The Thomas Telegraph: Special Edition – 06-22-2021

Vol. 2, Special Edition

Water / Wastewater Questions

Please review the memorandum from HPW Director Carol Haddock to Mayor Sylvester Turner and City Council providing answers to questions that have been raised regarding the water and wastewater rates.

Click here to read the full report.

Highlights

The water and wastewater rates are based specifically on cost of service for that customer type. Therefore, the rates are based on the actual costs to obtain, treat, and distribute water based on the customer type. For single family residential customers, this update is working to provide predictability in cost per thousand gallons. The previous rate structure was not for uniform for Water or Wastewater. The following table shows the old versus new rates (without the conservation rates) from the report:

After the proposed April 2026 increase, 12 months of revenue at the recommended rates ($1,838 million) will generate $707 million more than the current rates would generate ($1,131 million). The total revenue generated from the proposed rates and rate adjustments for the period FYE 2022 through FYE 2026 is $2,181 million higher than the revenue that would be generated from the current rates over that same period ($1,131 million per year for the 5-year period). These projections do not include revenue from the automatic adjustments that are governed by the Master Ordinance. The projected annual revenue with the recommended rates and rate adjustments is as follows:

FYE 2022 $1,333 million
FYE 2023 $1,482 million
FYE 2024 $1,578 million
FYE 2025 $1,673 million
FYE 2026 $1,770 million

These projections include 9 months at the previous fiscal year rates (July through March) and 3 months at the current fiscal year rates (April through June).

The rate increase from 3K to 4K gallons/month, and then from 4K to 5K to 6K gallons/month is very different. There is a huge increase from 3K to 4K gallons and then decreases per thousand gallons for 5K and 6K gallon usage.

The goal was to provide a rate structure that encourages conservation by charging a lower rate for reduced household water use. HPW determined that 45% of the customers use 3000 gallons or less and a conservation rate is applied for that usage only to the extent the customer’s monthly usage is remains at 3000 gallons or less.

Additionally, the Rate Study recommended that we promote conservation by increasing the cost of higher water consumption. The percentage increases from the current rates to the rates that will be applied in July 2021 include a steady increase with increased usage. For example, going from 4000-gallon usage to 5000-gallon usage has an increase of 12%. For even higher consumption customers, where the higher usage is often associated with optional consumption, such as outdoor irrigation and outdoor amenities, the use of 17,000 gallons includes an overall increase of 18%.

What are the fine associated with failure to comply with the terms of the consent decree?

Section X of the Consent Decree, which begins on page 51 of the Consent Decree scan (page 48 using page numbers of the actual CD) states which types of noncompliance with the Consent Decree will cause stipulated penalties to accrue, and at which amounts. The final, signed Consent Decree is available at this link: https://www.publicworks.houstontx.gov/sites/default/files/assets/003-signed_consent_decree.pdf.

Single Family Residential Bills Rendered used to develop the 2020 Water and Wastewater Cost of Service Rate Study

Please review single family residential water and wastewater bills used to develop the 2020 Water and Wastewater Cost of Service Rate Study.

Click here to read the full report.

Highlights

The 2020 Water and Wastewater Cost of Service Rate Study was developed with bills rendered data from Fiscal Year 2019, July 2018 to June 2019, water and wastewater accounts. This time period was the most recent complete year when the rate study started. An additional factor from this time period is that it is not impacted from drought, nor would it see the extra home usage during the COVID-19 pandemic. As such, this time period is representative of a typical usage in the single-family residential customer category.