Water Rates Should Be Based On Need



Determining water rates based on neighboring communities is not how a utility determines rates. While I would agree it is important to be aware of others’ rates, this information should only be used to ensure our utility is competitive and following prudent practices.

Municipal utilities should always have lower rates than their private counterparts. In part because they are tax exempt and the only shareholders are the residents of the community.

Rates should only be based on the rate case prepared by the utility and approved by the governing body. This rate would contain current and projected data regarding income and expense.

Further, this document should be available to the public, prior to any hearings regarding proposed rate increase.

Using any other method would appear to be setting rates based on the market. I think you would agree public monopolies should avoid any appearance of this.

Another problem with this approach is that an unwarranted surplus will exist and those funds may be swept into the town’s general fund. The results would be the meter becomes the tax collector.

Leon H. Keddington


frederick franz 6 years, 9 months ago

"Municipal utilities should always have lower rates than their private counterparts." Yes, in monopoly utilities, such as Payson Water Company, rates should be set according to, maintenance, and personnel costs. Water rates for current users should not be used to pay for projects like Blue Ridge. Those charges should be allocated to new water users. -Frederick W. Franz


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