Board of Water Supply-proposed rate increase intended to prepare us for 21st century challenges

Cover image: Koolau Mountains from Wahiawa by Helen Thomas Dranga, oil on canvas | wikicommons

Over the next 30 years, the Honolulu Board of Water Supply (BWS) is planning to invest in some 800 O‘ahu island-wide infrastructure projects totaling more than $5.3 billion in expenses. To pay for this massive push for repairs, maintenance, replacement and development, the BWS is planning to increase the rate residents and businesses will have to pay for access to drinking water.

Public hearings have been scheduled beginning in late April and going through May, with the final hearing scheduled for Thursday, May 24 at Mililani Recreation Center #5 from 6:30–8:30 p.m. BWS representatives have also been making presentations at neighborhood board meetings across the island.

According to BWS Chief Engineer Ernest Lau, “The Board of Water Supply is required to be financially self-sufficient and depends on customer fees to operate and maintain O‘ahu’s extensive and complex network of water infrastructure.” This includes five shafts, 13 tunnels, 194 groundwater wells and source pumps, 13 treatment facilities, 171 potable water reservoirs, 192 booster pumps, 21,000 fire hydrants and 2,100 miles of pipes, some of which—like the recent Dole Street water main that burst—are approaching 70 years old.

“Upgrading this infrastructure will result in increased reliability and strengthened resiliency of our water system,” Lau said at the recent May meeting of the Pālolo Neighborhood Board.

The proposed rate structure was shaped over the course of four years with collaboration from stakeholders and technical and financial experts. Community input was taken from BWS surveys that were sent out during the fall of 2017. According to BWS, respondents overwhelmingly supported increased funding for dependability and safety of water supplies through repairs and replacement of pipeline to reduce main breaks, as well as conservation and watershed sustainability.

A 28-member citizens group that includes members from each City Council district, along with representatives from the agriculture, business, travel, golfing and development sectors, along with environmental advocates, has been providing feedback to BWS since 2015.

BWS used this information to develop a Water Master Plan (WMP) assessing the condition of the water system, projecting future water demands and outlining projects to address wear, age, growth and sustainability. A 30-Year Infrastructure and Investment Plan outlines the implementation of the goals of the WMP through a multi-decade strategy that designates when specific water infrastructure projects should be implemented based on risk. And finally, a Long-Range Financial Plan was designed to assure sufficient funding for WMP implementation while BWS maintains its existing and ongoing operations, all while attempting to keep rates affordable.

Here’s what that means for your water rates:

Proposed Residential Water Rates
Proposed Non-Residential Water Rates

First, an “essential needs” tier will be established to provide the first 2,000 gallons of water per month to all residential customers at below cost. The average amount of water used per residential customer is 9,000 gallons per month.

“Currently, only 10 percent of single-family residential customers use fewer than 2,000 gallons per month, so this is designed to reward conservation,” said Lau.

Single-family residential customers’ water-use charges will still see the greatest percentage of increase as legacy subsidies from other customer groups are taken offline. This group will see its percent of total cost rise from 88 percent of cost up to 95 percent of cost. By contrast, multi-unit residential customers will see less of an increase as their current subsidies to other customer classes are reduced: their percentage of burden will actually decrease from 108 percent of cost reduced to 100 percent of cost. And non-residential users will see their burden shifted from the current 120 percent of total cost down to 117 percent of the total cost to provide water service to the City and County of Honolulu.

“Almost everyone’s bills will increase to some extent, but we believe [this structure] will mean that rates and charges are more evenly distributed so everyone is paying their fair share,” said Lau.

A monthly customer charge will be based on meter size to reflect the higher costs associated with larger meters and lower costs for the smaller meters that most customers use. Most single-family residential customers have a 5/8-inch to 3/4-inch meter. Multi-unit residential customers have meters that vary in size from 3 to 8 inches. A monthly customer charge based on meter size would distribute costs for service more fairly.

“Bigger meters will have to pay increasingly higher rates; the idea is to shift the burden to multi-unit residential, businesses and other large water users,” said Lau.

The monthly customer charge will cover the costs of servicing and replacing meters, reading meters, billing and other related customer and administrative services.

BWS is also proposing a monthly fire meter standby charge. Customers who have fire meters currently pay $4.96 per thousand gallons for non-fire use. Charges to fight an actual fire are waived. According to the BWS website, “These customers are not charged for the costs of standby service, which includes meter maintenance. All other customers, whether or not they have a fire meter, are currently paying for the costs of that service and maintenance. A fire meter standby charge is proposed so that customers with fire meters pay for the service provided uniquely to them.”

Lastly, the BWS is proposing up to a 40 percent subsidy on rates to qualified agricultural operations. According to Lau, this discount would apply evenly to small food-producers and large-scale industrial agriculture operations, like the seed and chemical research operations in central O‘ahu.

“But a lot of those large-scale operations, like in Kunia, aren’t BWS customers,” said Lau. “A lot of them have their own wells, or have been allowed to divert water from streams.”

Customers would not see a change in rates until 2019.

Once the new rate structure is approved, BWS will begin implementing the WMP. Beginning in the forthcoming decade, BWS will gradually ramp up pipeline replacement from 6 miles per year to 21 miles per year, which will significantly reduce the instances of main breaks. The investment will result in the number of main breaks decreasing over the coming decade. Crucially, if the rate of replacement remains the same, the strain Honolulu’s increasing population will place on the system will accelerate the rate of main breaks to the point that the BWS finds itself in an untenable situation. BWS estimates that implementation of its WMP will prevent some 4,000 water main breaks by the year 2045.

Projects will also be launched to renew or replace higher risk pumps and reservoirs. “Pumps are the heart of the water system and critical for reliable water delivery,” said Lau.

Currently, rate-payer dollars fund repairs and replacement of critical water system infrastructure, allowing BWS to continue to deliver safe drinking water to the nearly 1 million residents and visitors on O‘ahu at any given minute on any given day. The BWS conducts nearly 30,000 water quality tests, annually, at source and throughout the system. BWS has a role in protecting watersheds as well, and has a responsibility to provide sufficient funding to prepare for potential disaster recovery.

During the ensuing decades, weather projections indicate that the amount or rainwater falling on O‘ahu, and Pacific islands more generally, will decrease due to manmade climate change. BWS is therefore looking at ways to preserve existing water supplies, delaying the need for new ones. And targeted funding for watershed protection will be implemented to help adapt to the changing climate. BWS conducts studies in tandem with the University of Hawai‘i (UH) to prepare for and address climate change, initiating and expanding conservation programs and piloting new technologies. Finally, rate-payer funds finance education programs aimed at teaching Honolulu keiki to develop good water-use habits.

“Our water supply will be made more sustainable by expanding water recycling facilities, establishing new fresh-water wells, building the island’s first seawater desalination plant and developing a sharpened focus on conservation and watershed protections,” said Lau. “Partnerships on-island and throughout the water industry will ensure we remain out front in research and development, as well as best practices.”

These partners include the Hawaii Community Foundation, UH, the Ko‘olau and Wai‘anae Mountains Watershed Partnerships, the Oahu Invasive Species Council, the American Water Works Association and the Water Research Foundation.