| OCR Text |
Show SUMMARY OF FINDINGS Uniform Rates Uniform rates assess the same per unit charge for all water to all customers, regardless of customer class and consumption level. Because the rate does not provide a volume discount or a minimum block of water for no marginal cost, customers can minimize their total bill by avoiding excessive use, thus, there is an incentive to conserve. Uniform rates will generally fall short of meeting strict cost- of- service principles. In particular, uniform rates create a form of cross- subsidization between peak and off- peak users and between customer classes. They can also create spatial cross- subsidization by ignoring geographic cost differentials. Cost- of- service and conservation goals are generally not the reasons for adopting a uniform rate structure. Uniform rates are simple to develop, easy to calculate, easy to explain to customers, easy to implement, and widely accepted by customers. Typically, uniform rates are only questioned in areas where they place an unusually harsh burden on industry or institutional customers. Figure ES- 2 Uniform Rate Dlustration 2.5 - a 2 - 1.5 - 0.5 10 20 30 MONTHLY WATER USE ( IN 1,000 GALLONS) 40 Seasonal Rates Seasonal rates differentiate between peak and off- peak seasons by applying higher rates in the peak season than in the off- peak season. Seasonal rates provide one method of sending price signals to customers that providing water in one season is more expensive than in other seasons. ES- 15 Executive Summary |
