LARGO – Water costs will likely go up for many county residents, and the utility is seeking feedback on what the future of rates will look like.
The Washington Suburban Sanitary Commission (WSSC) is in the midst of a rate structure study, and the utility is engaging its customers through a series of community meetings about the study and the potential new rate structures before making the decision about what the new rates will look like. Seven meetings were planned for May and June 2017, with Prince George’s County hosting four of them. The most recent meeting on June 6 at Prince George’s Community College brought out a moderate, but engaged, crowd.
Carla Reid, general manager/ chief executive officer of WSSC, said the utility is going about the study in an “open and transparent” process to build up its customers’ trust.
“My vision for WSSC was to build not just a world-class utility, but the world-class utility. And for us to get there, one of the things that we must do is earn your trust,” she said.
The current rate structure, which features 16 usage tiers with per-1,000-gallons rates increasing with higher average daily consumption, has been in place for 25 years, and Reid said it is “just good management practice” to review policies that have been unchanged for so long. Moreover, the Maryland Public Service Commission (PSC) has ruled the rate structure must change after a citizen lawsuit. PSC determined that the current structure is “unduly preferential” towards low-volume users, to the detriment of others that include residents with large families.
“The prices we charge, the revenue we recover from our customers, it’s not fair. It’s not fair to high-usage customers: large families, certain commercial entities,” said Joe Beach, WSSC’s chief financial officer. “Also, they found that we didn't have a cost of service study to support our rate structure.”
Beach added the change is not an attempt by WSSC to raise its budget.
“We’re not using this as a means to collect more revenue than we’re currently collecting,” he said. “We set the rates in such a way so that it’s revenue neutral.”
WSSC presented two examples of potential rate structures for public comment. The first would be a single rate based on volume; in the example, it would be $14.23 per 1,000 gallons regardless of average daily consumption. The structure would be phased in over a three-year period, with the first two years maintaining an increasing rate based on consumption.
The second example is a four-tier structure with per-1,000-gallon rates increasing based on volume of consumption. The rates range from $10.62 per 1,000 gallons for usage up to 99 gallons per day to $19.12 per 1,000 gallons for usage greater than 9,000 gallons per day.
All rates given are for combined water and sewer rates.
Any new rate structure adopted would use the industry-best practice of billing “through the block.” In other words, instead of each gallon being charged at the highest rate reached, as under the current system, each gallon would be billed based on its individual tier. So, in Example 2 given, if a person used 120 gallons of water per day, the first 99 gallons would be billed at the $10.62 per 1,000 gallons rate and the remaining 21 at the $13.27 per 1,000 gallons rate.
Beach said the rates given are for illustrative purposes – as are the tier divisions presented.
“One thing to point out is, that actually, we’re looking at that a bit more to continue to analyze whether those are the right price separation by tiers in order to incentivize conservation, to promote affordability,” Beach said. “That’s something that I want to point out that we still have under review as well.”
The numbers were given to provide customers some sense of what to expect with their bill under a new structure. Both examples given resulted in larger bills for low-usage consumers and lower bills for higher-usage customers. In example one – the single rate – after the third year, bills for an account with average daily consumption of 137 gallons would go from $162.94 under the current structure to $213.09. Meanwhile, an account with 385 gallons of average daily consumption would see its $587.65 quarterly bill under the current structure go down to $526.14. With the four-tier structure, the bill for the 137 gallon user would rise to $176.57 and for the 385 gallon customer, decrease to $514.31.
Many of the residents who spoke at the meeting expressed their displeasure at the prospect of higher bills. Another common thread was the timing of the change. The new rates are projected to be adopted in June 2018, but some residents felt the timeline should be pushed back to give residents more time to comment and learn about the issue.
Customer Julia Dobra said she understood that WSSC was required to make this change, but wanted to know what benefit customers would get from a new rate structure.
“I’m usually a positive person and I try to look at the positive things. But anytime you talk about increases, the first thing you should really ask is the benefits of it,” she said. “Show us the benefits. Show us why, not saying that someone’s telling you to do this.”
She also questioned the sincerity of WSSC’s outreach.
“To me, these questions and answers are a joke because you already said it’s going to be implemented June in ’18,” Dobra said.
WSSC Commissioner Thomasina Rogers said she has read all of the comments submitted so far and will be taking them into account when the commission meets to decide on the new structure.
After comments have been received, the commissioners – appointed by the county executives of Prince George’s and Montgomery counties and approved by the county councils – will deliberate and make a recommendation of a rate structure to forward to the county councils. Although the councils approve rates each year as part of the budget, the commissioners have final say over the rate structure.
"County staff and both county councils will have the opportunity to review a revised rate structure. However, WSSC Commissioners approve a new rate structure. Approving rates is not the same as a new revised rate structure," said a WSSC spokesman.
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