Designing Appropriate Rate Structures for Small Water Systems

Tuesday, September 24, 2013
2:00pm - 3:30pm EDT
Host Organization: 
Environmental Finance Center at UNC
400 South Road
Chapel Hill, NC 27599
United States

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How a water system charges its customers for their water use affects revenue generation and can either help or hinder varying objectives of the utility. Several designs of rate structures can be used to produce the same level of revenue for a water system, but each rate structure promotes fairness, affordability, conservation, business incentives and other objectives at varying degrees. Do you have many customers on low or fixed incomes? Do you have very high fixed costs and a small customer base?  Do you have a mix of residential and commercial customers? Do you want or need to encourage water conservation?  Does your water system serve a seasonal community? Do you not charge based on metered use, or include the price for water as part of rent for housing?


How you charge your customers is often as important as how much you charge them. This webinar will describe the different elements of water rate structures and when it is appropriate to favor certain elements or rate structure designs over others based on the unique characteristics and objectives of water systems. The elements include customer classification, base or flat charges, volumetric rates, seasonal pricing, etc. Examples will be discussed and participants will have opportunities to ask questions.


This training is best suited for individuals who make financial decisions on behalf of small water systems or who assist small water systems in setting rates: utility managers, finance staff, system owners, board members, consultants, technical assistance providers, financial regulators, and other interested parties.


One of the trainings for the Smart Management for Small Water Systems project.


Presentation Slides:

See below.


Recording of the Webinar:


Guidebooks for Water Utilities:

Designing Rate Structures that Support Your Objectives: Guidelines for NC Water Systems, EFC at UNC-Chapel Hill guidebook, June 2009

Setting Small Drinking Water System Rates for a Sustainable Future, U.S. EPA guidebook, 2006

AWWA M1 and M54 Manuals (and other Manuals), AWWA


Do-It-Yourself Excel-Based Tool for Water Utilities:

Water & Sewer Rates Analysis Tool, (do-it-yourself cash flow model) EFC at UNC-Chapel Hill


Examples of a Variety of Rate Sheets from Small Water Systems:

PDF document of several rate sheets (may not be current rates)



Tuesday, September 24, 2013