Raftelis has completed two comprehensive cost-of-service and rate studies for the San Antonio Water System (SAWS) in the past six years. SAWS is responsible for providing water and wastewater services to approximately 300,000 customers within the City of San Antonio and portions of the surrounding metropolitan area. Water supply is provided by water pumped from the Edwards Aquifer, which provides potable water for approximately 1.2 million people. SAWS is focused on developing a comprehensive approach to meeting its long term water demands in one of the fastest growing regions of the country. A combination of effective conservation programs, acquisition of additional water rights in the Edwards Aquifer and development of new water supplies are the foundation of the SAWS capital improvement plan. As such, development of fair and equitable water and wastewater rates that meet the financial and pricing objectives of SAWS and effective communication of the basis for those objectives and the rates to community leaders and customers was an integral part of this effort.
Both studies involved a Rates Advisory Committee (RAC) comprised of San Antonio residents that represented each of the customer types that SAWS serves. One of the initial tasks in each study for SAWS was a rate-setting workshop that Raftelis facilitated for SAWS staff and members of the RAC. The purpose of the workshop was to bring everyone involved in the process up to speed with respect to some of the technical aspects of rate-setting. The next critical step in the process was the identification and prioritization of pricing objectives. To facilitate this process, SAWS staff and RAC members were provided with a list of pricing objectives that many of Raftelis’ clients identify as being critical. Raftelis conducted a meeting with SAWS staff and the RAC in which the pricing objectives were discussed in detail and then asked the staff and the RAC to rank these objectives in order of priority. Based on this prioritization of objectives, Raftelis was able to focus its effort with respect to identifying potential improvements to the existing rate structures and develop several options for alternative rate structures. Raftelis then developed a financial tool that provided a high-level indication of the impacts that each of the rate structure options would have on various customers’ monthly utility bills. The RAC and SAWS staff used this information to identify preferred water and wastewater rate structures. Finally, Raftelis developed a cost-of-service and rate model to calculate rates under the preferred rate structure options. These calculations served as draft rates that were adjusted to reflect various rate-setting policies.
