§ 45-39.1-5. Rates.
(a) Adequacy. The rates of municipal water supplies shall be adequate to pay for all costs associated
with the municipal water supply including, but not limited to, the costs of acquisition,
treatment, transmission, distribution, and availability of water, and of system administration
and overhead, including metering and billing, programs for the conservation and efficient
use of water, including costs of developing, implementing, enforcing and evaluating
such conservation programs and including conservation pricing as described in subsection
(d), and the cost and/or value of any services or facilities provided by the city
or town to the municipal water supply, testing, operation, maintenance, replacement,
repair, debt service, and for sufficient operating reserves, revenue stabilization
funds, debt service reserves and capital improvement/infrastructure replacement funds
to implement water supply system management plans;
(b) Equitability. Except for service charges and other fixed fees and charges, rates:
(1) Shall be based on metered usage and fairly set among and within the classes and/or
types of users;
(2) Shall provide that within any class of users the full costs of system capacity, administration,
operation, and water supply costs for peak and/or seasonal use is borne by the users
that contribute to such peak and/or seasonal use;
(3) May provide a basic residential use rate for water use that is designed to make a
basic level of water use affordable, and
(4) May require implementation of demand management practices, consistent with the standards
and guidelines of the water resources board, established pursuant to chapter 15.8 of title 46, by wholesale and retail customers;
(c) Revenue stabilization. Municipal water suppliers shall in the absence of other sufficient funds available
for similar purposes, establish as part of their next rate adjustment a revenue stabilization
account to provide for adequacy during periods when revenues decline as a result of
implementing water conservation programs, or due to circumstances beyond the reasonable
control of the water supplier, including, but not limited to, the weather and drought.
A revenue stabilization account shall accumulate a maximum of ten percent (10%) of
the annual operating expenses of the supplier and shall be used to supplement other
revenues so that the supplier's reasonable costs are compensated;
(d) Conservation. Municipal water suppliers shall take effective action to reduce waste of water and
to reduce non-agricultural seasonal increases in the use of water, and may adopt conservation
pricing as part of a demand management program or otherwise revise their rates as
a means to achieve their goals. For the purpose of encouraging conservation of water,
suppliers are authorized to adopt increased rates based on quantity used either throughout
the year or seasonally. Conservation pricing shall be designed to promote efficient
water use, and to limit seasonal non-agricultural outdoor water use, and to the extent
possible shall not increase prices for water users with no significant seasonal increase
in water use. Revenues generated from the adoption of conservation rates shall be
used to fund the revenue stabilization account established pursuant to subsection
(c) above, operating reserves, debt service reserves or capital improvement/infrastructure
replacement funds; and
(e) Billing. Billing shall be, at a minimum, quarterly by December 31, 2013.