I've been seeing more and more water utilities adding infrastructure surcharges, system improvement fees, and other add-on charges that sometimes exceed the actual water costs. Just reviewed a Memphis Light Gas & Water bill where the infrastructure charge was $847 per month on top of a $1,200 water bill. The client has been paying this for three years without question. When I dug into MLGW's tariff, this particular account doesn't seem to qualify for that charge level based on meter size and usage category. Anyone else seeing utilities get creative with these fees? How are you challenging them?
Water utility infrastructure charges - getting out of hand?
Randy, this is becoming epidemic. Charleston Water added a "resilience fee" last year that's basically just a way to fund capital improvements without going through a formal rate case. They're charging it based on meter size, but the tariff language is so vague that they're applying it inconsistently. I've found accounts with identical meter sizes getting charged different amounts. The key is demanding detailed justification for how they calculate these fees for each specific account.
Same issue here in Louisville. LG&E Water added a "system modernization charge" that's supposed to be based on equivalent residential units, but nobody can explain how they calculate ERUs for commercial accounts. I've gotten three different explanations from three different customer service reps. My approach has been to request copies of their calculation methodology in writing. If they can't provide it, that's grounds for disputing the charge.
EPB in Chattanooga has been pretty transparent about their infrastructure charges, but the amounts are still shocking. They publish the calculation methodology on their website, but when you actually run the numbers, some accounts are being overcharged because they're using outdated meter information or wrong customer classifications. I've had success getting refunds by providing current meter certifications and updated service classifications. The key is staying on top of how your accounts are classified in their system.
Here in Spokane, we've actually had some success getting these infrastructure charges reduced by challenging them at the city council level. These aren't regulated utility charges - they're municipal fees, so normal PUC processes don't apply. We organized several commercial customers to attend council meetings and present data showing how the fees were disproportionately impacting businesses. Got the fee structure revised to be more equitable. Sometimes you have to go political rather than regulatory.
Larry, that's a great point about the political approach. MLGW is also a municipal utility, so the city council route might be worth exploring. Wanda, I like your strategy about requesting calculation methodology in writing. I'm going to try that approach with my client's situation. Pete, the equivalent residential unit calculation is a black box at most utilities - definitely worth challenging when the numbers don't make sense.
This thread is really timely for me. I'm seeing similar issues here in Tyler with our municipal utility. They added a "capital recovery fee" that seems to be arbitrarily applied. Based on this discussion, I'm going to start by requesting detailed calculation explanations for all my commercial water accounts. Randy, did you end up getting that $847 monthly charge corrected for your Memphis client?
Howard, still working on the Memphis situation. MLGW initially said the charge was correct, but when I pressed for documentation, they admitted they need to "review the account classification." That usually means they know there's an error but don't want to admit it up front. I'm expecting to get at least a partial adjustment. The key was having detailed backup showing why their charge didn't match their own published methodology.
Randy and Howard, I'm dealing with something similar in Virginia. The water authority added a "system reliability charge" that they claim is based on peak day usage, but the calculation doesn't match any peak usage data I can find. Following the advice in this thread, I'm going to request their calculation methodology and challenge the underlying data they're using. These utilities are counting on customers not questioning these add-on fees, but clearly they're worth investigating.