Water-Wise in Atlanta? Well, then pay your premium. Our Water Revenues are Evaporating, and Your Water Rates are about to Jump (AtlantaJournalConstitution)

Jan.25, 2009 in Drought, Public Works, Water Conservation, Water Crisis, Water Industry, Water Rates

(Jan. 25, 2009, Atlanta Journal-Constitution)

While metro Atlanta water departments push —- and pay —- for conservation, their revenue continues to evaporate. And water-wise consumers are paying a premium.

In response to the drought and continuing water restrictions imposed by the state, Gwinnett County residents and businesses cut water use by 17.2 percent last year, a decline of more than 5 billion gallons from 2007. As a result, revenue for Gwinnett’s Department of Water Resources fell $11 million, or 5.4 percent. The loss would have been greater —- as much as $35 million —- had the agency not improved collection rates, adjusted fees and implemented a summer surcharge, said Lynn Smarr, acting department director.

Gwinnett approved a rate plan that calls for annual 5 percent rate increases, which began in 2005.

Last year, the county also passed an 8.4 percent sewer rate increase. The increases added about $3.50 to the average residential bill, said Pete Frank, deputy director for business services at the water department.

Rates went up again by the same amount in January.

Cobb County initiated an 8 percent rate increase last January, then a 12 percent rate increase in October in response to revenue shortfalls and increased expenses. The average water bill is now $10.72 more each month than at the end of 2007.

The water department saw an 18 percent decline in water consumption last year, which translates to about $25 million in reduced revenue, said Kathy Nguyen, Cobb County’s water efficiency manager.

The biggest factor is the statewide conservation initiatives to combat the drought, she said, but the sagging housing market also has pared fees assessed for new development.

Nguyen said the agency adjusts rates annually, but it had to move up the rate increase scheduled for this month.

“You’re starting to see a move toward pricing the true cost of water, and its value,” Nguyen said. “You have to price it at infrastructure maintenance, repair, growth.”

Consumer costs do not fall when water use declines, said David Kubala, environmental affairs manager for Cherokee County Water and Sewerage Authority.

“Many of our expenses are fixed costs,” Kubala said. “They don’t vary with the volume of sales.”

The number of meters to be read and lines to maintain do not go down as households reduce consumption, he said.

Cherokee County revenue from water sales fell 11 percent in 2008, as residents used 16 percent less water.

The county passed a 13 percent rate increase in August, raising the monthly fee from $30.45 to $34.24 for an average customer who uses 7,000 gallons per month. The rate for those using 6,000 gallons went from $26.10 to $29.20.

Water consumption declined in DeKalb and Fulton counties as well.

In DeKalb, consumption fell last year by 4.2 billion gallons, about 15 percent, from 2007. Without rate adjustments and improved efficiencies, the water department would have seen a 10 percent decline in revenue, spokeswoman Kristi Swink said. Those adjustments reduced the shortfall to 1 percent, she said.

DeKalb instituted a 16 percent rate increase in October, which raised the average bill by $8 per month.

Fulton saw a 20 percent drop in water consumption last year, which accounted for about $20 million in unrealized revenue, said Jessica Corbitt, community relations spokeswoman. Fulton passed a 15 percent rate increase in June, raising the average water bill nearly $9 a month to $68.

(Original Article Here)