Council to discuss proposed changes in water rate system

by Andrew Batten

Charlotte-Mecklenburg Utility officials are unveiling several new ways the utility will charge customers for water.

The Charlotte City Council will hold a public hearing on the proposed changes during the council’s Monday, Feb. 14, meeting, which takes place at 7 p.m. The public also can attend an earlier presentation about the changes, which takes place the same day at 5 p.m. in Room 267 of the Charlotte-Mecklenburg Government Center, 600 East Fourth St. The council is expected to vote on the changes at its Feb. 28 meeting.

Charlotte-Mecklenburg Utilities spent $268,241 on a Water and Sewer Rate Methodology Study department officials said was needed after the city’s Restructuring Government Committee reviewed its rates during the budget process and customers raised concerns.

Before any of that discussion began, the Mayor’s Water Solution Task Force found what it called “serious flaws within the CMUD rate-setting model.”

The task force said the model, which includes a tiered structure with four levels for residential customers and a flat rate for commercial customers, overburdens single-family homeowners. At the same time, the utility depends on those homeowners for most of its revenue.

The changes include:

Add availability fee

The department’s fixed billing charges for water and sewer recover the cost of basic servicing of customer accounts, such as the cost of meter reading and billing. Currently, the fixed billing charge is $2.40 per month for water and $2.40 per month for sewer.

The department wants to retain the fixed billing charges but also add an availability fee to recover 20 percent of annual debt service and reduce the volatility of rate revenues. The availability fee would vary and increase by meter size.

Red Oak Consulting, which helped the department draft the changes, said that high-volume users would pay slightly less than they pay now, and lower-volume users would pay slightly more. That shift could help the utility since it would no longer be dependent on high-volume customers.

Adjust the Sewer Cap

Under the current rate structure, customers pay for sewer service based on their water use. But the utility caps its sewer charge at 17,952 gallons.

Customers aren’t charged for sewer when they use more than who amount of water. But officials say customers using more than 12,000 gallons are usually using water for irrigation and therefore are paying for sewer service on water that never reaches the sewer system.

Instead, the department would determine the cap based on customer’s average water use in the winter. Since most customers don’t irrigate in the winter, officials believe that average offers a good picture of how much non-irrigation water they would use in the summer.

Officials plan to delay that change until at least 2013, to allow the utility to gather customer’s winter consumption data.

In the meantime, the department would lower the sewer cap to 11,968 gallons beginning in July.

Modify Tiers for Irrigation

Currently, customers who have a separate irrigation meter are charged a higher rate for that water – starting at the regular third tier, or $2.69 for 6,000 to 17,952 gallons and then progress to the fourth tier. Under the change, customers who install smart irrigation meters would only pay third-tier rates.

Changing tiers

The utility proposes keeping its fourth-tier rate structure. The department wants to change the amount charged under each tier based on the amount needed to cover the department’s daily costs. However, officials have not released what the amounts will be.

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