Beginning January 1, 2012, your water and wastewater utility rates will be increasing. Most of the rate increases are in direct response to increases in the cost of purchased water from the City of Chicago Department of Water and the DuPage Water Commission. This will be the first year of a four-year rate increase plan proposed by the two agencies.
In October 2011, the city of Chicago announced a four-year rate plan that included a 25 percent increase on January 1, 2012, followed by annual increases of 15 percent in 2013, 2014 and 2015. Shortly after, the DuPage Water Commission announced its rate plan to pass along Chicago’s annual rate increases to the member water systems (which includes Naperville), plus an additional charge for its own operating expenses. The DuPage Water Commission rates will be increasing 30 percent on January 1, 2012, followed by annual rate increases of 20, 18 and 17 percent for subsequent years.
The DuPage Water Commission rate increase in the wholesale water rates will appear on your monthly utility bill in the Wholesale Water Rate line item and reflects the cost of purchased water used by the customer.
Additionally, you will notice that the Naperville Retail Water and Wastewater rates will also be increasing on January 1, 2012. The Naperville Retail Water Rate has been increased 6 percent and the Wastewater Rate 3 percent. A 3 percent increase in the Retail Water and Wastewater rates was planned as part of the five-year Cost of Service Rate Study conducted in 2011. The rate study included a 29 percent increase in 2011, with annual rate increases of 3 percent for years 2012 through 2015 in both the Water and Wastewater Utility Funds.
However, the Retail Water Rate will increase 6 percent, which includes the planned 3 percent increase (noted above) plus an additional 3 percent which is needed to properly fund the utility’s operating cash reserve; and is directly attributable to the increase in the cost of purchased water. The utility’s 30-day operating reserve provides the utility liquidity to pay its bills while it awaits payment from customers.
Purchased water is the utility’s single largest expense; any significant increase in purchased water effects the utility’s operating cash reserve funding requirements.
As noted, the new rates will take effect on January 1, 2012, and will first appear on your February utility bill.
We understand that utility rate increases are never welcomed news. This is especially true today as the economy has affected many of your household budgets. The City and the Water and Wastewater Utilities are committed to holding rates down, and we continue to look for areas where we can cut expenses without jeopardizing utility services, system safety and reliability.