Wholesale water rate projections for FY18

wholesale water rate projections for FY18

Each year, the North Texas Municipal Water District sets wholesale water rates for Member Cities and Customers based on the cost to obtain, treat and deliver water. One of the biggest misconceptions by ratepayers, is that water rates pay for the amount of water a city receives. In truth, water rates pay for much #MoreThanWater. The lion’s share of the water rate (85%) covers fixed system costs associated with maintaining and expanding infrastructure. This includes pipes, pumps, treatment plants and debt repayment. Only 15% covers the actual water used and that includes chemicals, energy, and other costs associated with treating and delivering water.

Currently, the wholesale water rate for Member Cities is $2.53 per 1,000 gallons of treated water.  The anticipated wholesale water rate for FY18 will increase by 25 cents to $2.78 per 1,000 gallons (4 cents lower than previous projections). This is still about one-quarter of a penny per gallon of treated water delivered.

Water conservation saves money and resources.

Water conservation efforts have helped defer construction costs by more than $1 billion over the last several years.  Without the efforts of our cities to reduce water consumption, which has allowed us to delay construction projects, the wholesale water rate was estimated to be 70 cents higher this year. For FY18, NTMWD deferred the purchase of water from the Trinity River Authority (due to permitting delays) to FY19 when the Main Stem Pump Station and Pipeline will go into service providing up to 100 million gallons per day (MGD) of additional water.

Infrastructure matters.

Some Member City and Customer officials question why the District wholesale rates have been increasing annually. The answer is that we must maintain and rehabilitate the existing system, meet increasingly rigorous regulatory standards for water quality, and build new infrastructure to meet the growing needs of our cities.

In addition to ensuring adequate supplies, the District must also plan projects and improvements to provide sufficient treatment and delivery capacity. As the NTMWD service area grows, so must our infrastructure to continue providing reliable water services to new businesses and residents.

The challenge of maintaining and expanding water and wastewater infrastructure is not unique to NTMWD.  Watch the video below as George Hawkins, CEO and General Manager of the District of Columbia Water and Sewer Authority, discusses why water costs are increasing nationwide and how we must help the public better understand these challenges.