The Philadelphia Water Department is seeking another rate increase—the fourth in four years. In addition to the 2024 rate hike, it wants 5.9% more. If granted, the total rate increase for this year will be 14%, far above the inflation rate.
If all one read were the “advance notice” the Water Commissioner sent to City Council President Johnson and posted on the Philadelphia Water Rate Board’s web page, you would not know that a rate increase was pending. Here is what the Water Commissioner announced.
“The purpose of this correspondence is to provide the Advance Notice (defined below) to Philadelphia City Council of proposed changes in rates and charges by the Philadelphia Water Department (“Department”) to implement the annual adjustment to the Tiered Assistance Program Rate Rider Surcharge Rates (“TAP-R”) and to revise related water, sewer and fire service connection quantity charges. The proposed changes in rates and charges, if approved by the Philadelphia Water, Sewer and Storm Water Rate Board (“Rate Board”), will take effect on September 1, 2024. The following rates and charges will be impacted by the new TAP-R”
The size of the rate increase is hidden on page 4 of the consultant’s report. “Under the approved base rates and proposed TAP‐R rates, this customer’s monthly bill would increase from $74.81 to $85.27, an increase of $10.46 or about 14%.”
The Philadelphia Water Rate Board, whose members are appointed by the Mayor, sets water and sewer rates. The current board comprises the former water commissioner, the former chief legal counsel for PGW, a real estate developer, an “asset manager,” and the former state consumer advocate.
Despite the Federal Government making billions of dollars available to help consumers through the American Recovery Plan Act, the Philadelphia Water Department has failed to be awarded enough money to avoid four years of rate increases. In a time when Philadelphians are struggling, the Philadelphia Water Department’s response, with the approval of the Philadelphia Water Rate Board and the board’s advocate, has been to increase the burden.
The “annual adjustment,” as it is called, attempts to impose the equivalent of a sales tax on water and sewer bills.
Water rates have risen, so many can’t afford to pay. Under pressure from the City Council, the department developed a low-income plan that allows struggling families to pay a percentage of their income instead of the meter-based bill. The plan, called the Tiered Assistance Program (TAP), creates a shortfall. The difference between what a family pays and what the water and sewer service actually costs is the shortfall.
The issue in the current proceeding is how much is the difference, and just as importantly, who pays for the cost of poverty?
The Water Rate Board, the hearing examiner, and the entity appointed by the Rate Board, which it calls the public advocate, have all agreed that other ratepayers should pay for the cost of this necessary and important social service.
It is the same as putting a sales tax on food to pay for SNAP, the new name of the food stamp program.
People making a little too much to be eligible for help are paying higher water and sewer bills to help those making a few dollars less than they are.
Struggling water ratepayers are just some of the ones who can pay for the subsidy. The Water Department has a surplus, which it hides in its “rate stabilization fund,” which is large enough to pay for the subsidy. The City has millions left in federal dollars. And of course, like many low-income plans, the cost could be borne by the City’s General Fund.
At this year’s rate hike, like in the past four years, there will be no one to represent the public and ask why struggling families should pay for the cost of social programs through a sales tax on a basic necessity: water. Once again, the Water Rate Board has failed to seek public input to choose a public advocate. Instead, the Water Rate Board decided to hire someone who doesn’t represent the public, doesn’t answer to the public, and only answers to the Rate Board itself, to participate in the proceedings.
The Rate Board calls their appointment “the public advocate”—a “public advocate” who doesn’t represent the public.
The Rate Board hired its advocate months ago before public knowledge of this pending rate hike. Nothing in the contract requires its advocate to meet with RCO’s or anyone else. The process was kept so quiet that the Rate Board never sought public comment on who should be hired.
Without the Mayor or Council’s involvement, the Water Rate Board and its advocate will burden Philadelphians with a 14% rate hike, making it the fourth year that water rates have increased far above the inflation rate.
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