ABSTRACT
Government water and wastewater utilities often provide retail and/or wholesale service to customers in adjacent communities. Developing water and wastewater rates for these outside-city services requires an understanding of how such services are provided to customers and the fundamental cost-of-service principles that govern outside-city rate making. This chapter begins by providing an overview of the different types of arrangements through which a government utility can provide retail or wholesale service to outside-city customers. This discussion is followed by a review of key cost-of-service issues encountered when governmental utilities provide outside-city service. The chapter concludes with a discussion of wheeling arrangements, a unique form of wholesale service, in which a utility transmits water or wastewater across its service territory for the benefit of adjacent utilities.
