Common use of Pricing Principles Clause in Contracts

Pricing Principles. Where the prices set out in Schedule 2 do not apply because the nature of the service provided to a particular customer (including, in the case of trade waste customers, the volume or load of waste treated) is unique, prices must be set as follows: • variable prices (including, in the case of trade waste customers, load- based charges) should reflect the long run marginal cost (LRMC) of providing services (including, in the case of trade waste customers, trade waste transfer, treatment and disposal); • the total revenue received from each customer should be greater than the cost that would be avoided from ceasing to serve that customer, and (subject to meeting avoidable cost) less than the stand alone cost of providing the service to the customer in the most efficient manner; • the methodology used to allocate common and fixed costs to that customer should be clearly articulated and be consistent with any guidance provided by the Commission; • prices should reflect reasonable assumptions regarding the customer’s demand for services (including, in the case of trade waste customers, the volume and strength of trade waste anticipated to be produced by that customer); • depreciation rates and rates of return used to determine prices should be consistent with those adopted by the Commission for the purposes of making this Determination; • customers should be provided with full details of the manner in which prices have been calculated and any new, renewed or renegotiated contractual agreements with customers should indicate that the prices to apply are subject to any Determination made by the Commission; • where applying these principles results in significant changes to prices or tariff structures, arrangements for phasing in the changes may be considered and any transitional arrangements should be clearly articulated.

Pricing Principles. Where the prices set out in Schedule 2 do not apply because the nature of the service provided to a particular customer (including, in the case of trade waste customers, the volume or load of waste treated) is unique, prices must be set as follows: • variable prices (including, in the case of trade waste customers, load- based charges) should reflect the long run marginal cost (LRMC) of providing services (including, in the case of trade waste customers, trade waste transfer, treatment and disposal); • the total revenue received from each customer should be greater than the cost that would be avoided from ceasing to serve that customer, and (subject to meeting avoidable cost) less than the stand alone cost of providing the service to the customer in the most efficient manner; • the methodology used to allocate common and fixed costs to that customer should be clearly articulated and be consistent with any guidance provided by the Commission; • prices should reflect reasonable assumptions regarding the customer’s demand for services (including, in the case of trade waste customers, the volume and strength of trade waste anticipated to be produced by that customer); • depreciation rates and rates of return used to determine prices should be consistent with those adopted by the Commission for the purposes of making this Determination; • customers should be provided with full details of the manner in which prices have been calculated and any new, renewed or renegotiated contractual agreements with customers should indicate that the prices to apply are subject to any Determination made by the Commission; • where applying these principles results in significant changes to prices or tariff structures, arrangements for phasing in the changes may be considered and any transitional arrangements should be clearly articulated.. Volume Calculation Trade Waste Volume will be calculated at [XXX%] of the total volume of water delivered to the property, or by any other means as deemed appropriate by the Authorised Officer. SCHEDULE 4 – TREATMENT FACILITIES

Pricing Principles. Where the prices set out in Schedule 2 do not apply because the nature of the service provided to a particular customer (including, in the case of trade waste customers, the volume or load of waste treated) is unique, prices must be set as follows: •  variable prices (including, in the case of trade waste customers, load- based charges) should reflect the long run marginal cost (LRMC) of providing services (including, in the case of trade waste customers, trade waste transfer, treatment and disposal); •  the total revenue received from each customer should be greater than the cost that would be avoided from ceasing to serve that customer, and (subject to meeting avoidable cost) less than the stand alone cost of providing the service to the customer in the most efficient manner; •  the methodology used to allocate common and fixed costs to that customer should be clearly articulated and be consistent with any guidance provided by the Commission; •  prices should reflect reasonable assumptions regarding the customer’s demand for services (including, in the case of trade waste customers, the volume and strength of trade waste anticipated to be produced by that customer); •  depreciation rates and rates of return used to determine prices should be consistent with those adopted by the Commission for the purposes of making this Determination; •  customers should be provided with full details of the manner in which prices have been calculated and any new, renewed or renegotiated contractual agreements with customers should indicate that the prices to apply are subject to any Determination made by the Commission; •  where applying these principles results in significant changes to prices or tariff structures, arrangements for phasing in the changes may be considered and any transitional arrangements should be clearly articulated.

Pricing Principles. Where the prices set out in Schedule 2 do not apply because the nature of the service provided to a particular customer (including, in the case of trade waste customers, the volume or load of waste treated) is unique, prices must be set as follows: •  variable prices (including, in the case of trade waste customers, load- based charges) should reflect the long run marginal cost (LRMC) of providing services (including, in the case of trade waste customers, trade waste transfer, treatment and disposal); •  the total revenue received from each customer should be greater than the cost that would be avoided from ceasing to serve that customer, and (subject to meeting avoidable cost) less than the stand alone cost of providing the service to the customer in the most efficient manner; •  the methodology used to allocate common and fixed costs to that customer should be clearly articulated and be consistent with any guidance provided by the Commission; •  prices should reflect reasonable assumptions regarding the customer’s demand for services (including, in the case of trade waste customers, the volume and strength of trade waste anticipated to be produced by that customer); •  depreciation rates and rates of return used to determine prices should be consistent with those adopted by the Commission for the purposes of making this Determination; •  customers should be provided with full details of the manner in which prices have been calculated and any new, renewed or renegotiated contractual agreements with customers should indicate that the prices to apply are subject to any Determination made by the Commission; •  where applying these principles results in significant changes to prices or tariff structures, arrangements for phasing in the changes may be considered and any transitional arrangements should be clearly articulated.. Volume Calculation Trade Waste Volume will be calculated at [XXX%] of the total volume of water delivered to the property, or by any other means as deemed appropriate by the Authorised Officer. SCHEDULE 4 – TREATMENT FACILITIES