El Paso Water seeks board approval for rate increase options ahead of major projects

El Paso Water this week presented four budget and rate increase options to the Public Service Board, with the utility's preferred plan raising typical household water bills by roughly $60 per year, according to El Paso Matters.

The four proposals range from no rate increase to monthly hikes of 50 cents, $5, and $7. Current typical household water bills in El Paso total about $91, covering water, sewer, stormwater, and city fees for trash and environmental services. Under the rate increase options, typical bills would climb to between $92 and $98.

In a shift from past practice, the seven-member Public Service Board this year requested multiple budget scenarios and asked the utility to explore the effects of rejecting an annual rate increase for the first time in more than a decade. Gilbert Trejo, El Paso Water's chief engineer and vice president of engineering, operations and technical services, said that some budget options under consideration would require major workforce reductions and scaling back large projects to replace aging pipes and construct new water treatment facilities.

"Our customers expect from us to be affordable, but they also expect from us to have high-quality water services as well," Trejo said, according to El Paso Matters. "Each one of these different options has a different range of effects to the customers."

El Paso Water is managing a record construction cycle. Over the past fiscal year, the utility spent $831 million on capital improvements, compared with an average of $168 million annually from 2018 through 2022. Major projects include the $1.2 billion Bustamante Wastewater Treatment Plant expansion in the Lower Valley and the Pure Water Center, a new drinking water treatment plant that will recycle treated wastewater to drinkable standards and add as much as 10 million gallons per day to the city's water supply.

The larger rate increase option responds to a January water line break in the Northeast that prompted customers to request accelerated pipeline replacement, Trejo said. El Paso Water also plans to expand the Kay Bailey Hutchison Desalination Plant to increase daily production capacity from 27 million to 33.5 million gallons. The utility supplies approximately 108 million gallons daily to customers.

Under the middle-ground budget option, the utility proposes a total budget of $1.3 billion for the upcoming year, up from $1.2 billion in the current fiscal year, with capital spending rising to $888 million. The board will consider the options over the next three months.