Since 2007, Raftelis has assisted the Richmond Department of Public Utilities (DPU) with various financial, rate, and management consulting services for water, wastewater, stormwater, natural gas, and electric street lighting utility services.
Initially, Raftelis worked with DPU to develop a financial planning model that incorporates all utility systems: water, wastewater, natural gas, street lighting and stormwater. 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 the assessment of utility asset condition and the development of a system recapitalization budget for DPU. Raftelis assisted DPU with an 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. Raftelis 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.
Raftelis is currently providing ongoing rate and financial consulting services to DPU. These services include various cost-of-service analyses and support for DPU’s effort to develop an integrated plan for its water, wastewater, and stormwater utilities. Raftelis is working with DPU to define and measure various metrics of rate affordability, which will be used to help frame discussions with regulators to determine sustainable levels of capital spending. Raftelis also provides debt issuance support services including preparation of financial feasibility reports.
Since 2015, Raftelis has provided data management-related services, beginning with a needs assessment for key systems and data needs related to management, reporting, and business process efficiency. DPU identified that the development of a water loss program was a key need identified in the assessment, and Raftelis assisted DPU with the completion of its first water audit, aligning with the AWWA M36 Manual. Raftelis is also building an integrated software program supporting DPU’s Water Metro Care Affordability Program that provides an automated link between intake occurring at the Department of Social Services and DPU’s customer information system.
In addition to our water and wastewater consulting, Raftelis’ multi-year engagement with DPU includes stormwater services. We prepared the Department’s five-year financial model annually, which includes the implementation of a stormwater 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.
Raftelis also assists the DPU with various rate and financial services for its natural gas utility. We are currently conducting a cost-of-service analysis for the natural gas system which includes a detailed examination of customer usage and load characteristics. This study is expected to be completed in FY 2022.