§ 39-15.1-3 - Rates.
SECTION 39-15.1-3
§ 39-15.1-3 Rates. – (a) Adequacy. The rates of water suppliers subject to commission rateregulation shall be responsible and adequate to pay for all costs associatedwith water supply including, but not limited to, the costs of:
(1) Acquisition, treatment, transmission, distribution andavailability of water;
(2) System administration and overhead, including the prudentcost and/or value of all services and facilities provided by the city or townto the water supplier including, but not limited to, testing, operation,maintenance, replacement, repair, debt service, and associated with, but notlimited to, supply, production, treatment, transmission, administrationfacilities, and metering and billing;
(3) Programs for the conservation and efficient use of water,including costs of developing, implementing, enforcing and evaluating suchconservation programs and including conservation pricing as described insubsection (d);
(4) Sufficient operating reserves, revenue stabilizationfunds, debt service reserves, and capital improvement/infrastructurereplacement funds to implement water supply system management plans.
(b) Equitability. Except for service charges and other fixedfees and charges approved as reasonable by the commission, where practicable,rates:
(1) Shall be based on metered usage and fairly set among andwithin the classes and/or types of users;
(2) Shall provide that within any class of users the fullcost of system capacity, administration, operation, and water supply costs forpeak and seasonal use is borne by the users that contribute to such peak andseasonal use; and
(3) May provide a basic residential use rate for water usethat is designed to make a basic level of water use affordable. Rates mayrequire implementation of demand management practices, consistent with thestandards and guidelines of the water resources board, established pursuant tosubdivision 46-15.8-5(1), by wholesale and retail customers.
(c) Revenue stabilization. Water suppliers subject tocommission rate regulation shall in the absence of other sufficient fundsavailable for similar purposes, establish as part of their next general ratefiling before the commission a revenue stabilization account to ensure fiscalstability during periods when revenues decline as a result of implementingwater conservation programs, or due to circumstances beyond the reasonablecontrol of the water supplier, including, but not limited to, the weather anddrought. A revenue stabilization account shall accumulate a maximum of tenpercent (10%) of the annual operating expenses of the supplier and shall beused to supplement other revenues so that the supplier's reasonable costs arecompensated. A supplier may draw upon its revenue stabilization account withoutfurther action of the commission if revenues in any fiscal year fall below thelevel sufficient to provide reasonable compensation for services rendered,subject to periodic review by the commission to ensure that the purposes ofsection 39-15.1-1 are fulfilled.
(d) Conservation. Water suppliers subject to commission rateregulation shall take effective action to reduce waste of water and to reducenon-agricultural seasonal increases in the use of water, and may adoptconservation pricing as part of a demand management program or otherwise revisetheir rates as a means to achieve their goals. For the purpose of encouragingconservation of water, suppliers are authorized to request increased ratesbased on quantity used either throughout the year or seasonally and to seekexpedited review by the commission of such revised rates, provided that thesupplier shall not have the burden of proof to link the increased rate toobtaining reasonable compensation for the service rendered as established insection 39-3- 12. Conservation pricing shall be designed to promote efficientwater use, and to limit seasonal non-agricultural outdoor water use, and to theextent possible shall not increase prices for water users with no significantseasonal increase in water use. Revenues generated from the adoption ofconservation rates shall be used to fund the revenue stabilization accountestablished pursuant to subsection (c) above, operating reserves, debt servicereserves or capital improvement/infrastructure replacement funds.
(e) Billing. Billing shall be at a minimum quarterly byDecember 31, 2013.