A performance measurement application for a wastewater treatment plant

Public utilities, especially water and wastewater utilities, are facing intense financial pressures and increasing costs of service. Yet, raising the rates is not an easy option. Managing better and cutting costs seem to be the preferred choices. One must measure performance to manage it. This paper illustrates the application of performance measurement at a municipal wastewater utility using the 'Profitability = Productivity + Price Recovery' (PPP) model. This model is a multi-factor productivity measurement model that uses a chained-deflation technique. It is implemented in spreadsheet software with multi-period data. The results generated and the subsequent performance trend charts would help management identify the areas of concern that may lead to possible remedial actions. This paper would be beneficial to executives interested in improving performance and the researchers interested in gaining better insights into the interrelationships among the three performance criteria.