Your water bill is going up (slightly). Here’s why

That small increase helps us make big system upgrades, ensure water reliability and plan for future needs.

By Steve Snyder

 

Nobody likes to pay a bill.

No matter how much you like a service or how essential it may be, handing over your hard-earned money to somebody else — particularly if that bill often increases from year to year — is never fun.

But when it comes to your water bill, the simple fact is the cost of running a complex water system continues to rise. Your bill helps to maintain and upgrade a vast infrastructure that allows us to collect, treat and deliver safe, reliable water, while also providing for essential fire protection services.

You’ll see some slight increases in your water bill starting April 1, 2017. Here are the answers to three questions you may be asking:

1. Why are you raising my rates?

Crews work to place the concrete floor of one of the new Hillcrest treated water storage tanks on Dec. 10. Denver Water is in the middle of a $100 million project to improve the safety and reliability of its Hillcrest facility by replacing two 15-million-gallon underground water storage tanks with three 15-million-gallon tanks, and a pump station.

We have a large, intricate system with a lot of aging infrastructure. With a 5-year, $1.3 billion capital plan, we’re staying on top of the upgrades and new projects needed to keep this system running.

(Watch the video at the top of the page to see the kinds of projects, like replacing failing underground storage tanks and aging pipes.)

To keep up with this necessary work, we are increasing the monthly fixed charge on your bill to help us even out our revenues over the year so we can repair and upgrade our system. This means less reliance on revenues from how much water customers use, which has become increasingly difficult to predict in recent years given the more frequent and extreme weather fluctuations.

2. How much is my water bill going up?

That depends on the type of customer you are and how you use water. Your bill is comprised of a fixed monthly charge and charges for how much water you use.

Every customer will see an increase to their monthly fixed charge. If you’re like most residential customers who have a 3/4-inch meter, that charge will increase from $8.79 to $11.86 per month.

To help offset the fixed monthly charge, the charge per 1,000 gallons for many customers will see a small decrease in 2017.

Adding up those two elements, if you live in Denver and use 115,000 gallons of water a year in the same way you did in 2016, you can expect to see an annual increase of about $29, which averages out to a monthly increase of about $2.40 a month. (Summer bills are typically higher because of outdoor water use.)

If you live in the suburbs and get your water from one of our 66 distributors, your bill will be higher than Denver resident’s. That’s because the Denver City Charter requires that suburban customers pay the full cost of service, plus an additional amount.

3. You ask me to use less water and then raise my rates. Am I being penalized for conservation?

We always encourage conservation and the efficient use of water. In fact, rates would be higher without our customers’ conservation efforts; we’d have to build more treatment and distribution facilities to keep up with the demand for water.

For example, your conservation efforts are saving Denver Water an estimated $155 million on a new treatment plant and storage facilities because it doesn’t have to be as big as we originally estimated. That’s $155 million we don’t have to recover through rates and charges.

No one likes paying higher bills, but consider the overall value of water. Most Denver Water customers will still pay about $3 for 1,000 gallons of water.

And while rates are going up, Denver Water is committed to keeping water affordable, particularly for the essential indoor water use that is vital for drinking, cooking and sanitation. In 2017, customers will continue to pay the lowest rate for what they use indoors.

 

If you’d like to talk over your bill with someone, contact Denver Water’s Customer Care team at 303-893-2444, and a representative will help you calculate your individual bill impacts, based on your personal water-use information.

Why Denver water costs more in the ‘burbs

In 2017, some suburban customers will pay about $100 more for their water. Here’s how it breaks down.

A section of Main Street in Littleton, Colorado. The city of Littleton has been one of Denver Water’s 66 distributors since 1970. Photo credit: Jeffrey Beall, Wikimedia Commons

By Travis Thompson and Kim Unger

When it comes to water bills, no two customers are alike. Denver Water bills are highly individualized, based on customers’ overall consumption and how much water they use indoors vs. outdoors, among other factors.

To further complicate the matter, your water rates will be higher if you live in the suburbs and receive Denver Water.

But why?

It comes down to history. Denver Water was formed in 1918 to serve the City and County of Denver. For decades, we only could serve water to the suburbs on a year-to-year basis. In 1959, the Denver City Charter was changed to allow permanent leases of water to the suburbs based on two conditions: 1) there always would be an adequate supply for the citizens of Denver, and 2) suburban customers pay the full cost of service, plus an additional amount.

