AE2S Nexus has published the 2020 version of its annual Utility Rate Survey. We would like to thank the 257 participants this year. AE2S Nexus received responses from 122 systems serving populations 5,000 and greater, 92 systems serving populations less than 5,000, and 43 regional rural systems. Survey data was solicited from utilities in Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Utah, 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 2020 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 81% of the responding systems implemented an increase to water rates in 2020. For the same group, 81% of wastewater systems and 76% of stormwater systems increased rates in 2020.
Among the 95 respondents from the non-metro systems serving populations greater than 5,000 people, 59% reported water rate increases in 2020, while 66% of wastewater systems and 41% 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 2020, the average increases for water, wastewater, and stormwater for systems serving 5,000 people or more were 5.8%, 7.3%, and 14.1%, respectively. For comparison, in 2019 the average rate increases for systems of this size were 6.1% for water, 8.1% for wastewater, and 6.1% for stormwater.
For systems serving fewer than 5,000 people, 38% of respondents reported an increase to water rates, 37% increased wastewater rates, and only two of the 13 systems reporting a stormwater rate implemented an increase in 2020. For the small systems that reported increases in 2020, Figure 2 illustrates the average water and wastewater increases by population. Rate increases for stormwater are 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 2020 are 12.4% and 18.7%, respectively. This compares to average increases of 8.7% for water and 8.5% for wastewater last year.
Figure 3 illustrates the 2020 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 2020, 75% also responded in 2019. Overall, the average monthly water and wastewater bill for 6,000 gallons increased by 13.1% from 2019, while the median bill for 6,000 gallons increased by 15.2%.
A summary of historical results reported by Regional Water System rate survey participants since 2010 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 2003 to 2020 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 2003 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.
Note: The number of participants and geographical expanse of the annual rate survey has grown substantially since 2003 and 2006.