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170727 Budget Workshop Water Rate Alternatives

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Proposed water rate alternates presented to the Lubbock City Council on July 27, 2017.

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170727 Budget Workshop Water Rate Alternatives

  1. 1. NEWGEN STRATEGIES AND SOLUTIONS, LLC Council Feedback • General concern about affordability associated with increasing base rate and moving away from current volumetric structure • Examine impact of including a volume allotment within the base rate 1
  2. 2. NEWGEN STRATEGIES AND SOLUTIONS, LLC Critical Assumption • If volumes are included in the base rate, there are less volumes over which to recover necessary cost • The greater the volumes in the base rate, the higher the volumetric rates must be set to recover the same level of revenue • The same level of revenue is recovered overall, but as some customers pay less, others will pay more 2
  3. 3. NEWGEN STRATEGIES AND SOLUTIONS, LLC Residential Frequency Distribution % of Customers at Consumption Levels 3
  4. 4. NEWGEN STRATEGIES AND SOLUTIONS, LLC Residential Volumetric Rate Comparison (1,000 gallons included in Base Rate) 4 Current Proposed Alternate 1,000 gallons  included in base rate Block Structure Rate  Block Structure Rate  Block Structure Rate  0‐AWC (0‐7,000) $  4.76  0 – 5,000 $  3.62  1,000 – 5,000 $  4.03  AWC to PUA (7,001 ‐ 47,000) $  6.50  5,001 – 10,000 $  6.27  5,001 – 10,000 $  6.97  PUA + (47,001 +) $  7.79  10,001 – 30,000 $  7.52  10,001 – 30,000 $  8.36  30,001 +  $  7.71  30,001+ $  8.57  * Volumetric rates are in dollars per 1,000 gallons
  5. 5. NEWGEN STRATEGIES AND SOLUTIONS, LLC Residential Bill Comparison (1,000 gallons included with ¾ inch Base Rate) 5 Usage  (Gallons) Current  (Assumes AWC of  7,000 gallons) Proposed Variance  Proposed vs Current Alternate 1,000   gallons included  in base rate Variance Alternate vs  Current 1,000 $20.76  $21.62  $0.86  $18.00 $(2.76) 5,000 39.80  36.10  (3.70) 34.12 (5.68) 7,000 49.32  48.64  (0.68) 48.06 (1.26) 10,000 68.82  67.45  (1.37) 68.97 0.15  15,000 101.32  105.05  3.73  110.77 9.45  20,000 133.82  142.65  8.83  152.57 18.75  25,000 166.32  180.25  13.93  194.37 28.05  30,000 198.82  217.85  19.03  236.17 37.35  35,000 231.32  256.40  25.08  279.02 47.70 
  6. 6. NEWGEN STRATEGIES AND SOLUTIONS, LLC 6 Residential Bill Comparison (1,000 gallons included in 1 inch Base Rate) 6 Usage  (Gallons) Current  (Assumes AWC of  7,000 gallons) Proposed Variance  Proposed vs Current Alternate 1,000   gallons included  in base rate Variance Alternate vs  Current 1,000 $31.47  $33.68  $2.21  $30.06  $(1.41) 5,000 50.51  48.16  (2.35) 46.18  (4.33) 7,000 60.03  60.70  0.67  60.12  0.09  10,000 79.53  79.51  (0.02) 81.03  1.50  15,000 112.03  117.11  5.08  122.83  10.80  20,000 144.53  154.71  10.18  164.63  20.10  25,000 177.03  192.31  15.28  206.43  29.40  30,000 209.53  229.91  20.38  248.23  38.70  35,000 242.03  268.46  26.43  291.08  49.05 

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