Skip to main content
padlock icon - secure page this page is secure

Developing Water Rate Structures for a Sustainable Future

Buy Article:

$9.50 + tax (Refund Policy)

How can a water utility encourage efficient water use while fully recovering costs; maintaining and/or increasing industrial, commercial, and wholesale customers; and keeping rates affordable for essential and basic water use? Louisville Water Company (LWC) recently addressed this question.

LWC's water use per customer has declined over the last 20 years. Combined with wet weather and a slow economy, water revenues are down, and highlight the need for increased revenue stability so that LWC can keep water rate increases low and generate returns for the sole shareholder. At the same time, LWC also wanted to address trends in conservation. This paper examines the methodology and outcome of a rate restructuring effort at LWC to address these issues.

At the time of the study, LWC's retail customers were subject to a seven-tier rate structure, in which unit rates increase through tier three and then decline. We used a series of workshops to identify and prioritize goals and objectives, to review possible rate structures, and to finalize recommended changes to this structure.

To achieve greater revenue stability and create a rate structure that allows for sending price signals to consumers to be more efficient with their water use, LWC considered several changes to the existing water rate structure. Some of the structures considered included creating a separate irrigation class, creating separate tiered rates for each customer class, condensing tiers, and moving more distribution costs to the fixed cost recovery component. The wholesale rate structure was also examined. The goal of the rate restructuring effort was to create a flexible structure that could be easily adapted to meet the ever-changing needs of LWC and its customers.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Article Media
No Metrics

Document Type: Research Article

Publication date: 01 January 2012

More about this publication?
  • Proceedings of the Water Environment Federation is an archive of papers published in the proceedings of the annual Water Environment Federation® Technical Exhibition and Conference (WEFTEC® ) and specialty conferences held since the year 2000. These proceedings are not peer reviewed.

    A subscription to the Proceedings of the Water Environment Federation includes access to most papers presented at the annual WEF Technical Exhibition and Conference (WEFTEC) and other conferences held since 2000. Subscription access begins 12 months after the event and is valid for 12 months from month of purchase. A subscription to the Proceedings of the Water Environment Federation is included in Water Environment Federation (WEF) membership.

    WEF Members: Sign in (right panel) with your IngentaConnect user name and password to receive complimentary access. Access begins 12 months after the conference or event
  • Subscribe to this Title
  • Membership Information
  • About WEF Proceedings
  • WEFTEC Conference Information
  • Learn about the many other WEF member benefits and join today
  • Ingenta Connect is not responsible for the content or availability of external websites
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more