Drinking water rates are established based upon the following factors:
Operating costs: Southington Water must cover the cost of producing, treating, and distributing drinking water, as well as the cost of maintaining and upgrading infrastructure. Operating costs are often the largest factor in determining drinking water rates.
Capital costs: The Department uses a combination of reserve funds and may need to borrow money to fund infrastructure projects or to purchase equipment. Replenishing cash reserve funds and the cost of borrowing, as well as the repayment of principal and interest, may be factored into drinking water rates.
Regulatory requirements: The Water Department is subject to regulatory requirements from federal, state, or local agencies, which may impact the cost of producing and delivering drinking water. Compliance with regulations may require additional investments in infrastructure or treatment processes, which can impact rates.
Revenue requirements: Water utilities must generate enough revenue to cover their operating and capital costs, as well as to maintain an appropriate level of reserves. Revenue requirements are typically established through a rate study or financial analysis.
Customer usage: Drinking water rates may be structured to encourage conservation and responsible water use. Some utilities may charge higher rates for customers who use more water, while others may offer tiered rates based on usage levels.
Before new rates are established, Southington Water holds a public hearing to discuss proposed drinking water rates with customers and stakeholders before they are implemented.
It's worth noting that drinking water rates (when comparing different utililty rates) can vary widely depending on the location and the specific circumstances of the water utility or municipality.
Customers who have questions or concerns about drinking water rates in Southington should contact us at 860-628-5593 for more information.