Section 8 – Financial Consequences
CWC Section 10632 requires an analysis of the impacts of each of the actions taken for conservation and water restriction on the revenues and expenditures of the water supplier. The WSCP does not provide a detailed analysis of revenue and expenditure impacts of water shortages because IRWD’s billing structure is designed to be insulated from revenue swings resulting from deviations between actual and budgeted water sales and from declining or reduced water sales. IRWD’s billing structure consists of a fixed meter charge and a commodity charge based on the number of units of water used. Meter charges are set to meet IRWD’s fixed costs of operation (e.g., salaries, supplies, etc.). The base commodity charge is set to match the cost of producing, purchasing, and delivering water. Therefore, IRWD can recover its fixed costs regardless of the quantity of water sold, whereas the water sales at any level will cover the costs of providing water. This system has proven to be effective in balancing revenue and expenditures. Table 8 - 1 and Table 8 - 2 show components of revenue and expenditure impacts that were evaluated and found to have either minimal or no significant impacts. Table 8 - 1: Actions and Conditions of the Impact Expenditure
Type
Anticipated Revenue Reduction
Reduced Sales
Minimal to No Impact Minimal to No Impact
Development of Reserves
Impact of Supplier’s Higher Rates (Tier 2)
Likely Passed through to Customer
Category
Anticipated Cost
Change in Quantity of Sales
Minimal to No Impact Minimal to No Impact
Increased Staff Salaries/Overtime Increased Costs of New Supplies/Transfers/Exchanges
Minimal to No Impact
Table 8 - 2: Proposed Measures to Overcome Revenue Impacts
Name of Measure
Summary of Effects
IRWD can implement its Water Shortage Contingency Rates during water shortage stages which can increase commodity sale revenues if needed to offset Metropolitan shortage tier rates IRWD maintains reserves that can stabilize water rates during times of reduced water sales If necessary, IRWD can postpone capital expenditures and defer certain maintenance expenditures
Review of Rate Adjustment
Reserves
Decreased or Deferred Capital and Maintenance Expenditures
WSCP - 44
IRWD – 2025 Water Shortage Contingency Plan
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