Metropolitan Water District of Southern California

California

RFC has provided consulting services to Metropolitan Water District of Southern California (MWD) since 1998. In 2010, we completed an “Independent Review of FY 2010/11 Cost of Service and Rate Setting Process”.  This engagement includes confirming the following items:

In addition, as a part of the independent review process, RFC identified the potential opportunities to improve MWD’s cost of service, rate structure and methodology. 

 

In 2007, RFC was engaged to evaluate financial and pricing issues for the Long Term Financial Planning Committee of the member agencies.  Specifically evaluated was the manner in which overhead was allocated to various MWD functions, as well as the feasibility of a peaking surcharge to be assessed to member agencies.

 

In 1998, RFC was engaged to assist MWD in developing a cost of service process (including wheeling rates) that could serve as a basis from which alternative rate structures could be developed and evaluated.  Objectives of the project were as follows:

 

In addition to achieving the above objectives, RFC produced a comprehensive report documenting the project’s background, conceptual approach, and cost of service processes. Although the cost of service phase provided detailed information on the costs of providing different types of service (including wholesale) , it stopped short of developing actual rates or rate structures.  Instead, the project’s output was used by MWD as a foundation from which to examine the feasibility of different rate structure alternatives.  After completing the cost of service work, RFC assisted MWD in reviewing and refining alternative rate structures developed by MWD and their Board.  Through this process, MWD was able to use the project’s financial planning tools to develop, refine, and adopt a new rate structure consistent with their strategic plan policies and principles.