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Pricing Philosophy

Environmental Services rates are based on a region-wide average cost-of-service pricing philosophy. In other words, users are charged for the costs that MCES incurs to provide the specific services used. Charges for basic wastewater flow are based on the volume of flow disposed of by each community and MCES's average cost to treat wastewater. Charges for new capacity demand are intended to pay for the approximate average cost of growth. Charges to treat high strength wastewater are charged to the specific industrial users that discharge the high strength wastewater.

For wastewater utilities, some aspects of the charging system are prescribed by Environmental Protection Agency regulations (35.929-1) that state that the Regional Administrator may approve a user charge system based on actual use described as follows:

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A grantee's user charge system based on actual use (or estimated use) of waste water treatment services may be approved if each user (or user class) pays its proportionate share of operation and maintenance (including replacement) costs of treatment works within the grantee's service area, based on the user's proportionate contribution to the total waste water loading from all users (or user classes). To insure a proportional distribution of operation and maintenance costs to each user (or user class), the user's contribution shall be based on factors such as strength, volume, and delivery flow rate characteristics. Minnesota municipalities are required to design charges "as nearly as possible proportionate to the cost of providing the service" (M.S. 444.075 (36)). The Council supports this by designing its own fees based on cost-of-service.

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Moreover, cost-of-service pricing provides the most rational pricing signals to users thereby improving the economy of the region. For example, an industrial site that is considering whether or not to add pre-treatment equipment at their site will be encouraged to make the best decision for the region if their wastewater charges reflect the actual cost of the service.

Jason Willett, MCES Finance Director (651) 602-1196