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  1. 2/19/2016 WATER RATES TO RISE APRIL 1ST EMPLOYING NEW RATE STRUCTURE
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    Although Denver Water’s current rate structure has been in place for 20 years, the Denver Board of Water Commissioners adopted a new structure in December of 2015 designed to balance three objectives: affordability, conservation and revenue stability.

    The rate changes are scheduled to take effect April 1 and are expected to reflect current water-use habits and provide a buffer for more frequent extreme weather fluctuations. These weather fluctuations result in inconsistent revenue, making it harder to plan for and complete repairs and upgrades to the water distribution system. The new rate structure will shift from a heavy reliance on usage to a more stable fixed fee during the next few years. As such, future rate increases are expected to be less subject to bigger jumps caused by unpredictable weather.

    The impact of the new rate structure to individual customer bills is expected to vary depending upon customer water usage.

    How the new rate structure works

    Residential customers will continue to be charged on a tiered structure - the more you use, the more you pay. However, the new rate structure is based on three tiers instead of four as in the traditional rate structure.

    Tier 1 - The first and least expensive tier is based on indoor use. Because water used indoors for cooking, bathing, drinking and flushing toilets is essential for human life, it has been assigned the lowest rate, $2.34 per 1,000 gallons. This rate will be calculated by taking your average winter consumption (AWC) to determine how much water you need indoors (AWC is measured January through March each year, when you’re not watering your lawn).

    Each month, the amount of water you use up to your AWC will be charged at the lowest rate. The minimum possible average winter consumption is 5,000 gallons, and the maximum is 15,000 gallons. The 5,000 gallon minimum was set to ensure customers aren’t penalized for low water usage during the winter, and will have up to 5,000 gallons of water to use in that first tier with the lowest rate year-round. The minimum does not mean you will be charged for 5,000 gallons if you use less than that amount.

    Tier 2 – Denver Water understands the value of having healthy landscapes, gardens and places for kids and pets to play. Hence, customers will be allotted 15,000 gallons in addition to their average winter consumption - what it takes to water an average-sized yard efficiently - for outdoor use, which falls into a second, higher-priced tier at $6.04 per 1,000 gallons.

    Tier 3 - Any use above Tier 2 falls into the third, highest-priced tier at $6.72 per 1,000 gallons.

    Fixed monthly charge

    The costs to collect, store, treat and deliver water are expenses that have to be paid regardless of the amount of water customers use every year. No matter how much water customers use, Denver Water still needs to maintain and operate more than 3,000 miles of pipe, 19 reservoirs, 22 pump stations, 30 underground storage tanks, four treatment plants and other miscellaneous facilities. It is difficult to meet the maintenance needs and associated budgets given the increasingly common revenue swings. To provide more revenue stability, Denver Water plans to raise the fixed monthly charge which will account for meter size and the demands larger users have on the system. In effect, larger, commercial users will be billed at a higher fixed monthly charge. Your meter size is listed on your bill.

    For residential customers, the fixed monthly charge will increase from $6.74 to $8.79 each month. The fixed monthly charge varies by meter size, but the majority of single-family residential customers have a 3/4-inch meter. The higher fixed charge will be balanced out by the new tiered structure, where the cost per 1,000 gallons will actually be less than in the old structure.

    The new 2016 water rates are summarized in the chart below:

     

    Questions about this new rate structure and how it will affect your water bill can be answered by Denver Water’s Customer Care department at 303-893-2444.