Download
25 th annual region vi pretreatment association workshop august 5 2009 n.
Skip this Video
Loading SlideShow in 5 Seconds..
25 th Annual Region VI Pretreatment Association Workshop August 5, 2009 PowerPoint Presentation
Download Presentation
25 th Annual Region VI Pretreatment Association Workshop August 5, 2009

25 th Annual Region VI Pretreatment Association Workshop August 5, 2009

99 Views Download Presentation
Download Presentation

25 th Annual Region VI Pretreatment Association Workshop August 5, 2009

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Wastewater Rate Equity – Cost of Service, Customer Classes & Surcharges 25th Annual Region VI Pretreatment Association Workshop August 5, 2009

  2. Presentation Outline • Dallas Water Utilities (Morgan) • Utility Summary • Rate Charges • Utility Rate Basics (Jennifer) • Revenue Requirements • Wastewater Rate Cost of Service • Wastewater Rate Structure • Customer Classes • Significant Industrial User Surcharges • Retail Customer Classes • Customer Class Study (Morgan Set-up, then Randy) • Benchmarking • Information Collection • Sampling Statistics • Sampling • Grouping & Results

  3. Dallas Water Utilities is a large, Municipally owned regional water/wastewater supplier • Self-supporting • Costs are driven by infrastructure requirements for both growth and renewal • Responsibility for planning for water requirements for service area

  4. City of Dallas Water Utilities Fact Sheet • The department is funded from water and wastewater revenues, and receives no tax dollars • Approximately 1,500 employees • Population served (treated water) • 1.3 million - City of Dallas • 960,000+ wholesale customer cities • 699 square mile service area • 306,000 retail customer accounts • 4,850 miles of water mains • 4,200 miles of wastewater mains • 3 water treatment plants • 2 wastewater treatment plants • Wholesale customers • 24 treated water, 3 untreated water, 11 wastewater

  5. Morgan, Do you have a better map of the Dallas Wastewater system / service area?

  6. Dallas Water Utilities - Wastewater • 2 Wastewater treatment plants: • Central and Southside • Wastewater treatment capacity: 260 MGD • Wastewater pump stations: 14 • Miles of wastewater main: 4,146 • Wastewater treated 72 billion gallons • Service Area 699 Square Miles • Customer Accounts 300,000

  7. City of Dallas FY 2008-09 Budget FY 2008-09 Annual Budget $2.7 billion Operating Budget Capital Budget (day to day operation and maintenance) (long-term capital improvements) $2.02 billion $ 673.0 million General Fund - $1.09 billion General Purpose - $347.0 million Enterprise Fund - $686.2 million Enterprise Fund - $326.0 million Debt Service - $246.2 million

  8. FY 2008-09 Budget Enterprise Fund FY 2008-09 Annual Budget $2.7 billion Operating Budget Capital Budget (day to day operation and maintenance) (long-term capital improvements) $2.02 billion $ 673.0 million Enterprise Fund - $686.2 million Enterprise Fund - $326.0 million Water Utilities - $511.2 million Water Utilities - $320.0 million Aviation - $42.5 million Convention Services - $67.2 million Convention Services - $6.0 million Development Service - $26.8 million Municipal Radio - $3.5 million Storm Water - $35.1 million

  9. Index Cities Comparison of Average Monthly Water & Sewer Residential Bills Note: Bill comparison based on rates effective August 2008; water consumption of 8,300 gallons; and, 6,200 gallon Winter Months Average for sewer

  10. Components of Water Utilities Revenues

  11. Surcharge Program • A Surcharge program is a procedure for recovering costs incurred while treating high strength waste discharged by industrial (SIU Surcharge Program) and commercial users (Customer Classes) into the wastewater system. • It is an additional charge made to a customer that discharges high strength wastewater that is amenable to treatment by the wastewater system but that exceeds the strength of normal wastewater.

  12. DWU Customer Class Groups • Non-industrial (SIU) customers that routinely discharge Biochemical Oxygen Demand (BOD) and Total Suspended Solids (TSS) concentrations exceeding 250 mg/L are classified into the four class groups established under Dallas City Code • Eating Places • Equipment Service Facilities • Food and Kindred Products Processing • Drinking Places

  13. Presentation Outline • Dallas Water Utilities (Morgan) • Utility Summary • Rate Charges • Utility Rate Basics (Jennifer) • Revenue Requirements • Wastewater Rate Cost of Service • Wastewater Rate Structure • Customer Classes • Significant Industrial User Surcharges • Retail Customer Classes • Customer Class Study (Morgan Set-up, then Randy) • Benchmarking • Information Collection • Sampling Statistics • Sampling • Grouping & Results

  14. Principal Objectives of Rate Design & Cost-of-Service Study • Develop a comprehensive cost-of-service study that properly allocates costs to each customer class to ensure a fair and equitable rate structure. • Design Rate Structure that meets community values.