When determining 2017 rates, which you can read about in “Your water bill is going up (slightly). Here’s why,” we worked with our suburban partners to develop a system that provides those communities with a fair and stable additional charge. It looks like this:

First, the fixed monthly charge on your bill is the same no matter where you live. This part of the bill is determined by the size of your meter. Most residential customers have a 3/4-inch meter and will pay $11.86 each month, suburbs and city alike.

For suburban customers, the full cost of service, plus the additional amount per the city charter is then factored in.

Here’s how it breaks down:

Total Service customers pay the highest rates because they receive the same services as Denver customers. That means Denver Water employees work in these outlying areas to operate and maintain the infrastructure, provide customer service and much more. Next year, a typical customer who uses 115,000 gallons of water will pay an average of $678. In 2017, that’s $106 more than a comparable city-dweller.

Read and Bill customers pay the second-highest rates. They receive Denver water, along with some basic services, like reading meters and sending bills. But we don’t provide system maintenance and repairs; that work is handled by the suburban distributor. A Read and Bill customer that uses 115,000 gallons of water can expect to pay about $573 next year, roughly the same as the city equivalent.

And finally, there are Master Meter customers. These are not residential customers, but cities that buy treated water at a wholesale rate.

Learn more about our relationship with residential customers who receive a Denver Water bill, and what 2017 water rates mean for those receiving a Denver Water bill:

 

Why your water bill is going up

New rate structure still rewards conservation while helping us upgrade our system in a fluctuating climate.

By Travis Thompson

We’re getting a lot of questions about our new rate structure.

No surprise there. With multiple tiers of pricing, indoor and outdoor usage totals, and higher fixed charges to meet infrastructure demands and the extreme weather fluctuations of climate change, water rates are complex and often confounding.

Denver Water crews proactively install or replace an average of 60,000 feet of pipe throughout our service area per year. About $11 million will go to main replacement and main improvement in 2016 and $130 million will be invested in main replacements over the next 10 years.

But of all the questions, one stands above all the others.

Is my bill going up?

That’s a straightforward question, and the simple answer is yes.

Not necessarily everyone’s bill, and not by the same amounts. But yes, in general, this year’s charges were designed to help us recover our increasing costs to collect, treat and deliver safe, reliable water, while remaining affordable and encouraging responsible water use among those we serve.

For about half of our Denver residential customers, the annual increase in 2016 will be less than $39, including some who will see a decrease. In the suburbs, about half of the residential customers will see a total increase this year of $100 or less, including some customers with annual decreases.

“The reality is that the cost of water is going to increase as we continue to invest in infrastructure, new supplies, watershed protection, reuse and more,” said Denver Water CEO Jim Lochhead. “We are committed to keeping essential water use affordable and ensuring our customers are getting good value for the increasing investments they will need to make in their water system.”

Answering that question invariably leads to others, especially these three:

1. Are your new rates punishing me for conserving water?
2. If not, why are the biggest residential water users paying less while households using the least amount of water are paying more?
3. Why is my bill so much higher this year than it was last year?

Let’s take them one at a time.

Question 1: Am I being punished for conserving water?

Some customers tell us they worry the new rate structure doesn’t promote conservation.

Not so. Our philosophy remains exactly the same: The more you use, the more you pay. In fact, our new three-tiered rate structure gives customers a more accurate signal of how their water use affects their bills, allowing them to make changes to conserve water.

The old rate structure, which had four tiers, did its job. Customers reduced water use by more than 20 percent in the last 15 years, despite a population increase of 15 percent.

But under the old structure, most residential customers were paying the same price per 1,000 gallons for essential indoor use as they did for outdoor use – even if they weren’t efficient about their water use.

The new structure is much more individualized, with three tiers that help distinguish indoor use from outdoor watering for a typical-sized yard, and then anything additional for those who have larger properties or are being less efficient with their water.

All customers pay the cheapest rates (Tier 1) specific to their needs for essential indoor water use, considered vital for drinking, bathing and sanitation. That rate is calculated by averaging your monthly water consumption on bills dated January, February and March each year.

