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Show WATER PRICING POLICY STUDY PRICING CHARACTERISTICS OF WATER AGENCIES As part of the WMIS, a Water Usage Inventory Questionnaire was distributed to water agencies in Salt Lake, Utah and Wasatch Counties and the Uinta Basin in May 1992. Questionnaires were delivered to 324 water agencies. Responses were received from 134 agencies, representing a response rate of 41 percent. The 134 respondents provided information on the size and structure of their agencies, primary sources of supply, pricing systems employed, customer classes served, and water conservation programs in place or planned. A large majority of residential, commercial, and wholesale customers are charged under a minimum charge pricing system with a uniform per unit rate for water delivered in excess of the minimum. Pricing structures faced by irrigation customers are more evenly spread between a fixed charge system, a flat rate system, a minimum charge system, and other pricing systems. Only two responding agencies employ an increasing block pricing structure. The number of agencies employing each pricing structure is more evenly distributed than the number of customers served by each pricing structure. Most large utilities use a minimum charge system. FACTORS INFLUENCING FUTURE PRICING POLICIES IN THE REGION Traditionally, water utilities have based their rate structures primarily on cost- of- service based methods endorsed by the American Water Works Association ( AWWA). Recent trends have required the AWWA and water utilities across the country to re- evaluate their rate structures and the goals and objectives of their pricing policies. Concerns about imbalances in supply and demand of water resources and the financial, economic and social costs of closing the supply/ demand gap have led to the increased use of conservation- inducing pricing policies. Increased Demand High growth regions have been some of the strongest candidates for implementation of alternative rates. In areas such as the Southwest and Southeast, population growth has spurred an increased demand for water that is becoming increasingly difficult to meet with current supply sources. The Wasatch Front region of Utah is currently one of the most rapidly growing areas in the country. The population of Salt Lake and Utah Counties grew at an average annual rate of 4.0 percent from 1990 to 1995, compared to the U. S. rate of 1.1 percent for the same period. While traditional supply sources have been more than adequate to meet demand in Utah, it is expected that current supply sources will not be able to meet projected demand in less than thirty years. Executive Summary ES- 6 |