The Sheridan City Council discussed methods for setting and managing city utility rates at a work session on Thursday. StepWise Utility Advisors has been working with the City to come up with a plan for the future utility rate management. StepWise President Jason Mumm says setting rates is all about risk management.
When there are problems with rates, many times the underlying cause is the financial plan and not the rate structure itself. The city has struggled with keeping rates competitive in it’s enterprise accounts.
One of the biggest recommendations from the consultants concerned implementing rate changes. If the master plan shows a large discrepancy between rates and costs, the City should not try and make up the deficit all at once. Incremental adjustments will avoid the “rate shock” that customers will experience with a large change.