MUD Approves Rate Increase

By: WOWT Email
By: WOWT Email

The Metropolitan Utilities District board approved a $405 million operating budget for 2013 on Wednesday that includes $26.4 million for infrastructure replacement projects. Directors approved the budget with water and natural gas rate increases and a two-percent capital facilities charge increase effective January 2, 2013.

The board approved a five-percent water rate increase, which means the average residential water customer with a 5/8-inch meter will see an annual water bill increase from $307.85 to $320.88 for a $13.03 difference. According to MUD, the water rate increase will generate approximately $4 million in annual revenue.

Directors also approved a change to the natural gas rate, which equates to a 2.6 percent increase for the average residential consumer. The average residential gas customer who uses 789 therms a year will see an annual gas bill increase from $580.07 to $595.44 for a $15.37 difference. MUD says the gas rate increase is expected to generate $5.5 million in annual revenue.

“We did not raise rates in 2012, in part because of our effective cost management efforts,” said Deb Schneider, senior vice-president and chief financial officer. “The district needed to raise rates to cover operational costs in 2013, primarily related to rising employee costs, including wages, health care and retirement insurance expenses.”

The district also needs to cover the debt service costs on the 2006 water bonds and the new 2012 water bond issuance. “We remain committed to staying in compliance with all required bond covenants,” Schneider said.

MUD says despite moderate rate increases, the district's natural gas and water rates remain below the national average and comparable to other utilities in the Midwest.

“Our top priority is to provide safe and reliable water and natural gas service well into the future at competitive rates,” Schneider said. “We continue to look at further opportunities to reduce expenses as a critical component of our ongoing management.”

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