Rates and Charges for Sewer
Service to Industry
George K. Erganian, Executive Vice-President
Henry B. Steeg & Associates, Inc.
Indianapolis,  Indiana
INTRODUCTION
A number of papers have been written in the past discussing methods
of arriving at equitable charges for sewer service to industry. Most of
these papers have considered rate structures based primarily in terms
of volume and concentration of wastes involved. The development of
these rate structures has for the most part followed the reasoning that
the rates and charges are intended to cover the cost of constructing and
operating a sewage treatment plant and interceptor sewer system. Under this condition the development of a rate structure based on volume
of flow and including surcharge rates for abnormal concentrations of
industrial wastes is reasonable. Methods of determining these surcharge rates to industry involve the allocation of the cost of both the
construction and operation of the facilities required for handling (1)
flow, (2) solids and (3) BOD.
Examples of these computations presented in the literature are
worthy of attention and understanding, since they represent rational
methods of allocating the fair cost of waste treatment to the industries
involved. While this paper is not intended to discuss this phase of rate
making, it might be noted, in the way of confirming the opinion of
other authors, that the use of a surcharge formula has certain practical
limitation, particularly from the administrative cost angle, and as a
result we find very few instances of such surcharge rates being imposed
on industry in Indiana.
The principal concern of this author and the theme of this paper
is the fact that there has been a gradual distortion of the basic premises
of rate making for sewer service in Indiana. For years we have recited
the fact that the cost of constructing and operating a sewage works is
directly related to flow and concentration of wastes to be treated and
that equitable charges to a customer for the service should therefore
be based on the volume and concentration of wastes discharged by that
customer. In order to describe some of the inequities which may arise
from the indiscriminate use of this philosophy, it is necessary first to
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