The studies have given results according to which an opportunity to use a tool is being missed by the utilities which could help them in raising their revenue.
A report that came from the Resource Advocates and the Finance Center of the University of North Carolina has showed that the charges of water connection are not being utilized by the utilities to improve the number of development projects for the water conservation. The utilization is being done by some of the water utilities only.
Water connection charges are also recognized as impact fees, tap fees, plant investment fees or system development charges. These are the charges which are required to be paid once at the time when connection of water system is given by the utility by paying this direct cost. The charges are associated with the new developments and with the infrastructure and the capacity of resources that are required to give these developments a support.
The utilities get the revenue through these charges which much required so that the expenditure can be done the improvements of the infrastructure. Also the demand for water can be influenced in the new developments.
The importance of the findings have been demonstrated by a water analyst, Amelia Nuding at Western Resource Advocates. She said that the charges for the connection have been taken for number of years but the new developments are only being encouraged by few of the utilities. The strategy is a smart one in which efficiency of water is focused through the structuring of water connection charges.
A survey of the structures of more than 800 water connection charges has been done and according to the report, these water utilities are not using the tool. The analyzed utilities are in the states of North Carolina, Georgia, Utah and Colorado.
A uniform structure for the tap fees is being used by most of the utilities which means that they are getting same amount from all the family residential units for the connection with the water system regardless of the size or location of the homes.
Better structure of fees can be prepared if the utilities consider other factors like kinds of landscapes. There are some utilities in Colorado which are doing the allocation of costs among the customers in a fair manner, according to the report.
Utilities are suggested to take more than one factors into consideration for the determination of the connection charges to use them for the new developments and the efficiency of water. The report also suggests that for the designing of the new connection charges, customers and developers must also be involved by the utilities.