insight
DI-Why? What utilities should ask themselves before setting their own rates
Setting utility rates is a complex process. How do you know whether to do it yourself or seek help? Here are a few questions to help guide your decision.
Raftelis works with you to develop pricing objectives that deliver the rate structure that best meets your strategic and operational goals. These objectives range from promoting water conservation to addressing affordability concerns to promoting economic development and more.
We have developed thousands of customized rate structures and fees to meet the specific needs and goals of our clients and their stakeholders. There is no one-size-fits-all solution, and we use our experience to help you determine the optimal rate structure for your agency.
Utility rates and municipal fees are set based on revenue requirements and the number of accounts from which these costs must be recovered. We have a proven, data-driven method of forecasting costs and customer data to inform the rate-setting process. We work with you to execute this within a comprehensive, reliable, and flexible financial plan. Our financial plans forecast system operations and maintenance (O&M) costs, capital needs, and customer use, and monitor your overall financial performance.
Developing utility rates and municipal fees requires sophisticated models to project your organization’s revenue requirements and customer data, allocate costs appropriately, and allow for the evaluation of multiple rate structure alternatives. We develop customized, non-proprietary financial models that are user-friendly and flexible so you can use them for future financial planning and rate setting.
Your rate or fee structure must be approved by your governing body, so we don’t just design a sound rate, we bring you communication and outreach experts to help you build understanding and support for new rates and fees. We help you “show not tell” and demonstrate the true value of the services and the comprehensive analysis behind our recommended rates, to ensure broad stakeholder buy-in and adoption.
We provide a variety of related rate, charge, and fee consulting services, including: