2010 Great Lakes Water Rate Survey MICHIGAN STATE UNIVERSITY Janice Beecher and Jason Kalmbach I NSTITUTE OF P UBLIC U TILITIES  MICHIGAN STATE UNIVERSITY.

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Presentation transcript:

2010 Great Lakes Water Rate Survey MICHIGAN STATE UNIVERSITY Janice Beecher and Jason Kalmbach I NSTITUTE OF P UBLIC U TILITIES  MICHIGAN STATE UNIVERSITY  ipu.msu.edu Please do not distribute by electronic or other means or cite without permission.

Beecher Great Lakes Water Rate Survey  Top ten water systems by service population from eight Midwestern states, by service population size as reported in EPA Consumer Confidence Reports  Illinois, Indiana, Michigan*, Minnesota*, New York, Ohio, Pennsylvania, and Wisconsin (*no economic regulatory authority)  Data gathered from websites & personal communications.  Nine water providers no rate information available directly on the website

Beecher Watershed map and systems in the sample – not final

Beecher Service population

Beecher System service populations

Beecher Sample characteristics

Beecher Effective date of tariff

Beecher Billing cycles

Beecher Billing combinations

Beecher Tariff charges

Beecher Rate structures

Beecher Peaking-factor rate (Ann Arbor, MI)

Beecher Rate structures by ownership

Beecher Public fire-protection in fixed charges: average by meter size

Beecher Public fire-protection in fixed charges: range by meter size

Beecher Fixed charges and variable unit rates for 100 ccf by usage level

Beecher Conservation and assistance policies

Beecher Average charges by state

Beecher Average charges by system characteristics

Beecher Average charges for 0 cf (0 gal.)

Beecher Average charges for 1,000 cf (7,480 gal.)

Beecher Average charges for 50,000 cf (374,000 gal.)

Beecher Average charges for 1 mil. cf (7.4 mil. gal).

Beecher Monthly bills by system size and ownership

Beecher Comparison to AWWA rate survey (2008)

Beecher Water utility cost-trend analysis  Data from the Wisconsin Public Service Commission  Period:  Benchmarking analysis  Annual financial reports  Class AB water utilities  N ranges from 72 to 94  Informative but not generalizable to other water systems

Beecher Utility plant to revenue ratios (capital intensity)

Beecher Utility plant investment by function

Beecher Ratio of value of plant additions to retirements

Beecher Operating revenues and expenses per water sold

Beecher Operating expenses per water sold

Beecher Operating expenses by water source

Beecher Pumping statistics

Beecher Revenue trends by customer class

Beecher Trends in residential water sales and revenues

Beecher Note: rate disparity between private and public systems (Beecher)  Income, property, and other taxes and fees (e.g., franchise)  Profits (equity returns to “owners” are less for public)  Financing (including SRF for cities)  Scale and density economies (favor cities)  Locational cost differentials (varies)  Contributions and system development fees (cities)  Costing practices (depreciation v. replacement expense)  Hidden subsidies (but also transfers)  Rate practices (outside-city rates)  Cost avoidance and deferrals (sometimes)  Investment incentives (private)  Economic regulation (cost-based rates) Note: significant variations from system to system Some municipal utilities actually provide transfers