The Bowling Green Board of Public Utilities has voted to approve delaying an increase to water rates, and voted to move up an increase to wastewater rates.
However, the changes aren’t expected to have much immediate impact on most customers’ bills, according to Utilities Director Brian O’Connell.
“A customer’s total water and wastewater charges in 2022 will see almost no overall difference from the current rate schedules. It would have an impact on customers’ 2023 rates as the last wastewater adjustment was not scheduled until 2024,” he said in a memo to the board.
The BPU in 2018 had previously approved water rate adjustments to take place April 1, 2021, and April 1, 2022. In 2021 the BPU also previously approved wastewater rate adjustments to take place Jan. 1 of 2022, 2023 and 2024.
“It appears we do not need a rate adjustment in the Water Utility in 2022. Water sales revenue has been better than anticipated and expenses have been within our budgeted amounts,” O’Connell said. “We recommend delaying the April 1, 2022 rate adjustment until April 1, 2023. We estimate the Water funds would see a decrease in revenue of $306,000 from the 2022 budget. If this occurs, the Water fund would basically break even for the year since we estimated a margin of $331,000.”
He also said that the wastewater utility has been lower than anticipated due to declining sales volume.
“The rate adjustment built into the cost of service study assumed no growth in wastewater sales to calculate the revenue needed to operate the utility,” O’Connell said. “The 2022 Wastewater budget estimated a loss of $581,000. This included an estimated $143,600 in additional revenue from the January 1, 2022 rate adjustment.”
He recommended moving the Wastewater rate adjustment from Jan. 1, 2023 to July 1, 2022 and move the Jan. 1, 2024 adjustment to Jan. 1, 2023.
“We estimate the Wastewater fund would see an increase of $71,000 in revenue above the 2022 budgeted amount. This revenue would help to decrease the expected loss in the Wastewater fund,” O’Connell said.
Speaking about the matter at last week’s city council meeting, O’Connell said that it is much easier to add water customers than it is to add wastewater customers.
“We sell water to Grand Rapids and Waterville, Tontogany, Northwestern Water and Sewer District, as well as our inside customers, and so our water sales, they go from as far north as (to Perrysburg), all the way to southern Wood County, and now the district is looking to expand into Henry County with Bowling Green water sales. There’s a much larger potential for water sales than there is for wastewater. The network is just larger,” O’Connell said.
He also noted there are some customers who have water-only bills, and more efficient appliances cut into wastewater sales as well.
“We’re also seeing a smaller amount of wholesale wastewater sales,” he said.
“Ultimately, for most customers, when you look at the combined water and wastewater bill, it will be either a smaller increase or about the same overall cost difference,” O’Connell said of the new rates schedule. “So we think, overall, it should be a benefit to lowering costs for customers, if you look at the combined water and wastewater bills.”
Example customer charges were outlined in O’Connell’s memo to the BPU. Under the new rate schedule approved by the BPU, during 2022, an example residential customer starting in July 1 of 2022 would see a 25-cent increase in the monthly wastewater charges and no change in the water charges, or a 0.7% increase, instead of a 1.8% increase.
An example industrial customer would see a 2.4% increase starting in July of this year, instead of a 2.3% increase. An example commercial customer, however, would see their rate increase by 3.7% starting in July of 2022, instead of 2.5%.
O’Connell acknowledged the increase for commercial customers, but said that because the rate adjustment is taking place in July, the total annual cost “should be about a wash or cheaper than what the rate schedule was planned to be before this change.”
