A recent study by Carollo Engineers Inc. recommended a major hike in water and wastewater rates over the next several years for Houston’s residential, commercial, and industrial customers. Houston’s mayor, Sylvester Turner, agrees with these findings, stating that such an increase is necessary for the city to upgrade its infrastructure and continue to supply a reliable and safe source of water to its users.
The study recommended that Houston increase its water revenue by 39.5 percent, while also increasing its wastewater revenue by 60 percent, by the year 2026. This additional revenue would cover a $2 billion project that will upgrade the city’s sanitary sewer system over the next 15 years. This project is part of a consent agreement with the Environmental Protection Agency.
Without any water and wastewater rate hikes, Houston utility system’s cash reserves could also be depleted by 2023, with debt service costs rising above levels allowed in its bond agreements.
The recommended rate hikes would be done over the course of several years. Wastewater revenue would be increased by 20 percent in July 2021, 19 percent in April 2022, and 6 percent in April 2023. Water revenue, on the other hand, would be increased by 9 percent in July 2021, 10 percent in April 2022, and another 10 percent in April 2023. This is a sharp contrast to the rise of residential water rates (12.5 percent) over the last four years.
While the rate hikes may seem unexpected to residents, they have been anticipated for quite some time by Houston city officials. The $2 billion project to address the city’s need for sanitary sewer maintenance that will be funded by these increases is a result of the city’s alleged violations of the Clean Water Act.
The city will be taking on a variety of important tasks, including more regular cleaning and repairing of its lift stations, treatment plants and 5,500 miles of sewer pipes, to address sewer overflows that have sent waste into local streams and bayous. These added expenses are a necessary requirement of the $2 billion consent decree recently approved by a federal judge that serves as an alternative to a federal lawsuit for the city’s alleged violations of the Clean Water Act.
As of October 2018, Houston charged a monthly water bill of $100 on average for residences that used 7,500 gallons. This rate is slightly above average among the 50 largest U.S. cities. According to Mayor Turner, water bills in Houston should still remain below 2 percent of the citywide median household income despite the rate increases.
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