Rates

Water Rates Frequently Asked Questions

The UTC regulates privately-owned water companies that serve more than 100 customers or have charges that exceed an average of $557 per customer per year. The commission does not regulate the rates or services of city, town or county water systems, Public Utility Districts, cooperative or homeowners’ associations.

How does the commission review rates? 

In reviewing rate increase requests, the commission functions much like a court and must decide the case based on the evidence brought before it. Regulated water companies can propose rate increases at any time, for any amount.

Before a proposed rate increase takes effect, it must be filed with the commission and customers must be notified. Commission staff then reviews the request. Staff’s review is presented to the commissioners for decision at an open public meeting, normally held in Olympia. Many factors can lead to rate increase proposals: old pipes, storage tanks and treatment equipment may need to be upgraded or replaced or operating costs, such as the cost of electrical services or gas for repair trucks, can increase. Companies are not allowed to spend unreasonable amounts on their facilities or operations.

State law requires rates to be fair and reasonable for customers but also allow the company the opportunity to earn a return on capital. The commission can set service standards and penalize companies for poor service, but it cannot deny rates that are needed to cover legitimate costs. Rates are based on each company's specific costs structure and are not based on what customers of other water companies pay. Therefore, rates vary widely among companies.

How do I learn about rate increases?

Companies regulated by the commission must give customers a minimum 30 days advance notice of any proposed rate increases. The notice must explain how the company’s proposal may affect them and how to comment on a proposal before the commission takes action. Once a rate increase is proposed, the commission can keep you updated on the decision status as an interested person.

How often can a water company apply for a rate increase?

There are no restrictions on how often a company can file to increase rates. However, the company has the burden to demonstrate to the commission that it requires additional revenue and must comply with all filing requirements.

What are the steps in a rate case?

The company files a rate increase proposal and necessary financial information with the commission and notifies customers. Rates may go into effect in 30 days unless the commission suspends the increase for further investigation.

Commission staff reviews the company’s financial information, making adjustments for expenses that are unreasonable, for one-time expenditures, and for expenses that should not be paid by customers. If staff believe the request is justified, they will recommend that the commission allow the increase. If staff believes the company has not proven the need for more money, they may recommend a revised, lower rate be approved or that the commission suspend the rate increase and hold hearings.

Before the 30-day period ends, the commission decides whether to approve or suspend the increase at one of its regularly scheduled open meetings. At the open meeting, staff present their recommendations and a summary of customer comments. Representatives from the company and other agencies such as the Department of Health (DOH) may comment and customers are invited to speak.

What does commission staff review during a company’s rate increase proposal?

Commission staff look at five main issues:

1. Actual cost to provide service based on 12 months of financial information, excluding items for which money cannot be recovered from customers (e.g., political contributions and fines);

2. The company's total investment in equipment used to provide service (called rate base);

3. The appropriate profit level (called rate of return) the company should be allowed for its investments;

4. The appropriate amount that each customer class (residential, commercial or industrial) should pay;

5. The rate design. Monthly rates are either flat-rated service (unlimited water usage) or metered service (customers pay for what they use). Metered rates include a base charge, which may or may not include an amount of water, and usage blocks.

What is a surcharge?

A surcharge is a tool a water company can use to fund specific capital projects or unusual expenses, as required by the DOH, to provide water quality or improve quantity. A surcharge has a specific use and is a temporary charge to customers. The surcharge is removed from your bill when the project is paid in full.

My water is fine, why should I have to pay to repair a water system that does not supply water to me?

You benefit from economies of scale: more customers paying for the necessary repairs results in a lower cost per customer.

The commission sets a single rate that applies to all customers on all water systems that a company owns, known as Single Tariff Pricing. An important exception to Single Tariff Pricing occurs when customers on a system vote to pay for voluntary services, such as a surcharge for a backup generator if DOH does not require one or installation of fire flow when the fire marshal does not require it. To implement voluntary surcharges, the company must send ballots to all affected customers. If the majority of voting customers are in favor, then the company will file a proposal with the commission and only customers on the affected water system will pay the surcharge.

Can a water company seek a rate increase if the water quality is not up to Department of Health standards? 

Yes. The company can seek a rate increase to recover its reasonable costs of doing business.

If a water company is fined by the commission or Department of Health, can the company recover the fine in customer rates?

No. Any fines or penalties levied on a water company are removed from expenses used to set water rates.

How do I file a complaint?

Whenever you experience a problem with your water service or have a complaint, contact your service provider first and give them a chance to correct the problem, ask to speak to a supervisor if necessary.

If you cannot resolve your billing, meter reading, establishing service or similar problems directly with the utility, contact the UTC:

• Consumer Help Line: 1-888-333-WUTC (9882)
• Email: consumer@utc.wa.gov
• Address: PO Box 47250, Olympia, WA 98504-7250

When you call the commission, our staff will investigate the issue through an informal complaint. If the problem is not resolved and it involves a possible violation of law, commission rule or the company tariff, you may file a formal complaint. You do not have to be a lawyer to file a formal complaint, but it is a formal legal proceeding with hearings, witnesses and documents.

Help us help you, and report any problems that are not resolved by the company.

When you file a complaint, please provide the following information:

• Your name, physical/mailing address and phone number(s);

• The name of the company you have a problem with;

• Your account number, if possible;

• Whether you have contacted the company with your problem and the result;

• As much detail as possible about the problem; and

• What you would like to see done to resolve it.

UTC authority is limited to ordering refunds, recording violations and penalties, it cannot award you damages. You will need to go to court if you are seeking compensation for damages caused by the company.

If your complaint is about the rates charged by the company in general, the process is different. Customers may file a complaint against rates, but state law requires the complaint to be signed by 25 customers of the water company or 25 percent of the customers, whichever is less. A complaint against rates may also be filed by a mayor, city council or the commission.

When you call the commission, our consumer protection specialists will attempt to mediate the problem with the company by opening an informal complaint. If the problem is not resolved informally and it involves a possible violation of law, commission rule or the company’s own tariff, you may file a formal complaint. You do not have to be a lawyer to file a formal complaint, but it is a formal legal proceeding with hearings, witnesses and documents.

UTC authority is limited to ordering refunds and penalties, it cannot award you damages. You will need to go to court if you are seeking compensation for damages caused by the company.

If your complaint is about the rates charged by the company in general, the process is different. Customers may file a complaint against rates, but state law requires the complaint to be signed by 25 customers of the water company or 25 percent of the customers, whichever is less. A complaint against rates may also be filed by a mayor, city council or the commission.

Is there a law restricting a water company from buying more water systems?

No.

Can a regulated water company purchase a non-regulated water company? 

Yes. The commission does not have jurisdiction over a regulated company purchasing a non-regulated company. After a regulated water company buys a non-regulated water system, the new water system becomes regulated. The regulated company must add the new water system to its tariff and continue to charge the current rates that the non-regulated customers previously paid. The company may seek commission approval to charge a different rate after the new water system is purchased.

How can I submit a comment?

The commission carefully considers public comments before making decisions. Public comments can identify issues that need to be addressed, including the way rates are set and safety concerns.

You can comment on a proposed rate increase at:

• www.utc.wa.gov/comment,

• consumer@utc.wa.gov,

• 1-888-333-WUTC (9882), or

• Mail: UTC, P.O. Box 47250, Olympia, WA 98504.

To make your comments most effective, please:

• Clearly state which company filing you are commenting on, include the docket number if you know it.

• Put your name, mailing address and phone number on the letter or e-mail in case we need to contact you.

• Be as clear and specific as you can about your opinions and your position on the increase.

If you need more information about the status of a particular case, contact the commission.