At its meeting today, the Denver Board of Water Commissioners adopted rate changes to fund essential upgrades and new projects to keep Denver Water’s system running smoothly. The new rates take effect Feb. 1, 2019, and monthly bills for most Denver residents will increase by 55 cents if they use water the same as they did in 2018.
“While the cost to maintain and upgrade the water system continues to increase, rapid development inside the city of Denver has brought in more fees from new taps sold, helping to minimize the 2019 rate increase for Denver customers,” said Jim Lochhead, Denver Water CEO/Manager. “The surrounding suburbs, however, had less development than in the past, reducing the amount collected from new tap fees, which means we’ll need to collect more revenue from suburban water rates in 2019.”
Suburban customers who receive water from one of Denver Water’s 65 distributors will see an additional monthly increase added to their volumetric charges. The Denver City Charter requires that suburban customers pay the full cost of service, plus an additional amount. Learn more about how this works: “Why Denver water costs more in the ‘burbs.”
If you live outside Denver and receive water from a distributor under contract with Denver Water, you can expect to see an annual increase between $23 and $41, which is between $1.90 and 3.40 a month (based on an annual use of 102,000 gallons of water).
Pat Fitzgerald, general manager of four Denver Water distributors including the Platte Canyon Water and Sanitation District and chairman of the suburban districts’ Technical Advisory Committee, which reviews Denver Water’s rates annually, provided this statement:
“The advisory committee supports the rate increase. The cost-of-service study used to determine the difference between inside city and outside city customers is fair and reasonable, and the committee had no objections to the results. The expenses are going up, but they’re all projects that are necessary to provide a reliable and safe source of water.”
The major multiyear projects that water rates fund include building a new, state-of-the-art water treatment plant, installing a new 8.5-mile water pipeline to replace a pipeline that was built in the 1930s, expanding Gross Reservoir to provide a more reliable future water supply, constructing a new water quality lab to ensure the highest water quality standards, investing more than $100 million to repair and replace water pipes, and more. There are 158 major projects identified in Denver Water’s five-year, $1.3 billion capital plan.
A customer’s bill is comprised of a fixed charge, which helps ensure Denver Water has more stable revenue to continue the necessary water system upgrades to ensure reliable water service, and a volume rate. The fixed monthly charge — which is tied to meter size — in 2019 is increasing by 55 cents for most residential customers both inside the city and out.
Denver Water’s rate structure includes a three-tiered charge for water use (called the volume rate). To keep water affordable, indoor water use — like for bathing, cooking and flushing toilets — is charged at the lowest rate. Essential indoor water use is determined by averaging the customer’s monthly water use on bills dated from January through March each year. This is called average winter consumption. Water use above the average winter consumption — typically for outdoor watering — is charged at a higher price.
Volume rates for Denver residents will remain the same, but will increase on suburban bills.
Denver Water operates and maintains more than 3,000 miles of pipe — enough to stretch from Los Angeles to New York — as well as 20 dams, 22 pump stations, 30 underground storage tanks, four treatment plants and more. The water provider’s collection system covers more than 4,000 square miles, and it operates facilities in 12 counties in Colorado.
Denver Water does not make a profit or receive tax dollars, and reinvests ratepayers’ money to maintain and upgrade the water system. The utility is funded by water rates, bond sales, cash reserves, hydropower sales and fees for new service (called System Development Charges).
Customers will see more information about 2019 rates in their bills and on Denver Water’s website over the next few months.