2015 North Central Utility Rate Survey Results

AE2S Nexus plans to distribute the 2015 version of its annual North Central Utility Rate Survey within the next few weeks. We would like to thank the 251 participants this year. AE2S Nexus received responses from 106 systems serving populations 5,000 and greater, 77 systems serving populations less than 5,000, and 68 regional systems. As in previous years, survey data was solicited from utilities in Minnesota, North Dakota, South Dakota, Montana, and Wyoming.

Two survey reports are being prepared for distribution: one for systems serving 5,000 people or more, including systems in the Minneapolis/St. Paul metro area; and a second survey for systems that serve fewer than 5,000 people, as well as Regional Water Systems. In appreciation for volunteering survey information, each participant will receive a hard copy of the complete report.

Reported 2015 Rate Increases

Of the survey respondents serving greater than 5,000 people, 28 are from the Minneapolis/St. Paul metro area, which receives wastewater services from the Metropolitan Council – Environmental Services. Results from the metro area respondents indicate that 71 percent of the responding systems implemented an increase to water rates in 2015. For the same group, 79 percent of wastewater systems and 58 percent of stormwater systems increased rates in 2015.

Among the 78 respondents from the non-metro systems serving populations greater than 5,000 people, 55 percent reported water rate increases in 2015, while 63 percent of wastewater systems and 20 percent of stormwater systems increased rates. The average percent increase for each utility by population is shown in Figure 1 for metro and non-metro systems serving 5,000 or more people. 2015F1

Overall in 2015, the average increases for water, wastewater, and stormwater for systems serving 5,000 people or more were 6.5 percent, 13.9 percent, and 14.0 percent, respectively. For comparison, in 2014 the average rate increases for systems of this size were 8.3 percent for water, 9.4 percent for wastewater, and 13.8 percent for stormwater.

For systems serving fewer than 5,000 people, 47 percent of respondents reported an increase to water rates, 33 percent increased wastewater rates, and 29 percent increased stormwater rates in 2015. Figure 2 illustrates the average water and wastewater rate increases by population for small systems. It should be noted that only 25 percent of respondents in the survey of smaller communities reported having a stormwater utility, and of those, only six reported a 2015 increase. Due to the small sample size, the average increase by population is not reported for stormwater in Figure 2. 2015F2

For the systems serving fewer than 5,000 people, the average reported increases for water and wastewater rates in 2015 are 16.4 percent and 13.8 percent, respectively.  This compares to average increases for water and wastewater of 11.7 percent and 18.8 percent last year.

Figure 3 illustrates the 2015 average monthly water and wastewater charges by population grouping for all municipal survey respondents, based on an average monthly use of 6,000 gallons. 2015F3A summary of historical results reported by Regional Water System rate survey participants since 2008 is provided in Figure 4, which shows the average median reported charges for 6,000 gallons of water each year. The number of respondents to the survey each year is also indicated. 2015F4


From a historical perspective, the average water and wastewater charge for 6,000 gallons in our region from 2002 to 2015 has climbed at a rate higher than inflation, based on the Consumer Price Index for All Urban Consumers (CPI-U). Figure 5 illustrates the change in average charges for 6,000 gallons of water and wastewater service since 2002 for systems serving greater than 5,000 people (including the Minneapolis/St. Paul metro area), and Figure 6 indicates similar information for systems serving less than 5,000 people since 2006. The results illustrate the challenge that utility managers and policy makers continue to face in meeting financial demands on system operations while striving to minimize user charge increases. 2015F5

2015F6AE2S Nexus trusts that the results of the survey will continue to be useful to your community or regional system as you evaluate your utility rate charges and plan for the future. If you participated in the 2015 Rate Survey, watch for your copy to be delivered by mail or by an AE2S or AE2S Nexus representative. If you have questions related to the 2015 North Central Region Utility Rate Survey, please contact Miranda Kleven at 701-746-8087 or Miranda.Kleven@AE2S.com.