Summary:Daphne Utilities is proposing a modification to its rate structure beginning with the April 2016 billing cycles. This modification changes how our water and wastewater bills are calculated in line with industry standards. This is the first adjustment to our rate structure in more than 15 years and will result in a slight decrease for the majority of our customers. Some commercial customers, especially those with large water meters, may see an increase in their monthly billing. The Board of Directors will vote on this modification at its regularly scheduled meeting to be held on February 24, 2016 at 5:00pm in the Daphne City Council Chambers.
Background:Last spring, Daphne Utilities contracted with a national financial consulting firm to investigate its existing rate structure and make recommendations for an updated rate structure. There were three main objectives to this study: 1) to ensure rates fully accounted for the cost of providing the service; 2) to maintain affordability of service to the largest classes of customers; and 3) to maintain revenue stability. With these objectives in mind, the consulting firm evaluated our existing rate design methodology as well as our fixed and variable costs. They recommended a rate structure which simplifies the calculations by using a uniform rate design. The impact of these changes will result in slightly lower bills for our average residential customers and slightly higher monthly bills for our commercial customers who consume the largest amount of water.
Rate Design and Customer Impact:91% of our customers are residential or small commercial customers using a 3/4-inch meter. Nearly 75% of these customers have an average water and wastewater use amounting to 5,000 gallons per month or less. These customers will notice a slight decrease in rates as a result of this new rate structure. The remaining customers who use more than average water and wastewater, as well as those large commercial customers with larger meters may notice a modest increase in monthly bills. The tables on the next page illustrate the proposed rate design and anticipated impact of these changes.
For More Information:For more details about this proposed rate structure modification or any other details of Daphne Utilities’ operation, please contact the General Manager, Danny Lyndall, at 251-626-2628. Additionally, the public is always invited to attend the Utilities Board meetings. These meetings are generally held the last Wednesday of each month at 5:00pm in the City Council Chambers.
PROPOSED RATE DESIGN
|METER SIZE||BASE CHARGE (UP TO 1,000 GAL)||VOLUME CHARGE (PER 1,000 GAL|
|3/4-INCH & 1-INCH||$16.10||$26.09||$3.02||$5.72|
Water and Sewer Combined Bill Impacts
|USAGE (Thousands)||% OF BILLS||CUMULATIVE BILLS||EXISTING RATES||PROPOSED RATES||CHANGE|