Denver Water is considering raising 2007 water rates to cover a projected $12.2 million revenue shortfall, due in part to dwindling water sales.
For the average single-family home, the rates could rise 3 to 5 percent a year, or about $9 to $15.
Customers who use more than 200,000 gallons of water a year, however, could face steep increases under two of three rate plans being considered.
Under one alternative, residential customers who use more than 350,000 gallons could see a 20 percent increase on their annual bills – a more than $170 jump.
Denver Water, the state’s largest water provider, said it is being pushed to raise rates to compensate for lost revenues as use declines.
During the 2002 drought, Denver Water’s 1.2 million customers cut water use 24 percent over the historical average.
Denver Water commissioners say they are trying to come up with a rate policy that encourages conservation using price and other incentives.
“If you’re already paying $1,000 to $1,400 and your bill goes up $50 in peak months, is that a strong enough price signal to change your behavior?” Commissioner Tom Gougeon asked.
Denver Water customers have complained they are being penalized for conserving water during dry times by continued rate hikes – a complaint noted Thursday by commissioners
“I think we blunted a lot of customers’ desire to help,” Commissioner George Beardsley said.
Denver Water finance officials are proposing new rate structures to give customers more control over their bills by putting a greater emphasis on consumption.
Rates are currently dictated by water consumption and a fixed meter charge, which recovers 10 percent of the rate revenue.
Under a new alternative, the utility would adjust consumption charges, do away with the meter charge and replace it with a lower service charge.
That fixed charge would recover 5 percent of the rate revenue, placing more emphasis on how much water a customer uses.
“On a national spectrum, our service charges … are fairly low,” said Denver Water Manager Chips Barry.
The average residential Denver Water customer who lives inside the city limits currently pays about $282 annually, according to the utility.
The comparable annual bill is $536 in Aurora, $503 in Glendale, and $426 in Highlands Ranch, Denver Water staffers say.
Denver Water’s suburban customers pay an average annual bill of $416, which is in the middle of the pack of other regional customers.
The board will be taking public comment on the 2007 rates at its Sept. 13 meeting and at a citizens’ advisory committee meeting Sept. 21. It anticipates voting on the rates Sept. 27.
Staff writer Kim McGuire can be reached at 303-820-1240 or kmcguire@denverpost.com.
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