Transparent Cost of Service – Six Keys for Successful Stakeholder Involvement

As part of its normal business practice, the Austin Water Utility (AWU) conducted a comprehensive cost-of-service study for its water and wastewater utility. Central to this study was a unique public involvement strategy that integrated advocates for various classes of customers into the process of developing AWU's rate setting methodologies. This group of advocates was called the Public Involvement Committee (PIC).This public involvement strategy presented several challenges and opportunities to the project team. One key challenge of the strategy was ensuring that PIC members considered both the needs of the customers they represented and the needs of the utility as a whole.This paper presents the innovative approaches used to integrate the PIC into the methodology development aspects of the study in a meaningful and constructive manner while avoiding having participants take strong positions that derailed the process. The paper highlights the role of AWU's Executive Team and the project technical team in the public involvement program and how their approaches contributed to the strategy's success. Additionally, the paper includes the results of an anonymous online survey of PIC members that was conducted after the public involvement process was concluded. The anonymous survey presents the frank opinions of the PIC members on the pros and cons of the process.The paper also discusses techniques used by the project team to ensure the PIC had proper information to form their recommendations. These techniques include using the internet to provide PIC members the opportunity to view AWU's cost-of-service computer models and develop “what-if” scenarios in real-time. This technique ensured AWU maintained control of the computer models while enhancing the transparency of the process.