Utility Rate Study
City of Corona
COUNCIL WORKSHOP 1
MAY 1, 2024
Agenda
Study Objectives
Rate Development Process
Policy Objectives
Schedule
2 The Ask
City Council review the ranking of
policy objectives for each utility and
affirm the top three objectives
3 Study Objectives
Determine City goals for the Study
Engage stakeholders and garner buy-in for proposed rates and fees Ensure financial stability for each utility – how much revenue is needed? Proportionally allocate cost of service – who is covering the costs? Design rates and fees that achieve City goals – how will we collect the revenue? Satisfy Proposition 218 and 26 requirements
4 Rate Study at a Glance
Rate Setting
Framework
• Financial goals
and policies
• Pricing objectives
Financial Plan
• Evaluation of CIP
and financing
options
• Cash flow
analysis for
financial
sufficiency
Cost of Service
& Rate Design
• Cost allocations
• Rate design
̶Rate
calculations
̶Customer
impact analyses
Final Rate
Adoption
• Report
• Prop 218 Notice
• Public Hearing
1 2 3 4
5 Balancing
Competing
Pricing
Objectives
Customer
Understanding
Equity
Conservation
Affordability
Defensibility
Administrative Ease
Financial Stability
Revenue Stability
6 Which objectives are the most important to, you, the City Council? Reducing total water use
Infrastructure resiliency
Reducing outdoor water use
Maintaining revenue stability to ensure financial sufficiency Rates as a drought management tool
Allowing for cost-effective administration
Allowing easy implementation
Enhancing customer understanding
7 WATER
Please rank them in order of importance.
Top 3 for Water
1. Infrastructure Resiliency
2. Enhancing Customer Understanding
3. Maintaining Revenue Stability to Ensure Financial Sufficiency 8 Which objectives are the most important to, you, the City Council? Infrastructure resiliency
Maintaining revenue stability to ensure financial sufficiency Allowing for cost-effective administration
Allowing easy implementation
Enhancing customer understanding
Increase residential rate equity by considering household size 9 SEWER
Please rank them in order of importance.
Top 3 for Sewer
1. Maintaining Revenue Stability to Ensure Financial Sufficiency
2. Infrastructure Resiliency
3. Enhancing Customer Understanding
10 Which objectives are the most important to, you, the City Council? Reduce energy usage (e.g. 4 tier increasing block rate) Encourage electrification (e.g. flat rate TOU)
Rate that smooths out the electrical demand curve
Fixed costs for solar users to be connected to the grid Infrastructure resiliency
ELECTRIC
11 Please rank them in order of importance.
Top 3 for Electric
1. Fixed costs for Solar Users to be Connected to the Grid
2. Infrastructure Resiliency
3. Rate that Smooths out the Electrical Demand Curve
12 The Ask
City Council review the ranking of
policy objectives for each utility and
affirm the top three objectives
13 Next Steps
RDN team will utilize these Policy Objectives in conducting the rate study Develop the Financial Models to determine the amount of revenue needed to fund operating and capital projects
14 Proposed Schedule
Council Workshop 1 (policy objectives) – May 1, 2024 (TODAY) Council Workshop 2 (financial plan presentation) – June 5,2024 Council Workshop 3 (rate structure options) – July 3, 2024 Council Workshop 4 (recommendations) – August 7, 2024 Council Meeting Authorize Notice and Receive Report – October 2, 2024 Rate Hearing – November 20, 2024
Second Reading – December 4, 2024
Rate Implementation – January 2025
15 Any other
considerations?
16