serve Developed Areas Served by Individually Owned Wells, 194 vi

5 Chapter 28 System Development Charges Selecting a Method Based on Financial Goals and Objectives, 198 Legal Issues Related to Methodology, 199 Methods of Calculating SDCs, 199 Reimbursement Policies, 206 Economic Development Issues, 207 Administrative and Accounting Procedures, 208 Updates of the SDC Analysis, 209 Chapter 29 Dedicated-Capacity Charges Availability Charge, 211 Contract Demand Charge, 213 Section VII Fire Protection Charges, 215 Chapter 30 Rates for Fire Protection Service Historical Perspective, 218 Public Versus Private Fire Protection, 218 Regulated Versus Nonregulated Utilities, 220 Determining Fire Protection Costs, 220 Direct Public Fire Protection Charges, 227 Private Fire Service Charges, 228 Emerging Issues, 229 Section VIII Wholesale Rates, 231 Chapter 31 Wholesale Rates Water Service, 233 Determining Cost of Service, 233 Types of Service, 235 Rate Design, 236 Example, 239 Section IX Miscellaneous and Special Charges, 243 Chapter 32 Miscellaneous and Special Charges Definition of Charges for Services, 246 Example, 247 Legal Authority for Service Charges, 247 Selecting and Implementing Charges, 248 Cost Basis and Rationale for Miscellaneous and Special Service Charges, 250 Determining the Cost of Providing Service, 250 Sample Service Charge Calculation, 254 Examples, 254 Field Service Charges, 255 Office Service Charges, 258 Service Application, Engineering, and Inspection Fees, 260 Contract Work and Merchandise Sales, 261 Wheeling Charges, 264 Summary, 265 vii

6 Section X Implementation Issues, 267 Chapter 33 Public Involvement Definition General Considerations and Policy Issues, 269 Historical Perspectives, 270 Public Involvement Planning, 271 Communications Tools, 275 Evaluating Communication, 277 Summary, 277 Chapter 34 Legal Considerations Jurisdiction of Economic Regulation of Water Utilities, 279 General Legal Standards, 280 Factors to Consider in Determining if Rates Are Unreasonably Discriminatory, 281 Recent Court Decisions, 282 Summary, 285 Chapter 35 Data Requirements Customer Records, 287 Plant Investment, 291 Operation and Maintenance Expenses, 291 Revenue Stability and Sufficiency, 292 Customer Survey Information, 292 Summary, 293 Appendixes, 295 Appendix A Development of Capacity Factors by Customer Class Appendix B Equivalent Meter Ratios Appendix C Bill Tabulation Methodology Appendix D Example of Citizens Advisory Committee Guidelines Glossary, 321 Index, 329 List of AWWA Manuals, 341 viii