Pittsburgh, PA - After input from the community and negotiations with various stakeholders, the Pittsburgh Water and Sewer Authority (PWSA) has filed with the Pennsylvania Public Utility Commission (PUC) a proposed settlement regarding its 2022 and 2023 water, wastewater conveyance, and stormwater rate proposal.
The settlement is still to be reviewed by the presiding PUC administrative law judge, as well as the full Commission, with a final decision expected on or before December 16, 2021.
Additionally, PWSA proposes to establish a new stormwater fee that will restructure how customers are charged for stormwater service. By basing the new fee on the hard or impervious surfaces on a property, we can ensure that all property owners in Pittsburgh contribute a share that is proportional to the amount of runoff generated by their property. This is a more equitable way to charge for stormwater and is different than our current rate structure, which is based on water usage. As part of the implementation of the new stormwater fee, wastewater conveyance rates will decrease since the new stormwater fee will begin to recover the stormwater costs previously included.
To provide customers with safe and reliable water, sewer, and stormwater services, we must invest in the infrastructure we use each day. We are currently implementing an ambitious $1.2 billion capital program that includes replacing water mains, rehabilitating aging sewer lines, constructing new stormwater infrastructure, and implementing the Water Reliability Plan - a series of once-in-a-generation projects to renew key components of our water production and distribution systems.
As a publicly owned and managed water, sewer, and stormwater authority, every dollar we receive from ratepayers is reinvested back into our infrastructure and the improvements we are making to provide high-quality services to our customers.
Impervious surface is the hard surface on a property such as roofs, sidewalks, and parking areas that do not absorb stormwater. These hard surfaces generate stormwater runoff that collects trash and sends polluted water into local waterways. Runoff can also overwhelm our sewer system causing streets to flood, basements to backup, and sewage to overflow into rivers and streams.
In Pittsburgh, the average amount of impervious surface on a property is approximately 1,650 square feet. This is equal to one equivalent residential unit (ERU) of impervious surface, which is the unit of measure for calculating the stormwater fee and is accepted as the industry standard for determining a stormwater fee. The stormwater fee will be applied to all residential and non-residential properties in Pittsburgh in the following way:
Most residential properties, approximately 70%, fall within the Residential Tier 2 classification and will be charged the flat rate of $5.96. Tier 1 is half the amount of Tier 2 or the base rate and Tier 3 is twice the amount of the base rate and the remaining 30% of residential properties fall into these two categories. All non-residential properties will be charged the base rate multiplied by the number of ERU’s on their property. Eligible low-income customers will receive a discount off the stormwater fee.
PWSA has been focusing on improved stormwater management for several years. Currently, several initiatives are underway that will establish a comprehensive approach to managing stormwater. This includes developing a stormwater master plan, updating city codes and ordinances, and constructing innovative stormwater solutions across the city.
After deliberate analysis and input from stakeholders, the stormwater fee will begin to address the wet weather challenges experienced in Pittsburgh. It will provide a dedicated funding source to improve stormwater management, build innovative stormwater infrastructure, reduce sewer overflows, and lessen the amount of pollution entering our rivers and streams.
A stormwater fee based on impervious surface is a more equitable way to charge for stormwater. Our rates are currently based on water usage, which does not consider the amount of runoff generated by a property. Using impervious surface as the standard unit of measure will ensure that each parcel within the city of Pittsburgh is contributing a proportional share to help address our most pressing wet weather challenges. For more information about our plans to manage stormwater, please visit www.pgh2ostormwater.com.
“The new stormwater fee is perhaps the greatest change we have made to our rate structure, and it will significantly change how we fund stormwater management in Pittsburgh,” stated Will Pickering, Chief Executive Officer of the Pittsburgh Water and Sewer Authority. “We appreciate the input received from the public and our stakeholders as we worked to develop the fee. We will continue our outreach and education to residents and property owners to ensure they are aware of how it will be applied to their bill and how it is being used to invest in needed stormwater infrastructure.”
PWSA's rate increase is carefully allocated to increase revenue where it is needed most. The typical residential customer using 3,000 gallons of water per month currently pays $79.34 per month under the existing rates. When the rate settlement goes into effect in early 2022, this is expected to increase to $84.99 in 2022 or by $5.65 per month. In 2023, this is expected to increase to $86.43 or by $1.44 per month.
The typical residential customer enrolled in our low-income customer assistance Bill Discount Program using 3,000 gallons of water per month currently pays $41.77 per month under the existing rates. If the rate settlement is approved, this would change to $43.09 in 2022 or by $1.32 per month. In 2023 this is expected to increase to $44.15 or by $1.06 per month.
With any rate increase, we must consider the affordability of rates and provide our most vulnerable customers with the assistance they need. This settlement includes additional enhancements to existing customer assistance programs that will help customers reduce outstanding balances, save on their monthly bill, and expand current programs to more customers.
Among other benefits, PWSA will double the monthly arrearage forgiveness credit from $15 to $30 for on-time payments made by customers who are enrolled in the Bill Discount Program and on an active payment plan; very low-income customers enrolled in the Bill Discount Program will receive a 50% discount on water usage charges, and all customers enrolled in the Bill Discount Program will receive an 85% discount on the stormwater charge. Additionally, PWSA will continue to waive reconnection fees for all customers in 2022. We are also expanding the Hardship Grant Program to include sewage-only customers, and all verified low-income customers will automatically be enrolled in the Winter Shutoff Moratorium.
The PGH2O Cares team, established earlier this year, will continue its proactive outreach and education to customers who are eligible for our customer assistance programs. Their one-on-one interaction with customers is providing the extra boost many need to enroll in our programs to receive the support they deserve. PGH2O Cares is an essential feature of our existing customer assistance programs, and we are seeing that their efforts are working to build awareness and increase enrollment.
“We appreciate the public’s participation in our rate-setting process and the support from our customers as we make the needed investment in our infrastructure,” said Alex Sciulli, PWSA’s Board Chair. “This is a critical moment in our history, and we must move forward with these improvements to provide current and future generations with the water services they can rely on.”
In June, the PUC hosted six virtual public hearings to receive comment from the public on PWSA’s rate proposal. One such comment resulted in a reduction of the billing rate for residential customers residing in newly constructed townhomes who are required to install a meter greater than 5/8” for fire protection. All public comments were considered by PWSA and various customer advocates in crafting the settlement, which included the Commission’s Bureau of Investigation and Enforcement, the Office of Consumer Affairs, the Office of Small Business Advocate, Pittsburgh UNITED, and the City of Pittsburgh.
After incorporating any changes made by the PUC, the settlement will go into effect on or after January 12, 2022. The new rates will result in a $5,817,958 revenue increase in water revenue, a $6,652,259 decrease in wastewater conveyance revenue, and $17,766,816 in stormwater revenue. In 2023, this will result in a revenue increase of $9,985,328 in water revenue, a $12,029,364 decrease in wastewater conveyance revenue, and a $5,932,965 increase in stormwater revenue.
For more information on the rate settlement and our plans for renewing our water, sewer, and stormwater infrastructure, please visit pgh2o.com/ourwaterfuture.