Can New Pricing Models Capture the True Value of Water?

Can New Pricing Models Capture the True Value of Water?

Many water utilities are currently experiencing high sensitivity to demand and revenue fluctuations. As capital expenditures to maintain and upgrade distribution infrastructure become inevitable, many utilities are also facing increasing pressure to conserve resources and maintain water quality. Evaluating potential rate structures may reveal solutions to provide revenue stability while...

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Why is Conservation Driving Water Rates Up?

The fixed costs in most water utilities (depreciation, labor, amortization, maintenance, taxes, regulatory compliance, overheads, etc.) are far greater than the fixed charge on a customer’s bills. The commodity charge in theory should cover the variable costs of production only (power, chemicals, and residuals) but that creates a high base bill that neither municipalities nor state regulators...

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