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I PEAR -9 REVENUE WASTEWATER BOOK 88 P, u-1071 Based on reductions for reserved capacity units, residential seasonal units and elasticity adjustment for decrease in volume units, water volume charges would increase from an average of $1.99 per thousand gallons to $4.75 per thousand gallons and wastewater volume charge would increase from $3.35 per thousand gallons to $12.09 per thousand gallons. The water volume charge per thousand gallons would increase by 238.69% and the sewer volume charge would increase by 360.89%. The effect of removing the base facility charge would be the recovery of costs for providing the availability of service for reserved capacity (development) and residential seasonal customers from existing annual users of the system. As indicated in the attachments the following effect on a combined water and sewer monthly billing would occur: (a) The bill for a average residential water and sewer customer using 5,000 gallons would increase by 83.6% or $42.22 monthly/$506.64 annually. (b) The bill for a commercial water and sewer customer using 10,000 gallons monthly would increase by 125.3% or $96.09 monthly/$1,153.08 annually. RECOMMENDATION: The Staff of the Department of Utility Services believes that if the rate structure was modified to remove the base facility charge, it would create an inequity between customers of the system (existing and future) and would be detrimental to the overall financial stability of the system. The Staff believes that the existing rate structure provides financial sufficiency, equity between customer classes, compliance with legal authorities (EPA user charge regulations), and avoids relationships which cause one customer class to subsidize another customer class. M s � � Commercial Residential Reserved Totals 1992-93 $1,435,213 $3,249,861 $959,489 $5,644,563 % of Total 25.43% 57.58% 17.00% 100% W/O Base $1,603,752 $4,040,811 $0 $5,644,563 Facility 28.41% 71.59% 0% 100% Inc/Dec $168,539 $790,950 ($959,489) $0 Based on reductions for reserved capacity units, residential seasonal units and elasticity adjustment for decrease in volume units, water volume charges would increase from an average of $1.99 per thousand gallons to $4.75 per thousand gallons and wastewater volume charge would increase from $3.35 per thousand gallons to $12.09 per thousand gallons. The water volume charge per thousand gallons would increase by 238.69% and the sewer volume charge would increase by 360.89%. The effect of removing the base facility charge would be the recovery of costs for providing the availability of service for reserved capacity (development) and residential seasonal customers from existing annual users of the system. As indicated in the attachments the following effect on a combined water and sewer monthly billing would occur: (a) The bill for a average residential water and sewer customer using 5,000 gallons would increase by 83.6% or $42.22 monthly/$506.64 annually. (b) The bill for a commercial water and sewer customer using 10,000 gallons monthly would increase by 125.3% or $96.09 monthly/$1,153.08 annually. RECOMMENDATION: The Staff of the Department of Utility Services believes that if the rate structure was modified to remove the base facility charge, it would create an inequity between customers of the system (existing and future) and would be detrimental to the overall financial stability of the system. The Staff believes that the existing rate structure provides financial sufficiency, equity between customer classes, compliance with legal authorities (EPA user charge regulations), and avoids relationships which cause one customer class to subsidize another customer class. M s � �