Estimated Rate Increases
We estimate annual rate increases are needed for the next 6 years to ensure high-quality, reliable services. We used a three-step process to determine billing rates:
- Current baseline operations. We started with what the utility would cost to run if it didn’t change anything.
- Efficiency savings. We then looked for efficiencies in the way we do our work including ways to cut costs in lower priority areas.
- Action plans. Finally, we identified focus areas and action plans to improve services and maintain our systems for future generations. Improvements will increase billing rates.
Here’s the math for where we started:
Current baseline operations
- 2.4% Inflation
- 0.6% Replacing/building systems
- 1.1% Increasing cost of doing business
- 0.2% Utility Discount Program support
- 0.3% Lost revenue from decreasing demand
- 4.6% Total
After determining this starting point, we then looked at how efficiency savings and action plans would impact rates. To arrive at the recommended middle rate path, we identified $54 million in savings on operations, and an additional $71 million in project savings over the six-year period. These savings lower rates on average by 0.5% per year. Finally, we identified action plans that will cost $169 million to improve services and maintain our systems for future generations.
Bottom line rates and bills
The final, average annual billing rate looks like this:
- 4.6% Current baseline operations
- (0.5%) Minus efficiency savings
- 0.5% Plus action plans
- 4.6% Total Average Annual Rate Increase
At this rate, for an average household, utility bills would increase about $10 per month.
A primary goal of our strategic business plan is to reduce rate increases—while still providing excellent services.