Cost of service rate study
We are conducting a cost-of-service rate study to determine a structure for our rates and charges (i.e., water, sewer, land drainage).
Our water and sewer operations are supported mostly through rates that have typically been increased uniformly for all types of customers (e.g., residential, industrial).
The goal of the study is to develop rate structures that will:
- maintain affordability,
- ensure equitable and transparent funding, and
- generate adequate revenue to ensure financial stability.
Background
We are due to review our rate structures because:
- we need to determine whether rates are aligned with the actual cost of delivering services to each type of customer (e.g., residential, industrial)
- it is good practice to review rate structures regularly (our last review was 1997)
Increased funding is required to:
- Maintain the financial stability of our water and sewer systems.
- Winnipeg residents are conserving water. This is good news in the long term because it means we are able to avoid millions of dollars of infrastructure costs – if water consumption continued to grow, we would have needed a larger water treatment plant and quite likely a second aqueduct. However, lower water use means a decrease in revenue. The amount of money required to maintain the water and sewer systems is not decreasing. Consequently, current water and sewer rates are not generating enough revenue to sustain the system.
- Address infrastructure deficits for water main and sewer main renewals.
- Build and operate the expanded wastewater treatment facilities and programs resulting from Provincial wastewater treatment licensing requirements.
- This includes removing nitrogen and phosphorus in treated wastewater and reducing combined sewer overflows.
- Support land drainage and flood control services.
- Funding for land drainage and flood control currently comes from sewer revenues.
- We are establishing a separate fee to ensure financial stability for these services.
Documents and supporting information
- 2010 capital budget
(pdf - 3,240kb)
Stakeholder Advisory Committee
As part of the public process, a Stakeholder Advisory Committee has been assembled. The purpose of the Stakeholder Advisory Committee is to help us:
- review our customer classification structure and rate designs,
- review cost-of-service rate calculations relative to current rates,
- explore alternative rate structures in other cities, and
- provide input on the public participation process.
The members bring a variety of perspectives to utility rate setting (e.g., business representatives, environmental advocates, social interest groups).
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Last updated: March 12, 2012 |
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