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Show SUMMARY OF FINDINGS Depletion of Sources In addition to increased demand, many water purveyors are facing concerns of diminishing water supplies. Depletion of water sources generally refers to a depletion in the potable water supply of an area. Groundwater overdraft, groundwater and surface water contamination, and increasing environmental regulations can all contribute to the depletion of current water resources. Cost Recovery Obligations If a water utility had no costs, rate setting would be a matter of setting rates at a level that would promote a desired level of consumption. As we know, however, water utilities do have costs. Most conservation rates are established to decrease or modify demand; cost of service considerations are secondary. Conversely, most traditional cost of service based rates are established to recover the costs of delivering water first, to equitably balance the cost burden among customers second, and then to consider other goals - including conservation. Based on comments received through consultation with water petitioners during this study, cost recovery is the single most important issue to be resolved in the successful expansion of the use of conservation pricing techniques in the CUWCD service area. Conservation pricing and cost recovery are not mutually exclusive goals. Any successful pricing structure must consider cost recovery a primary goal. Customer Acceptance Customer acceptance is an important aspect of any utilities' rate structure. That importance grows if the ultimate responsibility ( or the perceived responsibility) for setting rates falls on the shoulders of publicly- elected officials. Whenever pricing policies are being altered, it is essential to involve the public in the policy making process through public involvement and information programs. Legal and Administrative Requirements In numerous instances utilities have adopted water conserving rate structures due to legal or administrative constraints or requirements. For example, under the guidelines for loans provided through a financing program, the State of Texas' Water Development Board imposes pricing related conditions, such as outlawing declining block rates for all but large industrial facilities with high load factors. 1 During the 1970s and 1980s, the U. S. Environmental Protection Agency provided numerous construction loans for wastewater treatment facilities, a condition for which was to essentially require a uniform rate structure. Many utilities eventually adopted similar rate structures for water 1 Telephone conversation with Bill Hoffman, Texas Water Development on February 6, 1992. ES- 7 Executive Summary |
