A more than 50% water rate hike for a majority of the Honolulu Board of Water Supply’s customers is set for a vote today.
If adopted by the agency’s board of directors, a new 5-1/2-year water rate schedule will see higher rates phased in, with the first 10% increase kicking in Feb. 1 and the next 10% hike to occur July 1.
Increased rates will
occur each year thereafter until 2028.
On July 1, 2025, the rates will rise 9%; 8.5% on July 1, 2026; 8% on July 1, 2027; and 8% on July 1, 2028, BWS says.
The agency’s customer classes — namely, residential, nonresidential and agricultural — will have these same tiered rate increases. However, nonresidential classes, like businesses, and agricultural customers typically pay higher rates due to higher water use, BWS says.
Although tiered residential rates will vary depending on household size and use, BWS says if new rates are approved, the average single-family household — using about 9,000 gallons of water per month, and comprising 60% of the agency’s customers —
will see their current $60 monthly water bill rise to about $65 per month, starting in 2024.
By 2028 the same single-family household would pay nearly $98 per month — a more than 63% increase over current water bills.
According to the agency, the new rates would apply only to water, not sewer rates. Wastewater charges are determined by the city Department of Environmental Services as well as the Honolulu City Council.
Previously, the agency stated, if adopted, the new water rates would take effect Jan. 1.
However, BWS spokesperson Kathleen Elliott-Pahinui told the Honolulu Star-Advertiser that a February start date appears more likely.
“It was related to timing of when the board may give its approval, and time needed for our IT team to do the programming,” Elliott-Pahinui said via email.
BWS — which is solely funded by ratepayers and receives no funding from property taxes like other city entities — serves 145 million gallons of water per day to
1 million people on Oahu, the agency says.
Its operating expenditures for the current 2024 fiscal year, which began July 1, are about $276.4 million.
During the last rate increase from 2018 to 2023, the water agency says it funded 494 capital improvement projects totaling about $769.5 million to replace aging infrastructure including pipes, pumps and new facilities, BWS says.
Of late, BWS says the COVID-19 pandemic, inflation and the agency’s response to the catastrophic fuel leaks at the Red Hill Bulk Fuel Storage facility in 2021 negatively affected its services.
As far as Red Hill contamination is concerned, due to the subsequent shutdown of the Halawa Shaft — one of Oahu’s four main water supply shafts — and other nearby wells in Aiea and Halawa, BWS had to replace 17.5 million gallons per day of potable water well pumping capacity.
Moreover, BWS says its response to the Red Hill fuel spills meant it was forced to implement enhanced water quality testing and protocols; install additional groundwater monitoring wells; temporarily increase reliance upon other water sources to replace lost water production; develop alternative supply wells to make up for lost water production; and evaluate drinking treatment technology.
During a news conference Tuesday, BWS Manager and Chief Engineer Ernest Lau said the planned water rate hikes were not solely due to the Navy’s fuel contamination crisis.
“Very honestly, we cannot blame the Navy for all of (the) water rate increases,” Lau told reporters. “There are costs in there for Red Hill-related response projects and other operating costs, but the majority of what we’re facing as a utility … is increased costs all over the place.”
He noted that other costs included “electricity, the cost of materials and equipment” and costs “just to operate the water system.”
According to BWS, new water rate increases will raise about $550 million for the agency.
This additional money will continue to fund operations and maintenance and help pay for 132 capital improvement projects, totaling over $1.26 billion, the agency says. Infrastructure investments include 41 miles of new and replacement water pipelines, which are expected to cost $425 million.
The agency also says it plans to use $399 million to find new sources of drinking water as well as fund the planned Kalaeloa Seawater Desalination plant in West Oahu.
As planned, that facility will produce 1.7 million gallons of fresh water daily and be a new source of fresh water to support the needs of Campbell Industrial Park, BWS says.
Meanwhile, on Tuesday, Lau, along with Board Chair Na‘alehu Anthony, announced BWS’ $1.2 billion claim against the Navy to recover costs of the agency’s response to Red Hill.
On Oct. 28, BWS filed its claim, under the Federal Tort Claims Act, with the Navy’s Judge Advocate General’s Corps in Norfolk, Va. That action was done within a two-year statute of limitations period, with regard to those 2021 fuel spills.
Lau said if the Navy, which has six months to respond or reject the claim, denies it, then “the next step would be the filing of a lawsuit in federal court.”
On Tuesday, Patricia Babb, a spokesperson Navy’s Judge Advocate General, told the Star-Advertiser it was in receipt of BWS’ claim and “conducting an evaluation of it.”
The BWS board of directors’ meeting is scheduled to begin at 2 p.m. today in the Boardroom, Public Service Building, 630 S. Beretania St.