When you use more water than your unique indoor average, your price per gallon jumps to Tier 2. That price signal tells you you’re using more water, most likely outdoors. We bill this at the second lowest rate so you can still afford to have a healthy landscape. (It takes about 15,000 gallons a month to water an average-sized yard efficiently.)

Water used in excess of that amount jumps to Tier 3, where you are charged the highest rate per 1,000 gallons, alerting you that you may want to cut back on water use that is more about choice than need.

In other words, those using the most still pay the most.

Question 2:  OK. So why am I hearing that bills for the highest users are going down while the lowest water users are paying more? 

There has been talk and media coverage on this point. To be clear, higher water users will always pay higher bills than lower water consumers.

And for 90 percent of our residential customers, bills for those who are higher water users will increase more than for lower water users under the new structure.

The remaining customers at either end of the spectrum are a different story and hardly represent what a typical customer looks like.

Let’s look at the lowest 5 percent of our water users. In many cases, these customers don’t ever use water in some months. They may live in a different state for part of the year, or the property could be vacant because it was abandoned or is waiting on rental tenants, among other reasons.

We raised the fixed charge on everyone’s bill by about $2 a month, which helps us stabilize our revenue throughout the year to account for more frequent extreme weather fluctuations that affect water usage.

That will raise the water bills of these customers by as much as 30 percent. But in almost all of those cases, 30 percent means less than $25 a year.

The highest 5 percent of water users are unique in their own way. Some may have had massive leaks over time, while some may fill large ponds, which creates a huge spike in water use in one month of the year. Others just own really big properties with acres of grass.

Even if they’re efficient users, the size and use of these properties translates into annual water bills totaling thousands of dollars.

Under the old structure, these customers were charged $11 in the city and more than $12 in the suburbs for every 1,000 gallons they used over 40,000 gallons (Tier 4). But less than 1 percent of city customers and less than 3 percent of suburban customers were ever billed at those rates.

With the fourth tier eliminated, the most these customers will pay per 1,000 gallons of water used is $6.24 in the city and $7.87 in the suburbs.

If these customers use water exactly as they did last year, they could see their bills drop by more than $100 this year.

These are the exceptions in the rate formula, not the norm, and they do not reflect the bills of more than 200,000 active single-family residential accounts.

The reality is that about half of Denver residential customers can expect to pay less than $350 total in 2016 for water under the new rate structure. Last year, under the old structure, the total amount paid was less than $300 annually.

Question 3: So why is my bill so much higher this year than last?

We’re not in Hawaii or San Diego, where we can set the daily weather report on repeat. In the Denver metro area, no two days, or months, are alike.

If you look back at the temperature and precipitation numbers for our summer months over the past few years, you’ll see major differences. Because weather drives outdoor water use, these changes make it more difficult to compare your current summer bills to previous summer months.

In 2015, June and July were 5 degrees cooler and brought 5 more inches of precipitation to the metro area than those same months this year. That led to an overall water consumption increase this June and July of 32 percent (about 4.3 billion gallons) compared to last year.

Based on “the more you use, the more you pay,” customers who used more water this summer will pay more than they did last summer.

To figure out why your bill is higher this year, look at the gallons used before comparing the dollar amounts. This information is displayed on a graph on your bill that charts your water use over the previous year.

With hot, dry temperatures in June and July this year compared to last year, customers are using more water (4.3 billion gallons, in fact), which means higher water bills.

 

So where does this leave us?

Updating our rate structure was an exercise in balancing three different, but related needs:

1. Stabilizing our long-term rates and revenues so we can continue to maintain and operate the water system;
2. Continuing to encourage conservation; and
3. Keeping essential water use affordable for our customers.

Read, “Your water bill: Different path, same goals,” to learn more about how this new structure is designed to help us meet these goals.

It wasn’t easy, and we did not make the decision overnight. We spent 18 months weighing the different impacts of this change. And we didn’t do it alone. The process included input from community leaders, as well as voices from all of our customer types and stakeholder groups, including West Slope and environmental representatives. They recommended this rate structure as the ideal way for us to continue to deliver safe, clean and affordable drinking water today and in the future.

But we also knew it was going to be confusing, so our Customer Care team is standing by to assist you. Call 303-893-2444, and a representative will help you calculate your individual bill impacts, based on your personal water use information.

A message in a bottle

History behind Perrier’s ad campaign feat highlights some of our favorite messages.

