Paying to protect our water supply

Pat Mulroy

Sunday, June 17, 2012 | 2:02 a.m.

Earlier this year, the Southern Nevada Water Authority Board of Directors approved an infrastructure surcharge to repay bonds issued for major water system facilities, including the River Mountains Water Treatment Facility and the third straw being tunneled under Lake Mead. While residents have been very supportive of the need for these facilities, which help ensure we can take the water this community needs even under the worst drought conditions, there has been some consternation about the most equitable way to share the responsibility, particularly among the small percentage of residential customers who have 1-inch water meters.

When the SNWA was conducting public outreach, we explained that most residential customers would see an increase of only $5 per month, but encouraged everyone to use the online bill estimator to verify how the infrastructure surcharge would affect their bill. We also noted in a variety of materials that the small number of customers with meters larger than three-quarters of an inch would face proportionally larger increases. Despite the outreach, some residential customers with 1-inch or larger meters have expressed surprise about their increase, which comes to about 65 cents a day.

The reasoning behind the larger increase for 1-inch residential customers is the same reason large resorts and other commercial properties pay a larger share than residential customers: The infrastructure surcharge is not based upon the volume of water consumed, like a water rate is, but rather is designed to pay for the facilities necessary to bring water service to a customer’s tap. In other words, whether you use 100 gallons or 100,000 gallons, certain components must be in place to bring you water. The size of those facilities is largely driven by the maximum volume of water that can be delivered through a meter. Customers rightfully expect that their water agency will be able to deliver all of the water their meters are designed to accommodate; in fact, volume and flow requirements are what drive the meter size builders install. In many cases, the larger meter size is dictated by water pressure requirements and the size of the property.

A 1-inch residential meter can deliver 1,200 more gallons per hour than the more common three-quarters-of-an-inch meter. Only about 5 percent of our community’s residential meters are 1-inch or larger in size. Ninety-five percent of all residential meters are three-quarters of an inch or smaller, and these are ones that will see an increase of about $5 per month. Builders often choose the larger meter because the home is on a larger parcel and they anticipate greater water demand for the property. The tiered pricing system used by SNWA member purveyors reflects that greater anticipated demand.

While customers with larger meters pay a higher monthly service charge and infrastructure surcharge, they are allowed to consume more water within each tier. In the case of residential customers, those with 1-inch meters can purchase roughly twice the water at each tier as their neighbor with a three-quarters-of-an-inch meter. However, not all customers with 1-inch meters use the larger volumes of water anticipated by their builders. As a result, some feel they are being penalized. This is simply not the case, but is rather a reflection of the additional burden the flow requirements for a 1-inch meter place on the municipal water system.

However, in order to help homeowners who feel they do not use enough water to warrant the larger meter, the Las Vegas Valley Water District — which serves the city of Las Vegas and unincorporated parts of Clark County — is offering a one-time free meter downsize to customers. We strongly caution customers considering this offer to carefully evaluate their monthly water use — particularly in the summer, when a home’s water use peaks — to ensure that the additional per-gallon cost for water under the tier system does not offset the reduced surcharge. Any customers who take advantage of the free downsizing offer and later change their minds will be required to pay connection charges when they switch back. These costs can be several thousand dollars, so this is a decision that warrants considerable thought.

The SNWA recognizes that although local water bills are still below the average for Western cities, no increase is ever painless — especially in these economically difficult times. By deferring nearly $400 million in non-critical construction projects, cutting staff by 25 percent and refinancing existing debt, the SNWA was able to delay this surcharge for several years.

The goal of the adopted rate structure was to spread the burden for this shared debt payment as equitably as possible and protect financially vulnerable customers, particularly those on fixed incomes.

Pat Mulroy is general manager of the Southern Nevada Water Authority.