Getting Rates Approved in the Big Easy Isn't Easy

The Sewerage and Water Board of New Orleans (SWBNO) is facing significant capital demands to upgrade a system that has been undercapitalized for decades and severely damaged by floodwaters following Hurricane Katrina. At the same time, its financial position has been compromised due to a significantly smaller population base from which to recover these costs. To determine the amount of revenues needed to fully restore the system, the Board of Directors approved a comprehensive financial planning and rate study (Rate Study), which has expanded in scope and increased in duration due to the challenges associated with gaining approval for the proposed rate increases. Utility managers need to be prepared for the various twists and turns that can occur during a rate setting process due to competing interests among and between key stakeholder groups. A strong working relationship between utility staff, key stakeholders, and the consultant will help the utility to meet and overcome these challenges.