Greater Vernon Services Committee (or GVAC for short) approved the water rates for 2011. The attached table demonstrates the budget as compared to the budget of 2010. One of the more glaring increase for low volume consumers is line 1.6. Last year a consumer using 20 m3 of water quarterly would have paid $50.17. From the second quarter of 2011 this same consumer would be paying $74.00 a whopping increase of $95.00 (46%). I could not support discrepancy of this magnitude. That translates to $3.70 per m3.
The main reason for this high cost is the very high flat rate component of the rates. About half the income for the utility is recovered from flat fees. This is in direct conflict with the user pay principle and with the principle of controlling consumption. The ultimate of flat fees is all revenues collected from flat fees. Everyone pays the same regardless of consumption. Obviously, under this situation we could not control consumption. The smaller the flat fee the better we can influence consumption especially with the new system of rising bock rates.
Another disagreement I had with the proposal was the fact that the user component of the commercial rates remained the same did not follow the increase imposed on residential customers. Why?
Commercial customers can transfer their increases to their customers. Their water has the same production costs as do ours. They should also be encouraged to conserve. One of the arguments was that increasing commercial rates could cost jobs. Let me provide a small example of the fallacy of this argument.
Producing one cubic meter of beer requires five cubic meters of water. Five cubic meters at an eight cent increase to $1.00 per cubic meter would increase the cost of a cubic meter of beer by 40 cents. Now, a bottle of beer contains about 0.350 liters of beer, thus a cubic meter of beer would fill 2857 bottles. That would increase the price of a case of beer by about 0.0016 cents, an imperceptible increase. That is a ridiculous argument. Anyway, for better or worse, I voted against the proposal. It did not matter, the proposal will be law as of April 1, 2011.
For a comprehensive review of how consumers of various consumption will be affected by the changes visit water rates for 2011.
The main reason for this high cost is the very high flat rate component of the rates. About half the income for the utility is recovered from flat fees. This is in direct conflict with the user pay principle and with the principle of controlling consumption. The ultimate of flat fees is all revenues collected from flat fees. Everyone pays the same regardless of consumption. Obviously, under this situation we could not control consumption. The smaller the flat fee the better we can influence consumption especially with the new system of rising bock rates.
Another disagreement I had with the proposal was the fact that the user component of the commercial rates remained the same did not follow the increase imposed on residential customers. Why?
Commercial customers can transfer their increases to their customers. Their water has the same production costs as do ours. They should also be encouraged to conserve. One of the arguments was that increasing commercial rates could cost jobs. Let me provide a small example of the fallacy of this argument.
Producing one cubic meter of beer requires five cubic meters of water. Five cubic meters at an eight cent increase to $1.00 per cubic meter would increase the cost of a cubic meter of beer by 40 cents. Now, a bottle of beer contains about 0.350 liters of beer, thus a cubic meter of beer would fill 2857 bottles. That would increase the price of a case of beer by about 0.0016 cents, an imperceptible increase. That is a ridiculous argument. Anyway, for better or worse, I voted against the proposal. It did not matter, the proposal will be law as of April 1, 2011.
For a comprehensive review of how consumers of various consumption will be affected by the changes visit water rates for 2011.
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