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2010 Great Lakes Water Rate Survey

Janice Beecher and Jason Kalmbach Institute of Public Utilities  Michigan State University beecher@msu.edu  ipu.msu.edu Please do not distribute by electronic or other means or cite without permission. 2010 Great Lakes Water Rate Survey. MICHIGAN STATE UNIVERSITY.

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2010 Great Lakes Water Rate Survey

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  1. Janice Beecher and Jason Kalmbach • Institute of Public UtilitiesMichigan State University • beecher@msu.edu  ipu.msu.edu • Please do not distribute by electronic or other means • or cite without permission. 2010 Great Lakes Water Rate Survey MICHIGAN STATE UNIVERSITY

  2. 2010 Great Lakes Water Rate Survey • Top ten water systems by service population from eight Midwestern states, by service population size as reported in EPA Consumer Confidence Reports • Illinois, Indiana, Michigan*, Minnesota*, New York, Ohio, Pennsylvania, and Wisconsin (*no economic regulatory authority) • Data gathered from websites & personal communications. • Nine water providers no rate information available directly on the website

  3. Watershed map and systems in the sample – not final

  4. Service population

  5. System service populations

  6. Sample characteristics

  7. Effective date of tariff

  8. Billing cycles

  9. Billing combinations

  10. Tariff charges

  11. Rate structures

  12. Peaking-factor rate (Ann Arbor, MI)

  13. Rate structures by ownership

  14. Public fire-protection in fixed charges: average by meter size

  15. Public fire-protection in fixed charges: range by meter size

  16. Fixed charges and variable unit rates for 100 ccf by usage level

  17. Conservation and assistance policies

  18. Average charges by state

  19. Average charges by system characteristics

  20. Average charges for 0 cf (0 gal.)

  21. Average charges for 1,000 cf (7,480 gal.)

  22. Average charges for 50,000 cf (374,000 gal.)

  23. Average charges for 1 mil. cf (7.4 mil. gal).

  24. Monthly bills by system size and ownership

  25. Comparison to AWWA rate survey (2008)

  26. Water utility cost-trend analysis • Data from the Wisconsin Public Service Commission • Period: 2000-2009 • Benchmarking analysis • Annual financial reports • Class AB water utilities • N ranges from 72 to 94 • Informative but not generalizable to other water systems

  27. Utility plant to revenue ratios (capital intensity)

  28. Utility plant investment by function

  29. Ratio of value of plant additions to retirements

  30. Operating revenues and expenses per water sold

  31. Operating expenses per water sold

  32. Operating expenses by water source

  33. Pumping statistics

  34. Revenue trends by customer class

  35. Trends in residential water sales and revenues

  36. Note: rate disparity between private and public systems (Beecher) • Income, property, and other taxes and fees (e.g., franchise) • Profits (equity returns to “owners” are less for public) • Financing (including SRF for cities) • Scale and density economies (favor cities) • Locational cost differentials (varies) • Contributions and system development fees (cities) • Costing practices (depreciation v. replacement expense) • Hidden subsidies (but also transfers) • Rate practices (outside-city rates) • Cost avoidance and deferrals (sometimes) • Investment incentives (private) • Economic regulation (cost-based rates) Note: significant variations from system to system Some municipal utilities actually provide transfers

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