Posts Tagged ‘water rates’

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.

View of mountains looking down Littleton main street.

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:

denver and suburbs 2017 rates infographic

 

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.

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.

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.

$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.

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:

 

Water conservation – It’s not just a campaign, it’s a way of life

One of our 2013 billboards reminding customers to Use Even Less.

One of our 2013 billboards reminding customers to
Use Even Less.

From promoting dry t-shirt contests to encouraging the family dog to lick your dishes clean, we’ve had fun with our “Use Only What You Need” and “Use Even Less” campaigns over the years (check out the 2013 campaign video).

But, advertising was only a piece of the effort that led customers to save 32 billion gallons of water in 2013 (compared to our benchmark of pre-2002 use) – our robust conservation program helped make that possible.

Here’s how:

Conservation technicians Jenelle Rhodes and Rick Alvarado adjust a sprinkler head during an irrigation audit.

Conservation technicians Jenelle Rhodes and Rick Alvarado adjust a sprinkler head during an irrigation audit.

  • We offer rebates, incentives, water audits and more for our residential, commercial and industrial customers.
  • We have rules and programs in place to reinforce best practices, like our summer water use rules, requirements for new properties to amend their soil so it will retain more water, and tiered water rates to incentivize lower water use.
  • In 2013, we also started new conservation programs that are transforming how we will do business in the future.
    • We introduced a water budget program for large commercial customers, allowing them the flexibility to decide where and when to water (though never between 10 a.m. and 6 p.m.) if they reduced water use 35 percent or more. This program helped large irrigators keep landscapes alive while saving 2,500 acre-feet of water this year.
    • We reached out to 8,000 residential high-water users to offer assistance through audits and rebates. By using the same principles as the water budget program, this proactive effort resulted in a savings of more than 16 million gallons of water.
    • We revamped our rebate program to make sure customer rebates are processed more quickly, reducing the wait for a rebate check from 5 to 6 weeks to 1 to 2 weeks.

Let’s take a look at what else was achieved last year:

  • Reyna Yagi, conservation technician, c.evaluates a sprinkler system at an apartment complex.

    Reyna Yagi, conservation technician, evaluates a sprinkler system at an apartment complex.

    Denver Water’s conservation field technicians worked with nearly 1,000 customers with high bills to examine their water use and help them become more efficient, saving them money.

  • Through our partnership with Mile High Youth Corps, we conducted 2,800 water audits and replaced 1,900 toilets.
  • Our high-efficiency toilet distribution program for residential community associations installed nearly 1,100 high-efficiency toilets in apartments and condominiums. One such project resulted in a 40 percent reduction in water use at the complex.
  • Denver Water’s water savers made more than 11,000 stops to educate customers about watering – 5,000 more stops than in 2012.

Water conservation wasn’t new in 2013. In fact, creating a culture of conservation in Denver dates back to 1936 when Denver Water advertised on street trolleys asking customers to help save water. While the modes of transportation have changed, the message remains the same. We believe water conservation must be a way of life in our dry climate and, along with recycled water and new supply, we are committed to ensuring a sustainable supply of water for our customers in the future.

Main breaks 101 – Raising our infrastructure GPA

A meain break at Sheridan Boulevard and Fifth Avenue in July 2013 stopped traffic. Denver Water spent more than $2 million on main breaks and leaks last year.

A main break at Sheridan Boulevard and Fifth Avenue in July 2013 stopped traffic.

The American Society of Civil Engineers’ 2013 grade for America’s drinking water infrastructure was a D, which is no surprise considering there are 240,000 water main breaks each year in the U.S.

With a significant portion of our system installed right after World War II, Denver Water is no stranger to main breaks and leaks. Not only does this mean disruption to our customers, it also means we’re losing our most precious resource – water.

But, we’re working hard to limit these issues and help raise the GPA of the nation’s water infrastructure.

Check out the curriculum for Main Breaks 101:

Home Room – The basics.

Denver Water operates and maintains more than 3,000 miles of pipe – enough to stretch from L.A. to New York. The treated water distribution pipes in our system vary in size, from ½-inch diameter service lines to a 108-inch diameter conduit.

Cracks and breaks occur based on the condition of the water main and its surroundings. Because many factors can contribute to a water main breaking or leaking – including age, pipe material, how corrosive the soil is, water flow, temperature and more – many times we are unable to identify one cause of the problem.

While every main break is different, fixing it quickly is our number one priority – to minimize disruption to our customers who live, work or commute in the area, and to make sure we lose as little water as possible.

A Denver Water crew digs to locate a main break at Lincoln Street and Fifth Avenue in December 2013.

A Denver Water crew digs to locate a main break at Lincoln Street and Fifth Avenue in December 2013.

Accounting – Water lost.

As part of running a water system, every water utility experiences water loss, which is called non-revenue water because we treat it, but it doesn’t get billed to customers. Most of this water is essential to running a water system and maintaining the health and safety of the public – water that goes to firefighting, water quality sampling and flushing, and draining for annual system maintenance and construction, for example. In 2013, our non-revenue water was about 3.5 percent of our total treated water.

We work hard to keep our non-revenue water to a minimum, but unfortunately, water loss due to undetected leakage in the system still occurs. In 2013, we estimate that amount was less than 2 percent of our total treated water. Our goal is to proactively detect non-surfacing leaks and respond quickly to water main breaks across our system, and we estimate that less than 1 percent of the water we treat annually is lost when we find and repair these problems.

When you treat more than 60 billion gallons of water a year, however, the percentage of water lost to main breaks and leaks add up, which is why we have numerous programs in place to proactively identify and minimize leaks, and upgrade and repair our aging system.

Math – Calculating water lost.

How do we know how much water is lost through main breaks and leaks? Without a water meter attached to a main break – which isn’t a viable option – we have to rely on calculations that factor in the size of the pipe, cause of the break (corrosion, temperature, etc.), average flow rates and average water shut-off times. The majority of our repairs are on ¾-inch-diameter service lines and pipes that are between 6 and 16 inches in diameter. Here’s how some of the numbers break down:

  • ¾-inch service line leak = 15,000 gallons lost
  • 6-inch main break = 30,000-156,000 gallons lost
  • 8-inch main break = 35,000-252,000 gallons lost
  • 12-inch main break = 45,000-378,000 gallons lost
  • 16-inch main break = 52,000-1,125,000 gallons lost

Applied Science – What we’re doing about it.

We have proactive programs in place to identify and  minimize the water loss in our system, such as:

  • Leak detection – We’ve saved an estimated 138 million gallons of water over the past 5 years through this program.
  • Pipe rehabilitation and pipe replacement – We install, replace or rehabilitate about 20 miles of new pipe a year – pipes we’ve identified with high potential to break or pipes that can be relined, which helps extend the life of the pipe.PowerPoint Presentation
  • Pressure regulating valve maintenance and replacement – A new program launched in 2012, which allows us to replace or repair the valves that regulate the 160 pressure zones in our system, reducing the number of main breaks caused by these valves.
  • Corrosion control – We have more than 4,000 test sites on pipes throughout our system to help us calculate the rates of corrosion and decide which pipes need to be replaced before they cause major damage.

Homework – How can you help?

You already do! Your water rates fund the programs to maintain, upgrade and replace our aging system, helping us ensure we provide you and the 1.3 million people we serve with clean, safe water every day.

If you see what may appear to be a leak in the street, call us at 303-628-6801.

And be sure to visit our website to learn how to troubleshoot problems and fix leaks at your home or business.

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