Brunswick County responds to recent comments about wholesale water rates, long-discussed rate increases driven by growth, GenX concerns

04.23.2021

Brunswick County responds to recent comments about wholesale water rates, long-discussed rate increases driven by growth, GenX concerns

MEDIA RELEASE

BOLIVIA, N.C. – Brunswick County is responding to recent comments from some wholesale water customers addressing the anticipated impacts to their water rates based on the County’s Fiscal Year 2022 recommended rates.

“Brunswick County has been working with our communities these past several years to address the significant water quality issues we face together,” Chairman Randy Thompson said. “We agreed with our customers’ concerns about PFAS and GenX in our water and developed a plan to ensure we have the best treatment system available to benefit all county water customers for decades to come. However, we also acknowledged together that this would come at a price.

“Brunswick County has worked extremely hard to take every avenue available through legal action and rate studies to reduce the impact on our customers’ rates as equitably and reasonably as possible. At the end of the day, however, the County has no control over how our wholesale customers bill their customers after we sell our water to them. Each wholesale customer must decide how it addresses any impacts through its billing cycles on its own.”

The County is recommending a $2.36 increase to the current wholesale rate per 1,000 gallons used. The County’s cost-of-service study projects this would be an increase of less than $11 a month (or less than $22 per bill for bimonthly billing) to an average wholesale customer’s monthly bill.*

Along with the other recommended rate changes for the County’s retail, industrial, and irrigation classes, these increase are necessary to the debt service from the County’s numerous water infrastructure projects, including the installation of a low-pressure reverse osmosis treatment system, new raw water line, and increased capacity at the Northwest Water Treatment Plant.

Those who receive their water service from one of the County’s wholesale customers should consider their average water use and their utility provider’s current (Fiscal Year 2021) rates when estimating any potential impacts.

Ultimately, it is up a wholesale customer to decide whether they would pass on any increases in their county wholesale rate down to their own customers. A wholesale customer might determine that their current rate structure could absorb all or part of that increase already without any changes to their rate.

Current Water Rates (Fiscal Year 2021)

Note: Customers with lower usage are typically in lower tiers while customers with higher usage are in upper tiers.

RateLower Tier Rate
$/per 1,000 gallons
Upper Tier Rate
$/ per 1,000 gallons
Brunswick County$ 2.85 $ 3.85
Shallotte$ 5.33 $ 7.13
Ocean Isle Beach $ 4.01 $ 4.87
Leland$ 3.49 $ 4.25
Leland Commercial $ 4.00 $ 7.06
Southport $ 5.84 $ 7.43
Oak Island $ 3.68 $ 4.92
H2GO $ 3.50 $ 4.00
Holden Beach $ 3.10 $ 4.10
Bald Head Island $ 6.02 $ 9.86

Two wholesale partners—the Town of Shallotte and the Town of Ocean Isle Beach—recently announced the changes they anticipated to make to their water rates should the County change its wholesale volumetric rate. Again, any changes to the Towns’ rates is at the discretion of their leadership to determine if their current rate structure could absorb all or part of the increase or if increases are necessary.

Other factors such as the towns’ water rate structure, water use, type of use (residential, commercial, etc.), meter size, and other water-related fees also impact an overall water bill.

The following charts show comparisons between the County and either wholesale customer using the current (FY21) retail water rates for all three utilities based on the monthly volumetric use. The County rate is for a 1-inch retail meter. Both Shallotte and Ocean Isle Beach use one rate for all meter sizes and types.

In the interest of consistency, the following comparisons are based on monthly data; both Shallotte and Ocean Isle Beach currently issue bills bimonthly.

Comparison: Brunswick County and the Town of Shallotte FY21 Retail Water Rates

Based on this data, the Town of Shallotte’s current rate structure shows that customers with higher volume usage (typically commercial customers) carry more of the burden of costs than a customer using a lower volume of water (typically residential customers). Shallotte’s current rate structure does not appear to make a distinction between commercial use and residential use at this time.

Brunswick County’s current retail rate structure factors in distinctions between residential and commercial use customers through means such as tiered rates based on meter size and volume use, and separate customer classes for retail, irrigation, and industrial customers.

Comparison: Brunswick County and the Town of Ocean Isle Beach FY21 Retail Water Rates

Based on this data, it appears the Town of Ocean Isle Beach’s current rates are trending higher than the County’s current rate for a 1-inch meter regardless of meter size. Ocean Isle Beach’s current rate structure does not appear to make a distinction between commercial use and residential use at this time.

Cost-of-service studies that follow American Water Works Association guidelines are an essential process to ensure rate structures are providing equitable costs to all customer classes. Since 2019, Brunswick County has worked with Raftelis, one of the foremost financial consultants in the utility sector, to perform the County’s cost-of-service rate analysis when developing the FY22 recommended rates.

It is highly recommended that wholesale customers also regularly conducting these studies for recommendations on how to best structure rates for their residential and commercial customers based on service needs, differentiated tiering based on meter size and/or customer type, or other relevant factors.

Background on the FY22 Recommended Rates

Brunswick County announced the Fiscal Year 2022 (FY22) recommended rates for its four customer classes this past January. Full details about those recommendations are on our website.

Following overwhelming public support to remove these compounds from our water, the Brunswick County Commissioners proactively decided in 2018 to finance and install an advanced low-pressure reverse osmosis treatment system at the Northwest Water Treatment Plant along with efforts to expand capacity at the plant to provide the additional water capacity necessary to sustain the ongoing growth that is critical to the local economy. 

The recommended rates also factor in the loss in revenues due to the recent closure of an industrial customer, expected reductions in revenue from wholesale customers, and expected rate increases for the raw water the County purchases to supply to our customers.

Construction on the project began in May 2020 and the low-pressure reverse osmosis is anticipated to go online June 2023. Learn more about the progress on the Northwest Water Treatment Plant at https://www.brunswickcountync.gov/nwtp/

In 2018, Brunswick County joined other utilities in the region to sue DuPont and Chemours. The County is seeking monetary damages from Chemours to hold it responsible for the millions of dollars it is spending to install a new treatment system necessary to remove PFAS contaminants. The lawsuit remains active and ongoing. Any proceeds received will be used for the benefit of all customer classes. How any proceeds from litigation would be returned has not been analyzed nor determined at this time.

Brunswick County receives several questions if it can use COVID-19 related federal funding to cover payments for the Northwest Water Treatment Plant project. The federal funding Brunswick County received in 2020 through the Coronavirus Relief Fund were restricted to pandemic- and health-related expenditures only.

For funding announced through the American Rescue Plan, more guidance from the federal government is necessary on what criteria local governments must meet for any expenditures moving forward and whether infrastructure projects might qualify. This future guidance from the federal government is essential to ensure that county staff and the Board of Commissioners use these funds as effectively as possible over the 3.5 years of eligibility, especially since a lot is still unknown about how long COVID-19 could continue to threaten public health in the years to come.

More information about the FY22 recommended rates and answers to frequently asked questions are at https://www.brunswickcountync.gov/utilities/rates/

-30-

*Assumes the wholesale customer passes the full volumetric rate increase ($2.36/per 1,000 gallons) to their retail customers

Media Inquiries

For media inquiries, contact the Communications Director at 910.253.2995 or email meagan.kascsak@brunswickcountync.gov

County Contact Information & Virtual Services During the Coronavirus Pandemic

Brunswick County is urging individuals to visit our website and to call or email county departments for assistance first before visiting county offices. The County requires appointments for in-person visits. Not sure who to contact? Call our main line and we can help direct your calls.

  • Main County Contact Information: 910.253.2000 / 800.442.7033