5 Yr TariffMethodology Nwrb Jan09

7/27/2019 5 Yr TariffMethodology Nwrb Jan09

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National Water Resources Board

A Presentation ofNWRBs 5-Year Tariff Methodology


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Background:

In 2005, the NWRB adopted the 5-Year

Tariff Methodology (Res. 001-0105 dtd J an. 14,2005)

Objective: Help WSPs plan their businessand attain full cost recovery.


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Main Features:

Tariff is computed based on agreed levels of service

Requires the submission of a 5-Year Business Planwith detailed proposed OPEX and CAPEX

Use of Excel-based tariff model

Computation of average ROI to reduce price shocks.

Mechanism for disallowances and upward adjustmentin succeeding tariff proposal.


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Setting Tariff Goals

Levels of tariff should be established in

consultation with customers or representatives.

Hours of service

Water qualityNon-revenue water

Service coverage and pressure


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Water Supply Planning

Levels of Service intended to be implemented

Projections of demand and supply levels

Projected new connections, volume sold and

population to be served.

Determine production capacity, NRW, water supplyshortage/surplus

Determine required investments

Determine operating expenses to be incurred.


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197,316194,796192,276189,756187,236200,952Volume Sold (m3/year)

21.0021.0021.0021.0021.0022.63Ave. Consumption/Conn./Month (m3)

96%95%94%93%91%91%% Population Served

4,8784,8784,8784,8784,8784,878Population in Service Area

4,6984,6384,5784,5184,4584,440Population Served

666666Average Persons per Household

783773763753743740Total Connections

10101010315New Connections

DEMAND

6.666.546.035.454.761.86Water Surplus / (Shortage) (lps)

209,952206,196190,281171,840150,21958,706Water Surplus / (Shortage) (m3/year)

473,040473,040473,040473,040473,040473,040Total Own Production and Water Purchases (m3.yr)

------Bulk Water Purchases (m3/year)

263,088266,844282,759301,200322,821414,334Production Requirement (m3/year)

25%27%32%37%42%52%% Non-Revenue Water473,040473,040473,040473,040473,040473,040Production Capacity (m3/year)

15.0015.0015.0015.0015.0015.00Installed Production Capacity, lps

SUPPLY

ProjectedActual

201220112010200920082007

SUPPLY AND DEMAND PROJECTIONS


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ACCEPTABLERESULT

230Monthly Revenue from Minimum Charge

463Ceiling, 5% of such Income

9,257Household Income of Low-Income Household

AFFORDABILITY CRITERIA

75.00Over 1000

57.0026-1000

1150.00First 25 m3

38.0038.00Over 50

33.0033.0041-50

29.0029.0031-40

26.0026.0021-30

24.0024.0011-20

228.32228.32First 10 m3

Commercial/ IndustrialResidential/ InstitutionalPublic TapQuantity Block (m3)

Affordability Criteria


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WSPs Review and Audit

Agreed service level targets that were used intariff determination were translated to:

Level of Service Standards

KPIs and KFIs Targets.

Failure to meet agreed standards and targets

will result to adjustments in revenuerequirements for next tariff proposal.


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Service Standards Or Levels Of Service

Water Quality

- in accordance withPhilippine National

Standard for DrinkingWater (PNSDW)


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Pressure Adequacy- not less than 5 psi (municipal)- not less than 25 psi (industrial zones)

Continuity of Supply- at least 8 hrs/day

Consumption Per Capita

- 100 lpcd (municipal)- > 100 lpcd (industrial zones)

Service Standards Or Levels Of Service


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FINANCIAL TECHNICALCUSTOMER

SERVICE

OperationalPerformance

Key Financial & Performance Indicators

ServiceLevel


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No. of Metered ServiceConnections

Total Service Connections x100

% Metered4

Personnel Management

No. of Staff

(Total ActiveConnections/1000)

Staff/1,000Connection Ratio5

Water Produced Water Billed

Water Produced x 100Non-RevenueWater (%)

3

Production Efficiency

FormulaKPI

Summary Table of KPIs and Formula


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Liquidity

Current Assets

Current LiabilitiesCurrent Ratio7

Operating Expenses

Operating RevenuesOperating Ratio6

Cost Control

B. Financial Ratios

FormulaKPI



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Total Liabilities

Total Stockholders Equity

Debt to Equity

Ratio9

Sustainability

Net Income before Tax

Total Debt Service

Debt ServiceRatio

10

Net Income

Operating Revenues

Net Income Ratio8

Profitability

FormulaKPI



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F

I

N

A

N

CI

A

L

V

IA

B

I

L

IT

Y

ProductionEfficiency

Personnel

Management

Others

LIQUIDITY

PROFITABILITY

COST CONTROL

SUSTAINABILITY

Key Result Areas

OPERATIONAL

PERFORMANCE

INDICATORSFINANCIAL RATIOS

Key Performance Indicators

Collection

Performance


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Documents

5 Yr TariffMethodology Nwrb Jan09