Perrier began advertising in the U.S. in the late 1970s. Photo credit: Erik Charlton, Flickr Creative Commons

By Sabrina Hall

Perrier is often synonymous with bottled water, and understandably so — after launching an advertising campaign in the late 1970s, Perrier’s success kicked off a new beverage trend that has only grown since then. It’s projected that by the end of this year or early next year, Americans will drink more bottled water than soda.

So it piqued our interest when we saw a recent article about Perrier’s historic ad campaign, “The ad campaign that convinced Americans to pay for water.” This article highlights some of our favorite messages.

1. As we’ve explained to Jay Z, and despite the article’s title, water isn’t free. Perrier and other bottled water companies sell bottled water that costs up to 2,000 times more than tap water. Denver Water customers pay an average of less than $3 for 1,000 gallons of water. While tap water is a bargain to say the least, utilities must operate vast collection, treatment and distribution systems to deliver this water. It’s not free.
2. The bottled vs. tap debate usually includes a lot of misinformation, especially when it comes to water quality and price. Last year, an opinion piece in The Washington Post about the lack of trust in drinking fountains spurred a Twitter chat on the benefits that safe, affordable tap water provide to the community.
3. Forty-five percent of all bottled water in the U.S. comes from the tap. Every so often a story comes along expressing shock that bottled water companies use tap water as the source. We don’t see this as a scandalous topic, as we proudly supply safe, high-quality drinking water to more than 1.4 million people.
4. Ad campaigns can change behavior around water. Perrier’s campaign changed how people consume water, and created a massive new market. Denver Water’s Use Only What You Need campaign successfully achieved a goal on the other end of the spectrum — customers reduced their water use by more than 20 percent in the last 15 years.

In the early 1900s, Perrier supplied Buckingham Palace with “the champagne of waters.” At the same time, across the pond, Denver Water was planning and developing a complex water system to serve a growing population. Fast-forward 100 years, and we’d like to think we also are serving the champagne of water. Our source, after all, is champagne powder.

Your water bill: Different path, same goals

The good, the bad and the confusing about next year’s water rates

This example shows what a bill would like for a customer in the city of Denver if their average winter consumption was 5,000 gallons and they used an additional 10,000 gallons one month.

By Travis Thompson

Imagine if we encouraged people to use as much water as they wanted, instead of only what they needed.

We’d have more money available to invest back into an aging and critical system that more than 1 million people — and counting — rely on for survival every day.

Alas, we don’t have that luxury. Coloradans know better. We can’t simply produce more water, so we will always have to use this precious resource efficiently — a fact recently underscored by the Colorado Water Plan.

But that reality also wreaks havoc on our cost-of-service financial system.

For the past 20 years, the way we’ve charged for water helped drive home the importance of conservation with one simple notion: The more you use, the more you pay.

We kept our fixed monthly charge very low, with a four-tiered consumption charge that increased with the amount of water you used. So a single-family residential customer in Denver paid $6.74 every month and then would pay from $2.75 up to $11.00 per 1,000 gallons, depending on the amount of water they used in each tier.

But a lot has changed in two decades. Our customers have adopted more efficient water use habits (that’s a good thing), cutting their average consumption by more than 20 percent in the last 10 years. And at the same time, our climate conditions have become far less predictable, creating more frequent, extreme weather. That means our revenue is inconsistent, making it harder to plan for and complete repairs and upgrades to our system.

So here’s the good, the bad and the confusing about your new water bill, coming April 2016:

The good: Three tiers, not four

The focus remains on efficient water use — we don’t have a choice in our semi-arid climate — by keeping a tiered structure that charges more for inefficient use.

Because water used indoors is for cooking, bathing, drinking and hygiene, we consider this to be essential for human life and assign this the lowest rate. So we’ll calculate your indoor use by taking your average winter consumption (when you’re not watering your lawn — we hope) to determine how much water you need indoors. Each month, the amount of water you use up to your average winter consumption will be charged at the lowest rate per 1,000 gallons.

That means, if you live in Denver and your average winter consumption is 5,000 gallons, you’ll pay $2.60 per 1,000 gallons up to 5,000 each month.

