By C. W., Ph.D. Corssmit, C. W., Ph.D. Corssmit
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Extra info for Water Rates, Fees, and the Legal Environment
Example text
History of Water Rates Lawsuits The leading legal case in the United States pertaining to reasonable water rates is the Bluefield case of 1923. However, precursors to the Bluefield 10 rates, fees & legal environment case started in the 1870s. Interestingly, the development of railroads across the United States in the mid-1800s and the industrial might of Standard Oil Company thereafter prompted the development of antimonopoly measures. The railroads received significant public land grants to finance their new westbound lines.
16 rates, fees & legal environment Reasonableness and Nondiscriminatory Rates Legal briefs often refer to the norms of reasonable, fair and equitable, and nondiscriminatory rates. In rate-making literature, these terms connote a more specific meaning than that found in standard dictionaries. Reasonable water rates are rates that are based on generating sufficient revenues to operate the water utility in a prudent manner and without any undue discrimination among customers. The term fair and equitable rates, also called cost-of-service-based rates, in rate making refers to a cost causality between rates and the customer’s bill.
This hybrid method is called the utility basis with cash residual. Details on these methods may be found in American Water Works Association (AWWA) Manual M1, Principles of Water Rates, Fees, and Charges. The structure of the legal environment in which the two types of authorities operate within the United States will be the subject of chapter 2. History of Water Rates Lawsuits The leading legal case in the United States pertaining to reasonable water rates is the Bluefield case of 1923. However, precursors to the Bluefield 10 rates, fees & legal environment case started in the 1870s.