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Method Used to Establish Rates Not based on Cost
Publication year - 1992
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.1551-8833.1992.tb07402.x
Subject(s) - borough , apartment , service (business) , business , distribution (mathematics) , potable water , agricultural economics , environmental science , geography , environmental engineering , engineering , civil engineering , economics , archaeology , mathematics , marketing , mathematical analysis
The Municipal Water Authority of the borough of Aliquippa, Pa., owned and operated both a facility that produced potable water and a distribution system within its service area. The township of Raccoon did not have production facilities but owned, operated, and maintained a distribution system within its service area. In February 1973, Aliquippa agreed to sell potable treated water to Raccoon. The contract allowed modification by the seller at any time if its consulting engineer so recommended on the basis of the total cost of the seller's operations. In 1985, the borough adopted uniform rates in the city of Aliquippa by establishing a multiminimum rate for apartment units and other multiply occupied buildings. Thereafter, the borough adopted uniform rates for customers outside the city limits (also a multiminimum rate). Raccoon contested the application of that rate but lost in the trial court. Raccoon's protest was squashed by the courts because of the clause that the rates reflect the total costs of the borough's operations, not Raccoon's.