Springfield City Utilities customers could see their water bills increase next fall. CU is seeking a water rate increase to keep up with increased costs of maintaining water system infrastructure.
CU will be seeking approval from Springfield City Council for a water rate increase that would result in a roughly $3.25 monthly increase for the average residential customer starting in October 2027, according to a CU news release. The full rate increase would be phased in over three years, with similar increases in 2028 and 2029. CU's Communications Manager Jamie Presley told the News-Leader the rate increase will be 8% each of the three years.
According to the release, CU's water rates have increased by less than 15% since 2019, compared to a roughly
73% increase in the average cost of materials needed to maintain the water system, such as pipe. The water rate increase would fund essential upgrades to aging infrastructure and support projects that secure long-term water supply, ensure compliance with regulatory requirements, and enhance delivery and storage. Once fully implemented, the rate increase is estimated to generate $16.8 million per year, according to the release.
To help lessen the impact of the rate adjustment, CU will introduce a new income-qualified free toilet replacement program for past recipients of the Low Income Home Energy Assistance Program, or LIHEAP. Presley said CU will reach out to LIHEAP recipients in order of highest usage, and customers will not need to need to sign up for the program to benefit. Additionally, the utility will increase the amount for the WaterSense toilet rebate for all customers looking to upgrade. Information on both programs is expected to be shared in the near future.
The request for the water rate increase will come in tandem with approval of CU's 2027 operating budget. The proposed budget, which allows for $874 million in expenditures, will come before council at its Tuesday, Sept. 8 meeting for a public hearing with a vote on the matter anticipating at its following meeting on Sept. 21.
The utility will also be asking for approval of a Transmission Cost Adjustment, or TCA. This change would allow CU to pass along only actual costs of regional transmission system improvements based on one-year estimates trued up annually, instead of baking these costs into base rate increases that require multi-year projections.
Presley said this change would mean customers are paying for only the current costs CU is accruing, over-recoveries are returned in a timely manner if actual costs come in lower than projected, and under-recoveries are trued up more quickly if costs are higher than projected. This will work similarly to CU's current electric fuel and purchased gas adjustments which allow the utility to pass through actual costs of generation fuel, purchased power and natural gas transmission costs.
The request for the change comes as regional transmission system improvement costs continue to grow. Those costs are already passed along to CU rate payers currently, but added into base rate increases. Presley shared that if TCA is approved by council, the Board of Public Utilities would then approve annual updates of the TCA factors in March and it would become effective in October.
Marta Mieze covers local government at the News-Leader. Have feedback, tips or story ideas? Contact her at mmieze@news-leader.com.
This article originally appeared on Springfield News-Leader: Springfield City Utilities proposes water rate hike in fall 2027
