Water Conservation Rates January 26, 2010 1
Purpose of Conservation Rates Why look at Conservation Rates Now? Southwest Florida Water Management District (SWFWMD) Requirement of PCU Consumptive Use Permit Applying greater pressure to enact conservation rates What are Conservation Rates? Rates that provide greater price incentives to excessive discretionary use that are intended to promote conservation Most common conservation rate structure in Florida is an inclining block rate structure Lower rates for essential use and reasonable amounts of discretionary use, with higher rates for excessive usage 2
life line rate applied at the lower end of the consumption spectrum Illustration of Inclining Block Rates Monthly Bill $50 $40 $30 $20...which shelters essential domestic water usage from high rates......and conservation rates, which encourage conservation by increasing the price per 1,000 gallons at higher levels of usage 3 $10 Readiness to Serve Charge Customer Service Charge 5,000 10,000 15,000 Monthly Usage Usage Charge 3
Primary Focus: Scope of Analysis Develop A Water Conservation Rate Structure Inclining block rate structure for residential accounts Secondary Focus: Identify other modifications to current water rate structure to: Conform to accepted industry practice and legal precedence Equitably allocate system costs to all users Key Issue: Timing of Implementation (10/1/2010) Integration of additional revenue requirement for FY 2011 Amount TBD, so example rates were developed based upon 0% ( revenue neutral ), 5%, and 10% scenarios. 4
Summary of Current Rate Structure Usage Charge ($4.62 per thousand gallons) Uniform rate per thousand gallons of use for all customers Does not provide a strong price signal for excessive use Nearly all utilities in the area have inclining block rates Fixed Charge ($6.48 bi-monthly per account) Allows for recovery of customer-related costs Minimal recovery of base facility or Readiness-to-Serve costs Does not adjust based upon potential demands of customers Very low in comparison to others 5
Summary of Recommended Rate Structure Usage Charges Single-Family & Multi-Family Residential 5-tier inclining block rate structure to promote conservation Tiers or blocks of consumption are applied to each dwelling unit Multi-family tiers set based on ratio of average use per dwelling unit Affordability rate for portion of essential domestic use Commercial Uniform rate for all usage because: Receive price signal because they pay sewer for all potable water use Profit motive to conserve water used as part of business process 6
Summary of Recommended Rate Structure (Cont d) Fixed Charges Customer Component Charged bi-monthly per account Base Facility Component Charged bi-monthly: Per dwelling unit for single-family and multi-family customers Lower fee for multi-family based upon less use per dwelling unit Scaled by meter size for Commercial Based on ratio of AWWA (American Water Works Association) maximum flow rates by meter size Meter Size AWWA Meter Equivalency 3/4" 1.00 1" 2.50 1 1/2" 5.00 2" 8.00 3" 16.00 4" 25.00 6" 50.00 8" 80.00 10" 115.00 7
