City Utilities is seeking approval of a water rate increase of 8% each year over three years that it said is needed to maintain clean and reliable water service.
The Board of Public Utilities Thursday voted to proceed with the plan. If the increase is approved by City Council, the average residential customer would pay about $3.25 more per month beginning in October 2027 with similar adjustments planned for each of the following two years.
The proposed increase would generate approximately $16.8 million when fully implemented, according to City Utilities. The adjustment would fund what the utility calls “essential upgrades” to aging infrastructure as well as strengthening system reliability. CU said it would also go towards projects that “secure long-term water supply, enhance delivery and storage, add backup power and redundancy and ensure compliance with regulatory requirements.”
City Utilities’ water rates have increased by less than 15% since 2019, and the utility company said inflation has outpaced its water rates. For example, the average cost of materials needed to maintain the water system, such as pipe, has risen about 73% since 2019, according to CU. And Steve Squibb, CU’s director of natural gas and water engineering/construction, said a new water tower is needed in northeast Springfield for adequate water pressure and fire protection. He said the cost of those towers has increased more than 300% since 2019.
CU’s director of rates and fuels Austin Beshears told the board that the amount customers pay for water would “remain around a penny per gallon, which continues to be a great value for our customers.”
Since toilets use a lot of water, City Utilities plans to introduce a free toilet replacement program for past LIHEAP recipients who meet certain income guidelines. It also plans to increase the amount for an existing toilet rebate for any customers that want to upgrade to a more water efficient toilet.
CU is also asking Springfield City Council to approve a Transmission Cost Adjustment. The utility company is already paying for regional transmission system improvements. “The TCA would simply allow the Board of Public Utilities to approve passing through only the actual costs of these improvements based on more accurate, one-year estimates that are trued up annually, rather than multi-year projections built into the base rate,” CU said in a statement. “These upgrades help strengthen the reliability of our electric system and support long-term service for the community.”
The Board of Public Utilities approved City Utilities’ $874 million Fiscal Year 2027 operating budget on Thursday. Budgeted expenditure includes fuel costs, capital improvements and operational expenses across all utility systems, according to CU.
