Richmond Department of Public Utilities
RFC worked with the Richmond Department of Public Utilities (DPU) to develop a financial planning model that incorporates all utility systems: water, wastewater, natural gas, street lighting and storm water. DPU uses the model to set rates, determine optimal capital financing scenarios and report on utility system financial conditions. The financial plan includes a projection of units of service (customer accounts and usage), operating expenses and capital improvements. One key goal of the model is assessment of utility asset condition and development of a system re-capitalization budget for DPU. RFC assisted DPU with evaluation of capital financing alternatives, including revenue bonds, general obligation bonds, Virginia Resource Authority (VRA) loans, Build America Bonds (BAB) and grants, to fund capital improvements. RFC recently completed a cost of service study for DPU’s water and wastewater utilities. The results of the study included several adjustments to the rate structures that balanced pricing goals of affordability, revenue stability, and resource conservation. RFC currently provides ongoing rate and financial consulting services to the DPU.
RFC is also conducting stormwater services for DPU. We are currently preparing the department’s five year financial model, which includes the implementation of a rate structure change from an equivalent residential unit to per thousand square foot unit of charge. In addition to developing the prospective costs, plan for capital improvement financing, and five year rate plan, we are providing supporting analysis associated with the proposed rate structure change as well as advising the utility on its stormwater compliance, fee, and rate structure change outreach process.