Regional and National Water and Sewer Rate Trends Brian F. Goetz. Project Manger Tighe & Bond

Transcription

1 Regional and National Water and Sewer Rate Trends Brian F. Goetz Project Manger Tighe & Bond

2 Regional and National Water and Sewer Rate Trends Environmental Business Council of New England New Hampshire Chapter Meeting February 12, 2013 Manchester, New Hampshire Brian F. Goetz Project Manager Portsmouth, NH

3 Water and Sewer Systems Generally Rely on Metered Use for Revenue Water Meter

4 Principals of Rate Setting Water and sewer are set on a zero sum basis Reductions in revenues due to decreased usage, rate structure changes or other factors result in the need for rate increases

5 Typical Rate Designs based on Customer s Metered Usage Common variable usage charge structures Uniform: All metered water and sewer use billed at the same unit rate. Inclining Block: Metered water and sewer use billed at increased rate with increased use. Seasonal: Metered water use billed at higher rate during summer for usage that exceeds winter usage. Pyramid: Metered water and sewer use billed at increased rate with increased use to a point and then rate reduced for higher usage.

6 Typical Rate Setting Components Technical Evaluation of Data Customer Allocations Develop Alternatives Capital Costs and Financing Policy Factors Water & Sewer System Costs Financial Model Regional and National Trends

7 Regional Rate Comparison for City of Portsmouth, NH 1. New Hampshire Systems 2. Systems with Similar Demographics 3. Coastal Communities

8 Rate Comparison - Water

9 Rate Comparison - Sewer

10 Rate Comparison - Combined

11 Rate Comparison Sewer Bill Offsets Some Systems Utilize General Funds to offset capital and/or operating costs: Peabody, MA: 20% of sewer costs are paid for by the General Fund Wolfeboro, NH: All sewer capital projects are financed through the General Fund (43% of overall sewer costs)

12 Sewer Billing based on a % of Water Consumption Attleboro Sewer uses 90% of water consumption for billing Clinton Sewer uses 75% of water consumption for billing Concord Sewer uses 77% of water consumption for billing, only during summer months Dighton Sewer uses 80% of water consumption for billing Huntington Sewer use is based on 80% of water consumption Mansfield Sewer use is based on 85% of water consumption Melrose Sewer use is based on 90% of water consumption North Brookfield Sewer use is based on 90% of water consumption Northbridge Uses winter average consumption for residential sewer bills year round Norwood Sewer use is based on 60% of water consumption Plainfield Sewer use is based on 85% of water consumption, only for residential customers Walpole Sewer use if based on 80% of water consumption Westborough Sewer use is based on 80% of water consumption Worcester Sewer use is based on 80% of water consumption for 5/8 metered services (residential)

13 Sewer - Flat Fee Structures Bourne Flat fee of $734/year which includes 45,000 gallons of consumption. $0.10/gallon after that. Raynham Flat fee of $228/year Dalton Flat fee of $110/dwelling unit, 2x/year Dracut Flat fee of $460/year Tyngsborough Flat fee of $496/year Woburn Flat fee of $328/year Montague Unmetered customers pay flat fee of $334/year South Hadley Flat fee of $265/year for residential customers Granby - $183.50/Equivalent Dwelling Unit, 2x year Ludlow Well accounts are billed $50.00/person living in household Stoughton Well accounts pay $242/private home, $161/condominium

14 Sewer - Seasonal Rates Chatham Seasonal rates: Summer is 2x winter rate

15 Sewer - Early Payment Discounts Mansfield Early payment discount of 10% Wakefield Early discount of 10%

16 Stormwater and Infiltration Fees Fall River Stormwater fee of $140/year assessed to each customer Rutland Infiltration and inflow fee of $32.00/quarter to each customer ($128/year)

17 Rate Increases Regionally 10 Year Percentages Community Period Water Increase Sewer Increase Manchester, NH % 105% Boston, MA % 56% South Burlington, VT % 108%

18 Tighe & Bond s Water and Sewer Rate Surveys

19 $3.92 / HCF $5.32 / HCF Typical Annual Homeowner s Cost in Massachusetts Average Annual Cost Water 73% Increase Sewer 98% Increase Water $584 Sewer $638 $323 $271 $357 $290 $321 $408 $363 $485 $426 $ Note: Based on 120 HCF/90,000 gallons per year (247 gpd). Reference: Tighe & Bond Water and Sewer Rate Surveys

20 $4.32 / HCF $3.84 / HCF Results - Typical Annual Homeowner s Cost in CT Average Annual Cost Water 57% Increase Sewer 85% Increase Water Sewer $415 $265 $278 $285 $261 $331 $305 $355 $364 $369 $200 $ Note: Based on 96 HCF/72,000 gallons per year (197 gpd). Reference: Tighe & Bond Water and Sewer Rate Surveys

21 National Trends - Rates Overall United States Water and Sewer Rates Increased 53% from 2001 to 2009 Black & Veach 2009/2010 Water/Wastewater Rate Survey

22 Combined Water and Sewer Rate Increases 2000 to 2010 (70% to 89%) 2010 Water and Wastewater Rate Survey American Water Works Association

23 Combined Water and Sewer Rate Increases 2000 to 2010 (80% to 129%) 2010 Water and Wastewater Rate Survey American Water Works Association

24 Combined Water and Sewer Rate Increases 2000 to 2010 (Over 130 to 233%) 2010 Water and Wastewater Rate Survey American Water Works Association

