Philadelphia water bill rises reduced due to settlement

Philadelphia water bill rises reduced due to settlement


For the next two years, Philadelphia residents’ water bills will increase every year, but the increase will be lower than the originally proposed rate.

The Philadelphia Water, Sewer, and Stormwater Rate Commission has approved a settlement between the Philadelphia Water Authority and the public advocates who have signed up to participate in the rate determination.

The water sector affected by the coronavirus pandemic is trying to increase rates in the next two fiscal years to restore revenue. The full rate hike was cancelled in the spring of 2020, but The matter was reopened in February It plans to raise interest rates by 17.6% in the next two years.

According to the terms of the settlement, the first rate hike of 3.62% will take effect on September 1. For a typical residential customer who uses 500 cubic feet of water per month, the monthly bill will increase from $66.73 to $69.15. The second rate hike of 6.40% is planned to take effect on September 1, 2022, increasing the typical monthly bill to $73.58.

The interest rate hike in the second year may decrease, but it will not increase, depending on the outcome of the special interest rate increase program in early 2022.

If the water department receives certain federal funds that will reduce its operating expenses, or if the department’s fiscal reserve funds exceed a certain level due to federal funds or any other reason, the rate increase in the second year may be reduced.

The settlement agreement reached after multiple public and technical hearings reduced the two-year overall interest rate hike from 17.6% to 10.2%, or possibly lower. City council members urged the water department to find other ways to recover income internally, rather than imposing a heavy burden on residents who have recovered from the economic losses caused by the pandemic.

The Rates Committee said in a statement: “Even if all potential settlement rate increases take effect, the rate increase within two years will fall from US$1409.0 million to US$57.42 million, or 60% less than the department’s initial request. “We have concluded that the rates specified in the proposed settlement are fair and reasonable, and that the proposed settlement between the Philadelphia Water Authority and the public advocate must be in the public interest.”

During the pandemic, after tens of thousands of Philadelphia residents defaulted on the payment of water bills, rates were about to rise.

Implemented by the water sector Prohibition of providing services to residential customers Unable to pay their bills. It was extended several times.

In March, the department stated that approximately 70,000 customers benefited from the water cut-off ban, and another 15,000 customers restored their water supply after the water cut before the pandemic.

The financial aid plan is Available to customers People who owe their bills but did not participate in these programs May be subject to law enforcement measures, Including referrals to collection agencies, starting on August 2.

As part of the settlement, the water department may once again extend the suspension of water shutdowns and provide deferred payment arrangements for customers who default on bills during the pandemic.

The department’s tiered assistance program allows low-income customers to pay a portion of the water bill based on household income. If they pay in time, they can waive the remaining unpaid part.

The settlement requires the water department to report the amount and type of forgiveness to the TAP customer on a monthly basis.

As originally submitted, the proposed interest rate hike will increase the total revenue of the water sector by US$48.9 million in FY2022 and US$92.1 million in FY2023, for a total increase of US$141 million. According to the settlement agreement approved by the Rates Committee, the rate will increase revenue in fiscal year 2022 by $10.4 million, and revenue in fiscal year 2023 will increase by up to $47 million, for a total increase of $57.4 million.

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