El Paso Water seeks rate increase to fund expanded construction projects
El Pasoans could see an average increase of $6.37 on their monthly water bills after El Paso Water officials proposed increasing rates for the seventh consecutive year.
CEO John Balliew presented the proposed budget to the Public Service Board Tuesday night. It seeks $724 million for its water and sewer budget — a $326 million increase from 2021. He also presented two options for stormwater, one asking for $71.7 million, the other nearly $90 million, which would triple the 2021 stormwater budget of $30.3 million.
The Public Service Board, which oversees the utility’s operations, is scheduled to vote on a budget Jan. 12. If the rate increases are approved, they will go into effect in March.
The requests for higher rates are driven by the need to expand the city’s water supply, embark on costly upgrades to aging water and sewage lines, and accelerate work on stormwater projects, Balliew said.
The utility is asking for a 9% increase in the stormwater fee, raising the current residential fee from $4.51 to $4.92 a month. The utility also asked for a 9% increase in water rates and a 13% increase in sewer rates for households. That means the average household water and sewer bill will increase from $60.62 monthly to $66.99.
With city charges — including recycling, solid waste collection and the franchise fee — the utility estimates the average monthly residential bill would increase from $113.17 to $119.54.
“Every year, we provide a different budget, based on the construction that we think needs to take place in that coming year. And this year, we think that there’s a significant amount of construction that needs to take place,” Balliew said.
The largest project on the water and sewer side is upgrading the 30-year-old Roberto Bustamante Wastewater Treatment plant, which would cost $500 million over five years.
Balliew said the utility needs another $100 million for generators, fuel storage and water reservoirs to ensure water can be supplied during a weather emergency — a mandate from the Texas Legislature after February’s deadly winter storm. Other projects would include replacing water and sewer lines, which are nearing 40 years old.
On the stormwater side, Balliew said both the El Paso City Council and community at large asked for expedited stormwater projects in the city.
This year’s flooding during a record monsoon season last summer killed three people, caused tens of millions in damage to stormwater projects and damaged homes.
In November, the board approved a measure for Balliew to indefinitely enter into emergency contracts to repair stormwater projects damaged by the 2021 floods without needing further approval from the board.
El Paso Water has completed $222 million in stormwater projects since 2008, when the utility took over as the stormwater authority, but has about $700 million left to complete, according to the Stormwater Master Plan.
Balliew said the board had options for stormwater projects, calling them “alternative one and alternative two.” Completing the $700 million of stormwater projection in the next two decades is “business as normal,” a plan he described as requiring minimal fee increases needed to complete $20- $30 million worth of construction every year.
The other alternative includes a significant rate increase to fund all projects within the next decade. That would require spending $70 million on stormwater construction every year.
“Whether you pick alternative one or alternative two, it’s still a 9% increase (in the stormwater fee) this year,” Balliew told the board.
While the fee increases between alternatives are currently the same, they will change dramatically over the next 10 years. Utility projections estimate the typical residential stormwater fee would be just under $12 a month in 2032 to fund $70 million a year in projects, compared to about $7 for the “business as usual” method.
At least four of the six board members present voiced their support for building stormwater projects within the next decade.
Ivonne Santiago, a civil engineering professor at the University of Texas El Paso, cautioned that the public shouldn’t expect rates to decrease, even after the projects are completed, because of climate change’s impacts on storms.
“I just want to be clear, this is an ongoing daily battle because the storms are going to get worse,” Santiago said.
Mayor Oscar Leeser, who sits on the board, was absent from the meeting.
When asked about affordability, Balliew said in an interview with El Paso Matters that the standard that financial rating companies use compares the bill to adjusted household gross income, so affordability “looks different community to community.”
At the proposed rate of $66.99 a month, or $803.88 a year, and a median household income of $48,903 in El Paso, water costs account for 1.6% according to that standard, even with the rate increase.
“As long as your water (and) wastewater bills are less than 2% of that number, that’s considered affordable, and that’s the measure we use,” Balliew said.
Cover photo: Contractors replacing corroded steel wastewater mains with fiberglass near the Frontera Force lift station in West El Paso. (Danielle Prokop/El Paso Matters)