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Show WATER PRICING POLICY STUDY The rationale for seasonal rates is that peak periods impose higher costs than non- peak periods. Utilities construct many facilities to meet peak demand. To meet peak demand, utilities with numerous sources of supply are forced to use all sources, including the higher cost resources not needed to meet off- peak demand. Operation and maintenance costs, like pumping, can also be higher during peak periods. Thus, seasonal rates are used to price water in a fashion that parallels peak and off- peak costs more closely. Seasonal rates can offer simplicity in implementation from the utility's standpoint, and ease of understanding from the customer's standpoint. Seasonal rates come in two main forms. One form is to have entirely different rates in the peak and the off- peak seasons. The other main form of the rate is adding a surcharge ( to the off- peak rate) for high levels of usage during the peak season rates. Figure ES- 3 Seasonal Rate Illustration One - Peak Season • Off Peak - - 1 1 i i i 0 10 20 30 40 MONTHLY WATER USE ( IN 1,000 GALLONS) Executive Summary ES- 16 |