Water Board seeks input on planned rate change

The first of four public hearings to get customer feedback on proposed price increases for municipal water on Oahu is scheduled for Thursday.

The Honolulu Board of Water Supply is seeking to raise an additional $60 million over four years through rate increases to help finance a more aggressive schedule for improving the island’s largest water system, which includes 2,100 miles of pipe and serves about 1 million customers.

One goal of the independent city agency is to replace 21 miles of pipe annually over the next 10 years, or about double the current pace.

To do that, BWS wants to dramatically restructure how it bills customers starting in mid-2019.

One of the most significant changes proposed is to have residential customers who use the most water pay more. Customers occupying single-family homes also would have higher rate increases than households in condominiums and apartment buildings, which in some cases would have their water bills reduced over four years. Small increases are also proposed for commercial property owners and users of agricultural water.

The base cost of water for the agency’s average single-family household customer, which uses 9,000 gallons of water a month, is proposed to rise by 19.3 percent over four years.

For the average multifamily household, which consumes 6,000 gallons of water a month, the base cost would dip 0.2 percent over the same period under the BWS plan.

However, when factoring in proposed increases for the monthly cost of water meters that calculate usage, the difference to a monthly bill for a multifamily household over four years could range from a 3 percent decrease to a 9 percent increase, depending on the amount of water used and the size of the meter, according to a BWS presentation.

The same “all-in” cost for single-family households would rise between 15.9 and 21.5 percent for customers using anywhere from 2,000 to 45,000 gallons in a month.

Another big change under the plan would reduce rates for those consuming less and increase rates for those consuming more.

Currently, there are three rate tiers: $4.42 per 1,000 gallons for the first 13,000 gallons, $5.33 per 1,000 gallons for between 13,001 and 30,000 gallons, and $7.94 for every 1,000 gallons beyond that for single-family homes. The rates for multifamily homes are the same, but the use ranges are lower.

As proposed, four tiers with modified use levels would be created, including a range up to 2,000 gallons and a second tier that would be 2,001 to 4,000 gallons for multifamily residences and 2,001 to 6,000 gallons for single-family residences.

More examples of proposed rate changes, which also include a monthly fire meter standby charge, are available at boardofwatersupply.com.

The reason rates for single-family households are proposed to rise more than for multifamily households is because multifamily households currently pay for a greater share of BWS costs: 108 percent compared with 88 percent for single-family customers, the agency said.

Overall, BWS describes its proposed pricing changes as modest and a deviation from drastic past increases that gave customers “rate shock” but were needed to catch up on work for maintaining a system with a lot of old pipes. Seven years ago 45 percent of BWS pipes, or 840 miles’ worth, were over 40 years old.

The agency in 2011 hiked rates 70 percent over five years, which followed a roughly 50 percent increase over five years started in 2006. Before that the last rate increase was in 1995.

Though the new proposed rate increases would generate only an extra $60 million over four years, BWS also would borrow money so that it could spend $271 million more over those four years. The current BWS budget for the fiscal year ending in June is $344 million.

Bryan Andaya, BWS chairman, encouraged the public to engage in the rate-change discussion.

“This is our proposal for modest, incremental increases to allow us to ramp up upgrades to our aging infrastructure,” he said at a board meeting last month.

Added board member Kapua Sproat, “I welcome the feedback we get.”