Policy Documents: Using Charges and Credits for Tap Rentals in Water Rates
Introduction The design of this rate structure started as an attempt to simultaneously address six goals for a water utility, like the City of Boulder's, in an area of scarce and expensive water, and that has a large existing customer base who have paid for the utility’s capital plant and water rights through tap fees/plant investment fees (PIFs): The rate structure should be equitable and economically efficient in that it accurately reflects both capital and operating costs associated with each individual customer, not just the “average” customer in a given class. Rates should provide an economically accurate incentive for conservation for all customers , big and small, that includes long term capital costs as well as variable operating costs , Plant Investment Fees should be accurate to current individual consumption levels and/or water budgets , not just to some class average consumption levels at some time in the past, The r