Setting Rates

The Rate Setting Process

Monterey One Water’s rates are updated annually to generate sufficient revenue to fund operations, maintenance, and other support activities related to wastewater treatment. Note wastewater or sewer collection is the responsibility of your city who uses its own process to determine collection fees.  

The methodology used to update treatment rates involves five basic steps:

  1. Determine revenue required from rates.
  2. Allocate revenue requirements among billable parameters (wastewater flow, waste strength, solids, and other categories).
  3. Develop unit costs that apply to all customers using revenue allocations.
  4. Determine the revenue required from each customer class based on unit costs and discharge from each class.
  5. Develop rates for each customer class based on revenue requirements and units of use.

Rates are described in more detail in the Proposition 218 notice mailed to property owners when a change in rates is being considered.

Current Rate Determination Details

Appropriate Units of Use

The rates for each customer class are based on appropriate units of use. The following are some examples of units of use:

ClassUnits of Use
Hotels/MotelsNumber of rooms
Residential (Multi-Family)Number of living units
RestaurantsNumber of seats
SchoolsNumber of students/teacher/administration (population)

Industrial & Some Commercial Users

Industrial and some commercial users are charged using the standard unit costs along with the applicable flow, strength, etc. of that waste. For some user categories, there may be a cost increase; for others, it may stay the same or even decrease. The calculation is based on historic data, state-imposed standards, and local flow information.

Because of this annual process, the percentage adjustment for each customer class may be different.

Rate Comparisons

M1W rates and charges continue to be comparable with our nearby agencies, as shown in the Rate Comparison (PDF), updated annually as part of the budget process.