As you are aware, in the last several years we have experienced several extreme weather events that have stretched our treatment system to its maximum capacity. In addition, continued growth throughout the system and increases in overall demand for water require that CWS expand its treatment capabilities. To plan for this expansion, CWS contracted with Willdan Financial Services to conduct a system-wide rate study and five-year financial plan.
To meet the timeline for this needed expansion, bonds will be issued in late 2024 and construction will begin in 2025. Therefore, the initial rate increase will occur with January 2024 usage. The base retail water rate per meter will be $31.40 and the demand charge will be $5.65 per 1000 gallons after the first 1000 gallons of usage. In other words, the average bill will increase approximately 13%.
Will there be more increases in the future? The short answer is yes. The rate study CWS conducted, as required by Act 605 of 2021 passed by the Arkansas Legislature, produced a five-year rate plan to cover the cost of new bonds for engineering and construction along with keeping pace with inflation over time. The plan calls for a 13% increase in rates for the years 2024 and 2025 then 3% increases for the years 2026 through 2028.
Keeping our water system in top condition requires continual investment, and as a non-profit water utility, our primary means of funding projects is by increasing water rates from time to time.
CWS strives to be equipped and prepared to ensure consistent quantity and high-quality water is delivered to every home in our system every day.