Recover password

Water rate hike likely — because use is down

Copyright © 2014 Albuquerque Journal

Congratulations on your water conservation success, Albuquerque. As a reward, you get another rate hike.

With revenue down as a result of dropping water sales, the Albuquerque Bernalillo County Water Utility Authority board at its Wednesday evening meeting will consider a 5 percent rate increase beginning July 1. The average homeowner’s water bill would rise roughly $3 per month, according to a report to be presented to the utility’s board of directors.

Customers saw a 5 percent rate increase last July 1.


Continue reading

The utility’s managers say the extra money is needed because – while they encourage water conservation – consumers actually conserved far more than anticipated.

They said the dropping water sales revenue is not sufficient to cover fixed operating costs, and pay for needed repairs to old water pipes and sewage treatment systems. Critics contend the agency should have anticipated the drop in water sales last year and the real problem is poor planning.

Governed jointly by city and county elected officials, the utility provides water and sewer service to most of the Albuquerque metropolitan area. Despite the current drought, with 2014 precipitation just 22 percent of normal, Albuquerque water use keeps dropping. Last year, Albuquerque used 32.4 billion gallons, the lowest consumption since the early 1980s, despite a population growth of 70 percent since then. This year, water use so far is down another 2.6 percent.

Per capita water use – all home and business use divided by the total population in the water utility’s service area – dropped from 148 gallons per person per day a year ago to a projected 135 this year, a 9 percent drop. The water utility’s 2013-14 budget was based on a projected 2 percent drop and the utility’s managers have been scrambling since last fall to deal with the revenue gap.

The drop in revenue essentially wiped out the funds the agency anticipated from the 5 percent increase that took effect July 1, according to Stan Allred, the utility’s chief financial officer. That left an $8.7 million hole in the agency’s $208 million budget this year, Allred said. Last June, the water utility’s board set 135 gallons per person per day as a long-term water conservation goal to be reached by 2024. Albuquerque has already hit that goal, a decade early.

“We went from 148 to 135 in less than a year,” said Mark Sanchez, the utility’s chief executive.

With water utility conservation efforts underway last year, the drop in Albuquerque water use should not have come as such a surprise, countered Elaine Hebard, an Albuquerque resident long critical of the agency’s budget practices. She noted a staff report in early 2013 that projected water savings of as much as 7 percent as a result of a formal “Drought Watch” declaration. The declaration included increased water wasting fines and public education efforts.

“It was expected,” Hebard said in an interview Monday.


Continue reading

The proposed rate increase reverses a policy of hitting big water users the hardest as a way of encouraging conservation. Under the plan being presented to the utility’s board Wednesday, all homeowners will see the same $3 per month increase, regardless of the amount of water they use.

The cost of delivering basic service, such as maintaining pipes and the municipal sewage plant, is the same regardless of how much water customers use, Sanchez argued. That especially applies to the agency’s efforts to play catch-up with aging infrastructure, he said.

Current plans call for spending $48 million on that work next year, nearly a quarter of the agency’s budget. Even with the rate increase, the agency plans to borrow an additional $15 million next year to keep up with an ambitious equipment replacement program, including the reconstruction of the sewage treatment plant in Bernalillo County’s South Valley.

Sanchez said the agency’s 2014-15 budget, including the rate increase, is based on the assumption that water use will not continue to drop.