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What to Do with Less
Author(s) -
Lafrance David
Publication year - 2011
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.1551-8833.2011.tb11560.x
Subject(s) - revenue , variable (mathematics) , variable cost , order (exchange) , fixed cost , business , finance , economics , operations research , operations management , actuarial science , microeconomics , engineering , mathematics , mathematical analysis
In his column, AWWA Executive Director David LaFrance discusses the impacts of declining water sales on utilities. LaFrance presents an alternative to raising fixed fees in order to manage revenue risks. The alternative includes the following: dividing reduced water sales into two categories ‐ planned and unplanned; making sure revenues are meeting costs at today's water sales levels; develop revenue forecast projections covering at least three to five years; and, get a solid handle on the relationship of fixed and variable costs to trued‐up fixed and variable revenue, making sure there are reserves to absorb any reasonable demand risks.