• AWWA ACE94280
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AWWA ACE94280

  • Rate Setting Models for Small Utilities
  • Conference Proceeding by American Water Works Association, 01/01/1994
  • Publisher: AWWA

$12.00$24.00


Last year, the Howard County Bureau of Utilities decided to begin serving new areas of the County employing a new technology that carried with it a high level of risk. At the same time, the County made a policy decision that each development using that technology would be treated as a separate utility for financial adequacy purposes. Since the average development using this technology is likely to have no more than 160 homes, this decision could result in a large number of small utilities, each one of which is expected to be financially self-sufficient. Because one of the risk factors turned out to be so costly to correct, the County later decided to establish an insurance reserve across these utilities as an added financial safety net. The county was able to procure a rate and financial model that met all of these objectives, required only Lotus software, received training in the use of the model so that the utility became self sufficient in rate setting, for a total cost of under $25,000, one third of which was for engineering studies. In this paper, the authors describe the development of this model as a case study and describe how this same approach can be used for other small utilities.

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