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Long‐Term Contracts for Large Users: An Industry Viewpoint
Author(s) -
Smith Ronald A.
Publication year - 1989
Publication title -
journal ‐ american water works association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.466
H-Index - 74
eISSN - 1551-8833
pISSN - 0003-150X
DOI - 10.1002/j.1551-8833.1989.tb03205.x
Subject(s) - subsidy , business , service (business) , term (time) , revenue , industrial organization , environmental economics , finance , marketing , economics , physics , quantum mechanics , market economy
General Motors Corp. (GM) negotiates rate and service contracts with its water suppliers as often as possible, based on fairness to the water utility, the utility's other customers, and GM. Water rates, in GM's view, should be adequate to maintain the operational and financial stability of the utility as a self‐supporting enterprise and should be based on the cost of service, without cross‐class customer subsidization or revenue subsidies. Detailed rate and service contracts are used by GM as vehicles to achieve these goals with its water suppliers.