Having sufficient revenues to provide quality service as well as a fair return on its investment is important to all utilities. We are experienced in revenue and expense analysis and preparing pro forma statements of income for ratemaking purposes. We have conducted numerous studies in support of revenue requirements before regulatory agencies and municipal councils or boards.
Cost of Service Allocation
Utilities have been increasingly concerned that their rates and charges are fair and equitable for all classes of users. We have conducted cost of service allocation studies for water and natural gas clients that determine the extent revenues are commensurate with the costs to provide service for each classification. We develop specific cost allocation models to identify and assign the costs to the appropriate service area, class or rate schedule. Our clients include some of the largest water companies in the country.
A properly designed rate structure is crucial to a utility's cost recovery. We are experienced in developing both traditional and innovative rate structures that address cost of service principles as well as conservation, social influences and customer acceptance. We use customized rate models, bill analysis and rate application software to test alternative rate structures and to ensure that required revenue levels are achieved.
Also referred to as "Tapping Fees," capital charges provide utilities an opportunity to offset the cost of expanding and extending the system of facilities without placing a burden on existing customers. We are experienced at developing capacity, connection and customer facilities fees using various methods such as the system buy-in method.