DENVER — Oct. 23, 2019 — The Denver Board of Water Commissioners today adopted rate changes to pay for critical upgrades and projects to keep its system operating efficiently. The new rates take effect Jan. 1, 2020, and would increase monthly bills for most residents by about $1 if they use water at similar volumes to 2019.
“We continue to move forward on a series of major, multiyear projects to ensure we’re delivering safe, reliable water to our customers,” said Denver Water CEO/Manager Jim Lochhead. “Our rates will fund important projects like building a new state-of-the-art water treatment plant and laboratory, expanding a key reservoir and the ongoing replacement of aging water pipes. While costs to maintain and upgrade this system continue to rise, we have worked to keep rate increases as small as possible.”
All residential customers will see a slight increase on both the fixed monthly charge and the price per gallon. Inside Denver, a customer using 103,000 gallons as they did in 2019 would see an overall rise in the monthly bill of about $1. Customers outside the city using that volume would see a monthly increase between $1.15 and $1.36 per month.
Denver Water’s proposed five-year, $1.3 billion capital plan includes about 140 major projects. The projects are focused on maintaining or upgrading infrastructure and ensuring the utility has the flexibility needed to ensure a reliable water supply as weather patterns in the future veer from the past and the population grows.
Among the most important projects receiving money from water rates are building a new, state-of-the-art water treatment plant, installing a new 8.5-mile water pipeline to replace a pipeline that was built in the 1930s, expanding Gross Reservoir to provide a more reliable future water supply, constructing a new water quality lab to ensure Denver Water is meeting the highest quality standards, and an aggressive approach to repair and replace water pipes and more.
A water bill is comprised of a fixed charge that helps ensure Denver Water has a stable revenue to continue the necessary water system upgrades. The fixed monthly charge, which is tied to meter size, is increasing slightly to ensure Denver Water is recovering 20% of its revenue from fixed charges; doing so helps even out revenues over the year.
Denver Water’s rate structure also includes a three-tiered charge for water use (called the volume rate). To keep water affordable, indoor water use — like for bathing, cooking and flushing toilets — is charged at the lowest rate. Essential indoor water use is determined by averaging the customer’s monthly water use on bills dated from January through March each year. This is called average winter consumption. Water use above the average winter consumption — typically for outdoor watering — is charged at a higher price.
Denver Water operates and maintains more than 3,000 miles of pipe — enough to stretch from Los Angeles to New York — as well as 20 dams, 22 pump stations, 30 underground storage tanks, four treatment plants and more. The water provider’s collection system covers more than 4,000 square miles, and it operates facilities in 12 counties in Colorado.
Denver Water serves 1.5 million people in the Denver metro area. The water provider does not make a profit or receive tax dollars and reinvests ratepayers’ money to maintain and upgrade the water system. The utility is funded by water rates, bond sales, cash reserves, hydropower sales and fees for new service (called System Development Charges).
Customers will see more information about their 2020 rates in their bills and on Denver Water’s website over the next few months.
Denver Water proudly serves high-quality water and promotes its efficient use to 1.5 million people in the city of Denver and many surrounding suburbs. Established in 1918, the utility is a public agency funded by water rates, new tap fees and the sale of hydropower, not taxes. It is Colorado’s oldest and largest water utility. Subscribe to TAP to hydrate your mind, and follow us on Facebook, Twitter and Instagram.