What factors can a city consider when setting water utility rates?
The primary state statute that applies to this subject is RCW 35.92.010. This statute actually gives very broad flexibility to a city in regard to setting water rates for its customers. First of all, this statute provides broad authority to a city to construct and operate a water utility system. It also provides that the city has full power to regulate and control the use of water and the distribution and price charged for the water service. The statute does indicate that the rates charged must be uniform for the same class of customers or service. In regard to classifying customers, the statute gives great discretion to the city council to consider any matter which presents a reasonable difference as a ground for distinction. The statute lists of number of examples such as difference in cost of service to various customers, location of the customers within and without the city, difference in cost of maintenance and repair, different character of service and a number of others which I