  15. Cornerstones of a Defensible User Charge System

  16. The Three Forms of Equity

  17. RATE SETTING PROCESS • REVENUE REQUIREMENTS COST ALLOCATION ASSIGN EXPENSES TO FUNCTIONAL CATEGORIES CLASSIFY FUNCTIONALIZED EXPENSES INTO COST COMPONENTS ALLOCATE TO CUSTOMER CLASSES RATE DESIGN

  18. Cost-of-Service Goal Revenue Requirements (O&M + Debt Service + Capital + Reserves) Non-Residential Cost of Service Residential Cost of Service

  19. Steps in a Cost-of-Service Study

  20. Wastewater Cost Allocation in the Broader Perspective

  21. Issue 1: Wastewater Cost Allocation Options • Design Basis • Functional Basis • Hybrid Approach

  22. Design Basis • Allocates costs based on engineering design criteria • Less administrative burden • Least implementation risk • Potential positive impact on conservation due to increased unit cost for wastewater treatment and disposal

  23. Functional Basis • Allocates costs based on operational or functional purposes • Minimal administrative burden

  24. Hybrid Approach • Allocates O&M costs based on function and capital costs based on design • More acceptable to public and political officials • Increased administrative burden • Improved interclass and intraclass equity • Improved sustainability • Recommended by consulting team

  25. Issue 2: Customer Service Characteristics • Flow, BOD, and TSS only • Considerations • Add Total Kjeldahl Nitrogen (TKN)? • Add Phosphorus? • Add O&G?

  26. Flow, BOD, and TSS Only • DWU’s current methodology • Least administrative burden • Most common approach

  27. Add Total Kjeldahl Nitrogen (TKN) • Difficult to implement without additional data • Likely to become increasingly important in future (policy durability – discharge permits) • Improved interclass and intraclass equity • Improved sustainability • Recommended (once sufficient data is available from sampling program)

  28. Add Phosphorus • Difficult to implement without additional data • Likely to become increasingly important in future (policy durability) • Improved interclass and intraclass equity • Improved sustainability • Recommended (once sufficient data is available from sampling program)

  29. Issue 3: I/I Estimation and Allocation • Combined connections and volume • Minimal administrative burden • Less affordable for residential customers • Potential increased economic development • Contributed wastewater volume • Easy to implement • Easy to understand • More affordable for residential customers • Potential negative impact on economic development • Number of connections • Easy to implement • Easy to understand • Less affordable for residential customers • Potential increase in economic development • Land area • Greatest administrative burden • Greatest risk of implementation • Least common approach

  30. Presentation Outline • Dallas Water Utilities (Morgan) • Utility Summary • Rate Charges • Utility Rate Basics (Jennifer) • Revenue Requirements • Wastewater Rate Cost of Service • Wastewater Rate Structure • Customer Classes • Significant Industrial User Surcharges • Retail Customer Classes • Customer Class Study (Morgan Set-up, then Randy) • Benchmarking • Information Collection • Sampling Statistics • Sampling • Grouping & Results

  31. Dallas Water Utilities Customer Classes • Currently four major customer classes for establishments producing wastewater exceeding 250 BOD and 250 TSS • Eating Places • Equipment Service Facilities • Food and Kindred Products Processing • Drinking Places

  32. Surcharge Class Study Phase I • Benchmark Other Utilities • Develop Database Structure & Populate with Existing Data • Screen Database to Develop Study Groups • Develop Statistical Sampling Approach based on Study Groups • Develop Sampling & Analysis Plan

  33. Task 1 - Benchmarking • Initial benchmark study done on the following cities • City of Amarillo • City of Austin • City of Corpus Christi • El Paso Water Utilities • City of Fort Worth • Benchmark Information • Number and types of customer classes • Surcharge rates for BOD and TSS • Average Domestic Wastewater Strengths for BOD & TSS • Strength ranges for BOD & TSS • Additional Cities • City of Bakersfield, CA • East Bay Municipal Utility District, CA • City of Fort Collins, CO • City of Prescott, AZ • City of Houston • City of Laredo • City of Lubbock • San Antonio Water System

  34. Benchmark Information • Number and types of customer classes • Surcharge rates for BOD and TSS • Average Domestic Wastewater Strengths for BOD & TSS • Strength ranges for BOD & TSS

  35. Benchmark Information • Number and types of customer classes • Surcharge rates for BOD and TSS • Average Domestic Wastewater Strengths for BOD & TSS • Strength ranges for BOD & TSS

  36. Benchmark Information • Number and types of customer classes • Surcharge rates for BOD and TSS • Average Domestic Wastewater Strengths for BOD & TSS • Strength ranges for BOD & TSS

  37. Domestic Wastewater Strength is Increasing.

  38. Benchmark Information • Number and types of customer classes • Surcharge rates for BOD and TSS • Average Domestic Wastewater Strengths for BOD & TSS • Strength ranges for BOD & TSS

  39. Benchmarked BOD value categories

  40. Benchmarked BOD value categories (contd.)

  41. Benchmarked BOD value categories (contd.)

  42. Benchmarked TSS value categories

  43. Surcharge Class Study Phase I • Benchmark Other Utilities • Develop Database Structure & Populate with Existing Data • Screen Database to Develop Study Groups • Develop Statistical Sampling Approach based on Study Groups • Develop Sampling & Analysis Plan

  44. City of Dallas Database Info • Dallas Water Utilities Bill System • DWU Pretreatment & Laboratory Services • City of Dallas Environmental Health Department • City of Dallas Development Services Department – Building Inspection Division

  45. Project Database