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Show SECTION 3 RECOMMENDATIONS Changes in pricing policies are likely to gain greater public acceptance if they are phased in over time. Thus, change should reflect relative priority. With the intent of making change in a gradual manner, rather than an abrupt and potentially disruptive manner, a recommended priority ordering for implementing pricing policy change is as follows. 1. Eliminate rate structures ( wholesale, retail, or wastewater) that promote water usage. All declining block rate structures should be eliminated. 2. Measure all accounts. A correlation between price and consumption can not be made without an accurate measurement of consumption. 3. Eliminate water and sewer rate structures that provide no ability for customers to reduce their water and sewer bills by reducing their water consumption, i. e., phase out flat fees and rates that include minimum charges covering large amounts of water. 4. Base wastewater rates on winter water usage as a proxy for metering consumption ( effluent). 5. Adopt monthly billing to increase the effectiveness of the price signal. In order to further increase the customer's understanding and use of the price signal, utilities should provide information on each bill such as monthly water usage for each of the last 12 months, or water usage during the previous period and the same time period from the previous year, or some other usage data that provides customers with information that can be used to assess water conservation efforts. 6. Adopt water and sewer rate structures that improve the correspondence between incidence of costs and revenue recovery, including the development of additional customer classifications if needed to implement cost- based rates. 7. Implement seasonal rates whenever the difference between peak and non- peak seasonal water usage is large. Large can be defined as peak season exceeding non- peak by more than 50 percent. Since inclining block rate structures can be structured to mimic seasonal rates, non- seasonal inclining block rates can be implemented as an alternative. ES- 39 Executive Summary |