A small rate increase for residential customers next year coupled with a more substantial hike for commercial customers will fulfill a three-year plan to equalize rates and repair infrastructure, Erie County Water Authority officials say.
Next year’s 1.9 percent increase for residential customers stems from water consultants’ previous recommendations that larger users bear more cost of capacity and infrastructure improvements, said Earl L. Jann Jr., the authority’s executive director.
As a result, the authority’s more than 3,000 commercial users will see their flat rate infrastructure charges double in 2018.
The rate hikes, announced Friday, are the first that will occur over the next three years.
“It was going to be too big a hit to deliver in one year, so we’re spreading it out over three years,” Jann said. “That’s why their rate is doubled this year and there will be a 50 percent increase for next year.”
The planned increases are part of a five-year budget plan adopted by the authority and submitted to the state Authorities Budget Office, he added.
Jerome D. Schad, one of three Water Authority commissioners approving the increase on Monday, also emphasized the five-year approach to infrastructure repair.
“It’s a function of our long-term plan and structuring of rates more equitably over the long term,” he said. “This is not a result of a blip somewhere.”
Prior to this year, all water rate payers – both residential and commercial – were subjected to a flat infrastructure fee in addition to their regular usage fees.
That fee rose more than 500 percent over a five-year period before the authority adopted a proportional rate structure for 2017 that charged heavier, commercial water users at a higher level than regular residential customers.
At that time, the board committed to leaving the infrastructure rate for residential users – 97 percent of all customers – unchanged for three years. Next year will represent the second year of the commitment.
The authority said the residential hike approved last week pertains to the cost of the water and will result in an additional 85 cents on bills per quarter. It also said the quarterly infrastructure investment charge will remain unchanged for customers with a service meter of one inch or smaller.
The increases will help pay for the authority’s capital budget devoted to infrastructure replacement, which stood at $32 million in 2017 and rises to $36 million in the new year.
The planned increases do not stem from significant repairs encountered at the authority’s Sturgeon Point facility earlier this year, Jann said, though the experience did underscore the need for other long term needs.
“Sturgeon Point did not affect our current price increase,” he said. “However, that pointed out the need for redundancy in the system.”