AE2S Nexus has published the 2018 edition of its annual Utility Rate Survey. We would like to thank the 311 participants this year. AE2S Nexus received responses from 135 systems serving populations 5,000 and greater, 115 systems serving populations less than 5,000, and 61 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 2018 Rate Increases
Of the survey respondents serving greater than 5,000 people, 30 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 63 percent of the responding systems implemented an increase to water rates in 2018. For the same group, 73 percent of wastewater systems and 63 percent of stormwater systems increased rates in 2018.
Among the 105 respondents from the non-metro systems serving populations greater than 5,000 people, 52 percent reported water rate increases in 2018, while 46 percent of wastewater systems and 35 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 2018, the average increases for water, wastewater, and stormwater for systems serving 5,000 people or more were 5.6 percent, 7.2 percent, and 16.0 percent, respectively. For comparison, in 2017 the average rate increases for systems of this size were 6.8 percent for water, 8.3 percent for wastewater, and 13.6 percent for stormwater.
For systems serving fewer than 5,000 people, 27 percent of respondents reported an increase to water rates, 23 percent increased wastewater rates, and only two of the 20 systems reporting a stormwater rate implemented an increase in 2018. For the small systems that reported increases in 2018, Figure 2 illustrates the average water and wastewater increases by population. The stormwater rate is not reported due to the relatively small data set. Among the systems serving fewer than 5,000 people, the average reported increases for water and wastewater rates in 2018 are 9.2 percent and 9.0 percent, respectively. This compares to average increases for water and wastewater of 9.8 percent and 17.4 percent last year.
Figure 3 illustrates the 2018 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 2018, 70 percent also responded in 2017. Overall, the average monthly water and wastewater bill for 6,000 gallons increased by 1.7 percent from 2017, while the median bill for 6,000 gallons increased by 4.4 percent.
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 is indicated above each year.
From a historical perspective, the average water and wastewater charge for 6,000 gallons in our region from 2002 to 2018 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). 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.
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 »
- Polar Vortex a Chilly Reminder of the Value of WaterBy Miranda Kleven on February 14, 2019
- MN Offers Outreach & Education Grants for Contaminants of Emerging ConcernBy Heather Syverson on February 14, 2019