Revenue Neutral Conservation Rate Schedule BI-MONTHLY FIXED CHARGES Single-Fam ily Residential Multi-Fam ily Residential Com m ercial Meter Size Water Water Water 3/4" 7.26 1" 11.60 1 1/2" $4.37 customer 18.82 $4.37 customer charge 2" cha rg e ( per bill) + 27.49 + $2.89 base facility 3" $2.17 base facility 50.61 charge = $7.26 total 4" charge (per dwelling 76.62 charge 6" unit) 148.87 8" 235.57 10" 336.72 USAGE CHARGES Single-Fam ily Residential Multi-Fam ily Residential Com m ercial Block Ranges Water Water Water (Gallons per month) (per unit) (per unit) (per meter) Block 1 1-3,000 1-2,000 > 0 Block 2 3,001-8,000 2,001-6,000 Block 3 8,001-15,000 6,001-11,000 Block 4 15,001-20,000 11,001-15,000 Block 5 >20,000 >15,000 Usage Rates Single-Fam ily Residential Multi-Fam ily Residential Com m ercial ($ / 1,000 gal.) Water Water Water Block 1 $ 2.98 $ 2.98 $ 4.62 Block 2 $ 4.87 $ 4.87 Block 3 $ 6.09 $ 6.09 Block 4 $ 7.92 $ 7.92 Block 5 $ 10.69 $ 10.69 8
TBW Member Water Rate Comparison (Reflecting Revenue Neutral Rates for PCU) FIXED MONTHLY CHARGES Pinellas Tampa* St. Pete New Port Richey Pasco Hillsborough 3/4" Meter (Residential) $ 3.63 $ - $ 8.22 $ 7.47 $ 7.16 $ 9.80 USAGE CHARGES Pinellas Tampa* St. Pete New Port Richey Pasco Hillsborough Block Ranges (Gallons per month) Block 1 1-3,000 1-4,000 1-6,000 1-5,000 1-6,000 1-5,000 Block 2 3,001-8,000 4,001-10,000 6,001-8,000 5,001-10,000 6,001-9,000 5,001-15,000 Block 3 8,001-15,000 10,001-19,000 8,001-15,000 10,001-15,000 9,001-15,000 15,001-30,000 Block 4 15,001-20,000 19,001-34,000 15,001-20,000 15,001-20,000 >15,000 >30,000 Block 5 >20,000 >34,000 >20,000 >20,000 Usage Rates Pinellas Tampa* St. Pete New Port Richey Pasco Hillsborough ($ / 1,000 gal.) Block 1 $ 2.98 $ 2.14 $ 2.99 $ 2.23 $ 2.34 $ 2.90 Block 2 $ 4.87 $ 2.47 $ 3.73 $ 2.90 $ 3.16 $ 4.05 Block 3 $ 6.09 $ 4.16 $ 5.06 $ 3.92 $ 4.00 $ 5.25 Block 4 $ 7.92 $ 5.55 $ 6.71 $ 5.45 $ 4.82 $ 6.75 Block 5 $ 10.69 $ 6.40 $ 13.42 $ 7.75 * Blocks were converted from CCF to nearest thousand gallons 9
Customer Impacts: 0% Additional Revenue Requirement Revenue Neutral Rates 10
Single-Family Bi-Monthly Bill Impacts (Revenue Neutral Rates) Arrow Denotes Bi-Monthly Average Use Per Bill 81% of Single-Family Bills Issued Would Decrease SWFWMD Defines Excessive Water Use Beginning 11 at 15,000 Gallons Per Month, or 30,000 Gallons Bi-Monthly 11
