The most common study we conduct for our clients. Ensuring utility rates and charges generate sufficient revenue to meet financial obligations, in a manner which results in a fair-and-equitable sharing of costs among utility customers, can be a challenge. Customers are sensitive to increases in their bills and utilities have an obligation to deliver these services which are necessary to the public health in the most cost effective and efficient means possible.
Do we issue debt or do we fund our capital plan with cash? What is the rate impact of each alternative? These are difficult questions and, for most of our clients, the answer is a mix of debt and equity (cash) funding. The right mix, which maintains the utility's financial health while being sensitive to rate increases can be difficult to determine. Our interactive utility financial model makes this process much easier for our clients.
In order to recover certain capital costs associated with the need to expand capacity for new customers, a system of Impact Fees is typically developed. This system of charges is designed to recover the pro-rata share of certain transmission/collection and treatment capital costs required to provide a unit of capacity to a new customer. A comprehensive Impact Fee Study is required to justify the level of impact fees charged to new development.