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How Cost-Based Method Can Fix Skewed Rates

Published Monday, July 01, 1996

For years, public utilities have analyzed their operating costs, added a fair profit and divided the total equally among its ratepayers when setting its rates. The result: The more services a customer used, the more that customer paid. Now, customers are demanding fair cost distribution, and the solid waste industry is listening by considering cost-based rates. Viewpoints vary on the use of cost-based rates. Some private contractors prefer this method because they are ensured of recovering their costs and are virtually guaranteed some level of profit each year. For this reason, municipalities that regulate the private waste management ...

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