Raftelis is under a long-term contract to provide financial planning, rate sustainability consulting, and management consulting services for DC Water.
Under this contract, Raftelis has conducted two cost-of-service studies. The most recent cost-of-service study included four major project deliverables: assuring the sufficiency of projected revenue to cover projected expenditures; calculating cost of service-based rates and comparing them to projected rates; reviewing miscellaneous fees and charges; and, recommending rate structure alternatives that enhance priority pricing objectives of DC Water.
As part of the COS Study, Raftelis also looked at the DC Water impervious area charge implemented to recover costs associated with stormwater management and combined sewer overflows. Raftelis reviewed and validated capital cost projections and units of services upon which charges were based. We offered an opinion on the sufficiency of revenue generation to cover long-term costs and recommendations on how the program may be enhanced. Results of the cost-of-service study, along with a comprehensive report and revenue sufficiency/cost-of-service model, were presented to the Retail Rates Committee of the Board in 2012.
Raftelis continues to provide a variety of financial, rate, and management consulting services for DC Water.
In 2017 and 2018, Raftelis completed a miscellaneous fee study for DC Water. DC Water updates its miscellaneous fees every 5-8 years to accurately reflect the cost of providing service. The purpose of the study was to benchmark DC Water’s fees to peer utilities, establish FOG (fat, oil, and grease) and cross connection/backflow preventer fees, and update fees wherever applicable. Raftelis contacted various peer utilities to establish a benchmarking analysis. The benchmarking compares fees across utilities whenever applicable. The FOG and backflow preventer fee development will generate roughly $1.7 million annually for DC Water. The fees were developed by analyzing costs relevant to each program and projecting annual estimated number of services performed. Raftelis prepared a excel model to accurately update the miscellaneous fees. The model estimates the amount of services to be performed in a year and then assigns weightings to the various services to approximate the cost of each service.
Along with the miscellaneous fees Raftelis wrote an extensive report accompanying the calculated fees. The report describes the benchmarking process in detail. The report lays out the approach taken to calculate the FOG and backflow preventer fees. The report contains numerous tables that display the benchmark utility fees and the current/calculated DC Water fees. This report was used extensively to help communicate the impact of the changes to applicable customers.
Raftelis is working with DC Water to evaluate the affordability of the Clean Rivers Impervious Area Charge (CRIAC) for defined customer segments. The project involves identifying means for segmenting the customer base, determining metrics to define affordability, and gathering and analyzing data to determine affordability for the customer groups.
In recent years, DC Water has undergone many major changes including the appointment of several new Board members and the initiation of large capital projects of unprecedented scale. DC Water’s leadership recognized the complexity of managing these changes while continuing to provide high-quality water and wastewater services to their more than 2,000,000 customers in the Metro DC area.
In 2008, DC Water adopted a strategic plan that was very operationally driven and, as a result, the organization has been very successful at providing service to its customers. However, the changes described above resulted in the need to re-evaluate the organization’s overall direction and to provide an opportunity for the utility’s new and existing leadership team to lend their perspectives and insights into the direction of DC Water’s future.
Raftelis assisted DC Water with the development and implementation of a Board-driven strategic plan called Blue Horizon 2020. The objectives of this planning process were to:
The strategic planning process included a series of meetings and workshops with the DC Water Board, Executive Management, and Strategic Planning Committee to gather their input and to ensure their buy-in of the strategic plan. DC Water’s plan has been developed, accepted, and endorsed by the Board and Executive Management, and it reflects input and thinking from the various jurisdictions DC Water serves.
To assure that the Blue Horizon 2020 plan is a living document, Raftelis assisted DC Water with the development of implementation plans for accomplishing the tasks necessary to meet the objectives of the strategic plan. These plans and updates on the progress towards achieving the stated objectives have become an integral element of the Board’s governance process and Executive Management’s budgeting and management processes. Implementation of this plan will enable DC Water to:
By accomplishing the above, DC Water is achieving its vision of being a world-class utility.
