ERMUSR Misc. Issues 01-11-2005 - Laserfiche WebLink

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AV IDI~ RATS - ~.~:~ ._,_._ ~ _, MAKING THE CASE FOR WATER RATES EXECUTIVE SUMMARY There is a growing recognition in the United States and elsewhere that the condition of our vital water infrastructure needs serious attention in many places. The pipes, pumps, and treatment facilities that are critical to delivering a clean, adequate supply of pota- ble water to our communities are central to our quality of life, the protection of public health and safety, and a thriving economy. The burden of paying for construction, oper- ation and maintenance of these facilities falls mainly on customers of the systems, and those costs are rising-dramatically in some areas. The Water Utility Council (WUC) of the American Water Works Association (AWWA)1 sponsored this study to provide a better understanding of how water utilities might make a good case to their decision-making bodies, customers, and other stakeholders about the need for sustain- able local financing of water infrastructure im- provements, operations, and maintenance. The study drew upon background research, case studies, and in-depth interviews with stakeholders, along with lessons learned from the project team's experience working on rate cases and strategic communications campaigns. The team was aided in this effort by a knowl- edgeable and experienced Workgroup of utility staff from nine geographically and demographi- cally diverse organizations. "Utility. credit. analysis has.: moved beyond a point-in-time analysis of current.. debt service coverage and rates compared to ratepayers' in- . come levels and rates. in neighboring communi- ties Because a variety of factors may affect financing options at the local level, the extent of a utility's. ability to implement .strategies and policies that address its unique characteristics and allow it to finance needed projects becomes a differentiating factor." --James Wiemken, Director, Standard & Poors Credit Market Services 1. AWWA is an international nonprofit scientific and educational society dedicated to the improvement of drinking water quality and supply. Its more than 57,000 members represent the full spectrum of the drinking water community: treatment plant op- erators and managers, scientists, environmentalists, manufacturers, academicians, regulators, and others who hold genuine in- terest in water supply and public health. Membership includes more than 4,700 utilities that supply water to roughly 180 million people in North America. The AWWA Water U[ility Council (WUC) provides strategic direction and guidance for the legisla- tive and regulatory affairs agenda of the Association. 3.-