NBU capital improvements

Project Manager Mike Candelaria walks along the site of NBU's new Gruene water reclamation facility on Tuesday, Oct. 1, 2019. For water and wastewater projects, the facility is the biggest ongoing capital improvement, said Shawn Schorn, chief engineer of water services at NBU. MIKALA COMPTON | Herald-Zeitung

New Braunfels City Council approved the first reading of ordinances allowing New Braunfels Utilities to increase water and wastewater rates Monday evening. 

City council voted to unanimously approve the ordinances during their regularly scheduled meeting on Oct. 14 at 6 p.m. in city council chambers. Their decision follows a special council session held Monday, Oct. 7 during which NBU CEO Ian Taylor and CFO Dawn Schriewer reviewed utility capacities for water, wastewater and electric.

“Growth is what’s driving the capital needs for water and wastewater system … you can see over the next five years we have quite a bit of capital, most of that for water and wastewater,” Taylor said.

NBU has a five-year, $587 million capital improvement plan to upgrade water and wastewater infrastructure and supply.

“At the heart of what’s driving these rate increases are the projects,” Taylor said.

Water

The 2020 rate increases will be across all classes but will be structured so heavier water users are footing more of the bill, Taylor explained.

“One of the key things we’re proposing adding this time to the water ordinance is what’s called a water supply fee — this is a direct pass through, it takes the NBU cost of a certain water supply, passes it directly through to our customers,” Taylor said. “That water supply fee will actually be a net value of our costs minus any income that we get from selling some of (our) water (to other municipalities).”

The water supply fee will be 33 cents per 1,000 gallons, Taylor said.

NBU has two types of charges; a fixed charge that doesn’t change that is dependent on the meter size, and a variable charge that changes depending on the volume a customer uses per month.

The fixed charge for residential with meters 5/8 inch or smaller won’t change, Taylor said.

“The customer charge will remain at $12.80 monthly for those with meters 5/8-inch and smaller, which constitutes more than 98% of the residential class,” Schriewer said. 

Rate changes differ slightly during the off-peak season (October-May) and on-peak season (June-September), Taylor said.

The change in off-peak rates for residential customers using 0 to 7,500 gallons will only be 33 cents, from $1.55 to $1.88, which is entirely the water supply fee, Taylor said.

“The amount, the rate for that 0-7,500 block — that’s the low volume customer we aim to protect,” Taylor said. “We’re not increasing the rate beyond that (for off peak).”

On-peak will increase by 40 cents, Taylor said. 

“So going from $1.55 to $1.95, again that was still the lowest bill among all our peers in this area,” Taylor said.

About 82% of customers fall within the 0-7,500 gallons of use during off-peak, and about 66% of customers fall within this block during on-peak, he said.

The fixed charge for commercial customers will be going up by $2.68 a month for customers with the 5/8 inch meter, Taylor explained.

“And then some commercial facilities are master metered — a strip center for example, so it’ll have different units behind it,” Taylor said. “So we charge per unit, it’s going from $6.10 to $10.”

For commercial off-peak rates, there is a large range again dependent on volume of use. Commercial users can range from having a single toilet for employees to “Schlitterbahn,” Taylor joked.

“These (blocks) are much bigger than residential,” Taylor said. “So these changes, these percent changes are larger than what you saw for residential.”

While a commercial customer who uses 0-5,000 gallons during off-peak will only see a 9.95% increase from $2.17 per thousand gallons to $2.72, a commercial customer using 200,000 gallons or more will see a 50% increase from $2.49 per thousand gallons to $4.07.

“Which is by design — because the more you use the more it’s going to cost,” Taylor said. 

A commercial customer who uses 0-5,000 gallons during on-peak will see a 20.94% increase from $2.17 per thousand gallons to $2.96 and a commercial customer using 200,000 gallons or more will see a 110% increase from $2.49 per thousand gallons to $5.56.

In designing water rates, NBU does all it can to keep rates low, Taylor said.

“The first thing we do is look for opportunities to cut costs; we’ve been able to pull $8.5 million out of our budget,” Taylor said. “Next thing we did was look for new opportunities for revenue, we’ve been able to add $21.4 million dollars of revenue that we did not have before.”

These come through grants, updating the impact fee and others, Taylor said.

“(A major goal) that was really important to us was to protect customers who only use water for domestic purposes such as drinking, bathing, preparing food, those things that are essential to life,” Taylor said. “(Which is why) the goal was to put the majority costs on high volume water users.”

Overall, even the increased water rates remain low throughout the area, Taylor said.

Wastewater

The wastewater rate is designed very similarly to water rates, Taylor said. 

“Goals; again the first one is fund these investments that we need; meet the rating agency criteria and then really there’s even a greater need to find that balance between fixed and variable rate,” Taylor said. “With more water efficiency, that’s less water being discharged into the sewer per customer, so we need to make sure we have the right amount in the fixed charge to cover the costs of the system.”

“Monthly wastewater customer charges will change from $15.31 to $18.50, and volume charges will change from $4.10 to $4.35,” Schriewer said.

Other takeaways

Electric rates will remain the same, Taylor said. 

“Electric is like the good kid, we’re good there. But in water and wastewater capacity we’re deficient,” Taylor said. 

Taylor emphasized NBU has plenty of supply, it’s capacity where NBU is working hard to get on top. 

“By 2023, we’ll have built some breathing room into our water capacity — right now and for the next five years we’re just riding that edge,” Taylor said. “We’re only allowing as many connectors as the system can handle, and we’re working with developers closely on that.”

For more information about proposed NBU rates visit www.nbutexas.com/About-Us/Planning.

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