ABSTRACT
The preceding chapter presented the determination of the total water and wastewater revenue requirements. As depicted in Exhibits 8.17 and 8.18, these requirements were then adjusted for projected ancillary and miscellaneous revenues and nonoperating revenues to derive the net amounts required from water and wastewater rates. The next step in the pricing process is to determine the cost of providing service to classes of water and wastewater customers. Cost of service is determined by allocating net revenue requirements to customer classes based on indicators of how much of various water or wastewater services each class receives. This chapter first discusses the allocation of net revenue requirements to water cost components, followed by the allocation of wastewater requirements. The results of this chapter will directly feed into Chapter 10.
