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The Board of Public Utilities will hold its second public hearing on a proposed restructuring of its billing system to a tiered water rate on Wednesday.
Department of Public Utilities staff is proposing a 6-percent rate increase across the board to address high capital and maintenance costs. The question before BPU is whether to add that increase to the current flat rate or institute a tiered seasonal rate, which aligns charges with the cost of providing water.
“The higher rates for higher tiers are caused by production costs, what it costs to manage the system. It’s not a conservation rate,” said Robert Westervelt, deputy utilities manager for finance and administration for the Department of Public Utilities. “The purpose is not to encourage people to use less water but to allocate the costs to what drives the costs, which is higher usage.”
DPU reports that based on historical data, 21 percent of residential customers use 56 percent of the total residential water consumed during the summer, when water consumption more than doubles.
The increased demand requires additional costs for pumping and delivering water and puts additional wear and tear on infrastructure, accelerating the need for replacement.
Under the proposed rates changes, service charges for larger meters would significantly increase and a three-tiered consumption rate for residential customers would be effective during peak usage months.
Peak season rates would be:
• First Tier: $4.19 per 1,000 gallons for the first 8,999 gallons consumed (same as current unit rate);
• Second Tier: $4.45 per 1,000 gallons for consumption between 9000 and 15,000 gallons; and
• Third Tier: $5.32 per 1,000 gallons for all consumption above 15,000 gallons.
The service charge for residential meters would be changed to $7.93, a slight increase for those with 5/8-inch meters (currently $7.55) and a decrease for those with 1- to 1 ¼-inch meters (currently $8.80 and $24).
According to DPU, approximately 60.5 percent of residential customers would not see a change in their annual commodity cost for water if the ordinance is adopted, although those with a 5/8-inch meter could see a slight increase on their overall bill.
County facilities, schools and businesses would not have a tiered seasonal rate, but could see significant increases in service charges. Service charges would increase from $24 a month for a 1 ½-inch meter to $25.12, up to $439.50 for an 8-inch meter, which currently costs $275 a month.
DPU staff is soliciting feedback on the ordinance on the county’s Open Forum, which is linked on the county’s homepage, losalamosnm.us.
Fifteen of the 20 comments received so far oppose a tiered rate. The opposition is based on assumptions that the tiered rate will be too prohibitive for people to have lawns and gardens and that it will hurt large families.
One typical comment reads, “Going to a tiered water rate would only discourage homeowners from keeping up their property and therefore letting their property decline. I personally enjoy and desire to live in a neighborhood that is not dirt, rocks and weeds. Having a maintained yard certainly enhances neighborhoods and makes a community more appealing! The tiered rate system would discourage that. It also discriminates against larger families. They would be taking a hit just from taking showers, and doing laundry!”
DPU staff has researched those issues, since they were raised during the last public hearing. The tiered rate would not affect those with average lawns, and those with large families would actually have a slightly reduced rate under the tiered system.
A White Rock family with two adults, seven children and a lawn with an average annual usage of 136,000 gallons currently pay $675 per year. The six percent increase with the flat rate would increase their bill to $704 per year. The tiered rate with the six percent increase would be $694 per year.
Those with pools and large yards would see the most significant increase, ranging from $175 for those with an annual usage of 297,200 gallons per year to $311 for those using 472,300 gallons.
Most of those supporting the tiered rate seem to be doing so for conservation purposes, although Westervelt stressed that the proposed rates are based on actually costs for providing service, and are not meant to encourage conservation.
Three residents also provided public comment supporting the tiered rate at the last BPU meeting.
Natali Steinberg, who does the landscaping at Oppenheimer Place and the Pajarito Environmental Education Center (PEEC) uses only drought-tolerant plants in her landscaping and believes a tiered water rate would “help educate people who have large lawns.”
“We all know that water is a scarce resource in New Mexico and getting scarcer, and we feel that the county has an obligation to encourage prudent use of such a scarce resource, and we think the tiered water structure is a good way of doing this,” said Mark Jones, chair of the Pajarito Group of the Sierra Club.
“The utilities department has already done a good public education campaign, but economic incentives are far more powerful than mere teaching in affecting people’s behavior.”
Jody Benson pointed out that contrary to popular belief in an inexhaustible aquifer; the aquifer is not being replenished due to drought conditions in recent years.
The hearing on the proposed rates is at 5:30 p.m. May 21 in the municipal building.