Audit of Major Commercial & Irrigation Water Accounts

• Project Type: General OWC
• Applicant: Town of Castle Rock
• Project Name: Commercial & Irrigation Water Audit
• Title: Audit of Major Commerical and Irrigation Water Accounts
• Date: 6/29/2006
• County: Douglas
• Water Conservation - Doc Type: Final Report

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Audits of Major Commercial and Irrigation Water Accounts
Town of Castle Rock

the 2004 and 2005 summer months was made using the ET utility provided by Northern
Colorado Water Conservancy District (NCWCD) and the average monthly temperature
for each summer month (see Table 2).

This water budget, which was developed. for each water account, accept those facilities
noted below, was used as the basis for developing an inclining block rate structure for
future water pricing, since the future cost of water for commercial and irrigation accounts
is expected to change from a flat rate structure to an inclining block rate structure to help
promote more efficient water use and more appropriately price water based on its value to
the customer and its cost to reliably produce. The future price of water was based on the
current price of water which is charged to commercial and irrigation customers at a flat
rate of$ 4.13 per 1000 gallons of water used.

Note that the use of the water budget methodology was not applicable to those facilities
that had varying water use without outdoor irrigation (e.g., Western Mobile Pre-Mix), or
had substantial other uses that fluctuated seasonally or monthly (e.g., Safeway, Jenny's
Market). For these situations, future water pricing and therefore proposed water use
improvements were evaluated based on average monthly water use over the two years
2004 and 2005.

Although a number of inclining block rate models exist in the literature, this project used
the block rate structure that is currently being used in Highlands Ranch, Colorado by the
Metro Districts (Mcloud, 2006) to estimate potential future costs of water to commercial
and irrigation accounts in Castle Rock. Specifically, the number of tiers, the percent of
increase of water cost between tiers, and the change from one tier to the other based on
percent of the water budget used were obtained from the Highlands Ranch model. The
cost of the lowest tier was set at the current commercial flat rate currently being used by
the Town.

The block rate structure that Metro Districts currently uses evolved from the application
of Irvine Ranch, California inclining block rate structure. The inclining block rate
structure that was developed for this project to evaluate the cost benefit of proposed water
use efficiency recommendations is presented in Table 3.

Note that Castle Rock in currently in the process of evaluating the cost of providing
reliable water to its customers, and as a result, the Town may find that it will be required
to implement a rate structure that is different than presented herein; however, for the
purposes of this project, the inclining rate structure was used.

The actual cost of water to the Town's customers combines the cost of water used
(calculated using Table 3) and a base rate. For the future cost of water analyses presented
herein, it was assumed that the base rate for commercial and irrigation user is based on
the single family equivalent (SFE) cost per tap size using the factors presented in Table 4.
These SFE factors are the same as those currently used by the Town.

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