Evaluation of User Charges to Finance Water Services

摘要

The study reviews demand theory and presents a case study for price/income elasticities of demand for Georgia municipal systems to illustrate price and income effects on revenues. Similar theoretical constructs are presented for two market pricing solutions and for discriminatory pricing within a market for flow type commodities, both systems intended to generate revenue more closely aligned to market value of the services provided. A second case study is used to show how updated 'alternative cost' pricing will lead to increases of 4-10 times in the revenue received from hydropower generation (capacity and energy). Although some repayments are long-term contracts, there are opportunities to renegotiate contracts for better terms to Federal agencies producing and marketing hydropower. Specific details are given for the Southeast Power Administration (SEPA).