City of Philadelphia Passes on Massive Rate Increase

The Board of Directors of BCWSA approved last evening rate increases that will affect all retail & wholesale water and sewer service areas. The increases will be effective July 1, 2008.

The rate increases are a result of massive rate increases by the City of Philadelphia. BCWSA was recently notified that the City of Philadelphia adopted a four-year rate increase commencing on July 1, 2008. The first year’s rate increase imposed by the City is 27.5% for water and the same 27.5% for wastewater services. The cumulative effect of the sewer increases raises BCWSA’s compounded costs for sewage treatment by 45.2% through 2012. BCWSA was able to significantly reduce the impact of the increase passed on by the City through the reduction of budget line item costs including the layoffs of management and staff reductions of non-mission critical employees through attrition over the four year rate increase period. Additionally, BCWSA will restructure its debt to absorb some of the rate increase.

As a result of these reductions, BCWSA’s retail sanitary customers will experience a 12.2% and wholesale customers a 24.2% total rate increase for the 4 year period. Similarly, the City’s compounded water rates will increase 49.7% through 2012. BCWSA was able to mitigate the impact to our customers using the same cost savings thereby reducing the total increase to 9.3% for retail water customers and 24.8% to wholesale customers over the period.

The City of Philadelphia has raised BCWSA’s water & sewer rates 127% and 108% respectively since 2001. As a result of these exorbitant increases and questions on the way the City rate study was calculated, the BCWSA Board of Directors authorized its Solicitor to send a formal letter of objection to the City of Philadelphia on the rate increase in accordance with the contract.

The new rates and municipalities affected:

SEWER SYSTEM

  • Retail sewer service areas: 12.2% increase; both minimum and per gallon components.

(Bensalem, Buckingham, Doylestown, Doylestown Township, Langhorne, Middletown, New Hope, Plumstead, Richland, Richlandtown, and Solebury)

  • Wholesale: 24.2% increase (Currently $2.62/1,000 gallons; raised to $3.25/1,000 gallons)

(Bristol Township, Lower Southampton, Newtown, Newtown Township, Falls, Penndel, Hulmeville, Lower Makefield and Northampton)
WATER SYSTEM

  • Retail water service areas: 9.3% increase; both minimum and per gallon components.

(Langhorne Manor, Lower Southampton, Middletown, New Hope, Penndel and Solebury)

  • Wholesale: 24.8% increase (Currently $2.15/1,000 gallons; raised to $2.68/1,000 gallons)

(Newtown, Northampton, Upper Southampton and Bensalem)