Value of Water: Current billing structure
For the past two decades under the current rate structure, London
residents and businesses have been paying for our water and sewer
systems based entirely on the volume of water they use. As a result of
this method of charging for services, as shown below, our customers
contribute different amounts to the total revenue required to run the
publicly owned and municipally operated water and sewer systems. One
of the issues with this style of revenue recovery is that the cost for
the City to provide and maintain all of the pipes, is the same
regardless of how much water is used. In fact, approximately 70% of the
total revenue collected is used to pay for maintenance and operations,
repairing pipes and providing fire protection to all customers. The
remaining portion covers the cost of the water purchased from the Joint
Boards and the treatment plants in Grand Bend and Port Stanley.
The intent of the new model is to be revenue neutral, which would
mean that the approximate $130 million in annual revenue required to
safely and reliably operate the water and sewer systems would still be
recovered, but it would be redistributed amongst all different rate
payers (residential, commercial, institutional, and industrial customers) more equitably
based on the cost to service their home or business.
Click on the poster to see an enlarged image or for a printable
version download the pdf
The Value of Water to ICI (Customers.
In the example here, we have two different types of businesses.
One a heavy water user and one a warehousing style of operation. Even
though the warehouse uses significantly less water than the large
industry, it actually has higher needs for fire protection as
mandated by the Fire Underwriters and insurance companies in Ontario. In
the current model, the large water user ends up covering the costs of
fire protection and system renewal as part of their rates and charges
when their fire protection needs are actually less.