2022 Utility Rate Survey Results

AE2S Nexus has begun mailing or hand delivering the 2022 edition of the annual Utility Rate Survey. We would like to thank the 274 participants this year. AE2S Nexus received responses from 131 systems serving populations 5,000 and greater, 97 systems serving populations less than 5,000, and 46 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 2022 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 93% of the responding systems implemented an increase to water rates in 2022. For the same group, 89% of wastewater systems and 80% of stormwater systems increased rates in 2022.

Among the 104 respondents from the non-metro systems serving populations greater than 5,000 people, 67% reported water rate increases, and 60% reported wastewater rate increases in 2022, while 47% of stormwater systems experienced a rate increase. 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, the average increases in 2022 for water, wastewater, and stormwater systems serving 5,000 people or more were 5.6%, 6.7%, and 12.1%, respectively. For comparison, in 2021 the average rate increases for systems of this size were 5.7% for water, 5.6% for wastewater, and 9.8% for stormwater.

For systems serving fewer than 5,000 people, 55% of respondents reported an increase to water rates, 46% increased wastewater rates, while 46% also reported a stormwater rate increase in 2022.  For the small systems that reported increases in 2022, Figure 2 illustrates the average increases by population.  Among the systems serving fewer than 5,000 people, the average reported increases for 2022 were 7.9% for water, 10% for wastewater, and 6.3% for stormwater.  Water and wastewater rate increases reported last year were 7.9% and 9.2%, respectively. With 13 of 28 respondents reporting an increase to the stormwater rate, 2022 is the first year in which the number of small systems reporting an increase to the stormwater rate was large enough to calculate a representative average.

Figure 3 illustrates the 2022 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 2022, 69% of 2022 respondents also participated in 2021.  Overall, the average monthly water and wastewater bill for 6,000 gallons increased by 1.8% from 2021, while the median bill for 6,000 gallons increased by 0.7%.

A summary of historical results reported by Regional Rural Water System rate survey participants since 2012 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.

Continued Upward Trend in Water & Wastewater Charges

From a historical perspective, the average water and wastewater charge for 6,000 gallons in our region from 2003 to 2022 has climbed at a rate higher than historical inflation values, 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 since 2003 and 2006.