Rate Study Results | 2024 and 2025 Rate Adjustments

2023 Utility Rate Study

During 2023, KPUD conducted a comprehensive study of utility rates. The completed study provides an analysis of current water rates and system costs with recommendations for adjusting basic service charges and water consumption rates as needed to cover the utility’s ongoing operations, maintenance, and capital improvement needs.

As a not-for-profit, community-owned utility, Washington State law (RCW 54.24.080) requires KPUD to set water rates that provide revenues sufficient for the payment of utility obligations including operation and maintenance, necessary repairs, replacements, renewals, and bonds and/or loans.

The rate study showed our rates and fees do not provide ample cost recovery for our services and capital infrastructure needs, and revenues must be increased for sustainability. Utility rate recommendations were presented to and discussed by the KPUD Board of Commissioners at the following public meetings held both in-person and virtually: September 12, September 26, October 10, October 24, October 25, and October 31.

The recommendations included several rate structure options involving both fixed and variable charges along with KPUD borrowing through bond issues. These structured increases provide for an equitable distribution of customer costs for base rates and water consumption tiers among customers with similar usage while minimizing increases to the residential water customer with typical usage. At the October 31 meeting, the Board approved a 6-year phased in rate structure that increases overall revenues by 8% in 2024 and 5.5% in 2025 and each subsequent year through 2029, in addition to borrowing through bonding in years 2024, 2026, and 2028.

On November 14, 2023, the Board passed a resolution approving a biennial budget for 2024-2025 which includes adjustments to our rates and fees for 2024 and 2025. The study provided proposed rate and fee increases through 2029; however, the Board will set future rates for these years during the appropriate budget processes. The Board anticipates the revenue increase rate to remain the same for each year after 2025 as mentioned above.

2024 Rate Adjustment

Effective January 16, 2024, KPUD will increase water rates and fees. The monthly Basic Service Charge for water will increase from $37.00 to $39.50.* As a reminder, KPUD bills bi-monthly, so the bi-monthly will reflect two months of billing increasing from $74.00 to $79.00.* Water consumption bi-monthly tier increases vary with a $0.04 increase in Tier 1, $0.13 increase in Tier 2, $0.20 increase in Tier 3, and a $0.50 increase in Tier 4. KPUD bills for two months of service at a time, which is reflected on the fee chart below.

*This applies to the most common sized water connection of a 5/8” meter. Rate adjustments for larger-sized meters are available in the rate table included with this notice.

2025 Rate Adjustment

Effective January 16, 2025, KPUD will increase water rates and fees. The monthly Basic Service Charge for water will increase from $39.50 to $41.28.* As a reminder, KPUD bills bi-monthly, so the bi-monthly will reflect two months of billing increasing from $79.00 to $82.56.* Water consumption bi-monthly tier increases vary with a $0.07 increase in Tier 1, $0.13 increase in Tier 2, $0.21 increase in Tier 3, and a $0.51 increase in Tier 4. KPUD bills for two months of service at a time, which is reflected on the fee chart below.

*This applies to the most common sized water connection of a 5/8” meter. Rate adjustments for larger-sized meters are available in the rate table included with this notice.

Ready to Serve Customers

Ready to serve (RTS) customers are currently billed at half the Basic Service Charge. Effective January 16, 2024, all RTS customers will be charged the full Basic Service Charge.

Basic Service Charge

Due to KPUD’s meter reading/billing schedule, new Basic Service Charges take effect January 16.  The Basic Service Charge does not include taxes, surcharges, or other special assessments. KPUD bills over a two-month cycle. As such the rates reflected below are for two months of service.

Meter Size 2023 Bi-Monthly Rate 2024 Bi-Monthly Rate 2025 Bi-Monthly Rate
5/8” $74.00 $79.00 $82.56
1” $118.38 $138.20 $157.90
1 ½” $192.36 $234.08 $278.80
2” $266.36 $333.26 $409.04
3” $517.94 $652.38 $804.36
4” $739.94 $948.84 $1,191.04
6” $1,109.90 $1,507.52 $2,004.44

Commodity Charges and Block Volumes (Water Consumption)

The cost of water consumption tiers is billed per 100 cubic feet over a two-month cycle. 100 cubic feet of water is equivalent to 748 gallons.

2024/2025 Bi-Monthly Rates
Meter size Tier 1 Tier 2 Tier 3 Tier 4
from to from to from to from
5/8” 0 1,400 1,401 2,400 2,401 4,000 4,001
1” 0 2,200 2,201 3,800 3,801 6,400 6,401
1 ½” 0 3,600 3,601 6,200 6,201 10,400 10,401
2” 0 5,000 5,001 8,600 8,601 14,400 14,401
3” 0 10,000 10,001 16,800 16,801 28,000 28,001
4” 0 14,000 14,001 24,000 24,001 40,000 40,001
6” 0 21,000 21,001 36,000 36,001 60,000 60,001
Price per 100 cubic feet $1.47 / $1.54 $2.21 / $2.34 $3.40 / $3.61 $8.40 / $8.91

Reduced Basic Rate for Low Income Senior/Disabled Persons

KPUD offers a reduced basic service charge for low-income seniors and low-income disabled persons. Eligibility for this reduced charge is based on certain criteria. Applications for participation in this program are available and accepted year-round. Approved applications are valid for up to two (2) years and will be re-evaluated after that time. For more information, including an application, please visit our website at www.kpud.org, email us at customerservice@kpud.org, or call us at 360-779-7656.

Here is the letter sent with November and December customer billings: KPUD Customer Letter 2024