Omaha Utility Says Water, Gas Rates Likely to Rise in 2018

The board in December approved a 2017 budget that included a 2.5 percent increase in water rates and a 1 percent increase in gas rates. This week, MUD President Scott Keep said management is using those same increases in early work for next year’s budget.

Taken together, this year’s rate increases worked out to monthly increases of about $1.80 for average water and gas users, with anticipated additional revenues of about $7.1 million. Gas rates had held steady for three years before the increase for 2017.

MUD has committed to abandoning more than 1,500 miles of aging cast-iron water and gas lines and replacing them with plastic throughout Omaha over the coming decades. By 2027, the utility will abandon the last few hundred miles of remaining cast-iron gas mains.

“If we can do less, we certainly will, but we’ve got to keep growing the cast-iron water pipe replacement, and we have to maintain that 40-mile-per-year rate of cast iron replacement on the gas side,” Keep said. “I’m anticipating that it will take some small rate increases to do that.”

Maintaining that schedule and paying for expenses tied to operations, facilities improvements and debt obligations amid volatile water and gas usage means MUD has to make up for lower-than-anticipated revenues with higher rates.

Gas usage for the past two years declined among MUD customers because of warmer winter weather, even as the utility’s customer base grew. Water usage is also dependent on weather and increased significantly last year, which was drier than normal.