RATE STRUCTURES (WATER AND WASTEWATER TREATMENT)

Rate structures for water and wastewater treatment are generally classified into three primary categories: declining block, uniform, and inverted. Details of these primary rate structures are as follows: (1) Declining Block Rate: Provides a means of recovering costs from the customer classes under a single rate schedule, recognizing the different water and wastewater demands and costs associated with each customer class. Under this rate schedule economies of scale are recognized since the price per unit declines as the water customer consumes more water; (2) Uniform Rate: Provides separate rates for each customer class based on the demand, use, and other characteristics of the customer class; (3) Inverted-Block Rate: Incorporates a unit charge that increases with increasing water consumption or demands for wastewater treatment; requires a multiple blocking structure with the rate per unit of consumption increasing with each successive level.Variations and applications of these primary rate structures typically include: (1) Unmeasured Usage: Flat rate, irrespective of usage, generally based on (pipe) size of service; (2) Constant Block with Service Charge: Constant rate per unit, times the number of units consumed, plus flat rate service charge; (3) Increasing Block with Service Charge: Cost per unit increases with increasing (block) rate of water usage, plus flat rate service charge; (4) Decreasing Block with Service Charge: Cost per unit decreases with increasing (block) rate of water usage, plus flat rate service charge; (5) Increasing Block with Minimum Allowance: Cost per unit increases with increasing (block) rate of water usage over a minimum charge for minimum amount of use (Lifeline Rate);