2010/02/01 by Janice A. Beecher · 1 citation
Engineering · #Water Systems and Optimization #Water resources management and optimization
paper · doi:10.1002/j.1551-8833.2010.tb10051.x
crossref issued 2010/02/01 · crossref published 2010/02/01 · crossref published-online 2010/02/01 · crossref published-print 2010/02/01 · openalex publication_date 2010/02/01 · crossref created 2018/02/23 · crossref deposited 2023/09/24 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28 · crossref indexed 2026/07/28
This article discusses the significant financial challenge that utilities face in the rising infrastructure costs that must be recovered from a shrinking sales base. Fortunately, strategic coping methods are available such as forecasting, scenario‐building, and planning. Utility plans should incorporate long‐term goals and performance metrics as well as prudent investment strategies based on changing demand patterns. Cost recovery should recognize expenditures for cost‐effective investments in efficiency, and regulators can provide additional incentives as appropriate. As long as costs and demand continue to shift, more frequent rate adjustments will help reduce lag and ensure that rates are properly aligned with costs. Forward‐ looking rates can be established by using a “future test year” for revenues. A demand‐repression adjustment may be needed to recognize the effects of programs and prices on forecast use. Utilities will also need to examine rate‐design options and assess whether they exacerbate or mitigate revenue volatility, uncertainty, and distributional consequences.