Water Utility Rate & Fee Studies

Designing equitable and defensible utility rates & fees

From small rural agencies to urban systems serving hundreds of thousands of customers, RDN helps public and private utilities design sustainable water rates and effectively communicate them to customers

California utilities are charged with a difficult financial task – to promote conservation, facilitate economic development, and provide affordable rates, all while investing in capital projects, retaining healthy reserves, and ensuring long-term viability under a dynamic and demanding environment. At RDN, we specialize in strategic planning, employing traditional and innovative methods to develop tailored solutions for your utility.

Financial Planning

Utility financial plans form the roadmap for funding capital needs, debt service, operating, and maintenance costs. RDN has reviewed hundreds of utility financial plans across California. Using this experience, we develop user-friendly financial models that generate sensitivity analyses and summary dashboards to help your utility visualize the impacts of changing assumptions. Our models empower your utility to address current needs and long-term planning.

Cost of Service Studies

We work with your staff to evaluate the cost-of-service for each customer class through methodologies endorsed by the American Water Works Association (AWWA) and the Water Environment Federation (WEF). We aggregate historical usage patterns and peaking demand characteristics using R and Python to project your utility’s revenue requirements and allocate costs proportionately across customer classes. Our goal is to help your utility strike the optimal balance between financial, legal, and strategic objectives.

Rate Setting

At RDN, we understand that the perfect rate structure will depend on the characteristics and goals that make your utility unique. We tailor our rate-setting process to consider your study objectives, financial situation, demand projections, and conservation goals. From this analysis, we offer multiple rate structure alternatives. We evaluate each option and recommend the rate structure that best meets your strategic objectives, working with you each step of the way.

Fee Setting

We leverage our econometric expertise to evaluate, design, and recommend fee structures that are specifically designed to meet your objectives. As economists, we offer a more robust analysis of new and existing fees than with a financial firm. This will give you more confidence in the comprehensiveness of the analysis used to ensure that fees are equitable and sufficiently recover the cost of the service provided.

Legal Requirements & Public Outreach

RDN is knowledgeable about the legal requirements governing California utility rates and fees including Proposition 218, Proposition 26, Assembly Bills 1600 and 1668, and Senate Bill 606. We develop detailed administrative records, and we effectively communicate easy-to-understand presentations for public hearings to ensure stakeholder buy-in.

Additional Services

• Capacity Charges & Fees
• Demand Forecasting
• Development Impact Fees
• State Water Budget Calculator
• Water and Wastewater Surcharges
• Water Budget Bill Calculator
• Water Budget Rate Structure Implementation
• Wholesale Water Rates

  • Testimonials

    The Palmdale Water District was very pleased with the work provided by RDN and Ichiko Kido in particular. She and her team were very professional, detailed oriented, and a stickler for accuracy. Six months into our final product of the 5-year rate plan, their revenue and consumption projections were right on target. Their presentation during the public hearing was concise, informative, and presented in a manner that was easily understood. Working with RDN made the process simple.

    Michael Williams

    Finance Manager/CFO, Palmdale Water District
    “When RDN prepared our Cost of Service and water rates in 2017, we felt they went the extra mile to make sure the rates were fair, properly documented, and truly represented the cost of service.”

    Bert Rapp, P.E.

    General Manager, Ventura River Water District