System Development Charges / Impact Fee Studies

Capacity fees or system development charges are used by utilities to recover the costs of increasing capacity among the users of the new capacity. Our approach to developing system development charges for utilities uses spreadsheet models to ensure that all capital costs incurred in constructing expanded system capacity—in particular, future debt service payments—are recovered through fees paid only by new customers if the entity has a policy that "growth pays for growth". We also use sensitivity analysis to identify the financial burden of carrying unused capacity and the effect it will impose on existing customers if growth does not occur or occurs at a slower rate than expected.

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