Water Rates Vary Due to Location, Use

Water rates throughout Southeastern Michigan vary greatly, despite the fact that most communities in the region receive their water through the Great Lakes Water Authority (GLWA). The GLWA was approved by Wayne, Oakland and Macomb counties’ Board of Commissioners in October of 2014 and on January 1, 2016 the regional authority became fully operational, ultimately as a result of Detroit’s bankruptcy. The county boards’ approval allowed the authority to form and for the GLWA to lease water and sewer infrastructure from the City of Detroit for 40 years at a cost of $50 million a year. The approval of the GLWA also meant that all Detroit Water and Sewer wholesale customers, with the exception of the City of Detroit (127 in all, 75% of which are in the tri-county area) are now customers of the Great Lakes Water Authority.

The Detroit/GLWA system consists of:

  • 640 miles of large water and sewer pipes
  • Five water treatment facilities
  • One major sewage treatment plant

The map below shows the commodity charge rates for Fiscal Year 2020, as approved by the GLWA. In total, the GLWA represents 127 different communities, not all are shown in the map below though because some receive their services through the smaller water authorities, such as the South Oakland County Water Authority (which is a member of the GLWA and then services communities in that area).   As the map shows, Bruce Township has the highest rate at $75.53 per million cubic feet (MCF). However, majority of the communities in the region that participate in the GLWA have commodity charge rates that range between $4.28 per mcf and $18.53 per mcf. The City of Ecorse has the lowest rate at $4.28 per mcf.

According to the GLWA, the charges vary across communities for a number of reasons. Of course, communities are in charge of their end rates but the GLWA starts with setting their commodity prices by creating a water budget, which is capped at a 4 percent increase each year. This budget is reflective of operating expenses, the cost of infrastructure and other costs. The GLWA then looks at the usage patterns of each community and where it is located in terms of its elevation and distance from a water plant. Location matters because the more electricity that is used to pump water to a community the more a city’s commodity charge will be. So, for example, Bruce Township is in the northern part of Macomb County so transportation is farther. Additionally, it does not have a storage facility (such as a water tower) that would allow it to store water at cheaper rates and distribute to customers. In addition to storage options, cities can also manage their water rates as charged by the GLWA by not exceeding max volume usage during peak hours and conserving.

Leave a Reply

Your email address will not be published.