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4. Rate Design <br />Figure 6 — Sewer Fixed Charge Comparison (One ERU or a 5/8" or V Meter Equivalent) zs <br />$45 <br />$40 Average <br />$35 <br />$30 <br />$25 - <br />$20 <br />$15 <br />$10 <br />$5 <br />o� oJ�c� e � .,o���� oJ��A o°oa o���� o���� <br /><a <br />ej <br />� Q� <br />�0 <br />• <br />Utility systems often establish fixed charges at desired levels to support revenue stability in times of • <br />economic instability and/or volatility in billed demands. Credit rating agencies have historically utilized a <br />revenue defensibility component in rating criteria with revenues from fixed charges exceeding 30.0% <br />considered in the "stronger" category. IRCDUS' currently collects approximately 36% of water rate revenues <br />and approximately 59% of sewer rate revenues through fixed charges which provides overall strong <br />revenue stability. <br />4.1.2 Volumetric Rates <br />Volumetric water and sewer charges are based upon metered water use, and for potable water, inclining <br />block rate structures are common in regions where water conservation is essential, including throughout <br />the State of Florida. Inclining block rate structures are intended to provide price incentives to reduce <br />discretionary water use, notably outdoor irrigation. IRCDUS currently applies a four -tier inclining block water <br />rate structure to all its customers. For example, the tier one demand threshold under IRCDUS' existing <br />rates for a customer with one ERU is 4,000 -gallons while the tier one threshold for a customer with two <br />ERUs is 8,000 -gallons and so on. Figure 7 summarizes the water volumetric rate structure for residential <br />customers including tiers and pricing for other water systems in the region. As can be seen, use of inclining - <br />26 Rates as of March 25, 2024. <br />28 <br />• <br />