3. Traditional Rate Setting

Water utilities' authorized revenue requirements and rates have traditionally been set and approved on a district by district basis. Factors that impact such cost have included infrastructure, geography, topography, and hydrology. In other words, individual districts within a multi-district water utility would have unique revenue requirements and tariffs distinctly separate and different from each of the other districts within a water utility. Some of those districts even have distinctly different rates within the service areas of a specific district. This traditional rate setting process for water utilities differs from the ratesetting process for energy utilities, where rates are set on a system wide basis.