Water FAQs - Rates

What is the Safe Drinking Water Act and why is it causing water costs to go up?

The Safe Drinking Water Act was passed by Congress in response to serious contamination found in drinking water at many locations around the country. Congress, in 1986 and 1997, amended the Safe Drinking Water Act to mandate establishment of new regulations for safe drinking water quality. The U.S. Environmental Protection Agency (USEPA) is required to develop an extensive series of rules, which must be carried out by the States and organizations, which supply water to the public. Most of the new regulations involve testing water supplies for various potential contaminants and specification for treatment or other action if limits are exceeded. Testing, of course, raises costs to a limited extent, but if required, treatment and other mitigating actions can be very expensive. Should a well have to be abandoned, for example, the cost of drilling a new well can be very costly, and obtaining new water rights from the State can take many years or involve a very expensive cost reimbursement process.

What state and federal regulation changes have caused water costs to increase?

The primary regulation that is causing costs to increase is the Federal Safe Drinking Water Act (SDWA).

The State and local governments have enacted and are continuing to propose increases in fees, penalties, and operational requirements, which add to the cost of service. Examples include:

  • Expansion of the utility tax
  • Permit processing construction review fee increases
  • Water system operating permits and plan review fee increases
  • Expanded water system operator certification and qualification requirements
  • Conditions, requirements, or necessary improvements to ensure safety of water supplies
  • Conservation Fees

The State Department of Ecology's (DOE) review process for new water right applications is a very lengthy and exhaustive process. Simple requests can take years of political and legal capital before action is taken. The majority of recent DOE decisions have been based on water right applications where health and safety were an issue. The inability of water systems to obtain water rights has resulted in resorting to more expensive alternatives (e.g., installing expensive treatment systems on old sources or using the cost reimbursement provision for priority water right processing).

Does a rate increase mean that KPUD is going to conduct an extensive upgrade to our system?

There are a number of reasons for rate increases and many are in response to rising costs. While a rate increase helps address general maintenance and repairs in water systems, not all system improvements and upgrades can be completed with rate increases.  System improvements and upgrades are scheduled by priority with consideration of need and available resources.

Why should “meter rates” go up when the meters are already paid for?

"Meter rates" are more properly called "Basic Service Charge." They are not just associated with meters, but are designed to fund the fixed expenses of operating a water system. The Basic Service Charge covers the cost of billing, maintaining and operating water system facilities, other facilities related costs, operating water quality monitoring and treatment if necessary, as well as improvements. The Commodity Charge is based on variable costs such as electric power and treatment chemicals.

How much will water rates have to go up in the near future?

Rate increases in the next several years will be determined primarily by increased costs driven by factors such as new regulations, inflation (increasing cost of materials and labor) and adjustments in money set aside for system facilities refurbishment or replacement. The amount of additional expenses caused by new and more rigorous water quality rules will depend on the results of sampling. If extensive treatment is not required and drilling replacement wells is avoided, increases can be minimized. As federal regulations for water quality increase, the cost of service can be expected to follow the same trend.

The District is involved with all sorts of things such as conservation, monitoring, and ground water planning all around the County. Are we (the Kitsap PUD water system customers) paying for those sorts of things through our water bill?

Activities of the type mentioned are not funded by customer rates. The District has several countywide responsibilities that are funded through taxes and grants. These activities include:

  • Water conservation
  • Water resource education
  • Computer mapping water-related information
  • Countywide collection of rainfall and surface, and groundwater resource data
  • Water resource development and study
  • Test well drilling program
  • Water related legislation liaison
  • Watershed Planning
Why do water rates seem less expensive in other locations?

Water rates vary considerably throughout Western Washington.

Monthly costs for a family that uses 1000 cubic feet of water can range from $10 to $50. In general, the larger the system the cheaper it can supply water. Other factors such as the cost of the source of water, cost associated with paying for or upgrading water system facilities, water treatment costs, etc., cause variations in water rates. A water system may keep rates down by not conducting maintenance, not upgrading systems to make them more reliable, or not setting aside funds to replace outdated or aging facilities. That would put such a system in a "pay me now or pay me later" situation. A system that has a large number of industrial or commercial customers can usually charge their residential customers lower rates. Some municipalities use other sources of money to subsidize water rates while others divert money from water rates to other needs.

Many of the systems taken over by Kitsap Public Utility District (KPUD) were in very poor condition. High maintenance and repair expenses increase costs. Most KPUD systems are small and some distance apart; factors which also increase costs of operation and water rates.

What is the district doing to keep rates low?
  • Combining systems to achieve economies of scale
  • Re-examining procedures to improve efficiencies without compromising quality
  • Searching for lower cost suppliers
  • Implementing cost saving technologies
  • Promoting education and conservation measures to limit the need for new expensive source development