The Portland Water District (District) maintains a 1,000-mile network of water mains ranging from 60 inches to 2 inches, pump stations, and reservoirs that bring water from Sebago Lake to 15% of Maine’s population. Raftelis recently performed a financial planning, rate, and cost-of-service analysis. In doing so, Raftelis designed and developed a custom-built cost of service, rate, and financial planning model for the District. This model was used to first perform a financial planning study to determine the District’s necessary rate increases over 10-year forecast period. Rate increases were set to adequately fund all of the District’s operating and capital needs, as well as maintain the District’s annual reserve fund requirements. Raftelis also performed a cost-of-service study to present to the District the existing rate equity among customer classes. Given that adjusting the District’s rates to immediately achieve cost of service equity would result in rate shock to the District’s customers, Raftelis recommended a phase-in approach to slowly move towards cost of service with each year’s rate increases. Throughout this process, Raftelis made multiple presentations to the District’s Trustees to receive direction and buy-in for the recommended rate plan. Ultimately, the District approved the phase-in approach and financial plan for rate increases, and will reevaluate at its next cost-of-service study.
