Portland Rate Increases: The Bigger Picture
Posted on May 7, 2014 by Janice Thompson
Tags, Consumers and Utility Customers, Legislative & Political, Portland Water, Sewer and Wastewater
If you’re registered to vote in Oregon, by now you’ve probably received your voter pamphlet for the May 20th election. If you live in Portland, you might have heard or read about Measure 26-156 that will be on the May 20 ballot. CUB’s board elected to take a neutral stance on this matter, so CUB is here to help shed light on this topic! We’ll be releasing a series of informative blogs before May 20th to help prepare voters just like you to make an educated decision on Measure 26-156. You can follow these updates by visiting our Portland Water, Sewer and Wastewater news feed. We’ll also be announcing new posts on our Facebook and Twitter feeds, so follow us on those channels to keep up with our new water and wastewater series!
Portland’s water and wastewater rates are high, but our city isn’t an outlier in terms of the upward trend of utility rates. For example, in the last decade the average customer costs for utility services in the 50 largest U.S. cities have been steadily increasing at rates comparable to the rate of increases occurring in Portland. Faint comfort when utility bills hit your pocketbook. The reality, though, is that Portland’s rate increases are not a rarity, but indicative of a national trend.
Discussion around Measure 26-156 has involved comparisons between Portland’s rates and those of other cities. But caution is required – let’s take a look at Phoenix, AZ as an example.
Phoenix’s water rates are lower than Portland’s, but the story of why Phoenix’s rates are lower is a bit more complicated than meets the eye. If we focus just on the rates themselves, we miss the fact that Phoenix residents pay for their water in two forms in addition to their water bills: first, an underground water storage tax; and second, a property tax dedicated to paying off a $1.68 billion fund, which the federal government financed for construction of the Central Arizona Project (a significant source of Phoenix’s water). That repayment started at the end, rather than the beginning, of a 20 year construction project and is occurring on a generous 50 year schedule.
When comparing Portland’s rates to those in other cities, it’s most accurate to restrict the comparison to cities that, like Portland, have been required to protect public waterways by addressing combined sewer overflows. In Phoenix’s case, since it’s a newer city than Portland, it was built with separate sewer and stormwater pipes so combined sewer overflows wouldn’t occur. Phoenix’s water rates are lower than Portland’s in part because Phoenix city officials haven’t had to install a “Big Pipe” to address overflows and other problems associated with older water infrastructure.
In general, because Portland has a good credit/bond rating, construction projects by Portland’s utilities are more cost effective than they would be otherwise. On Friday May 9th in our next pre-election blog, we’ll take a look at concerns that Measure 26-156 could possibly hurt Portland’s utility credit rating to the detriment of ratepayers.
Let us know what questions you have about Measure 26-156, or water and wastewater services in general, by contacting Janice Thompson at .(JavaScript must be enabled to view this email address)!
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04/07/17 | 0 Comments | Portland Rate Increases: The Bigger Picture