Water Utilities Charge More To Offset Low-Flow Toilets, Faucets And Shower Heads

Sep 01, 2014 No Comments by

Federally mandated low-flow toilets, shower heads and faucets are taking a financial toll on the nation’s water utilities, leaving customers to make up the shortfall with higher water rates and new fees that have left many paying more for less.

Utility officials say they understand that charging more for water because demand has dropped might seem to violate a basic premise of Economics 101. But utilities that generally charge by the number of gallons used are beginning to feel the financial pinch of 20 years of environmentally friendly fixtures and appliances, as older bathrooms and kitchens have been remodeled, utility experts say.

Federal laws aimed at conserving water limit toilets that once needed up to seven gallons per flush to 1.6 gallons. Shower heads that spewed up to eight gallons per minute are being replaced with sprays of about 2.5 gallons. Adding to the problem, Washington-area utilities say, is the fact that consumption is falling as costs are mounting to upgrade sewer systems and repair and replace aging water pipes, some more than a century old, that are bursting after decades of decay and neglect. Meanwhile, utilities’ costs — electricity, chemicals and labor — have continued to rise.

Alan Roberson of the American Water Works Association called it a “converging storm.” “Pretty much every utility across the country is seeing it,” he said. “It’s a combination of infrastructure needs going up as per capita water usage is going down.”

David Hyder, vice president of Municipal & Financial Services Group, an Annapolis consulting firm for water and sewer agencies, said utilities nationwide are eyeing fixed fees as a more reliable income stream, immune to fluctuations in water consumption. “All our clients are asking, ‘How do we deal with our customers using less water, but our costs are going up?’ ” Hyder said. His firm has recommended more fees for the Washington Suburban Sanitary Commission in the Maryland suburbs, where water consumption has remained flat since 1995 even while the utility added 71,000 new accounts from development and population growth. WSSC has scheduled public meetings this month in Montgomery and Prince George’s counties to pitch a new infrastructure fee and a higher account maintenance fee. They are expected to add a total of $16 to the typical household quarterly bill of $162.

Bills for households that use the least amount of water, such as people living alone, would feel the biggest impact, WSSC officials said. The fees would come on top of annual rate increases, which have reached as high as 9 percent in recent years. Since 2002, WSSC customers have seen their rates almost double, jumping by 95 percent. While WSSC’s rate increases have far outpaced inflation, they haven’t been as large as those of many other major U.S. water agencies, a consultant found.

But some customers say they’re being squeezed too much. Susan LaCourse, who lives in Laurel, said she understands the need for an infrastructure fee. Even so, LaCourse said, she wants WSSC to show “some evidence of belt-tightening” before it continues to hike rates every year. LaCourse, who’s part of a 140-member group called Marylanders for Affordable WSSC Water, said she hears from people who are “very, very angry” over the rate increases. “They feel they’re being punished for conserving water,” LaCourse said. “People are saying, ‘We did what we were supposed to — we conserved water — and now WSSC is saying they need more money.’ ”

WSSC officials say they are pursuing a way to subsidize or waive the fees for low-income customers. Significant rate increases have been required, WSSC officials say, in part to offset the drop in water consumption. Meanwhile, the utility’s fixed water production costs rose with inflation, officials said. WSSC also has significantly stepped up its pipe replacement program in response to the thousands of annual breaks that, in the worst cases, close roads, leave taps dry and, in the case of the largest pipes, explode into geysers. The new fees would ultimately save customers money by slowing the trajectory of future rate increases, said Chris Cullinan, WSSC’s acting chief financial officer. “We need to find a more stable way of paying for our infrastructure needs,” he said.

D.C. Water is feeling the crunch, too. Utility officials say the amount of water pumped, which follows demand, dropped from a daily average of 130 million gallons in 2004 to 95 million gallons in 2013. “Our population keeps increasing, but the amount of water we’re moving into the District keeps going down,” said Chuck Sweeney, who oversees water pumping operations for D.C. Water. The utility has kept up with inflation and mounting infrastructure costs — its pipes are a median 79 years old — by charging annual rate increases of 4.5 percent to 12.5 percent over the past seven years, officials said. D.C. Water customers also pay a surcharge for a major project to reduce sewage overflows into rivers and basements during rainstorms.

Officials for Fairfax Water, which serves Fairfax County and Falls Church and supplies wholesale water to Alexandria and Loudoun and Prince William counties, say they have noticed per capita water consumption dropping over the past five years, but they are just beginning to analyze why. Spokeswoman Jeanne Bailey said the utility is trying to determine how much stems from energy-efficient appliances and similar conservation measures vs. other factors, such as periods of dry weather, when lawns get watered more.

Fairfax Water has buffered the financial impact of lower water use by charging a steady 5 percent to 6 percent annual rate increase over the past decade. The utility has no plans to impose a separate infrastructure fee, Bailey said. She noted that Fairfax Water’s pipes are relatively young, with most less than 50 years old. “So far, we’re doing fine and meeting our revenue goals,” Bailey said. “We’ve been able to smooth things out with incremental increases in our rates.”

Montgomery County Council member Nancy Floreen (D-At Large), who serves on the committee that oversees WSSC issues, said she agrees that the utility needs a more reliable revenue stream to keep its aging system pumping. “You have to bite the bullet in terms of infrastructure funding — someone has to pay for it,” Floreen said. “The cost of infrastructure is annoying and boring. People don’t see the benefits of paying [higher] rates until a pipe explodes and you’re out of water.”


Source: Washington Post


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