How Does Your Agency Implement This Type of Rate Increase?
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The inquiry was:
Mesa’s new water rate went into effect for water bills mailed on, and after, September 1, 2008 which means that our customers are paying for water they have already used prior to the new rate, at the new rate.
How does your agency implement this type of rate increase?
The responses are:
Brisbane
We usually wait until at least half of the water used at the new rate. This time we are waiting until the next billing cycle so some of the water used after the rate increase will be billed at the old rate.
Sierra Madre
The answer to this question depends upon two factors… Can your accounting system handle two utility rates and when do you officially have Sept readings in your system. What we encountered in our City was that we read every other month. For July 1 changes to the UUT rate, we would not bill before Sept for usage in July… However, we had 10 days of June still in that cycle so we could not read any of this period because our accounting system did not let us apply multiple rates. Be forewarned, most large utilities such as the GAS Company and Edison do put multiple rates on their bills for overlapping periods and this caused many residents to call in and assume they were charged twice.
Helix Water District after the 218 notice has gone out we change are rates on July 1st (usually). Here is the statement from our 218 notice that discusses when the rate is put in place.
Moraga
When I worked for the City of Dixon, we had a similar situation. We used the old code for the "old" usage and created a new code for the new water rate effective whatever the date was. So for example, our rate increase was effective July 1, but we billed every two months in arrears. The August bill reflected June rates and the new July rate. I don't know what system you are using, but my guess is that it can do a similar thing.
Redding Electric Utility
That is also how the City of Redding Electric Utility implements approved rate increases.
Laguna Beach County Water District
In your case, we would only bill them at the new rate if they had been noticed prior to July 1 about the rate change. We have always felt they needed the lead time to see how they could adjust their usage for the higher rate if they wanted. Desert Water Agency
At the Desert Water Agency, we prorate the bills (so many days at the old rate & so many days at the new rate, depending on where they fall in the billing cycle). We take the number of days in the cycle to determine the average daily usage, and then calculate the bill using the two rates.
Chino Hills
The City of Chino Hills implemented new rates. We bill in arrears so we prorated the bills to reflect the old rate for the period prior to implementation and a portion of the new rate on the new period. Technically we cannot charge the new rate for water used prior to the effective date of the new rate.
Cucamonga Valley Water District
Our system allows us to put an effective date in so that bills are prorated. We are on a bi-monthly billing cycle, so let’s say the customer is being billed October 1. That covers water used in August and September, so it will charge half the water at the old rate and half at the new rate. It will do this type of prorating until all of the water is at the new rate. You may want to contact your billing system vendor to see if they have this kind of feature available.
Santa Fe Irrigation District
We have struggled with that issue as well, but have concluded that there has to be some cut off point. When we mail our Prop 218 notices, we make it clear that the increase will go into effect as of a certain date, and all billings after that date are subject to the increase. We have consulted with our legal counsel, and as long as we wait the requisite amount of time, implementation of the new rates can be performed even though the usage lags. We haven’t had any push back from our customers, since we have been doing it this way as long as most employees can remember.
San Francisco Public Utilities Commission
We bill on a bi-monthly basis and when we raised our rates, we had some on one billing cycle and those on another.
Our system can handle those kinds of changes.
Tustin
Hi Vikki, while our rate resolutions state the rates become effective at the beginning of a month we really put them in place at the beginning of the bill cycle with a start date that is after the adoption date. We intend to change the effective date to the actual date on the next rate change planned for Jan 09.
Poway
When we adopt rates in Poway, they become effective for water used after a date certain. For instance, our water rate ordinance would read that rates become effective the first full billing cycle after January 1. This means that customers don’t see their new rates until their March and April bills (we bill b- monthly). Calistoga
Section 1. Effective Changed in Rates. The wastewater rates in Section 13.18.030 (B) shall be effective on the first billing after the dates indicated in said section regardless of the actual dates of the water or flow meter reading period applicable to the first billing. In Section 13.18.030 (C) the wastewater connection fee shall be effective for all building permits issued after the effective date of this ordinance.
Roseville
Hi Vikki – We put the following language into our municipal code to cover this situation:
“Effective February 1, 2008, the residential rate on monthly billings shall be as follows:...”
The phrase “on monthly billings” allows us to apply the rates based on billing date.
Morro Bay
We had a rate increase that was effective July 1, 2008. Our reading schedule is such that the increase did not apply to the bills until September (July 1 bill is for May 5 - June 4 reads, August 1 bill is for June 5 through July 4 reads). We are being fair by matching the timing of increase to water used from that point forward.
Coachella Valley Water District
Our rate increases are always effective July 1, but do not actually get billed until Cycle 1 has its first billing in August. We make every effort to wait until all our billing cycles have finished their June 30-July 15 billings, and then put the rates on. It delays our revenue a bit, but saves us alot of trouble with rate payers who want to be sure they are paying for water at the correct rates. We checked into prorating, and with a new utility billing system we are implementing next Jan., we will be able to prorate bills based upon a 30 day month, from July 1 forward. We researched whether agencies are doing actual real-time use billing, but to do so would require daily meter readings in order to charge for water used on the actual date of the increase. That's not practical for most of us, and in the long run, is not material.
Las Virgenes Municipal Water District
Our reso for rate increase says rate changes on bills issued after a specified daten rather than when the water was used.
Humboldt Community Services District When Humboldt Community Services District implements a rate increase, bills prepared after the effective date use the new rates, even if the billing period spans the effective date of the new rates.
Coachella Water Authority and Sanitary District
Rate increase effective September 1
New rate included on invoice dated October 1 for service between September 1 and September 30
Visalia
It sounds as if Mesa bills in arrears. When Visalia billed in arrears, we would make the new rate apply on the services which were rendered after the rate increase, not before. Therefore, if the utility district billed 30 days in areas, we would bill on the next cycle.
