Phoenix Plans To Hike Water Rates, Cut Allowance

April 8, 2023

By Corinne Murdock |

The city of Phoenix plans to hike various water rates over the next two years by 25 percent minimum, and cut water allowances by up to 20 percent. 

The city has proposed to increase its water rate by 26 percent and wastewater fees by 25 percent over the next two years — and likely more for commercial and industrial customers. They also proposed to cut water allowances by 20 percent in the warmer months of June through September (from nearly 7,500 gallons to just under 6,000 gallons) and just over 16 percent in the cooler months (from about 4,500 gallons to about 3,700 gallons).

The Phoenix City Council will consider the proposed increases at some point this month, then take a final vote come June. 

The Phoenix Water Services Department stated that additional revenue was necessary to cover higher expenses, improvements on aging infrastructure, development of advanced water purification options, protection of the department’s bond rating, and meeting new stormwater permit requirements. 

The department blamed rising costs and both current and anticipated inflationary pressures for the rate increases. Included within the proposed changes were allowances to encourage water conservation, which the department noted may result in an additional $4 charge to some customers come October. This includes an average 25-cent increase beginning in October within the Stormwater Excise Tax (about $3 a year), which pays for compliance with the Federal Clean Water Act.

The rate increases will be divided out into three parts over the next two years. For the water usage fee, there would be a 6.5 percent increase (about $2) in October, another 6.5 percent increase in March 2024, and a 13 percent increase in March 2025. For the wastewater service, there would be a 6.5 percent increase ($1.60) in October, another 6.5 percent increase in March 2024, and a 7 percent increase in March 2025. 

The department shared that cost increases through the 2023-24 fiscal year were as follows: raw water, 35 percent; water electricity, 12 percent; water chemicals, 136 percent; water personnel, 38 percent; wastewater electricity, 17 percent; wastewater chemicals, 51 percent; and wastewater personnel, 16 percent. 

The city noted in its water allowance assessment that only 31 percent of all household bills on average have consumption levels within the existing allowance, first enacted in 1990. Yet, the city stated that the proposed cuts would better align with current average water usage; the city also stated that the cuts would reset the ratio between average water consumption and allowance levels to match those set in 1990, thereby better reflecting the city’s past successes in water conservation efforts.

The cuts would result in nine percent less households falling within the allowance, or 22 percent. The city expressed hopefulness in its report that these cuts would bring the city closer to water conservation goals. 

“A larger portion of a customer’s water usage under the volumetric (actual use) rate and not the flat base charge (allowance) will generate a stronger water usage signal to our customers,” stated the city. “The expectation is that a better understanding of usage will encourage people to use less water, helping the City reach its conservation goals.”

The city anticipated a $17 million increase in water revenue from the proposed rate increases.

The city began hosting village planning meetings in March and will continue doing so through May to gather public comments on the rate increases. Those interested in attending an upcoming meeting may find the schedule on the water services department’s page, or submit public comment online.

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.

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