Consultant outlines rate-study steps and options for Boulder City utilities

At a Boulder City advisory committee workshop, consultant Mark Bauschau, president of Utility Financial Solutions, presented a roadmap for the city’s upcoming utility rate study and outlined rate-design options that could affect how much customers pay and how costs are distributed across residential and commercial accounts.

Bauschau said the study generally follows three steps: multi-year financial planning to identify revenue requirements and cash-reserve needs; a cost-of-service study to allocate costs by customer class; and a rate-design phase where the governing body decides policy trade-offs such as customer charges, bandwidths around average increases, time-of-use rates and demand charges. "A cost of service study looks at who's causing certain costs to be incurred," he said, adding that the governing body’s input is critical when moving from cost allocation to the actual rate structure.

Why it matters: Boulder City currently benefits from unusually low power costs tied to its supply contracts and assets such as Hoover and Mead capacity, Bauschau noted, and those local facts should shape any study. Still, he warned that insufficient cash reserves or unplanned…