This action leaves several questions regarding the future and prior adjustments to the UAAL balance. Because of the uncertainty of UAAL adjustments, governments may want to defer any prepayment decisions until this issue is resolved, since it could affect the liability balance. Obtaining a rate increase using the PSC's traditional procedures is a complex and timely process. This process can be used if the utility does not have any new plant requirements and has obtained a traditional rate increase in recent years. A simplified rate increase works great for utilities in communities that are not experiencing significant growth.
Revenues tend to remain constant, but expenses usually increase due to inflation.
This results in gradual declines in net income and cash flows. A simplified rate increase provides the utility with a cost-effective way to keep up with inflation. We can assist you with rate increases, UAAL prepayments, and other management decisions. Please contact one of our governmental specialist in the HAB office nearest you.