Water rates rise as residents' usage falls

City Council approved the 2014–15 budget Sept. 8 that includes an increase in Plano residents' water bills starting Nov. 1. The residential water rate increased by 10 percent and the wastewater rate by 2.5 percent.

"I hate to go to our citizens and say 'You've conserved all this water, and now you're going to have to pay because you've conserved,'" said Public Works Director Gerald Cosgrove. "It's a bad message. Unfortunately [we had to conserve water]. If we hadn't done it, then there might not have been any water to use."

The average city resident uses 21,480 gallons of water per month, but starting Nov. 1, residents will see a rate increase on all gallons over 30,000. The rate of $5.53 per 1,000 gallons will increase to $7.50 per 1,000 gallons on every gallon over 30,000.

Rising costs

The NTMWD is a wholesale water provider to customers in 13 member cities, such as Plano and Frisco, and 33 regional customer cities, such as Little Elm and The Colony. Until the past few months, the NTMWD has not had access to Lake Texoma, which is 28 percent of the district's water supply, because of a zebra mussel infestation. A $300 million pipeline was constructed to prevent the spread of zebra mussels and get the water supply back online. The cost of paying for the pipeline is in part handed down to water district customers.

Denise Hickey, spokeswoman for the NTMWD, said power costs associated with pumping from Lake Texoma and the necessary ozonation process combined with increased capital costs for a pump station and Lower Bois D'arc Creek Dam construction are also contributing to the rate increases for FY 2015.

As water costs are increasing, the district also continues to push for conservation with an eye on the present and future. The NTMWD population is expected to grow from 1.6 million current users to about 3.73 million users by 2070. An extended drought has also taken a toll on existing water supplies.

NTMWD payment structure

More conservation for the good of the district as a whole, however, does not translate to being good for the Plano city budget. With NTMWD's pay structure, no matter how much water residents save, the city is still required to pay a fixed amount. Cities pay the water district a set amount every year based on the maximum amount of water it has needed for any one year in the past. For Plano that year was 2001 when the city had about 20 percent less people than its current population of more than 270,000. The city is locked into paying the water district for 26 billion gallons of water, although on average it uses 10–15 percent less than that peak every year, Cosgrove said. This year Plano has used only 18.7 billion gallons—about 30 percent less than the average yearly usage in recent years, Cosgrove said.

"Even with all the future growth we project for Plano, we may never hit that [peak] again," he said.

Cities are refunded 35 cents per 1,000 gallons for the cost of the power and chemicals associated with unused water. The city is paying $13 million this year for water it will not use, said Plano Budget Director Karen Rhodes-Whitley.

She said the city has a reserve fund to pay the difference, which has been drawn upon more as the amount of conservation has increased and the amount of money coming back to the city through water bills has decreased.

Rhodes-Whitley and Cosgrove said cities like Frisco that are still in the major growth stages actually benefit from the take or pay system because its peak usage—and therefore the amount of water it is required to purchase—continues to go up each year. As a result, the growing city is not required to purchase water it does not use.

Only now with the drought and subsequent extra conservation are other member cities "starting to turn around to the issue," Rhodes-Whitley said.

Hickey said each city benefits at different stages of development and growth, which balances out over time.

"The NTMWD has reviewed the current water rate methodology and each scenario evaluated—some cities will benefit and others will not benefit from a structure change," she said.

Hickey said for a pay structure change, all 13 cities must agree on the water rate methodology.