Stella Werner Office BuildingRockville, Maryland

2 Water Filtration Plants

6 Wastewater Treatment Plants

(WWTP)

3 Water Storage Dam/Reservoirs

60 Water Storage Tanks

53 WWTP Pumping Stations

42,000+ Fire Hydrants

17,000 Solar Panels

0 Water Quality Violations

WSSC At A Glance

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Why Change?

Rate Structure Setting Milestones

Extensive Public Outreach

Commissioners’ Policy Priorities

Basis for Rate Structure Options

Rate Structure Options & Bill Impacts

Timeline for Selection of New Rate Structure

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1. WSSC’s current rate structure was adopted 25 years ago and good management practice dictates periodic review of rate structure alternatives.

2. The Maryland Public Service Commission (PSC) ordered WSSC to develop a new rate structure. The PSC found the existing rate structure to be preferential to low-usage customers.

3. A new rate structure is intended:

• To better align costs to produce and deliver safe, clean water with rates;

• To reflect customer and Commission rate setting policy goals and objectives; and

• To provide a more predictable revenue stream to pay for infrastructure improvements.

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Current 16-Tier rate structure charges customers at their highest level of water use back to the 1st

drop

Common practice is to charge for usage that falls within each tier

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CombinedWater & Sewer Rates Per 1,000 Gallons

Average Daily Consumption (ADC) Effective

Range July 1, 2017

(Gallons Per Day)

0-49 $ 7.95

50-99 9.12

100-149 10.38

150-199 11.83

200-249 13.27

250-299 14.38

300-349 15.29

350-399 15.99

400-449 16.46

450-499 16.95

500-749 17.28

750-999 17.68

1,000-3,999 18.26

4,000-6,999 18.67

7,000-8,999 18.94

9,000 & Greater 19.36

WSSC’sCurrent 16-Tier Rate Structure

June – October 2016: Bi-County Rate Structure Working Group develops viable rate structure options

November 2016 – January 2017: Stakeholder Representative Group meets to review & provide input on rate structure options

April 2017: Cost of Service Study completed

May – July 2017: WSSC holds public informational meetings on rate structure options

June – September 2017: WSSC Commissioners hold 4 special public sessions on rate structure policies & options

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11 public meetings attended by nearly 1,000 WSSC customers

4 special Commission meetings on the rate structure

3 direct mailings to all customers

All WSSC meetings livestreamed and seen by nearly 2,000 viewers

Radio ads on key stations

English/Spanish outreach

Paid social media ads

News releases/earned media

Elected official notification

wsscwater.com/ratestudy

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Policy Considerations Score

Revenue Stability 17

Conservation/Demand Management 15

Rate Stability 15

Affordability 14

Ease of Understanding 12

Ease of Implementation 11

Minimize Customer Impacts 11

Cost Based Rates 6

Experts developed industry best practice rate structure options

Only one customer class per Maryland state law

Only consumption within a tier is billed at that tier’s rate

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Basis for rate design is 3 person household

Typical household size in WSSC service area is 3 people

93% of all bills are for residential customers

75% of residential households are 3 or less people

95% of residential households are 5 or less people

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26 gallons per person per day is the World Health Organization estimate of minimum sanitary needs

80 gallons per day – Minimum sanitary needs for a 3 person household

165 gallons per day – Based on average per person consumption of 55 gpd for a 3 person household

275 gallons per day – Based on average per person consumption of 55 gpd for a 5 person household

9,000 gallons per day – Consistent with WSSC’s top tier in current rate structure

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12

Water & Sewer Tiers (gpd)

Uniform No Tiers in a Uniform Rate

3 BlockInclining

Option A

0-80

Option B

0-165

81-165 166-275

>165 >275

4 BlockInclining

Option A

0-80

Option B

0-80

81-165 81-165

166-275 166-9,000

>275 >9,000

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Annual bill is between 1.0% and 1.3% of Median Household Income

Lowest income bracket is between 4.0% -5.0% of Household Income

Average Family Impact – Using 55 gpd per Person for a 3-person Household

Combined Rate($/kgal)

Current Bill($/quarter)

Bill ($/quarter)

$Change($/quarter)

Uniform $14.73 $205.45 $248.95 $43.50

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3 Block Option A: Annual Bill is 0.8% - 1.1% of Median Household Income

Lowest income brackets is between 3.4% - 4.2% of Household Income

3 Block Option B: Annual Bill is 0.7% - 1.0% of Median Household Income

Lowest income brackets is between 3.0% -3.7% of Household Income

Average Family Impact – Using 55gpd per Person for a 3-Person Household

W/Sewer Tiers (gpd)

CombinedRate ($/kgal)

Current Bill($/quarter)

Bill($/quarter)

$ Change($/quarter)

3 BlockInclining

Option A

0-80 $10.66

$205.45 $210.06 $4.6181-165 $13.43

>165 $17.61

Option B

0-165 $10.41

$205.45 $184.15 ($21.30)166-275 $13.89

>275 $19.96

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4 Block Option A: Annual Bill is 0.8% - 1.1% of Median Household Income

Lowest income brackets is between 3.3% - 4.0% of Household Income

4 Block Option B: Annual Bill is 0.8% - 1.1% of Median Household Income

Lowest income brackets is between 3.4% -4.1% of Household Income

Average Family Impact – Using 55gpd per Person for a 3-Person Household

W/Sewer Tiers (gpd)

CombinedRate ($/kgal)

Current Bill($/quarter)

Bill($/quarter)

$ Change($/quarter)

4 BlockInclining

Option A

0-80 $10.66

$205.45 $200.62 ($4.83)81-165 $12.25

166-275 $14.86

>275 $18.74

Option B

0-80 $10.66

$205.45 $207.34 $1.8981-165 $13.09

166-9,000 $16.16

>9,000 $20.52

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All 5 of the proposed rate structure options are subject to change by the WSSC Commissioners

The Commission could request different or additional options based on public hearing input, the need for further analysis, or other policy reasons

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Your feedback is very important to us

Each speaker has a maximum of 3 minutes

Happy to answer questions after testimony portion of meeting

Written testimony accepted through noon on Oct. 31, 2017

Mail to: WSSC Budget Division, 14501 Sweitzer Lane, Laurel, MD 20707

Email: budgetgroup@wsscwater.com

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Water & Sewer Tiers (gpd)

Uniform$14.73 ($/kgal)

$14.73 ($/kgal)

3 Block Inclining

Option A

0-80 $10.66

Option B

0-165 $10.41

81-165 $13.43 166-275 $13.89

>165 $17.61 >275 $19.96

4 Block Inclining Option A

0-80 $10.66

Option B

0-80 $10.66

81-165 $12.25 81-165 $13.09

166-275 $14.86 166-9,000 $16.16

>275 $18.74 >9,000 $20.52