| dc.description.abstract | To ensure break-even of wasterwater treatment plants, the pricing for wastewater treatment at industrial parks should base upon the principles of user pays, fairness, and reasonability. Current flat rate tariffs fail to consider inter-industry differences in types of contamination, quantity, and quality. Because different types of contamination of wastewater require a variety of treatments to remove the contamination, cost of treatment varies considerably across industries. The flat-rate tariffs result in overcharge for some industries and undercharge for others, which contradicts the user pays principle and leads to operating losses of the wastewater treatment plants at industrial parks.
In this paper, I examine treatment wastewater treatment costs for eight industries. Using both archival and survey data, I compare the quantity, quality, and costs of two disposal methods for each of the eight industries and propose a break-even pricing formula. The two methods examined are: self-discharge by individual business outside the industrial park and central disposal by an industrial park agency. Under the assumption of break even, I develop the pricing formula after considering the different treatment costs of the two methods examined. Using the said formula, I further analyze the variance of treatment costs across different industries, illustrating the unfairness and unreasonableness of current single-rate tariffs. To minimize impact on other industries beyond the scope of this study, the proposed pricing formula is derived while holding constant the total revenues of the wastewater treatment plant. The pricing formula produces one rate adjustment, denoted in percentage as x, for each industry, thereby arriving at differential, industry-specific rates. Results of this study provide a basis for future pricing revisions.
| en_US |