Infrastructure replacement costs are an imminent problem for many water companies (mostly municipal and smaller investor-owned. The incentive for investor-owned utilities has been to invest in upgrades--if the allowed return on equity is adequate. In fact the incentive for regulated utilities is to overinvest). When infrastructure is replaced, the replacement will not result in any additional water sales. This is different than replacing the infrastructure in telecommunications, for example, where new technology brings more capacity and new services to the customer, relieving somewhat the cost of replacement. The purpose of this paper is to help develop a program to replace failing infrastructure that customers can afford, in all senses of the word. There are three goals listed: minimize the problem; mitigate the problem; and mediate the problem. Minimizing the problem means making the rate impact as small as possible, mitigating the problem means timing the increases to minimize rate shock and using rate design to apportion the increases optimally and mediating the problem means making the unavoidable results as palatable as possible.
| File Size : | 1
file |
| ISBN(s) : | 0898678358 |
| Note : | This product is unavailable in Ukraine, Russia, Belarus |
| Number of Pages : | 9 |
| Published : | 01/01/1995 |
