2016 Utility Rate Survey Results

AE2S Nexus plans to distribute the 2016 version of its annual Utility Rate Survey within the next few weeks. We would like to thank each of the 277 participants this year. AE2S Nexus received responses from 132 systems serving populations 5,000 and greater, 88 systems serving populations less than 5,000, and 57 regional systems. Utilities in Minnesota, North Dakota, South Dakota, Montana, Utah, and Wyoming were invited to participate.

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 2016 Rate Increases

Of the survey respondents serving greater than 5,000 people, 28 are among those in the Minneapolis/St. Paul metro area that receive wastewater services from the Metropolitan Council – Environmental Services. Results from the metro area respondents indicate that 82 percent of the responding systems implemented an increase to water rates in 2016. For the same group, 79 percent of wastewater systems and 60 percent of stormwater systems increased rates in 2016.

Among the 104 respondents from the non-metro systems throughout the region serving populations greater than 5,000 people, 39 percent reported water rate increases in 2016, while 41 percent of wastewater systems and 27 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.

Figure 1

Overall in 2016, the average increases for water, wastewater, and stormwater for systems serving 5,000 people or more were 5.4 percent, 8.2 percent, and 17.8 percent, respectively. For comparison, in 2015 the average rate increases for systems of this size were 6.5 percent for water, 13.9 percent for wastewater, and 14.0 percent for stormwater.

For systems serving fewer than 5,000 people, 29 percent of respondents reported an increase to water rates, 15 percent increased wastewater rates, and 19 percent increased stormwater rates in 2016. Figure 2 illustrates the average water and wastewater rate increases by population for small systems. It should be noted that 25 percent of respondents in the survey of smaller communities reported having a stormwater utility, and of those, only six reported a 2016 rate increase. Two of the six that reported an increase implemented a stormwater rate for the first time in 2016. Due to the small sample size, the average increase by population is not reported for stormwater in Figure 2.

Figure 2

For the systems serving fewer than 5,000 people, the average reported increases for water and wastewater rates in 2016 are 8.8 percent and 18.5 percent, respectively.  This compares to average increases for water and wastewater of 16.4 percent and 13.8 percent last year.

Figure 3 illustrates the 2016 average monthly water and wastewater charges by population grouping for all municipal survey respondents, based on an average monthly use of 6,000 gallons.

Figure 3

A 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.

Figure 4


From a historical perspective, the average water and wastewater charge for 6,000 gallons in our region from 2002 to 2016 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 2002. The results illustrate the challenge that utility managers and policy makers continue to experience in meeting financial demands on system operations while striving to minimize user charge increases.

Figure 5

Figure 6