Single-Family Bi-Monthly Bill Distribution (Revenue Neutral Rates) Low volume users (58%) Up to 10,000 gal. bi-mo. $1 Increase - $9 decrease Typical/Average users (29%) 11,000-20,000 gal. / bi-mo. $1 - $8 decrease Higher volume users (13%) >20,000 gal. / bi-mo. Bills increase at same use Conserve to avoid increase Water Use (TGAL) % of Bills Cumulative % Current Recommended $ Chg. % Chg. 0 5.4% 5.4% $ 6.48 $ 7.26 $ 0.78 12.0% 1 2.3% 7.7% $ 11.10 $ 10.24 $ (0.86) -7.7% 2 3.2% 10.9% $ 15.72 $ 13.22 $ (2.50) -15.9% 3 4.5% 15.4% $ 20.34 $ 16.20 $ (4.14) -20.4% 4 5.4% 20.8% $ 24.96 $ 19.18 $ (5.78) -23.2% 5 6.0% 26.8% $ 29.58 $ 22.16 $ (7.42) -25.1% 6 6.6% 33.3% $ 34.20 $ 25.14 $ (9.06) -26.5% 7 6.6% 40.0% $ 38.82 $ 30.01 $ (8.81) -22.7% 8 6.6% 46.6% $ 43.44 $ 34.88 $ (8.56) -19.7% 9 6.1% 52.7% $ 48.06 $ 39.75 $ (8.31) -17.3% 10 5.6% 58.3% $ 52.68 $ 44.62 $ (8.06) -15.3% 11 5.0% 63.3% $ 57.30 $ 49.49 $ (7.81) -13.6% 12 4.3% 67.6% $ 61.92 $ 54.36 $ (7.56) -12.2% 13 3.8% 71.4% $ 66.54 $ 59.23 $ (7.31) -11.0% 14 3.3% 74.7% $ 71.16 $ 64.10 $ (7.06) -9.9% 15 2.8% 77.5% $ 75.78 $ 68.97 $ (6.81) -9.0% 16 2.4% 79.9% $ 80.40 $ 73.84 $ (6.56) -8.2% 17 2.0% 81.9% $ 85.02 $ 79.93 $ (5.09) -6.0% 18 1.8% 83.7% $ 89.64 $ 86.02 $ (3.62) -4.0% 19 1.5% 85.2% $ 94.26 $ 92.11 $ (2.15) -2.3% 20 1.3% 86.5% $ 98.88 $ 98.20 $ (0.68) -0.7% 21 1.2% 87.7% $ 103.50 $ 104.29 $ 0.79 0.8% 22 1.0% 88.7% $ 108.12 $ 110.38 $ 2.26 2.1% 23 0.9% 89.6% $ 112.74 $ 116.47 $ 3.73 3.3% 24 0.8% 90.4% $ 117.36 $ 122.56 $ 5.20 4.4% 25 0.7% 91.1% $ 121.98 $ 128.65 $ 6.67 5.5% 26 0.7% 91.8% $ 126.60 $ 134.74 $ 8.14 6.4% 27 0.5% 92.3% $ 131.22 $ 140.83 $ 9.61 7.3% 28 0.5% 92.8% $ 135.84 $ 146.92 $ 11.08 8.2% 29 0.5% 93.3% $ 140.46 $ 153.01 $ 12.55 8.9% 30 0.4% 93.8% $ 145.08 $ 159.10 $ 14.02 9.7% 12 12
Multi-Family Bi-Monthly Bill Impact Graphs (Revenue Neutral Rates) Arrow Denotes Bi-Monthly Average Use Per Bill 13 13
Multi-Family Bi-Monthly Bill Impact Table (Revenue Neutral Rates) 14
Commercial Bi-Monthly Bill Impact Graphs (3/4 Meter With Revenue Neutral Rates) Arrow Denotes Bi-Monthly Average Use Per Bill 15 15
Commercial Bi-Monthly Bill Impact Graphs (2 Meter With Revenue Neutral Rates) Arrow Denotes Bi-Monthly Average Use Per Bill 16 16
Commercial Bi-Monthly Bill Impact Table (1 of 2) (Various Meter Sizes With Revenue Neutral Rates) 17
Commercial Bi-Monthly Bill Impact Table (2 of 2) (Various Meter Sizes With Revenue Neutral Rates) 18
Single-Family Survey @ 3,000 Gallons / Month (Revenue Neutral Rates) Current Bill (White Arrow) = $17.10 New Bill (Black Arrow) = $12.57 19 19
Single-Family Survey @ 6,000 Gallons / Month (Revenue Neutral Rates) Current Bill (White Arrow) = $30.96 New Bill (Black Arrow) = $27.18 20 20
Single-Family Survey @ 12,000 Gallons / Month (Revenue Neutral Rates) Current Bill (White Arrow) = $58.68 New Bill (Black Arrow) = $61.28 21 21
Single-Family Survey @ 15,000 Gallons / Month (Revenue Neutral Rates) Current Bill (White Arrow) = $72.54 New Bill (Black Arrow) = $79.55 22 22
Customer Impacts: 5% & 10 % Additional Revenue Requirement Examples 23
Revenue Neutral 5% 10% 24
Revenue Neutral 5% 10% 25
Revenue Neutral 5% 10% 26
Revenue Neutral 5% 10% 27