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‘Use more, pay more’: El Paso Water looks to change rate structure, increase bills for big consumers [1]
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Date: 2024-11-14
El Paso Water could increase its bills for water-guzzling customers starting next March while rewarding the lowest water users in El Paso.
Households that use roughly more than 3,000 gallons per month could have their monthly water bills increase by $10 on average, while those that use minimal amounts of water could potentially save about $15 under proposed changes to the utility’s rate structure.
The typical El Paso household uses about 6,700 gallons per month, according to El Paso Water.
City-owned El Paso Water already takes a “use more, pay more” approach to bills, where the more water a customer uses, the pricier the water gets. But EP Water could ratchet up bills more on big water users and collect less from households that use little water every month.
“The next step in conservation needs to take place at some point,” said Bryan Morris, chair of the seven-member Public Service Board that governs El Paso Water. “And this is a step towards additional conservation.”
The utility’s motivation to tweak rates is to reduce monthly bills for people who don’t use much of the city’s supply of water and don’t stress El Paso’s water infrastructure, according to John Balliew, the utility’s CEO.
The households that use the least water are commonly senior citizens and people on a fixed income, according to Rocky Craley, a vice president with Raftelis, the utility’s financial consultant.
The rate change on the table wouldn’t bring in more money to El Paso Water, but would lower bills for some users and increase them for others, Craley said.
The PSB will decide in early December whether to adopt the rate change, but the utility’s board may decline to tweak rates at all. Over the coming weeks, the PSB said it wants to hear if customers think the utility should lower bills for homes and businesses that don’t use much water.
Coaxing conservation
Balliew has long said he wants to provide a “lifeline” to help low-income customers afford their water and sewer bills as rates are set to continue rising in the years ahead.
EP Water’s rates are likely to keep increasing because the utility is in the middle of a multi-billion dollar effort to rehab the city’s water and sewer systems, build a new water treatment plant on the Eastside and complete a massive expansion of the Bustamante Wastewater Treatment Plant in the Lower Valley.
If EP Water adopts this proposed rate change, most of the utility’s 221,000 water customers would probably see their bills increase as a result, even if tens of thousands of low water users see a bill decrease. But the utility’s idea is to help the customers who are most in need, and who use much less water than the average customer.
“The revenue has to be made somewhere,” said Arturo Duran, EP Water’s finance chief. “The decision is: Do we assist more our lower users, and shift that cost more to typical and higher users? That’s the decision the board has to make.”
EP Water is assuming that if it becomes more expensive to use a lot of water, El Pasoans will use less and conserve more. The utility thinks water consumption would decline by about 2% if it adopts rates that charge bigger water users even more.
“As the cost of the product – in this case, the water – goes up, the customers respond by consuming less of it,” Balliew said.
EP Water wants people to use less water so that it can avoid paying to pump more water from underground, as well as delay having to build an expensive pipeline to import water from Dell City, which is located about 90 miles east of El Paso.
The utility also would like to reduce the “peak demand” for water – or the maximum amount of water that homes and businesses in El Paso are consuming at any given moment over the course of a year.
On an average day, EP Water usually pumps around 110 million gallons of water into its system of treatment plants, pipes, storage tanks and then into homes and businesses. But on hot days in the middle of summer when El Pasoans are watering plants, running swamp coolers and showering more, the utility has to pump as much as 161 million gallons to meet that peak demand for water.
That means EP Water has to build a big enough system to handle over 160 million gallons of water a day, even if it only actually pumps that much on one or two days a year. Building a bigger system with larger facilities costs more – an expense paid for by ratepayers.
So, the utility reasons that charging some customers more now could save ratepayers money in the long run.
Lower peak demand “allows us to put in smaller diameter pipes, smaller tanks, smaller pump stations, and so the dollars that go into the (facilities) goes down,” Balliew said.
“Water conservation saves the customer money,” he added. “Because we don’t have to spend the money – we don’t have to pay the capital for larger facilities and the (operations and maintenance cost) to produce and deliver that water.”
Some PSB members were skeptical about adopting the rate change proposed Wednesday.
It’s possible EP Water will seek to increase rates early next year. Some on the PSB worried that many customers could see a double whammy in the months ahead: bigger bills because of the rate change the board examined this week, plus another increase if the utility separately raises rates on all customers next year.
How to read your water bill
The way that EP Water charges customers for water is somewhat complex, and involves multiple calculations. But, the bottom line is that, as a customer uses more water over the course of a month, the water gets more expensive.
EP Water charges customers a flat monthly service fee of about $10, and then it adds another “water supply replacement” charge of just under $15 to cover the cost of maintaining a supply of water for the city. Under the rate change, if a household uses 4 centum cubic feet, or CCFs, of water – which equals about 3,000 gallons – or less in a month, the utility would waive that $15 charge.
On top of the two flat fees, EP Water charges another fee that’s calculated based on how much water the customer used that month. But it’s not a straightforward calculation, and it’s designed to not overcharge larger households where several people live.
The utility’s goal is to reward customers that don’t use much water – by waiving the flat fee – without penalizing customers with multiple members in their household.
Separate from water charges, EP Water customers on their monthly bills also pay $21 for a gray curbside trash bin – which increased from $19 per month in September – plus $6 to cover the annual franchise fee the city charges El Paso Water and another $5 for a city environmental fee, as well as sales tax. Those fees aren’t related to EP Water, but since it’s a city-owned utility, the city collects those charges through the water bill.
EP Water is planning to unveil a newly-designed bill next year that it said will be easier for customers to understand.
When EP Water executives during the board meeting Wednesday lifted the hood on the utility’s rates and how it bills customers, it puzzled even members of the PSB who have overseen the utility for years.
A CCF, which equals 100 cubic feet of water, is the unit of measurement for water consumption that El Paso Water uses on bills.
“I thought a CCF was 1,000 gallons,” said Morris, a professional engineer and chair of the utility’s board. It’s actually 748 gallons.
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[1] Url:
https://elpasomatters.org/2024/11/14/el-paso-water-proposed-rate-changes-increase-bills-march/
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