Politics & Government

Saving water means spending money

Jane Rogers is among the many Raleigh residents who have continued to practice the water conservation habits they adopted during the last drought.

She runs the dishwasher only when it's full. She keeps a bucket in the kitchen to capture excess water for outdoor use.

So when City Manager Russell Allen announced last month that an immediate 17percent water rate increase was needed, in part, to offset water sales lost to conservation, she was baffled.

"I just went to the mat," Rogers, 62, said of her conservation efforts. "And I've continued doing the same thing. I'm doing what you asked me to do, and I'm being penalized."

If there's a dirty little secret about water conservation, it's that it often puts pressure on utility operators to raise water rates. Less water consumed, after all, means less water sold.

Raleigh is projecting that its water system will take in 10 percent less revenue than budgeted during the fiscal year that ends June 30. The decline is being attributed to continuing conservation by customers as well as the recent run of rainy weather. And there are fewer new water customers this year because the recession has slowed Raleigh's growth.

The rate increase, which is being discussed at the City Council meeting today, has reignited a debate over how Raleigh's Public Utilities Department should operate.

Council member Russ Stephenson argues that Raleigh needs to move away from borrowing lots of money to pay for costly expansions of its water system. The city is spending about $100 million a year on capital improvements to its public utilities system, and the debt service on that money is driving the need for annual rate increases.

Allen's proposed 17 percent increase would be in lieu of an already planned 15percent increase scheduled to take effect July 1. The city's utility rate model also calls for 9 percent increases in 2011 and 2012, and 7 percent increases in 2013 and 2014.

"We've committed ourselves to building more capacity than we need, and now we're indebted to build it," Stephenson said.

Stephenson wants to use conservation to create new capacity instead of physically expanding the water system. To reduce the burden on water customers, he wants to raise the fees the city charges developers to tie into the system.

"I think we should phase them in and let them go up in response to economic improvements," Stephenson said.

It costs $1,666 to connect a single-family home to Raleigh's system, less than many surrounding systems charge.

Allen said the city plans to review its public utilities capital plan for the next five to 10 years in light of Raleigh's slower growth and the increase in conservation among customers. He said delaying or not going ahead with projects could diminish the need for rate increases after 2010.

"We can't do anything about the debt that's already there," he said.

Bill Holman, director of state policy for Duke University's Nicholas Institute for Environmental Policy Solutions, said changing the way Raleigh's water system operates will take time, with the full benefits of conservation not being seen by rate payers for several years.

He said water rate increases are inevitable as the resource becomes scarcer.

"The city needs to help its customers be more efficient," Holman said. "Provide financial and technical assistance so that people have options to keep their bills low."

Among the items being discussed today is a proposal for the city to offer $100 rebates to residents who install water-efficient toilets. The 17 percent rate increase being proposed amounts to about $5 a month more for the average household.

Although Raleigh's water rates remain among the lowest in the state, Jane Rogers said the timing of the city's proposed increase couldn't be worse.

"I don't need $5 more on my monthly bills right now," she said. "I'm doing everything I can to lessen my monthly expenses."