The Mahanoy Township Authority authorized the preparation of a water rate study by Keystone Alliance Consulting. The goal of the study was to develop and recommend a water rate structure that would satisfy the revenue requirements of the Authority water system and reflect, to the extent possible and feasible, the actual cost to provide service to customers. In addition the Authority wished to see the effect of the proposed Vulcan Waterline Extension project on rates to assist them in studying the financial feasibility of this project.

Keystone performed the following services in connection with the study:

• Reviewed the latest financial data, including the operating budget for the current year, as well as the latest audited financial statements.
• Determined the annual revenue requirements of the Authority’s water system operations for the study period and allocated those requirements between its fixed and variable components.
• Analyzed the pattern of water customer usage for a 12-month period.
• Compared the revenues projected for the study period under the current rate structures with the annual revenue requirements and quantified any deficiencies.
• Developed alternative rate structures consistent with the goals of the Authority.
• Compared the impact of these alternative rate structures on customers at various usage levels.

Several alternative structures were studied. Keystone discussed these structures, as well as their impact at various usage levels, with the Authority staff and board in an effort to provide rates that were self-supporting without being onerous on any class of customer.