AE2S Nexus has published the 2017 version of its annual Utility Rate Survey. We would like to thank the 285 participants this year. AE2S Nexus received responses from 130 systems serving populations 5,000 and greater, 107 systems serving populations less than 5,000, and 48 regional rural systems. Survey data was solicited from utilities in Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Utah, Wisconsin, and Wyoming.
Two survey reports have been prepared: 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 Rural Water Systems. In appreciation for volunteering to provide survey information, each participant receives a hard copy of the complete report.
Reported 2017 Rate Increases
Of the survey respondents serving greater than 5,000 people, 27 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 89 percent of the responding systems implemented an increase to water rates in 2017. For the same group, 74 percent of wastewater systems and 76 percent of stormwater systems increased rates in 2017.
Among the 103 respondents from the non-metro systems serving populations greater than 5,000 people, 61 percent reported water rate increases in 2017, while 58 percent of wastewater systems and 30 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.
Overall in 2017, the average increases for water, wastewater, and stormwater for systems serving 5,000 people or more were 6.8 percent, 8.3 percent, and 13.6 percent, respectively. For comparison, in 2016 the average rate increases for systems of this size were 5.4 percent for water, 8.2 percent for wastewater, and 17.8 percent for stormwater.
For systems serving fewer than 5,000 people, 27 percent of respondents reported an increase to water rates, 20 percent increased wastewater rates, and none of the 22 systems reporting a stormwater rate implemented an increase in 2017. For the small systems that reported increases in 2017, Figure 2 illustrates the average water and wastewater increases by population. Among the systems serving fewer than 5,000 people, the average reported increases for water and wastewater rates in 2017 are 9.8 percent and 17.4 percent, respectively. This compares to average increases for water and wastewater of 8.8 percent and 18.5 percent last year.
Figure 3 illustrates the 2017 average monthly water and wastewater charges by population grouping for all municipal survey respondents, based on an average monthly use of 6,000 gallons. Of the municipal respondents in 2017, 61 percent also responded in 2016. A comparison of total monthly water and wastewater bills indicates that the average of reported rates for systems serving less than 2,500 is five percent less in 2017 than the average reported bill for that population group in 2016. For all other population groups, the average reported combined water and wastewater bill is approximately 10 percent higher than the results reported in 2016.
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.
From a historical perspective, the average water and wastewater charge for 6,000 gallons in our region from 2002 to 2017 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 experience in meeting financial demands on system operations, while striving to minimize user charge increases.
AE2S Nexus trusts that the results of the annual rate survey has been and continues to be useful to your community or regional system as you evaluate your utility rate charges and plan for the future. If you have questions related to the 2017 Utility Rate Survey, please contact Miranda Kleven at 701-746-8087 or Miranda.Kleven@AE2S.com.
- Tagged: Rate Survey
The SourceThe Source is a quarterly technical-based newsletter that features financial and utility rate issues and resources for utility managers, city finance managers, and auditors.
Get The Source delivered to your inbox!Subscribe »
- MPCA Announces Section 319 Funding Application DeadlineBy Heather Syverson on February 8, 2018
Utility Rate SurveyAE2S Nexus conducts an annual rate survey of utilities in the Upper Midwest to help utilities gauge their rates against similar sized systems. Learn More
Bolstering Financial Stability and Sustainable Infrastructure Management
AE2S Nexus, a dedicated Financial and Asset Management company, is comprised of individuals committed to fully understanding issues such as State and Federal funding programs, project financing, utility financial health (revenue adequacy, cost of service, etc.), and asset management.
Together we work as an integrated team, providing our clients with the perfect marriage of financial and engineering expertise that enables us to truly understand your organization and bolster your financial stability.