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Philadelphia Faces Significant Water Rate Increase Proposal

An aerial view showcasing the water infrastructure of Philadelphia against the city's skyline.

News Summary

The Philadelphia Water Department is proposing an 18% rate increase for residential water bills over the next two years, raising typical monthly costs from $82 to $97 by 2024. This would result in an additional $180 in annual expenses for the average household. The Rate Board’s decision, expected by late July, comes as operational costs rise and infrastructure investments are needed. A public hearing is scheduled for July 23, as discussions about assistance programs for low-income residents continue amid these changes.

Philadelphia is facing a proposed rate increase from the Philadelphia Water Department (PWD) that could raise typical residential water bills by 18% over the next two years. If approved, this increase would see monthly bills rise from approximately $82 to around $91 in September 2023, escalating further to about $97 by September 2024. This adjustment translates to an additional annual cost of about $180 for the median customer who uses 430 cubic feet of water monthly.

The proposal, currently under review by the Philadelphia independent Rate Board, marks what could be the largest percentage increase in water bills in at least a decade. Should the increase be sanctioned, by the end of 2026, average water bills would be 45% higher than they were in 2016. The Rate Board is expected to issue its decision by late July.

Reasons for Rate Increase

The PWD has cited rising operational costs as the primary reason for the proposed rate hike. Factors influencing these costs include labor, materials, equipment, and regulatory obligations. Significant investments in infrastructure and compliance with Environmental Protection Agency (EPA) requirements for stormwater management also contribute to the need for increased rates.

For the fiscal year beginning in July, the PWD’s budget is projected to increase from $569 million to $640 million. Discussions among the Rate Board include examining the structure of customer charges and financial projections related to future cost increases. The independent Public Advocate is actively advocating for a more moderate rate increase, asserting that the existing model tends to overburden homeowners and calling for adjustments that would lower proposed rates for residential users.

Water Usage Trends

Current data reveals that the average customer’s water usage has decreased to 430 cubic feet per month, down from an average of 600 cubic feet in prior years. This reduction in consumption could mitigate some impacts of the rate increase for individual customers, yet the overall pricing adjustments will still significantly affect household budgets.

Comparative Water Costs

Nationally, the average combined water and sewer bills have risen by 4.6% from 2023 to 2024, accumulating a total increase of 24% since 2019. In the northeastern United States, water utility costs rank among the highest in the country, averaging nearly $142 per month for residents in the region.

Public Hearing and Assistance Programs

A public hearing has been scheduled to discuss the PWD’s rate request, with a final decision set to be made on July 23. The new rates are expected to take effect on September 1, pending approval. Additionally, the department is reviewing potential modifications to the Tiered Assistance Program (TAP), designed to provide financial relief for low-income customers.

The PWD currently offers a 25% discount on water bills for senior citizens aged 65 and older, contingent on household income. The TAP allows customers to have any outstanding bill debt forgiven after consistently making payments over two years. These assistance options aim to alleviate the financial burden on vulnerable segments of the population during these uncertain economic times.

Future Funding Plans

In response to these changes and to help maintain service without imposing excessive costs on residents, the Philadelphia Water Department plans to pursue additional federal funding aimed at supporting infrastructure improvements. This endeavor is intended to help offset future rate hikes while ensuring the consistent delivery of essential water services.

As the Rate Board prepares for its pivotal decision, the community is urged to stay informed and engaged in the conversation surrounding the proposed rate increases and their implications for Philadelphia residents.