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Residents voice concerns about WSSC’s proposed rate structures

WSSC buildingLARGO – Local residents expressed concerns about new proposed rate structures for water costs at a public hearing on at Prince George’s Community College Oct. 16.

Washington Suburban Sanitary Commission (WSSC) has developed five proposed rate structures to replace its current system. In March, the Maryland Public Service Commission ordered the WSSC to come up with a new rate structure since it found the current 16-tier structure, which has been in place since 1992, to be overly preferential to low-usage customers.

Under the current rate structure, customers are charged at their highest tier of usage. Joseph Beach, the chief financial officer of WSSC, said this practice is unique among most utility companies.

“Say you’re in the second or third tier, you consume 100 gallons per day,” Beach said. “Under the current rate structure, for that 100 gallons per day, you would pay $10.38 for all 100 gallons. Under what’s more common practice, what we’re looking for in the current rate structure, is to bill you at each tier of consumption, that is, the first 49 gallons would be at that $7.95 rate, the second 50 gallons would be at $9.12, and the last gallon would be at $10.38.”

The new proposed rate structures include a uniform rate, two different three-tier rates, and two different four-tier rates. Under the uniform rate, customers would be charged $14.73 per 1,000 gallons (kgal).

Based on the three-tier structure:

For option A, customers would be charged $10.66/kgal for a household using 0-80 gallons a day, $13.43/kgal for 81-165 gallons, and $17.61/ kgal for everything more than 165 gallons.

For option B, customers would pay $10.41/kgal for using 0-165 gallons per day, $13.89/kgal for 166-275 gallons, and $19.96/kgal for usage above 275 gallons.

Under the four-tier structure:

For option A, users would be charged $10.66/kgal for an average 0-80 gallons per day, $12.25/kgal for 81-165 gallons, $14.86/kgal for 166-275 gallons, and $18.74 for more than 275 gallons.

For option B, users would pay $10.66/kgal for using 0-80 gallons per day, $13.09/kgal for 81-165 gallons, $16.16/kgal for 166-9,000 gallons, and $20.52/kgal for more than 9,000 gallons.

These proposed rates are subject to change by the WSSC Commissioners.

All of these rate structures would be revenue-neutral. Beach said that there is a 2 percent factor with the structures to account for any “increased delinquencies and any problems with the new billing systems” that may arise with switching the billing system.

Ten residents spoke at the public hearing.

Susan LaCourse, a resident from Laurel who served on the WSSC rate study state board of representatives, said the new WSSC rates do not compare favorably with utility companies in Washington, D.C. and Baltimore. She said the highest tiers in WSSC’s proposed structure would be charged much more than the comparable tiers in neighboring jurisdictions.

“A major drive behind the change is a mandate from the Maryland Public Service Commission to make the WSSC rates more equitable and stop discriminating against certain classes of customers,” she said. “A tiered rate structure with a highest tier of $19-20 per thousand gallons does not satisfy this mandate in any way.”

LaCourse said she prefers the uniform rate.

“Among the options that are currently being presented, only the uniform rate of $14.73 is acceptable and has any chance of satisfying the (public service commission),” she said. “But even $14.73 is a very high rate, much higher than our neighbors. Please consider the possibility of a transitional tier structure, whose highest tier is within the range of acceptability, and I would think that would be less than $16 per thousand gallons.”

She added that the high proposed rates may prompt lawsuits.

Ron Wineholt with the Apartment and Office Building Association of Metropolitan Washington appreciated that the WSSC was removing its practice of charging at the highest tier, though he did have concerns regarding some of the proposed changes.

“We find in particular options 3B and 4B difficult to defend as they would further increase rates on high-volume customers which your own cost of service study identified as being significantly over-charged,” he said. “We wish we had seen additional three and four-bracket options that did not increase rates on high-volume customers. It’s important that at minimum, your new rate structure start to close the gap between what customers are charged and the cost to serve them. Having said that, out of the five options presented, 4A is probably the most defensible at this time.”

Some residents said they were worried their rates would go up as single people living alone.

“I do not believe your new tiered rate structure is fair or equitable to any county resident. I believe the rate structure is arbitrary and capricious,” Melinda Smith said. “What incentive is there to be more frugal in your water usage and not waste it, when the people who are the ‘haves’ who live in mansions with many bathrooms and (with) pools will get a decrease in their bill (compared with the current rate structure), but I’m single and only person living in my household, and our rates will go up.”

Resident Michael Sitney announced he drafted a petition in opposition to the proposed rate structure. The petition states that the rates would violate customers’ rights because “there are no laws written in our USA Constitution that bound; binds or tied law abiding citizens to bears the burden and responsibilities for negligent actions e.g.; (abused of water consumption; failure to pay water usage bill) caused by irresponsible citizens; naturalize(d) alien; illegal immigrants; and public housing subsidies program recipients persons.”

The rate structure will be selected in June 2018 and will go into effect July 2018 or 2019.

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