Utility Rates
Changes in City's Water Pricing Structure
In December of 2002, City Council approved a more equitable water pricing structure that will result in changes to some water and sewer utility bills. This new rate structure has been instituted to encourage greater efforts around water conservation and ensure equity in how water customers are charged for the resources they are using.
Prior to this change, the water rate structure consisted of a consumption charge based on the volume of water used. Rates for this system involved a declining block system, which means that the unit price for the resource decreased as more water was consumed. The recommended changes in structure were approved because this structure did not promote water conservation, did not consider the user's capacity to consume water, and favored large volume users over small volume users.
The water utility has two cost components, capital debt (fixed costs) and operation and maintenance (variable costs). The new rate structure for metered water recovers funds to meet obligations in both of these areas and has two components - a consumption charge and a capacity charge.
The consumption charge will be based on the volume of water used by the consumer and will recover costs associated with the operation and maintenance of water supply. Once the new rate structure is fully implemented, the consumption charge will move from the declining rate to one constant price for each gallon of water used.
The second component of the new rate structure is the capacity charge. With the City's water infrastructure constructed to meet peak demand requirements, it takes considerably more capital expenditures to supply water to a manufacturing plants or some industrial agencies than it does to supply a residential family dwelling. This capacity charge is based on meter size, which indicates the size of the service connection provided and its capacity for water.
The rate structure for sewer charges has traditionally been set at a percentage of the water charges, and this system will remain in place, however future sewer charge calculations will only be based on the consumption water charges.
The effects of these changes are dependant on meter size and water consumption, but generally speaking users with meter sizes of 1½" or less may see their water and sewer charges drop, while those users with meter sizes of 2" and larger may see their water and sewer charges increase.
This change will be reflected on the first utility bill you receive in 2003. If you have any questions regarding the new water and sewer rate structure, or if you require assistance in dealing with the changes, please contact Bill Gaal, Supervisor, Development Services Administration at 250-561-7691.
For more information on the related bylaws, please click on one of the links below: