The policy on tariff setting in Rivers State is that it should amongst other things:
* Ensure that water is distributed equitably.
* Allow for total cost recovery on the part of service providers.
* Ensure price discrimination.
* Ensure that consumers benefit from efficiency gains.
* Ensure that the inefficiency of the service providers is not passed on the consumers.
OBJECTIVES OF A GOOD TARIFF STRUCTURE
* Revenue sufficiency: cost recovery – sufficient revenue to pay for operations and maintenance costs as well as provide a return on capital.
* Cost reflectiveness: charging customers so as to limit consumption to efficient levels.
* Social acceptability: ensure that charges seem reasonable and that all customers, even those with low incomes are able to receive at least the basic service.
Based on our tariff study, we decided to adopt a simple tariff structure with the following three components:
a. Category of users;
* Government & others
* Stand pipes
b. Charges for services
We adopted a binomial tariff – consisting of a fixed monthly charge and volumetric charge. The fixed monthly charge is billed regardless of consumption level.
* 3 blocks for domestic customers
* 2 blocks for Government and other users.
* No block for businesses and standpipes.
c. Charge for connection
* One time charge at the time of connection.
d. Other changes: Material costs such as pipes and accessories, meters, reconnection and labour.