This Friday, at 10:00 am, there will be a public hearing on the 4th consecutive Water/Sewer Rate hike. The proposal is for a combined 14% increase.
The issue isn’t whether PWD will increase rates. It’s how large the rate increase will be. The lawyer appointed by the Water Rate Board to represent the public, as in the three previous rate increases, has agreed to an increase. The hearing examiner who approved the last three increases has ruled discussions regarding the efficacy of the water department, the cost of the low-income plan, and whether there are alternatives to the rate increase are inadmissible. The Philadelphia Water Rate Board, comprised of the former Water Commissioner, the former chief legal counsel for PGW, a developer, an asset manager, and the State’s former consumer advocate, will determine how much higher rates will go.
Since the Rate Board hired its public advocate, rates have increased by $214.44 a year. In 2015, the average water bill was $67.40. When the agreed-upon rate increase goes into effect in September of this year, the bill will be $85.27.
During that same period, the Water Department, with the agreement of the rate board, hearing examiner, and the Water Rate Board’s public advocate, has been allowed to retain two surplus funds: $139 million in “a rate stabilization fund” and a “residual fund balance” of $16 million dollars. Both are kept as “cash” in a bank with no retail branches in Philadelphia.
There has been a public outcry against this 4th consecutive rate increase. The Water Rate Board lists the people who have emailed to object. The Hearing examiner and the Water Rate Board’s public advocate have stopped the public from demonstrating at the hearing, by refusing to hold an “in-person” hearing. A participant in the hearings, former Police Captain Skiendzielewski, asked both the rate board’s public advocate and the hearing examiner, who decided to make the hearing virtual as all other government functions are now in person. No one responded. The virtual hearing will begin at 10:00 am on a workday. Anyone wishing to participate must have access to the internet, a device that works with Zoom, and time off during the work day.
Unlike SEPTA, City Council, The Mayor, and the other governmental and quasi-governmental entities, neither the rate board’s public advocate, the hearing examiner, nor a single member required an evening hearing.
While the majority of the rate increase has already been approved, the hearing will decide just how much more the water department will be allowed to raise rates to cover the cost of its anti-poverty Tiered Assistance Plan (TAP). There should be little doubt that, with the unequal distribution of wealth in Philadelphia and the large number of families living in poverty, there is a need to help families keep their water on.
The questions are: Does it matter how efficient the program is? Who pays for the cost of poverty? Are there things the PWD could do to keep the costs affordable?
Dr. Manny Teodoro, the Wager Distinguished Professor at the La Follette School of Public Affairs, University of Wisconsin‐Madison, has studied the TAP program for years and found:
Dr. Teodoro’s research and writing make it clear that small rate increases matter. He found that the financial impact of these higher bills isn’t trivial for families who struggle to make ends meet. “Add it all up, and TAP took nearly 285,000 meals off of poor Philadelphians’ tables from 2018-2022… This analysis actually understates the negative impact of TAP on low-income households. TAP costs drive up prices for every water/sewer customer in Philadelphia–including apartment buildings that serve the lion’s share of the city’s poor and working class families. Those higher prices likely pushed rents higher for low-income households that pay for water through their leases. It’s weird that nobody talks about that when discussing income-based water rates.”
Hall Monitor has asked if the PWD’s consultants or the Rate Board’s public advocate have read Dr. Teodoros’ research and if they are concerned with how many contracts are given to companies outside of Philadelphia and PWD’s ability to use excess water capacity as an economic development tool. We hope to get their answers at the hearing on Friday.
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