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Show Elimination of declining block rate schedules from any system of water or wastewater treatment charges. Public Law 102- 575, subsection 207( f)( 2)( B) Status According to national surveys, 46 percent of water utilities serving the 100 largest metropolitan areas use the declining block rate schedule. Uniform rates are used in 36 percent of these cities, and increasing block rates are used in 18 percent. Consultants hired by the Central Utah Water Conservancy District and Division of Water Resources have found only one declining block rate schedule for culinary water in Utah. There is no evidence of declining block rates in Utah for wastewater. The impact of wastewater pricing on demand for water is relatively undocumented. Wastewater prices are generally included as one explanatory variable in water demand functions, and are believed to be predictors of water demand. Since wastewater is not metered, due to the presence of solids in the water, it is difficult to price wastewater. Common practice in Utah by municipal water and wastewater managers is to measure each resident's contribution to the wastewater stream as the average monthly water use during winter months times 12 months. Officials at the Utah Division of Water Quality indicate all wastewater is charged at a base rate and uniform fee, much like culinary water. The Central Utah Water Conservancy District is required by the Central Utah Project Completion Act to carry out a pricing policy study. A draft of this study is referenced in this report. When completed, the study will provide additional insight and direction for pricing municipal and industrial water. Background Historically, water systems fees have been set to recover the cost to develop, store and deliver water. In earlier times, systems had no meters, and costs of running the water system were divided among customers. All users paid the same amount. Managers of larger systems were quick to see the advantage of metering to measure the amount of water used, and to identify and categorize users. The primary goal of setting rates is to collect sufficient revenue, and collect it from individuals and groups in proportion to the costs each imposes on the system. As a water system grows and becomes more complex, it is more difficult to achieve equity in rate setting. Declining block rates make sense when the cost to deliver water decreases as volume increases. This may occur in water rich regions of the U. S., but seldom in arid Utah. Uniform rates make sense when capacity in the supply, storage and delivery system is adequate and stable revenue flows are important. If needed, a different uniform rate can be set for each class of user. Rate Schedule Design Originally, a methodology was needed that properly allocated costs to various classes of customers and then recovered all costs through a rate structure. As a result, the goal has been to maintain a self- sustaining enterprise that is not unduly discriminatory to any class of customer. Now water |