American Canyon
We make the rate effective, say on September 1st and the first bill that customers get reflecting the rate increase is October 1st which theoretically is for September’s usage. Nevertheless, the meter may be read in mid month for usage from Mid-august to Mid September but that’s the best we can do.
Western Municipal Water District
The CIS system prorate the charges both for the monthly system charge and the volumetric charge. Water used prior to the effective date is charged at the old rate and water used after the effective date is charged at the new rate. The monthly system charge is prorated by day with the number of days prior to the effective date charged at the old rate and days after charged at the new rate.
San Clemente
We increase our rates effective July 1st every year. Our July bills, for June consumption are at the old rates. We implement the new rates after the July billing, effectively billing at the new rates in the August bills, so what you list below does not happen.
Hughson
I think it has to do with the way you implement the rate change: by ordinance or resolution. It is a question probably most easily answered by your city attorney
Calexico
The increase goes into effect after the consumption period. If the resolution takes effect July 1, then the effective billing date is August, after consumption.
West Valley Water District When we implemented a rate increase effective January 1, 2007, it was for 1) monthly service charge, plus 2) consumption. Both of them had effective dates of January 1, 2007. However, the bills we created on January 1 included the rate increase for the monthly service charge, but not the consumption increase. The consumption was billed at the old rate because it actually was consumed prior to the rate increase. In February, the bills we created included both rate increases.
City of Lakewood
Rate increases cannot be applied to consumption prior to the date of approval of the new rate. Implementation: 1. Institute the water rate in the system after the last possible date a customer could possibly be billed for consumption prior to the rate increas approval. For example, if the water agency bills monthly to all customers, increase the rates 31 days after the approval date of September 1, 2008. The downside to this method is that some post approved rate increase date consumption will be paid for at the old lower rate. 2. Many new financial and utility billing systems are date sensitive, so that the rate increase can be set to capture all consumption after the approval date of the rate increase and none of the consumption prior to the rate increase approval date.
Foresthill Public Utility District
We have a new rate ordinance also which was approved Aug 13, 2008. We bill from the 15th to the 15th – our new rate is effective Sept 13th so our next billing goes out Oct 1 for this billing period. So, we are doing the same.
Calveras County Water District
We prorate the rate increases. So many days at the old rate, so many days at the new rate.
Oakdale
We bill from the 16th of the month to the 15th of the month and the bill goes out on the 30th of the month. When we implement rate increases it is always effective on the 16th of the month. Because we bill 30 days in arrears we wait for the next billing cycle before we implement the rate increase, so that customers are not paying the new rate on water consumed in the previous month.
Morgan Hill
Rate adjustments effective for the period beginning on a date certain, not for bills mailed after a date certain. So if a new rate is effective January 1, we mail our January bills in February with higher rates.
Shasta Lake
We begin billing 30 days after the ordinance’s effective date for the rate change for both our Electric and Water utility. We have prorated in the past, but it does become a bit of a workout to make it work effectively. If the rate change only affects our Wastewater or Solid Waste rates, we just set a date and charge after that date.
Turlock For metered rates, the accounts are charged in arrears, the City of Turlock does not implement the rate increase until we are billing for the usage after the increase. If we had a rate increase effective 9/1/08, we would not bill with the increase until October billing which would be for Sept usage.
Palmdale Water District
Just a thought, but was the rate based on cost of production during the same time as usage? If so then I would say the new rate applies because the cost was already considered.
Riverside Public Utilities
Our rates are effective one month and billed the following month.
Example: Rates become effective January 1, 2009 and are billed with the first billing cycle in February 2009. We have 20 billing cycles each month.
Dublin San Ramon Services District
Our rate goes into effect on a certain date and our billing system is able to prorate the consumption for the billing period between the old rate and new rate. It is much easier now that we have that capability!
South Coast Water District
A lot of it depends on how the resolution/ordinance sets the implementation. If it says “all billings from this date forward,” you just change the rates and go on. If it reads “for water used from this date forward” it could get a little messy. Here at SCWD we have never applied rates to water used prior to the approval date. As a matter-of-fact our resolutions/ordinances specify “for use from this date forward.” Since we bill bi-monthly it means even some of the water used for the next month is at the old rate since the new rates are not applied to anyone until after their current billing cycle completes.
Moulton Niguel Water District
Every increase I did at STPUD the new rate did not impact billings in arrears. In other words, the quarterly billing following the rate increase the consumption was at the old rate and the subsequent bill had the new rate, so it was based on when the water was used.
San Juan Water District
What about Prop 218? Our Board adopts rate increases through the budget process with Prop 218 notification occurring in April, budget/rates adopted at the end of June, rate increase goes into effect January 1st (mid-budget year). In other words, I guess I will not be much help! Hope it goes well.
Burlingame
Yes, for water bills mailed after July 1.
Huntington Beach When we update our rates we enter a start date for the new rate and a stop date for the old rate. We base our billing on actual days so if a billing period runs August 20-September 19th, our bill would reflect 11 days at the old rate and 19 days at the new rate.
Perris
When we implemented rate changes, the effective date was the billing date not the date a bill is mailed.
Ramona Municipal Water District
Our water district prorates the bills with each increase. For example, if the increase in on July 1st and the usage was from June 15th to July 14th, the bill would show half of the usage at the old rate and half at the new rate. The calculation actually prorates by number of days in the month.
Pinole
When we implement rate increases or impose new fees -- there is always an "effective date." I've always assumed that was a control point for "billing purposes," regardless of when a service was delivered. Most of our fees are paid in advance of the deliver of service, but not always (i.e. refuse collection). No one has ever challenged us on this issue.