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Show with imports from other utilities over a national grid. With water, agencies are limited by the fixed nature of aqueducts, canals and other infrastructure. Obviously, caution must be used when drawing comparisons between the two industries. However, it is valuable to analyze the successes and failures of related industries. This is particularly true as they relate to large scale restructuring and business strategies that may directly affect revenue generation. Decoupling Decoupling is the link between volume of water sold and revenues that encourage providers to sell more water and discourages them from promoting more efficiency usage. Of the many possible solutions available, decoupling is gaining in popularity in the electric power industry because it does not involve the administrative and legal costs associated with other approaches. Decoupling is a two- part mechanism. For water, the first part may consist of breaking the connection between water sales and water revenues. The second and considerably more complex part involves " recoupling" these revenues to another economic factor. This factor may be growth in the customer base, determinants of changes in fixed costs or other factors beyond the direct control of the utility. For more information on decoupling and other elements of electric utility rate making, see " Municipal Water Management in Utah. " Wastewater Pricing Wastewater pricing nationally appears to be an unused tool for water conservation. Of 22 utilities using inverted block rates for water, only three had inverted wastewater rates. Utilities nationally are not linking wastewater rates with water rate structures. Most link uniform wastewater rates with whatever water rates are used. Many wastewater rates in Utah are based on average monthly winter water consumption. Because there are few outdoor uses for water in Utah during the winter, it is expected that all winter usage is indoors, and therefore, is discharged as effluent. It is expected that indoor water use, and subsequent effluent, will remain constant between seasons. Wholesale Water Pricing Wholesale water pricing encompasses at least three issues. First is the relationship between the level of wholesale water costs on the level of retail water rates. Second is the possible use of wholesale water rates as a water conservation tool unto themselves. Third is the imposition of conditions of service on those purchasing water from the wholesale entity. Any water pricing scheme that is available to retail water agencies is also available to wholesalers. Retail water agencies are customers of the wholesaler. Water sold to them can be priced in the same fashion as water sold to residential, commercial and industrial customers of retail agencies. Does the wholesaler play a part in the decision to conserve water or is this the sole role of the customer, who is influenced only by retail prices? From a policy standpoint, wholesale agencies can introduce methods that will induce a reduction in the ultimate consumption of water. As noted earlier, the primary option available to a wholesaler is to introduce conservation rates themselves. Alternately the wholesaler can subject their customers to certain conditions of service. Wholesale agencies have available a wide range of pricing tools that can be used to shape water demand. Wholesale purveyors can assess rates that are identical to the rates used by retailers, i. e., uniform, inverted, seasonal, etc. 42 |
