The primary purpose of rates and fees for utility and government services are to recover sufficient revenues to cover costs. However, expertly designed rates can be used as tools to help accomplish your strategic objectives while maintaining equity among all customer classes. Raftelis has conducted thousands of water, wastewater, and stormwater rate studies for utilities across the country, and fee studies for other public services, utilizing a variety of traditional and cutting-edge rate structures to help meet the specific goals of each utility.
Using rates and fees to not only recover revenues,
but also meet your organization’s objectives
Raftelis works with our clients to develop pricing objectives that guide the determination of the most appropriate rate structure to satisfy your organization’s strategic and operational goals. These objectives range from promoting water conservation to minimizing customer affordability concerns to promoting economic development.
Raftelis has experience developing a variety of utility rate structures and other fees that meet the specific needs and goals of each client and its stakeholders. Some agencies are best served by basic rate structures, whereas others benefit from the most innovative solutions. There is no one size fits all solution and we use our experience to help you determine the optimal rate structure for your utility or organization.
The calculation of utility rates and municipal fees depends on the costs that must be recovered from customers (revenue requirements) and the accounts/billable units from which these costs must be recovered. Raftelis has a proven and data-driven method of forecasting costs and customer data to inform the rate-setting process. Raftelis works with organizations to execute this within a comprehensive, reliable, and flexible financial plan. We forecast system operational and maintenance (O&M) costs, capital needs, and customer accounts and usage and monitor overall financial performance of a utility or government agency.
To ensure appropriate recovery of costs from different user classes, Raftelis reviews existing customer classifications to ensure proportionality. We consider historical customer class usage and peaking characteristics, along with emerging demographic and conservation trends. Raftelis employs methodologies and standards endorsed by the American Water Works Association (AWWA), Water Environment Federation (WEF), and the National Association of Regulatory Utility Commissioners (NARUC) to allocate costs that are robust enough to withstand scrutiny under regulated rate cases and interjurisdictional disputes.
Developing utility rates and government 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. Raftelis develops customized, non-proprietary computer models with an emphasis on being user-friendly and flexible. Our models are designed to be used by your utility for future financial planning and rate setting.
The perfect rate/fee structure that is not approved by governing bodies has no value. Raftelis is adept at effectively communicating recommendations to stakeholders and elected officials about the importance of any rate recommendation. Our focus is on demonstrating the true value of the services and the comprehensive analysis behind our recommended rates to ensure buy-in and adoption.
Raftelis provides a variety of related rate, charge, and fee consulting services, including: