Summary of Utility Rate Analysis
Utility Rate Increase Effective January 1, 2010

SIOUX FALLS AT A GLANCE

• Sioux Falls has a current population of 154,100 people and has an annual growth rate of 1.9 percent.
• The city encompasses 73.2 square miles and has an annual growth rate of 4.4 percent.
• 135,100 people are employed in Sioux Falls and has an annual growth rate of 2.3 percent.
• There are currently 64,500 households with an annual growth rate of 2.8 percent.

WHY DOES THE CITY PREPARE RATE STUDIES?

By completing rate studies we can ensure that we will have enough funding to provide for the essential services our customers need; clean drinking water, waste water treatment, electricity, landfill space, and well-maintained streets. Rate studies are key financial forecasting tools for Public Works and our elected officials as well.

COST OF SERVICE ANALYSIS

A major component of a utility rate study is the Cost of Service Analysis (COSA). A COSA is an evaluation to determine whether costs are allocated among the various customer classes served (i.e. Residential, Commercial, Industrial, etc.) corresponding to the level of service provided. A utility incurs costs in relation to the range of expenses required to meet customer needs. A COSA follows the principles of cost-causation (those that cause costs, pay costs).

The fundamental question of the COSA is "do cost differences exist to serve the various customer classes of service?" Many costs are incurred for the joint benefit of all customers, while other costs may benefit only specific customers. A COSA uses an established procedure to assign utility costs across customer classes to support equitable and defendable utility rates, equal to the cost of service provided.

HOW WILL RATE INCREASES AFFECT YOU?

the table below shows impacts of rate adjustments to a typical household in Sioux Falls.

IMPACTS TO A TYPICAL RESIDENTIAL HOUSEHOLD

	CURRENT	INCREASE	TOTAL
Light & Power* (5% INCREASE)	$44.68	$2.23	$46.91
*Light Division has 1,633 residential customers
	CURRENT	INCREASE	TOTAL
Sewer (16% INCREASE)	$23.51	$3.77	$27.28
Water (14% INCREASE)	$24.89	$3.55	$28.44
Landfill** (NO INCREASE)	$22.44	$0.00	$22.44
Totals	$70.84	$7.32	$78.16
**Actual garbage hauler rates may differ
	CURRENT	INCREASE	TOTAL
Street Front Foot Assessment (NO INCREASE)	$80.00	$0.00	$80.00
(Based on 80’ frontage)