We also understand the value of having landscapes for gardens or kids and pets to play on. (It’s the reason we provide tools to help with this.) So customers will be allotted an additional 15,000 gallons — what it takes to water an average-sized yard efficiently — for outdoor use, which falls into a second, higher-priced tier at $4.68 per 1,000 gallons.

Anything above that will fall into the third, highest-priced tier at $6.24 per 1,000 gallons, as this is considered inefficient water use, such as over watering your landscape. The more you use, the more you pay. Sound familiar?

The following chart shows how the price per tier compares this year to last. You’ll also notice that the service charge is higher (more on that in a moment).

The average winter consumption (AWC) in the new structure will be determined by averaging the customer’s monthly water consumption on bills dated January, February and March, which is a way of determining essential indoor water use. Chart compares service charge for customers with a ¾-inch meter and tiers for residential customers in the city of Denver.

So does this mean your bill will be higher or lower? Bottom line: With the new individualized bills, it is completely dependent on how you use water.

The bad: Increases

In the past, when water use was low because of a rainy summer or one filled with drought restrictions, we relied on financial reserves to help make up that deficit. But we’re now seeing multiple years with extreme weather swings, causing more frequent dips in revenue. The result is a less reliable revenue stream for us, resulting in more variable rate increases for our customers.

Here’s the reality: The price to collect, store, treat and deliver water is based mostly on fixed costs. No matter how much water is used, we still need to maintain and operate more than 3,000 miles of distribution pipe, 19 reservoirs, 22 pump stations, 30 underground storage tanks, four treatment plants and much more.

That makes it difficult to keep up with these increasingly common revenue swings.

To provide more stability, we’ve raised the fixed monthly charge on residential water bills to $8.79, up from $6.74. This fee takes into account the stress put on the system, and the cost is dependent on meter size. That means larger, commercial users will be billed at a higher fixed monthly charge.

This chart shows that this fixed monthly charge is still among the lowest in the Front Range.

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 current structure (see the rate structure chart above).

This new structure does not change the fact that the cost to deliver clean, reliable drinking water and provide fire protection increases every year. In fact, next year we’ll need an overall 3.8 percent revenue increase. This increase was factored in when we analyzed and created the water charges for 2016.

The confusing: No two customers are alike 

Because the first tier will be based on the amount each individual household uses in the winter, your bill will likely be different than some of your neighbors.

Let’s assume two neighbors both use 15,000 gallons in June. The neighbor with higher outdoor water use (more gallons included in the second tier) will end up paying more for the exact same amount of water. (Remember the emphasis on conservation?)

Even more confusing is that we have different customer classes and types. So when explaining an impact of a rate increase, or a billing structure, we can’t provide a one-size-fits-all number. Everyone is affected differently, depending on your relationship with water.

 

Change is hard. And we’re not alone. The value and price of water is a much-discussed topic across the nation. And, as our good friends at DC Water explained, communication is vital.

That’s why we’ll keep on talking about this as we get closer to April, when the new billing structure kicks in, from informational pieces in your water bills to more information and tools on our website.

Stay tuned.

 

Note: Fixed service charge is dependent on meter size and suburban, commercial and recycled customers will see different charges in each tier. See the full rates chart for treated water here.

Does your water bill seem high? You’re not alone.

 There’s a lot of chatter out there about ‘unusually high’ water bills. We found out why.

By Travis Thompson

Water bills seem to be the talk of the town.

Neighbors are complaining about higher-than-normal water bills in community forums like Nextdoor and Facebook. There have even been news stories on the topic, including one from 9News last week featuring one of our customers.

Many people along the Front Range are asking, “Why is my bill so high?”

It’s a fair question. And since we’re your water department, it’s on us to give you a fair answer. Here’s what we learned:

Real customer’s water use through September.

Water bills were significantly higher this September compared to last September. Why?

Short answer: The weather.

Your water bill includes a chart detailing your water use, month-by-month, for the past year. Look at September 2014; it was an abnormally low water-use month. In fact, September 2014 saw the second-lowest total treated water volume since 1976 for that month. (September 2013, with its historic rain, ranked first.)

But 2015 was different. We had record rainfall in the spring, and customers used a lot less water than normal. In fact, single family residential water use was down 51 percent in June and 36 percent in July from our 2008-2013 baseline averages. See our story, “Water, water everywhere.”