25 Regional and National Trends Effecting Water and Sewer Rates Aging Infrastructure Regulatory Requirements Safe Drinking Water Act Clean Water Act (Sewer) Reduction in Billable Usage

26 Usage Trends Regionally Vermont Champlain Water District 18% Decrease from 2001 to 2010 Champlain Water District Annual Report

27 Average Annual Water Use (Gallons per Customer) Usage Trends Regionally Maine 160,000 Portland Water District - Annual Use Per Customer 140, , ,000 80,000 60,000 40,000 20, Source: Maine Public Utilities Commission Annual Reports of Portland Water District

28 Usage Trends Regionally Massachusetts 250 Massachusetts Water Resources Authority Average Daily Delivery Million Gallons Source: Summary Report of MWRA s Demand Management Program for Fiscal Year 2012

29 Total Annual Water Sales (Gallons) Usage Trends Regionally Connecticut 30,000,000 Aquarion Water Co., of Connecticut - Total Annual Water Sales 25,000,000 20,000,000 15,000,000 10,000,000 5,000, Source: Connecticut DPUC Annual Reports

30 Usage Trends New Hampshire 6.00 Portsmouth, NH Water Division Million Gallons per Day and 5 Year Rolling Average Source: Portsmouth Water System Master Plan (2012 draft) Tighe & Bond

31 Average Daily Withdrawal - Million Gallons Usage Trends New Hampshire 6.0 City of Concord - Annual Water Treatment Withdrawals Source: NHDES OneStop Data Query

32 Average Daily Withdrawal - Million Gallons Usage Trends New Hampshire 14.0 Pennichuck Water (Nashua) - Water Treatment Flows Source: NHDES OneStop Data Query

33 Average Daily Withdrawal - Million Gallons Usage Trends New Hampshire 0.8 Town of Wolfeboro - Water Treatment Flows Source: NHDES OneStop Data Query

34 Usage Trends New Hampshire 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Aquarion Water Company of NH Average Residential Customer Annual Use (Gallons) Source: Attachment MAN-5 NHPUC DW Docket

35 Usage Trends Nationally Milwaukee, Wisconsin: 46% reduction in Residential Use since 1975 AWWA Streamlines, August 23, 2012 Seattle, Washington: 30% reduction in Total Use since 1995 AWWA Streamlines, August 23, 2012 Louisville, Kentucky: 20% reduction in Total Use from 1975 to 2000 AWWA Journal, February 2011 When the price of residential water increases by one percent, the quantity demanded falls by 0.41% USEPA: The Importance of Water to the U.S. Economy, September 2012 Public Review Draft

36 Typical Indoor Water Use 1990 s Faucets 16% Showers 17% Clothes Washers 22% Toilet Flushing 27%

37 20 Years Later More Efficient Plumbing Most full-sized High Efficiency washers use 13 gallons of water per load, compared to the 27 gallons used by standard top loading machines. SHOWER HEADS: Typical Shower Heads use 2.5 gallons-per-minute, Higher Efficient Shower Heads use 2.0 gallons-perminute or less. HIGH EFFICIENCY TOILETS: 1.28 to 1.6 Gallons per Flush versus older models that used 3.5 to 5.0 Gallons per flush

38 Tampa Water Study: 49% Reduction of Indoor Use after Retrofit with High Efficiency Plumbing Fixtures

39 Water Efficient Appliances are Mainstream

40 Declining Water Use Mark Naylor, New Hampshire Public Utilities Commission - testimony on January 11, 2013 Declining water use is a national trend and the reasons are many. Among these reasons are changing attitudes toward conservation, greater use of low flow appliances, changing demographics including smaller households, economic conditions, greater use of bottled water, and customer response to the rising cost of water resulting in part from regulatory requiremtns such as the Safe Drinking Water Act. The resulting reduction in sales columes creates upward pressure on customer rates.

41 More frequent water billing More frequent billing can result in a reduction of water use, as consumers feel the immediate impact of high water use on their bill, and are more likely to adjust for it during the next month. Helps identify leaks quickly as water consumption is compared to prior month or yearly use.

42 Large Customers Cutting Back IBM Burlington, Vermont: Between 2000 to 2009 IBM cut it s water use by 29% IBM discovered, the measuring of its water use alone created a change in behavior just like when you keep track of every calorie you eat, you start cutting back The Big Thirst by Charles Fishman, Free Press (2011)

43 Large Customers Cutting Back:

44 Usage trends are critical to other systems:

45 Usage trends are critical to other systems:

46 Usage trends are critical to other systems:

47 The Car Analogy 1976 Volkswagen Rabbit 24 MPG 2012 Honda Civic 34 MPG

48 The Car Analogy 1976 Volkswagen Rabbit 2012 Honda Civic % Change in Cost Annual Cost Change % Annual Change in Cost Annual Annual % Gasoline Change Annual Year Car MPG Miles Gallons Change Change Cost Gal in Cost Cost Volkswagen Rabbit 24 12, $1.00 $ Honda Civic 34 12, % $3.50 $ % $1,235 $ %

49 The Car Analogy Another Way to Look at it Still driving the Rabbit 1976 Volkswagen Rabbit % Change in Cost Annual Cost Change % Annual Change in Cost Annual Annual % Gasoline Change Annual Year Car MPG Miles Gallons Change Change Cost Gal in Cost Cost Volkswagen Rabbit 24 12, $1.00 $ Volkswagen Rabbit 24 12, % $3.50 $ % $1,750 $1, %

50 Thank You! Brian Goetz Ph: ext

51