Setting the Stage for Water Rates: Policy Direction Should be a Priority
EXCERPT:
Introduction
In the vast majority of cases, important water rate policy issues are never really discussed until the Proposition 218 hearing, which is undoubtedly the worst time to have that discussion. If the rate adoption process is going to blow up, that’s when it will happen. Discussing and adopting well-vetted and well-understood rate-related policies beforehand can reduce the heated battles and tone down the rate-payer venom by settling some key questions, such as: (1) Are we willing to minimize rate increases at the expense of adequately funding capital replacement costs? (2) How do we make trade-offs between revenue stability vs. water conservation?[1] or (3) Are we accumulating sufficient reserves to position ourselves to issue new debt? This paper discusses practical measures to consider prior to the heated debates about rate increases.