In August, water use remained slightly below average. Then September and October arrived, and were much warmer than normal — September was even the warmest on record. Because of this, single family residential customer water use rose 6 percent and 23 percent from the average for those months.

And if you actually compare this September with September 2014, single family residential water use was 44 percent higher.

Higher water use, higher water bill.

But some customers apparently aren’t buying the weather explanation. On social media, some said they thought their water meters weren’t working. So we checked on that, too.

We read the meters all the time, and we’ll actually stop by your home and examine your meter if you think there’s an issue. Our testing and routine maintenance on our meters shows that less than 1 percent of them fail.

Even if there are issues with the automatic reader on your meter, like a dead battery or faulty wiring, the meter will continue to read consumption, and we can use that to get the correct reading.

In September, 160 customers reported higher-than-normal water bills. Here’s what our investigation turned up:

• We found a water leak in 65 of these homes. Leaks will drive up your bill. Of those, we found 29 toilet leaks and 26 leaks in the irrigation system.

• Another 31 customers were simply running their sprinkler systems too long. We urged them to use this tool to create a zone-by-zone schedule and dial-in their irrigation requirements.

• Many of the homes had old, inefficient fixtures, and we helped customers make simple, water-saving upgrades. You’d be surprised what you save by replacing toilet flappers, showerheads and faucet aerators, not to mention Denver Water’s rebate program for upgrading to qualifying WaterSense-labeled toilets.

In many cases, we discovered multiple factors for higher bills, but all of them were easy fixes to get the customer back on the right track. If you think your bill is too high, you can conduct your own self-audit.

Same customer’s water use through October.

 OK, so when will it get better?

Water bills will soon return to normal, but we’re not out of the woods quite yet.

This month, you’ll be receiving your water bills reflecting October use. Because October was warm, many customers didn’t winterize their irrigation systems when they typically would, thus extending the watering season. So for many customers, those October bills will also reflect a higher water use than the year before.

Fortunately, the snow is here and watering season is over, which will create a more stable bill reflecting only indoor water use.

One last thought

While some of the conversations we saw on social media weren’t exactly positive about Denver Water, we’re actually happy to see that customers are looking at their bills and paying close attention to their water use.

After all, understanding your own water use is a great way to help you realize how efficiently you are using our most precious resource — or what you can do better.

Interested in learning more about your own water history? Register through Denver Water Online and view up to two years of your water use.

Just make sure to factor in the weather.

 

 

 

$40 million and counting: upgrading aging underground reservoirs

The concrete placement for the roof started at 5 a.m. in order to beat the heat of the day. Over an eight-hour span, roughly 25 concrete trucks per hour continuously delivered concrete to four concrete pumping trucks until the roof slab was complete.

According to DenverUrbanism, there are about 5,900 single-family homes in Denver that were built in the 1890s still standing today. And now, there is only one underground water storage tank left in the Denver metro area built that same decade that continues to store treated water today — but not for long.

That’s because Denver Water is in the middle of a $40 million capital project to improve the safety and reliability of Ashland Reservoir. One of the two reservoirs at the Ashland site has already been demolished and the new tank is nearly complete. Once that tank is in service, the second reservoir will be demolished and another built in its place.

This project is a vital part of Denver Water’s work to upgrade its aging infrastructure. In fact, over a decade-long span, Denver Water — through customer water rates — plans to spend about $120 million on treated water storage tank projects.

There are 30 underground reservoirs, just like the two at Ashland, in various city locations that store treated water after it leaves one of Denver Water’s three treatment plants. These reservoirs ensure customers have a reliable water source, especially during times of the day when water use is at its highest, like mornings when people wake up and water use spikes as they all use the toilet, shower and sink at the same time. The tanks also provide a dependable source for the fire department so there never is a concern about having enough water to fight a fire in the community.

On Aug. 18, 2014, the Ashland project reached a significant milestone as the roof was placed on the new storage tank. This required hundreds of concrete truckloads and more than 60 laborers working continuously until the 1,500-cubic-yard roof slab was finished.

And, the local media was there to capture the massive undertaking.

Throughout its morning show, 9News highlighted the concrete placement and importance of the reservoir to the community. Here is one of the live shots:

 

 

7News used the helicopter to provide a visual of the work from the sky:

At the end of the day, CBS4 provided an update from overhead with another helicopter video showing the final product: