Understanding the Practices, Policies and Impacts of System Development Fees and Upgrade Requirements

Water utilities in North America face the challenge of equitably and effectively distributing the costs of system expansion and upgrade requirements that arise due to economic and population growth in their service areas. System development fees are one approach that allows new customers to help finance some or all of the cost associated with expanding and upgrading the capacity of their water systems. 

There are different approaches utilities can take to develop their system development fees, each with their own benefits and tradeoffs. This research will provide water utilities with a robust analysis on the available approaches to, and methodologies for, enacting utility development fees and on their impact on different customer classes. The insights and frameworks generated will support decision makers in determining which option best meets their community needs and values, and will improve water utilities’ ability to anticipate and communicate to their ratepayers the short and long-term implications of utility development fee choices.