Philly water rate increases are the wrong approach

On Jan. 24, the Philadelphia Water Department formally filed notice of its desire to increase water rates over the next two years. If approved, Philadelphians will see a nearly 12% increase beginning on Sept. 1. The following September, rates would rise by more than 8%. Together, these increases would amount to about $14, bringing the average residential monthly bill to around $84.

Other than telling us to start saving up for higher water bills, what does this mean? Well, it confirms that city government continues to expect ratepayers to swallow higher costs for lower quality services, even when Philadelphia is flush with federal dollars through American Rescue Plan Act funding that could easily be allocated to our water infrastructure needs. This is the wrong approach.

The Philadelphia Water Department is requesting a total increase of about 20% over two years for residential ratepayers. This represents a substantial increase for Philadelphia residents, who are already dealing with rising energy costs and may only be starting to feel some relief from the impact of rising inflation.

In its filing with the Philadelphia Water, Sewer, and Storm Water Rate Board, the Philadelphia Water Department argued that additional revenues are needed to meet “significantly increasing costs.” The department says this increase will generate nearly $144 million in revenue, and goes on to state that inflation is widespread throughout the economy and additional resources are required to pay increasing costs for operations, upgrades, repairs, improvements, and maintenance.

Earlier this month, President Joe Biden announced $500 million for lead pipe replacements and other water service upgrades in Philadelphia. While the federal government is making generational investments to update water infrastructure across America, Philadelphia city government has made a deliberate choice to continue to rely on ratepayers to fund its operations. The Water Department confirmed that this latest infusion of federal funding does not reverse its pursuit of higher water rates. In fact, the Kenney administration is sitting on approximately $800 million in American Rescue Plan Act funding. That money could provide city government with an easy alternative to raising rates and would serve as a lifeline to the Water Department.

PennFuture, the environmental advocacy organization where I work as a campaign manager, has argued previously that American Rescue Plan Act funds should be used to accelerate the city’s Green City, Clean Waters program, which would significantly reduce the stormwater pollution entering our waters. In 2021, we urged the rate board to suspend or stay the proceeding surrounding the Philadelphia Water Department’s last request to increase rates because of the possibility of federal funds being made available to municipalities via federal stimulus efforts, including the American Rescue Plan Act.

Philadelphia’s water problems won’t be solved by continuing to raise rates. Our call for the city to consider the possibility of federal funding to help fix its water problem can no longer be ignored.

However, rather than wisely investing these funds to improve the quality of the city’s waters, the Kenney administration would rather the money sit in an account for a rainy day. This overly cautious approach means higher bills for residents for a basic service. And there is now talk that Congress may claw back unspent funding, meaning the rainy day fund may evaporate without being invested in our residents.

The Philadelphia Water Department needs more money to ensure Philadelphians have clean water, and these federal dollars are the perfect vehicle to accomplish that. These funds are designed to be invested in our infrastructure, creating jobs and delivering the quality water Philadelphians deserve. The fiscally cautious approach does not serve our city at this moment in history. In the next two years, our city needs to be investing dollars, not passing the buck.

At a time when more and more of us wonder if government will ever work for us, Philadelphia’s public officials should take immediate action to reduce water pollution, protect our natural resources, and save residents from unnecessary rate increases. Holding on to federal dollars may look great on a balance sheet, but it’s terrible for our water, our health, and our environment.

Adam M. Nagel is a campaign manager for PennFuture, an environmental advocacy organization with five offices across Pennsylvania. He writes from Philadelphia. @amnagel1