EWUA Rate Committee — Progress Report
The Board of EWUA — following a member engagement discussion in September 2016 — has undertaken a review of all aspects of our water use rate structure. A Rate Committee was established consisting of three Board Members, the General Manager of EWUA (P. Kamin), and two non-board members.
During the months of June–September we have met on a weekly basis and sincerely engaged in an open, frank, and vigorous process of discovery, data analysis, understanding, and testing of several proposed new rate models.
Our anticipation was to announce a new rate structure in September with a planned effective date of January 1, 2018. While we have made significant progress, we have not arrived at a consensus on how best to move forward.
We are now targeting an announcement of the new structures in the first quarter of 2018 — with a planned implementation date of July 1, 2018.
Here are the bullet point highlights of what we have learned:
- The current rate structure has several strengths that we do not wish to compromise. In particular, about 75% of revenue derives from the base rate charges and the balance of 25% from excess water charges. This provides for stable and predictable revenue to your association.
- There is a near parity in the ratio of water consumption and revenue among the service groups (residential, multi-family, and commercial)
- There is a very strong conservation signal when usage exceeds the base allotment of 5000 gallons (per ERU).
- Current revenue is adequate to meet 2017 and projected 2018 budget obligations.
- The current rate structure has its shortcomings — and yet it is non-controversial.
There are of course shortcomings in the current rate structure as well: The parity of revenue vs consumption between service groups breaks down within service groups. The lowest usage consumers and the highest usage consumers pay dramatically higher per gallon consumption rates than the moderate consumers do across all service groups.
- There are many specific instances of users having dramatically higher water bills for using identical amounts of water in a billing period.
- The $20 per thousand gallons ‘surplus usage rate’ is very high, and can be perceived as more than just a strong conservation signal. For some, it is viewed as punitive.
- The current rate structure has no seasonal component (higher rates in summer to encourage conservation, lower rates in winter, to help the local economy when water is plentiful).
- The current rate structure has little flexibility to fine tune for future revenue needs of the association (more granularity in usage rates and tiers, seasonal rates, etc.).
- There is no conservation signal when usage is less than the base allotment of 5000 gallons (per ERU).