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7.A. - Page 62 <br /> 2.13 Water Rate Derivation <br /> The basic methodology used to develop new rates is summarized below. <br /> Fixed vs. Variable Rate Recovery <br /> Allocate costs for recovery from fixed <br /> rates vs.variable quantity charges <br /> IP <br /> Fixed Rate Derivation Quantity Rate Derivation <br /> Divide costs allocated for fixed rate Attribute costs allocated for variable <br /> recovery by total meter equivalents to rate recovery to the various customer <br /> determine a uniform cost per 5/8" classes or tiers <br /> meter equivalent <br /> Divide the costs attributed to each <br /> Apply the underlying cost per 5/8" class or tier by projected water use <br /> meter equivalent to larger meter sizes per class or tier to calculate rates <br /> based on meter capacity <br /> B Water Utility Finances& Rates 35 <br /> �'ti Water&Sewer Financial Plans&Rate Studies <br />