Each water system has unique operating characteristics that drive its rates. This makes it very difficult to compare costs across systems. Water systems, in general, are sized to meet fire flow requirements, as well as domestic uses. This means there is actually much more capacity than is required for just the domestic use. All of these costs must be factored into the rate structure.
The Montana Public Service Commission (PSC) regulates our rates. The objective of this regulation is to achieve reasonable rates and good service while maintaining a financially viable company.
The “revenue requirement”, or the total amount that can be collected from our customers, is derived from the reasonable costs necessary to provide service. Those costs are operating and maintenance costs, administrative costs, and a fair return to those who have invested in or lent dollars to Mountain Water for infrastructure that is used to serve the customers. Great care is taken by the PSC to ensure that these costs are prudent and reasonable.
Rates are set on what is termed a “historical test year” basis. This means that a baseline is established for costs, number of customers, and infrastructure investment over a period of a year. Adjustments are allowed for “known and measurable” changes.
As our operating costs, such as electricity and insurance, continue to increase and we continue to replace aging infrastructure, our rates will have to increase over time. We realize the impact of increasing rates on our customers. Our employees live in this community, and many of them are Mountain Water customers also. We are committed to providing the best combination of quality, service and price for our customers.
For more information, visit the Montana Public Service Commission website at www.psc.state.mut.us/commission/workings.asp
Meters vs. Flat Rate:
There are two billing methods: Metered measurement or Flat Rate billing. Both methods are approved by the Montana Public Service Commission and are subject to periodic adjustment.
A metered bill includes a monthly service charge which is a fixed rate based on meter size in addition to the water usage charge. All new structures are required to have meters and once a meter is installed, service cannot be changed back to a flat rate account.
A Flat Rate bill is based on the number of rooms, baths and toilets, and not based on actual consumption. There is a separate flat rate sprinkling charge for outside water that is based on the square footage of the yard. We know how much water our metered customers use, but can only estimate flat rate consumption. Therefore, our rate structure assumes that flat rate customers consume a maximum amount of water. This assumption is applied to both domestic and irrigation rates. The result is rates that, particularly for conservative users, may seem very high. Metered billing is usually to the advantage of conservative users.
When flat rate customers switch to metered billing, Mountain Water
Company pays for the meter, including installation, as long as a location
exists for the meter that is protected from the elements and properly
plumbed. If you call for an appointment we can send one of our service
people out to discuss the specifics of your situation, free of charge.