How are utility rates determined?

The Town of Erie financial policies require a formal rate study be performed on the utility fund (water, wastewater, and storm drainage) charges at least every five years. This is an industry best practice to ensure costs are recovered equitably from customer payments.

The most recent study was completed by Raftelis, a nationally recognized independent financial consultant specializing in rate and fee studies for water provider clients across the country. They recommended changes to rates and charges for water and wastewater, with no changes to stormwater drainage charges.

After review, the Board of Trustees then voted to establish the new rates and charges effective in 2021. The changes are revenue-neutral, meaning that the utility fund is anticipated to receive the same amount of revenue in 2021 as it did in 2020. Still, the changes do reflect a focus on the following:

  • Providing customers more opportunity to manage water use and their bills
  • Emphasizing affordability by reducing the monthly service charge
  • Encouraging conservation and rewarding customers who use less water by increasing the volumetric rate

The Town is changing how we charge for water and wastewater service in 2021 to provide affordable, high quality, reliable service that rewards water efficiency. Did you know the cost of water and wastewater services are paid entirely by the rates you pay, not by taxes? Additionally, the Town can use the revenue from water and wastewater rates only for those services; in this way, the Town’s utilities operate as financially distinct “Enterprise” services. To make sure we are consistent with the enterprise approach, the Town, through a nationally-recognized independent consultant, recently reviewed how we charge for these services. Based on this review, we are adjusting rates into a new structure that balances these priorities: affordability, conservation, revenue stability, and equity. 

Under the new rates, higher users pay more and lower users to pay less because the rates more closely reflect the actual costs of service. In the new design, about 60 percent of customers will pay less than they do today, and 17 percent will see an increase of less than $50 a year. Learn more about the rates and the Town’s water conservation programs at www.erie.co.gov/waterrates.

With input from the Board of Trustees and Town staff, Raftelis designed a rate structure that balances these Town priorities:
Town Priorities Graphic

Show All Answers

1. How does the Town supply our community with water?
2. How does the cost of Erie’s water compare to our neighbors?
3. How do I read my utility bill?
4. How will the 2021 rate changes affect my bill?
5. What does my utility bill cover?
6. Are rates going up by 25%?
7. How are utility rates determined?
8. How does the rate structure encourage water efficiency?
9. How is my utility bill calculated?
10. How will water and wastewater rates change in 2021?
11. How does the new rate structure promote affordability?
12. How do we ensure that we don’t subsidize new and future neighbors who tie-in to the system?
13. Are there any changes to how wastewater is charged?
14. We want to do more to conserve – can the Town help?
15. Are there any other ways the Town is helping customers have greater visibility on water use?
16. When do you read the water meters?
17. I’m struggling to pay my water bill – are there resources to help?
18. What kind of payments do you accept?
19. When do you send out the bills?
20. When is my bill due?
21. How is the drinking water quality?