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Base‐Extra Capacity Water Rate Design Questioned
Reader Joe Dimeo writes with the following criticisms of AWWA's Manual M1 and “Base‐Extra Capacity Water Rate Design” (JOURNAL AWWA September 1983) by R.F. Banker: no rationale is given for allocating costs to base (commodity) or extra capacity (demand) and the considerable variation between the two systems; measuring extra capacity on an individual class basis is beyond the ability of almost every water district in the US; nothing tangible supports the assumption that extra capacity is contributed primarily by users in the first 15,000 gal/month category; though the manual recognizes the wide variation in water usage habits within each class and therefore the unavoidable discrimination in charges to individuals, it blandly dismisses this problem by saying that this issue is too complex to deal with; and the manual makes a weak case for assigning the balance of cost‐of‐service and unit costs on an individual basis in the actual design and development of water rates. R.F. Banker responds to each of Dimeo's points, and concludes that careful study of the new Water Rates Manual M1, including recognition of the intent and limitations of such a manual as set forth in the introduction, will provide the user with a basic understanding of the principles of rate‐making.
Base‐Extra Capacity Water Rate Design Questioned
Reader Joe Dimeo writes with the following criticisms of AWWA's Manual M1 and “Base‐Extra Capacity Water Rate Design” (JOURNAL AWWA September 1983) by R.F. Banker: no rationale is given for allocating costs to base (commodity) or extra capacity (demand) and the considerable variation between the two systems; measuring extra capacity on an individual class basis is beyond the ability of almost every water district in the US; nothing tangible supports the assumption that extra capacity is contributed primarily by users in the first 15,000 gal/month category; though the manual recognizes the wide variation in water usage habits within each class and therefore the unavoidable discrimination in charges to individuals, it blandly dismisses this problem by saying that this issue is too complex to deal with; and the manual makes a weak case for assigning the balance of cost‐of‐service and unit costs on an individual basis in the actual design and development of water rates. R.F. Banker responds to each of Dimeo's points, and concludes that careful study of the new Water Rates Manual M1, including recognition of the intent and limitations of such a manual as set forth in the introduction, will provide the user with a basic understanding of the principles of rate‐making.
Base‐Extra Capacity Water Rate Design Questioned
Dimeo, Joe (author) / F, R. (author)
Journal ‐ American Water Works Association ; 76 ; 4-99
1984-02-01
2 pages
Article (Journal)
Electronic Resource
English
Base–extra capacity water rate design
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