Water Tariff Setting and Affordability Training Course

Participants can assemble and test the data required for a credible tariff model.

• Customer segmentation using connection type, consumption and socioeconomic characteristics
• Household survey variables: income, expenditure, household size and water sources
• Billing extracts cleaned for active connections, consumption and collection rates
• Estimating billed demand from metering coverage, intermittency and consumption patterns
• IWA Water Balance separates physical losses from commercial losses
• Data-quality checks using reconciliation, outlier review and documented assumptions
• Building a tariff model input register with source ownership

Participants can calculate a cost-based revenue requirement from utility financial and asset data.

• Operating expenditure classified by fixed, variable, controllable and uncontrollable costs
• Asset registers linked to depreciation, renewal needs and service areas
• Lifecycle costing for treatment plants, networks, boreholes and fecal sludge systems
• Allocating shared costs between water, sanitation and non-core activities
• Capital expenditure programmes tested for timing, procurement and commissioning risks
• Inflation, exchange-rate and energy-price assumptions incorporated into forecast costs
• Revenue requirement calculated from operating costs, depreciation, taxes and financing

Participants can assess whether tariff revenues support cash needs, debt obligations and planned investments.

• Revenue requirement reconciled to cash needs, debt service and reserves
• Working-capital assumptions for receivables, payables, inventory and cash balances
• Debt-service coverage ratio calculated under base, downside and recovery cases
• Grant funding, connection subsidies and operating subsidies treated separately
• Regulatory asset base principles applied where an asset-return regime exists
• Financial sustainability assessed through income statement, cash flow and balance sheet
• Scenario analysis tests inflation, demand, collection and energy-cost shocks

Participants can select and model tariff structures that meet stated financial and social objectives.

• Uniform, increasing-block and two-part tariffs compared against policy objectives
• Fixed charges assessed for customer acceptance and low-use household impacts
• Volumetric rates structured around metering, billing costs and marginal consumption
• Tariff blocks designed using consumption distributions rather than assumed household use
• Sanitation charges linked to water bills, property values or service tiers
• Connection charges separated from recurrent tariffs and financing arrangements
• Cross-subsidies quantified between customer classes, service areas and consumption blocks

Participants can assess affordability across household groups and explain the limits of available evidence.

• Affordability indicators calculated using expenditure shares, residual income and poverty lines
• Household expenditure survey analysis distinguishes reported bills from coping costs
• Residual-income approach tests capacity after food, housing and essential expenditures
• Affordability thresholds interpreted cautiously alongside service levels and payment frequency
• Informal vendors, tanker purchases and self-supply costs included in comparisons
• Disaggregating impacts by income decile, household size, gender and location
• Affordability findings documented with limitations, confidence intervals and data gaps

Participants can design targeted support measures and assess their distributional and fiscal effects.

• Targeting methods compared: geographic, categorical, proxy-means and self-selection approaches
• Social tariffs designed through lifeline blocks, rebates, vouchers or transfers
• Eligibility verification balances inclusion errors, exclusion errors and administrative costs
• Subsidy incidence analysis identifies beneficiaries by income group and customer class
• Connection subsidies address upfront barriers separately from monthly bill support
• Sunset clauses, recertification and grievance channels protect programme integrity
• Financing sources tested for fiscal affordability and predictable utility reimbursement

Participants can prepare and assess a tariff submission within a transparent regulatory process.

• Price-control periods aligned with investment planning, data cycles and regulatory capacity
• Building-block approach separates efficient operating costs, depreciation and allowed returns
• Benchmarking unit costs using IBNET indicators and peer-utility comparators
• Efficiency targets distinguish controllable costs from exogenous price movements
• Tariff applications supported by evidence files, assumptions and audit trails
• Consumer consultation plans explain bill impacts, service commitments and redress
• Regulatory decisions communicate approved rates, conditions, timelines and review triggers

Participants can plan operational implementation and monitor whether tariff changes achieve intended results.

• Billing-system configuration translates tariff rules into customer-account calculations
• Meter-reading, estimation and complaint procedures tested before tariff effective dates
• Communication materials explain charges, assistance channels and consumption-saving actions
• Collection strategies pair payment plans with fair disconnection and reconnection rules
• Key performance indicators track collection, consumption, complaints and subsidy uptake
• Post-implementation monitoring compares actual revenue, affordability and service outcomes
• Corrective actions governed through thresholds, accountability and documented change control

Participants can assemble a decision-ready tariff package and prioritise next steps for their institution.

• Integrated tariff model links service targets, costs, demand and customer impacts
• Base-case projections reconcile volumes, bills, revenue, cash flow and affordability
• Sensitivity tables present outcomes under inflation, collection and demand scenarios
• Management briefing frames trade-offs, decisions required and residual risks
• Tariff implementation roadmap sequences approvals, system changes, communication and monitoring
• Personal application plan identifies data requests, stakeholders and first analyses
• Peer review tests model logic, assumptions, traceability and decision usefulness