Sewer utilities that are not regulated by the Public Service Commission (PSC) have several alternatives available to recognize water consumption which does not enter the sewer system. The most common methods used are:
1. Do not offer any sprinkling credit on sewer bills. This maintains a lower sewer rate throughout the year, since the water used is part of the volume factored in when designing new sewer rates.
2. Estimate the volume of sewage for the summer quarter based on an average winter quarter's water consumption. Bill the customer based on his or her actual metered water consumption, or the winter quarter(s) consumption, whichever is less.
3. Have a summer sewer volume rate that is lower than the winter volume rate.
4. Require a separate meter be installed to measure water which does not reach the sanitary sewer. (All sewer utilities regulated by the PSC are required to offer this option).
5. Direct meter sewer (applicable primarily in industrial applications).
6. A combination of the above methods.
All methods have sewer volume rates based on the concept of "billable units". If sewer charges are based on water usage with no adjustments, the number of units billed will be higher than the number of units that must be treated at the sewer plant. The resulting cost per unit is then lower. If credits are given, either through a second meter or a summer sprinkling credit, the number of billable units decrease and the cost per unit is then higher. All of the above options are in practice and are acceptable in the unregulated sewer industry (PSC does not set rates and rules). A municipality that allows billing only for volumes that enter the sewer, there are two metering ownership options available.
Water Utility Ownership of Meters
In this case, the water utility retains ownership of the sewer deduct meters and requires installation according to water utility specifications. The customer pays a charge for the additional meter each billing period as authorized by the PSC in Schedule Am-1. One advantage of this method is that the water utility controls the permanent location of the meter and remote register placements and determines appropriate repair and maintenance schedules. A disadvantage is the water utility's need to provide the financing to purchase and maintain the sewer deduct meters. The accounting of these meters would be the same as any other water meter that the water utility currently owns and maintains. Where the metering configuration would require the two water meter readings be added together for billing water, the PSC requires both meters be owned by the water utility.
Sewer Department Ownership of Meters
The water utility may sell meters to the sewer department, or the sewer department could buy meters directly from a vendor. The sewer department can then sell or rent meters to sewer customers. Under this option, all related costs such as testing and repairing these meters is handled by the sewer department, not the water utility. In this case, the sewer deduct meters are owned and recorded on the books of the sewer department, and it could recover its costs by implementing a sewer department charge. If the water utility purchases a specific lot of meters for the sewer department, the water utility could simply invoice the sewer department for the cost of the meters. Commission staff recommends the water utility not sell meters directly to the sewer customers, since this may be construed by sewer customers that the water utility is responsible for obtaining meter readings placed in inaccessible locations and other problems associated with the operation and maintenance of these meters.