Average use residential gas and water customer bill projected to go up an average of $1.80 a month
Projections for 2017 show an estimated 2-percent increase on the total water and gas bill as compared to 2016 bills for residential customers of Metropolitan Utilities District. Approximately 80 percent of residential customers use both District gas and water services.
The M.U.D. board today approved the rate increases as part of the 2017 budget resulting in expected 2017 revenues of $122.5 million for the Water Department and $216.3 million for the Gas Department.
Directors approved a 2.5-percent water rate increase to the service charge and commodity component of the bill, effective January 2, 2017. The Water Infrastructure Replacement charge remains unchanged. An average use residential customer will see only a 0.4 percent increase to the total water bill.
- Water use for average residential customer budgeted at 114 CCF or 85,272 gallons
- Increase equates to additional 12 cents a month or $1.38 a year for an average use residential customer
The water rate increase will generate approximately $2.3 million of additional revenue in 2017. The increase is necessary to fund operating expenses, debt service costs, capital improvements and cash reserves for future bond issuances.
Directors also approved a gas rate increase, the first in three years. The average use residential gas customer will see a 1-percent increase to the bill for District operating costs and a 2.8-percent increase related to pass-through costs. The gas service charge and Gas Infrastructure Replacement charge remain unchanged.
- Gas use for average residential customer budgeted at 802 therms, based on normal weather
- Increase equates to additional $1.68 a month or $20 a year for an average use residential customer
The gas rate increase is expected to generate $4.8 million of additional revenue in 2017, which is necessary to fund increased costs associated with pipeline demand and District operating costs, purchased gas costs, capital expenditures and to maintain cash reserves for future bond issuances. A revised Northern Natural Gas contract became effective November 1, 2016. The 20-year contract will increase the pipeline demand cost by $3.5 million annually for the District’s firm natural gas customers.
“Rate design and increases are not taken lightly, and we strive to find a balance between rate increases and operational efficiencies while ensuring that we provide safe, reliable and cost-effective service to our customers,” said Senior Vice-President and Chief Financial Officer Deb Schneider. “It is also critical that the District continues to responsibly invest in infrastructure.”
The District's water rates trend mid-range nationally and regionally when compared with other utilities, while the District’s gas rates remain below national and Midwest averages. As compared to U.S. utilities that participated in the 2016 Memphis Light Gas and Water Survey, Omaha ranked 15th lowest for residential water bills and fifth lowest for residential gas bills.
M.U.D. is one of the few water utilities to operate a system with three water plants, which enhances reliability and the ability to serve during extreme weather conditions or emergency situations. In addition, water availability is a positive when looking at community economic growth opportunities.
Standard & Poor’s Rating Services recently upgraded the District’s water system bond rating to “AA-" with a “stable outlook.” M.U.D. was previously rated “A+” by the rating agency. The rating agency noted the utility’s rates remain “affordable” at 0.7 percent of Omaha’s median household effective buying income.
About Metropolitan Utilities District of Omaha
M.U.D. provides safe, reliable, and cost-effective natural gas and water services to our community. We serve safe drinking water to 208,256 customers in the metropolitan Omaha area and maintain nearly 27,000 hydrants for fire protection. As the fifth largest public gas utility in the United States, we also serve natural gas to 224,950 customers. We are a public utility and proud to be customer-owned. The District is governed by a board of seven directors, elected by our customer-owners.