A presentation and discussion from Grant Rabon, NewGen Strategies and Solutions, LLC (NewGen), Residential Rate Advocate

1. Austin Water Cost
of Service and Rate
Design Study
Residential Rate Advocate

2. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Agenda
•
Background
•
Progress to Date
•
Upcoming PIC Meetings
•
Ways to Get Involved
•
Policy Questions for Consideration
2

3. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Background – NewGen
•
NewGen is a management and economic
consulting firm primarily providing
professional services to public sector
utilities
– Water
– Wastewater
– Electric
– Solid Waste
– Gas
3

4. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Background – Rate Study
•
Austin Water has recently begun a
comprehensive Water, Reclaimed Water
and Wastewater Cost of Service and Rate
Design Study to develop rates projected to
be effective November 1, 2017
•
Includes outreach/feedback via:
– Public Involvement Committee (PIC) – retail
customers
– Wholesale Involvement Committee (WIC)
4

5. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Background – NewGen’s Role
•
NewGen has been hired by the City to
represent the interests of the Residential
customer class in the rate review
– Participant on PIC
– Attend and monitor WIC
– Public outreach
•
NewGen is not Austin Water’s rate
consultant and does not represent or
speak for Austin Water
5

6. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Progress to Date
•
PIC and WIC meetings to date
– PIC #1 and WIC #1 on Sept 27:
•
Background, participants, roles, objectives and
rate setting 101
– PIC #2 and WIC #2 on Oct 5:
•
Revenue requirement basis – utility versus cash
– Policy question: which is more appropriate?
•
Financial statistics (e.g., DCOH, DSCR, etc.) and
financial polices (e.g., GFT, cash funded CIP,
revenue stability fund)
6

7. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Progress to Date (continued)
– PIC #3 on Oct 25:
•
AW consultant recommendation of utility basis for
wholesale customers and customers outside City
Limits
•
High-level review of FY 2017 budget
•
Discussion of reclaimed water fund
– PIC #4 and WIC #3 on Nov 8:
•
Various transfers to the city (e.g., GFT, PILOT,
franchise fees, etc.)
– PIC #5 and WIC #4 on Nov 29:
•
Residential water bill comparisons by city 7

8. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Upcoming PIC Meetings
6. Dec 13: Water cost allocation
7. Jan 4: Wastewater cost allocation
8. Jan 17: Rates and bill impacts
9. Jan 31: Rates and bill impacts
(continued)
10. Feb 21: Overview of results
8

9. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Ways to Get Involved
•
Keep track of the rate review (including
recordings of prior PIC and WIC meetings)
as well as provide feedback or ask
questions via the following link:
http://www.austintexas.gov/department/2016
-cost-service-rate-study
9

10. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Policy Questions for
Consideration
•
Water Rate Design (hypothetical example)
– IF Residential rates must recover an
additional $1 million, how should it be
charged?
•
$0.46 fixed monthly charge (excluding CAP)
•
$0.07 / 1,000 gal for all consumption
•
$0.24 / 1,000 gal for all consumption above 6,000
gallons per month
•
Highest Priority
– Conservation 10

11. Questions?
Grant
Rabon
Dave Yanke
(512) 649-1254
dyanke@newgenstrat3420 Executive Center Drive, Suite 165