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WSSC decides on preferred rate structures

WSSC buildingLAUREL – After months of planning and numerous public hearings, the Washington Suburban Sanitary Commission (WSSC) determined the three rate structures it prefers.

WSSC management recommended three rate structures out of the five alternatives it presented during public hearings in October. The original five alternatives included a uniform rate, two different inclining three-tier rate structures, and two different inclining four-tier rate structures.

The recommended rates are the two three-tier rates and one of the four-tier rates. The recommendations, along with the other two tiers, will be considered by WSSC commissioners during a meeting on Nov. 15.

“The three rate structures we are recommending today minimize bill impacts to our customers, while providing us a more predictable revenue stream to pay for infrastructure improvements,” WSSC General Manager and Chief Executive Officer Carla Reid said.

Based on the three-tier structure:

For option A, customers would be charged $10.66 per 1,000 gallons (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-tiered option, customers would pay $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.

The Public Service Commission recently determined that WSSC’s current 16-tier rate structure is unduly preferential to low-usage customers. Under this system, which the WSSC adopted 25 years ago, customers are charged at their highest tier of usage.

With an inclining rate tier structure, however, water usage is charged at each tier of consumption. For instance, under option 3A, if a customer uses 100 gallons per day, the first 80 gallons would be charged at the $10.66/kgal rate, and the rest would be charged at $13.43/kgal.

Bills for typical three-person households would decrease with two of the recommended options. For three-person households in which each person uses an average 55 gallons of water per day – the average consumption of WSSC customers – the currently quarterly bill is $205.45. Under option 3B, the bill would decrease to $184.15, and under the four-tiered recommendation it would decrease to $200.62. The bill would increase to $210.06 with option 3A.

Officials with the WSSC believe the inclining tiered rate structures will encourage water conservation among their customers.

“The rates will increase with the more water that you use, so that certainly sends a conservation message to our customers to try to encourage them to save water and to conserve water the best they can,” said Charles Brown, director of office communications and community relations at WSSC. “We think this is a fair and reasonable rate structure which will treat all of the households more uniformly and fairly, whether it’s a single person, or whether it’s a large family, all the way up to a commercial establishment.”

The Maryland Department of the Environment lists increasing block rate structures as a strategy water systems can use to encourage conservation.

While WSSC customers Susan LaCourse and Richard Boltuck agree the three recommended rates are more fair than the current rate structure, they believe the recommended rates are still discriminatory and do not actually encourage conservation.

“Strictly looking at what’s fair, it seems like everybody should be paying the same amount per gallon of water,” said LaCourse, a Laurel resident who served on the WSSC rate study state board of representatives. “The argument for (the tiered structure) is conservation, but to say that somebody’s wasting just because they use more water is bad logic. Because a larger family has to use more water, that’s doesn’t mean they’re being wasteful.”

Out of the three rates, she said option 3A is “the least offensive because $17.61 (for the highest tier) is the least outrageously expensive price.” However, she still supports a single uniform rate for all users.

Brown said the WSSC did not include the uniform rate in its recommendations because “the overwhelming majority of our customers did not express support for the uniform rate at the 20 plus meetings we had. Plus, it would have significantly adverse impacts on low and fixed-income households.”

According to a memorandum by Reid, the uniform rate would cause a typical residential family’s bills to increase by more than 20 percent and “would represent up to 5 percent of the annual income of customers in the lowest one-fifth household income in Prince George’s County.”

Boltuck, whose complaint against the WSSC for discriminatory pricing resulted in the Public Service Commission’s order for them to create a fairer rate system, also agrees the way forward should be with a uniform rate.

“All three of (the recommended structures) are highly discriminatory,” he said. “It was more severe in WSSC’s existing rate structure than it will be in proposed ones, so it’s true it’s less discrimination. Nonetheless, there’s a lot of discrimination left.”

The WSSC commissioners will make their rate structure recommendation on Nov. 15 for Montgomery and Prince George’s counties to review. Although the WSSC management recommended three specific rate structures, the original five are still under consideration by the commissioners.

The commission will select a rate structure in June, and it will go into effect July 2018 or July 2019.

The rates are subject to change.

Last modified onWednesday, 15 November 2017 17:08
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