AWWA JAW56926

Public water utilities formulate service rates to accomplish several goals. Three common rate-making goals are: stability, or the ability to generate revenue reliably; equity, or the degree to which rates reflect customers' cost of service; and, conservation, or the efficient use of natural resources. In many cases, utilities that have tried to improve the equity and/or conservation qualities of their rates have risked increased revenue volatility. Part of the answer to this dilemma might be fixed monthly rates tailored to reflect individual customers' usage patterns. By adopting cost-of-service fixed rates for each individual customer, rather than classes of customers, utilities can achieve greater customer equity, enjoy a stable revenue base, and send more accurate price signals to promote conservation. Includes 10 references, tables, figures.